[Congressional Record Volume 157, Number 185 (Monday, December 5, 2011)]
[Senate]
[Pages S8186-S8187]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. WHITEHOUSE (for himself, Mr. Sessions, Mr. Durbin, Mr. 
        Graham, Mr. Leahy, Mrs. Feinstein, Mr. Nelson, of Florida, Mr. 
        Bennet, Mrs. McCaskill, and Mr. Pryor):
  S. 1946. A bill to require foreign manufacturers of products imported 
into the United States to establish registered agents in the United 
States who are authorized to accept service of process against such 
manufacturers; to the Committee on Finance.
  Mr. WHITEHOUSE. Mr. President, I rise to speak in support of the 
Foreign Manufacturers Legal Accountability Act of 2011, which I am 
introducing today with Senator Sessions, Senator Durbin, Senator 
Graham, Senator Leahy, Senator Feinstein, Senator Nelson of Florida, 
Senator Bennet, Senator McCaskill, and Senator Pryor.
  This bipartisan bill is an important step in protecting American 
consumers and businesses from injuries caused by defective products 
manufactured outside the United States. Those products hurt American 
consumers--they lead to serious injuries, and even death--and they hurt 
the American businesses that must deal with angry customers, product 
recalls, and unusable inventory.
  The list of recent examples of Americans injured by defective foreign 
products is shocking. Sadly, the situation is no better than when we 
first introduced this legislation in 2009. A recent rash of cases 
involving children's toys is particularly chilling because children are 
so susceptible to the effects of defective products, and because there 
is no worse nightmare as a parent than seeing harm befall your child, 
particularly when that harm is preventable.
  The following are just a few of the many examples of defective and 
dangerous toys and children's products that are being sold to unknowing 
parents:
  On October 27, the Consumer Product Safety Commission announced a 
settlement with a foreign toy maker because a line of its craft kits 
contained beads that were, unbelievably, coated with the chemical GHB, 
also known as ``the date-rape drug.'' Children who swallowed the beads 
became comatose, developed respiratory depression, or had seizures. 
Over 4.2 million of these toys were sold.
  A week earlier, a line of wooden peg toys made by a foreign 
manufacturer were recalled for having small parts that could choke 
toddlers.
  Earlier this year, there was a recall of jewelry marketed to children 
12 years old and under because it contained cadmium, which can cause 
cancer. The cadmium levels in these products were as high as 2,300 
times the legal limit in California, where the jewelry was distributed.
  Foreign toys have been found to contain dangerous levels of lead. In 
2007, a major toy company was forced to recall 18.6 million foreign-
made toys for containing lead or dangerous magnets. The same year, 
another major company had to recall more than 1.6 million foreign-made 
toys for containing lead. In 2006, a foreign-made, lead-tainted charm 
bracelet claimed the life of a 4-year-old. The autopsy demonstrated 
that the charm was 99 percent lead, 1,650 times more than the 0.06 
percent lead limit specified in enforcement guidelines for children's 
jewelry.
  However, it is not just toys and other children's products that pose 
risks. In 2008, a contaminated blood thinner from a foreign 
manufacturer caused severe medical reactions and contributed to 
numerous deaths. Imported food products from seafood to honey have been 
contaminated with unthinkable chemicals, including veterinary drugs 
banned in domestic production, potentially harmful antibiotics, and 
unapproved food additives. Tens of millions of packages of pet food 
contaminated with tainted wheat gluten have been recalled. Substandard 
tires have failed, leading to fatalities. Defective drywall imported 
from China has been found to contain excessively high levels of sulfur, 
causing houses to smell like rotten eggs, corroding copper wiring, 
making expensive appliances fail, causing respiratory an other health 
problems, and making homes unlivable. Thousands of homes have been 
affected. I am very pleased that tomorrow Senator Pryor will chair an 
important hearing of the Commerce Committee Subcommittee on Consumer 
Protection, Product Safety, and Insurance, focusing on this 
contaminated drywall, and its awful consequences.
  At a hearing that I chaired in 2009, the Senate Judiciary Committee 
Subcommittee on Administrative Oversight and the Courts explored the 
legal hurdles facing consumers who are injured by defective foreign 
products and by businesses that find that their foreign partners refuse 
to honor their contracts. These hurdles allow foreign manufacturers to 
injure American businesses and consumers with impunity. They also put 
American manufacturers at a competitive disadvantage since they allow 
foreign manufacturers to offer cheaper products that do not comply with 
American safety requirements.
  Two major hurdles to proper accountability are the inability to serve 
process on the foreign manufacturer and the ability of that foreign 
manufacturer, even if served, to evade the jurisdiction of American 
courts. Legislation to address these issues is both necessary and 
appropriate. The Foreign Manufacturers Legal Accountability Act 
addresses both concerns.
  The first problem, the inability to serve process on a manufacturer, 
essentially means that it is difficult for an American to give a 
foreign manufacturer the legally required notice that it is the subject 
of a lawsuit. This sounds like a simple step, and it should be. 
Unfortunately, however, it is very hard to serve process on foreign 
companies abroad. Service abroad is complicated by the Hague Convention 
on the Service Abroad of Judicial and Extra Judicial Documents in Civil 
and Commercial Matters, to which the United States is a signatory. 
Under that convention, a complaint must be translated into the foreign 
language, transmitted to the Central Authority in the foreign country, 
and then delivered according to the rules of service in the home 
country of the defendant. This can cause months and even years of 
delay, not to mention great expense for Americans.
  The Foreign Manufacturers Legal Accountability Act will allow 
Americans to overcome that procedural hurdle by serving legal papers 
inside the United States on registered agents of foreign manufacturers. 
The bill requires the heads of Federal Government agencies such as the 
Food and Drug Administration to pass regulations requiring that foreign 
manufacturers of products regulated by their agencies register an agent 
who will accept service of process. It allows regulators to exclude 
manufacturers who only import a minimal amount of products into the 
United States. It imposes a minimal burden on foreign manufacturers, 
since they would only have to appoint one agent to accept service of 
process for all State and Federal regulatory and civil actions anywhere 
in the United

