[House Hearing, 110 Congress]
[From the U.S. Government Publishing Office]
PROTECTING THE PLAYROOM: HOLDING FOREIGN MANUFACTURERS ACCOUNTABLE FOR
DEFECTIVE PRODUCTS
=======================================================================
HEARING
BEFORE THE
SUBCOMMITTEE ON
COMMERCIAL AND ADMINISTRATIVE LAW
OF THE
COMMITTEE ON THE JUDICIARY
HOUSE OF REPRESENTATIVES
ONE HUNDRED TENTH CONGRESS
FIRST SESSION
__________
NOVEMBER 15, 2007
__________
Serial No. 110-166
__________
Printed for the use of the Committee on the Judiciary
Available via the World Wide Web: http://judiciary.house.gov
U.S. GOVERNMENT PRINTING OFFICE
38-868 PDF WASHINGTON : 2008
----------------------------------------------------------------------
For sale by the Superintendent of Documents, U.S. Government Printing
Office Internet: bookstore.gpo.gov Phone: toll free(866) 512-1800; DC
area (202) 512-1800 Fax: (202) 512-2104 Mail: Stop IDCC,
Washington, DC 20402-0001
COMMITTEE ON THE JUDICIARY
JOHN CONYERS, Jr., Michigan, Chairman
HOWARD L. BERMAN, California LAMAR SMITH, Texas
RICK BOUCHER, Virginia F. JAMES SENSENBRENNER, Jr.,
JERROLD NADLER, New York Wisconsin
ROBERT C. ``BOBBY'' SCOTT, Virginia HOWARD COBLE, North Carolina
MELVIN L. WATT, North Carolina ELTON GALLEGLY, California
ZOE LOFGREN, California BOB GOODLATTE, Virginia
SHEILA JACKSON LEE, Texas STEVE CHABOT, Ohio
MAXINE WATERS, California DANIEL E. LUNGREN, California
WILLIAM D. DELAHUNT, Massachusetts CHRIS CANNON, Utah
ROBERT WEXLER, Florida RIC KELLER, Florida
LINDA T. SANCHEZ, California DARRELL ISSA, California
STEVE COHEN, Tennessee MIKE PENCE, Indiana
HANK JOHNSON, Georgia J. RANDY FORBES, Virginia
BETTY SUTTON, Ohio STEVE KING, Iowa
LUIS V. GUTIERREZ, Illinois TOM FEENEY, Florida
BRAD SHERMAN, California TRENT FRANKS, Arizona
TAMMY BALDWIN, Wisconsin LOUIE GOHMERT, Texas
ANTHONY D. WEINER, New York JIM JORDAN, Ohio
ADAM B. SCHIFF, California
ARTUR DAVIS, Alabama
DEBBIE WASSERMAN SCHULTZ, Florida
KEITH ELLISON, Minnesota
Perry Apelbaum, Staff Director and Chief Counsel
Joseph Gibson, Minority Chief Counsel
------
Subcommittee on Commercial and Administrative Law
LINDA T. SANCHEZ, California, Chairwoman
JOHN CONYERS, Jr., Michigan CHRIS CANNON, Utah
HANK JOHNSON, Georgia JIM JORDAN, Ohio
ZOE LOFGREN, California RIC KELLER, Florida
WILLIAM D. DELAHUNT, Massachusetts TOM FEENEY, Florida
MELVIN L. WATT, North Carolina TRENT FRANKS, Arizona
STEVE COHEN, Tennessee
Michone Johnson, Chief Counsel
Daniel Flores, Minority Counsel
C O N T E N T S
----------
NOVEMBER 15, 2007
Page
OPENING STATEMENT
The Honorable Linda T. Sanchez, a Representative in Congress from
the State of California, and Chairwoman, Subcommittee on
Commercial and Administrative Law.............................. 1
The Honorable Chris Cannon, a Representative in Congress from the
State of Utah, and Ranking Member, Subcommittee on Commercial
and Administrative Law......................................... 2
WITNESSES
Mr. Thomas L. Gowen, The Locks Law Firm, Philadelphia, PA
Oral Testimony................................................. 5
Prepared Statement............................................. 8
Mr. Victor E. Schwartz, Shook, Hardy and Bacon, LLP, Washington,
DC, on behalf of the Institute for Legal Reform, U.S. Chamber
of Commerce
Oral Testimony................................................. 17
Prepared Statement............................................. 19
Ms. Pamela Gilbert, Cuneo, Gilbert and Laduca, LLP, Washington,
DC
Oral Testimony................................................. 23
Prepared Statement............................................. 24
Mr. Andrew F. Popper, American University, Washington College of
Law, Washington, DC
Oral Testimony................................................. 27
Prepared Statement............................................. 30
LETTERS, STATEMENTS, ETC., SUBMITTED FOR THE HEARING
Prepared Statement of the Honorable Steve Cohen, a Representative
in Congress from the State of Tennessee, and Member,
Subcommittee on Commercial and Administrative Law.............. 4
Article entitled ``AGs Gone Wild,'' from The Wall Street Journal
dated Tuesday, November 13, 2007, submitted by the Honorable
Chris Cannon, a Representative in Congress from the State of
Utah, and Ranking Member, Subcommittee on Commercial and
Administrative Law............................................. 66
APPENDIX
Material Submitted for the Hearing Record
Responses from Thomas L. Gowen, The Locks Law Firm, Philadelphia,
PA, to Post-Hearing Questions from the Honorable Linda T.
Sanchez, a Representative in Congress from the State of
California, and Chairwoman, Subcommittee on Commercial and
Administrative Law............................................. 72
Responses from Victor E. Schwartz, Shook, Hardy and Bacon, LLP,
Washington, DC, to Post-Hearing Questions from the Honorable
Linda T. Sanchez, a Representative in Congress from the State
of California, and Chairwoman, Subcommittee on Commercial and
Administrative Law............................................. 74
Responses from Pamela Gilbert, Cuneo, Gilbert and Laduca, LLP,
Washington, DC, to Post-Hearing Questions from the Honorable
Linda T. Sanchez, a Representative in Congress from the State
of California, and Chairwoman, Subcommittee on Commercial and
Administrative Law............................................. 77
Responses from Andrew F. Popper, American University, Washington
College of Law, Washington, DC, to Post-Hearing Questions from
the Honorable Linda T. Sanchez, a Representative in Congress
from the State of California, and Chairwoman, Subcommittee on
Commercial and Administrative Law.............................. 80
PROTECTING THE PLAYROOM: HOLDING FOREIGN MANUFACTURERS ACCOUNTABLE FOR
DEFECTIVE PRODUCTS
----------
THURSDAY, NOVEMBER 15, 2007
House of Representatives,
Subcommittee on Commercial
and Administrative Law,
Committee on the Judiciary,
Washington, DC.
The Subcommittee met, pursuant to notice, at 9:43 a.m., in
Room 2141, Rayburn House Office Building, the Honorable Linda
Sanchez (Chairwoman of the Subcommittee) presiding.
Present: Representatives Sanchez, Johnson, Lofgren, Cannon,
and Franks.
Staff present: Eric Tamarkin, Majority Counsel; Paul
Taylor, Minority Counsel; and Adam Russell, Professional Staff
Member.
Ms. Sanchez. This hearing of the Committee on the Judiciary
Subcommittee on Commercial and Administrative Law will now come
to order.
I will now recognize myself for a short statement.
From the millions of toys recalled because of lead paint,
to last week's recall of Aqua Dots, a popular Chinese-made toy
which converts into a dangerous date-rape drug when eaten, it
has become increasingly clear that playrooms across the country
are in danger. There is a growing business trend of sacrificing
safety standards and quality for slightly cheaper imported
products.
While defective foreign-manufactured products entering into
the U.S. is not a new phenomenon, I have been alarmed by the
recent flow that is flooding our marketplace. Unfortunately,
the Consumer Product Safety Commission, which is tasked with
protecting consumers from harmful and dangerous products,
appears to have done little to curb the flow of these
problematic imports. In fact, the CPSC has actually cut its
total staff by 55 percent and its budget by 49.4 percent since
it was created in 1974. It now has fewer than 100 inspectors
and investigators nationwide.
Even more troubling was the recent release of records
showing that CPSC employees have accepted a large number of
trips financed by industries the commission is mandated to
regulate, calling into question its independence. I look
forward to hearing from Pam Gilbert, former executive director
of the CPSC, on how the commission can more effectively do its
job.
Given the increase of imported products that do not meet
U.S. standards for health, safety and quality and the fact that
the CPSC has been largely ineffective in preventing the
importation of defective products, consumers are left with
little protection. When consumers are harmed by foreign-made
products, current law leaves them little recourse in receiving
compensation from a foreign manufacturer.
Consumers seeking to hold foreign manufacturers accountable
face a number of daunting barriers. First, a consumer must
establish personal jurisdiction, an increasingly difficult task
given the uncertainty of the law. A consumer must then navigate
the complex service of process requirements when serving a
manufacturer in a foreign country. This may include translating
materials into the language of that country. Finally, even if
the consumer succeeds in having the matter heard and winning a
favorable judgment, collecting compensation may be difficult as
most countries resist enforcing U.S. judgments.
I look forward to hearing from our witnesses on how we can
ensure that foreign manufacturers are held accountable for
injuries consumers suffer as a result of defective products. As
the holiday season comes upon us, we must do what we can to
make certain it is both joyful and safe.
Accordingly, I very much look forward to today's hearing
and to receiving the testimony from all our witnesses.
I will at this time now recognize my colleague, Mr. Cannon,
the distinguished Ranking Member of the Subcommittee, for his
opening remarks.
