Emory International Law Review

Toxic Toys and Dangerous Drywall: Holding Foreign Manufacturers Liable for Defective Products—The Fund Concept
Stephanie Glynn Notes & Comments Editor, Emory International Law Review; J.D. Candidate, Emory University School of Law (2012); University of Virginia (2006). The Author would like to thank her advisor, Professor Frank J. Vandall, for his guidance, insight, and unmatched enthusiasm for products liability law and the staff of the Emory International Law Review for their assistance in writing and editing this Comment. The Author would also like to thank her family and her fiancé, Andrew, for their unwavering support.

Introduction

The mid-decade building boom coupled with post-Hurricane Katrina reconstruction led to a nationwide drywall shortage in the United States in 2005 and 2006, forcing builders to turn to imports. 1Jason Hanna, Chinese-Made Drywall Ruining Homes, Owners Say, CNN (Mar. 18, 2009), http://articles.cnn.com/2009-03-18/us/chinese.drywall_1_chinese-made-drywall-homeowners-appliances. According to the Consumer Product Safety Commission, shipping records show the United States has imported 6.5 million sheets of Chinese-made drywall since December 2005. Aaron Kessler & Joaquin Sapien, SPECIAL REPORT: Federal Failure on Chinese Drywall, Herald-Trib. (Dec. 14, 2010, 6:45 PM), http://www.heraldtribune.com/article/20101214/ARTICLE/101219891. Prior to 2005, drywall imports from China were negligible; however, since 2006, the United States has imported more than 550 million pounds of drywall from China because it is “abundant and cheap.” 2Brian Skoloff, Cheap Chinese Drywall Causing Another Round of Nightmares, Wash. Post (Oct. 17, 2009), http://www.washingtonpost.com/wp-dyn/content/article/2009/10/16/AR2009101600082.html; accord Tim Padgett, Is Drywall the Next Chinese Import Scandal?, TIME (Mar. 23, 2009), http://www.time.com/time/nation/article/0,8599,1887059,00.html. This Chinese-made drywall has proven to be defective, and, as a result, thousands of U.S. citizens have sustained economic damage to their homes and incurred health problems. 3Skoloff, supra note 2. The drywall emits hydrogen sulfide gas, which produces a rotten-egg odor, corrodes metal, and destroys electronic equipment. 4Andrew Martin, Drywall Flaws: Owners Gain Limited Relief, N.Y. Times (Sept. 17, 2010), http://www.nytimes.com/2010/09/18/business/18drywall.html. In addition, American consumers have reported various physical ailments, such as breathing difficulties, persistent coughs, bloody noses, recurrent headaches, and asthma attacks. 5Drywall Information Center, U.S. Consumer Prod. Safety Comm’n, http://www.cpsc.gov/info/drywall/where.html (last visited Feb. 20, 2012).

Chinese drywall presents one of the largest and most complex defective product conundrums the U.S. government has ever encountered. 6Kessler & Sapien, supra note 1. The cost of repairing an average-size house (replacing all the drywall, the wiring, and the air-conditioning system) is about $100,000. Id. Thus far, the U.S. Consumer Product Safety Commission (“CPSC”), the government agency responsible for protecting the public from injury or death from consumer products, has received more than 3,805 complaints about the drywall and believes thousands of others have failed to report the problem. 7Drywall Information Center, supra note 5; Martin, supra note 4. “A database compiled by the Herald-Tribune and ProPublica shows that at least 6,944 homeowners are seeking help for problems created by contaminated drywall.” Kessler & Sapien, supra note 1. Approximately 5,600 homeowners have filed suits, but because the current legal system makes it virtually impossible for U.S. plaintiffs to sue Chinese manufacturers, legal redress is limited or nonexistent for the majority of these consumers. 8Martin, supra note 4. One company, Knauf Plasterboard Tianjin, a Chinese–German joint venture, has begun settlement negotiations with homeowners. Id. Three primary procedural hurdles—personal jurisdiction, service of process, and enforcement of the judgment—prevent suits against Chinese manufacturers. 9Leveling the Playing Field and Protecting Americans: Holding Foreign Manufacturers Accountable: Hearing Before the Subcomm. on Admin. Oversight and the Courts of the S. Judiciary Comm., 111th Cong. 4 (2009) (statement of Louise Ellen Teitz, Professor of Law, Roger Williams University School of Law) [hereinafter Hearing—Leveling the Playing Field]. While injured consumers may bring suit in the United States against importers, distributors, and sellers of the defective drywall, 10Restatement (Third) of Torts: Products Liability § 1 (1998). many of these potential defendants are out of business, bankrupt, or possess insufficient assets to satisfy a judgment. As a result, many consumers are left with no one to sue and thus no compensation for the harm they incurred.

Chinese manufacturers have successfully argued that U.S. courts do not have jurisdiction over them. 11Martin, supra note 4. Virginia Senator Mark Warner, whose office is helping Virginia drywall victims negotiate with their home mortgage lenders, remarked, “[Foreign manufacturers] can avoid liability and there’s almost nothing we can do about it right now.” 12Kessler & Sapien, supra note 1. Injured consumers are left to seek legal recourse in the United States or go uncompensated. As a result, many homeowners affected by faulty Chinese drywall are facing foreclosure and bankruptcy. 13Monsurat Adebanjo, Gov’t Failing To Deal with Bad Drywall, CBS News (Dec. 15, 2010, 3:06 PM), http://www.cbsnews.com/8301-31727_162-20025776-10391695.html. Pamela Gilbert, a former executive director of the CPSC during the Clinton Administration, noted, “Our current consumer protection laws don’t adequately address product liability in a globalized economy . . . . And these problems are only going to get worse in the future.” 14Kessler & Sapien, supra note 1. The U.S. Supreme Court has also recognized the shortcomings and difficulties present in this area of the law, and in late 2010 the Court granted certiorari in two cases, J. McIntyre Machinery, Ltd. v. Nicastro 15J. McIntyre Mach., Ltd. v. Nicastro, 131 S. Ct. 2780 (2011). and Goodyear Dunlop Tires Operations, S.A. v. Brown, 16Goodyear Dunlop Tires Operations, S.A. v. Brown, 131 S. Ct. 2846 (2011). concerning jurisdiction in U.S. courts over foreign manufacturers in the context of a globalized society. 17Peter Trooboff, The Global Reach of U.S. Personal Jurisdiction, Nat’l L.J., Dec. 13, 2010, available at http://www.cov.com/files/Publication/39e9f9b2-f78f-4328-af70-e7786215eba4/Presentation/PublicationAttachment/eb4ee708-e070-4ac3-b867-eb28d5b0ccdb/The%20Global%20Reach%20of%20U.S.%20Personal%20Jurisdiction.pdf.

The two cases, J. McIntyre and Goodyear, deal with the stream of commerce theory of personal jurisdiction as it pertains to specific and general jurisdiction, respectively. 18Mark R. Vespole, Stream of Commerce in the 21st Century: McIntyre and Goodyear: Potential Ramifications of U.S. Supreme Court Decision on NJ and NC Long Arm Jurisdiction Statutes, LexisNexisCommunities Litig. Resource Community (Dec. 13, 2010, 3:50 PM), https://www.lexisnexis.com/COMMUNITY/LITIGATIONRESOURCECENTER/blogs/litigationcommentary/archive/2010/12/17/potential-ramifications-of-supreme-court-decision-on-n-j-n-c-long-arm-jurisdiction-statutes.aspx. On January 11, 2011, the Court heard oral argument in both cases. 19Allison Torres Burtka, Supreme Court Takes On States’ Jurisdiction over Foreign Manufacturers, Am. Ass’n for Just. (Jan. 20, 2011), http://www.justice.org/cps/rde/xchg/justice/hs.xsl/14246.htm. The Court revisited the requirements under the Due Process Clause of the Fourteenth Amendment for state courts to assert personal jurisdiction over foreign defendants. 20Id. On the last day of its 2010–2011 term, the Court issued opinions in the two cases. In J. McIntyre, the Court addressed whether the state of New Jersey could exercise jurisdiction over a foreign (English) manufacturer when the plaintiff was injured by the defendant’s product in New Jersey. 21J. McIntyre Mach., Ltd. v. Nicastro, 131 S. Ct. 2780, 2785 (2011). The Court issued a fractured 4-2-3 decision, holding that the manufacturer was not subject to personal jurisdiction in the state of New Jersey because it had not engaged in conduct purposefully directed at New Jersey. 22Id. at 2791. In Goodyear, the Court addressed whether foreign subsidiaries of a U.S. parent corporation are amenable to suit in state court based on claims that are unrelated to any activity of the subsidiaries in the forum state. 23Goodyear Dunlop Tires Operations, S.A. v. Brown, 131 S. Ct. 2846, 2850 (2011). The Court reached a unanimous decision, reversing the North Carolina Court of Appeals’ ruling that the foreign Goodyear subsidiaries were subject to North Carolina’s general jurisdiction because some of the defendant’s tires had reached the state through the stream of commerce. 24Id. at 2851. The Court reiterated the standard for general jurisdiction, noting that “a court may assert general jurisdiction over foreign corporations . . . when their affiliations with the State are so ‘continuous and systematic’ as to render them essentially at home in the forum State.” Id. The unanimous ruling in Goodyear made it clear that introducing goods into the stream of commerce in a state was an insufficient basis for a court to exercise general jurisdiction over foreign subsidiaries when the accident occurred elsewhere. 25Kimberly Atkins, Court Creates Confusion on Foreign Product Liability Suits, LegalNews.com (July 21, 2011), http://www.legalnews.com/detroit/1016629. However, the divided ruling in J. McIntyre failed to announce a standard for determining when foreign firms are subject to specific jurisdiction in U.S. court, thereby virtually ensuring that the justices will consider the issue again. 26Id. Although the Court’s holdings addressed key jurisdictional questions, neither case addressed enforcing U.S. judgments against foreign manufacturers. Absent a mechanism for enforcement, U.S. consumers will likely be unable to collect on judgments.

Attempt at revision in this area of the law has not been limited to the judiciary. The Foreign Manufacturers Legal Accountability Act of 2010 (“2010 Act”) was introduced in the U.S. House of Representatives in February 2010, aiming to combat the lack of jurisdiction over foreign manufacturers. 27Kessler & Sapien, supra note 1; Bill Summary & Status 111th Congress (2009–2010) H.R.4678, Libr. Congress, http://thomas.loc.gov/cgi-bin/bdquery/z?d111:HR04678:|/home/LegislativeData.php?n=BSS;c=111 (last visited Feb. 20, 2012). The 2010 Act died in committee, and was reintroduced in December 2011 as the Foreign Manufacturers Legal Accountability Act of 2011 (“2011 Act”). 28H.R. 4678 (111th): Foreign Manufacturers Legal Accountability Act of 2010, Govtrack.us, http://www.govtrack.us/congress/bills/111/hr4678 (last visited Mar. 20, 2012) [hereinafter H.R. 4678: Govtrack]; Bill Summary & Status 112th Congress (2011–2012) H.R. 3646, Libr. of Congress, http://http://thomas.loc.gov/cgi-bin/bdquery/D?d112:1:./temp/~bdZY4R::|/home/LegislativeData.php?n=BSS;c=112 (last visited Mar. 20, 2012). As the 2011 Act is in the early stages of the legislative process at the time of this writing, 29H.R. 3646: Foreign Manufacturers Legal Accountability Act of 2011, Govtrack.us, http://www.govtrack.us/congress/bills/112/hr3646 (last visited Mar. 23, 2012). this Comment considers the language and implications of both bills, as well as the legislative and public responses to the 2010 bill. The 2010 and 2011 Acts, both initiated by Ohio Democrat Betty Sutton in response to the toxic Chinese-made drywall debacle, would require foreign manufacture to appoint a registered agent in the United States to accept service of process on behalf of the manufacturer. 30Foreign Manufacturers Legal Accountability Act of 2011, H.R. 3646, 112th Cong. (2011); Foreign Manufacturers Legal Accountability Act of 2010, H.R. 4678, 111th Cong. (2010). By accepting service of process, the manufacturer would thereby consent to personal jurisdiction in the state in which the appointed agent is located. 31H.R. 3646 § 3(c)(1); H.R. 4678 § 3(c)(1). The bills propose a solution to jurisdictional and service of process issues, but, like the Supreme Court cases, fail to address enforcement of U.S. court judgments overseas.

Presently, U.S. consumers who have been injured by a Chinese-made product and are unable to bring suit against a responsible party in the United States will not be compensated for their injury. In this regard, the U.S. legal system has failed to provide adequate protection for U.S. consumers. 32This failure provides a multi-billion dollar windfall for the Chinese because manufacturers avoid accident costs in the pricing of their manufactured goods. Manufacturers can evade U.S. lawsuits; therefore, they forego both the cost of prevention and the cost of liability associated with faulty products. See Elizabeth Ann Hunt, Comment, Made in China: Who Bears the Loss and Why?, 27 Penn St. Int’l L. Rev. 915, 918–19 (2009). Additionally, the U.S. government currently lacks any obligation to reimburse consumers for the harm they have incurred. 33Kessler & Sapien, supra note 1. This Comment proposes creation of a fund for injured consumers, thereby alleviating the undue burden on these individuals. Chinese manufacturers responsible for producing defective products that have injured U.S. consumers would be required to contribute to the fund before continuing to export their products to the United States. The fund would be distributed solely to compensate injured consumers.

This Comment argues that current U.S. law fails to provide an adequate mechanism to ensure U.S. consumers are economically compensated for injuries sustained by Chinese-made products. Part I explores the history of the United States–China trade relationship and highlights China’s position as the world’s leading exporter. It delves into the multitude of reasons Chinese products are poorly made and examines why, despite quality problems, the United States continues to import from China. Part II outlines the procedural hurdles in place for suing a Chinese manufacturer and examines why U.S. law has failed to hold manufacturers liable for their faulty products. Part III advocates for the creation of a fund that would serve dual purposes: deterring Chinese manufacturers from releasing defective products in the United States and compensating victims.

I. Background

Trade relations between the United States and China commenced in the early days of U.S. independence, and, since the turn of the twenty-first century, China has blossomed into the United States’ primary trade partner and has earned the title “manufacturer to the world.” 34China’s Economic Growth: The Next Wave, Committee for Econ. Dev. Austl. (Nov. 10, 2010), http://www.ceda.com.au/research-and-policy/current-topics/ace/2010/11/10/china_parkinson; Jiawen Yang, Sino–U.S. Trade Relations, GW Center for Study Globalization (Jan. 2004), http://globalgrn.files.wordpress.com/2009/08/sino-us-trade-relations.pdf. Although the United States benefits economically from cheap products manufactured in China, some of these products pose a risk of shoddy manufacturing and have led to injuries and product recalls in the United States. 35Kessler & Sapien, supra note 1. A combination of political and economic factors has led to production of defective Chinese products, and both the United States and China are to blame.

A. History of United States–China Trade Relations

The United States–China trade relationship, although somewhat marred by poorly made Chinese goods, is historically and economically significant. The United States was China’s leading trade partner at the end of World War II; however, the trade relationship between the two countries dissipated following the founding of the People’s Republic of China in 1949. 36Yang, supra note 34, at 1. By 1951, trade between the United States and China had come to a halt. Id. In the wake of President Richard Nixon’s momentous visit to China in 1972, trade between the two nations was renewed. 37 Id. On July 6, 1979, the United States and China signed the Agreement on Trade Relations, formally establishing diplomatic ties. 38Agreement on Trade Relations Between the United States of America and the People’s Republic of China, U.S.-P.R.C., July 7, 1979, 31 U.S.T. 4651.

In 1980, the United States restored China’s Most-Favored Nation status (now Normal Trade Relations) guaranteeing China the same trading opportunities accorded to all other favored nations. 39China’s Most-Favored Nation status had previously been suspended in 1951. Vladimir N. Pregelj, Cong. Res. Serv., Most-Favored-Nation Status of the People’s Republic of China 1 (2001), available at http://www.au.af.mil/au/awc/awcgate/crs/rl30225.pdf. In 2000, the United States granted China Permanent Normal Trade Relations (“PNTR”). 40Yang, supra note 34, at 2. Paul Midler, a consultant and middleman for Chinese factories and U.S. companies, recounts the PNTR debate in the U.S. Congress:

[T]here was a chance for the United States to hold out for political and economic reform in China, but the opportunity was lost. Improved structural conditions made possible then might have more appropriately set the stage for stability going forward. Instead, American politicians and business leaders rushed headlong into greater levels of interdependency with China, a nation whose reliability is questionable. 41 Paul Midler, Poorly Made in China: An Insider’s Account of the Tactics Behind China’s Production Game 240 (2009).

The United States opted to open the door to unrestricted trade with China before China was sufficiently mature. 42 See id. Midler believes that this decision was motivated by U.S. greed—that U.S. politicians were unable to overcome the lure of cheaply made goods from China. Id. Prior to 2000, the U.S. Congress had to review and renew China’s Most-Favored Nation status on an annual basis. 43Yang, supra note 34, at 2. However, once the United States granted PNTR, the status was permanent and unarguable, and the United States surrendered significant leverage over China. 44 Id. Congress no longer conducted an annual review of “China’s activities regarding unfair trade practices, human rights and national security.” Jim Burns, Congressmen Work on Bill Revoking PNTR for China, CNSNews.com (July 7, 2008), http://www.cnsnews.com/node/10184. Under the WTO, the United States retains the right to protect its national security interests, which include the revocation of PNTR if necessary. Furthermore, Congress can choose to revoke PNTR at any time “if circumstances warrant and Congress is willing to forego WTO benefits.” Press Release, Office of the Press Sec’y, White House, Fact Sheet on Benefits of PNTR for American Workers (May 12, 2000), available at http://archives.clintonpresidentialcenter.org/?u=051200-fact-sheet-on-benefits-of-pntr-for-american-workers.htm. During the PNTR debate, politicians advocating for free trade with China never suggested that the “American public would be involved in any sort of trade-off.” 45 Midler, supra note 41, at 198. There was an assumption that China would become easier to work with as it rose to prosperity; however, the manufacturer–importer relationship has proven the opposite to be true. 46 Id. at 240.

China became a member of the World Trade Organization (“WTO”) in 2001, 47 China Officially Joins WTO, CNNWorld (Nov. 10, 2001), http://articles.cnn.com/2001-11-10/world/china.WTO_1_wto-meeting-wto-director-general-mike-moore-world-trade-organization. and since that time, trade has consistently grown between the United States and China. 48 US—China Trade Statistics and China’s World Trade Statistics, US–China Bus. Council, http://www.uschina.org/statistics/tradetable.html (last visited Mar. 3, 2012). In 2001, the United States imported $102.3 billion of consumer products from China. 49 Id. By 2009, that number had risen to $296.4 billion. 50 Id. tbl.1. Today, the United States is China’s top export destination, 51 Id. tbl.8. meaning U.S. consumers are at a higher risk of encountering defective Chinese-made products than other countries.

