In a Per Curiam decision arising out of the Chinese Drywall Litigation, the U lipitor weight loss.S. Fifth Circuit allowed a claim for stigma damages to go forward, despite the class release of claims “known and unknown, arising from, or otherwise related to” Chinese Drywall.
“When deciding whether Mangiarelli’s stigma claims are within the scope of the Global and Banner settlement agreements, the ‘Class Member’ definitions are not considered in isolation; instead they are to be considered in the context of the agreements as a whole….
“Although the class definitions in the Global and Banner agreements purport to include all persons with claims arising from or related to Chinese Drywall, language elsewhere in the agreements limits these broad definitions. As the district court pointed out, Section 4.3 of the Global agreement requires that ‘Class Members agree … to apply the settlement proceeds they receive … to assist in the remediation of their Affected Property allegedly damaged by Chinese Drywall.’ In addition, the Global agreement’s opt-out provisions contemplate only those plaintiffs seeking damages to an ‘Affected Property.’ Section 5.6.2 states that ‘in the event a Class Member opts out from this Settlement, all Parties reserve all claims, defenses and coverage positions … against any person or entity alleged to have any liability related to the Chinese Drywall in the Affected Property of that opt-out Class Member’ ….
“More importantly, both the Global and the Banner settlement agreements apportion funds based on each ‘Affected Property.’ Thus, with the exception of personal injury claimants, the settlement agreements limit recovery to those individuals who own, lease, or otherwise have a close tie to a property containing Chinese Drywall. The appellants acknowledge that the terms of the Global and Banner agreements do not provide compensation for stigma claims like those at issue here. It spurns simple reasoning to require individuals to opt out of a settlement agreement under which they were never entitled to compensation.”
Mangiarelli v. Sixty-Fifth and One LLC, No.14-31355, 2015 WL 5771919 (5th Cir. Oct. 2, 2015).