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The latest news regarding potentially defective Chinese imports has plaintiffs lawyers eyeing potential lawsuits while others may be scrambling to limit U.S. companies’ liability. “I’m sure everyone involved – consumers, importers, retailers, plaintiffs lawyers – is on alert now,” said Lianne Pinchuk, an associate in New York’s Weil Gotshal & Manges who is a member of the firm’s products liability and mass torts group. “I do think this is forcing all companies to get prepared.” Last week’s news that tires imported from China through a New Jersey distributor may be defective is the latest involving safety of Chinese imports. In recent months, concerns have also been raised regarding imports that include children’s toys, toothpaste and food. Michael D. Hausfeld, a partner at Washington’s Cohen Milstein Hausfeld & Toll who has handled class action litigation, noted that news regarding the allegedly defective tires has prompted several calls from clients. “We’re in the process right now – because we have a large Chinese presence – of evaluating the extent of the issue,” he said. “We’ve got requests on tires, on glycerin, on numerous products that clearly now emanate in one form or another at least in part from China.” One law firm, Seattle-based Hagens Berman Sobol Shapiro, recently filed a proposed class action against the manufacturer of various Thomas & Friends Wooden Railway Toys, which were imported from China and voluntarily recalled this month for allegedly containing lead paint, which can be toxic if ingested. “It’s a wake-up call for American companies, regardless of where their products are coming from,” said Beth Fegan, a partner in the Chicago office of Hagens Berman. Dan Harris of Seattle’s Harris & Moure, who writes for the “China Law Blog,” noted that “[a]nyone who’s doing business with China without a fairly comprehensive quality check is basically off their rocker.” But Harris said a surprising number of these companies do not have detailed contracts with their manufacturers and distributors or don’t have contracts in place at all. He noted that many businesses do not invest in quality control. “Even if there is no enforcement in China – which is absolutely not true – you still want it for many other reasons,” he said. Lawyers said the issue of defective Chinese imports in the United States brings a range of complex legal issues, such as identifying all the responsible parties, jurisdictional issues and whether any judgments can be collected in China. John Leary, who heads White & Case’s Shanghai office, said it could be interesting to see whether American companies end up using Chinese firms. “Nearly every American company that’s doing business in China has a law firm they use already,” he said. “Are they going to find a different one in order to enforce their indemnities if they need to? I don’t know, but you can certainly see it as a growing potential practice area, particularly given the fact that foreign firms are prohibited from practicing local law.” As distributors increasingly deal with overseas manufacturers, they also need to ensure they have the proper insurance and protection in place, said Ken Kliebard, a partner in the Chicago office of Washington’s Howrey, who often defends class action matters. “Lawyers who are representing distributors of products made overseas should be taking proactive steps immediately to protect their clients,” he said. Todd L. Platek of the Law Office of Todd L. Platek in Berkeley Heights, N.J., who represents American companies doing business in China as well as Chinese companies, said that issues regarding problematic Chinese imports will most likely continue to surface, as they are a typical challenge for any developing nation. “What they don’t have are the sufficient statutes, rules and regulations to really support socially responsible manufacturing,” said Platek, who has a legal consulting business in China. Plaintiffs attorney W. Mark Lanier of The Lanier Law Firm, which has offices in New York and Houston, said he recently reached a confidential settlement in a case involving problems with toys imported from China. He said he would not be surprised if more cases surfaced. “There is a lag time between initial awareness and responsible action, and that lag time we’ll definitely see,” he said. “Whether it will be long or short, that depends in part whether lawyers are doing their work and businesses are doing their work.” This article originally appeared in The National Law Journal, a publication of ALM.

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