News & Resources

August 17, 2009. Category: Product Liability

New Bill Proposes to End Foreign Manufacturer Tort Liability Loopholes

Each year, many people in the United States are injured by defective foreign products imported into the United States. Loopholes in the law give foreign manufacturers ways of delaying lawsuits against them in the United States – but that may be about to change. Currently, when a foreign manufacturer’s product injures someone in the U.S. because of a defect, and the victim files suit against that manufacturer, serving the foreign defendant can take months or even years. As just one example, the recent Chinese-made drywall fiasco is faced with this sort of issue. Foreign manufacturers often seek to avoid judicial consideration of their actions by asserting that United States courts lack personal jurisdiction over their companies.  New legislation, however, seeks to make it easier for plaintiffs to establish service and get the lawsuit moving.

In many cases today, serving process on foreign defendants is complicated and time consuming, thanks to international law ratified in the 1960s. Plaintiffs must translate the papers into the manufacturer’s native language, sent to a “central authority” (someone appointed by that country), then serviced per the laws of the country. This can cause huge delays, from a few months to over a year.  Newly proposed legislation sponsored in early August by Senators Sheldon Whitehouse, (D-RI), Jeff Sessions, (R-Ala), and Richard Durbin, (D-Ill) called the Foreign Manufacturers Legal Accountability Act of 2009 addresses this problem with a two-pronged solution:

  1. Foreign manufacturers will be required to have an “agent” in at least one state, which is designated to accept service on the company’s behalf.
  2. Foreign companies consent to state or federal jurisdiction where their registered agent is located upon receiving service.

Obviously, this bill will not affect whether the manufacturer is liability for an injury or make the legal burdens on foreign manufacturers any greater than those imposed on domestic manufacturers. It simply makes service of process work as though the manufacturer were American.  

Despite bipartisan support, though, the bill has not passed.  But it is important that this important legislation get passed to finally end the loopholes which have allowed foreign manufacturers to delay lawsuits.  Foreign companies that import products into the U.S. should not be able to avoid liability simply because of difficulties relating to serving process upon the company.

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