Mr. Cannon. Thank you, Madam Chair.
The American tort system is nothing to be proud of. As
Lawrence McQuillan, director of business and economic studies
at the Pacific Research Institute, recently concluded,
``America's tort system imposes a total cost on the U.S.
economy of $865 billion per year. This constitutes an annual
tort tax of $9,827 on a family of four. It is equivalent to the
total annual output of all six New England states or the yearly
sales of the entire U.S. restaurant industry.'' These costs
hurt domestic American jobs and businesses, and much of these
costs are imposed on American wholesalers and distributors.
In the United States, any seller of a product--not just the
original manufacturer--is liable for damages caused by a
defective product under the legal doctrine of strict tort
liability. The fact that a wholesaler-distributor did not
create the defect or did not participate in the design or
production of the product or did not author the product
instructions or warnings is no defense under current law. This
often results in great unfairness, and efforts to aggravate
that unfairness would simply increase the unjustified costs
already imposed on American companies.
Normally, a wholesaler-distributor in a U.S. product
liability suit will bring the manufacturer of the defective
product into the case as a defendant, if the plaintiff has not
already done so, and claim indemnity from the manufacturer as
the faulty party. However, this may not always be successful,
especially when the product is made by a foreign supplier
If the foreign supplier does not have a legal presence in
the United States, such as a U.S. subsidiary, a U.S. plant or
other offices, or has not agreed by contract to be subject to
the jurisdiction of the U.S. courts, the wholesaler-distributor
often cannot obtain jurisdiction over the foreign supplier in
America. The wholesaler-distributor may still claim indemnity
from the foreign supplier, but it will have to do so in a
distant, overseas court system that may not yield reliable
compensation.
One prime impediment American courts face when seeking to
assert jurisdiction over foreign corporations is the
Constitution itself, which cannot be amended through simple
legislation. Under the due process clause, as interpreted by
the Supreme Court, a foreign corporation that has its principal
place of business overseas, engages in little or no economic
activity inside the United States and does not otherwise
subject itself to the jurisdiction of the United States cannot
be subject to the jurisdiction of the various state courts.
These problems for domestic distributors have been brought
to the fore by a recent spate of problems with defective
products whose defects may be traced to Chinese or other
foreign sources.
Tort reform advocates, such as Victor Schwartz, who is a
witness before us today, have proposed that Congress consider
requiring that substantial suppliers be required to post a bond
or appoint an agent for service of process before they can
enter into transactions in which their component parts are
distributed in the U.S. Such proposals could help ensure that
money from foreign manufacturers is available to compensate
those injured by foreign component parts in the U.S. and also
allow such foreign companies to be subject to the service of
process in the United States so Americans courts can assert
jurisdiction over them.
Unfortunately, however, legislative proposals that have
been introduced to address this issue have tended to focus on
misguided attempts to amend the rules governing the Consumer
Product Safety Commission in a way that threatens more
litigation, but less actual enforcement of product safety
issues. As The Wall Street Journal editorialized just last
week, ``Just in time for toy season, Congress is promoting new
legislation to crack down on companies selling products said to
be defective or dangerous. A Senate bill would empower all 50
State attorneys general to effectively run their own consumer
product safety adjuncts, deciding what constitutes a safety
defect and making their own judgments about appropriate
remedies.
``The result could be a jigsaw system of conflicting
standards across the country. You can see where this is going:
banned-in-Michigan toys being smuggled across the border into
Indiana and so on. And without a consistent national standard,
small businesses would be particularly hard hit, lacking
resources to monitor the evolving rules nationwide, all of this
happening at a time when the appetite for business self-
policing is strong. Businesses have every incentive to clean up
their acts, given the costly damage to their brand equity from
news stories about tainted toys.''
I look forward to hearing from all of our witnesses today,
but I hope we can all agree on at least one thing at the outset
of this debate, and that is that no attempt to amend the tort
liability system in America should increase the burdens the
current out-of-control lawsuit industry already imposes on
American jobs and businesses, especially small businesses.
I thank you, Madam Chair, and I yield back.
Ms. Sanchez. I thank the gentleman for his statement.
Without objection, all Members will be allowed to enter
their opening statements in the record.
[The prepared statement of Mr. Cohen follows:]
Prepared Statement of the Honorable Steve Cohen, a Representative in
Congress from the State of Tennessee, and Member, Subcommittee on
Commercial and Administrative Law
Last year, half of all the products that the Consumer Product
Safety Commission recalled were made in China, and 80% of all products
recalled this year were made in China. Among the Chinese-made products
recalled were toys containing high levels of lead and tainted pet food
that has lead to the serious illness or death of beloved animal
companions. The recent discovery of tainted foreign-made products
raises several concerns. One concern is whether the Consumer Product
Safety Commission, the federal agency charged with protecting the
American consumer from such tainted products, has been adequately doing
its job. Another concern is whether Congress can provide for a private
cause of action for any consumer that has been injured by a tainted
product made by a foreign manufacturer. I look forward to considering
the suggestions of our witnesses as to how we can protect consumers and
hold foreign manufacturers accountable for introducing defective
products into the American marketplace.
Ms. Sanchez. And without objection, the Chair will be
authorized to declare a recess of the hearing at any point.
I am now pleased to introduce the witnesses for today's
hearing.
Our first witness is Thomas Gowen. Mr. Gowen is special
counsel to the Locks Law Firm. His practice is concentrated
primarily in the areas of complex personal injury and civil
litigation, and he has represented numerous clients in products
liability, head injury, construction litigation, medical
malpractice and automobile litigation.
Mr. Gowen is a member of the faculty of the National
College of Advocacy and a past chairman of the Montgomery Bar
Association continuing legal education committee. He has
published legal articles in Am Jur Trials, a Guide for Legal
Assistance by the Practicing Law Institute, the Barrister, the
Pennsylvania Law Journal Reporter and other journals.
We welcome you, Mr. Gowen.
Our second witness is Victor Schwartz. Mr. Schwartz chairs
the Public Policy Group at Shook, Hardy & Bacon. He co-authors
the nation's leading torts casebook, ``Prosser, Wade &
Schwartz's Torts,'' and authors ``Comparative Negligence,'' the
principal text on the subject. Mr. Schwartz also serves as
general counsel to the American Tort Reform Association and co-
chairs the American Legislative Exchange Council's civil
justice task force.
Mr. Schwartz is former dean of the University of Cincinnati
College of Law and currently serves on its board of visitors.
During his academic career, he litigated cases on behalf of
plaintiffs and secured the first punitive damages award of the
Midwest against the manufacturer of a defective product.
Welcome, Mr. Schwartz.
Our third witness is Pamela Gilbert. Ms. Gilbert is a
partner in Cuneo, Gilbert and LaDuca and focuses her practice
on government relations matters. She represents a wide variety
of clients before Congress, the executive branch and regulatory
agencies.
Ms. Gilbert serviced as the executive director of the U.S.
Consumer Product Safety Commission from 1995 until 2001. In
that capacity, she was responsible for the full range of
government management issues and helped persuade Congress and
the Administration to increase funding to the agency by nearly
40 percent.
Ms. Gilbert also served as consumer program director at the
U.S. Public Interest Research Group from 1984 to 1989 where she
specialized in civil justice and consumer protection issues.
She worked for Public Citizen's Congress Watch, one of
Washington's largest consumer advocacy organizations, first as
legislative director and then as executive director.
Welcome, Ms. Gilbert.
Our final witness, which we are glad to see has arrived,
despite the delays caused by the rain, is Andrew Popper who
serves as a professor at American University Washington College
of Law, in Washington, D.C. He teaches administrative law,
government litigation, advanced administrative law and torts
and directs the law school's integrated curriculum project. He
has served as chair of the administrative law section of the
Federal Bar Association and vice chair of the ABA committee on
government relations' section on legal education and admission
to the bar.
Professor Popper is the author of more than 100 published
articles, papers and a number of amicus curiae briefs before
the United States Supreme Court. He has served as consumer
rights advocate and pro bono counsel for the Consumers Union of
America. Prior to his career in legal education, he was a
Federal administrative antitrust prosecutor.
I want to thank you all for your willingness to participate
in today's hearing. Without objection, your written statements
will be placed into the record, and we are going to ask that
you please limit your oral remarks to 5 minutes.
You will note that we have a lighting system that starts
with a green light when you begin your testimony. At 4 minutes,
it will turn yellow to give you a warning that you have a
minute remaining. And then when your time has expired, the
light will turn red. If the light turns red and you are mid-
sentence, we will allow you to finish your final thoughts
before moving on to our next witness.
After each witness has presented his or her testimony,
Subcommittee Members will be permitted to ask questions subject
to the 5-minute limit.
With that, I would now invite Mr. Gowen to proceed with his
testimony.
TESTIMONY OF THOMAS L. GOWEN, THE LOCKS LAW FIRM, PHILADELPHIA,
PA
Mr. Gowen. Thank you, Madam Chairman Sanchez and Mr.
Cannon. Good morning.
As the Chairwoman stated, the problem that we are here
today to discuss is finding remedies to deal with the large
number of imported products that are defective and causing
injury to people in the United States. Our Federal agencies
seem not to have been able to keep up with this large increase
in volume. The tort system, however, can provide an important
private vehicle for the policing of dangerous products that are
injuring people in this country when it is not hampered by
procedure rules as it presently is today.
