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I'm living on a Chinese drywall, the response in Congress

Five months after the Senate version of the legislation came in, Rep. Betty Sutton (D-OH) has introduced H.R. 4678, the Foreign Manufacturers Legal Accountability Act, to require foreign manufacturers of products imported into the United States to establish registered agents in the United States who are authorized to accept service of process against such manufacturers. The bill came in with 30 cosponsors, mostly but not solely Democratic.

The American Association for Justice hailed the new bill in a typically blunderbuss news release, Foreign Manufacturers Account for 83% of 2009 Recalls," but the bill does not automatically draws widespread business opposition. If U.S.-based and multinational businesses with a U.S .presence are going to be paying additional costs because of American litigiousness, then why should purely foreign manufacturers escape the burden?

The companion bill is S. 1606 introduced by Sen. Sheldon Whitehouse (D-RI) last September (news release). Last May, Sen. Whitehouse chaired a Senate Judiciary subcommittee hearing on the issue, "Leveling the Playing Field and Protecting Americans."

Allegedly contaminated drywall imported from China has provided the largest impetus for the legislation. The news seemed to have died down -- as the weather cooled? -- but it's in the headlines again. AP, Feb. 23, "Judge Weighs Damages in Chinese Drywall Case":

NEW ORLEANS (AP) -- A federal judge heard emotional testimony from a group of Virginia homeowners who blame corrosive Chinese drywall for ruining their homes and finances and are seeking more than $2.5 million in damages.

U.S. District Judge Eldon Fallon didn't immediately rule on the plaintiffs' bid for a judgment against Chinese drywall manufacturer Taishan Gypsum Co., which hasn't responded to lawsuits and didn't have a lawyer representing the company for a two-day hearing that ended Monday.

Much related litigating is going on, and conferences on litigating, too.

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Rafael Mangual
Project Manager,
Legal Policy

Manhattan Institute


Published by the Manhattan Institute

The Manhattan Insitute's Center for Legal Policy.