B. China: Manufacturer to the World

In early 2010, China overtook Germany to become the world’s largest exporter and now accounts for almost ten percent of total world exports. 52Press Release, World Trade Org., Trade To Expand by 9.5% in 2010 After a Dismal 2009, WTO Reports (Mar. 26, 2010), available at http://www.wto.org/english/news_e/pres10_e/pr598_e.htm. In the second quarter of 2010, China passed Japan to become the world’s second-largest economy behind the United States. 53David Barboza, China Overtakes Japan To Become No. 2 Economy, N.Y. Times, Aug. 16, 2010, at B1. These statistics evidence China’s rapid economic ascendance 54In 2005, China’s gross domestic product was approximately half of Japan’s. Id. and solidify its position as a global economic superpower. 55Id.; India’s Surprising Economic Miracle, Economist, Oct. 2nd–8th 2010, at 11 (stating that China’s rapid, sustained growth has lifted hundreds of millions of Chinese out of poverty). China’s export industry has been a “powerful engine of growth” that thrives due to its ability to produce cheap products. 56 Alexandra Harney, The China Price 8 (2008); see also Stoking Protectionism, Economist (Aug. 16, 2007), http://www.economist.com/node/9657177. Alexandra Harney, an expert on Asian business, argues that no single country has ever “yielded such visible price declines on such a wide range of goods.” 57 Harney, supra note 56, at 3. For example, China has been able to short-circuit the traditional timeline of consumer electronic manufacturing. 58Ted C. Fishman, The Chinese Century, N.Y. Times, July 4, 2004, § 6 (Magazine), at 31. Wilf Corrigan, the chairman and CEO of LSI Logic, an American company making video players for the Chinese market, noted that when new technology is released, it traditionally takes two years for the technology to be sold below its initial price and five to seven years for it to reach the mass market at a substantially lower price. 59 Id. However, China’s low labor costs, vast consumer population, and competition among manufacturers have allowed the Chinese to produce sophisticated, low-priced electronics much faster than what was traditionally possible. 60 Id. Even when new features are added, prices continue to drop. Id.

Harney compares China’s ability to undercut prices to a second industrial revolution: “Since the start of the new millennium, China has come to dominate global manufacturing in a way almost inconceivable before its rise. The prices it offers have been so low . . . they have become known simply as the China price.” 61 Harney, supra note 56, at 2. U.S. consumers, who have become aware of and accustomed to “the China price,” demand these lower prices, and American businesses are under pressure to match “the China price” to retain their customers and remain competitive. 62Fishman, supra note 58, at 46; India’s Surprising Economic Miracle, supra note 55 (“[I]f your supply chain for manufactured goods does not pass through China your shareholders will demand to know why.”).

“The China price” is possible partially because China possesses the world’s largest manufacturing workforce. 63 Harney, supra note 56, at 8. China has a manufacturing workforce of 104 million; this is roughly twice the combined workforces of the United States, Canada, Japan, France, Germany, Italy, and the United Kingdom. 64 Id. While China does not possess the cheapest workforce in the world, it has become the world’s workshop because its workers are reliable, capable, and disciplined. 65Fishman, supra note 58, at 28. Chinese workers are motivated by the nation’s twin virtues of patriotism and hard work. 66 Id. Undisciplined or undermotivated workers are easily replaced with other poor, unemployed Chinese workers anxious for work. Id. Sometimes this means working twelve- to eighteen-hour days, seven days a week, in unsafe labor conditions. 67 See, e.g., Harney, supra note 56, at 108 (describing the working conditions of an undocumented migrant working in a plastic bag factory in China). Factory wages along China’s east coast can be $120 to $160 a month, and half of that in inland China. Fishman, supra note 58, at 28. Mao Zedong, who believed China’s wealth lay in its abundant population, is credited with mobilizing Chinese labor as an alternative to machinery. 68 Id. Today, the use of highly skilled workers who cost only a few hundred dollars a month (as opposed to multi-million dollar machines) allows a company such as Wanfeng Automotive, located outside Shanghai, to sell its handmade luxury version of the American Jeep for merely $8,000 to $10,000. 69 Id. China has been able to successfully alter the competitive landscape of the global marketplace by employing people in place of machines. 70 Id.

In addition to the abundance and relatively low cost of labor, startup costs for U.S. companies in China are minimal. 71 See Midler, supra note 41, at 20–21. Chinese manufacturers offer U.S. companies enticing incentives to initiate a business relationship. 72 Id. Competition among Chinese factories is fierce, and manufacturers “ben[d] over backwards” to attract foreign clients and “to make it seem as though doing business with them [is] a breeze.” 73 Id. at 20. Chinese manufacturers can take a company’s product sample and move it into production quickly and for a competitive price. 74 Id. at 20–21. Ten years ago, Wanfeng Automotive was “hammering out motorcycle wheels by hand in a Chinese garage”; only a few years later it was the top seller of aluminum alloy motorcycle wheels in China, and later in Asia. 75Fishman, supra note 58, at 28. One of the key factors driving Chinese competitiveness is the ability of Chinese workers to adapt to the production of new products.

A more troubling reason that “the China price” is possible stems from demands from U.S. consumers and companies for cheap goods coupled with China’s willingness to cut costs and skip safety measures. 76 Harney, supra note 56, at 35; Midler, supra note 41, at 166. U.S. suppliers experience pressure from their customers to relocate production to China or to use Chinese subcontractors in their production lines. 77Fishman, supra note 58, at 46. Companies like Walmart, which insists on “Every Day Low Prices,” 78About Us, Walmart Corp., http://walmartstores.com/AboutUs/7606.aspx (last visited Mar. 4, 2012). epitomize U.S. consumers’ appetite for cheap products. American consumers “once preferred to see the Made In USA tag, but there [was] another shift in the marketplace. Somewhere along the line, made in China began to sound like a bargain.” 79 Midler, supra note 41, at 172. Economists estimate that cheap products from China save the average American household $500 a year. 80Fishman, supra note 58. This statistic, however, fails to take into account certain unquantifiable risk factors, primarily that the products may be defective or dangerous. 81 Midler, supra note 41, at 197. One commenter has argued, “United States consumers cannot reasonably be expected to consider the costs of melamine and lead paint, or a skipped safety measure, if they are completely unaware and unadvised.” 82Hunt, supra note 32, at 918. Melamine is an industrial chemical. Id. at 916 n.10. Midler poses the question: “How much [is] it worth to know that the products you purchased were lead- or melamine free?” 83 Midler, supra note 41, at 197. Quality control issues that accompany Chinese-made products are passed along to U.S. consumers, along with the cheap prices.

Finally, China’s low prices are possible partly because they fail to reflect the potential accident costs posed by their goods. 84Hunt, supra note 32, at 918–19. Judge Richard Posner’s accident reduction theory suggests actors will forego preventative measures when the cost of accidents, and therefore the cost of liability, is less than the cost of prevention. 85Richard Posner, A Theory of Negligence, 1 J. Legal Stud. 29, 33 (1972). Chinese manufacturers can evade economic and legal liability; therefore, they have no financial incentive to install preventative measures. As a result, the price of their goods fails to account for products liability risks. 86Hunt, supra note 32, at 918–19. By evading liability, Chinese manufacturers have created a quality problem and asked U.S. importers, distributors, and retailers to assume all the associated legal and economic risks. 87 China’s Toxic Toymaker, Economist, Aug. 18th–24th 2007, at 58 (“No doubt many importers will examine their supply chains more carefully, if only for fear that they will be sued by customers who have bought poisonous furniture or explosive mobile telephones, and shunned by others who hear about such fiascos.”).

C. Why Chinese Products Are Poorly Made

“The China price” is economically alluring, but the lack of legal liability dissuades Chinese manufacturers from focusing on safety, resulting in poorly made products. The United States and China share the blame for the creation of a cost-cutting culture that has led to the production of defective products manufactured in China. While China is responsible for actually producing the goods, the United States is guilty of continually demanding and consuming such substandard products. There are three primary reasons poorly made Chinese products are abundant. First, Chinese governmental oversight is deficient. The Chinese government has failed to provide a workable structure to implement product safety laws, and its response to product safety incidents is dismal. 88 Harney, supra note 56, at 256–57; The Poison Spreads, Economist, Sept. 27th–Oct. 3rd 2008, at 77–78. Second, Chinese manufacturers embrace unsafe cost-cutting measures to increase their profit margins. 89 Shoddy Work: Why So Many Chinese Products Are Born To Be Bad, Economist, May 16th–22nd 2009, at 89 [hereinafter Shoddy Work]. Finally, Chinese manufacturers are firmly entrenched in global supply chains; China has emerged as the world’s leading supplier for many consumer goods, and its prices are unmatched. 90 Stoking Protectionism, supra note 56.

1. Deficient Chinese Governmental Oversight

The rapid economic and social development in China has “outpaced the development of government institutions.” 91 Harney, supra note 56, at 256. As a result, the Chinese government has failed to provide a workable framework to implement product safety. Adding to the problem, enforcement of the law in China is riddled with corruption. 92 See Stoking Protectionism, supra note 56. Although the Chinese government drafts policy, it has traditionally delegated enforcement to local governments. 93 Harney, supra note 56, at 257. The local officials parse the government’s policies and decide which policies to enforce and the appropriate degree of enforcement. 94 Id. This form of governance results in patchy implementation of rules and regulations regarding product quality. 95 Stoking Protectionism, supra note 56. In the 1980s and 1990s, the planned economy in China failed to create a sufficient number of jobs, and the Communist Party turned to private industry to employ the remaining workers. 96 Midler, supra note 41, at 234. Those who provided the necessary jobs earned political clout with government officials, and these unhealthy links between government and business persist today. 97 Id.; Stoking Protectionism, supra note 56. Consequently, manufacturers with close relationships to the Communist Party, especially those who are able to attract foreign investors, often enjoy a free pass when it comes to enforcement of safety regulations. 98 Midler, supra note 41, at 234–35; The Poison Spreads, supra note 88.

Chinese government officials are notorious for accepting bribes from manufacturers to approve their products without undergoing the legally mandated testing processes. 99 China Food Safety Head Executed, BBC (July 10, 2007, 11:36 AM), http://news.bbc.co.uk/2/hi/6286698.stm. In 2007, China executed Zheng Xiaoyu, the former head of China’s State Food and Drug Administration, for taking bribes and approving fake medicines. 100 Stoking Protectionism, supra note 56. Following the Xiaoyu scandal, the General Administration of Quality Supervision, Inspection and Quarantine, a Chinese government agency, surveyed a range of Chinese food and consumer products and found that almost one-fifth were substandard. 101 Id. Lax standards and inconsistent enforcement in China allow defective products to leave the country, bound for the U.S. market. Not only do Chinese government officials fail to appropriately monitor production, but they also fail to protect consumers when dangerous products are released into the market.

China is infamous for denying allegations of product inferiority. In 2007, U.S. toy company Mattel, the world’s largest toymaker, recalled millions of Chinese-made toys due to lead paint and dangerous magnets. 102Jyoti Thottam, Why Mattel Apologized to China, TIME (Sept. 21, 2007), http://www.time.com/time/business/article/0,8599,1664428,00.html. Chinese-made toys were manufactured with strong magnets, which if swallowed in multiples could rip through a young child’s intestines. Id. In August 2007, Zhang Shuong, who owned a factory that made Mattel toys, hanged himself following Mattel’s massive recalls in the summer of 2007. China’s Toxic Toymaker, supra note 87. As the Mattel recalls unfolded, China issued a series of denials and claimed the “product-safety issue ha[d] been whipped out of proportion by the foreign media.” 103 Stoking Protectionism, supra note 56. Similarly, pets in the United States started dying in 2007 because of Chinese-made pet food contaminated by melamine, an industrial chemical that is harmful if swallowed. 104Kate Pickert, Brief History of Melamine, TIME (Sept. 17, 2008), http://www.time.com/time/health/article/0,8599,1841757,00.html. In response, Chinese officials issued emphatic denials claiming, “[t]he poisoning of American pets has nothing to do with China.” 105 See China’s Food Safety: A New Plan To Improve Standards of Food and Drugs, Economist (June 12, 2007), http://www.economist.com/node/9325404. After denying responsibility for the contaminated pet food, the Chinese mounted a “counter-attack noting that food contamination occurred both within the US and with US exports to China.” Id. Later, Chinese officials released a five-year food-and-drug safety plan, which called for increased inspections of food exports and a more sophisticated procedure for recalling faulty products. Id. In September 2008, six children died and more than 300,000 became ill in China due to tainted milk powder. 106 China Executed Two over Tainted Milk Powder Scandal, BBC (Nov. 24, 2009, 12:03 AM), http://news.bbc.co.uk/2/hi/8375638.stm. Evidence reveals that the Chinese government began filtering out information on the internet about tainted milk in December 2007 in an effort to protect China’s reputation during the year preceding the Beijing Olympics. 107 The Poison Spreads, supra note 88. Toward the end of September 2008, as the problem grew to massive proportions, the Chinese government’s response changed “seemingly overnight, from suppression to intervention.” 108 Id. Although the Chinese government had an opportunity to suppress the milk powder scandal in 2007 by issuing an early warning, it chose to hide the problem until it became a national crisis.

China’s initial reaction of denying responsibility for product safety issues gives way to draconian punishment when the problems become undeniable. 109 Id. As previously discussed, China executed Zheng Xiaoyu, former head of the State Food and Drug Administration, for accepting bribes and approving substandard products. 110 See supra text accompanying note 100. China’s reaction to the tainted milk powder scandal was similarly severe. The government executed two people and sentenced nineteen others to prison terms. 111 China Executed Two over Tainted Milk Powder Scandal, supra note 106. The Chinese government could alleviate harm to consumers at home and abroad by simply identifying, acknowledging, and alerting consumers to the potentially hazardous goods produced by Chinese manufacturers. However, instead of issuing early warnings, the government historically denies responsibility until numerous consumers have sustained significant injuries.

2. Product Degradation: Quality Fade, Subcontracting, and Third-Party Auditing

The Chinese government fails to provide top-down leadership and enforcement relating to product safety, but Chinese manufacturers are equally responsible for the production of substandard products. “Quality fade,” or “incremental degradation of a product over time,” is to blame for many poorly made Chinese products. 112 Midler, supra note 41, at 96. Chinese manufacturers lure U.S. importers into relationships, offering speed of production, the convenience of manufacturing in a single location, and low prices. 113 Id. at 20. Midler describes the process thus: “Typically, the importer negotiates pricing in advance of any order; then throughout the production process the [manufacturer] looks for savings at every step.” 114 Id. at 83. Initially, the manufacturer will generate a product that matches the importer’s specifications. 115 Shoddy Work, supra note 89. After initial shipments, the manufacturer will resort to cost-cutting techniques, some of which are unsavory and dangerous: “Packaging is cheapened, chemical formulations altered, sanitary standards curtailed, and on and on, in a series of continual product debasements.” 116 Id. Chinese manufacturers thereby transform “profitless contracts into lucrative relationships” by devaluing the manufacturing process and passing off the increased product risk to the importer, and eventually to the consumer who discovers the product’s flaws. 117 Id.

Subcontracting, which can cut costs and accelerate production, is a common practice in China. 118 Harney, supra note 56, at 46. One auditor of Chinese factories estimates that ninety-nine percent of factories in China have a “shadow” factory, an off-site manufacturing building that helps to meet the customer’s demands. 119 Id. U.S. customers, who typically demand to work directly with the factory owners, often have no knowledge of these “shadow” factories, which add an additional level to an already complicated supply chain and make products particularly difficult to trace. 120 Id. As a result, the source of a dangerous product often cannot be identified. 121Id. at 47 (quoting Paul Midler) (internal quotation marks omitted). Midler notes, “You can’t control for quality that you can’t see. . . . Anything you are trying to monitor, you can’t monitor if the product is being made somewhere else.” 122 Id. When U.S. companies take production to China, they surrender the ability to oversee each step of the manufacturing process, and monitoring subcontracting from abroad is extremely difficult. Even reputable companies that carefully monitor their supply chains and emphasize product quality, like Mattel, can still fall victim to the dangers of subcontracting. 123 Stoking Protectionism, supra note 56; China’s Toxic Toymaker, supra note 87. Mattel CEO Bob Eckert blamed the 2007 lead paint toy recall on a subcontractor who used paint from a non-authorized third-party supplier, in violation of Mattel’s policies. 124Thottam, supra note 102. One of Mattel’s contract manufacturers allegedly engaged the subcontractor. Stoking Protectionism, supra note 56. Unless U.S. companies can successfully monitor their suppliers’ subcontractors, there is no guarantee of where, how, or to what standards the products are made. 125 Harney, supra note 56, at 47.

The United States, aware of “quality fade” and subcontracting, has implemented third-party auditing in an attempt to combat substandard production in China. 126 See Dexter Roberts & Pete Engardio, Secrets, Lies, and Sweatshops, BusinessWeek, Nov. 27, 2006, at 50. In theory, auditing is a logical way to monitor Chinese manufacturers. In practice, however, audits fail to provide the necessary oversight. 127 Id. The moment U.S. importers suspect a Chinese manufacturer is cutting corners, the importers typically implement an audit. 128 Shoddy Work, supra note 89. Unfortunately, these inspections are often “more form than function.” 129 Id. Corruption within the auditing industry is widespread and bribes make a mockery of the process. 130 Harney, supra note 56, at 210–11. Many auditors in China have no qualifications and factory managers routinely offer auditors money under the table so the auditor will give the factory a positive review. 131 Id. at 209–211. U.S. companies are not merely innocent players unknowingly subjected to China’s faulty auditing practices. Some U.S. companies who hire auditors tell the inspectors candidly that the inspection is simply a gesture. 132 Id. at 227. U.S. companies want to appear as though they take product control seriously, yet do not want the inspectors to audit too strictly or report too many problems. 133 Id. If problems can go undetected by consumers, companies prefer not to know about substandard products. 134 Shoddy Work, supra note 89. U.S. companies buy from China in order to save money and satiate demand for cheaper products. 135 Harney, supra note 56, at 227. This constant pressure to produce cheap goods incentivizes Chinese manufacturers to break the law to comply with demand. As a result, U.S. companies are caught between the desire to evade costly and disruptive hitches in their manufacturing processes and the fear of being responsible for producing a dangerous product. 136 Shoddy Work, supra note 89.

3. China’s Economic Edge and Resulting Quality Control Issues

Chinese manufacturers get away with “quality fade” 137 Id. and questionable subcontracting practices because they occupy a key place in Western supply chains and have positioned themselves as the leading suppliers for many goods. 138 Stoking Protectionism, supra note 56. Seventy to eighty percent of the toys sold in the United States are made in China. Eric S. Lipton & David Barboza, As More Toys Are Recalled, Trail Ends in China, N.Y. Times (June 19, 2007), http://www.nytimes.com/2007/06/19/business/worldbusiness/19toys.html. Even when U.S. companies are unhappy about the product quality from China, alternative manufacturing sources are limited and China’s low prices are unmatched. 139 Stoking Protectionism, supra note 56. The economic benefits of manufacturing in China are so significant that importers are forced to deal with potential product quality drawbacks. 140 Midler, supra note 41, at 62. Although Mattel recalled millions of Chinese-made toys in 2007, incurring economic and reputational damage, the company continues to outsource its manufacturing to China. 141Thottam, supra note 102. Jyoti Thottam notes, “Mattel needs China just as much as China needs Mattel, and it cannot afford to jeopardize its relationship with the country that produces 65% of its toys.” 142 Id. While U.S. companies may become more selective about which manufacturers they choose to work with, it is “unlikely there [will] be a large shift out of Chinese products.” 143 Stoking Protectionism, supra note 56. China has firmly entrenched itself in U.S. manufacturing supply chains and the mutual economic benefits indicate that the United States will remain China’s primary export market as China further expands its manufacturing prowess.

