Bipartisan Bill Addresses Foreign Corporate Liability in U.S.

78% of 2012 CPSC Recalls from Foreign Makers According to Analysis

Washington, DC—More than seventy-eight percent of all Consumer Product Safety Commission (CPSC) recalls in 2012 were products made by foreign manufactures.  Despite those numbers, foreign corporations are able to evade United States laws and safety standards because of the difficulty of holding them responsible in the U.S. court system. This creates an unfair market advantage for foreign corporations, who have little fear of being held accountable when their defective products injure and kill American consumers.<--break->

Today, U.S. House of Representatives Matt Cartwright (D-PA) and Mike Turner (R-OH) along with 30 bipartisan cosponsors have reintroduced the Foreign Manufacturers Legal Accountability Act of 2013 (H.R. 1910), requiring foreign manufacturers to have a registered U.S. agent that would accept service of process and could be held accountable for civil and regulatory claims arising from a defective product.  This legislation comes just days after ten members of Congress filed a brief in the ongoing case against Chinese drywall maker Taishan Gypsum, a company that earned 85 million dollars, selling 87 million square feet of drywall after the 2005 hurricanes.

“With the overwhelming majority of recalled products in the U.S. being manufactured overseas, accountability of foreign manufacturers should be a priority,” said American Association for Justice (AAJ) President Mary Alice McLarty.  “Both American businesses and consumers suffer when a foreign producer has no responsibility for the safety of their product in the U.S. legal system.” 

Under the current system, in order to pursue legal action against a foreign manufacturer, you are typically required to serve the foreign company in their country, according to their rules of service.  This often requires translating the papers into the language of the native country and tracking down the companies’ foreign address, adding additional time and expense to the legal process.  This system deters consumers from pursuing claims against the foreign manufacturer. 

Yesterday members of Congress filed an amicus brief asking an appeals court to uphold a federal judge’s judgment of $2.6 million levied against the company in 2010 for bad drywall.  The federal judge had made the extraordinary gesture to travel to Hong Kong to oversee depositions for the multidistrict litigation, but the Chinese manufacturer still refuses to acknowledge any financial responsibility for their product.

“If foreign companies are not subject to jurisdiction in the United States for injury done by their defective products sent into the United States, they will have a competitive advantage over their American competitors,” reads the legislators’ brief. 

The “Foreign Manufacturers Legal Accountability Act” applies to all foreign products overseen by the CPSC, Environmental Protection Agency (EPA) and the Food and Drug Administration (FDA), such as drugs, devices, cosmetics, biological products, consumer products, chemical substances, and pesticides.  Just last year, in 2012, there were 392 product recalls in the CPSC alone; of those 78 percent were manufactured by a foreign corporation. 

For example, see the list of products manufactured in China that fall under the CPSC regulation that have been recalled from 2012 through today.

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As the world's largest trial bar, the American Association for Justice (formerly known as the Association of Trial Lawyers of America) works to make sure people have a fair chance to receive justice through the legal system when they are injured by the negligence or misconduct of others