A multibillion-dollar potential class-action claim against the major manufacturers and distributors of allegedly defective fire-retardant roofing plywood has been dismissed by a U.S. District Court judge in Baltimore, squelching an attempt at blanket relief for thousands of unhappy town house owners.
"My advice to [people with defective roofs] is to save the receipts for any repair work, save a sample of the defective wood, preferably with the stamp of the manufacturer on it and follow the newspapers to find out what the next step will be," said Gary E. Mason, an attorney at Cohen, Milstein, Hausfeld & Toll, a Washington firm serving as lead counsel in local attempts to settle the case.
The next step, however, may already have been taken.
Representatives of the major manufacturers and distributors of the product and the National Association of Home Builders have already met once with Kenneth R. Feinberg, a widely respected attorney in the field of alternative dispute resolution, to try and hash out a compromise. More meetings are scheduled this winter and spring.
"It's a voluntary decision on everybody's part and we could come away with an agreement in a few weeks or it could blow up in our faces at the next meeting," said Gary Komarow, senior staff counsel for the NAHB. "But if anyone's got a shot at settling this thing, it's Ken Feinberg."
John Nethercut, an assistant attorney general who is overseeing the plywood controversy for the Maryland Attorney General's Office, echoed those comments.
"If there is any short-term answer to this without tremendous legal costs involved, that's going to be it," he said. "But if it doesn't work, you're going to see a lot of lawsuits and it's going to be a mess."
Mr. Feinberg, a Washington attorney, was instrumental in settling similar wide-scale product controversies involving the Dalkon shield and Agent Orange.
Most recently, he was involved in the consolidation of nearly 8,000 Maryland asbestos personal injury cases that threatened to overwhelm an already clogged Baltimore Circuit Court.
Fire retardant-treated, or FRT, plywood sold by major manufacturers such as Hoover Treated Wood Products and Georgia-Pacific Corp. in the 1980s has been found to deteriorate under normal attic temperatures, causing roofs on thousands of town homes to sag, splinter and crack.
On Tuesday, officials from Georgia-Pacific applauded the judge's decision to dismiss the suit and said the company stands by its product -- raw, untreated plywood.
"It's when chemicals are added to the plywood that problems occur," said Gail Smith, Georgia-Pacific's senior manager of corporate communications. "The chemical treaters are responsible and that is where recourse should come."
Housing officials have estimated that nearly 100,000 homes in the Baltimore area and Prince George's and Montgomery counties were built with FRT plywood roofs in the last decade, along with thousands of others in Anne Arundel, Howard and Harford counties. Nationwide, the number of homes potentially affected by defective FRT plywood could be as high as one million.
In his decision issued earlier this month, U.S. District Chief Judge Alexander Harvey II ruled that the plaintiffs in the case -- essentially all fire-retardant plywood roof owners in the eastern United States -- did not meet the jurisdictional requirements necessary to bring a lawsuit to federal court.
Federal law demands that certain conditions be met by the plaintiffs, including that the amount sought in each claim must exceed $50,000.
Judge Harvey refused to allow the plaintiffs to lump the total of their claims to meet the federal jurisdictional monetary requirement.
The judge's ruling does not mean a class-action suit is no longer possible. Attorneys for the plaintiffs have indicated that they will either ask for a reconsideration of their complaint or seek a new class-action suit in state court.
A class-action claim filed in state court limits the scope of the lawsuit considerably, since only property owners in Maryland with FRT plywood roofs, and not people with similar problems in other states, will be covered.
At the state level, the Consumer Protection Division of the Maryland Attorney General's Office, which has been barraged with hundreds of calls about FRT plywood, began its own mediation program several weeks ago, according to Mr. Nethercut.
The office will provide a mediator and a meeting place for builders and homeowners to settle their differences, Mr. Nethercut said, although a number of major builders such as Ryland Homes and the Pulte Corp. have declined, saying they have their own inspection, repair and settlement procedures.
Michael Enright is a Baltimore free-lance writer.