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Firms to Pay $750 Million for Pipe Leaks : Consumers: Class-action settlement called largest ever for property damage. Chemical companies admit no wrongdoing.

October 25, 1994|JESUS SANCHEZ | TIMES STAFF WRITER

In one of the largest legal settlements of its kind, three big chemical makers Monday agreed to pay at least $750 million to replace and pay for damage caused by leaky plastic plumbing installed in an estimated 6 million homes, apartments and businesses nationwide.

Shell Oil Co., DuPont Co. and Hoechst Celanese agreed to settle a Texas class-action lawsuit over an allegedly defective polybutylene piping system, which was touted during the 1980s as being more flexible and cheaper than other kinds of plastic or copper plumbing. The class-action settlement is believed to be the largest ever involving property damage.

While polybutylene was never approved for use in the city of Los Angeles, the gray plastic piping sold primarily under the Qest and Qick Sert II brand names was widely used in other parts of Southern California. An estimated 40,000 homes in San Diego County, for instance, have polybutylene pipes.

"It was really popular where it was legal because it weighed a heck of a lot less (than other pipes), was easier to transport and much easier to work with," said Jeffrey Masters, a Century City attorney who represents many area home builders but is not involved in the class-action suit. Since polybutylene was so widely used, he said, "the question you would ask yourself is, is this (settlement) enough?"

The class-action suit, filed on behalf of all affected homeowners in September, 1993, alleged that the polybutylene systems leaked and caused millions of dollars of property damage. Consumers were never told the pipes and fittings would corrode and ultimately leak when exposed to chemicals such as chlorine, which is found in most U.S. drinking water, the suit alleges.

Under the tentative settlement, which is expected to be approved by the court in late 1995, eligible consumers who have suffered damage and related repair costs will receive total reimbursement. They must apply for reimbursement within a year after the court approves the agreement. The three firms will provide complete replumbing for consumers who have had at least two previous leaks.

The settlement will also cover future leaks based on when the system was installed. Homeowners will be eligible for reimbursement for up to 16 years after installation, depending on the makeup of their systems. Mobile homeowners will be eligible for 10 years after installation.

When a final settlement is reached, consumers will be instructed on how to file for reimbursement through advertisements and will be able to call a toll-free number for more information.

Polybutylene is a resin product developed by Shell to manufacture plumbing pipes. DuPont and Hoechst Celanese helped produce resins used to make fittings for the pipes, which were promoted for their durability.

Most of the polybutylene systems were manufactured by other companies, including the U.S. Brass unit of Eljer Industries Inc., which filed for Chapter 11 bankruptcy protection in May over plumbing claims.

However, attorneys for the homeowners said the larger chemical companies knew of the pipe's problems.

"Shell participated in the marketing of the product," said Arthur Bryant, executive director of the Trial Lawyers for Public Justice, a Washington-based public interest law firm and co-counsel on the class-action suit. "These companies knew when they were selling this plumbing that it would corrode on exposure to common drinking water."

The three companies agreed to the settlement without admitting any wrongdoing.

"Hoechst Celanese is not liable for any alleged defects in such systems, which were designed, manufactured and marketed by other companies," said a statement issued by the Somerville, N.J.-based firm.

The lawsuit does not cover consumers who had filed lawsuits before the class-action suit was filed. Those consumers will be reimbursed under separate settlements reached with the companies involved, an attorney said. Several other kinds of plastic pipes, including polyvinylchloride, or PVC, are not involved in the suit and have not produced any major problems.

Staff writers David Myers and Michael Parrish contributed to this report.

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