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How International Companies Are Liable for Their Products in the U.S.

product liability

If you buy goods produced abroad and they were somehow defective and caused you injury, should you be able to recover for your injuries? International manufacturing companies don’t think so. They want access to our markets without being held responsible for the damage they are causing to consumers here in the United States. This has become very common with items purchased on Amazon but sold by distributors or manufacturers from overseas. The same is true for companies who bring their goods to America and then attempt to hide behind the fact that they are international and should not be sued here.

Thankfully, our justice system has a precedent that holds companies who knowingly conduct business in the United States liable for the products they sell here. The United States is the world’s largest importer of goods, with many of the products we rely on being produced by international companies. As attorneys specializing in product liability, we know that if you’re injured by a defective product — you have options to recover, even if it was produced internationally.

When lawsuits have been brought against foreign producers of goods, they have systematically tried to dismiss claims on the grounds that U.S. courts don’t have jurisdiction over them since they are based abroad. This article will serve to share information on when a foreign manufacturer is responsible for injury, different U.S. cases involving foreign manufacturers, and options for U.S. consumers to recover if injured.

What Makes Foreign Manufacturers Responsible for Defective Products?

The most common reason cited for dismissal of claims against foreign companies is a lack of subject matter jurisdiction. Defined as “The power of a court to adjudicate a particular type of matter and provide the remedy demanded” by Cornell law, subject matter jurisdiction defines whether a court can hear and prescribe a remedy to a claim.

In New York, specific personal jurisdiction is obtained through New York’s long-arm statute (CPLR 302).
CPLR 302 (a) (1) states:
“a court may exercise personal jurisdiction over any non-domiciliary… who… (1) transacts any business within the state or contracts anywhere to supply goods or services in the state.” (CPLR 302 [a] [1]; Aybar v US Tires & Wheels of Queens, LLC, 211 Ad 3d 40, 48-49 [2d Dept 2022].)

In analyzing whether a court has specific jurisdiction over a defendant, the court must first prove whether the defendant has transacted business or supplied goods or services in the state. If so, the court must then ask whether the claims being charged resulted from those transactions.

More specifically, the Court of Appeals explains, “jurisdiction is proper even though the defendant never enters New York, so long as the defendant’s activities here were purposeful, and there is a substantial relationship between the transaction and claim asserted” (Rushaid v Pictet & Cie, 20 NY3d 316, 323 [2016].) .

While some companies have made the argument successfully that they had no knowledge of a partner’s intentions to transport their goods to New York (Ortiz v Food Mach. of Am., Inc.) (2014 NY Slip Op. 31868[U] [Bronx Ct. Sup. Ct. 2014), this is often not the case.

Leav & Steinberg Wins Dismissal of Manufacturer’s Claim

Leav & Steinberg is currently representing two clients who suffered serious injury as a result of defective furniture produced by a foreign manufacturer.

When our clients — both doctors from Iran — went to visit their daughter in New York for the birth of their first grandchild, they stayed at their daughter’s home. The daughter and her husband had purchased a very high-end Murphy bed/library modular furniture from Resource Furniture in New York City. The item purchased was a Murphy Bed called the LGM Tavolo. While they were sleeping, the entire furniture assembly and library component came crashing down on them, causing the wife to become paralyzed from her neck down.

defective furniture

While the distributor was here in New York, our investigation revealed that the product was manufactured by an Italian company called CLEI Furniture, based in Italy. It was negligently designed, manufactured, and had a failure to warn of several dangers. We chose to add them to the New York suit. However, in their attempt to delay and deny justice, CLEI moved to dismiss the case on the grounds that they did not have a presence in New York and that the court lacked subject matter jurisdiction over the company.

CLEI operates in a working relationship with NY distributor Resource Furniture. As CLEI’s sole NY offering partner, the court ruled that CLEI operated purposefully in New York and could therefore be held accountable for the defective furniture it provided to NY consumers.

You can find more information about the full case against CLEI furniture here.

Partner Daniela Henriques drafted a very strong opposition to the motion and argued that CLEI absolutely availed themselves of New York’s Courts and should be held responsible here. The court agreed, and a New York Supreme Court Judge issued an order denying CLEI’s motion. The matter can now proceed through discovery.

A History of Manufacturers Pursuing Dismissal

A famous Supreme Court case in 2009 involved Goodyear tires in a matter of personal jurisdiction by courts.

On April 18, 2004, Matthew Helms and Julian Brown died as a result of a bus accident near Paris, France. Helms and Brown were thirteen-year-old soccer players preparing to fly home to North Carolina at the time of the accident. Their bus allegedly crashed as a result of a defective Goodyear tire. (Cornell Law).

When evaluating whether U.S. courts have general jurisdiction over Goodyear, Brown (plaintiff) made a point. Brown argued that the Supreme Court’s decision in International Shoe v Washington, the proper test of jurisdiction is whether the corporation satisfies the minimum contact test. This test asks whether Goodyear Luxembourg “had continuous, systematic, and substantial contacts with North Carolina” so that the state’s exercise of general jurisdiction was reasonable.

Ultimately, the Supreme Court decided in favor of Goodyear Luxembourg on the grounds that their attenuated connections to the state fell far short of the continuous and systematic business contacts necessary to empower North Carolina to entertain a suit.

While this case is different than the one described earlier, it is akin to the type of arguments international manufacturers will make to evade liability for their actions.

How U.S. Consumers Can Recover if Injured

As you might recognize, laws holding international manufacturers responsible for the products they make are complex. Those injured because of defective products from international manufacturers would be well-advised to consult an attorney experienced in international product liability law.

The team of attorneys at Leav & Steinberg is well-versed in product liability law and can help you determine if you have a valid claim against an international manufacturer. There are a variety of legal methods that those injured can use to recover against international manufacturing companies, all of which should be used to secure a favorable outcome.

Please contact us for a free consultation if you or a loved one have been injured as a result of a product manufactured internationally.