China is still developing as a country and is arguably going through the same quality cycle that Japan endured in its post-World War II development and that the United States encountered during the nineteenth-century manufacturing boom. 144 Shoddy Work, supra note 89. Economists acknowledge that every developing economy undergoes quality issues and substandard products. 145 Midler, supra note 41, at 197–98. China is maturing in front of the entire developed world and is subjected to more scrutiny than either Japan or the United States suffered. 146 Shoddy Work, supra note 89. However, China’s quality control issues differ from those of Japan and the United States due to the type and the extent of quality manipulation involved. 147 Midler, supra note 41, at 198. China is not simply working out the kinks in its manufacturing process or merely cutting corners; Chinese manufacturers are intentionally manipulating the quality of the product to bypass third-party quality assurance tests and “slip one past the inspectors.” 148 Id. Chinese manufacturers are not only shortcutting the production process in an attempt to save money, but are also deliberately substituting inferior products in such a way that their clients cannot detect the change. 149 Id. Although experts on Chinese production predicted relationships with Chinese manufacturers would mature over time, factory owners have continued to deceive U.S. customers and repeatedly push quality control limits. 150 Id. at 199.

Recent product recalls and safety scares in the United States involving Chinese-made products have highlighted the fact that U.S. consumers are paying for the lack of knowledge and accountability regarding the manufacturing process in China. 151 Harney, supra note 56, at 185. In 2007 alone, the CPSC recalled 473 different products; more than eighty percent were imported and seventy-four percent of those imports came from China. 152Memorandum from the Subcomm. on Commerce, Trade, and Consumer Prot. Staff to Members of the Subcomm. on Commerce, Trade, and Consumer Prot. 1–2 (June 11, 2010), available at http://democrats.energycommerce.house.gov/documents/20100612/Briefing.Memo.ctcp.06.16.2010.pdf. Among these recalled products were Chinese-made pet food, toothpaste, seafood products, tires, and toys. 153Kayla Webley, List of Problem Chinese Imports Grows, NPR (July 10, 2007), http://www.npr.org/templates/story/story.php?storyId=11656278. In August of the same year, Mattel recalled 19 million Chinese-made toys that were coated with excessive amounts of lead paint and contained unsafe magnets. 154Louise Story & David Barboza, Mattel Recalls 19 Million Toys Sent from China, N.Y. Times (Aug. 15, 2007), http://query.nytimes.com/gst/fullpage.html?res=950CEEDB153FF936A2575BC0A9619C8B63&scp=2&sq=Mattel%20toy%20recall&st=cse. Sixty-three of the magnetized toys recalled were made in China, but recalled due to errors in Mattel design specifications. Id. Most recently, in 2009, the CPSC identified defective drywall made in China as problematic. 155 Drywall Information Center, supra note 5. Flaws in the United States and China regarding oversight and accountability in the manufacturing industry mean “the primary source of discovery will come in the worst possible way—by consumers who buy Chinese products, only to discover their flaws themselves.” 156 Shoddy Work, supra note 89, at 90. While it may not be feasible to completely insulate U.S. consumers from flawed Chinese products, consumers should, at the very least, be able to turn to legal recourse for compensation if injured by such products.

II. Current State of the Law and Proposed Legislation

Dangerous Chinese-made products enter the U.S. stream of commerce and injure consumers; however, U.S. victims are unable to sue the foreign manufacturer responsible for production. There are three primary procedural hurdles for plaintiffs attempting to collect on a U.S. judgment against a Chinese manufacturer: (1) personal jurisdiction, (2) service of process, and (3) enforcement of the judgment. These procedural obstacles are discussed in turn. The U.S. Congress has noted the law’s shortcomings in the area of foreign manufacturer liability and, in response to the numerous recalls of Chinese products in 2007, passed the Consumer Product Safety Improvement Act of 2008 (“2008 Act”). 157Consumer Product Safety Improvement Act of 2008, Pub. L. No. 110-314, 122 Stat. 3016; Russell T. Gips, Comment, From China with Lead: The Hasty Reform of the Consumer Product Safety Commission, 46 Hous. L. Rev. 545, 548 (2009). The 2008 Act focuses on improving product safety in the United States, 158 See infra pp. 346–48, which discuss the 2008 Act. but fails to hold foreign manufacturers liable for releasing dangerous products in the U.S. stream of commerce. In an attempt to remedy the shortcomings present in the 2008 Act, Ohio Representative Betty Sutton introduced the Foreign Manufacturers Legal Accountability Act of 2010 in the U.S. House of Representatives in February 2010; when the 2010 Act died in committee, Sutton reintroduced the bill in December 2011. 159See supra notes 27–28 and accompanying text. These proposed items of legislation address personal jurisdiction and service of process as they relate to foreign manufacturers, but fall short of providing a workable method for enforcing U.S. judgments abroad. 160 H.R. 3646, 112th Cong. §§ 3(a), 3(c)(1) (2011); H.R. 4678, 111th Cong. §§ 3(a), 3(c)(1) (2010).

A. Personal Jurisdiction

Foreign manufacturer liability, although an unsettled area of the law, is not a new legal issue. In 1987 the Supreme Court decided Asahi Metal Industry Co. v. Superior Court, a distinguished products liability case involving a Japanese defendant. 161 Asahi Metal Indus. Co. v. Superior Court, 480 U.S. 102 (1987). The Court held that, to sue a foreign company in U.S. court, the plaintiff must prove the defendant established minimum contacts in the forum state such that the suit does not violate “traditional notions of fair play and substantial justice.” 162 Id. at 113–16. The Court’s decision set forth a two-pronged analysis for garnering jurisdiction: (1) the defendant’s purposeful minimum contacts with the forum state, and (2) the fairness of subjecting the defendant to personal jurisdiction in the forum state. 163 Hearing—Leveling the Playing Field, supra note 9. Under the fairness prong, the Court assessed a number of factors, including the burden a foreign company faces in having to defend a suit in the United States. 164 Asahi, 480 U.S. at 113. The Court held that, based on the facts of the case, it was unreasonable for California to assert jurisdiction over the foreign defendant. 165 Id. at 116. The Court failed to announce a majority opinion under the purposeful availment prong, and the split decision produced a confusing set of competing theories regarding what degree of purposeful contact is required to satisfy due process. 166Raymond L. Mariani, U.S. Supreme Court To Revisit Personal Jurisdiction over Foreign Manufacturers, Nixon Peabody (Nov. 16, 2010), http://www.nixonpeabody.com/linked_media/publications/Products_Alert_11_16_2010.pdf.

Justice O’Connor’s plurality opinion states that merely placing a product in the stream of commerce is insufficient to constitute purposeful contact. 167 Asahi, 480 U.S. at 112 (O’Connor, J., plurality). In contrast, Justice Brennan rejected the part of Justice O’Connor’s opinion that required conduct in addition to placing the product in the stream of commerce. Id. at 117 (Brennan, J., plurality). Brennan argued that as long as the defendant is aware that the final product is being marketed in the forum state, jurisdiction comports with the Due Process Clause. Id. O’Connor’s opinion, often referred to as the “stream-of-commerce plus” test, requires the foreign manufacturer to actively engage with the forum state. 168E.g., Nicastro v. McIntyre Mach. Am., 987 A.2d 575, 586 (N.J. 2010). Unfortunately, this high burden has protected Chinese manufacturers from lawsuits. 169One commentator has argued that Justice O’Connor’s opinion in Asahi “has made it virtually impossible for an injured plaintiff to sue a component parts manufacturer in any state or country other than its place of domicile or the state or country where delivery of the component part is made to a product assembler.” Christine M. Wiseman, Reconstructing the Citadel: The Advent of Jurisdictional Privity, 54 Ohio St. L.J. 403, 404 (1993). Justice Brennan’s plurality opinion rejected O’Connor’s stream of commerce theory and advocated for a standard based on the foreign defendant’s “awareness” that the product might end up in the forum state: “As long as a participant in this process is aware that the final product is being marketed in the forum State, the possibility of a lawsuit there cannot come as a surprise.” 170 Asahi, 480 U.S. at 117. Lower courts have been severely divided over the application of the Asahi stream of commerce test. 171 Gary B. Born, International Civil Litigation in United States Courts 139 (3d ed. 1996); Robert C. Neff, After Asahi: Forging a New Personal Jurisdiction Standard, Martindale.com (May 24, 2010), http://www.martindale.com/products-liability-law/article_Wilson-Elser-Moskowitz-Edelman-Dicker_1032600.htm. Some lower courts have created their own hybrid of the O’Connor and Brennan theories regarding the stream of commerce test. Id.

Although the jurisdictional threshold in domestic consumer products cases is traditionally very low, in Asahi the Supreme Court “embraced an arguably higher standard where the defendant is a foreign party.” 172Jacques Delisle & Elizabeth Trujillo, Consumer Protection in Transnational Contexts, 58 Am. J. Comp. L. 135, 138 (2010). The complex minimum contacts analysis and the Court’s failure to articulate a purposeful availment requirement has allowed foreign defendants to escape jurisdiction and thus liability for dangerous and defective products sold in the United States. Most Chinese companies strategically structure their businesses using independent importers and distributors in an effort to reduce their exposure to lawsuits. 173 Hearing—Leveling the Playing Field, supra note 9, at 4. Chinese manufacturers argue that they do not purposefully conduct business in the forum state, leaving legal liability on the shoulders of the U.S. importers, distributors, and retailers. Chinese manufacturers enjoy economic benefits from the sale of their products in the United States, but are insulated from the legal and economic ramifications created when their products cause harm. Globalization and the resulting international marketplace have called into question the effectiveness of the Asahi jurisdictional test. The Supreme Court, agreeing this issue was ripe for discussion, granted certiorari in two cases addressing jurisdiction over foreign manufacturers in the context of a global economy. 174Sean Wajert, Supreme Court Grants Cert in Important Personal Jurisdiction Cases, Mass Tort Def. (Oct. 7, 2010), http://www.masstortdefense.com/2010/10/articles/supreme-court-grants-cert-in-important-personal-jurisdiction-cases.

On June 27, 2011, the Supreme Court issued decisions in two cases that had the potential to vastly expand the scope of products liability suits in U.S. state courts against foreign manufacturers. 175J. McIntyre Mach., Ltd. v. Nicastro, 131 S. Ct. 2780 (2011); Goodyear Dunlop Tires Operations, S.A. v. Brown, 131 S. Ct. 2846 (2011). Unfortunately, the outcomes of both cases will likely bar future products liability lawsuits against foreign manufacturers who have little or no contact with the forum state. 176Eric C. Strain, Personal Jurisdiction: Is No News from the Supreme Court Good News for Foreign Product Manufacturers?, Nixon Peabody (June 30, 2011), http://www.nixonpeabody.com/linked_media/publications/Products_Alert_06_30_2011.pdf. Both cases raised questions regarding when U.S. courts, in accordance with the Fourteenth Amendment Due Process Clause, may hear claims arising from injuries sustained by products manufactured and placed in the stream of commerce by multinational corporations. 177Trooboff, supra note 17. In J. McIntyre Machinery, Ltd. v. Nicastro, the question presented was whether the state of New Jersey may exercise in personam jurisdiction 178A court has in personam, or specific, jurisdiction over a non-resident defendant if the claim arises out of the defendant’s contacts with the forum state. Richard D. Freer, Civil Procedure 40–41 (2d ed. 2009). over a foreign manufacturer when the manufacturer targets the U.S. market in general for the sale of the product. 179Mariani, supra note 166. J. McIntyre, a company incorporated in the United Kingdom, manufactured machinery and used a U.S. distributor (based in Ohio) to sell its products in the United States. 180Nicastro v. McIntyre Mach. Am., 987 A.2d 575, 579 (N.J. 2010). J. McIntyre never sold its machines to buyers in the United States beyond its U.S. distributor, never marketed goods in New Jersey, and never shipped goods directly to New Jersey. 181J. McIntyre Mach., Ltd. v. Nicastro, 131 S. Ct. 2780, 2786 (2011). No more than four of J. McIntyre’s machines ended up in New Jersey. 182Id. J. McIntyre officials did attend annual conventions in the United States for the scrap metal recycling industry; however, none of these conventions took place in New Jersey. 183 Id. An employee of a New Jersey scrap metal company lost four fingers as a result of an accident involving a metal-cutting machine manufactured by J. McIntyre. 184 Nicastro, 987 A.2d at 577. The employee, a resident of New Jersey, brought a products liability action against J. McIntyre in New Jersey state court. 185 Id. at 577–78. J. McIntyre argued, consistent with Asahi, that the state cannot assert personal jurisdiction when the product causing harm entered the state through the stream of commerce unless the foreign entity purposefully availed itself to the benefits of the forum state. 186 Alexandra B. Cunningham, United States Supreme Court To Address “Stream-of-Commerce Theory” as Basis for Personal Jurisdiction over Foreign Manufacturers, Martindale.com (Nov. 11, 2010), http://www.martindale.com/products-liability-law/article_Hunton-Williams-LLP_1182918.htm.

The New Jersey Supreme Court issued an opinion, characterized as an “unprecedented expansion of personal jurisdiction,” 187 Id. in which the divided court held that when a foreign manufacturer places an allegedly defective product in the stream of commerce that targets the U.S. market and a New Jersey consumer purchases that product, the manufacturer is subject to personal jurisdiction in New Jersey. 188 Nicastro, 987 A.2d at 592. The court conducted an extensive analysis of Asahi in the context of a globalized economy and ultimately applied a stream of commerce test that comported with Justice Brennan’s “awareness” standard in Asahi. 189 Id. at 589. The court found it significant that “our nation is a global economy driven by startling advances in the transportation of products and people.” 190 Id. at 582. The court recognized the impact of globalization, and its holding reflects a shift in the law to account for the dramatic changes in international commerce—reflecting the new reality of a contemporary global economy.

The U.S. Supreme Court reversed the New Jersey Supreme Court and held 6-3 that personal jurisdiction did not exist in this particular products liability case. However, there was no majority opinion on the applicable rule of law to be applied in similar situations. 191 J. McIntyre Mach., Ltd. v. Nicastro, 131 S. Ct. 2780, 2791 (2011) (Kennedy, J., plurality); John Maley, Editorial: Personal Jurisdiction Theories Still Evolving, Ind. Law. (Aug. 3, 2011), http://www.theindianalawyer.com/article/print?articleId=26858. The Court held that no stream of commerce doctrine can displace the general rule, which requires that a manufacturer is subject to jurisdiction only if it purposefully avails itself of the privileges of conducting activities within the forum state. 192 J. McIntyre, 131 S. Ct. at 2785 (Kennedy, J., plurality). In this case, J. McIntyre did not have a single contact with New Jersey other than the fact that the product in question ended up there; therefore, the Court reasoned, it had not purposefully availed itself of the New Jersey market. 193 Id. at 2790. Justice Kennedy, writing for a plurality of four justices, adhered to O’Connor’s concurrence in Asahi, in which she wrote that placement of a product into the stream of commerce, on its own, does not constitute purposeful action by the defendant directed toward the forum state. 194 Id. at 2792 (Breyer, J., concurring). Kennedy disagreed with Justice Brennan’s opinion in Asahi, which argued that jurisdiction can be based simply on placing a product into the stream of commerce, so long as the defendant is aware that the product is being marketed in the forum state and “the possibility of a lawsuit there cannot come as a surprise.” Id. at 2789 (Kennedy, J., plurality). Applying this standard, Kennedy opined that jurisdiction over J. McIntyre was improper because, while J. McIntyre may have intended to serve the U.S. market generally, there was no evidence of any actions leading to purposeful availment of the New Jersey market specifically. 195 Id. at 2790–91 (Kennedy, J., plurality).

Justice Breyer, joined by Justice Alito, filed a concurrence in which he agreed with the ruling, but argued it was “unwise to announce a rule of broad applicability” at this time, given that the case failed to address recent advances in commerce and communication. 196 Id. at 2791 (Breyer, J., concurring). Breyer relied on precedent and felt that the case should be decided narrowly and limited to its facts. 197 Id. He found this particular case an unsuitable vehicle for making extensive pronouncements that “refashion basic jurisdictional rules.” 198 Id.; see also Esther H. Lim, No Personal Jurisdiction Exists over a Foreign Party Because Simply Placing Goods in the Stream of Commerce, Without More, Is Not an Act Purposefully Directed to the Forum State, Finnegan (July 2011), http://www.finnegan.com/files/upload/Newsletters/Last_Month_at_the_Federal_Circuit/2011/July/FCN_Jul11_4.html. Although Breyer declined to overturn Asahi at this opportunity, he acknowledged that the global economy might require a reexamination of the Court’s precedents. 199 Beth S. Rose & Charles J. Falletta, U.S. Supreme Court Reversed New Jersey’s Exercise of Personal Jurisdiction over Foreign Manufacturer, Nat’l L. Rev. (Aug. 5, 2011), http://www.natlawreview.com/article/us-supreme-court-reverses-new-jersey-s-exercise-personal-jurisdiction-over-foreign-manufac-2.

Justice Ginsburg, joined by two other justices, strongly disagreed with the fractured majority. 200 J. McIntyre, 131 S. Ct. at 2794–2804 (Ginsburg, J., dissenting). Ginsburg felt J. McIntyre’s goal was to “simply sell as much as it can, wherever it can.” 201 Id. at 2794. She opined that jurisdiction could be properly exercised over J. McIntyre based on the manufacturer’s efforts to distribute products in the United States generally. 202 Id. at 2801. Ginsburg wrote, “McIntyre UK, by engaging McIntyre America to promote and sell its machines in the United States, purposefully availed itself of the United States market nationwide . . . . McIntyre UK thereby availed itself of the market of all States in which its products were sold by its exclusive distributor.” 203 Id. (internal quotation marks omitted). Ginsburg feared that “the Court’s decision would allow foreign manufacturers to insulate themselves from products liability litigation in the U.S. by engaging a U.S. distributor to ship its goods throughout the U.S. market.” 204 Rose & Falletta, supra note 199. She warned that the Court’s decision might prevent U.S. states from protecting their citizens from defective products. 205 Id.

In Goodyear Dunlop Tires Operations, S.A. v. Brown, the Supreme Court addressed whether a foreign corporation is subject to general jurisdiction when the particular product at issue did not enter the forum state, but other similar products did. 206Mariani, supra note 166. In 2004, two thirteen-year-old boys from North Carolina died in a bus accident outside of Paris, France. 207Brown v. Meter, 681 S.E.2d 382, 384 (N.C. Ct. App. 2009). The complaint alleged that a flawed Goodyear tire caused the incident. 208 Id. The administrators of the boys’ estates brought suit against Goodyear subsidiaries, located abroad, in North Carolina state court. 209 Id. The suit claimed Goodyear tires were defectively manufactured and subsequently caused the accident. 210 Id.

