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.
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 .