Statements on Introduced Bills and Joint Resolutions
Floor Speech
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Mr. WHITEHOUSE. Mr. President, I rise to speak in support of the Foreign Manufacturers Legal Accountability Act of 2011, which I am introducing today with Senator SESSIONS, Senator DURBIN, Senator GRAHAM, Senator LEAHY, Senator FEINSTEIN, Senator NELSON of Florida, Senator BENNET, Senator MCCASKILL, and Senator PRYOR.
This bipartisan bill is an important step in protecting American consumers and businesses from injuries caused by defective products manufactured outside the United States. Those products hurt American consumers--they lead to serious injuries, and even death--and they hurt the American businesses that must deal with angry customers, product recalls, and unusable inventory.
The list of recent examples of Americans injured by defective foreign products is shocking. Sadly, the situation is no better than when we first introduced this legislation in 2009. A recent rash of cases involving children's toys is particularly chilling because children are so susceptible to the effects of defective products, and because there is no worse nightmare as a parent than seeing harm befall your child, particularly when that harm is preventable.
The following are just a few of the many examples of defective and dangerous toys and children's products that are being sold to unknowing parents:
On October 27, the Consumer Product Safety Commission announced a settlement with a foreign toy maker because a line of its craft kits contained beads that were, unbelievably, coated with the chemical GHB, also known as ``the date-rape drug.'' Children who swallowed the beads became comatose, developed respiratory depression, or had seizures. Over 4.2 million of these toys were sold.
A week earlier, a line of wooden peg toys made by a foreign manufacturer were recalled for having small parts that could choke toddlers.
Earlier this year, there was a recall of jewelry marketed to children 12 years old and under because it contained cadmium, which can cause cancer. The cadmium levels in these products were as high as 2,300 times the legal limit in California, where the jewelry was distributed.
Foreign toys have been found to contain dangerous levels of lead. In 2007, a major toy company was forced to recall 18.6 million foreign-made toys for containing lead or dangerous magnets. The same year, another major company had to recall more than 1.6 million foreign-made toys for containing lead. In 2006, a foreign-made, lead-tainted charm bracelet claimed the life of a 4-year-old. The autopsy demonstrated that the charm was 99 percent lead, 1,650 times more than the 0.06 percent lead limit specified in enforcement guidelines for children's jewelry.
However, it is not just toys and other children's products that pose risks. In 2008, a contaminated blood thinner from a foreign manufacturer caused severe medical reactions and contributed to numerous deaths. Imported food products from seafood to honey have been contaminated with unthinkable chemicals, including veterinary drugs banned in domestic production, potentially harmful antibiotics, and unapproved food additives. Tens of millions of packages of pet food contaminated with tainted wheat gluten have been recalled. Substandard tires have failed, leading to fatalities. Defective drywall imported from China has been found to contain excessively high levels of sulfur, causing houses to smell like rotten eggs, corroding copper wiring, making expensive appliances fail, causing respiratory an other health problems, and making homes unlivable. Thousands of homes have been affected. I am very pleased that tomorrow Senator PRYOR will chair an important hearing of the Commerce Committee Subcommittee on Consumer Protection, Product Safety, and Insurance, focusing on this contaminated drywall, and its awful consequences.
At a hearing that I chaired in 2009, the Senate Judiciary Committee Subcommittee on Administrative Oversight and the Courts explored the legal hurdles facing consumers who are injured by defective foreign products and by businesses that find that their foreign partners refuse to honor their contracts. These hurdles allow foreign manufacturers to injure American businesses and consumers with impunity. They also put American manufacturers at a competitive disadvantage since they allow foreign manufacturers to offer cheaper products that do not comply with American safety requirements.
Two major hurdles to proper accountability are the inability to serve process on the foreign manufacturer and the ability of that foreign manufacturer, even if served, to evade the jurisdiction of American courts. Legislation to address these issues is both necessary and appropriate. The Foreign Manufacturers Legal Accountability Act addresses both concerns.