The dispute in this case did not arise from Goodyear’s contacts with North Carolina. 211 Id. at 387. The tires in question were manufactured overseas and the accident occurred in France. Therefore, general rather than specific jurisdiction was at issue. General jurisdiction is permissible when the defendant’s contacts with the state are unrelated to the cause of action, but the defendant’s activities with the state are sufficiently “continuous and systematic” to permit jurisdiction over the defendant. 212 Id. at 388 (quoting Skinner v. Preferred Credit, 361 N.C. 114, 122 (2006)). The North Carolina Court of Appeals found jurisdiction was permissible over Goodyear subsidiaries that were located abroad and that manufactured tires for sale in the United States. 213 Id. at 395. The court acknowledged the defendants operated a continuous and highly organized U.S.-based sales and distribution network. 214 Id. Goodyear subsidiaries manufactured thousands of tires that were distributed in North Carolina. 215 Id. The court held jurisdiction was proper because the foreign subsidiaries could have reasonably expected to be sued in North Carolina court based on their continuous sale of tires in the United States. 216 Id. at 394.

The U.S. Supreme Court reversed the judgment of the North Carolina Court of Appeals. 217 Goodyear Dunlop Tires Operations, S.A. v. Brown, 131 S. Ct. 2846, 2858 (2011). In a unanimous decision, the Court held that the three foreign subsidiaries of Goodyear were not subject to personal jurisdiction in North Carolina state court. 218 Id. at 2857. Justice Ginsburg, writing for the Court, stated that general jurisdiction could not be based on the fact that some of the tires Goodyear subsidiaries manufactured abroad entered North Carolina through the stream of commerce. 219 Id. at 2855–56. She explained that such a tenuous connection with the state did not establish the requisite “continuous and systematic” affiliation that would allow North Carolina to exercise general jurisdiction. 220 Id. at 2856. Ginsburg explained that “flow of a manufacturer’s products into the forum . . . may bolster an affiliation germane to specific jurisdiction . . . but ties serving to bolster the exercise of specific jurisdiction do not warrant a determination that, based on those ties, the forum has general jurisdiction over a defendant.” 221 Id. at 2855 (emphasis in original).

Almost twenty-five years after its decision in Asahi, the Supreme Court had the opportunity to revisit the decision and to amend or overrule the judgment, which is now inadequate because it fails to protect U.S. consumers from defective foreign-made products sold in the United States. The Court clarified the general jurisdiction standard in Goodyear but punted when it came time to issue a framework for specific jurisdiction in J. McIntyre. 222 See Atkins, supra note 25. The stream of commerce theory “remains unsettled at best” after J. McIntyre, 223 Maley, supra note 191. and the fractured opinion virtually ensures there will be future decisions from the Court on this issue as both federal and state courts wrestle with the impact of globalized commerce on products liability lawsuits. 224John C. Maloney & Florice E. Pressman, The Supreme Court Protects Foreign Manufacturers in the Stream of Global Commerce, Martindale.com (July 20, 2011), http://www.martindale.com/products-liability-law/article_Day-Pitney-LLP_1316130.htm. Unfortunately, the Court missed an opportunity to issue a definitive statement on questions regarding the jurisdictional reach of U.S. courts in products liability cases and the ramifications of the split decision in Asahi remain virtually unaltered. 225Strain, supra note 176. The Court declined to expand the jurisdictional reach of state courts based on a foreign defendant’s nationwide contacts; therefore, it will be more difficult for plaintiffs to succeed on a pure stream of commerce theory against foreign manufacturers. 226Id. Raising the bar for personal jurisdiction will undoubtedly hurt U.S. consumers who are injured by products manufactured abroad and sold in the United States. 227Atkins, supra note 25. Thomas L. Gowen, a partner at the Locks Law Firm in Philadelphia, commented on the decisions: “Basically the Supreme Court has given corporations a roadmap for avoiding responsibility.” 228Id. The Court has allowed foreign manufacturers to insulate themselves by using middlemen in their distribution chains and by targeting the U.S. market while claiming they have no knowledge of precisely where their products will be sold.

B. Service of Process

Personal jurisdiction is merely the first procedural hurdle a plaintiff must overcome in a suit against a foreign manufacturer. Once a plaintiff has garnered personal jurisdiction over the defendant, the plaintiff must properly serve the defendant, thereby providing notification of the charge. 229 Freer, supra note 178, at 40–41; see also Hearing—Leveling the Playing Field, supra note 9, at 4. The United States and China have not executed a bilateral treaty governing service of process; therefore, the Hague Convention on the Service of Process Abroad of Judicial and Extrajudicial Documents in Civil and Commercial Matters 230Hague Convention on the Service of Process Abroad of Judicial and Extrajudicial Documents in Civil and Commercial Matters, Nov. 15, 1965, 658 U.N.T.S. 163. governs. 231Daniel Griswold & Sallie James, Consumer Safety Bill Could Boomerang Against U.S. Manufacturers, Free Trade Bull., Sept. 28, 2010, at 1, available at http://www.cato.org/pub_display.php?pub_id=12174. The United States ratified the convention in 1969. Born, supra note 171, at 797. China became a member in 1991. Id. Article 2 of the convention requires each contracting state to designate a Central Authority, which will undertake to receive requests for service. 232Hague Convention on the Service of Process Abroad of Judicial and Extrajudicial Documents in Civil and Commercial Matters, supra note 228, art. 5. Under Article 5, “[t]he Central Authority of the State addressed shall itself serve the document or shall arrange to have it served by an appropriate agency.” 233 Id. A U.S. plaintiff bears the cost of having the Central Authority in China serve notice as well as the cost of translating the document from English to Chinese, which often amounts to thousands of dollars. 234 Hearing—Leveling the Playing Field, supra note 9, at 4. Due to complex supply chains and collusion between government and factory owners, Chinese authorities often fail to serve process or cannot locate the accused company because it has dissolved or changed ownership. 235 Dan Harris, Chinese Drywall Litigation and Why Seizing Assets Is Very Different from Seizing Ships, China L. Blog (Feb. 28, 2010), http://www.chinalawblog.com/2010/02/chinese_drywall_and_the_halfas.html. The lack of a registered agent for service of process in the United States is problematic and encourages plaintiffs to sue U.S. defendants when such an option is available. 236 See Hearing on H.R. 4678, the “Foreign Manufacturers Legal Accountability Act” Before the H. Subcomm. on Commerce, Trade, and Consumer Prot., 111th Cong. 2 (2010) [hereinafter Hearing—H.R. 4678] (statement of Jeremy Baskin, Import Surveillance Division, Office of Compliance, U.S. Consumer Product Safety Commission).

C. Enforcement

Enforcement of a U.S. judgment in China is the most formidable obstacle an injured U.S. consumer faces. Even if plaintiffs can garner jurisdiction over the manufacturer and properly serve the company, the judgment is meaningless until the injured consumer receives financial compensation. Although a plaintiff could enforce the judgment if a Chinese company had assets in the United States, or in another country that generally enforces U.S. judgments, Chinese manufacturers rarely have assets outside of China. 237 Hearing—Leveling the Playing Field, supra note 9, at 4. Article 267 of the Chinese Civil Procedure Law mandates the existence of a treaty or de facto reciprocity to enforce a foreign judgment in China—neither exists between the United States and China. 238Donald C. Clarke, The Enforcement of United States Court Judgments in China: A Research Note 1–2 (George Washington Univ. Law Sch. Pub. Law & Legal Theory, Working Paper No. 236, 2004), available at http://papers.ssrn.com/sol3/papers.cfm?abstract_id=943922.

Because no such United States–China treaty exists, the only potential enforcement mechanism at present is reciprocity. 239 Id. at 2–3. Reciprocity is based on the theory that if the United States is willing to enforce Chinese judgments, China would be willing to enforce U.S. judgments. 240 See Di Er Bai Liu Shi Wu Tiao (第二百六十五条) [Civil Procedure Law of the People’s Republic of China, Article 265], (promulgated by the Standing Comm. Nat’l People’s Cong., Oct. 28, 2007, effective April 9, 1991), available at P.R.C. Laws, http://www.lawinfochina.com/display.aspx?id=6459&lib=law. Under PRC Law, “[i]f a legally effective judgment or ruling made by a foreign court seeks the recognition and enforcement of a people’s court of the People’s Republic of China, . . . the foreign court may, according to the provisions of the international treaties concluded or acceded to by the People’s Republic of China or based on the principle of reciprocity, request the recognition and enforcement of a people’s court.” Id. In 2009, the Central District of California upheld a judgment against Robinson Helicopters, issued by a Chinese court, under California’s Uniform Money Judgments Recognition Act. 241Hubei Gezhouba Sanlian Indus. v. Robinson Helicopter Co., No. 2:06-cv-01798-FMC-SSx, 2009 WL 2190187 (C.D. Cal. July 22, 2009). Although enforcement of a single Chinese judgment does not create reciprocity, the United States has demonstrated that it will enforce Chinese decisions that are “final, conclusive, and enforceable.” 242Id. at *5. A civil suit for recognition of a foreign judgment may be heard under federal law if the foreign judgment is “final, conclusive and enforceable.” Id. China has yet to reciprocate. 243See Zhang Shouzhi et al., Forum Shopping for Dispute Resolution, King & Wood, http://www.kingandwood.com/article.aspx?id=Forum-Shopping-for-Dispute-Resolution-Hurdles-and-Solutions&language=en (last visited Mar. 10, 2012). Chinese courts do not presume China has reciprocal interests with other countries, and China has not acceded to any multilateral treaties that allow it to mutually recognize and enforce court judgments rendered in other countries. Id. “In short, if there is no applicable bilateral treaty providing mutual recognition and enforcement of judgments between the forum state and China, judgments rendered in the forum state will not be recognized and enforced by Chinese courts.” Id. Granting greater recognition to Chinese judgments in the United States would not require courts in China to offer the same recognition to American decisions. 244 Harris, supra note 235. Reciprocity is built on mutual respect for each other’s legal systems and a desire to nurture and protect the relationship between the two countries. Such an understanding does not yet exist between China and the United States. 245Eric Stone, the former director of the CPSC Legal Division, Office of Compliance and Field Operations, notes that “[w]e are not yet at a point in our international jurisprudence where each country is willing to participate in another’s legal processes.” Kessler & Sapien, supra note 1.

Under U.S. customs law, the U.S. importer of record (the owner or purchaser of the goods) is charged with the legal responsibility of ensuring goods enter the United States in compliance with all federal laws. 24619 U.S.C. § 1484(a) (2006). U.S. products liability law has expanded liability to encompass not only manufacturers, but distributors and sellers as well. 247 Restatement (Third) of Torts: Products Liability, supra note 10, § 1. A consumer injured by a defective product in the United States can bring suit against anyone in the supply chain—from the manufacturer to the importer or retailer. Due to the procedural mechanisms presently in place, a U.S. plaintiff would save time and money bringing suit against a domestic defendant rather than a Chinese manufacturer. 248 Hearing—Leveling the Playing Field, supra note 9, at 4. Furthermore, the plaintiff is considerably more likely to receive economic compensation in a domestic suit, given the fact that China has never before enforced a U.S. judgment. 249See Shouzhi et al., supra note 243.

The United States is presently grappling with the law’s procedural shortcomings regarding protection for consumers who are injured by foreign-made products. The fact that the U.S. Supreme Court granted certiorari in two cases in this area indicates the severity of the law’s imperfections. Unfortunately, effective economic compensation for injured U.S. consumers remains elusive. Even if jurisdiction and service of process are possible, no solution currently exists regarding enforcement of the judgment. A fund designated to reimburse injured U.S. consumers would circumvent the law’s inability to force China to honor U.S. judgments. Manufacturers responsible for dangerous exports would be required to contribute to the fund, 250If a manufacturer produced a product that injured a U.S. citizen and failed to compensate the victim, the manufacturer would be required to contribute to the fund as a condition of continuing to export to the United States. thereby providing the economic incentive that the law lacks to incite Chinese manufacturers to monitor the quality and safety of their products. At the same time, the fund would provide a mechanism for injured consumers to enjoy the monetary compensation they deserve. Procedural amendments like those the Supreme Court considered in J. McIntyre and Goodyear should be welcomed, but will not alone resolve the law’s shortcomings.

Efforts to amend foreign manufacturer liability law in the United States have not been limited to judicial activism. The U.S. Congress has attempted to address liability of foreign manufacturers through legislative action. A combination of government agency regulations and Congressional legislation demonstrates the ongoing significance of the issue. Unfortunately, such legislative efforts have been largely ineffective.

D. Consumer Product Safety Improvement Act of 2008

On August 14, 2008, in response to the massive recalls of Chinese products in 2007, the U.S. Congress passed the Consumer Product Safety Improvement Act of 2008 (“CPSIA”). 251Gips, supra note 157, at 568–69; Consumer Product Safety Improvement Act of 2008, Pub. L. No. 110-314, 122 Stat. 3016 (2008). The bill was a bipartisan effort enacted to protect U.S. consumers from defective products. 252Eileen Flaherty, Note, Safety First: The Consumer Product Safety Improvement Act of 2008, 21 Loy. Consumer L. Rev. 372, 384 (2009). The 2008 Act modified the Consumer Product Safety Act, which Congress passed in 1972 as a response to the lack of nationwide comprehensive consumer product safety regulation. 253Gips, supra note 157, at 549. The Consumer Product Safety Act created the CPSC, an independent government agency “charged with protecting the public from unreasonable risks of injury or death from thousands of types of consumer products under the agency’s jurisdiction.” 254CPSC Overview, U.S. Consumer Protection Safety Commission, http://www.cpsc.gov/about/about.html (last visited Mar. 20, 2010). The Consumer Product Safety Act grants the CPSC the power to set mandatory product safety standards, ban dangerous products from the marketplace, order product recalls, and levy fines against violators. 255 Charles W. Lamb et al., Marketing 113 (10th ed. 2009). Despite the CPSC’s enforcement powers, in 2007 it was understaffed, underfunded, and charged with regulating an ever-increasing number of imported goods. 256 Id. “From 1998 to 2007, the value of consumer products imported into the United States increased over 100 percent.” Hearing—H.R. 4678, supra note 236 (statement of Jeremy Baskin, Import Surveillance Division, Office of Compliance, U.S. Consumer Product Safety Commission).

The 2007 product recalls exposed the shortcomings of the U.S. product safety system and made it clear U.S. consumer safety laws needed reform. 257 Hearing—H.R. 4678, supra note 236 (statement of Ami V. Gadhia, Policy Counsel, Consumers Union). The CPSIA, which focuses on improving product safety, requires toys and infant products to be tested before they are sold, and mandates permissible limits for lead. 258Consumer Product Safety Improvement Act of 2008, Pub. L. No. 110-314, §§ 101–102, 122 Stat. 3016, 3017–28. The CPSIA protects whistleblowers, increases CPSC resources, and increases the civil and criminal penalties the CPSC can assess against violators. 259 Id. § 217. A civil penalty of $100,000 is imposed for each violation of the CPSIA and a maximum of $15 million for any related series of violations. A maximum five-year sentence will be imposed for knowingly and willfully violating consumer product safety laws. Id. The CPSIA also created the first comprehensive, publicly accessible consumer complaint database, which identifies and updates information regarding hazardous products. 260 Id. § 212.

One obstacle the CPSIA fails to address adequately is the challenge posed by the sheer number of products the United States imports. The United States Customs and Border Patrol (“CBP”) is charged with safeguarding U.S. borders and facilitating the flow of trade, which includes ensuring that goods arriving in the United States are safe for consumer consumption. 261 See CBP Mission Statement and Core Values, CBP.gov (Feb. 17, 2009), http://www.cbp.gov/xp/cgov/about/mission/guardians.xml. On a typical day the CBP processes 70,900 truck, rail, and sea containers at 326 ports of entry. 262 U.S. Customs & Border Prot., Snapshot: A Summary of CBP Facts and Figures 1 (2007), available at http://www.phpintl.com/PDF%20Files/cbp_snapshot_final.pdf. Following the enactment of the CPSIA, the CPSC partnered with the CBP staff to leverage joint resources and increase inspection of products entering the United States. 263 Hearing—H.R. 4678, supra note 236 (statement of Jeremy Baskin, Import Surveillance Division, Office of Compliance, U.S. Consumer Product Safety Commission). The CBP and CPSC executed a Memorandum of Understanding allowing CPSC inspectors to target suspect shipments before they arrive and intercept potentially hazardous goods prior to entering the U.S. stream of commerce. 264 Id.

In 2007, at the port of Los Angeles, which receives 15 million truck-sized containers a year, a single CPSC inspector would spot-check incoming shipments two or three days a week. 265Eric Lipton, Safety Agency Faces Scrutiny amid Changes, N.Y. Times, Sept. 2, 2007, at A1. While CBP agents help inspect imports, they are often looking for counterfeit goods, not necessarily products that fail to comply with safety standards. 266 Id. The number of port inspectors the agency has implemented since the CPSIA is negligible, 267 Hearing—H.R. 4678, supra note 236 (statement of Jeremy Baskin, Import Surveillance Division, Office of Compliance, U.S. Consumer Product Safety Commission). exemplifying that post-CPSIA, budget and personnel remain inadequate to ensure the safety of imported products. Today, the vast majority of imported cargo enters the United States without being screened. 268 See Lipton, supra note 265. Despite efforts to the contrary, defective Chinese-made products will elude border protection and enter into the U.S. stream of commerce. Consumers should be able to rely on U.S. law to provide a remedy for injuries resulting from these defective products.

The CPSIA’s most significant shortcoming is its failure to address how to hold foreign manufacturers liable for introducing dangerous products into the U.S. marketplace. In her testimony before the House Subcommittee on Energy, Trade, and Consumer Protection, Ami Gadhia, policy counsel for the Consumers Union, acknowledged the CPSIA has “made great strides in improving product safety,” but noted that the law “does not address bringing foreign manufacturers into our civil justice system.” 269 Hearing—H.R. 4678, supra note 236 (statement of Ami V. Gadhia, Policy Counsel, Consumers Union). Gadhia argued, “American consumers must be able to hold manufacturers accountable when they are harmed—no matter where the products are made.” 270 Id. Gadhia’s testimony was offered in support of the Foreign Manufacturers Legal Accountability Act of 2010. 271 Id. Although the 2010 Act expired with its Congressional session, Gadhia’s testimony successfully highlighted the loopholes and deficiencies of the CPSIA. 272 See id. The CPSIA lacks a mechanism to punish manufacturers; therefore, manufacturers lack the incentive to comply with U.S. product safety laws.

