A House panel is set to take up a piece of legislation this week that would give American consumers the ability to sue foreign manufacturers in U.S. courts for injuries resulting from dangerous or defective products, according to The Dow Jones Newswire.
The Foreign Manufacturer Legal Accountability Act, introduced by Rep. Betty Sutton and co-sponsored by more than 60 representatives of both parties, is a response to a rash of defective and dangerous foreign products that have flooded the American market in recent years.
"If foreign entities have the benefit of selling products and making profits from sales in the U.S., they should be accountable if the product causes harm," Ami Gadhia, policy counsel for the Consumers Union, said in a House hearing last month, according to the Newswire.
As the law currently stands, it is extremely difficult to sue a foreign company in an American court. Even if a lawsuit is filed and litigated, some foreign companies will not even acknowledge the legal action, fail to accept jurisdiction in U.S. courts and neglect to pay any awarded damages.
More often than not, it is the U.S. distributors and retailers that are stuck to foot the bill for their foreign suppliers.
"When consumers aren't able to hold the foreign manufacturer accountable, it kind of forces them to have go to the U.S. business that sold the goods or supplied the goods," Christine Zinner, associate director of public affairs for the American Association for Justice, told the Public News Service. "That's why this legislation really helps level the playing field for U.S. businesses."
The legislation would require, as a condition of market access, foreign companies to identify a registered agent to accept service of process on behalf of non-U.S. manufacturers. Doing so would constitute an acceptance of jurisdiction in U.S. courts.
The rules would be applied to all products regulated by the Environmental Protection Agency, the Food and Drug Administration and the Consumer Product Safety Commission.
Perhaps the most important effect the legislation could have would be to deter foreign companies from taking shortcuts in making products to be exported to the U.S. If that is the case, it could seriously cut down on the amount of foreign-made goods recalled. Last year, 83-percent of the defective goods recalled were produced overseas.
On that list of recalls is millions of pounds of Chinese-made drywall. The Chinese-made drywall has been found to emit sulfur gases that erode copper coiling in electronic and plumbing equipment. The faulty drywall is responsible for destroying numerous air conditioner and refrigerator coils, microwaves, computer wiring, faucets and copper tubing. In addition, rashes, allergic reactions, asthma and sore throats have been reported as a result of exposure to the substance.
Although the extent of the damage is not yet known, more than 2,100 lawsuits have been filed for property damages alone. Thousands more are expected to be filed seeking damages for illnesses related to the drywall. According to the Sarasota Herald, roughly 550-million pounds of Chinese drywall were imported between 2006 and April 2008, used to build more than 60,000 homes in over a dozen states.
Unclear is whether it will be possible to collect the damages from the Chinese company. No international law currently exists that would compel the Chinese company to honor the decision of the U.S. court.
Attorneys for the plaintiffs have suggested seizing the company's U.S.-bound vessels and shipments, which could be an avenue to recoup the damages owed to their clients. However, if the Foreign Manufacturer Legal Accountability Act is passed, that will not be necessary.
Yet, drywall is hardly the only foreign-made product to have been found to contain dangerous levels of toxic materials.
In recent years, more than 60 million cans and pouches of dog and cat food originating from China were recalled after, by some estimates, 3,600 American pets died from eating foods contaminated with the toxic chemical melamine.
The blood-thinner Heparin manufactured in China was also recalled recently by the FDA after it was found to have caused the deaths of 81 American citizens. Authorities believe that the contaminant, oversulfated chondroitin sulfate, a substance that mimics heparin but costs 99-percent less, entered the drug's supply chain in China.