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A federal judge in New Orleans ruled last week that a Chinese manufacturer of noxious drywall owes seven Virginia homeowners $2.6 million to completely replace the offending material and all other affected building fixtures. Thousands of similar cases could be on the way. Do Chinese companies need to worry?

As a practical matter, probably not. “In general, collecting on a U.S. judgment [in China] is difficult if not impossible,” says Gordon Gao, a litigation partner in Beijing with the Chinese law firm Fangda Partners. Chinese law, he explains, only permits the enforcement of foreign judgments through bilateral treaties. But China doesn’t actually have any such treaties with other countries.

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