E. Foreign Manufacturers Legal Accountability Acts of 2010 and 2011

The CPSIA’s failure to enforce penalties against foreign manufacturers has left the door open for additional legislation in this area of the law. In response to concerns about Chinese-made products, particularly defective drywall, Ohio Democrat Betty Sutton introduced the Foreign Manufacturers Legal Accountability Act of 2010 in the U.S. House of Representatives in February 2010. 273H.R. 4678, 111th Cong. (2010). Sutton’s position is that “the current system makes it difficult to sue shadowy companies that export toxic drywall, faulty infant cribs or children’s toys containing lead paint. . . . We cannot allow foreign manufacturers to continue to undercut U.S. manufacturers by disregarding the safety of their products, thereby endangering our consumers and costing us jobs.” 274Ian Swanson, Import Ban Bill Has Manufacturers Worried, Hill (Sept. 13, 2010, 5:00 AM), http://thehill.com/business-a-lobbying/118257-import-ban-bill-has-manufacturers-worried. The 2010 Act was approved in July 2010 by the House Energy and Commerce Committee, but died in committee. 275See supra notes 28–29 and accompanying text. The bill was reintroduced as the Foreign Manufacturers Legal Accountability Act of 2011 in December 2011; the 2011 Act is in committee as of this writing. 276See supra notes 28–29 and accompanying text.

The 2011 Act would require foreign manufacturers who export products to the U.S. market to establish a registered agent in the United States authorized to accept service of process against the manufacturer. 277H.R. 3646, 112th Cong. §§ 3(a), 3(c)(1) (2011); see also Daniel Griswold, Chinese Drywall Maker Held Accountable Without Congressional Meddling, Cato Liberty (Oct. 15, 2010, 2:37 PM), http://www.cato-at-liberty.org/chinese-drywall-maker-held-accountable-without-congressional-meddling (discussing the 2010 Act). The agent must be registered in a state with “substantial connection to the importation, distribution, or sale of the products of the foreign manufacturer or producer” such that the minimum contacts test is satisfied and service is appropriate. H.R. 3646 § 3(a)(2)(A). A 2009 companion bill in the Senate, sponsored by Senator Sheldon Whitehouse, died following introduction. S. 1606: Foreign Manufacturers Legal Accountability Act of 2009, Govtrack.us, http://www.govtrack.us/congress/bill.xpd?bill=s111-1606 (last visited Mar. 20, 2012). By registering an agent, the foreign manufacturer would thereby consent to jurisdiction of the state and federal courts of the state in which the agent is located for any civil or regulatory proceedings. 278H.R. 3646 § 3(c). If a foreign manufacturer fails to designate a registered agent in the United States, the 2011 Act would ban the importation of any goods produced by the manufacturer. 279 Id. § 4(a). The proposed legislation would apply to “covered products” regulated by federal agencies. 280 Id. § 3(c). Section 2(3) of the 2011 Act defines the term “covered product,” which includes drugs and cosmetics, biological products, consumer products, chemical substances, and pesticides. 281 Id.

The impetus behind the 2010 and 2011 Acts stems from the failure of previous legislation to ensure compensation from foreign manufacturers for U.S. consumers who are injured by defective foreign-made products. 282 See Press Release, Am. Ass’n for Just., Legislation Would Aid Consumers in Holding Foreign Manufacturers Accountable for Dangerous Products (Aug. 7, 2009), available at http://www.justice.org/cps/rde/xchg/justice/hs.xsl/10192.htm. The Chinese drywall debacle has bolstered the belief that U.S. consumers “damaged by faulty products, whether made abroad or domestically, should be able to seek compensation through the courts.” 283Griswold & James, supra note 231. By making consent to jurisdiction and service of process a condition of importing products into the United States, 284H.R. 3646 § 3(a). the 2011 Act, if passed, would eliminate two of the procedural hurdles presently in place. However, the 2011 Act’s fatal flaw is its failure to address enforcement, the third and most important procedural hurdle. Daniel Griswold, the director of the Center for Trade Policy Studies at the Cato Institute and Sallie James, a trade policy analyst at the Cato Institute, noted in regards to the 2010 Act:

Requiring foreign companies like the Chinese drywall producer to designate a legal representative in the United States would not guarantee collection of damages from the producer. . . . Merely having a designated agent in the United States would not guarantee access to the resources of the original manufacturer to pay for the damages ultimately awarded in a court case. 285Griswold & James, supra note 231.

Enactment of the 2011 Act is unlikely to incentivize Chinese manufacturers to enforce U.S. court judgments. Manufacturers will likely appoint a “fall man” to accept service of process in the United States and subsequently refuse enforcement. The 2011 Act is a unilateral action on behalf of the United States and, as previously discussed, China is under no legal obligation to acknowledge or enforce U.S. judgments. 286 See supra text accompanying notes 238–44.

Critics of the 2010 and 2011 Acts describe the legislation as protectionist. 287 See Tom Ramstack, Foreign Countries Upset About “Protectionist” U.S. Trade Bill, Daily HR Tips.com (Sept. 21, 2010), http://www.dailyhrtips.com/2010/09/21/foreign-countries-upset-about-protectionist-u-s-trade-bill. Canadian Ambassador Gary Doer argued, in regards to the 2010 Act, that the legislation would have given an unfair trade advantage to U.S. firms, who are not required to appoint an agent, thereby violating the World Trade Organization and North American Free Trade Agreement Rules. 288 Id. U.S. sponsors argued that the 2010 Act fell under the exception to WTO fair trade rules that protect life and health. Id. Small and mid-sized businesses that are unable to afford hiring an agent in the United States would be cut out of the U.S. market by the 2011 Act’s passage. 289 Id. In a letter written to Speaker of the House Nancy Pelosi, Doer argued that the 2010 Act, then still in committee, would have added another logistical and administrative requirement, thereby interfering with trade across the border. 290 Id. Treaties between the United States and Canada allow U.S. plaintiffs to bring suit against Canadian manufacturers and Canadian courts routinely enforce American court judgments where jurisdiction and due process is proper. 291 Id. The intent of the 2010 and 2011 Acts is to make jurisdiction and service of process over foreign manufacturers easier for U.S. plaintiffs. 292 See supra text accompanying notes 231–37. Because neither jurisdiction nor service of process over Canadian manufacturers is problematic, the 2011 Act, as applied to Canada, would be redundant and would impose additional procedural constraints to maintain current levels of trade between the two nations.

Criticisms of the 2010 Act were not limited to cries of protectionism. 293Andrew Mayeda, U.S. Bill “Badly Crafted,” Trade Minister Says, Edmonton J. (Sept. 24, 2010), http://www2.canada.com/edmontonjournal/news/business/story.html?id=21fe7957-61b4-40aa-a175-9f28db18a78a. The proposed law, opponents argued, might have encouraged similar retaliatory legislation from other countries, which would have a negative impact on U.S. exporters. 294Griswold & James, supra note 231. Additionally, costly registration requirements in the event of the 2011 Act’s passage could force some foreign manufacturers to exit the market, thereby limiting options for U.S. consumers. 295 Id.; Hearing–H.R. 4678, supra note 236 (statement of Marianne Rowden, President & CEO, American Association of Exporters and Importers). While the 2011 Act, if passed, will apply equally to all U.S. trading partners, the enhanced restrictions appear to specifically target Chinese manufacturers. Such targeted legislation runs the risk of escalating chronic bilateral trade frictions between the United States and China. 296Delisle & Trujillo, supra note 172, at 162.

Pritam Banerjee, the Head of Trade and International Policy at the Confederation of Indian Industry, felt the 2010 Act was unnecessary supplemental legislation designed to satisfy protectionist supporters. 297Pritam Banerjee, The Foreign Manufacturers Liability and Accountability Act: A Major Concern for Indian Exporters to the US, World Com. Rev., http://worldcommercereview.com/publications/article_pdf/294 (last visited Mar. 3, 2012). Banerjee argued the CPSIA “already provides more than adequate protection to the U.S. consumer by requiring producers to test and verify that products entering the United States conform to U.S. standards before they are imported into the country.” 298 Id. As previously discussed, budget and personnel issues, and the sheer number of U.S. imports, mean most imported cargo enters the United States without inspection. 299 See supra text accompanying notes 266–69. As a result, U.S. consumers who purchase flawed Chinese-made products are typically the first to discover the defects in the products. 300 Shoddy Work, supra note 89.

Other critics of the 2010 Act argued that the existing legal system, which allows plaintiffs to bring suit against U.S. importers, distributors, and retailers, works reasonably well and provides adequate compensation for U.S. consumers. 301 See Griswold & James, supra note 231. As previously discussed, this framework shields Chinese manufacturers from liability and shifts the entire cost of legal responsibility to U.S. players in the supply chain. 302 See supra text accompanying notes 84–87. Simply augmenting the legal penalties imposed against domestic partners of foreign producers lets China off the hook and allows the Chinese to benefit economically from exports to the United States without internalizing any costs of harm. 303 See Kenneth A. Bamberger & Andrew T. Guzman, Keeping Imports Safe: A Proposal for Discriminatory Regulation of International Trade, 96 Calif. L. Rev. 1405, 1410 (2008). Additionally, the current system fails to protect consumers who are unable to sue U.S. parties. The creation of a fund would protect those consumers and work to close the loophole in the existing framework.

Products liability ensures “that the costs of injuries resulting from defective products are borne by the manufacturers that put such products on the market rather than by injured persons who are powerless to protect themselves.” 304Greenman v. Yuba Power Prods., Inc., 377 P.2d 897, 901 (Cal. 1963). Under the present system, if U.S. consumers are harmed by a defective Chinese-made product and are unable to sue a party in the United States, they are left without legal recourse. 305 See supra text accompanying notes 8–10. An innocent U.S. consumer who unknowingly buys a house constructed with defective Chinese-made drywall will receive no legal or economic compensation from the manufacturer responsible for the faulty product. 306The manufacturer is directly responsible for production and therefore is arguably the party most responsible for product quality issues. The problem the 2010 and 2011 Acts were designed to address is real; however, the proposed legislation alone is not the answer. As discussed in reference to the relevant Supreme Court cases, J. McIntyre and Goodyear, expanded jurisdiction and service of process will be of little significance if China refuses to recognize U.S. judgments. 307Experts Predict Passage of the Foreign Manufacturers Legal Accountability Act of 2010: What Does This Law Mean to U.S. Importers and Exporters?, Katten (July 21, 2010), http://www.kattenlaw.com/experts-predict-passage-of-foreign-manufacturers-legal-accountability-act. The 2011 Act fails to provide an adequate mechanism for ensuring reimbursement for consumers who have been injured by foreign manufacturers. Like those of the judiciary, legislative attempts to combat liability of foreign manufacturers have fallen short of protecting injured consumers. The fund concept is a solution that bypasses the legal obstructions and delves into the heart of the problem—economic compensation.

III. The United States and China Moving Forward—Imposing Liability on Chinese Manufacturers

Persistent debate among legal scholars and advocates regarding the ideal solution for holding foreign manufacturers liable for faulty products highlights the ongoing uncertainty inherent in this area of the law. 308 See Clarke, supra note 238, at 2–3. The fund concept is a practical framework that aims to ensure availability of economic compensation for the injured consumer; however, it is not the only possible solution. One resolution to the current legal dilemma would be for the United States and China to execute a bilateral treaty mandating the enforcement of each other’s products liability judgments. 309Donald C. Clarke argues a treaty is the only ground upon which a Chinese court would enforce a U.S. judgment. Id. at 2–3. A bilateral treaty would be specific to the unique relationship the United States and China enjoy, and the two countries could negotiate and tailor the terms to best reflect their needs and concerns. Such a treaty should command specific penalties, likely economic, if either the United States or China failed to enforce a legitimate judgment from the other nation. Political activist and four-time Green Party presidential candidate Ralph Nader is a longtime advocate of a consumer protection treaty with China. 310Ralph Nader, Weak-Kneed in China, CounterPunch (Nov. 25, 2009), http://www.counterpunch.org/nader11252009.html. In addition to calling for increased access to Chinese factories and testing laboratories, Nader argues a United States–China treaty must subject Chinese companies who do business in the United States to U.S. tort and contract laws. 311 Id. Although a bilateral treaty is an attractive solution, it is unlikely China will consent to such an agreement. Chinese manufacturers are benefitting financially from their poorly made products, and most manufacturers are able to evade all economic and legal liability associated with their goods. 312Hunt, supra note 32, at 919. Meanwhile, the Chinese export industry and economy continue to grow. 313 See supra text accompanying notes 48–50. China has insufficient motivation to voluntarily subject its manufacturers to legal liability in the United States. As a result, the United States needs to focus on a workable solution that offers protection for U.S. consumers. The creation of a consumer settlement fund may be the answer for which the United States has been searching.

A. The Fund Concept

The end goal of this Comment’s legal analysis is to ensure economic compensation for injured U.S. consumers. In the absence of a bilateral treaty, the United States cannot force Chinese courts to recognize and enforce U.S. judgments. Therefore, the United States must look for alternative ways to make an injured consumer whole. The United States should create a consumer settlement fund, modeled after Superfund: an environmental program created by the Comprehensive Environment Response, Compensation, and Liability Act (“CERCLA”) of 1980 to address hazardous waste sites. 314Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C. §§ 9601–9675 (2006); see also Basic Information: What Is Superfund?, U.S. Envtl. Protection Agency, http://www.epa.gov/superfund/about.htm (last visited Mar. 3, 2010). CERCLA was enacted following the discovery of toxic waste dumps in the 1970s and allows the Environmental Protection Agency to seek out responsible parties and compel them to perform cleanups or reimburse the government for such cleanups. 315 Basic Information: What Is Superfund?, supra note 314. When multiple parties are responsible for the contamination, each participant is required to pay. 316Lawrence Hurley, Lawyers Still Cleaning Up over Superfund Sites, N.Y. Times (Jan. 3, 2011), http://www.nytimes.com/gwire/2011/01/03/03greenwire-lawyers-still-cleaning-up-over-superfund-sites-92748.html. Like Superfund, the consumer settlement fund would enforce penalties against parties responsible for injuring U.S. consumers. The primary target of the fund would be the foreign manufacturers directly responsible for producing faulty products.

The fund concept would also draw inspiration from the September 11, 2001 Victim Compensation Fund (“VCF”) and the British Petroleum (“BP”) Gulf Coast Claims Fund (“BP Fund”). 317 See Michael Cooper, Two Funds, Same Goal: Compensate, N.Y. Times, Aug. 22, 2010, at A14. Commenter James C. Harris, who advocates for adoption of a comprehensive social insurance system, acknowledges 9/11 was an “unprecedented horror” but argues the extraordinary background circumstance should not limit the fund model in application. James C. Harris, Comment, Why the September 11th Victim Compensation Fund Proves the Case for a New Zealand-Style Comprehensive Social Insurance Plan in the United States, 100 Nw. U. L. Rev. 1367, 1370 (2006). The theory behind the VCF and BP Fund was to persuade people to accept payments for their losses up front, in lieu of engaging in long, costly, and uncertain lawsuits. 318Cooper, supra note 317. Following the terrorist attacks of September 11, 2001, Congress passed the Air Transportation Safety and System Stabilization Act. 319Air Transportation Safety and System Stabilization Act, 49 U.S.C. § 40101 (2006). The act combined U.S. Treasury revenues and charitable donations to create the VCF. 320Harris, supra note 317, at 1369. The VCF’s goal was to provide economic compensation for all the victims of the September 11, 2001 terrorist attacks. 321 Id. Victims were narrowly defined. Claims could only be brought by or on behalf of those who were on one of the hijacked flights or who were physically present at the World Trade Center or Pentagon sites within twelve hours of the attack, and who suffered physical injury, requiring medical help, within a designated time period. 322James R. Copland, Tragic Solutions: The 9/11 Victim Compensation Fund, Historical Antecedents, and Lessons for Tort Reform 20 (Jan. 13, 2005) (working paper, Center For Legal Policy at the Manhattan Institute), available at http://www.manhattan-institute.org/pdf/clpwp_01-13-05.pdf. While participation in the VCF was optional, if injured parties claimed compensation from the VCF, they waived the right to bring suit in court. 323Harris, supra note 317, at 1376. The legislation placed strict time regulations on filing claims. 324Copland, supra note 322, at 24. Once a claim was filed against the VCF, it had to be determined within 120 days of filing and payment received within twenty days of determination. 325Harris, supra note 317, at 1377. Attorney General John Ashcroft appointed Kenneth Feinberg, a Washington lawyer, as the VCF’s special master. 326Neil King, Jr., Feinberg Ramps Up $20 Billion Compensation Fund, Wall St. J., June 21, 2010, at A1. Feinberg possessed enormous power and discretion to interpret and apply the law as it applied to fund payouts. 327Copland, supra note 322, at 20. Feinberg’s compensation decisions were final; no judicial review was permitted. 328 Id.

Overall, the September 11 VCF was highly successful; ninety-seven percent of all eligible claimants received compensation from the fund and total awards were near $7 billion. 329Harris, supra note 317, at 1379. Although claimants gave up substantial litigation rights, the high percentage rate for participation in the VCF suggests that under the right circumstances, claimants will opt into a fund approach to seek closure on their claims, despite the risk of receiving less compensation than they might in a jury trial. 330Linda S. Mullenix, The Future of Tort Reform: Possible Lessons from the World Trade Center Victim Compensation Fund, 53 Emory L.J. 1315, 1344 (2004). The VCF relieved the vagueness and inconsistency inherent in jury determinations and spared claimants years of discovery, litigation, and appellate processes as well as the transaction costs associated with litigation. 331 Id. at 1345. The VCF was created under unique and extreme circumstances, but it is a good injury compensation model and its application should not be limited to disaster scenarios.

The Deepwater Horizon Spill in the Gulf of Mexico in April 2010 prompted the creation of the BP Fund—a $20-billion escrow account dedicated to compensating victims of the oil spill. 332 About the $20 Billion Dollar BP Fund for Oil Spill Victims, BP Fund (July 21, 2010), http://www.thebpfund.com [hereinafter About the BP Fund]. This fund originated on June 16, 2010, following an agreement between BP and President Barack Obama stipulating the basic terms of the $20-billion account. 333 Id. Unlike the VCF, which relied partially on charitable donations, BP is the sole contributor to the account. 334See Kimberly Kindy, Overseer of BP’s Gulf Spill Claims Fund Gets His Hands Dirty, Wash. Post, Oct. 20, 2010, at A6. President Obama appointed Kenneth Feinberg, special master of the VCF, to administer the BP Fund. 335 Id. Since the creation of the fund, Feinberg has tried to maintain separation from both BP and the Obama Administration and has implemented independent and neutral policies regarding the claims. 336 About the BP Fund, supra note 332. Under the BP Fund, claimants can get emergency payments for six months without giving up their rights to sue. 337 Oil Fund Administrator: Come to Me, Not Court, CBS News (July 19, 2010), http://www.cbsnews.com/stories/2010/07/19/national/main6692221.shtml. However, claimants who decide to opt in for consideration of a final payment do waive their litigation rights. 338 Id. While administration of the BP Fund is ongoing, 339Kenneth Feinberg has incurred criticism from claimants unhappy with their compensation. BP Claims Czar Continues Gulf Tour amid Complaints, Huffington Post (Jan. 11, 2011, 5:31 AM), http://www.huffingtonpost.com/huff-wires/20110111/us-gulf-oil-spill-claims; Troy King, Opinion, Fund Chief Can’t Be Trusted, USA Today (Jan. 28, 2010, 8:30 PM), http://www.usatoday.com/news/opinion/editorials/2010-12-29-editorial29_ST1_N.htm. thus far the fund has received more than 490,000 claims and has paid out approximately $3.5 billion to 170,000 claimants. 340Moira Herbst, BP Fund, Feinberg Face Lawsuits by Claimants, Reuters, Feb. 28, 2011, available at http://af.reuters.com/article/energyOilNews/idAFN2826927720110228. Superfund, the VCF, and the BP Fund were enacted under varying circumstances and their structures and goals somewhat differ. However, each serves as a useful framework upon which to model a consumer settlement fund.