Presently, foreign manufacturers are able to take advantage
of onerous service of process rules, either under the Hague
Convention, if their country is a signatory, or even worse if
it is not. Once service is achieved--and it takes months and
months oftentimes to get service under the Hague Convention--
the party comes in and raises the minimum contacts defenses
that were set forth in Justice O'Connor's opinion in the Asahi
case. Discovery can be cumbersome, and collection of judgments
can also be very difficult.
One of the problems is that our commercial markets are
designed to be national. The foreign manufacturers sell their
products for sale in the United States and not to any
particular State. The minimum contacts rules are designed for a
State-based court system, such that tests, including whether or
not a product is specifically designed for Pennsylvania or
Maryland or Utah or California, is a factor to be considered,
whether there is an office there, whether there is advertising
specifically there, when, in fact, the products are very rarely
made specifically for any given State and are made for sale in
the United States market.
We should not handicap our consumers by tying them to the
minimum contacts rules of the State courts when, in fact, our
commercial reality reflects that we have a national market.
The Supreme Court in Asahi, although the plurality opinion
did establish many of the factors that are raised in case after
case when a foreign manufacturer is brought in, did
specifically note that Congress could legislate to create a
standard of national contacts for the standard of minimum
contacts, and I would encourage that Congress should consider
doing so because it would bring our justice system into line
with the commercial reality of our markets.
I have dealt over the years with multiple cases involving
foreign manufacturers and have seen that they arise in several
different contexts.
The first context is when there is a brand name, such as on
a tire. I had a case with Fate S.A.I.C.I., the largest tire
manufacturer from Argentina. They were able to be identified
and served through the Hague Convention, but, again, came in
after many months to get service and raised all of the Asahi
defenses claiming that they had only imported 8,000 tires
through the Port of Baltimore which were then sold in Maryland
where our client was injured.
Secondly, you have products that are made for the
proprietary names of many retailers, such as Sears, Wal-Mart,
Target, and it is often difficult to find out even who this
manufacturer is until the lawsuit is well underway and the
information can be provided by the defendant retailer. It is
important to have the retailer in the case for that reason so
that that information can be provided hopefully on a timely
basis so the statute does not run.
The third context that I have seen--and this leaves aside
the component part one which is an entirely different issue--is
where a product is sold to a large marketer or retailer, such
as the Easy Pull Stomach Trimmer that I attached to my
testimony, where two million units were imported to the United
States through seven different importers who could not identify
the manufacturer, but they knew that it was made in China. I
think there is a solution to this problem.
The first solution is for Congress to legislate that the
standards should be consistent with the due process clause,
should be a national standard of contacts rather than the
artificial State standards that are presently considered by the
courts.
Secondly, I think that Congress should legislate that there
be an import license required for all foreign manufacturers who
seek to sell their products in our important market. The
license should require the disclosure of the name and address
of the manufacturer, the product lines and brand names that
they make, appointments of an agent of service of process in
all the States where the product is sold. It should require
consent to jurisdiction of the U.S. courts by accepting the
license and selling products in the United States market, much
like we have required consent to drive on our highways. It
should require insurance in the United States and should
contain a provision that the license will be revoked if a
judgment of the U.S. court is not satisfied.
Finally, the information----
Ms. Sanchez. Mr. Gowen?
Mr. Gowen [continuing]. Should be placed on a searchable
Web site.
[The prepared statement of Mr. Gowen follows:]
Prepared Statement of Thomas L. Gowen
Ms. Sanchez. Thank you very much. I was just about to say
that your time had expired, but you summarized nicely. Thank
you for your testimony.
At this time, I will invite Mr. Schwartz to begin his
testimony.
TESTIMONY OF VICTOR E. SCHWARTZ, SHOOK, HARDY AND BACON, LLP,
WASHINGTON, DC, ON BEHALF OF THE INSTITUTE FOR LEGAL REFORM,
U.S. CHAMBER OF COMMERCE
Mr. Schwartz. Thank you, Madam Chairwoman and Ranking
Member Cannon.
This morning, I am testifying on behalf of the Institute
for Legal Reform of the Chamber of Commerce of the United
States, but the views are my own, and I think that is why I was
invited here. And I am just going to discuss three topics
briefly.
The first, which Mr. Gowen referred to, is the problem of
products coming into the United States that may be defective
and a consumer who has a claim cannot reach that party. This is
unfair in more than one way. We have a tort tax on every
product sold in the United States. In some instances, it is
very substantial, maybe as much as 10 percent.
So, if a company is able to come into the United States and
not be subject to liability, it has an advantage of setting
price that is simply unfair competition. It is coming into a
marketplace without the same cost burdens, and that is not
right.
More severe is the fact that somebody may be seriously
injured by one of these products and, as Mr. Gowen has
suggested, there is no remedy to reach the manufacturers.
I have read the Asahi case. I think there is room in that
case for this body and this Committee to look at alternatives
as to ways to impose a fair tort system on people who sell
substantial amounts of products here. We are talking about toys
where somebody puts the lead in the paint or puts a poison
wrapping around a bead. These are very serious things, and to
allow such parties to totally escape our system is wrong.
Asahi was a plurality opinion. Footnote 5 in the opinion
which Mr. Gowen referred to provides a good menu for Congress
to look at it. This is not fair.
I am going to very briefly talk about the tort system a
little bit and what Congress has done because some have
suggested that some way to cure this is to expand liability for
defendants. That, I think, is a very poor idea. When Congress
has stepped into address liability reform, it has limited
liability and had remarkable success.
In 1994, Congress enacted the General Aviation Recovery
Act. That saved an industry. Mr. Glickman was very instrumental
in that--Democratic member--and it was signed by the President;
it was an 18-year statute of repose. I sat in a similar room
and was told if it was enacted, planes would be falling out of
the sky. I was told that safety equipment would not be put on
aircraft. Now we know--it is a little bit later--that the
products that are sold by the General Aviation products--are
safe. Twenty-three thousand new jobs were created. Safety
equipment is on those planes that was never there before.
This Congress also worked on the Biomaterials Access
Assurance Act--that was Mr. Lieberman and Republicans, too--
bipartisan legislation limiting liability of people who
supplied raw materials to medical devices. People who made the
medical devices could not get the raw materials, so a limit was
placed. We were told that this would create mayhem, that people
who made the raw materials would just take largesse and not be
concerned with safety. That has not happened. What has happened
is the medical device manufacturers can get the raw materials.
Very recently, this body enacted the Class Action Fairness
Act. That was needed because some personal injury lawyers were
manipulating the system and bringing interstate commerce cases
into local State courts that were friendly to plaintiffs. That
also has worked. It has not brought about the serious harm to
consumers that was predicted. At the State level, reforms have
also helped reduce the cost of medical liability insurance and
gained access to medicine.
So the idea that somehow civil justice reform does not work
is belied by the facts.
And, finally, I would like to address the Consumer Product
Safety Commission. Pam and I know each other a long time, and
she knows--and it is true--I have always been supportive of the
commission, even before it existed. I wrote a paper when I was
a law professor that said tort law comes in too late, that we
need a strong agency to protect people before they are injured,
and I think it is right that the agency be reauthorized and
there should be a focus on the powers of the agency to catch
defective products at the border, and they should have adequate
personnel and adequate funding to reach that goal.
Unfortunately--and, Madam Chairwoman, you have seen it and
Mr. Cannon has seen it--a good legislation gets waylaid by
things that people put in there that have nothing to do with
the goal, and in the sense----
Ms. Sanchez. That never happens in Congress. Never.
Mr. Schwartz. Well, no, maybe not under your watch, but I
have seen it happen here or there. And that has happened with
this bill in some quarters.
For example, authorizing 51 State attorney generals on
their own to decide how to enforce the CPSC. I was told,
``Well, do not worry about this, Victor, because the CPSC can
intervene and help bring about uniform policy.'' Well, if they
do not have enough people to do their job, I think setting them
up as sort of monitors for State attorney generals is not a
good idea. The CPSC should focus on its purpose.
And I thank you for the time to speak this morning.
[The prepared statement of Mr. Schwartz follows:]
Prepared Statement of Victor E. Schwartz
Ms. Sanchez. Thank very much for your testimony.
Ms. Gilbert?
TESTIMONY OF PAMELA GILBERT, CUNEO,
GILBERT AND LADUCA, LLP, WASHINGTON, DC
Ms. Gilbert. Thank you very much, Chairwoman Sanchez,
Ranking Member Cannon.
I am Pamela Gilbert. I am a law partner in the law firm of
Cuneo, Gilbert & LaDuca. I have been asked to testify today,
however, to share with you some of the insights that I learned
when I was executive director of the Consumer Product Safety
Commission from the very end of 1995 through mid-May 2001. I am
testifying on my own behalf, and all of my opinions are solely
my own.
As the Chairwoman mentioned in the beginning of the
hearing, the summer of 2007 might well be remembered as the
summer of toy recalls. At one point, it seemed that every day
brought new reports of dangers posed by another well-loved toy
that could be lurking in our children's playrooms. The list
included Thomas and Friends trains with unsafe levels of lead,
Easy-Bake Ovens that could entrap and burn children, Polly
Pocket dolls with magnets that could also seriously injure
children if swallowed, and Barbie doll accessories--Barbies, of
all things--with high levels of lead. And this left parents
across the country wondering if any toy they buy will be safe
for their children.
Adding to the public's concern is the fact that just about
all of the recalled toys were manufactured in China, and, in
fact, according to the Toy Industry Association, toys made in
China make up 70 to 80 percent of all the toys sold in the U.S.
Some industry analysts say that only about 10 percent of the
toys sold in the USA are actually made in the USA.
So the question of whether we can hold these foreign
manufacturers accountable for harms caused by the toys is not
merely an interesting academic exercise. It actually is the
heart of the issue.
