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Home Improvement Giant Lowe's Settles Drywall Lawsuit for Millions

Source: Wall St. Journal

Posted on 12 Aug 2010

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A class action lawsuit that claimed home improvement giant retailer Lowe's Cos. sold defective drywall has been hammered out, with the company agreeing to hand out $6.5 million in the form of the store's gift cards and up to $2.2 million in plaintiffs' attorney fees.

Lowe's admits no wrongdoing in the case as part of the agreement, which the retailer said has been given preliminary court approval.

Plaintiffs claimed Lowe's sold drywall containing high levels of sulfur or other organic compounds, leading to rotten-egg-like smells and other problems, according to a copy of the agreement filed July 30 in Superior Court of Muscogee County, Ga.

In the past few years, thousands of homeowners have filed complaints with state and federal agencies saying drywall imported from China emits irritating fumes, corrodes metals and breaks down electrical appliances.

But Lowe's said its vendors have told the retailer the drywall Lowe's sold wasn't imported from China.

Any customer who purchased allegedly defective drywall from Lowe's before July 27 is included in the proposed settlement class.

"Lowe's entered into this agreement as part of our commitment to serving our customers, not because such a step is or has been required by law, or because drywall purchased from Lowe's has been proven deficient in any way," company representative Karen Cobb said in an email statement.

Cobb said the claims process is expected to begin in about 30 days. The agreement is a nationwide settlement that Lowe's believes will also cover suits pending in Florida, Louisiana and Arizona regarding a variety of drywall products, she said.

An attorney for plaintiffs couldn't be reached immediately for comment.

The agreement calls for Lowe's to make the settlement payments to the claims administrator within