Nominaton Of Elena Kagan

Floor Speech

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Mr. WHITEHOUSE. First of all, Mr. President, let me thank the distinguished assistant majority leader for his continuing work on this issue. It protects small businesses and consumers from gouging by the credit card companies and the monolithic monopoly power they bring to bear. I was pleased to vote for and support this amendment on the floor, and I wish the assistant majority leader much success in the conference committee to get that in the final bill.

Mr. DURBIN. I thank the Senator.

Mr. WHITEHOUSE. Mr. President, I rise today to speak about the Foreign Manufacturers Legal Accountability Act, which I have filed as amendment No. 4324 to the package currently under consideration by the Senate. This amendment would close a loophole in Federal law that allows foreign manufacturers to evade accountability when their products injure Americans here at home. It would do so by requiring foreign manufacturers to meet the same standards as domestic manufacturers. It is a simple reform. It is much needed. It will protect American industry against unfair competition or having to, in effect, subsidize dangerous foreign products. It will foster American jobs for that reason. It will keep American consumers safe, and it will help Americans who are injured make sure they get an adequate recovery for their injuries from the foreign manufacturer who caused them the harm.

What happens here in America when a foreign manufacturer is able to avoid responsibility for a defective product that causes an injury to an American? When they are able to avoid responsibility, one of two bad things happen. One or the other has to be. One is that the injured American gets no recovery. Their injury goes unredressed. They cannot find the accountable company, and they just have to suffer without compensation. The second alternative is that an American company, under the theory of joint and several liability, has to make good for the harm caused by the foreign company. It becomes a cost to the American company.

This actually came up in the hearing on the bill when an Alabama contractor explained how he had to make good on the claims of homeowners whose homes he built when, without knowing it, he had used defective Chinese wallboard in the homes and they emitted sulfur that was bad for the health of the home occupants, that corroded piping, and that caused an immense amount of work that had to be redone to have his customers be satisfied customers. It became his problem when the Chinese wallboard company was nowhere to be found when their defective product caused all this harm down in Alabama. These are things that should not happen, and they are bipartisan concerns.

I want to say I am proud and grateful to have had the opportunity to work with Senator Sessions and Senator Durbin to achieve these goals. Both Senator Sessions and Senator Durbin were original cosponsors when I first introduced this bill on a stand-alone basis. Thirteen other bipartisan cosponsors have since signed on to that bill, and I am very grateful for all their support.

Let me describe for a few minutes the specifics of this particular amendment.

There are two legal hurdles that currently face an American harmed by one of these foreign manufacturers. As my lawyer colleagues know, someone who gets injured and brings a lawsuit must bring the responsible party into the proper court. This requires the injured party, one, to serve process on the defendant, to file the papers in the lawsuit with the defendant, and two, to establish personal jurisdiction over the defendant, consistent with the due process clause of the Constitution. No service of process, no jurisdiction, no lawsuit, no recovery, no assistance for the injured American.

The problem is that service of process on a foreign manufacturer is often extremely costly and extremely slow because it often must be done abroad rather than here in the United States. For instance, when an American seeks to serve a defendant in a country that is a signatory to what is called the Hague Convention on the Service Abroad of Judicial and Extra Judicial Documents in Civil and Commercial Matters, the 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, which may not be hospitable to foreign litigants. Even more complex procedural hurdles face an American seeking to serve a defendant in a country that has not signed the Hague Convention.

But let's say you get through all that expense and all that hassle and all that delay. Even when an American does serve process successfully on a foreign manufacturer, personal jurisdiction then can prove an insurmountable hurdle. This is because Supreme Court decisions interpreting the due process clause make it hard to exercise jurisdiction over foreign companies, even those whose products have injured Americans.

So something clearly needs to be done to bring the way we treat foreign manufacturers into line with the liability and responsibility of domestic manufacturers. They should not have this advantage over our domestic industry.

This amendment provides a simple solution to both of these problems. It requires a foreign manufacturer that wants to import products into the United States for our consumers to use to register an agent in the United States who will accept service of process for cases in the United States. By designating such an agent, the manufacturer would consent to the personal jurisdiction of the courts in the State where the agent is located, and no further complicated service of process would be required. This is not dissimilar, for example, to the way a corporation from outside my home State of Rhode Island must register to transact business in our State--a requirement that exists in many States around the country. I suspect it exists in the distinguished Presiding Officer's home State of Colorado.

Finally, let me make clear to whom this applies and how.

The big foreign manufacturers that ship billions of dollars of products into the United States and whose names we would all instantly recognize already can be held accountable somewhere in the United States by virtue of their having American operations or by virtue of the size of their imports. They can usually be found. And for companies such as that, complying with the new law will be as simple as designating someone in their U.S. headquarters to be that agent for service process. It will be a 5-minute task to comply with this law.

For foreign companies that have set up manufacturing operations somewhere in the United States, they will get the same treatment as domestic companies under this bill. Their domestic operation will be a location where they can be served. It is the foreign manufacturers that take advantage of our marketplace, but when their defective product injures someone and can't be found, that are the real targets of this amendment, they don't want to be held responsible anywhere.

Who are they? Well, to give a few examples, they are the ones who make the drywall I talked about, full of sulfur, that corrodes wiring and makes the residents sick. They are the companies that make cheap toys with lead paint on them that is poisonous to children or metal plumbing fittings that rupture under routine use because they are so shoddy or those that contaminate medical supplies that are sold into the United States with unthinkable chemicals. These companies may look perfectly legitimate when they sell their products, but when you try to find them once you have been injured by them, it is like grasping smoke. They disappear, and they avoid all accountability when their products hurt our fellow Americans.

It is these companies that this amendment will fully bring within the scope of the American legal system. It is important that we do this, because they should play by the same rules our American companies do with respect to service of process and availability for redress.

The Foreign Manufacturers Legal Accountability Act applies to major product categories including consumer goods, drugs, cosmetics, and chemicals through the Federal agencies that already regulate those product categories and through the components of the Department of Homeland Security that oversee our Nation's imports. The amendment empowers those agencies to use their expertise in these fields to set appropriate thresholds; for instance, to exempt small foreign manufacturers from having to register an agent, and allows a working period to ensure that no disruptions in imports occur during the implementation period of this amendment.

I urge my colleagues to support this amendment. I think it is important. By leveling the economic playing field, it will allow American manufacturers to compete fairly with foreign manufacturers, thereby protecting American jobs. By holding foreign manufacturers to the same standards as American manufacturers, it will protect our consumers and American businesses without raising any trade issues. It will eliminate this terrible situation of a foreign product causing an injury to an American for which that American can get no relief or a foreign company causing an injury to an American but because they can't be found, having an American company that worked on the installation of the product, that sold the product, that is for some reason jointly and severally liable for that injury having to carry the cost that belongs on the foreign manufacturer and would be their cost if only they could be found and served and brought to account in an American court. Both of those things are rankly unfair, and this is the best solution to put an end to those two injustices.

I think it is an important and a much needed fix to a quirk in our laws. We should pass it as soon as possible. I hope very much it can become a part of the legislation to which it is now a pending amendment.

I thank you very much.

I yield the floor, and I note the absence of a quorum.

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