S. 1946 (112th): Foreign Manufacturers Legal Accountability Act of 2011

112th Congress, 2011–2013. Text as of Dec 05, 2011 (Introduced).

Status & Summary | PDF | Source: GPO

II

112th CONGRESS

1st Session

S. 1946

IN THE SENATE OF THE UNITED STATES

December 5, 2011

(for himself, Mr. Sessions, Mr. Durbin, Mr. Graham, Mr. Leahy, Mrs. Feinstein, Mr. Nelson of Florida, Mr. Bennet, Mrs. McCaskill, and Mr. Pryor) introduced the following bill; which was read twice and referred to the Committee on Finance

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.

1.

Short title

This Act may be cited as the Foreign Manufacturers Legal Accountability Act of 2011.

2.

Findings

Congress makes the following findings:

(1)

Each year, many people in the United States are injured by defective products manufactured or produced by foreign entities and imported into the United States.

(2)

Both consumers and businesses in the United States have been harmed by injuries to people in the United States caused by defective products manufactured or produced by foreign entities.

(3)

People in the United States injured by defective products manufactured or produced by foreign entities often have difficulty recovering damages from the foreign manufacturers and producers responsible for such injuries.

(4)

The difficulty described in paragraph (3) is caused by the obstacles in bringing a foreign manufacturer or producer into a United States court and subsequently enforcing a judgment against that manufacturer or producer.

(5)

Obstacles to holding a responsible foreign manufacturer or producer liable for an injury to a person in the United States undermine the purpose of the tort laws of the United States.

(6)

The difficulty of applying the tort laws of the United States to foreign manufacturers and producers puts United States manufacturers and producers at a competitive disadvantage because United States manufacturers and producers must—

(A)

abide by common law and statutory safety standards; and

(B)

invest substantial resources to ensure that they do so.

(7)

Foreign manufacturers and producers can avoid the expenses necessary to make their products safe if they know that they will not be held liable for violations of United States product safety laws.

(8)

Businesses in the United States undertake numerous commercial relationships with foreign manufacturers, exposing the businesses to additional tort liability when foreign manufacturers or producers evade United States courts.

(9)

Businesses in the United States engaged in commercial relationships with foreign manufacturers or producers often cannot vindicate their contractual rights if such manufacturers or producers seek to avoid responsibility in United States courts.

(10)

One of the major obstacles facing businesses and individuals in the United States who are injured and who seek compensation for economic or personal injuries caused by foreign manufacturers and producers is the challenge of serving process on such manufacturers and producers.

(11)

An individual or business injured in the United States by a foreign company must rely on a foreign government to serve process when that company is located in a country that is a signatory to the Convention on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters done at The Hague November 15, 1965 (20 UST 361; TIAS 6638).

(12)

An injured person in the United States must rely on the cumbersome system of letters rogatory to effect service in a country that did not sign the Convention on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters. These countries do not have an enforceable obligation to serve process as requested.

(13)

The procedures described in paragraphs (11) and (12) add time and expense to litigation in the United States, thereby discouraging or frustrating meritorious lawsuits brought by persons injured in the United States against foreign manufacturers and producers.

(14)

Foreign manufacturers and producers often seek to avoid judicial consideration of their actions by asserting that United States courts lack personal jurisdiction over them.

(15)

The due process clauses of the fifth amendment to and section 1 of the fourteenth amendment to the Constitution govern United States courts' personal jurisdiction over defendants.

(16)

The due process clauses described in paragraph (15) are satisfied when a defendant consents to the jurisdiction of a court.

(17)

United States markets present many opportunities for foreign manufacturers.

(18)

In choosing to export products to the United States, a foreign manufacturer or producer subjects itself to the laws of the United States. Such a foreign manufacturer or producer thereby acknowledges that it is subject to the personal jurisdiction of the State and Federal courts in at least one State.

3.

Sense of Congress

It is the sense of Congress that—

(1)

foreign manufacturers and producers whose products are sold in the United States should not be able to avoid liability simply because of difficulties relating to serving process upon them;

(2)

to avoid such lack of accountability, foreign manufacturers and producers of foreign products distributed in the United States should be required, by regulation, to register an agent in the United States who is authorized to accept service of process for such manufacturer or producer;

(3)

it is unfair to United States consumers and businesses that foreign manufacturers and producers often seek to avoid judicial consideration of their actions by asserting that United States courts lack personal jurisdiction over them;

(4)

those who benefit from exporting products to United States markets should expect to be subject to the jurisdiction of at least one court within the United States;

(5)

exporting products to the United States should be understood as consent to the accountability that the legal system of the United States ensures for all manufacturers and producers, foreign, and domestic;

(6)

exporters recognize the scope of opportunities presented to them by United States markets but also should recognize that products imported into the United States must satisfy Federal and State safety standards established by statute, regulation, and common law;

(7)

foreign manufacturers should recognize that they are responsible for the contracts they enter into with United States companies;

(8)

foreign manufacturers should act responsibly and recognize that they operate within the constraints of the United States legal system when they export products to the United States;

(9)

United States laws and the laws of United States trading partners should not put burdens on foreign manufacturers and producers that do not apply to domestic companies;

(10)

it is fair to ensure that foreign manufacturers, whose products are distributed in commerce in the United States, are subject to the jurisdiction of State and Federal courts in at least one State because all United States manufacturers are subject to the jurisdiction of the State and Federal courts in at least one State; and

(11)

it should be understood that, by registering an agent for service of process in the United States, the foreign manufacturer or producer acknowledges consent to the jurisdiction of the State in which the registered agent is located.

