Posted on Monday, June 29, 2009
WASHINGTON — Chinese manufacturers made more than half of the goods that the U.S. Consumer Product Safety Commission recalled last year, but few of them paid any price for producing defective wares.
The long list of faulty products included Chinese-made highchairs whose seat backs failed, steam cleaners that burned their users, bikes whose front-wheel forks broke, saunas that overheated, illuminated exit signs that stopped working when commercial power failed, dune buggies whose seat belts broke on impact and coffee makers that overheated and started fires.
It also included loosely knotted soccer goal nets that entrapped and strangled a child and a toy chest whose poorly supported lid fell on a toddler's neck and killed him, according to CPSC filings.
The difficulty in recovering damages is a lesson that U.S. homeowners who are stuck with defective and possibly toxic Chinese drywall are likely to learn in the coming months. Builders installed the drywall in 2004-5 when the home building boom outstripped U.S. drywall supplies. The CPSC and the Environmental Protection Agency are investigating the consequences.
While everyone involved is likely to be sued — installers, contractors, distributors, importers and Chinese manufacturers — the last are the hardest to reach by far.
For starters, suing a Chinese company in a Chinese court isn't a good idea for most American plaintiffs, said Michael Lyle, a seasoned international lawyer. "It's like suing Michael Jordan in Chicago."
Yet many Chinese manufacturers also evade trial in the U.S. simply by persuading judges that their companies had no substantial business presence in the states in which they've been sued. That's not hard for Chinese manufacturers, which typically rely on independent importers to sell to the American market.
A Senate Judiciary subcommittee is considering measures to make that defense — which has been invoked in scores of product liability suits — more difficult. For now, however, it's so effective that many U.S. tort lawyers won't take cases against Chinese products unless there are American co-defendants. Further, if the U.S. defendants are forced to pay up, the likelihood of their successfully suing the Chinese manufacturers is as distant as the customers'.
Lyle — the managing partner of the Washington office of the New York firm Weil, Gotshal & Manges — and other international lawyers say the larger problem is that the growth of globalized trade has outrun the legal systems that were created to check its excesses.
"It's in the nature of economic development that systems of remedy develop out of the need to fix what's gone wrong, so they develop more slowly," said Charles Toy, the manager of a Washington-based international private-equity fund who once practiced law in Hong Kong and Beijing.
That's no comfort to American defendants who must accept court judgments that Chinese manufacturers can flout.
More:
http://www.mcclatchydc.com/homepage/story/70986.htmlThis is one of those "no shit" headlines.
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