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.”
According to an analysis by American Association for Justice, 83% (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% (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).
The bill would apply to drugs, medical devices, and cosmetics, biological products, “consumer products” as defined in the Consumer Product Safety Act, chemicals under the Toxic Substances Control Act, and pesticides.
The bill specifically addresses the issues of service of process and jurisdiction. Service abroad involves the Hague Convention on the Service Abroad of Judicial and Extra Judicial Documents in Civil and Commercial Matters, to which the U.S. is a signatory. Under the terms of this agreement, a complaint must be translated into the foreign language, transmitted to the central authority in the foreign country, and then delivered according to the rules of service in the home country of the defendant. This can be a lengthy and expensive process.
The proposed legislation would require foreign manufacturers and producers of covered products distributed in commerce (or component parts that will be used in America to manufacture such products) to establish a registered agent in the United States who is authorized to accept service of process. It similarly states that a person may not import into the U.S. a covered product (or component part that will be used in America to manufacture a covered product) if such product (or component part) or any part of such product (or component part) was manufactured or produced outside the United States by a manufacturer or producer who does not have a registered agent.