(Katten Muchin Rosenman LLP)
One of the more controversial bills brewing in Congress is the Foreign Manufacturers Legal Accountability Act of 2010. Although a variation of this bill was introduced in the Senate Finance Committee last year, it received little attention. Just last month, however, a House version of the bill passed the Subcommittee on Commerce, Trade, and Consumer Protection, and many trade experts are now predicting that the bill will pass.
The Act was developed in response to reports of defective Chinese drywall that damaged houses and sickened people, and the uproar that resulted upon finding that the Chinese manufacturers could not be held accountable under U.S. law for the defective products. It would require foreign manufacturers of “covered products” to designate a registered U.S. agent to receive service of process on behalf of the company. This, in essence, would allow foreign manufacturers to be sued in the United States for any civil action related to those covered products. The law would also prohibit any person from importing covered products from manufacturers who do not have registered agents in the United States.
The products that would be covered under the act consist of those that are regulated by the Food and Drug Administration, the Consumer Product Safety Commission, the Environmental Protection Agency and the National Highway Traffic Safety Administration. This includes – among other goods – consumer products, chemical substances, pesticides, cosmetics and motor vehicles. The law also extends to component parts of these products. Read more here.