The first step in setting up a consumer settlement fund would be to enact the fund. On December 11, 1980, the U.S. Congress passed CERCLA, which created a tax on the chemical and petroleum industries and provided federal authority to respond to dangerous substances that threaten public health or the environment. 341 Basic Information: What Is Superfund?, supra note 314. The money collected from the tax goes into a trust fund, Superfund, for cleaning up hazardous waste sites. 342 Id. Similarly, on September 22, 2001, the U.S. Congress enacted the Air Transportation Safety and System Stabilization Act, which created the September 11 VCF. 343 See supra text accompanying note 319. Like Superfund and the VCF, the consumer settlement fund should be enacted through legislation. Support for the proposed fund would likely come from both Democrats and Republicans. While U.S. lawmakers understand and appreciate the importance of the United States–China trade relationship, in today’s tough economy, both Democrats and Republicans are under pressure to support any bill that protects U.S. companies. 344Kessler & Sapien, supra note 1. Domestic producers, who have a legal presence in the United States and thus can be sued for faulty products, are currently at a competitive disadvantage against foreign manufacturers, who can escape liability. 345 See Griswold & James, supra note 231, at 1. Furthermore, neither party would want American voters to think it was protecting Chinese manufacturers who were dumping defective products, such as toxic drywall, in the United States. 346Kessler & Sapien, supra note 1.

After the consumer settlement fund is enacted, management of the fund must be determined. While CERCLA grants the Environmental Protection Agency the power to conduct cleanups of toxic waste sites and compels contribution from responsible parties, the proposed legislation should create a new and independent entity charged with development and administration of the consumer settlement fund. The CPSC, with its knowledge and experience in the products liability arena, seems like the logical agency to undertake this responsibility. However, the agency is already overburdened, understaffed, and underfunded. 347 See supra text accompanying notes 256, 266–67. A newly created independent body would be better able to receive and analyze claims from U.S. plaintiffs related specifically to foreign manufacturers. In this way, the consumer settlement fund would mimic the VCF and the BP Fund. Both funds employed an independent unit to collect, analyze, and process claims. 348 See supra text accompanying notes 326, 336. Unlike the VCF and the BP Fund, which were each created in response to a single devastating event, 349 See supra text accompanying notes 319, 332. the consumer settlement fund would address the ongoing problem of U.S. consumers injured by foreign-made products. The VCF, which terminated operations on June 15, 2004, 350Copland, supra note 322, at 20 n.123. and the BP Fund were both enacted as temporary mechanisms to resolve a defined set of claims. 351See Harris, supra note 317, at 1378 (stating the VCF required claims to be filed within a two-year period); About the BP Fund, supra note 332. The consumer settlement fund, on the other hand, would be a more permanent institution.

The theory behind the consumer settlement fund would be to grant the compensation and deterrence that the U.S. law fails to provide. CERCLA provides a framework for “remediation and liability for releases of hazardous materials that pose a risk to human health and the environment.” 352Gregory Mandel, Nanotechnology Governance, 59 Ala. L. Rev. 1323, 1356 (2008). Similarly, the consumer settlement fund would provide a mechanism that serves dual purposes: compensating U.S. consumers and deterring foreign manufacturers from releasing dangerous products into the U.S. market. Compensation would be charged to an institutional arbiter. While the VCF and BP Fund employed Kenneth Feinberg as administrator, 353 See supra text accompanying notes 326, 336. the consumer settlement fund, a more enduring entity, should grant power to the institution, not an individual. With durability in mind, the proposed fund should set up a permanent claims court. The court would hear a victim’s defective product claim, determine liability, assess any damages, and, if appropriate, award a proportionate monetary remedy as a distribution from the fund. Unlike the VCF, 354 See supra text accompanying note 328. a traditional appeals process would be available.

The fund would provide an alternative to engaging in a fruitless lawsuit against a foreign manufacturer. A consumer who is injured by foreign-made products should be able to bring his claim to the consumer settlement fund’s claims court before engaging in litigation. 355This framework does not necessarily let responsible U.S. parties (importers, distributors, or sellers) off the hook. While some claimants will opt into the fund, others will choose to pursue traditional litigation, hoping for increased jury verdicts in court. If the arbiter accepts the claim and awards a payout from the fund, the claimant should be barred from suing in court. 356If a claimant opts into either the VCF or BP Fund, they are barred from pursuing a separate claim in court. See supra text accompanying notes 325, 338. An injured consumer should not be able to recover twice for a single action. However, if the arbiter rejects the claim or the claimant does not receive a payout, the claimant should be allowed to pursue litigation in court. Similarly, if the claimant brings a lawsuit and receives economic compensation, they should be barred from receiving a payout from the fund. If the claimant brings suit in court and loses or is unable to collect on their judgment (because the defendant is insolvent or a foreign manufacturer), they should be allowed to bring their claim to the fund’s claims court. The purpose of the fund is not to discourage claimants from bringing lawsuits, but to provide economic compensation for an injury where a lawsuit would fail to do so.

In addition to adjudicating claims, the consumer settlement fund would determine when a foreign manufacturer would be required to contribute to the fund. Under CERCLA, liability arises when a party releases a “hazardous substance,” as defined by the Environmental Protection Agency, into the environment. 357Mandel, supra note 352, at 1356. Under the consumer settlement fund, liability would arise when a foreign manufacturer produces a defective product that injures a consumer in the United States. If the manufacturer refuses to compensate the consumer, the United States should flag the manufacturer. The responsible manufacturer must contribute a designated sum of money to the settlement fund if they wish to continue to export products to the United States. 358The proposed framework will not be able to compensate consumers who have been injured prior to the creation of the fund by defective foreign-made products. Rather, it is a prospective solution that aims to provide a compensation model for consumers in the future. Once a foreign manufacturer has injured a U.S. consumer, the United States must demand the money up front as a “fee” for doing business in the United States. 359China’s refusal to indemnify injured U.S. consumers epitomizes why the United States needs to demand the money up front as a “fee” for doing business in the United States.

The threshold question under CERCLA for determining liability is whether the substance in question is “hazardous.” 360 See Mandel, supra note 352, at 1356. Under the consumer settlement fund, three initial questions would arise: (1) whether a consumer was “injured,” (2) whether the product was defective, and (3) where the product was manufactured. In response to the first question, injury should not be limited solely to those physically hurt by Chinese products. Rather, the definition of injury should be broad enough to encompass those individuals who have sustained economic injury. For example, homeowners who have suffered depreciation on their homes due to Chinese-made drywall should be eligible for reimbursement. Secondly, the claimant must prove the product was defective—that it was flawed or that it malfunctioned. Finally, the injured consumer must prove a foreign manufacturer produced the injurious product. Identifying the responsible manufacturer may pose substantial difficulties. This is addressed in the next Subpart of this Comment. Once a claimant has satisfied these three initial questions, the claim could proceed and the arbiter would determine causation and damages.

While compensation is the primary aim of the consumer settlement fund, deterrence is a secondary goal and an essential component of the proposed framework. Deterrence would occur in two forms: economic and reputational. Economic deterrence is necessary because the price of Chinese products sold in the United States fails to reflect potential accident costs. 361Hunt, supra note 32, at 919. Chinese manufacturers are currently able to avoid liability for their defective products; therefore, manufacturers lack the economic incentive to install preventative safety measures. 362 See id. Requiring manufacturers to contribute to a fund if they injure a consumer would force the manufacturer to internalize the cost of a faulty product. The requisite contribution, as determined by the fund’s administrators, should fully compensate the injured consumer and provide a deterrent effect. 363One of Congress’ goals in enacting CERCLA was to provide a deterrent to “irresponsible hazardous-material management.” L. De-Wayne Layfield, CERCLA, Successor Liability, and the Federal Common Law: Responding to an Uncertain Legal Standard, 68 Tex. L. Rev. 1237, 1241 (1990). To create effective deterrence, the penalty must be significant enough to dissuade the manufacturer from distributing defective or dangerous products in the U.S. market. Furthermore, naming the responsible party would be injurious to the manufacturer’s reputation in the United States and would reflect poorly on the U.S. company associated with the manufacturer. Competition among Chinese manufacturers for partnerships with American companies is ferocious 364 See supra text accompanying note 71. and U.S. firms are less likely to partner with a Chinese manufacturer who is notorious for producing dangerous products.

B. Challenges and Limitations Associated with the Fund Concept

There would be a number of challenges associated with the implementation of a consumer settlement fund. The primary hurdle would remain the ability to identify the responsible foreign manufacturer. As previously discussed, long, complex, and shifting supply chains often make identification of the responsible party extremely difficult. 365 See supra text accompanying note 118–21. U.S. companies who outsource their manufacturing to China must be able to identify the manufacturer with whom they have a business or contractual relationship. If the U.S. company cannot identify the manufacturer responsible for producing the product at issue, the company itself will be required to make the requisite contribution to the fund. This model encourages U.S. companies to ensure, to the best of their ability, that the manufacturer with whom they contract is identifiable and safety-conscious. If Chinese manufacturers fail to step up and take the blame for their faulty products, thereby leaving the U.S. companies to take the hit, U.S. firms will likely terminate the relationship and the manufacturer will be excluded from the U.S. market. The best way to foster the relationship between Chinese manufacturers and U.S. companies is to urge the U.S. parties to disclose the details and requirements of the fund before initiating the business relationship. Ideally, the two parties would sign a contract, and the Chinese manufacturer would agree to make the requisite contribution if an injury occurs. If the Chinese manufacturer knows it will have to pay into the fund for a defective product accident, the manufacturer will have the incentive to cooperate with product safety requirements before production even begins.

A related issue is deciding how far down the foreign manufacturing chain the United States should seek compensation. While primary manufacturers who contract with the United States should have to contribute to the fund, for subcontractor, or “shadow” factories, liability is less clear. U.S. companies often do not have knowledge of the manufacturer’s use of shadow factories or subcontractors. This problem arose in the 2007 Mattel toy recalls, which Mattel CEO Bob Eckert blamed on a subcontractor who used paint from a non-authorized third-party supplier. 366See Thottam, supra note 100. One of Mattel’s contract manufacturers allegedly engaged the subcontractor. Stoking Protectionism, supra note 56. The best way to resolve this issue is to place liability squarely on the shoulders of the foreign manufacturer who directly contracts with the U.S. company. If the manufacturer chooses to outsource production to other factories, they will remain liable for quality issues that result from the delegation.

Providing notice to the foreign manufacturer could remain a procedural roadblock under the proposed fund. If a manufacturer’s product injures a U.S. consumer and the manufacturer is held liable, the consumer settlement fund would demand compensation as a condition of exporting to the United States. The fund would be charged with providing notice to the manufacturer detailing the contribution requirements. However, as previously discussed, Chinese manufacturers often evade notice or cannot be located. 367 See supra text accompanying note 235. If the foreign manufacturer fails to respond to the contribution notice, the onus would be placed on the contracting U.S. party to contact the manufacturer. If the U.S. party fails, it will assume the contribution requirement. This structure provides yet another incentive for U.S. parties to contract with responsible foreign manufacturers.

Finally, the fund must comport with WTO rules and regulations. 368The WTO is the international organization charged with regulating trade relationships. About the WTO, World Trade Org., http://www.wto.org/english/thewto_e/whatis_e/wto_dg_stat_e.htm (last visited Feb. 17, 2012). WTO rules mandate that any requirement placed on products from one WTO member must apply equally to all members. 369 Services: Rules for Growth and Investment, World Trade Org., http://www.wto.org/english/thewto_e/whatis_e/tif_e/agrm6_e.htm (last visited Feb. 17, 2012). Therefore, the United States cannot single out Chinese manufacturers for contribution and must apply the requirement universally. Furthermore, under the WTO, import-restricting measures designed to protect public health and safety are permissible; however, they must have an “adequate scientific foundation and may impose only limited and non-discriminatory restrictions on trade.” 370Delisle & Trujillo, supra note 172, at 162. There must be proof that a manufacturer has created a defective product, and contribution to the fund should only be required until a manufacturer’s safety record is deemed adequate.

Although there would be potential problems associated with the consumer settlement fund concept, the benefits would far outweigh the costs. Most importantly, the fund would reimburse U.S. victims for injuries sustained from defective foreign-made products. U.S. plaintiffs are unable to enforce judgments against Chinese manufacturers; therefore, unless they can collect on judgments against U.S. parties, their injuries will remain uncompensated. Additionally, the potential for an economic penalty would induce foreign manufacturers to comply with product safety laws and would provide an incentive for U.S. parties to contract with responsible and safety conscious manufacturers.

Conclusion

U.S. law is currently grappling with its inability to require foreign manufacturers to compensate U.S. consumers who are injured by defective foreign-made products. Personal jurisdiction, service of process, and enforcement of the judgment remain the three primary procedural hurdles a U.S. plaintiff must overcome before successfully bringing suit against a foreign manufacturer. The two Supreme Court cases, J. McIntyre Machinery, Ltd. v. Nicastro and Goodyear Dunlop Tires Operations, S.A. v. Brown, and the proposed congressional legislation, the Foreign Manufacturers Legal Accountability Act of 2011, prove the shortcomings in the legal system are pressing and significant. Unfortunately, neither the Supreme Court cases nor the proposed Congressional legislation solves the most pressing of the procedural hurdles—enforcement of a U.S. judgment overseas.

While amendments and alternations to the law through judicial and legislative activity should be welcomed, the United States should not sit by passively and wait for change. The United States must affirmatively act to protect its citizens from harm imposed by foreign manufacturers. The toxic drywall is simply the latest in a series of defective products from China. China’s unbeatable prices and paramount position in global manufacturing chains indicate Chinese-made products will remain dominant in the United States. Resource shortages at the U.S. border guarantee defective Chinese-made products will continue to enter the United States. U.S. consumers cannot be fully insulated from such products; however, they should be legally protected from the consequences posed by these dangerous goods.

The creation of a consumer settlement fund not only provides the economic compensation the law cannot ensure, but it also encourages the formation of responsible and accountable partnerships between U.S. companies and Chinese manufacturers. The fund would be unable to force foreign manufacturers to comply with U.S. law directly, but would penalize the U.S. contracting party if the manufacturer failed to provide the requisite compensation. U.S. parties, knowing they would be liable if the manufacturer failed to uphold their requirements under the fund, would have the incentive to contract with reliable manufacturers who comport with product safety standards. Innocent U.S. victims should not be penalized because U.S. law has failed to garner economic compensation from foreign manufacturers. The consumer settlement fund would succeed where the U.S. law has failed—in providing economic relief for U.S. consumers injured by defective foreign-made products.

Footnotes

1Jason Hanna, Chinese-Made Drywall Ruining Homes, Owners Say, CNN (Mar. 18, 2009), http://articles.cnn.com/2009-03-18/us/chinese.drywall_1_chinese-made-drywall-homeowners-appliances. According to the Consumer Product Safety Commission, shipping records show the United States has imported 6.5 million sheets of Chinese-made drywall since December 2005. Aaron Kessler & Joaquin Sapien, SPECIAL REPORT: Federal Failure on Chinese Drywall, Herald-Trib. (Dec. 14, 2010, 6:45 PM), http://www.heraldtribune.com/article/20101214/ARTICLE/101219891.

2Brian Skoloff, Cheap Chinese Drywall Causing Another Round of Nightmares, Wash. Post (Oct. 17, 2009), http://www.washingtonpost.com/wp-dyn/content/article/2009/10/16/AR2009101600082.html; accord Tim Padgett, Is Drywall the Next Chinese Import Scandal?, TIME (Mar. 23, 2009), http://www.time.com/time/nation/article/0,8599,1887059,00.html.

3Skoloff, supra note 2.

4Andrew Martin, Drywall Flaws: Owners Gain Limited Relief, N.Y. Times (Sept. 17, 2010), http://www.nytimes.com/2010/09/18/business/18drywall.html.

5Drywall Information Center, U.S. Consumer Prod. Safety Comm’n, http://www.cpsc.gov/info/drywall/where.html (last visited Feb. 20, 2012).

6Kessler & Sapien, supra note 1. The cost of repairing an average-size house (replacing all the drywall, the wiring, and the air-conditioning system) is about $100,000. Id.

7Drywall Information Center, supra note 5; Martin, supra note 4. “A database compiled by the Herald-Tribune and ProPublica shows that at least 6,944 homeowners are seeking help for problems created by contaminated drywall.” Kessler & Sapien, supra note 1.

8Martin, supra note 4. One company, Knauf Plasterboard Tianjin, a Chinese–German joint venture, has begun settlement negotiations with homeowners. Id.

9Leveling the Playing Field and Protecting Americans: Holding Foreign Manufacturers Accountable: Hearing Before the Subcomm. on Admin. Oversight and the Courts of the S. Judiciary Comm., 111th Cong. 4 (2009) (statement of Louise Ellen Teitz, Professor of Law, Roger Williams University School of Law) [hereinafter Hearing—Leveling the Playing Field].

10Restatement (Third) of Torts: Products Liability § 1 (1998).

11Martin, supra note 4.

12Kessler & Sapien, supra note 1.

13Monsurat Adebanjo, Gov’t Failing To Deal with Bad Drywall, CBS News (Dec. 15, 2010, 3:06 PM), http://www.cbsnews.com/8301-31727_162-20025776-10391695.html.

14Kessler & Sapien, supra note 1.

15J. McIntyre Mach., Ltd. v. Nicastro, 131 S. Ct. 2780 (2011).

16Goodyear Dunlop Tires Operations, S.A. v. Brown, 131 S. Ct. 2846 (2011).

17Peter Trooboff, The Global Reach of U.S. Personal Jurisdiction, Nat’l L.J., Dec. 13, 2010, available at http://www.cov.com/files/Publication/39e9f9b2-f78f-4328-af70-e7786215eba4/Presentation/PublicationAttachment/eb4ee708-e070-4ac3-b867-eb28d5b0ccdb/The%20Global%20Reach%20of%20U.S.%20Personal%20Jurisdiction.pdf.

18Mark R. Vespole, Stream of Commerce in the 21st Century: McIntyre and Goodyear: Potential Ramifications of U.S. Supreme Court Decision on NJ and NC Long Arm Jurisdiction Statutes, LexisNexisCommunities Litig. Resource Community (Dec. 13, 2010, 3:50 PM), https://www.lexisnexis.com/COMMUNITY/LITIGATIONRESOURCECENTER/blogs/litigationcommentary/archive/2010/12/17/potential-ramifications-of-supreme-court-decision-on-n-j-n-c-long-arm-jurisdiction-statutes.aspx.

19Allison Torres Burtka, Supreme Court Takes On States’ Jurisdiction over Foreign Manufacturers, Am. Ass’n for Just. (Jan. 20, 2011), http://www.justice.org/cps/rde/xchg/justice/hs.xsl/14246.htm.