4.

Definitions

In this Act:

(1)

Applicable agency

The term applicable agency means, with respect to covered products—

(A)

described in subparagraphs (A) and (B) of paragraph (4), the Food and Drug Administration;

(B)

described in paragraph (4)(C), the Consumer Product Safety Commission;

(C)

described in subparagraphs (D) and (E) of paragraph (4), the Environmental Protection Agency; and

(D)

described in subparagraph (F) of paragraph (4)—

(i)

the Food and Drug Administration, if the item is intended to be a component part of a product described in subparagraphs (A) and (B) of paragraph (4);

(ii)

the Consumer Product Safety Commission, if the item is intended to be a component part of a product described in paragraph (4)(C); and

(iii)

the Environmental Protection Agency, if the item is intended to be a component part of a product described in subparagraphs (D) and (E) of paragraph (4).

(2)

Commerce

The term commerce means trade, traffic, commerce, or transportation—

(A)

between a place in a State and any place outside of the State; or

(B)

which affects trade, traffic, commerce, or transportation described in subparagraph (A).

(3)

Commissioner of U.S. Customs and Border Protection

The term Commissioner of U.S. Customs and Border Protection means the Commissioner responsible for U.S. Customs and Border Protection of the Department of Homeland Security.

(4)

Covered product

The term covered product means any of the following:

(A)

Drugs, devices, and cosmetics, as such terms are defined in section 201 of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 321).

(B)

A biological product, as such term is defined in section 351(i) of the Public Health Service Act (42 U.S.C. 262(i)).

(C)

A consumer product, as such term is used in section 3(a) of the Consumer Product Safety Act (15 U.S.C. 2052).

(D)

A chemical substance or new chemical substance, as such terms are defined in section 3 of the Toxic Substances Control Act (15 U.S.C. 2602).

(E)

A pesticide, as such term is defined in section 2 of the Federal Insecticide, Fungicide, and Rodenticide Act (7 U.S.C. 136).

(F)

An item intended to be a component part of a product described in subparagraph (A), (B), (C), (D), or (E) but is not yet a component part of such product.

(5)

Distribute in commerce

The term distribute in commerce means to sell in commerce, to introduce or deliver for introduction into commerce, or to hold for sale or distribution after introduction into commerce.

5.

Registration of agents of foreign manufacturers authorized to accept service of process in the United States

(a)

Registration

(1)

In general

Beginning on the date that is 180 days after the date on which the regulations are prescribed pursuant to subsection (e)(1) and except as otherwise provided in this subsection, the head of each applicable agency shall require foreign manufacturers and producers of covered products distributed in commerce to establish a registered agent in the United States who is authorized to accept service of process on behalf of such manufacturer or producer for the purpose of any State or Federal regulatory proceeding or any civil action in any State or Federal court relating to such covered product, if such service is made in accord with the State or Federal rules for service of process in the State in which the regulatory action or case is brought.

(2)

Location

The head of each applicable agency shall require that an agent of a foreign manufacturer or producer registered under this subsection with respect to a covered product be located in a State with a substantial connection to the importation, distribution, or sale of the covered product.

(3)

Designation and acceptance

(A)

Designation by foreign manufacturers and producers

The head of each applicable agency shall require each foreign manufacturer and producer described in paragraph (1) to provide to the applicable agency a written designation of the agent established by the foreign manufacturer or producer pursuant to paragraph (1) that—

(i)

is signed by an official or employee of the foreign manufacturer or producer who has authority to appoint an agent;

(ii)

contains the full legal name, principal place of business, and mailing address of the foreign manufacturer or producer; and

(iii)

contains a statement that the designation is valid and binding on the foreign manufacturer or producer for the purposes of this section.

(B)

Acceptance by agents

The head of each applicable agency shall require each agent established pursuant to paragraph (1) with respect to a foreign manufacturer or producer to provide to the applicable agency a written acceptance of such establishment that—

(i)

is signed by the agent or, in the case in which a domestic firm or domestic corporation is designated as an agent, an official or employee of the firm or corporation with authority to sign for the firm or corporation;

(ii)

contains the agent’s full legal name, physical address, mailing address, and telephone number;

(iii)

contains a statement that the agent accepts such establishment and the designation by the foreign manufacturer or producer under subparagraph (A); and

(iv)

contains a statement that the agent acknowledges that the duties of the agent—

(I)

may not be assigned to another person; and

(II)

remain in effect until withdrawn or replaced by the foreign manufacturer or producer.

