By: Dennis M. LynchA frequent source of debate in recent years has been the topic of outsourcing jobs. The common complaint is that more and more jobs, particularly in manufacturing, are moving overseas where cheaper labor can be found. Even historically American companies, like Chrysler, have been bought by foreign corporations – DaimlerChrysler in Germany.Indeed, take a look at many everyday products, such as automobiles, motorcycles, machinery, toys, bicycles, coffee makers, fitness equipment and the like, and one common theme will develop, “Made in China.” China, of course, is not the only country offering low cost manufacturing. Taiwan, Japan, India, Mexico and many other countries have become major producers of the goods we use everyday.
This fact can often become a problem when one of those products causes serious injury, and the injured consumer looks to the foreign corporation for compensation. Often, these foreign corporations will deny they owe any compensation because they are not American companies, and cannot be sued in American courts. These companies attempt to shield themselves from lawsuits in America by operating through several middlemen, such as manufacturers, marketers and distributors, to separate themselves from their products in America. All the while, these same companies earn substantial profit from the sale of their product throughout the United States.
Recently, much litigation on this issue across the United States has focused on one product – Aim n’ Flame utility lighters. The Aim n’ Flame lighter is designed by a Japanese corporation, manufactured in Mexico and distributed throughout the United States in many large retail stores. Unfortunately, the Aim n’ Flame lighter can be very dangerous, and lacks a simple, inexpensive safety device. As a result, several fatal fires have occurred throughout the country when children came across these dangerous lighters.
Following these fires, many lawsuits have been brought against the Japanese designer of the lighter. However, this company has denied that it can be sued in the United States, because it does not do any business here. In order to file a lawsuit against a person or company, a court must have jurisdiction over them. A state court obtains jurisdiction over someone in many ways. For instance, that company could have an office located within the state, or regularly do business in a state. Also, a court can obtain jurisdiction over a company if that company distributes a large number of products throughout the state.
The judicial decisions involving this lighter have been split. A court in Connecticut found that the Japanese company was too far removed from the territory to be sued. On the other hand, the Illinois Appellate Court recently found that this company could be sued in Illinois. The court reasoned that this company earns substantial amounts of money from the sale of its product here in Illinois, and should have to answer for the harm its product has caused in Illinois.
A court in Kansas similarly found that this company could be sued in Kansas.Like the court in Illinois, it reasoned that with the number of lighters that have been distributed in Kansas, and caused injury there, it would not be unfair to require the designer to defend its product in Kansas.
Many more cases are waiting to be decided and it is clear that the fight is not over yet. Although the Supreme Court of Illinois declined to review the Illinois Appellate Court’s opinion, the Japanese designer is asking the Supreme Court of the United States to hear their claim.
Another everyday product that is overwhelmingly produced overseas is the bicycle. Although over 100 million Americans own bicycles, 97% of bicycles sold in America are imported from foreign countries. By far, China and Taiwan produce the majority of bicycles which are distributed throughout the world and particularly in the United States.Currently our firm is suing three Taiwanese component parts manufacturers who allegedly manufactured defective brake parts in a bike which was eventually sold in Illinois. When the brakes failed, the rider fell to the ground and sustained serious injuries.
Our firm has also pursued claims against a popular Japanese manufacturer – Yamaha. In the past several years, motorcycle riders have approached us to represent them when defective throttles have caused accidents resulting in serious injury, including paraplegia. We have been able to pursue claims in Illinois, Texas, Nevada and Pennsylvania, all of which allowed claims against the Japanese manufacturer.
Often, cases involving foreign manufacturers are the most vigorously defended, and more often than not need to be resolved by trial, and sometimes, in the Appellate or Supreme Court. Consider again the case of the utility lighter mentioned above. In a recent case, the utility lighter manufacturer defended its case all the way up to the Illinois Supreme Court. As with the other cases, this case grew out of a fatal fire which took the life of a three year old girl when she was able to find an Aim n’ Flame utility lighter.
In this case, the manufacturer argued that it could not be held responsible, because its product worked exactly as expected, and it should not be required to put child safety devices on adult products. Expert testimony revealed that the added child safety feature would only cost a small amount per unit. Nevertheless, the case was dismissed by the trial court.
On appeal, the Illinois Supreme Court rejected the manufacturer’s argument and held that only a jury could resolve whether this product was or was not unreasonably dangerous under the circumstances. The court noted that it was foreseeable that children could come in contact with the lighter and that if they did, horrible consequences could result. As a result, a jury trial was warranted to give both sides an opportunity to present their arguments.
These cases are but a few examples of the many problems that develop in prosecuting foreign product manufacturers. As the internet and other technological innovations make the world smaller and smaller, more and more of our dealings will be with foreign corporations.Indeed, in Cook County, one of the largest litigation centers of the country, not only are more foreign corporations being sued as defendants, but more are themselves initiating lawsuits as plaintiffs. It gives you something to think about when you see that sticker, “Made in China.”