Congress Holds Hearings On The "Foreign Manufacturers Legal Accountability Act"
Previously, I wrote about legislation introduced into the U.S. House of Representatives to protect American consumers from dangerous and defective imported products. The statistics are very troubling. In 2009, 83% of the recalls announced by The Consumer Product Safety Commission (CPSC) were from foreign manufacturers. Statistics from recent prior years are similar.
Last week, a Congressional subcommittee held hearings on the proposed bill. The hearing brief prepared by the subcommittee staff summarizes the current problems with dangerous imported products. According to the subcommittee brief:
The import of consumer products into the United States more than doubled in the decade between 1998 and 2007. This sharp rise in imported consumer products has been accompanied by an overall increase in product recalls and a disproportionate increase in the share of product recalls involving imported products – particularly products from China.
In 2007, the Consumer Product Safety Commission (CPSC) announced 473 recalls. This was the highest level of recalls in ten years.3 Of those 473 recalls, 389 (82%) involved imported products. Of the 389 recalls involving imported products, 288 (74%) involved products from China. Among the defective imported products grabbing national attention in the past several years were: a children’s craft kit containing beads coated with a chemical similar to a date rape drug; toy trains coated with lead paint; a contaminated blood thinning drug; and drywall emitting sulfurous gases.
While the CPSC has been working to bolster its surveillance of imported products and working with foreign governments to improve compliance with U.S. safety standards, holding foreign manufacturers accountable for injuries caused by defective products that make it into the hands of American consumers remains a problem. Victims trying to sue foreign manufacturers for injuries caused by defective products face significant obstacles with respect to providing service of process (notice about the litigation required to be given to the defendant) and establishing jurisdiction over foreign manufacturers in U.S. courts.
According to a CPSC representative at the hearing, by 2008 almost 80% of the toys purchased in the United States were imported from China or Hong Kong. The fact that the vast majority of toys we place in the hands of our children are imported certainly makes this an important issue
Currently, injured victims trying to sue a foreign manufacturer face substantial hurdles simply providing the required service of process to the foreign defendant. The Hague Convention on Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters, provides a very time consuming method requiring all legal documents to first be translated into the foreign manufacturer's native language and then provided to a governmental authority for actual attempts at service. Even if the injured victim eventually has the foreign manufacturer served, the manufacturer will often challenge the suit by claiming the U.S. Court does not have personal jurisdiction over it due to its lack of actual contacts in the United States. The current rules work to greatly increase the time and expense on the innocent victims of the defective product and the judicial system as a whole. In addition, they often serve as a means for the manufacturer to escape ultimate liability for the damages caused by its defective product.
The current legislation in the House of Representative solves these initial problems by requiring that foreign manufacturers importing products into the United States designate a registered agent in this country who is authorized to accept service of legal papers. Registering an agent would also constitute a link establishing personal jurisdiction in the United States where the agent was located. Similar legislation has also been introduced in the U.S. Senate.
The current legislation does not cure the problem of defective products flooding our market. We certainly need to take steps that will enforce important safety standards for all products, including those imported to the United States. Enforcing safety standards protects our citizens from needless injury and damage. However, this legislation will prevent foreign manufacturers from escaping accountability simply based on service of process and jurisdictional issues. As a result, it is a much needed step.
