WASHINGTON — New legislation could make it easier for homeowners with defective Chinese drywall to take the manufacturer to court.
The Foreign Manufacturers Legal Accountability Act of 2009, introduced by Rhode Island Democrat Sen Sheldon Whitehouse, and co-sponsored by Sen. Jeff Sessions, R-Alabama, attempts to make it easier to bring foreign companies before an American court.
Legal analysts say current laws contain so many loopholes that foreign manufacturers of shoddy equipment are rarely penalized by the legal system.
“American businesses and consumers harmed by defective foreign products need justice, and they don’t get it when foreign manufacturers use technical legal defenses to avoid compensating those they have injured,” said Whitehouse, a former U.S. Attorney and Attorney General for Rhode Island.
The bill would require foreign manufacturers to retain a business representative in at least one state where it does significant business and who could be served with a lawsuit.
“It’s much better if these companies can be made to come in and answer for the defective product in the same way an American company does,” said Thomas Gowen, a specialist in international product-liability claims at the Lock Law Firm in Philadelphia, who has reviewed the legislation.
He noted the effects would go well beyond the faulty drywall that builders installed in 2004-5 when the home building boom outstripped U.S. drywall supplies.
“Imports have tripled in the last 10 or 15 years and are expected to double or triple again,” Gowen said. “We’re talking about a sizeable portion of the sizeable part of the economy that is coming from abroad and is at least potentially affected by this bill.”
The bill has the support of the Consumers Union and the Consumer Federation of America. A U.S. manufacturer is subject to full accountability to ensure that people only purchase and use safe products,” Sessions said.
“This bill would help to make sure consumers are similarly protected from foreign products, and that there is a level playing field for both domestic and foreign manufacturers.”
Whitehouse and Sessions in May held a hearing on accountability for foreign manufacturers in before the Senate Judiciary Committee Subcommittee on Administrative Oversight and the Courts. Witnesses — including Professor Louise Ellen Teitz of Roger Williams University School of Law — testified about the delays and expense associated with serving foreign manufacturers with a lawsuit and establishing jurisdiction.
But she cautioned in her prepared testimony that whatever the committee proposed, “there is the strong possibility that our trading partners will adopt similar legislation in their own countries that may make it harder for US manufacturers exporting their products overseas.’’
Chuck Stefan, vice president of an Alabama home builder, The Mitchell Company, told the panel that his company tried to resolve the drywall issue only to run into roadblocks.
“The lack of registration and identification of these imported products and the difficulties involved in serving a foreign manufacturer have made a challenging task even more daunting,’’ he said in testimony prepared for the hearing.