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Can Foreign Manufacturers Evade Defective Products Lawsuits?

The 2015 Foreign Manufacturers Legal Accountability Act (FMLAA), proposed in the Senate this past July, is a bipartisan plea to hold foreign manufacturers responsible for any injuries or fatalities directly caused by their product in the United States. Unfortunately, legal loopholes exist that occasionally allow foreign companies to escape accountability for harmful, defective products. The U.S. Consumer Product Safety Commission reports that plaintiffs can often get around these loopholes by settling with domestic partners of foreign companies, such as importers and retailers. However, this is not always possible. One of the most infamous catalysts for the proposed bill is the Chinese drywall recall that occurred in 2005 and 2006. The defective drywall resulted in billions of dollars in medical and financial damages,

What Exactly Is the Foreign Manufacturers Legal Accountability Act (FMLAA)?

If passed, the FMLAA would ultimately control the regulation of product safety for all imported consumer goods, as well as ensure the legal involvement of a foreign manufacturer in a defective product lawsuit. The following factors apply:

  • The FMLAA requires that all foreign corporations pursuing business in the U.S provide a legal agent to represent that corporation in the event of a U.S. civil suit or regulatory claim. This would place all legal matters under U.S. jurisdiction.
  • Legislation would pertain to products including pharmaceuticals, cosmetics, devices, biological products, consumer products, chemical substances, and motor vehicles and vehicle parts. All of these products would be regulated by the Consumer Product Safety Commission, Environmental Protection Agency, and Food and Drug Administration.
  • If a foreign company chooses not to comply, the act would ban their products in the United States.

Defective Chinese Drywall

One of the worst examples of a foreign corporation evading defective product lawsuits occurred during the beginning stages of post-Hurricane Katrina. A nationwide construction supply shortage resulted in 550 million pounds of drywall being imported from China. After a period of time, the drywall began emitting hydrogen sulfide gas, corroding metal, and causing respiratory conditions, chronic headaches, and nosebleeds. An estimated 5,600 lawsuits were filed, to no avail. Unfortunately, the U.S. legal system makes it extremely difficult to sue Chinese companies. Although victims were able to sue domestic partners of the Chinese drywall manufacturer, such as importers, sellers, and distributors, many of these companies subsequently went out of business, filed for bankruptcy, or simply didn’t have enough assets to make a lawsuit worthwhile. As a result, many victims were left financially damaged and even bankrupt, with no hope of compensation. The magnitude of the Chinese drywall case unveiled the need for better legislation surrounding foreign product manufacturers.

 

Altman & Altman, LLP – Massachusetts’ Products Liability Lawyers

Defective products can range from unsafe infant car seats to defective drugs. You may have been injured in a car accident because of a malfunctioning seat belt, or experienced a long and painful recovery from defective knee replacement products. At Altman & Altman, LLP our product liability attorneys have extensive knowledge in this complex area of the law. Serving Massachusetts for nearly 50 years, our firm has successfully recovered compensation from some of the largest manufacturers and retailers in the world. We will thoroughly examine every detail of your case to determine the best strategy for moving forward. Contact us today for a free consultation.