Accountability is the key to making sure that we provide in
this country the right incentives for manufacturers and other
companies in the stream of commerce to make and sell safer
products. Accountability is also the key to ensuring that
people who are injured by dangerous products can be compensated
and that dangerous products can be removed from the market
quickly.
With such a large percentage of the toys we buy for our
children being manufactured abroad, it is incumbent upon us to
ensure that our system of accountability includes foreign
manufacturers, but where that is not possible, that it also
includes others in the stream of commerce to make sure they can
be held responsible.
Under section 15 of the Consumer Product Safety Act,
companies are required to make reports of hazardous products to
the commission. Section 15 gives the CPSC authority over
manufacturers who are defined to be also importers,
distributors and retailers who discover that one of the
products they sell does not comply with Consumer Product Safety
rules or are otherwise dangerous. Section 15 also authorizes
the commission to order a manufacturer, importer, distributor
or retailer to inform the public of the dangers in their
products and to remove those products from the marketplace and
from people's homes.
And so, for purposes of our discussion today, what is
critical about the scheme that is adopted by this section 15 is
that manufacturers, importers, distributors and retailers are
all equally responsible for notifying the public and the
commission of hazards and conducting a recall, if they are
selling a dangerous product.
The Aqua Dots recall that has already been mentioned today
is a really good example of this, because what happened is
these beads were supposed to be covered with a safe chemical.
Now what happens is you put the beads in water and then they
make an art product, an art and craft. The beads were, in fact,
covered with a toxic chemical that, when ingested, acted like
the date-rape drug GHB, of all things, and a couple of infants
actually went to the hospital, were in a coma, hospitalized for
a number of days after ingesting many of these beads, and it
turns out that the Chinese company or Chinese manufacturer
substituted the unsafe chemical for the safe glue.
What is interesting about Aqua Dots is that the chain of
ownership of Aqua Dots, until it reached U.S. stores, was all
foreign. The manufacturer was an Australian company. The
distributor is a company in Canada. And, of course, the
products were actually physically manufactured in China. Now
the Canadian distributor is the one that voluntarily did the
recall with CPSC.
However, many times, companies are not as cooperative with
the Consumer Product Safety Commission, and, in that case, when
you are dealing with a foreign distributor, it makes it very
difficult, if not impossible in some cases, for the CPSC to
order a recall of that foreign company, and so what you have is
the CPSC, as a last resort, can go after the retailer to make
sure the retailer conducts the recall.
And I would argue that in this world of the global economy
that we have, that that is a very, very critical piece of the
puzzle, and when the Consumer Product Safety Commission cannot
reach the others in the stream of commerce that are foreign
companies, whether it is the manufacturer or the importer or
the distributor, that the buck stops where the retailer is and
that the retailers need to take equal responsibility for
getting these products out of people's homes and for informing
the public of the dangers.
So I will stop there and take your questions.
Thank you.
[The prepared statement of Ms. Gilbert follows:]
Prepared Statement of Pamela Gilbert
Good morning Chairwoman Sanchez, Ranking Member Cannon and members
of the Subcommittee. I am Pamela Gilbert and I am a partner in the law
firm of Cuneo Gilbert & LaDuca. I have been asked to testify today to
share with you insights I gained as executive director of the U.S.
Consumer Product Safety Commission from 1996 through May, 2001. I am
testifying on my own behalf and all the opinions expressed are my own.
Thank you for giving me the opportunity to testify on the
critically important issue of accountability for dangerous products
that are sold in the U.S. but produced by foreign manufacturers.
The summer of 2007 might well be remembered as the summer of the
toy recalls. At one point, it seemed every day brought new reports of
dangers posed by another well-loved toy that could be lurking in our
children's playrooms--Thomas and Friends trains with unsafe levels of
lead; Easy-Bake Ovens that could entrap and burn children; Polly Pocket
dolls with magnets that were dangerous if swallowed or aspirated; and
Barbie doll accessories with high levels of lead. This left parents
wondering if any toy they buy will be safe for their children.
Adding to the public's concern is the fact that just about all of
the recalled toys were manufactured in China. In fact, according to the
Toy Industry Association, toys made in China make up 70 to 80 percent
of the toys sold in the U.S. Some industry analysts estimate that only
about 10 percent of toys sold here are actually made in the U.S.A.
The question of whether we can hold these foreign manufacturers
accountable for harms caused by their toys is not merely an interesting
academic exercise. It is really the heart of the issue. Accountability
is the key to making sure that we are providing the right incentives
for manufacturers and others in the stream of commerce to make and sell
safer products. Accountability is also the key to ensuring that people
who are injured by dangerous products can be compensated and that
dangerous products can be removed from the market quickly. With such a
large percentage of the toys we buy for our children being manufactured
abroad, it is incumbent upon us to ensure that our system of
accountability includes foreign manufacturers, and where that is not
possible, to ensure that others in the stream of commerce can be held
responsible.
It is not my role here today to discuss the difficulties, under
current product liability law, of holding foreign manufacturers
accountable to injured people in the U.S. There are other, more
qualified witnesses to discuss those issues. I am here to explain some
of the obstacles faced by the Consumer Product Safety Commission when
the agency tries to conduct a recall of a product that was manufactured
in China or in another foreign country. I would note, however, that
most of the obstacles that injured individuals face in the product
liability system--obtaining jurisdiction, conducting discovery, and
enforcing judgments--also make it very difficult for the CPSC to carry
out a product recall with a foreign firm.
The Consumer Product Safety Commission is charged with protecting
the public from hazards associated with at least 15,000 different
consumer products, ranging from toys to home appliances to all-terrain
vehicles. CPSC's mission, as set forth in the Consumer Product Safety
Act, is to ``protect the public against unreasonable risks of injury
associated with consumer products.'' CPSC's statutes give the
Commission the authority to set safety standards and work with industry
on voluntary standards, collect death and injury data, educate the
public about product hazards, and ban and recall dangerous products.
My testimony will focus on the authority of the CPSC over firms
that sell defective or dangerous products. As I am sure the
subcommittee is aware, over the years, CPSC's budget has shrunk,
impairing its ability to effectively carry out its mission.
Furthermore, the Commission recently has come under fire for poor
leadership and management. I do not intend, however, to address CPSC's
current difficulties in my testimony, unless I am asked by a member of
the subcommittee.
Section 15 of the Consumer Product Safety Act \1\ requires
companies to make reports of hazardous products to the Commission and
sets forth the procedures for conducting a recall of such products.
Under section 15, manufacturers (defined as a manufacturer or
importer), distributors and retailers who discover that one of the
products they sell does not comply with a consumer product safety rule,
contains a defect which creates a substantial risk of injury to the
public, or creates an unreasonable risk of serious injury or death,
must immediately inform the Commission.
---------------------------------------------------------------------------
\1\ Consumer Product Safety Act, 15 U.S.C. 2064, section 15.
---------------------------------------------------------------------------
In addition, section 15 authorizes the Commission to order the
manufacturer, distributor or retailer to notify the public of the
product hazard and to conduct an appropriate corrective action to
remove the hazard from the marketplace and from people's homes. The
statute allows the manufacturer, distributor or retailer to elect to
repair or replace the product, or offer refunds to the public less an
allowance for use for products more than one year old. These corrective
action plans are commonly referred to as product recalls.
For purposes of our discussion today, what is critical about the
scheme adopted by section 15 is that manufacturers--including
importers--distributors and retailers are equally responsible for
notifying the Commission and the public and conducting a recall when
they sell a dangerous product. To illustrate why this is so important,
and how it may play out in practice, I am going to use a recent recall
as a case study.
Last week, more than four million sets of a children's art product
containing beads called Aqua Dots were recalled in cooperation with the
CPSC. According to the Commission's press release, the sets were
recalled because the coating on the beads that causes the beads to
stick together when water is added contains a chemical that turns toxic
when many are ingested. Children who swallow the beads can become
comatose, develop respiratory depression or have seizures.
Before the recall, the Commission had two reports of serious
injuries from children swallowing the Aqua Dot beads. A 20-month-old
became dizzy and vomited several times before slipping into a comatose
state and being hospitalized after swallowing several dozen beads. A
second child who swallowed the beads also vomited and slipped into a
coma and was hospitalized for five days before recovering.
According to news reports, the beads contained an adhesive solvent
called ``1,4 butylene glycol,'' which can simulate the so-called date-
rape drug gamma hydroxyl butyrate or GHB when ingested, causing
seizures, coma or death. According to the toy's manufacturer, the
problem had been traced to a Chinese factory under contract that
substituted a toxic chemical for a safe glue during manufacturing.
This is not the first time we have heard of a Chinese factory
substituting a harmful chemical for a safe one. In many of the toy
recalls involving unsafe levels of lead, a Chinese factory reportedly
bought and used leaded paint, against the specifications of the U.S.
manufacturer contracting with the Chinese. The question on most
peoples' minds is who is responsible when this happens, and how can we
ensure that these harmful practices stop?
In the Aqua Dot case, the chain of ownership was as follows: The
manufacturer, Moose Enterprise, is a Melbourne, Australia company.
Moose Enterprise produced the product in Chinese factories. The North
American distributor of Aqua Dots is Spin Master, a company based in
Toronto, Canada. All of this means that, until the toys reached stores
in the U.S., they were owned and controlled by foreign firms. This type
of scenario is becoming increasingly common with toys and other
products that are sold here.
In the Aqua Dots case, Spin Master worked cooperatively with the
CPSC to conduct the recall. The company set up a website and an 800
number for consumers to use to get a replacement toy for their
children. As far as I know, the recall is running smoothly.
