Holding Foreign Manufacturers Accountable for Defective Products Sold in the United States

Earlier this week, The U.S. House Energy and Commerce's Subcommittee on Commerce, Trade, and Consumer Protection held a hearing to discuss The Foreign Manufacturers Legal Accountability Act. If passed, this Act will require all foreign manufacturers who do business in the U.S. to have a local agent that can accept service of process for any legal claims being filed against the company.

Up until now, if you suffered injuries or losses from a foreign manufacturer with no U.S. offices, you would have to spend thousands of dollars having claims translated into a foreign language and then tracking down an overseas office where the service of process for claims could be served. This lengthy, expensive, and difficult process has led to many American citizens failing to get justice from overseas manufacturers who have sold defective products to U.S. consumers.

One witness who testified before the Committee is retired police officer William Morgan. Mr. Morgan lives in Williamsburg, Virginia and owns a house that is worthless because a Chinese manufacturer sold him defective drywall. Mr. Morgan's home was foreclosed upon after he and his family were forced to relocate. The drywall in his home is moldy and has made the home unsafe to live in and essentially worthless. The Chinese company who makes the drywall knows it is defective, but it is extremely difficult to hold them accountable under the current laws.

The American Association for Justice (AAJ) supports the new bill and states "foreign corporations should not be able to profit by selling their products in our country if they do not intend to follow our safety standards … both American businesses and consumers suffer when a foreign manufacturer cannot be held accountable in our legal system."

What the Foreign Manufacturers Legal Accountability Act (S. 1601/ H.R. 4678) does if passed:

• Manufacturers are required to have an "agent" located in at least one state where the company does business that would accept service of process for civil and regulatory claims.
• By registering an agent, companies would consent to U.S. jurisdiction in disputes involving U.S. consumers.
• The legislation covers products regulated by the Consumer Product Safety Commission (CPSC), such as children's toys; the Food and Drug Administration (FDA), including prescription drugs and medical devices; and the Environmental Protections Agency (EPA), like pesticides.

There are some agencies that are against the new bill, however. The National Association of Manufacturers (NAM) is speaking out against the new Bill. They are against the bill because it can affect smaller businesses who currently deal with foreign manufacturers for their supplies. Because of the expense involved with maintaining an agent in the U.S., smaller foreign manufacturers could be frozen out of American trade. Companies who currently use smaller foreign manufacturers will have to search for new suppliers who are financially stable and large enough to shoulder the burden of these additional costs. Searching for suppliers of specific goods and developing qualified lists of manufacturing prospects may not be a simple task.

If you are a consumer who has been affected by a foreign company's defective products, you may need an experienced attorney to help you with your claim. Translation services, court filing, and legal jurisdictional issues are not easy to do on your own and an attorney like those at BISNAR | CHASE can help you with this process. Contact an attorney right away to discuss your rights under the current laws.

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