20Id.

21J. McIntyre Mach., Ltd. v. Nicastro, 131 S. Ct. 2780, 2785 (2011).

22Id. at 2791.

23Goodyear Dunlop Tires Operations, S.A. v. Brown, 131 S. Ct. 2846, 2850 (2011).

24Id. at 2851. The Court reiterated the standard for general jurisdiction, noting that “a court may assert general jurisdiction over foreign corporations . . . when their affiliations with the State are so ‘continuous and systematic’ as to render them essentially at home in the forum State.” Id.

25Kimberly Atkins, Court Creates Confusion on Foreign Product Liability Suits, LegalNews.com (July 21, 2011), http://www.legalnews.com/detroit/1016629.

26Id.

27Kessler & Sapien, supra note 1; Bill Summary & Status 111th Congress (2009–2010) H.R.4678, Libr. Congress, http://thomas.loc.gov/cgi-bin/bdquery/z?d111:HR04678:|/home/LegislativeData.php?n=BSS;c=111 (last visited Feb. 20, 2012).

28H.R. 4678 (111th): Foreign Manufacturers Legal Accountability Act of 2010, Govtrack.us, http://www.govtrack.us/congress/bills/111/hr4678 (last visited Mar. 20, 2012) [hereinafter H.R. 4678: Govtrack]; Bill Summary & Status 112th Congress (2011–2012) H.R. 3646, Libr. of Congress, http://http://thomas.loc.gov/cgi-bin/bdquery/D?d112:1:./temp/~bdZY4R::|/home/LegislativeData.php?n=BSS;c=112 (last visited Mar. 20, 2012).

29H.R. 3646: Foreign Manufacturers Legal Accountability Act of 2011, Govtrack.us, http://www.govtrack.us/congress/bills/112/hr3646 (last visited Mar. 23, 2012).

30Foreign Manufacturers Legal Accountability Act of 2011, H.R. 3646, 112th Cong. (2011); Foreign Manufacturers Legal Accountability Act of 2010, H.R. 4678, 111th Cong. (2010).

31H.R. 3646 § 3(c)(1); H.R. 4678 § 3(c)(1).

32This failure provides a multi-billion dollar windfall for the Chinese because manufacturers avoid accident costs in the pricing of their manufactured goods. Manufacturers can evade U.S. lawsuits; therefore, they forego both the cost of prevention and the cost of liability associated with faulty products. See Elizabeth Ann Hunt, Comment, Made in China: Who Bears the Loss and Why?, 27 Penn St. Int’l L. Rev. 915, 918–19 (2009).

33Kessler & Sapien, supra note 1.

34China’s Economic Growth: The Next Wave, Committee for Econ. Dev. Austl. (Nov. 10, 2010), http://www.ceda.com.au/research-and-policy/current-topics/ace/2010/11/10/china_parkinson; Jiawen Yang, Sino–U.S. Trade Relations, GW Center for Study Globalization (Jan. 2004), http://globalgrn.files.wordpress.com/2009/08/sino-us-trade-relations.pdf.

35Kessler & Sapien, supra note 1.

36Yang, supra note 34, at 1. By 1951, trade between the United States and China had come to a halt. Id.

37 Id.

38Agreement on Trade Relations Between the United States of America and the People’s Republic of China, U.S.-P.R.C., July 7, 1979, 31 U.S.T. 4651.

39China’s Most-Favored Nation status had previously been suspended in 1951. Vladimir N. Pregelj, Cong. Res. Serv., Most-Favored-Nation Status of the People’s Republic of China 1 (2001), available at http://www.au.af.mil/au/awc/awcgate/crs/rl30225.pdf.

40Yang, supra note 34, at 2.

41 Paul Midler, Poorly Made in China: An Insider’s Account of the Tactics Behind China’s Production Game 240 (2009).

42 See id. Midler believes that this decision was motivated by U.S. greed—that U.S. politicians were unable to overcome the lure of cheaply made goods from China. Id.

43Yang, supra note 34, at 2.

44 Id. Congress no longer conducted an annual review of “China’s activities regarding unfair trade practices, human rights and national security.” Jim Burns, Congressmen Work on Bill Revoking PNTR for China, CNSNews.com (July 7, 2008), http://www.cnsnews.com/node/10184. Under the WTO, the United States retains the right to protect its national security interests, which include the revocation of PNTR if necessary. Furthermore, Congress can choose to revoke PNTR at any time “if circumstances warrant and Congress is willing to forego WTO benefits.” Press Release, Office of the Press Sec’y, White House, Fact Sheet on Benefits of PNTR for American Workers (May 12, 2000), available at http://archives.clintonpresidentialcenter.org/?u=051200-fact-sheet-on-benefits-of-pntr-for-american-workers.htm.

45 Midler, supra note 41, at 198.

46 Id. at 240.

47 China Officially Joins WTO, CNNWorld (Nov. 10, 2001), http://articles.cnn.com/2001-11-10/world/china.WTO_1_wto-meeting-wto-director-general-mike-moore-world-trade-organization.

48 US—China Trade Statistics and China’s World Trade Statistics, US–China Bus. Council, http://www.uschina.org/statistics/tradetable.html (last visited Mar. 3, 2012).

49 Id.

50 Id. tbl.1.

51 Id. tbl.8.

52Press Release, World Trade Org., Trade To Expand by 9.5% in 2010 After a Dismal 2009, WTO Reports (Mar. 26, 2010), available at http://www.wto.org/english/news_e/pres10_e/pr598_e.htm.

53David Barboza, China Overtakes Japan To Become No. 2 Economy, N.Y. Times, Aug. 16, 2010, at B1.

54In 2005, China’s gross domestic product was approximately half of Japan’s. Id.

55Id.; India’s Surprising Economic Miracle, Economist, Oct. 2nd–8th 2010, at 11 (stating that China’s rapid, sustained growth has lifted hundreds of millions of Chinese out of poverty).

56 Alexandra Harney, The China Price 8 (2008); see also Stoking Protectionism, Economist (Aug. 16, 2007), http://www.economist.com/node/9657177.

57 Harney, supra note 56, at 3.

58Ted C. Fishman, The Chinese Century, N.Y. Times, July 4, 2004, § 6 (Magazine), at 31.

59 Id.

60 Id. Even when new features are added, prices continue to drop. Id.

61 Harney, supra note 56, at 2.

62Fishman, supra note 58, at 46; India’s Surprising Economic Miracle, supra note 55 (“[I]f your supply chain for manufactured goods does not pass through China your shareholders will demand to know why.”).

63 Harney, supra note 56, at 8.

64 Id.

65Fishman, supra note 58, at 28.

66 Id. Undisciplined or undermotivated workers are easily replaced with other poor, unemployed Chinese workers anxious for work. Id.

67 See, e.g., Harney, supra note 56, at 108 (describing the working conditions of an undocumented migrant working in a plastic bag factory in China). Factory wages along China’s east coast can be $120 to $160 a month, and half of that in inland China. Fishman, supra note 58, at 28.

68 Id.

69 Id.

70 Id.

71 See Midler, supra note 41, at 20–21.

72 Id.

73 Id. at 20.

74 Id. at 20–21.

75Fishman, supra note 58, at 28.

76 Harney, supra note 56, at 35; Midler, supra note 41, at 166.

77Fishman, supra note 58, at 46.

78About Us, Walmart Corp., http://walmartstores.com/AboutUs/7606.aspx (last visited Mar. 4, 2012).

79 Midler, supra note 41, at 172.

80Fishman, supra note 58.

81 Midler, supra note 41, at 197.

82Hunt, supra note 32, at 918. Melamine is an industrial chemical. Id. at 916 n.10.

83 Midler, supra note 41, at 197.

84Hunt, supra note 32, at 918–19.

85Richard Posner, A Theory of Negligence, 1 J. Legal Stud. 29, 33 (1972).

86Hunt, supra note 32, at 918–19.

87 China’s Toxic Toymaker, Economist, Aug. 18th–24th 2007, at 58 (“No doubt many importers will examine their supply chains more carefully, if only for fear that they will be sued by customers who have bought poisonous furniture or explosive mobile telephones, and shunned by others who hear about such fiascos.”).

88 Harney, supra note 56, at 256–57; The Poison Spreads, Economist, Sept. 27th–Oct. 3rd 2008, at 77–78.

89 Shoddy Work: Why So Many Chinese Products Are Born To Be Bad, Economist, May 16th–22nd 2009, at 89 [hereinafter Shoddy Work].

90 Stoking Protectionism, supra note 56.

91 Harney, supra note 56, at 256.

92 See Stoking Protectionism, supra note 56.

93 Harney, supra note 56, at 257.

94 Id.

95 Stoking Protectionism, supra note 56.

96 Midler, supra note 41, at 234.

97 Id.; Stoking Protectionism, supra note 56.

98 Midler, supra note 41, at 234–35; The Poison Spreads, supra note 88.

99 China Food Safety Head Executed, BBC (July 10, 2007, 11:36 AM), http://news.bbc.co.uk/2/hi/6286698.stm.

100 Stoking Protectionism, supra note 56.

101 Id.

102Jyoti Thottam, Why Mattel Apologized to China, TIME (Sept. 21, 2007), http://www.time.com/time/business/article/0,8599,1664428,00.html. Chinese-made toys were manufactured with strong magnets, which if swallowed in multiples could rip through a young child’s intestines. Id. In August 2007, Zhang Shuong, who owned a factory that made Mattel toys, hanged himself following Mattel’s massive recalls in the summer of 2007. China’s Toxic Toymaker, supra note 87.

103 Stoking Protectionism, supra note 56.

104Kate Pickert, Brief History of Melamine, TIME (Sept. 17, 2008), http://www.time.com/time/health/article/0,8599,1841757,00.html.

105 See China’s Food Safety: A New Plan To Improve Standards of Food and Drugs, Economist (June 12, 2007), http://www.economist.com/node/9325404. After denying responsibility for the contaminated pet food, the Chinese mounted a “counter-attack noting that food contamination occurred both within the US and with US exports to China.” Id. Later, Chinese officials released a five-year food-and-drug safety plan, which called for increased inspections of food exports and a more sophisticated procedure for recalling faulty products. Id.

106 China Executed Two over Tainted Milk Powder Scandal, BBC (Nov. 24, 2009, 12:03 AM), http://news.bbc.co.uk/2/hi/8375638.stm.

107 The Poison Spreads, supra note 88.

108 Id.

109 Id.

110 See supra text accompanying note 100.

111 China Executed Two over Tainted Milk Powder Scandal, supra note 106.

112 Midler, supra note 41, at 96.

113 Id. at 20.

114 Id. at 83.

115 Shoddy Work, supra note 89.

116 Id.

117 Id.

118 Harney, supra note 56, at 46.

119 Id.

120 Id.

121Id. at 47 (quoting Paul Midler) (internal quotation marks omitted).

122 Id.

123 Stoking Protectionism, supra note 56; China’s Toxic Toymaker, supra note 87.

124Thottam, supra note 102. One of Mattel’s contract manufacturers allegedly engaged the subcontractor. Stoking Protectionism, supra note 56.

125 Harney, supra note 56, at 47.

126 See Dexter Roberts & Pete Engardio, Secrets, Lies, and Sweatshops, BusinessWeek, Nov. 27, 2006, at 50.

127 Id.

128 Shoddy Work, supra note 89.

129 Id.

130 Harney, supra note 56, at 210–11.

131 Id. at 209–211.

132 Id. at 227.

133 Id.

134 Shoddy Work, supra note 89.

135 Harney, supra note 56, at 227.

136 Shoddy Work, supra note 89.

137 Id.

138 Stoking Protectionism, supra note 56. Seventy to eighty percent of the toys sold in the United States are made in China. Eric S. Lipton & David Barboza, As More Toys Are Recalled, Trail Ends in China, N.Y. Times (June 19, 2007), http://www.nytimes.com/2007/06/19/business/worldbusiness/19toys.html.

139 Stoking Protectionism, supra note 56.

140 Midler, supra note 41, at 62.

141Thottam, supra note 102.

142 Id.

143 Stoking Protectionism, supra note 56.

144 Shoddy Work, supra note 89.

145 Midler, supra note 41, at 197–98.

146 Shoddy Work, supra note 89.

147 Midler, supra note 41, at 198.

148 Id.

149 Id.

150 Id. at 199.

151 Harney, supra note 56, at 185.

152Memorandum from the Subcomm. on Commerce, Trade, and Consumer Prot. Staff to Members of the Subcomm. on Commerce, Trade, and Consumer Prot. 1–2 (June 11, 2010), available at http://democrats.energycommerce.house.gov/documents/20100612/Briefing.Memo.ctcp.06.16.2010.pdf.

153Kayla Webley, List of Problem Chinese Imports Grows, NPR (July 10, 2007), http://www.npr.org/templates/story/story.php?storyId=11656278.

154Louise Story & David Barboza, Mattel Recalls 19 Million Toys Sent from China, N.Y. Times (Aug. 15, 2007), http://query.nytimes.com/gst/fullpage.html?res=950CEEDB153FF936A2575BC0A9619C8B63&scp=2&sq=Mattel%20toy%20recall&st=cse. Sixty-three of the magnetized toys recalled were made in China, but recalled due to errors in Mattel design specifications. Id.

155 Drywall Information Center, supra note 5.

156 Shoddy Work, supra note 89, at 90.

157Consumer Product Safety Improvement Act of 2008, Pub. L. No. 110-314, 122 Stat. 3016; Russell T. Gips, Comment, From China with Lead: The Hasty Reform of the Consumer Product Safety Commission, 46 Hous. L. Rev. 545, 548 (2009).

158 See infra pp. 346–48, which discuss the 2008 Act.

159See supra notes 27–28 and accompanying text.

160 H.R. 3646, 112th Cong. §§ 3(a), 3(c)(1) (2011); H.R. 4678, 111th Cong. §§ 3(a), 3(c)(1) (2010).

161 Asahi Metal Indus. Co. v. Superior Court, 480 U.S. 102 (1987).

162 Id. at 113–16.

163 Hearing—Leveling the Playing Field, supra note 9.

164 Asahi, 480 U.S. at 113.

165 Id. at 116.

166Raymond L. Mariani, U.S. Supreme Court To Revisit Personal Jurisdiction over Foreign Manufacturers, Nixon Peabody (Nov. 16, 2010), http://www.nixonpeabody.com/linked_media/publications/Products_Alert_11_16_2010.pdf.

167 Asahi, 480 U.S. at 112 (O’Connor, J., plurality). In contrast, Justice Brennan rejected the part of Justice O’Connor’s opinion that required conduct in addition to placing the product in the stream of commerce. Id. at 117 (Brennan, J., plurality). Brennan argued that as long as the defendant is aware that the final product is being marketed in the forum state, jurisdiction comports with the Due Process Clause. Id.

168E.g., Nicastro v. McIntyre Mach. Am., 987 A.2d 575, 586 (N.J. 2010).

169One commentator has argued that Justice O’Connor’s opinion in Asahi “has made it virtually impossible for an injured plaintiff to sue a component parts manufacturer in any state or country other than its place of domicile or the state or country where delivery of the component part is made to a product assembler.” Christine M. Wiseman, Reconstructing the Citadel: The Advent of Jurisdictional Privity, 54 Ohio St. L.J. 403, 404 (1993).

170 Asahi, 480 U.S. at 117.

171 Gary B. Born, International Civil Litigation in United States Courts 139 (3d ed. 1996); Robert C. Neff, After Asahi: Forging a New Personal Jurisdiction Standard, Martindale.com (May 24, 2010), http://www.martindale.com/products-liability-law/article_Wilson-Elser-Moskowitz-Edelman-Dicker_1032600.htm. Some lower courts have created their own hybrid of the O’Connor and Brennan theories regarding the stream of commerce test. Id.

172Jacques Delisle & Elizabeth Trujillo, Consumer Protection in Transnational Contexts, 58 Am. J. Comp. L. 135, 138 (2010).

173 Hearing—Leveling the Playing Field, supra note 9, at 4.

174Sean Wajert, Supreme Court Grants Cert in Important Personal Jurisdiction Cases, Mass Tort Def. (Oct. 7, 2010), http://www.masstortdefense.com/2010/10/articles/supreme-court-grants-cert-in-important-personal-jurisdiction-cases.

175J. McIntyre Mach., Ltd. v. Nicastro, 131 S. Ct. 2780 (2011); Goodyear Dunlop Tires Operations, S.A. v. Brown, 131 S. Ct. 2846 (2011).

176Eric C. Strain, Personal Jurisdiction: Is No News from the Supreme Court Good News for Foreign Product Manufacturers?, Nixon Peabody (June 30, 2011), http://www.nixonpeabody.com/linked_media/publications/Products_Alert_06_30_2011.pdf.

177Trooboff, supra note 17.

178A court has in personam, or specific, jurisdiction over a non-resident defendant if the claim arises out of the defendant’s contacts with the forum state. Richard D. Freer, Civil Procedure 40–41 (2d ed. 2009).

179Mariani, supra note 166.

180Nicastro v. McIntyre Mach. Am., 987 A.2d 575, 579 (N.J. 2010).

181J. McIntyre Mach., Ltd. v. Nicastro, 131 S. Ct. 2780, 2786 (2011).

182Id.

183 Id.

184 Nicastro, 987 A.2d at 577.

185 Id. at 577–78.

186 Alexandra B. Cunningham, United States Supreme Court To Address “Stream-of-Commerce Theory” as Basis for Personal Jurisdiction over Foreign Manufacturers, Martindale.com (Nov. 11, 2010), http://www.martindale.com/products-liability-law/article_Hunton-Williams-LLP_1182918.htm.

187 Id.

188 Nicastro, 987 A.2d at 592.

189 Id. at 589.

190 Id. at 582.

191 J. McIntyre Mach., Ltd. v. Nicastro, 131 S. Ct. 2780, 2791 (2011) (Kennedy, J., plurality); John Maley, Editorial: Personal Jurisdiction Theories Still Evolving, Ind. Law. (Aug. 3, 2011), http://www.theindianalawyer.com/article/print?articleId=26858.

192 J. McIntyre, 131 S. Ct. at 2785 (Kennedy, J., plurality).

193 Id. at 2790.

194 Id. at 2792 (Breyer, J., concurring). Kennedy disagreed with Justice Brennan’s opinion in Asahi, which argued that jurisdiction can be based simply on placing a product into the stream of commerce, so long as the defendant is aware that the product is being marketed in the forum state and “the possibility of a lawsuit there cannot come as a surprise.” Id. at 2789 (Kennedy, J., plurality).

195 Id. at 2790–91 (Kennedy, J., plurality).

196 Id. at 2791 (Breyer, J., concurring).

197 Id.

198 Id.; see also Esther H. Lim, No Personal Jurisdiction Exists over a Foreign Party Because Simply Placing Goods in the Stream of Commerce, Without More, Is Not an Act Purposefully Directed to the Forum State, Finnegan (July 2011), http://www.finnegan.com/files/upload/Newsletters/Last_Month_at_the_Federal_Circuit/2011/July/FCN_Jul11_4.html.