[[Page S8187]]

States. The bill allows the manufacturer to choose any location for 
that agent with a ``substantial connection to the importation, 
distribution, or sale'' of their products. This clear and 
straightforward system will allow Americans to commence their lawsuits 
fairly and promptly, and ensure that foreign manufacturers have proper 
and fair notice of the proceedings brought against them. It will not 
conflict with American obligations under the Hague convention, since 
that convention applies to service of process on foreign manufacturers 
in their home countries, not in the United States.
  The second hurdle, the inability to establish personal jurisdiction 
over foreign manufacturers, can end a lawsuit against a foreign 
manufacturer before it even begins. Think about how unfair this is. A 
foreign manufacturer sells its defective products in the United States, 
injures American consumers and businesses, and then argues that it is 
not subject to the courts in the state where the American was injured--
in legal parlance, that the courts do not have personal jurisdiction 
over it. Foreign manufacturers raise this technical legal defense to 
avoid liability even when serious injuries or even death have been 
caused by their products--their defective tires, fireworks, exercise 
equipment, bikes, and toys.
  The Foreign Manufacturers Legal Accountability Act will enable 
injured Americans to surmount this hurdle. It will make clear to 
foreign manufacturers that by importing their products into the United 
States and by registering an agent in the United States, they are 
consenting to the jurisdiction of the courts in the state where their 
agent is located. By consenting to jurisdiction, the manufacturers will 
be unable to engage in unnecessary and expensive legislation about 
technical legal issues and allow courts to settle the merits of 
disputes. This approach is fair to foreign manufacturers since all 
American manufacturers are subject to the jurisdiction of the courts of 
at least one state. This bill therefore complies with the trade 
principle that we should not subject foreign manufacturers to burdens 
not already imposed on domestic manufacturers.
  Indeed, the Foreign Manufacturers Legal Accountability Act is 
ultimately about fairness. We all know American manufacturers comply 
with regulations that ensure the safety of American consumers and 
businesses. When they fail to do so, they must answer to regulators and 
are held accountable through the American tort system. Unfortunately, 
foreign manufacturers are not being held to the same standards--
injuring American consumers and businesses, and putting American 
manufacturers at a competitive disadvantage. We must level the playing 
field for all manufacturers and provide justice for American consumers 
and businesses. The Foreign Manufacturers Legal Accountability Act will 
allow us to make a major step in that direction. It covers major 
product categories including consumer goods, drugs, cosmetics, and 
chemicals, and it requires relevant agencies to study workable 
approaches to ensure that foreign food producers also are brought 
within the ambit of the American legal system.
  Because of its benefits to consumers, this legislation has the 
support of several leading consumer groups, including Consumers Union, 
Consumer Federation of America, U.S. PIRG, and the National Association 
of Consumer Advocates.
  Protecting Americans and holding foreign manufacturers accountable 
when their products harm American consumers and businesses is a 
bipartisan issue. Everyone agrees that we should do what we can to keep 
Americans safe from defective products. So too, I think, do we all 
agree that American companies should not be at a competitive 
disadvantage to their foreign counterparts. The Foreign Manufacturers 
Legal Accountability Act builds on those fundamental agreements. I am 
grateful to my colleague Senator Sessions, and the bill's other 
cosponsors, for their hard work on this bill. I know that they all feel 
the impacts of harmful, defective foreign products in their home 
states, just as we feel it in Rhode Island.
  I look forward to working with my colleagues on both sides of the 
aisle to see this important legislation passed into law.

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