Home siding by Louisiana-Pacific Inc. sold as a cheap alternative to cedar turned out to be more expensive than expected. When it swelled, buckled, soaked up water, rotted and even grew a mushroomlike fungus in wet weather, customers began frantically calling the company about their Inner Seal siding (HCN, 8/21/95).


Now, Louisiana-Pacific says it will pay $275 million for its mistake in one of the largest product-liability settlements in U.S. history. Owners of the company's defective siding have begun filing damage claims with a Portland, Ore., office established by a U.S. district court. Since the middle of October, approximately 500 checks have been mailed, says Jayne Menard, administrator of the claims office. She expects 100,000 claims to be filed in the seven-year life of the class-action settlement fund.


An estimated 1 million homeowners around the country own Inner-Seal siding. Menard says most claims so far have come from residents in the humid Northwest and Southeast, and the company expects the siding to hold up in drier parts of the country.


Compensation checks will vary, but at an average of $4 per square foot of damaged board, people can expect checks ranging from $2,000 to $8,000, says Steve Berman, the Seattle attorney representing claimants. "It's a great deal," he says. "People are getting a lot more than they would have gotten in court."


This class-action settlement is only one of Lousiana-Pacific's recent troubles and environmental violations. With a history of flushing chemicals into the ocean, emitting toxic fumes and breaking hazardous waste laws, the timber-products giant is getting accustomed to paying off the disgruntled. In the past few years the company ousted chief executive Harry Merlo, shut down its Ketchikan, Alaska, pulp mill and faced a class-action suit filed by its shareholders .





" Katie Fesus