Foreign Products Fact Sheet

FOREIGN MANUFACTURERS MUST BE HELD ACCOUNTABLE FOR SELLING HARMFUL PRODUCTS

The Consumer Product Safety Commission (CPSC) has failed its mandate to protect consumers from harmful and dangerous products. With jurisdiction over more than 15,000 different products ranging from toys and baby products to ATVs, the CPSC is the primary agency responsible for making sure both imported and domestic products meet American safety standards.[1] However, a recent avalanche of foreign product recalls continues to demonstrate the ineffectiveness of the CPSC and the need to combat a growing business trend of sacrificing safety standards and quality for slightly cheaper imported products. 

Around half of the 467 products recalled last year were made in China, up from 110 product recalls in 2000.[2] Chinese products now represent 60 percent of all product recalls, compared with 36 percent of all product recalls seven years ago.[3] Furthermore, foreign manufacturers and American importers of foreign products often delay reporting product related incidents. The reality of each recall means that thousands of individuals sustained serious injuries or died from exposure to highly toxic substances and defectively designed products.[4] Despite a demonstrated need for greater oversight of imported products, the CPSC has actually cut its total staff by 55 percent and its budget by 49.4 percent since it was created in 1974.[5] 

In order to hold businesses accountable for profiting off harmful products, access to American courts must go hand in hand with government regulation, especially in light of a weakened CPSC and the growing number of dangerous imported products. Unfortunately, injured individuals face significant procedural challenges in this area, making it difficult, and sometimes impossible, to hold foreign manufacturers accountable in court.

• Foreign manufacturers evade responsibility through the service of process requirement. Though they profit off of American business, foreign manufacturers often try to evade legal responsibility by asserting that the American courts have no jurisdiction over them. In many state and federal courts, injured individuals must be able to physically serve process on a defendant in that state to meet jurisdiction requirements, making it impossible for American courts to have jurisdiction over foreign manufacturers located abroad. [6] Even though American jurisdiction may extend to foreign defendants with sufficient ties to the state, it remains difficult, costly, and time consuming to demonstrate these ties.
  
  
• Foreign manufacturers evade responsibility through forum non conveniens. Foreign manufacturers who are subject to American courts can move to dismiss an action by invoking the doctrine of forum non conveniens and arguing that it is inconvenient for the foreign business and the Court to hold a trial in America. Defendant manufacturers granted a dismissal would then be allowed to move the trial to a location preferable to them, potentially forcing injured consumers to fight an expensive battle overseas in an unfamiliar foreign jurisdiction. This creates an unfair advantage for foreign manufacturers who chose to engage in American business but, at the same time, are not held accountable by the American people. 
  
  
• U.S. judgments are unenforceable in foreign countries. Foreign manufacturers under U.S. jurisdiction can still evade liability because U.S. judgments are unenforceable abroad. The U.S. is not a party to any treaties or agreements on enforcement judgments in foreign countries. According to the State Department, without a treaty, “whether the courts of a foreign country would enforce a judgment issued by a court in the United States depends upon internal laws of the foreign country and international comity.” [7]
  
  
• Seller liability provides sole viable alternative. American based sellers and importers of foreign manufactured products also profit off of American business, and should, in fairness, be similarly responsible for harmful products. Keeping sellers and importers responsible for poorly manufactured products will ensure that consumers are not left without any means of recourse. Despite its necessity, multiple attempts have been made to eradicate seller responsibility.   For example, H.R. 989 would completely immunize sellers from liability. Restrictions on seller liability were also contained in the “Small Business Liability Reform Act,” introduced in every Congress since 1999 (and even passed by the House in 2000),[8] would provide additional liability protection to qualifying small businesses. Passage of this bill would eliminate joint and several liability, leaving consumers without compensation for non-economic damages—such as permanent injury, loss of a limb, and excruciating pain---if fault were mostly allocated to foreign companies not subject to American courts. The most recent version of this damaging legislation, H.R. 2995, was introduced by Representative Steve Chabot (R-OH) and referred to the House Judiciary Committee in July 2007.