Monday, September 13, 2010
Guest Blogger Andy Popper: "Leaping Forward--or Not--With the 2010 Foreign Manufacturer Legal Accountability Act"
Earlier this summer I testified in favor of H.R. 4678, The Foreign Manufacturers Legal Accountability Act. While at first the bill looked like it would sail through, recent highly vocal and stunningly well-funded opposition from foreign automobile manufacturers and others (can you guess which absolutely huge auto manufacturer – from
Gross sales of foreign manufactured goods in the
H.R. 4678 would require foreign manufacturers of certain products and component parts to designate a registered
This strikes me as a simple, elegant, and appropriate step forward. It levels the civil liability landscape, stripping foreign manufacturers of an unfair advantage over domestic manufacturers and addresses a powerful but understandable anomaly in our legal system.
By making possible litigation against those who place into the stream of commerce defective goods, the bill triggers the corrective justice incentive mechanisms of the tort system. When you create the realistic possibility for liability, you activate incentives to make safer and more efficient products.
It is both the current state of the law – and problematic – that a foreign producer cannot readily be held accountable in state courts even if (a) the product was unquestionably dangerous and defective, (b) the harm to the victim was foreseeable, and (c) the foreign producer has sold large numbers of these products in the
We all recognize the legal issue: assertion of jurisdiction over an individual or entity presents a challenge when the entity’s contacts with state are limited. Not surprisingly, many foreign manufacturers do not have an officer, agent, representative, employee, office, or property in a particular state where their products cause harm. At present, such manufacturers cannot readily be “haled” into state court if their contacts fail to meet the constitutionally compelled “minimum contacts” requirement. In addition, the assertion of judicial power must be consistent with notions of fair play and substantial justice, fundamental fairness, and reasonability – for the defendant. In the absence of the ingenious solution presented in H.R. 4678, these norms prevail and access to justice is limited or denied.
Opponents have argued that the terms of the bill violate WTO constructs. They claim this system would discriminate unfairly against foreign manufacturers. Frankly, it is hard to see how H.R. 4678 would create any undue barrier or obstacle to trade. It imposes on foreign manufacturers the same responsibilities and obligations of domestic sellers and producers. This is a straightforward and essential change, giving injured persons access to the civil justice system.
Check out the full text of the legislation as well as the testimony and statements filed regarding H.R. 4678 at: http://energycommerce.house.gov/documents/20100616/Popper.Testimony.06.16.2010.pdf