If Spin Master did not willingly cooperate with the CPSC, however,
this recall could not have happened as quickly or as comprehensively.
When companies refuse to cooperate with CPSC on a product recall, the
agency can order the company to conduct a recall if it proves after a
hearing in accordance with the Administrative Procedures Act that the
product is defective and creates a substantial product hazard or that
it violates the law. The Commission can also go to federal court and
seek an injunction to stop the product from being sold while the
hearing is pending. To take these steps, however, CPSC must have
personal jurisdiction over the company. In practice, CPSC will rarely
pursue an order for a recall against a recalcitrant foreign firm
because of the difficulties of succeeding. CPSC has a very limited
budget. It will only proceed against a firm if there is a good
likelihood of success. When a company is not cooperating, and has
limited assets or presence in the U.S., the Commission will try to find
another way to accomplish the recall.
Even back in 1973, when the Consumer Product Safety Act was
enacted, Congress recognized that there would be situations in which
the only U.S. company involved in selling a product in the U.S. would
be the retailer. Therefore, as I mentioned in the beginning of my
testimony, under section 15 of the CPSA, retailers are equally
responsible for notifying the CPSC when a dangerous product may pose a
risk to the public, and for implementing measures to remove the product
from the marketplace and from people's homes.
As our economy is increasingly global, and goods and services
seemingly have no national boundaries, it is a lynchpin of our product
safety system that retailers remain responsible for ensuring a safe
marketplace.
In general, CPSC calls on retailers to implement a recall only as a
last resort. Usually, a product has only one manufacturer and one
distributor, but many retailers. To carry out an effective and
comprehensive recall through retailers requires agreements with a
number of companies. In addition, depending on how broadly the product
was distributed, it may be impossible to include in the recall every
retailer that sold the product. This is, therefore, not usually the
most efficient or effective method of carrying out a recall. But it is
critical, for the reasons already discussed, that this option be
available to the commission.
In the years since the Consumer Product Safety Act was enacted, the
consumer product industry in the U.S. has changed significantly. It
used to be that retailers were considered to be ``mom and pop'' stores,
selling products produced by much larger companies. Think of Barbie
dolls, manufactured by Mattel, being sold at local ``five and dimes''
in every community in the country. With the advent of the ``big box
stores,'' that scenario has changed substantially.
Now we have Wal-Mart, the largest retailer in the world, which
sells over 20 percent of the toys in the U.S. According to experts, the
top five retailers control almost 60 percent of the U.S. toy market. In
this environment, you can conduct a product recall of a substantial
percent of the market with just a handful of companies.
In addition, these large retailers have greater abilities to
influence the quality and safety of products than ever before.
Therefore, it makes sense to put greater responsibility on these mega-
retailers for ensuring the safety of the products we buy. For example,
many, if not most, of these large retailers have contracts with testing
facilities to test the products they sell. In some instances, they have
their own testing facilities. They should bear responsibility for
ensuring that the products they sell meet consumer product safety
standards, both voluntary and mandatory.
Large retail chains also have increasing market power, which they
can use to make sure the products they sell are safe and high-quality.
If Wal-Mart, for example, stops selling a certain manufacturer's
products because the manufacturer does not have sufficient quality
controls in place, the chances are excellent that the manufacturer will
improve its practices rather than lose Wal-Mart as a customer.
Furthermore, some retailers are increasingly ``cutting out the
middle man.'' That is, they contract with factories in China to
manufacture products and ship them directly to the retailer's
distribution center for delivery to the store. In those cases, the
retailer is the importer. For purposes of the Consumer Product Safety
Act, that means the retailer is also the manufacturer. In those cases,
there is no reason the retailer should not bear all the responsibility
to ensure the safety of the product.
Times have changed. Our economy is global. It is getting
increasingly difficult to ensure the safety of the products on store
shelves and in consumers' homes. The responsibility for safety must be
shared, or there will be gaps in protection. Manufacturers, importers,
distributors, and retailers all must work together to restore the faith
of the public in the safety of the marketplace.
Certainly, there is room for strengthening our laws so that foreign
manufacturers can be held accountable through the U.S. legal and
regulatory systems. But I would argue that the barriers to effectively
holding foreign firms accountable in the U.S. are always going to be
steep, because of distance, language and sovereignty problems. The only
way that we can have effective accountability in our global marketplace
is for all firms in the stream of commerce to be responsible for the
safety of the products they sell and profit from. Regulation must work
that way. Liability must also.
Thank you for the opportunity to testify today. I look forward to
answering your questions.
Ms. Sanchez. All right. We appreciate your testimony. Thank
you so much.
And last, but not least, Professor Popper?
We are not super strict with the time limits. So we have
given everybody a little bit of leeway.
TESTIMONY OF ANDREW F. POPPER, AMERICAN UNIVERSITY, WASHINGTON
COLLEGE OF LAW, WASHINGTON, DC
Mr. Popper. Chairwoman Sanchez, Ranking Member Cannon,
thank you very much for inviting me. I apologize for my delay
in getting here. There were tort reformers in the hall, and
they blocked me.
It strikes me as nearly miraculous that the four of us are
in agreement on the basic measure that needs to be taken. I
think we should pause and enjoy the moment because that does
not happen very often in the product liability area.
Ms. Sanchez. Should we order a moment of silence to absorb
that? [Laughter.]
Mr. Popper. I would be happy with a croissant, but silence
is fine.
And out of respect to Professor Schwartz, I want to note
that I have used his fantastic book for as long as I have been
teaching, and there is just nothing like it, and I thought I
would put that on the record.
Ms. Sanchez. So noted.
Mr. Popper. Onto my testimony. Of course foreign
manufacturers and their domestic counterparts should be liable
for the harms they cause when sellers place millions of toys in
the stream of commerce with toxic levels of lead and deadly
drugs and cribs that can strangle children. Of course they have
to be accountable. It is not really much of a question.
I want to first talk a little bit about something on which
Victor and I disagree. Why has this happened? Year after year,
tort reformers have come to this capital and to state houses
demanding relief from the accountability the law required.
They asked for abolition of strict liability. They asked
you to relieve retailers and distributors and component parts
manufacturers of liability. They sought to cap noneconomic
losses. They sought to ratchet up standards for evidence. They
sought to abolish joint and several liability, abolish the
punitive damages and, ultimately, by indirection, neuter the
Consumer Product Safety Commission.
With singular determination, they sought to dismantle a
system that had generated a tough market-based force that
compelled the production of safe products. State legislatures
and occasionally congressional Committees gave in to these
requests, congratulating themselves on how they were leveling
the playing field. In the feeding frenzy that resulted, known
as tort reform, vital market pressures, corrective justice
forces, were diluted.
Stripped of the strong civil justice incentives, free from
coherent regulation, foreign manufacturers and their domestic
distributors put our children at risk. They went with dangerous
products, shiny and cute, but deadly. With the ability to
calculate with precision downstream liability, with many States
abolishing joint and several liability, strict liability and on
and on, what else would you expect?
Against this bleak backdrop, what next?
Well, I am done with the negative part. I think there is a
lot that you can do. The good news is that the backbone of the
tort system, negligence law, has survived the onslaught. The
State court doors are open, and they are open for domestic
distributors and foreign manufacturers who produce the goods
that bring us to the hearing today. Foreign manufacturers are
subject to the jurisdiction of domestic courts if there are
constitutionally sufficient minimum contacts in the forum State
and if the proceeding comports with our notion of fairness,
justice and fair play.
While Asahi requires us to take into account the unique
burdens placed on one who must defend oneself in court, if you
reap the distributional benefits of a product in the network,
Asahi also says you should not be able to escape the
jurisdiction of the courts. Too often, that is exactly what
happens.
The minimum contacts puzzle is not complicated. The more a
foreign manufacturer has domestic facilities, bank accounts,
property, pays taxes, has employees, agents, advertisers,
communicates with consumers, the less minimum the contacts
become.
The problem is that the courts have interpreted both the
plurality and Brennan's opinion in different ways. As the
Eighth Circuit has said repeatedly, there is no one single
interpretation, and that is possibly where you can step in and
where this gets interesting. I am not sure, constitutionally,
that you can change a Supreme Court decision that declares a
Due Process minimum requirement by legislation declaring that
Justice Brennan was correct. I do think that the Supreme Court
opinion left it wide open for you to adopt a national effects
test to secure personal jurisdiction, discussed by all members
of this panel today.
I also think that you can adopt a bond requirement. I can
see no overt impediment to prevent you from creating, as a
condition of importation to that foreign importers post a bond
when they bring products into the United States. By the same
token, I think that you can require foreign importers to
consent to jurisdiction.
Party autonomy has been the heart of our conflict of laws
system and in other systems as well. What is wrong with signing
a statement that says: ``We consent to the jurisdiction of any
State in which our products are sold.'' Once a party actively
consents, I think the matter gets far easier.
It does not mean, however, that once you have jurisdiction
over foreign manufacturers that these cases are going to be
easy. Discovery is difficult when you are dealing with foreign
manufacturers. Blocking statutes, as I mentioned in my
testimony, are a problem. The Hague Convention is an expensive
and unreliable solution in terms of service of process, and the
United States, to be perfectly frank, has not exactly done
things that would allow it to lay claim to comity and support
of foreign courts when it tries to enforce its own judgments.
Let's face it. When you are looking at dangerous product
recalls on the order of 30 million and upward, it is time to
think boldly about how things can be turned around. No more so-
called reforms that cut down consumers at the knees. It is time
at last to facilitate justice, not to impede it.