The first problem, the inability to serve process on a manufacturer, essentially means that it is difficult for an American to give a foreign manufacturer the legally required notice that it is the subject of a lawsuit. This sounds like a simple step, and it should be. Unfortunately, however, it is very hard to serve process on foreign companies abroad. Service abroad is complicated by the Hague Convention on the Service Abroad of Judicial and Extra Judicial Documents in Civil and Commercial Matters, to which the United States is a signatory. Under that convention, 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 cause months and even years of delay, not to mention great expense for Americans.
The Foreign Manufacturers Legal Accountability Act will allow Americans to overcome that procedural hurdle by serving legal papers inside the United States on registered agents of foreign manufacturers. The bill requires the heads of Federal Government agencies such as the Food and Drug Administration to pass regulations requiring that foreign manufacturers of products regulated by their agencies register an agent who will accept service of process. It allows regulators to exclude manufacturers who only import a minimal amount of products into the United States. It imposes a minimal burden on foreign manufacturers, since they would only have to appoint one agent to accept service of process for all State and Federal regulatory and civil actions anywhere in the United States. The bill allows the manufacturer to choose any location for that agent with a ``substantial connection to the importation, distribution, or sale'' of their products. This clear and straightforward system will allow Americans to commence their lawsuits fairly and promptly, and ensure that foreign manufacturers have proper and fair notice of the proceedings brought against them. It will not conflict with American obligations under the Hague convention, since that convention applies to service of process on foreign manufacturers in their home countries, not in the United States.
The second hurdle, the inability to establish personal jurisdiction over foreign manufacturers, can end a lawsuit against a foreign manufacturer before it even begins. Think about how unfair this is. A foreign manufacturer sells its defective products in the United States, injures American consumers and businesses, and then argues that it is not subject to the courts in the state where the American was injured--in legal parlance, that the courts do not have personal jurisdiction over it. Foreign manufacturers raise this technical legal defense to avoid liability even when serious injuries or even death have been caused by their products--their defective tires, fireworks, exercise equipment, bikes, and toys.
The Foreign Manufacturers Legal Accountability Act will enable injured Americans to surmount this hurdle. It will make clear to foreign manufacturers that by importing their products into the United States and by registering an agent in the United States, they are consenting to the jurisdiction of the courts in the state where their agent is located. By consenting to jurisdiction, the manufacturers will be unable to engage in unnecessary and expensive legislation about technical legal issues and allow courts to settle the merits of disputes. This approach is fair to foreign manufacturers since all American manufacturers are subject to the jurisdiction of the courts of at least one state. This bill therefore complies with the trade principle that we should not subject foreign manufacturers to burdens not already imposed on domestic manufacturers.
Indeed, the Foreign Manufacturers Legal Accountability Act is ultimately about fairness. We all know American manufacturers comply with regulations that ensure the safety of American consumers and businesses. When they fail to do so, they must answer to regulators and are held accountable through the American tort system. Unfortunately, foreign manufacturers are not being held to the same standards--injuring American consumers and businesses, and putting American manufacturers at a competitive disadvantage. We must level the playing field for all manufacturers and provide justice for American consumers and businesses. The Foreign Manufacturers Legal Accountability Act will allow us to make a major step in that direction. It covers major product categories including consumer goods, drugs, cosmetics, and chemicals, and it requires relevant agencies to study workable approaches to ensure that foreign food producers also are brought within the ambit of the American legal system.
Because of its benefits to consumers, this legislation has the support of several leading consumer groups, including Consumers Union, Consumer Federation of America, U.S. PIRG, and the National Association of Consumer Advocates.
Protecting Americans and holding foreign manufacturers accountable when their products harm American consumers and businesses is a bipartisan issue. Everyone agrees that we should do what we can to keep Americans safe from defective products. So too, I think, do we all agree that American companies should not be at a competitive disadvantage to their foreign counterparts. The Foreign Manufacturers Legal Accountability Act builds on those fundamental agreements. I am grateful to my colleague Senator SESSIONS, and the bill's other cosponsors, for their hard work on this bill. I know that they all feel the impacts of harmful, defective foreign products in their home states, just as we feel it in Rhode Island.
I look forward to working with my colleagues on both sides of the aisle to see this important legislation passed into law.
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