Bipartisan Bill Targets Foreign Corporations That Skirt Federal Safety Standards, Legal System

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For Immediate Release: December 6, 2011

Contact: Jennifer Fuson
American Association for Justice
202-965-3500 x8369
jennifer.fuson@justice.org

Bipartisan Bill Targets Foreign Corporations That Skirt Federal Safety Standards, Legal System

Senate Commerce subcommittee hearing today to examine contaminated drywall that has plagued U.S. homeowners    

Washington, DC—Senators Sheldon Whitehouse (D-RI) and Jeff Sessions (R-AL) have reintroduced the Foreign Manufacturers Legal Accountability Act of 2011 (S.1946), requiring foreign manufacturers to have a registered U.S. agent that would accept service of process for civil and regulatory claims.

Currently, foreign manufacturers are able to evade U.S. 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 liable when their products injure or even kill U.S. consumers.  

“Foreign corporations should not be able to profit from selling their products in our country without being held to the same laws and safety standards as U.S. manufacturers,” said American Association for Justice President Gary M. Paul.  “American businesses and consumers all suffer when a foreign producer cannot be held accountable for a hazardous product through our legal system.”   

Today, the Senate Commerce, Science and Transportation Subcommittee on Consumer Protection, Product Safety, and Insurance will hold a hearing on contaminated drywall, an issue that gained national attention after drywall manufactured in China left American homeowners with millions of dollars in property damage and numerous health problems.  Bringing a case against the Chinese manufacturer requires servicing the company in their country, according to their rules of service.  Even then, a foreign corporation has no obligation to show up in the U.S. court proceedings, as became problematic in the drywall legal proceedings.    

In September, Operation Helping Hands, a Catholic ministry in New Orleans that rebuilt nearly 200 homes after Hurricane Katrina, announced it will close next summer because of its disastrous encounter with toxic Chinese drywall.  The nonprofit used the toxic product in the homes it built after the hurricane.  Rather than face the uphill battle holding the foreign corporation accountable for their product, the organization chose to take responsibility for removing the drywall from the homes at a cost of millions of dollars.  

According to an analysis by AAJ, 83 percent (312) of the 377 recalls announced by the Consumer Product Safety Commission (CPSC) in 2009 were from foreign manufacturers.  The 2008 CPSC data is similar, when 84 percent (329) of recalls were from foreign manufacturers.  The legislation will address foreign products overseen by the CPSC, National Highway Traffic Safety Administration (NHTSA), Environmental Protection Agency (EPA) and the Food and Drug Administration (FDA). 

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