Thank you very much for the opportunity to testify today.
[The prepared statement of Mr. Popper follows:]
Prepared Statement of Andrew F. Popper
Mr. Johnson. [Presiding.] We will now begin the
questioning, and I will begin by recognizing myself.
Professor Popper, in your written testimony, you suggest
that Congress require foreign manufacturers of consumer goods
to consent to the jurisdiction of any domestic State court in
which their products are sold as a condition of importation.
Please explain further how this could be accomplished.
Mr. Popper. When you are presented with a problem of this
magnitude, you have an opportunity initially to be creative and
thereafter to think in detail. I have to tell you, I am still
in the creative stage, and I think that we all are. There are
problems with NAFTA any time you impose any kind of obstacle to
importation and there are issues that come under our customs
laws, and there are enforcement problems since this is
primarily in the domain of the executive.
All that said, let me give you a simple analogy. When you
buy insurance, in your insurance policy, you consent to the
laws of a particular State and you consent to be part of
compulsory arbitration. We argue about that, whether that is a
good idea for consumers or not, but we have done it for years.
I do not see anything different about doing this with a foreign
importer. When you come in, it is part of the customs statement
you sign, ``I consent to the jurisdiction of any State in which
my products are sold.''
I recognize, sir, that there are complexities to this, but
I think as a starting point, if the States find, as they do,
and the Federal courts affirm, that minimum contacts is a
significant problem, a statement that says by the foreign
manufacturer, ``We consent to the jurisdiction in which our
products are sold,'' would go a long way to solving that.
Mr. Johnson. Thank you, sir.
In your written testimony, you also recommend that Congress
require foreign manufacturers to post a bond in the event goods
they produce prove to be defective, and dangerous. How would
that be accomplished?
Mr. Popper. The same set of considerations would apply
here. I think there is a NAFTA problem. I think you have
executive enforcement problems. This is Customs, Treasury. And
just to be clear, it would not be that they post a bond in the
event their goods are defective, it would be that they post a
bond as a condition of importation. If it turns out that their
goods are defective, then at least an injured consumer has some
recourse through the bond, assuming that they have difficulty
securing minimum contacts or assuming they cannot secure relief
from the foreign manufacturer's distributor.
Let me be clear about something. A domestic distributor or
retailer of a foreign entity is responsible under any
construction of the law that I know if that foreign product
fails and if that foreign entity is unavailable for suit. So
there is that recourse that is out there. We have not talked
about that. It is not really part of the charge of this
hearing, but I would not want that lost today.
Mr. Johnson. All right. Thank you.
Ms. Gilbert, do you think that foreign manufacturers would
comply with safe product standards if they were held
accountable in U.S. courts?
Ms. Gilbert. Yes. I think that that would go a long way
toward helping the accountability problem that we have now. Now
we have these foreign manufacturers or these foreign factories
that really get away scot-free when these problems arise in the
U.S. The U.S. companies are the ones that are conducting the
recalls.
For the most part, the U.S. companies are the ones that are
on the hook if they are sued in a liability lawsuit so that, if
you were to have a longer arm reach out to the foreign
manufacturers and the foreign factories that are causing some
of these problems, then I think that the incentives would be
the right incentives, and then you would ultimately get safer
products and better accountability
Mr. Johnson. Thank you, ma'am.
Mr. Schwartz, H.R. 989, the Innocent Sellers Fairness Act,
would completely immunize sellers from liability except under
limited circumstances. In light of the facts that consumers
currently have a difficult time holding foreign manufacturers
accountable, do you support this legislative approach?
Mr. Schwartz. I support a legislative approach that would
say that a seller or distributor should not be subject to what
is called strict liability, unless the manufacturer is
unavailable for suit. You know, I have been supportive of that
approach. It is the law in 16 States. It has worked very well.
There has been no problem. So it just gets the innocent seller
out of court in situations when the manufacturer is available
for suit and there is jurisdiction over the manufacturer.
So my answer to the question is if that bill reflects that
approach--I do not have that bill in front of me--I have always
been supportive of it.
Mr. Johnson. Thank you, Mr. Schwartz.
My time has expired. I now recognize the Ranking Member of
the Subcommittee, Mr. Cannon, for 5 minutes.
Mr. Cannon. Thank you.
Ms. Gilbert, on October 30, a political newspaper noted
that 75 percent of contributions that come from lawyers and
their lobbyists go to Democrats, and in October of 2004, in an
article in The Nation magazine, you noted that ``tort reform
would help de-fund the Democratic Party.'' Can you please
describe the connection between a system that allows more
lawsuits and more money going to candidates for the Democratic
Party?
Ms. Gilbert. I got everything up until your question. I am
sorry. What was the question?
Mr. Cannon. Can you describe the connection between a
system that allows more lawsuits and increased funding for the
Democratic Party?
Ms. Gilbert. Not very well. It is not my area of expertise.
I do not recall that Nation article.
Mr. Cannon. Let's go back to the----
Ms. Gilbert. It was a long time ago. Did you say it was
1994?
Mr. Cannon. No, 2004.
Ms. Gilbert. Oh, 2004. I do not recall the article or what
the context was, so I cannot really speak to that, and, again,
I am not here to be an expert on the funding of either the
Democratic Party or the Republican Party.
Mr. Cannon. Do you think there is----
Ms. Gilbert. I am personally a very, very strong believer
in a strong civil justice system that places responsibility
where it belongs when there are injuries from unsafe products
or other unsafe activities.
Mr. Cannon. Regardless, 2004 is a long time ago, and who
knows when the discussion happened, if it was an accurate
quote, but do you think that there is a relationship between
tort reforms or the availability of tort actions for lawyers
and contributions for Democrats?
Ms. Gilbert. I do not know. I do not know. Again, it is----
Mr. Cannon. I know.
Ms. Gilbert. It is not my area of----
Mr. Cannon. I know. I think everybody knows.
Ms. Gilbert [continuing]. Expertise, and it is not why I am
here.
Mr. Cannon. The fact is this is a Republic-Democrat issue
in part because the Republicans want a system that works and
makes sense, and the Democrats want to empower lawyers to make
money and suck that out of the system.
I see Mr. Popper is furiously making a note, and I suspect
you would like to respond to that, Mr. Popper.
Mr. Popper. I----
Mr. Cannon. You do not need to. I thought you were
anxiously engaged there.
Mr. Popper. I was just noting what I needed to do after the
hearing.
Mr. Cannon. You leave academia----
Mr. Popper. Pick up the laundry. Go to the cleaner's.
Mr. Cannon. No, we do not mean to be mean. Let me just
say----
Mr. Popper. I am happy to respond just----
Mr. Cannon. I will just use some time, but let me just say
I am not anti-tort. I mean, I have lots of friends that are
lawyers that bring about justice for people in small cases, in
certain cases. It is just that there has to be a balance, and I
think that there is clearly an imbalance both in the
contributions and in the incentives that the different parties
have, and I would love to hear what you have to say about that.
Mr. Popper. Too often tort reform is characterized as an
issue between the Democratic Party and the Republican Party. I
think while sometimes it seems that way on different votes, it
really is not.
The States' rights issue that is at the heart of tort
reform is very much an issue of the Republican Party. I think
there are many, many people in the Republican Party who have
trouble with Congress trying to impose standards on the States.
I think there are many people in the Democratic Party--
Senators Dodd and Lieberman, proposed legislation that would
have declared the tort system compensatory some years ago. As a
consumer advocate, I thought was horrendous.
So I do not think it is quite that clear as a Democrat-
Republican matter. I would just as a final comment regarding
contributions of lawyers to campaigns. I think Ms. Gilbert is
right. That is almost impossible to isolate. People give to
campaigns for all kinds of different reasons. If I ran the zoo,
campaigns would be publicly financed, and we would not be
talking about this.
Mr. Cannon. Thank you. That was a very thoughtful comment.
I appreciate it.
If I had my way, people could contribute anything they
wanted, and we would have disclosure of everything, and I think
that would clean up the cesspool much better than any other
system would, but we are not likely to have that, and that
makes it sort of a zoo, I agree, and it is sometimes hard to
have direct connections in these things because you make good
points about States' rights and that sort of thing, and I am
personally deeply troubled about some of the aspects of tort
reform that go to the prerogatives of States.
Mr. Schwartz, I suspect you could further enlighten us on
the issue----
Mr. Schwartz. Well, not on----
Mr. Cannon [continuing]. Or on anything else that you would
like to respond to that other people have said on the panel
thus far.
Mr. Schwartz. Well, thank you. Since Professor Popper has
graciously said he is a customer of my casebook, I have to
tread lightly on criticizing anything he said. [Laughter.]
But I do not believe and it is really speculation that the
people in China who put lead in paint that would hurt children
were thinking about tort reform in the American system. They
may have thought that they are immune from the reach of our
system of tort law, and that is not good. As I said, there is a
tort tax on products. There is no reason for someone who is
supplying a substantial number of products to this country to
be immunized from our system, and I think it is good that this
body is considering ways to address that.
Professor Popper talked about bonding. I think any remedy
should be isolated to the problem, not everybody who sends
imports, but those who are not really available for suit under
the current system, and there is flexibility in these decisions
to try to address that particular problem.
You have large importers that can be sued here and have
been sued here. That is not the problem. It is those who send a
substantial amount of products into the United States and are
immune from our tort system, and that is, I think, what this
body should look at.
Mr. Cannon. Thank you.
Mr. Johnson. The gentleman's time has expired.
We will now proceed with questions from the gentlewoman
from California, Ms. Lofgren.
Ms. Lofgren. Thank you very much.
