| Court
Rules Chinese Foundries
Untouchable by US Laws!
In a stunning defeat for AB&I and
the American foundry industry, the US District Court in San Francisco has recently ruled
that Qiaoshan Casting Co., Ltd. and Hua Du City Pin An Foundry Limited, both exporters of
Chinese DWV into the American market, cannot be sued in American courts because those
courts have no jurisdiction over them.
AB&I sued these foundries for unfair
business practices, claiming that they sold their products at below cost to injure their
competition. While the court assumed that the allegations against these Chinese companies
were true, they also ruled that those companies were not doing business in the United
States and, therefore, were not subject to American laws. Attorneys for AB&I argued
that these companies were, indeed, doing business in America, as evidenced by their
products being shipped, sold, and resold within California, invoices from these foundries
to American companies, and bills of lading showing transactions taking place on American
soil.
The Chinese foundries defended their
position by claiming to the Court that they were not subject to the jurisdiction of
American laws. They claimed, in essence, that since the sales were in China and their
business activity was restricted to China, that they should not be deemed doing business
in California. These claims were made in spite of the fact that they knew their goods were
being shipped to California, would be resold in California, and that they authorized local
companies to use their trademarks in order to resell their products.
In the end, the Court sided with the
Chinese foundries. While the holding of the Court is only directly applicable to the facts
and circumstances of the AB&I case, contractors and others should consider the
possible ramifications. What, for example, would be the result of a case in which the
claim was for injuries and damages, perhaps as a result of arsenic or asbestos, both
proven to exist in some Chinese DWV? What if the product failed, resulting in losses to
your customer? With the Chinese foundries' ability to claim lack of jurisdiction by
American courts, who would be left to meet the claims of those damaged? Certainly the
engineer, architect, owner, and contractor would be involved, and perhaps the importer (if
they were still in business), but with the manufacturer out of the legal picture, the hit
on the other parties to the transaction could be devastating. While we at AB&I are
disappointed in the results of our lawsuit, we're also very concerned for the construction
industry, if products coming into this country can be installed on jobsites with no
meaningful recourse against the companies that make those products. This lack of
responsibility is certainly contrary to the American way of doing business. Be careful out
there.
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