The decision in the class action could affect thousands of other U.S. homeowners whose houses were made with Chinese wallboard and who have filed claims.

In his decision, Judge Fallon noted that drywall was imported in large quantities from China after a materials shortage caused by damage from Gulf Coast hurricanes.

He mentioned that the materials in question were never tested according to the U.S. ASTM (American Society for Testing and Materials Standard), and that the vendor Venture Supply Inc. of Norfolk, Va., had relied on a representation that Chinese testing was the equivalent of U.S. standards.

Meanwhile, in the second case, a federal appeals court in Chicago ruled that ACE American Insurance Company does not have to pay $1.62 million in defense costs for a company that sold lead-tainted toys from China.

The 7th U.S. Circuit Court of Appeals' ruling came in a case brought by ACE against the RC2 Corp. Inc., which sold Thomas & Friends wooden railway sets.

A three-judge panel of the Circuit Court found that the liability policies ACE issued "unambiguously excluded" exposure in the United States, regardless of where the toys were made.

The policies, issued by Philadelphia-based ACE, applied internationally, the court said, but excluded occurrences that took place within the United States.

Policy language stated that "'bodily injury' or 'property damage' must be caused by an occurrence. The 'occurrence' must take place in the 'coverage territory,'" the court noted.

ACE's argument that RC2′s policies excluded U.S.-based injuries was initially turned down by U.S. District Court Judge William T. Hart in Chicago, who found that the negligent manufacturing had taken place in China–a covered territory. The judge awarded the toy seller $1.62 million plus interest.

In reversing the district court's decision, Judge Daniel Manion wrote that "it is undisputed that the underlying lawsuits involve damages allegedly caused by exposure to lead paint that occurred within the United States, which under the contract is entirely excluded from the coverage area."

The panel's ruling found that the ACE policies are "clear that the 'occurrence' that triggers coverage takes place where the actual event that inflicts the harm takes place. And based on the undisputed facts in this case, the 'occurrence' here happened at the location of the exposure itself: within the United States."