(Brenda Jacobs and Marinn Carlson, Sidley Austin LLP)
Proposed U.S. legislation would require all foreign manufacturers of certain products and product components to consent to be sued in U.S. courts as a condition for their goods to be imported into the United States. The bill, the Foreign Manufacturers Legal Accountability Act, may have significant consequences for foreign manufacturers and any U.S. corporate affiliates, and for U.S. importers – including U.S. manufacturers that source their components overseas.
The FMLAA would require non-U.S. manufacturers of consumer products, cars and auto parts, drugs, medical devices, cosmetics, biological products, chemicals, and pesticides to maintain registered agents in the United States to accept service of process and to consent to the jurisdiction of U.S. state and federal courts for lawsuits related to the products covered by the bill. It would then restrict U.S. imports of covered products to those produced by registered manufacturers, either by requiring importers to certify that goods are being sourced from registered companies, or by banning imports from non-registered companies.
Proponents of the legislation point to recent product safety concerns relating to imported products, such as drywall and toys with lead content, and state that the bill is intended to ensure that U.S. plaintiffs can sue foreign manufacturers for damages for defective products sold in the United States. However, the legislation as currently framed has the potential to lead to unintended consequences, including expanded liability for U.S.-based entities related to foreign manufacturers and onerous new trade hurdles that could slow or impede the entry process for imported products. Opponents also point to risks that U.S. exporters could be subjected to similar requirements in other countries. Read more here.
