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Chinese manufacturers avoid liability for unsafe products


Posted on Jul 01, 2009

Everywhere we look in stores, we find products made in China.  What happens if one of those products is defective and someone is injured?  

Lawyers all over the United States are finding out how difficult it is to hold a Chinese company accountable for defective products.  Although more than half of the products found to be defective by the U.S. Consumer Product Safety Commission were manufactured in China, judgments against Chinese companies are few and far between.

There are several reasons for this.  Before a Chinese company can be sued in a state court, the injured party must show that the Chinese company has sufficient contacts with the state to allow the court to hear the case.   If the court finds that there are not enough business ties between the state and the company, the court will say that the court is "without jurisdiction" to hear the case and will dismiss the Chinese company. Even if a Chinese company does have sufficient contacts so that the court retains jurisdiction over the Chinese company, and even if the plaintiff wins, it may be difficult to collect the judgment.  If the Chinese company has no assets in the United States,  the plaintiff would have to go to the courts of China to attempt to seize Chinese assets, a difficult and expensive process.

In Ohio, a person injured by a Chinese product may be able to recover from a United States supplier of the Chinese product.  Ohio Revised Code Section 2307.78 . If the foreign manufacturer is not subject to "jursidiction" in the Ohio courts, the supplier stands in the shoes of the manufacturer and would have to pay a judgment if the injured party proved his case.   

There are rumblings in Congress to make changes that would force Chinese companies to be sued in state courts.  However, until Chinese companies are required to have liability insurance to cover judgments for defective products, little will change.

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