(4)

Minimum size

This subsection shall only apply to foreign manufacturers and producers that manufacture or produce covered products in excess of a minimum value or quantity the head of the applicable agency shall prescribe by rule for purposes of this section. Such rules may include different minimum values or quantities for different subcategories of covered products prescribed by the head of the applicable agency for purposes of this section.

(b)

Registry of agents of foreign manufacturers

(1)

In general

The Secretary of Commerce shall, in cooperation with each head of an applicable agency, establish and keep up to date a registry of agents registered under subsection (a).

(2)

Availability

The Secretary of Commerce shall make the registry established under paragraph (1) available—

(A)

to the public through the Internet website of the Department of Commerce; and

(B)

to the Commissioner of U.S. Customs and Border Protection.

(c)

Consent to jurisdiction

(1)

In general

A foreign manufacturer or producer of a covered product that registers an agent under this section thereby consents to the personal jurisdiction of the State or Federal courts of the State in which the registered agent is located for the purpose of any regulatory proceeding or civil action relating to such covered product.

(2)

Rule of construction

Paragraph (1) shall not be construed to apply to actions brought by foreign plaintiffs in which the alleged injury or damage occurred outside the United States.

(d)

Declarations

(1)

In general

Beginning on the date that is 180 days after the date on which the regulations are prescribed pursuant to subsection (e), any person importing a covered product manufactured or produced outside the United States shall provide to U.S. Customs and Border Protection a declaration that—

(A)

the person has made appropriate inquiry as to whether the manufacturer or producer of the covered product has complied with the requirements of this section, including by seeking appropriate documentation from the exporter of the covered product and by consulting the registry established pursuant to subsection (b); and

(B)

to the best of the person’s knowledge, with respect to each importation of a covered product, the foreign manufacturer or producer of the product has registered an agent in the United States as required under subsection (a).

(2)

Electronic submission

Not later than 1 year after the date of the enactment of this Act, the Commissioner of U.S. Customs and Border Protection shall establish a mechanism whereby declarations made pursuant to paragraph (1) may be submitted electronically and maintained as an electronic record within the data management systems of U.S. Customs and Border Protection.

(3)

Regulations

(A)

In general

Not later than 1 year after the date of the enactment of this Act, the Commissioner of U.S. Customs and Border Protection shall prescribe regulations to carry out this subsection.

(B)

Summary declaration

The regulations required by subparagraph (A) shall require that each declaration of an importer made pursuant to paragraph (1) with respect to a covered product shall accompany the entry summary documentation for such product or, in the case of repeated transactions, may be submitted on an annual basis.

(4)

Penalties

Any person who fails to provide a declaration required under paragraph (1), or files a false declaration, shall be subject to any appropriate penalty under section 592 of the Tariff Act of 1930 (19 U.S.C. 1592) or title 18, United States Code, with respect to importation of a covered product.

(e)

Regulations

(1)

In general

Not later than 1 year after the date of the enactment of this Act, the Secretary of Commerce, the Commissioner of U.S. Customs and Border Protection, and each head of an applicable agency shall prescribe regulations to carry out this section, including the establishment of minimum values and quantities under subsection (a)(4).

(2)

Interagency cooperation

The Secretary of Commerce, the Commissioner responsible for U.S. Customs and Border Protection, and each head of an applicable agency shall cooperate and consult with one another for the purpose of—

(A)

prescribing consistent regulations to the extent necessary for the effective and efficient sharing of information and establishment of systems and procedures necessary to carry out this section; and

(B)

establishing minimum values and quantities under subsection (a)(4), and to the extent advisable and practicable for the purpose of establishing consistent minimum requirements.

6.

Study on registration of agents of foreign food producers authorized to accept service of process in the United States

Not later than 1 year after the date of the enactment of this Act, the Secretary of Agriculture and the Commissioner of Food and Drugs shall jointly—

(1)

complete a study on the feasibility and advisability of requiring foreign producers of food distributed in commerce to establish a registered agent in the United States who is authorized to accept service of process on behalf of such producers for the purpose of all civil and regulatory actions in State and Federal courts; and

(2)

submit to Congress a report on the findings of the Secretary with respect to such study.

7.

Study on registration of agents of foreign manufacturers and producers of component parts within covered products

Not later than 2 years after the date of the enactment of this Act, the head of each applicable agency shall—

(1)

complete a study on determining feasible and advisable methods of requiring manufacturers or producers of component parts within covered products manufactured or produced outside the United States and distributed in commerce to establish registered agents in the United States who are authorized to accept service of process on behalf of such manufacturers or producers for the purpose of all civil and regulatory actions in State and Federal courts; and

(2)

submit to Congress a report on the findings of the head of the applicable agency with respect to the study.

8.

Relationship with other laws

Nothing in this Act shall affect the authority of any State to establish or continue in effect a provision of State law relating to service of process or personal jurisdiction, except to the extent that such provision of law is inconsistent with the provisions of this Act, and then only to the extent of such inconsistency.