In response to a series of foreign manufacturer recalls, including Toyota vehicles, drywall and children’ toys, federal lawmakers are considering a bill that would allow U.S. consumers to effectively sue foreign product manufacturers in U.S. courts pursuant to the Foreign Manufacturer Legal Accountability Act of 2010. The proposed bill was approved by the House’s Subcommittee on Commerce, Trade, and Consumer Protection. Many trade experts predict that the bill will pass through Congress this year.
Similar legislation was proposed to the Senate Finance Committee in 2009, but received little attention in the midst of all the drywall and Toyota recalls.
The 2010 Act is intended to provide greater protections for consumers from foreign manufacturers who operate in countries with less strict safety standards and regulations than in the U.S.
The Act would require all foreign manufacturers and producers of products covered by the Act, with U.S. distribution, to establish a registered agent in the U.S. This agent implicitly consents to personal jurisdiction and is authorized to accept service of process on behalf of such manufacturer or producer for the purpose of all civil and regulatory actions in State and Federal courts. See H.R. 4678. Any manufacturer or producer who fails to register an agent within the U.S. will be prohibited from importing into the U.S.
Under current U.S. law, injured consumers must undergo costly investigations to locate the foreign manufacturers in their home countries and try to obtain internal documents and financial information. The proposed Act would streamline the process and provide incentive for foreign manufacturers to achieve the highest standards of safety.
Foreign companies oppose the legislation, arguing that it would increase manufacturing costs. They also claim it would conflict with World Trade Organization rules, which may prompt some countries to impose retaliatory measures that would restrict trade with the U.S. at a time when the U.S. is trying to increase exports.
Counter to the industry response, Ami Gadhia, policy counsel for the Consumers Union, publisher of Consumer Reports, testified at a House hearing last month: “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.”
Andrew Popper, an American University law professor, said the threat of lawsuits is needed to deter foreign companies from taking shortcuts in the design and manufacture of products.
If the proposed Foreign Manufacturer Legal Accountability Act of 2010 becomes law, consumers who are injured by products designed or manufactured overseas will more readily be able to bring a lawsuit for their injuries within the U.S. Additionally, the bill will provide foreign manufacturers with a strong deterrent to avoid taking negligent shortcuts to increase company profits at the expense of consumer safety.
Copyright © 2010 The Filutowski Law Firm, PLLC. This post is intended for general information purposes only and should not be construed as legal advice or legal opinions on any specific facts or circumstances. An attorney-client relationship is not created or continued by reading this post. If you would like further information regarding the matters discussed herein, you may post a comment. If you need a consultation on a legal matter, contact Alexandra Filutowski.
