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Chinese Parent Companies Lose Toxic Drywall Appeal (Corrected)

July 10, 2020, 3:06 PMUpdated: July 10, 2020, 4:24 PM

Chinese state-linked parent companies that fought unsuccessfully to stay out of U.S. homeowners’ toxic-drywall suits, which eventually settled for $248 million, were properly kept in, the Fifth Circuit ruled.

The partially split panel of the U.S. Court of Appeals for the Fifth Circuit Thursday affirmed multidistrict litigation judge Eldon Fallon’s use of Florida and Louisiana law to pierce the corporate veil for purposes of jurisdiction.

Fallon’s April 2017 decision kept China National Building Materials Co., Beijing New Building Materials PLC, and Beijing New Building Material Group in the consolidated litigation on the basis of drywall subsidiary Taishan Gypsum Co.'s contacts...

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