And I am glad that this hearing is being held today. This
is, I think, an enormously important issue.
Recently, I was in a department store, and I walked past
the toy aisle, and I saw all of these toys, and I thought I am
so glad that my youngest is 22, and that I do not have to worry
about buying one of these things and whether there is lead on
it and whether it is going to poison my kid. And when you take
a look at parents all over the country thinking about, with
Christmas coming up, whether they are going to injure their
children by their Christmas gifts, it is just a horrendous
situation.
And, you know, I have always supported internationalism,
and I have been supportive of trade issues. It just has to be
noted that most of these defective products seem to be coming
from China, and, you know, how are we going to hold them
accountable? That is what really this is about.
The Ranking Member and I worked together on many things. I
like him. He knows that. And there are things that we agree on.
But I think when it comes to so-called tort reform, for 12
years, the Republican majority pursued efforts so that people
would not be held accountable for hurting people who were
innocent, and now there is a new approach here, which is how do
we hold people accountable?
And part of that is using the court system, the system of
civil justice, where people have to be held accountable for
what they do, and when it comes to foreign entities who are
wrongdoers, no one should want to defend misconduct on the part
of toy manufacturers who are either reckless or--who knows what
the motivation is--that would harm American children. And
noting we had a hearing a couple of weeks ago on a different
subject on the IP Subcommittee where the Customs Department
admitted that when it comes to penalties for careless dumping
and other misconduct, they collect less than 1 percent of
assessed penalties. So that whole system is not functioning
well.
The Consumer Product Safety Commission is not up to task.
We have called for, you know, a complete re-haul of that whole
system, but here is my question, I guess maybe to the professor
or whoever else could answer it, given the fact that most of
what is being imported into the United States is not even
inspected, the Customs Bureau is not actually efficiently even
collecting the fines, it is not clear----
How would we actually administratively get these importers
to consent to jurisdiction? And is there a role in terms of
treaties? Do you think it would be constitutionally permissible
for, for example, the government of China to consent to
jurisdiction on its manufacturers and citizens because it is
really in their long-term interest not for this to happen? I
mean, nobody is going to buy a toy made in China if this
continues. Do you have an opinion on those questions? Any of
you?
Mr. Popper. On the question of consent to jurisdiction,
there is the individual party choice that a foreign
manufacturer can make, and then there are choices that a
country can make to declare that foreign manufacturers are
subject to the jurisdiction of the courts of the United States.
Constitutionally, I do not think that there is any prohibition
on a foreign government doing that.
I mentioned in my statement, however, that this requires
real cooperation and agreement from the executive because when
you are talking about how the customs system functions in the
United States, I do not know that that is something that you
can legislate into efficiency. If----
Ms. Lofgren. Well, certainly, we cannot, and I have a lot
of respect for the line officers trying to do a very tough job,
but it is administratively a complete mess, and I do not have
any hope that under the current Administration that is going to
improve despite the very, you know, diligent efforts of the
officers on the line.
Mr. Popper. This is the one thing that you can have an
effect on: is resources, which really gets, I think, all of us
back to thinking about the CPSC. My alma mater law school and
the law school in which I currently work, in both institutions,
our budget is larger than the budget of the CPSC, which is just
appalling.
Ms. Lofgren. Right. Well, I think, you know, it is
appalling, but if the manufacturers or the government of China
know that they are going to face civilian courts in the United
States--and it is not about lawyers. It is about parents and
their children who have a right to be heard, to have their day
in court and to hold somebody accountable, you know, even the
fact that the government is dysfunctional at this point--that
element could help save the day for American families.
Mr. Popper. I would agree with that.
Ms. Lofgren. My time is expired.
Mr. Chairman, I thank you.
Mr. Johnson. Thank you, Madam.
We will now turn to Congressman Franks from Arizona for 5
minutes.
Mr. Franks. Well, thank you, Mr. Chairman. You are doing a
good job.
Mr. Johnson. Thank you, sir. Your check is in the mail,
sir. [Laughter.]
And you can have an extra 5 minutes.
Mr. Franks. Mr. Chairman, I guess, you know, some of these
esoteric areas of law escape a lot of us, but the one thing
that is paramount in our minds is doing everything we can to
protect the children of this country and, for that matter, in
every country, and you folks have insight into the mechanics
and the process of how these toys are not only manufactured,
but how they get here and under what auspices, what the
protections are, whether it be the Port Authority or legal
remedy might be available.
So I want to ask each of you kind of a straightforward
question. Let me first say that Ms. Lofgren said, you know, no
one will want to buy toys from China if this continues. Now I
am not sure that that is such a bad idea. Maybe the market
itself, if properly informed, would have an economic impact
that would mitigate this quite a lot.
But without trying to color your perspective, I would like
to have each person, starting over here with you, Mr. Gowen, if
it is all right, to just go down the panel and tell me what you
think would be the one thing if you were running the zoo that
you would do to solve this problem. What is the one most
important single thing? You know, in Congress, we actually try,
but sometimes it is hard to stay focused on something that
would really make a difference, and we shoot in a lot of
directions and we do not hit anything of consequence.
So tell me, if you were emperor of the world, what is the
one thing you would do to protect children in this country from
dangerous or faulty toys from other countries or, for that
matter, this one?
Mr. Gowen?
Mr. Gowen. Thank you, Mr. Franks.
I would require all who are importing products into the
United States or exporting to the United States to have an
import license into the United States that would require them
to consent to the jurisdiction of the courts, to have insurance
in this country and to have that license subject to revocation
if the judgment of an American court is not paid, as well as
having an agent for service of process here in this country, to
put them on an equal footing with American companies and to
give American consumers a reasonable remedy in the event that
they are injured.
Mr. Popper. Madam Chairman, that almost sounds reasonable
to me.
Ms. Sanchez. [Presiding.] I am glad we agree on something.
Mr. Franks. Mr. Schwartz?
Mr. Schwartz. I would pinpoint responsibility on suppliers
of products from foreign countries who are currently on an
unequal playing field in our tort system. All of our companies
here are subject to it, including those who send goods here and
have substantial business, but there are ways to address and
pinpoint that responsibility on those companies.
The tort system, when it is fair, can have a deterrent
value, and, right now, they escape that deterrent value, and
that would be a good policeman since we cannot have the borders
staffed with policemen to catch these goods.
Mr. Franks. Thank you, Mr. Schwartz.
Ms. Gilbert?
Ms. Gilbert. I am going to try to cheat and give you two
things.
My second choice would be the import license and the scheme
that Mr. Gowen just laid out.
I would have to say as my first choice, being a devotee of
the Consumer Product Safety Commission, I would triple the
budget of the agency and the size of the agency to address this
problem.
Mr. Franks. Thank you.
Mr. Popper? I am sorry.
Mr. Popper. I think those are all good suggestions. If you
could put together a simple piece of legislation that
incorporated all three, I would certainly be excited about it.
In addition to an import license and focus on the CPSC, I think
that the Supreme Court has invited you to declare that minimum
contacts can be satisfied with a nationwide-effect tes. I think
that is actually fairly easy to do and, arguably would resolve
some of the problems that Asahi created.
Mr. Franks. Well, thank you, Mr. Popper. That is all of the
above.
Mr. Popper. That is all of the above.
Mr. Franks. And I appreciate that.
Mr. Gowen, thank you for starting out with a crisp--I am
going to vote for Mr. Gowen if that is okay with the rest of
you, but I think all of you had good suggestions here.
And I yield back, Mr. Chairman. Thank you. Or Madam Chair.
I am sorry. We had a little switch here.
Ms. Sanchez. Thank you. We pulled the switcheroo on you, so
it is understandable.
And I want to apologize to our witnesses. I dashed out
because I had a concurrent markup in the Ed and Labor Committee
and I was required to vote there.
I understand Mr. Johnson did a very good job chairing the
Committee, although when the Chairwoman leaves, the Committee
goes to hell and he wants to give away an additional 5 minutes
for questioning to each panel member.
I am going to take my round of questions.
Mr. Cannon. The minority would not object if the Chair took
her 5 minutes and we did not go to a second round, by the way.
Ms. Sanchez. Thank you. We will see if there is substantial
interest in the second round of questions, but I am going to do
my first 5 minutes.
Mr. Gowen, in your written testimony, you note that Justice
Sandra Day O'Connor's opinion in Asahi suggested that Congress
could authorize Federal court personal jurisdiction over alien
defendants based on the aggregate of national contacts rather
than on the contacts between defendant and the State where the
Federal court sits. If that were enacted, how would this
proposal impact the ability of injured consumers to hold
manufacturers accountable?
Mr. Gowen. Well, presently, when foreign manufacturers
filed their motions to dismiss, which usually comes shortly
after service is achieved, they raise the factors that Justice
O'Connor suggested as possibilities for looking at the
additional factors beyond placement into the stream of
commerce.
One of those is: Was the product made specifically for
California or Pennsylvania or New Jersey? And I think we know
that very few products are really made specifically for any
State. They are made for our national market.
Secondly, they look at things like: Do they have an office
there? Do they advertise specifically in that State?
Frequently, they work through an intermediary, such as an ad
agency or an importer. So, if we were able to look at a
national standard of minimum contacts instead of saying there
were 8,000 tires sold in Maryland and suppose 500 of those had
been taken to Delaware where the injury occurred, would that
have been enough?
This company that we had the case with there had millions
of tires that were sold into the United States as a whole, and
I think that it would make the process of establishing minimum
contacts much easier?
