One of the realities of operating in a global economy is the rising number of today's products liability claims relating to defective products that were manufactured overseas. The U.S. Consumer Product Safety Commission (CPSC) reported in 2007 that the value of 2006 United States imports from all countries under its jurisdiction totaled $614 billion. Of this amount, approximately 40 percent of all consumer products imported into the United States were from China. According to the CPSC report, approximately two-thirds of all product recalls are of imported products, and the vast majority of these recalls involve Chinese products. By understanding the unique legal and practical issues that can potentially arise, carriers can be better prepared to pursue claims against a foreign manufacturer and defend claims seeking to join a foreign manufacturer as an additional defendant in the suit. It is imperative that carriers also analyze the practical considerations involved in pursuing claims against foreign manufacturers, including the additional time and expense involved.
Personal Jurisdiction
Foreign manufacturers selling products in the United States generally face the same product liability rules that domestic manufacturers face; however, plaintiffs or co-defendants attempting to seek legal redress against a foreign manufacturer face additional practical and legal problems when seeking compensation, contribution, or indemnification for damages from a foreign entity. A threshold question in any case involving a product manufactured by a foreign manufacturer is whether a U.S. court can exercise personal jurisdiction over the foreign entity. In cases involving foreign entities, this threshold issue is frequently the subject of extensive litigation before the parties even begin to address liability issues.
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