199 Beth S. Rose & Charles J. Falletta, U.S. Supreme Court Reversed New Jersey’s Exercise of Personal Jurisdiction over Foreign Manufacturer, Nat’l L. Rev. (Aug. 5, 2011), http://www.natlawreview.com/article/us-supreme-court-reverses-new-jersey-s-exercise-personal-jurisdiction-over-foreign-manufac-2.

200 J. McIntyre, 131 S. Ct. at 2794–2804 (Ginsburg, J., dissenting).

201 Id. at 2794.

202 Id. at 2801.

203 Id. (internal quotation marks omitted).

204 Rose & Falletta, supra note 199.

205 Id.

206Mariani, supra note 166.

207Brown v. Meter, 681 S.E.2d 382, 384 (N.C. Ct. App. 2009).

208 Id.

209 Id.

210 Id.

211 Id. at 387.

212 Id. at 388 (quoting Skinner v. Preferred Credit, 361 N.C. 114, 122 (2006)).

213 Id. at 395.

214 Id.

215 Id.

216 Id. at 394.

217 Goodyear Dunlop Tires Operations, S.A. v. Brown, 131 S. Ct. 2846, 2858 (2011).

218 Id. at 2857.

219 Id. at 2855–56.

220 Id. at 2856.

221 Id. at 2855 (emphasis in original).

222 See Atkins, supra note 25.

223 Maley, supra note 191.

224John C. Maloney & Florice E. Pressman, The Supreme Court Protects Foreign Manufacturers in the Stream of Global Commerce, Martindale.com (July 20, 2011), http://www.martindale.com/products-liability-law/article_Day-Pitney-LLP_1316130.htm.

225Strain, supra note 176.

226Id.

227Atkins, supra note 25.

228Id.

229 Freer, supra note 178, at 40–41; see also Hearing—Leveling the Playing Field, supra note 9, at 4.

230Hague Convention on the Service of Process Abroad of Judicial and Extrajudicial Documents in Civil and Commercial Matters, Nov. 15, 1965, 658 U.N.T.S. 163.

231Daniel Griswold & Sallie James, Consumer Safety Bill Could Boomerang Against U.S. Manufacturers, Free Trade Bull., Sept. 28, 2010, at 1, available at http://www.cato.org/pub_display.php?pub_id=12174. The United States ratified the convention in 1969. Born, supra note 171, at 797. China became a member in 1991. Id.

232Hague Convention on the Service of Process Abroad of Judicial and Extrajudicial Documents in Civil and Commercial Matters, supra note 228, art. 5.

233 Id.

234 Hearing—Leveling the Playing Field, supra note 9, at 4.

235 Dan Harris, Chinese Drywall Litigation and Why Seizing Assets Is Very Different from Seizing Ships, China L. Blog (Feb. 28, 2010), http://www.chinalawblog.com/2010/02/chinese_drywall_and_the_halfas.html.

236 See Hearing on H.R. 4678, the “Foreign Manufacturers Legal Accountability Act” Before the H. Subcomm. on Commerce, Trade, and Consumer Prot., 111th Cong. 2 (2010) [hereinafter Hearing—H.R. 4678] (statement of Jeremy Baskin, Import Surveillance Division, Office of Compliance, U.S. Consumer Product Safety Commission).

237 Hearing—Leveling the Playing Field, supra note 9, at 4.

238Donald C. Clarke, The Enforcement of United States Court Judgments in China: A Research Note 1–2 (George Washington Univ. Law Sch. Pub. Law & Legal Theory, Working Paper No. 236, 2004), available at http://papers.ssrn.com/sol3/papers.cfm?abstract_id=943922.

239 Id. at 2–3.

240 See Di Er Bai Liu Shi Wu Tiao (第二百六十五条) [Civil Procedure Law of the People’s Republic of China, Article 265], (promulgated by the Standing Comm. Nat’l People’s Cong., Oct. 28, 2007, effective April 9, 1991), available at P.R.C. Laws, http://www.lawinfochina.com/display.aspx?id=6459&lib=law. Under PRC Law, “[i]f a legally effective judgment or ruling made by a foreign court seeks the recognition and enforcement of a people’s court of the People’s Republic of China, . . . the foreign court may, according to the provisions of the international treaties concluded or acceded to by the People’s Republic of China or based on the principle of reciprocity, request the recognition and enforcement of a people’s court.” Id.

241Hubei Gezhouba Sanlian Indus. v. Robinson Helicopter Co., No. 2:06-cv-01798-FMC-SSx, 2009 WL 2190187 (C.D. Cal. July 22, 2009).

242Id. at *5. A civil suit for recognition of a foreign judgment may be heard under federal law if the foreign judgment is “final, conclusive and enforceable.” Id.

243See Zhang Shouzhi et al., Forum Shopping for Dispute Resolution, King & Wood, http://www.kingandwood.com/article.aspx?id=Forum-Shopping-for-Dispute-Resolution-Hurdles-and-Solutions&language=en (last visited Mar. 10, 2012). Chinese courts do not presume China has reciprocal interests with other countries, and China has not acceded to any multilateral treaties that allow it to mutually recognize and enforce court judgments rendered in other countries. Id. “In short, if there is no applicable bilateral treaty providing mutual recognition and enforcement of judgments between the forum state and China, judgments rendered in the forum state will not be recognized and enforced by Chinese courts.” Id.

244 Harris, supra note 235.

245Eric Stone, the former director of the CPSC Legal Division, Office of Compliance and Field Operations, notes that “[w]e are not yet at a point in our international jurisprudence where each country is willing to participate in another’s legal processes.” Kessler & Sapien, supra note 1.

24619 U.S.C. § 1484(a) (2006).

247 Restatement (Third) of Torts: Products Liability, supra note 10, § 1.

248 Hearing—Leveling the Playing Field, supra note 9, at 4.

249See Shouzhi et al., supra note 243.

250If a manufacturer produced a product that injured a U.S. citizen and failed to compensate the victim, the manufacturer would be required to contribute to the fund as a condition of continuing to export to the United States.

251Gips, supra note 157, at 568–69; Consumer Product Safety Improvement Act of 2008, Pub. L. No. 110-314, 122 Stat. 3016 (2008).

252Eileen Flaherty, Note, Safety First: The Consumer Product Safety Improvement Act of 2008, 21 Loy. Consumer L. Rev. 372, 384 (2009).

253Gips, supra note 157, at 549.

254CPSC Overview, U.S. Consumer Protection Safety Commission, http://www.cpsc.gov/about/about.html (last visited Mar. 20, 2010).

255 Charles W. Lamb et al., Marketing 113 (10th ed. 2009).

256 Id. “From 1998 to 2007, the value of consumer products imported into the United States increased over 100 percent.” Hearing—H.R. 4678, supra note 236 (statement of Jeremy Baskin, Import Surveillance Division, Office of Compliance, U.S. Consumer Product Safety Commission).

257 Hearing—H.R. 4678, supra note 236 (statement of Ami V. Gadhia, Policy Counsel, Consumers Union).

258Consumer Product Safety Improvement Act of 2008, Pub. L. No. 110-314, §§ 101–102, 122 Stat. 3016, 3017–28.

259 Id. § 217. A civil penalty of $100,000 is imposed for each violation of the CPSIA and a maximum of $15 million for any related series of violations. A maximum five-year sentence will be imposed for knowingly and willfully violating consumer product safety laws. Id.

260 Id. § 212.

261 See CBP Mission Statement and Core Values, CBP.gov (Feb. 17, 2009), http://www.cbp.gov/xp/cgov/about/mission/guardians.xml.

262 U.S. Customs & Border Prot., Snapshot: A Summary of CBP Facts and Figures 1 (2007), available at http://www.phpintl.com/PDF%20Files/cbp_snapshot_final.pdf.

263 Hearing—H.R. 4678, supra note 236 (statement of Jeremy Baskin, Import Surveillance Division, Office of Compliance, U.S. Consumer Product Safety Commission).

264 Id.

265Eric Lipton, Safety Agency Faces Scrutiny amid Changes, N.Y. Times, Sept. 2, 2007, at A1.

266 Id.

267 Hearing—H.R. 4678, supra note 236 (statement of Jeremy Baskin, Import Surveillance Division, Office of Compliance, U.S. Consumer Product Safety Commission).

268 See Lipton, supra note 265.

269 Hearing—H.R. 4678, supra note 236 (statement of Ami V. Gadhia, Policy Counsel, Consumers Union).

270 Id.

271 Id.

272 See id.

273H.R. 4678, 111th Cong. (2010).

274Ian Swanson, Import Ban Bill Has Manufacturers Worried, Hill (Sept. 13, 2010, 5:00 AM), http://thehill.com/business-a-lobbying/118257-import-ban-bill-has-manufacturers-worried.

275See supra notes 28–29 and accompanying text.

276See supra notes 28–29 and accompanying text.

277H.R. 3646, 112th Cong. §§ 3(a), 3(c)(1) (2011); see also Daniel Griswold, Chinese Drywall Maker Held Accountable Without Congressional Meddling, Cato Liberty (Oct. 15, 2010, 2:37 PM), http://www.cato-at-liberty.org/chinese-drywall-maker-held-accountable-without-congressional-meddling (discussing the 2010 Act). The agent must be registered in a state with “substantial connection to the importation, distribution, or sale of the products of the foreign manufacturer or producer” such that the minimum contacts test is satisfied and service is appropriate. H.R. 3646 § 3(a)(2)(A). A 2009 companion bill in the Senate, sponsored by Senator Sheldon Whitehouse, died following introduction. S. 1606: Foreign Manufacturers Legal Accountability Act of 2009, Govtrack.us, http://www.govtrack.us/congress/bill.xpd?bill=s111-1606 (last visited Mar. 20, 2012).

278H.R. 3646 § 3(c).

279 Id. § 4(a).

280 Id. § 3(c).

281 Id.

282 See Press Release, Am. Ass’n for Just., Legislation Would Aid Consumers in Holding Foreign Manufacturers Accountable for Dangerous Products (Aug. 7, 2009), available at http://www.justice.org/cps/rde/xchg/justice/hs.xsl/10192.htm.

283Griswold & James, supra note 231.

284H.R. 3646 § 3(a).

285Griswold & James, supra note 231.

286 See supra text accompanying notes 238–44.

287 See Tom Ramstack, Foreign Countries Upset About “Protectionist” U.S. Trade Bill, Daily HR Tips.com (Sept. 21, 2010), http://www.dailyhrtips.com/2010/09/21/foreign-countries-upset-about-protectionist-u-s-trade-bill.

288 Id. U.S. sponsors argued that the 2010 Act fell under the exception to WTO fair trade rules that protect life and health. Id.

289 Id.

290 Id.

291 Id.

292 See supra text accompanying notes 231–37.

293Andrew Mayeda, U.S. Bill “Badly Crafted,” Trade Minister Says, Edmonton J. (Sept. 24, 2010), http://www2.canada.com/edmontonjournal/news/business/story.html?id=21fe7957-61b4-40aa-a175-9f28db18a78a.

294Griswold & James, supra note 231.

295 Id.; Hearing–H.R. 4678, supra note 236 (statement of Marianne Rowden, President & CEO, American Association of Exporters and Importers).

296Delisle & Trujillo, supra note 172, at 162.

297Pritam Banerjee, The Foreign Manufacturers Liability and Accountability Act: A Major Concern for Indian Exporters to the US, World Com. Rev., http://worldcommercereview.com/publications/article_pdf/294 (last visited Mar. 3, 2012).

298 Id.

299 See supra text accompanying notes 266–69.

300 Shoddy Work, supra note 89.

301 See Griswold & James, supra note 231.

302 See supra text accompanying notes 84–87.

303 See Kenneth A. Bamberger & Andrew T. Guzman, Keeping Imports Safe: A Proposal for Discriminatory Regulation of International Trade, 96 Calif. L. Rev. 1405, 1410 (2008).

304Greenman v. Yuba Power Prods., Inc., 377 P.2d 897, 901 (Cal. 1963).

305 See supra text accompanying notes 8–10.

306The manufacturer is directly responsible for production and therefore is arguably the party most responsible for product quality issues.

307Experts Predict Passage of the Foreign Manufacturers Legal Accountability Act of 2010: What Does This Law Mean to U.S. Importers and Exporters?, Katten (July 21, 2010), http://www.kattenlaw.com/experts-predict-passage-of-foreign-manufacturers-legal-accountability-act.

308 See Clarke, supra note 238, at 2–3.

309Donald C. Clarke argues a treaty is the only ground upon which a Chinese court would enforce a U.S. judgment. Id. at 2–3.

310Ralph Nader, Weak-Kneed in China, CounterPunch (Nov. 25, 2009), http://www.counterpunch.org/nader11252009.html.

311 Id.

312Hunt, supra note 32, at 919.

313 See supra text accompanying notes 48–50.

314Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C. §§ 9601–9675 (2006); see also Basic Information: What Is Superfund?, U.S. Envtl. Protection Agency, http://www.epa.gov/superfund/about.htm (last visited Mar. 3, 2010).

315 Basic Information: What Is Superfund?, supra note 314.

316Lawrence Hurley, Lawyers Still Cleaning Up over Superfund Sites, N.Y. Times (Jan. 3, 2011), http://www.nytimes.com/gwire/2011/01/03/03greenwire-lawyers-still-cleaning-up-over-superfund-sites-92748.html.

317 See Michael Cooper, Two Funds, Same Goal: Compensate, N.Y. Times, Aug. 22, 2010, at A14. Commenter James C. Harris, who advocates for adoption of a comprehensive social insurance system, acknowledges 9/11 was an “unprecedented horror” but argues the extraordinary background circumstance should not limit the fund model in application. James C. Harris, Comment, Why the September 11th Victim Compensation Fund Proves the Case for a New Zealand-Style Comprehensive Social Insurance Plan in the United States, 100 Nw. U. L. Rev. 1367, 1370 (2006).

318Cooper, supra note 317.

319Air Transportation Safety and System Stabilization Act, 49 U.S.C. § 40101 (2006).

320Harris, supra note 317, at 1369.

321 Id.

322James R. Copland, Tragic Solutions: The 9/11 Victim Compensation Fund, Historical Antecedents, and Lessons for Tort Reform 20 (Jan. 13, 2005) (working paper, Center For Legal Policy at the Manhattan Institute), available at http://www.manhattan-institute.org/pdf/clpwp_01-13-05.pdf.

323Harris, supra note 317, at 1376.

324Copland, supra note 322, at 24.

325Harris, supra note 317, at 1377.

326Neil King, Jr., Feinberg Ramps Up $20 Billion Compensation Fund, Wall St. J., June 21, 2010, at A1.

327Copland, supra note 322, at 20.

328 Id.

329Harris, supra note 317, at 1379.

330Linda S. Mullenix, The Future of Tort Reform: Possible Lessons from the World Trade Center Victim Compensation Fund, 53 Emory L.J. 1315, 1344 (2004).

331 Id. at 1345.

332 About the $20 Billion Dollar BP Fund for Oil Spill Victims, BP Fund (July 21, 2010), http://www.thebpfund.com [hereinafter About the BP Fund].

333 Id.

334See Kimberly Kindy, Overseer of BP’s Gulf Spill Claims Fund Gets His Hands Dirty, Wash. Post, Oct. 20, 2010, at A6.

335 Id.

336 About the BP Fund, supra note 332.

337 Oil Fund Administrator: Come to Me, Not Court, CBS News (July 19, 2010), http://www.cbsnews.com/stories/2010/07/19/national/main6692221.shtml.

338 Id.

339Kenneth Feinberg has incurred criticism from claimants unhappy with their compensation. BP Claims Czar Continues Gulf Tour amid Complaints, Huffington Post (Jan. 11, 2011, 5:31 AM), http://www.huffingtonpost.com/huff-wires/20110111/us-gulf-oil-spill-claims; Troy King, Opinion, Fund Chief Can’t Be Trusted, USA Today (Jan. 28, 2010, 8:30 PM), http://www.usatoday.com/news/opinion/editorials/2010-12-29-editorial29_ST1_N.htm.

340Moira Herbst, BP Fund, Feinberg Face Lawsuits by Claimants, Reuters, Feb. 28, 2011, available at http://af.reuters.com/article/energyOilNews/idAFN2826927720110228.

341 Basic Information: What Is Superfund?, supra note 314.

342 Id.

343 See supra text accompanying note 319.

344Kessler & Sapien, supra note 1.

345 See Griswold & James, supra note 231, at 1.

346Kessler & Sapien, supra note 1.

347 See supra text accompanying notes 256, 266–67.

348 See supra text accompanying notes 326, 336.

349 See supra text accompanying notes 319, 332.

350Copland, supra note 322, at 20 n.123.

351See Harris, supra note 317, at 1378 (stating the VCF required claims to be filed within a two-year period); About the BP Fund, supra note 332.

352Gregory Mandel, Nanotechnology Governance, 59 Ala. L. Rev. 1323, 1356 (2008).

353 See supra text accompanying notes 326, 336.

354 See supra text accompanying note 328.

355This framework does not necessarily let responsible U.S. parties (importers, distributors, or sellers) off the hook. While some claimants will opt into the fund, others will choose to pursue traditional litigation, hoping for increased jury verdicts in court.

356If a claimant opts into either the VCF or BP Fund, they are barred from pursuing a separate claim in court. See supra text accompanying notes 325, 338.

357Mandel, supra note 352, at 1356.

358The proposed framework will not be able to compensate consumers who have been injured prior to the creation of the fund by defective foreign-made products. Rather, it is a prospective solution that aims to provide a compensation model for consumers in the future.

359China’s refusal to indemnify injured U.S. consumers epitomizes why the United States needs to demand the money up front as a “fee” for doing business in the United States.

360 See Mandel, supra note 352, at 1356.

361Hunt, supra note 32, at 919.

362 See id.

363One of Congress’ goals in enacting CERCLA was to provide a deterrent to “irresponsible hazardous-material management.” L. De-Wayne Layfield, CERCLA, Successor Liability, and the Federal Common Law: Responding to an Uncertain Legal Standard, 68 Tex. L. Rev. 1237, 1241 (1990).

364 See supra text accompanying note 71.

365 See supra text accompanying note 118–21.

366See Thottam, supra note 100. One of Mattel’s contract manufacturers allegedly engaged the subcontractor. Stoking Protectionism, supra note 56.

367 See supra text accompanying note 235.

368The WTO is the international organization charged with regulating trade relationships. About the WTO, World Trade Org., http://www.wto.org/english/thewto_e/whatis_e/wto_dg_stat_e.htm (last visited Feb. 17, 2012).

369 Services: Rules for Growth and Investment, World Trade Org., http://www.wto.org/english/thewto_e/whatis_e/tif_e/agrm6_e.htm (last visited Feb. 17, 2012).

370Delisle & Trujillo, supra note 172, at 162.

Notes & Comments Editor, Emory International Law Review; J.D. Candidate, Emory University School of Law (2012); University of Virginia (2006). The Author would like to thank her advisor, Professor Frank J. Vandall, for his guidance, insight, and unmatched enthusiasm for products liability law and the staff of the Emory International Law Review for their assistance in writing and editing this Comment. The Author would also like to thank her family and her fiancé, Andrew, for their unwavering support.