Ms. Sanchez. Okay. Mr. Schwartz, sort of along the same
line, Justice O'Connor in her opinion suggested that we could
potentially use the aggregate of national contacts, and I
thought I heard you use the term ``substantial business,'' and
I think I heard Professor Popper use the word ``nationwide
effect,'' and I am sort of wondering if they all are fairly
similar or if there are distinctions between any of those
standards that we could potentially use.
Mr. Schwartz. Well, I think that you have two measures
there. Having a national measure is a sound idea that is put in
Footnote 5 of the opinion. But if it was just a mere sprinkling
of sales and not substantial as a whole, that might not satisfy
the Constitution. So I think both elements would be required.
Ms. Sanchez. Okay. And do you have--since you are an author
of a torts book--an idea of what criteria might be used to
establish substantial?
Mr. Schwartz. Well, I have learned from my work not to
draft when one is sitting here----
Ms. Sanchez. We will allow you some----
Mr. Schwartz [continuing]. But I certainly would be pleased
to follow up with this, Chairwoman, on that issue.
Ms. Sanchez. Sure. I appreciate that.
Ms. Gilbert, as you referenced in your written testimony,
the Consumer Product Safety Commission has come under fire for
poor leadership and management, and it is recently reported
that CPSC employees have accepted a large number of trips
financed by industries that the CPSC are mandated to regulate,
which sort of sounds a little icky, to use sort of a
nongovernmental term. What steps do you think that the CPSC
should take in order to overcome those recent problems and to
restore the independence of the commission?
Ms. Gilbert. Well, as I mentioned before, the Consumer
Product Safety Commission needs an infusion of cash, frankly. I
mean, it has been underfunded for decades now, and when I was
there, I used to say that the Pentagon spent CPSC's annual
budget every hour and a half, and I think that that must be a
much shorter period of time now since the Pentagon has gotten
bigger and CPSC has gotten smaller. So I am not arguing that
CPSC should be as big as the Pentagon, but maybe it should be a
little bit larger than 45 minutes worth of the Pentagon to keep
American families and children safe. So, to me, that is the
most important.
And then, secondly, the current leadership of CPSC is,
frankly, quite sad, and it has saddened those of us who worked
there, and many of the staff who were quite expert and
committed and devoted to that agency who have left out of
frustration, and there are many of them, and so we really do
need new leadership at the commission.
It appears from what has come out in the press--as you
mentioned, the trips--that the current chair and her
predecessor really abuse the privilege. I will admit that when
I was at CPSC, I did approve some industry-funded travel,
mostly for staff, for the technical or legal compliance staff
of the agency for product safety work, for specific product
safety work that we did not have the budget for, but we did not
have chairs and commissioners flying around to this resort and
that golfing, you know, excursion on the dime of the industry,
and that really does need to stop.
Ms. Sanchez. Thank you.
My time has expired, but I will beg the indulgence of my
Ranking Member. I think we can finish up without going to a
second round of questions if I could have 2 additional minutes.
Mr. Cannon. I would be happy.
May I just ask unanimous consent to submit for the record
an article in The Wall Street Journal that was printed on
Tuesday, November 13 called AGs Gone Wild?
Ms. Sanchez. Without objection.
[The information referred to follows:]
Ms. Sanchez. I have one last question, and I understand
this question has been asked of another witness, but I am
interested in getting Professor Popper's perspective on this.
Somebody asked about the H.R. 989, the Innocent Sellers
Fairness Act, which would completely immunize sellers from
liability, except under very limited circumstances, and in
light of the fact that consumers already have a difficult time
holding foreign manufacturers accountable, do you think that
this is a smart legislative approach to the problem?
Mr. Popper. I think the initial smart answer would be
Victor's, which is without the legislation in front of me, I am
hesitant to comment. But on the general proposition of
relieving retailer sellers of responsibility, I think it is a
terrible idea.
It has been an argument for a long time, and you can
understand why. Most sellers--retailers in particular--do not
design goods, they do not place the warnings, the labels on the
goods, and so therefore to tie them into broad-based stream-of-
commerce liability might seem, at a certain level unfair.
Anticipating that argument, I would say sellers have an
enormous influence on design. If a seller communicates with a
manufacturer that the product is not satisfactory, the product
will not be sold and the design will change. Further sellers
have an affirmative duty to warn, and they are vital to the
stream of commerce, they make a profit from the products they
sell, and they have the capacity to spread loss. They need to
take responsibility for the products they sell. If there is
some kind of global wash that eliminated the liability of
retail sellers, I think that would be a very bad idea.
And, again, it is like a lot of tort reform. It is not that
I am right or Victor is wrong. They are two different points of
view. If I am a small seller, and I am getting products from
abroad, and I hear that they are great products, and I put them
on the shelf, and I sell them, and I had nothing to do with the
design or labeling of them, and then, suddenly, I am tied up in
a lawsuit, of course, I am going to feel it is unjust. But in
the grand scheme of things, we make tradeoffs, and by
legislation, to give that wash to the whole of the selling
community strikes me as bad legislation.
But, again, I do not have the language of that bill in
front of me. I would assume that you have characterized it
correctly, and on that assumption, I would say it is a bad
idea.
Ms. Sanchez. Great. Thank you so much.
Mr. Schwartz. Madam Chairman?
Ms. Sanchez. Yes?
Mr. Schwartz. You were at another Committee when I was
asked that question, so I will just very briefly mention my
answer.
Ms. Sanchez. Certainly.
Mr. Schwartz. Most of the bills that have taken the product
seller issue on work like this. It relieves the product seller
of strict liability. So, if they are selling a steam-and-dry
iron and something is wrong with it and it is in a box and they
do not know about it, they are not subject to liability. In the
laws that have been enacted in the 16 States, it has worked
well--not one of them has been repealed. No one has tried to
repeal them. They have been law for 20, 25 years--they are
subject to liability if the manufacturer cannot be reached by
judicial process.
So, in the problem that we are talking about today, if the
foreign manufacturer could not be reached, the retailer or
wholesaler would be subject to liability. But it does cut legal
costs. You are not bringing them in in every single case.
And what sometimes happens is that a plaintiff's lawyer, a
good one, who wants to sue a manufacturer but wants to be in a
State court, will name the retailer, not for the purposes of
suing them at all, but just to get jurisdiction into a State
court because then--I may be getting too legal here--the
plaintiff and defendant are from the same State, and the
Federal court cannot take jurisdiction. So that is the reason
for that particular reform.
I would want to review the bill and then have an
opportunity to give you my views in writing about it.
Ms. Sanchez. Sure. I do not want to mischaracterize your
testimony, but you agree that if somebody is in that chain of
commerce and we do not have the ability to reach the
manufacturer, that they do bear some responsibility and should
be subject to----
Mr. Schwartz. If you do not strand the complainant.
Ms. Sanchez. The consumer. The complainant.
Mr. Schwartz. But product seller reform legislation has
worked, and also----
Ms. Sanchez. Would you----
Mr. Schwartz [continuing]. A lot of other civil justice
reforms that have been supported by Mr. Cannon have worked.
So----
Ms. Sanchez. But you would also agree, though, that in this
instance--and I think I have heard it in different ways from
everybody here--there is a general sense that, A, it is unfair,
B, it is unsafe for us not to be able to reach the
manufacturers who are the starting point in this process----
Mr. Schwartz. Absolutely. I think that to have people who
are making a substantial profit from dollars spent in this
country to be immune from our tort system is unsound public
policy.
Ms. Sanchez. Thank you very much.
And would everybody agree, if I could just get a verbal on-
the-record answer?
Mr. Gowen?
Mr. Gowen. Yes, I would certainly agree.
Ms. Sanchez. Ms. Gilbert?
Ms. Gilbert. Yes, I agree.
Ms. Sanchez. Professor Popper?
Mr. Popper. I agree as well.
Ms. Sanchez. We are all in agreement.
Mr. Cannon. May I add my voice to this?
Ms. Sanchez. Mr. Cannon? Sure. Feel free.
Well, that wraps up pretty much the hearing for today.
Again, I want to thank all of the witnesses for their
testimony.
Without objection, Members will have 5 legislative days to
submit any additional written questions which we will forward
to the witnesses and ask that you answer as timely as possible
so that we can also include those in the record.
Without objection, the record will remain open for 5
legislative days for the submission of any additional
materials.
Again, I want to thank everybody for their time and their
patience, and this hearing on the Subcommittee on Commercial
and Administrative Law is adjourned.
[Whereupon, at 10:4 a.m., the Subcommittee was adjourned.]
A P P E N D I X
----------
Material Submitted for the Hearing Record
Responses from Thomas L. Gowen, The Locks Law Firm, Philadelphia, PA,
to Post-Hearing Questions from the Honorable Linda T. Sanchez, a
Representative in Congress from the State of California, and
Chairwoman, Subcommittee on Commercial and Administrative Law
Responses from Victor E. Schwartz, Shook, Hardy and Bacon, LLP,
Washington, DC, to Post-Hearing Questions from the Honorable Linda T.
Sanchez, a Representative in Congress from the State of California, and
Chairwoman, Subcommittee on Commercial and Administrative Law
Responses from Pamela Gilbert, Cuneo, Gilbert and Laduca, LLP,
Washington, DC, to Post-Hearing Questions from the Honorable Linda T.
Sanchez, a Representative in Congress from the State of California, and
Chairwoman, Subcommittee on Commercial and Administrative Law
Responses from Andrew F. Popper, American University, Washington
College of Law, Washington, DC, to Post-Hearing Questions from the
Honorable Linda T. Sanchez, a Representative in Congress from the State
of California, and Chairwoman, Subcommittee on Commercial and
Administrative Law