Foreign Manufacturers Legal Accountability Act of 2019

I 116TH CONGRESS 1ST SESSION H. R. 3737 To require foreign manufacturers of products imported into the United States to establish registered agents in the United States who are authorized to accept service of process against such manufacturers. IN THE HOUSE OF REPRESENTATIVES JULY 12, 2019 Mr. CARTWRIGHT introduced the following bill; which was referred to the Committee on Energy and Commerce, and in addition to the Committees on Ways and Means, and Agriculture, for a period to be subsequently de- termined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned A BILL To require foreign manufacturers of products imported into the United States to establish registered agents in the United States who are authorized to accept service of process against such manufacturers. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLE. 3 This Act may be cited as the ‘‘Foreign Manufacturers 4 Legal Accountability Act of 2019’’. 5 SEC. 2. FINDINGS. 6 Congress makes the following findings: 7 VerDate Sep 11 2014 02:04 Jul 23, 2019 Jkt 089200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H3737.IH H3737 kjohnson on DSK79L0C42 with BILLS 2 •HR 3737 IH (1) Each year, many people in the United 1 States are injured by defective products manufac- 2 tured or produced by foreign entities and imported 3 into the United States. 4 (2) Both consumers and businesses in the 5 United States have been harmed by injuries to peo- 6 ple in the United States caused by defective prod- 7 ucts manufactured or produced by foreign entities. 8 (3) People in the United States injured by de- 9 fective products manufactured or produced by for- 10 eign entities often have difficulty recovering damages 11 from the foreign manufacturers and producers re- 12 sponsible for such injuries. 13 (4) The difficulty described in paragraph (3) is 14 caused by the obstacles in bringing a foreign manu- 15 facturer or producer into a United States court and 16 subsequently enforcing a judgment against that 17 manufacturer or producer. 18 (5) Obstacles to holding a responsible foreign 19 manufacturer or producer liable for an injury to a 20 person in the United States undermine the purpose 21 of the tort laws of the United States. 22 (6) The difficulty of applying the tort laws of 23 the United States to foreign manufacturers and pro- 24 ducers puts United States manufacturers and pro- 25 VerDate Sep 11 2014 02:04 Jul 23, 2019 Jkt 089200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H3737.IH H3737 kjohnson on DSK79L0C42 with BILLS 3 •HR 3737 IH ducers at a competitive disadvantage because United 1 States manufacturers and producers must— 2 (A) abide by common law and statutory 3 safety standards; and 4 (B) invest substantial resources to ensure 5 that they do so. 6 (7) Foreign manufacturers and producers can 7 avoid the expenses necessary to make their products 8 safe if they know that they will not be held liable for 9 violations of United States product safety laws. 10 (8) Businesses in the United States undertake 11 numerous commercial relationships with foreign 12 manufacturers, exposing the businesses to additional 13 tort liability when foreign manufacturers or pro- 14 ducers evade United States courts. 15 (9) Businesses in the United States engaged in 16 commercial relationships with foreign manufacturers 17 or producers often cannot vindicate their contractual 18 rights if such manufacturers or producers seek to 19 avoid responsibility in United States courts. 20 (10) One of the major obstacles facing busi- 21 nesses and individuals in the United States who are 22 injured and who seek compensation for economic or 23 personal injuries caused by foreign manufacturers 24 VerDate Sep 11 2014 02:04 Jul 23, 2019 Jkt 089200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H3737.IH H3737 kjohnson on DSK79L0C42 with BILLS 4 •HR 3737 IH and producers is the challenge of serving process on 1 such manufacturers and producers. 2 (11) An individual or business injured in the 3 United States by a foreign company must rely on a 4 foreign government to serve process when that com- 5 pany is located in a country that is a signatory to 6 the Convention on the Service Abroad of Judicial 7 and Extrajudicial Documents in Civil or Commercial 8 Matters done at The Hague November 15, 1965 (20 9 UST 361; TIAS 6638). 10 (12) An injured person in the United States 11 must rely on the cumbersome system of letters roga- 12 tory to effect service in a country that did not sign 13 the Convention on the Service Abroad of Judicial 14 and Extrajudicial Documents in Civil or Commercial 15 Matters. These countries do not have an enforceable 16 obligation to serve process as requested. 17 (13) The procedures described in paragraphs 18 (11) and (12) add time and expense to litigation in 19 the United States, thereby discouraging or frus- 20 trating meritorious lawsuits brought by persons in- 21 jured in the United States against foreign manufac- 22 turers and producers. 23 (14) Foreign manufacturers and producers 24 often seek to avoid judicial consideration of their ac- 25 VerDate Sep 11 2014 02:04 Jul 23, 2019 Jkt 089200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H3737.IH H3737 kjohnson on DSK79L0C42 with BILLS 5 •HR 3737 IH tions by asserting that United States courts lack 1 personal jurisdiction over them. 2 (15) The due process clauses of the fifth 3 amendment to and section 1 of the fourteenth 4 amendment to the Constitution govern United States 5 courts’ personal jurisdiction over defendants. 6 (16) The due process clauses described in para- 7 graph (15) are satisfied when a defendant consents 8 to the jurisdiction of a court. 9 (17) United States markets present many op- 10 portunities for foreign manufacturers. 11 (18) In choosing to export products to the 12 United States, a foreign manufacturer or producer 13 subjects itself to the laws of the United States. Such 14 a foreign manufacturer or producer thereby acknowl- 15 edges that it is subject to the personal jurisdiction 16 of the State and Federal courts in at least one 17 State. 18 SEC. 3. SENSE OF CONGRESS. 19 It is the sense of Congress that— 20 (1) foreign manufacturers and producers whose 21 products are sold in the United States should not be 22 able to avoid liability simply because of difficulties 23 relating to serving process upon them; 24 VerDate Sep 11 2014 02:04 Jul 23, 2019 Jkt 089200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H3737.IH H3737 kjohnson on DSK79L0C42 with BILLS 6 •HR 3737 IH (2) to avoid such lack of accountability, foreign 1 manufacturers and producers of foreign products 2 distributed in the United States should be required, 3 by regulation, to register an agent in the United 4 States who is authorized to accept service of process 5 for such manufacturer or producer; 6 (3) it is unfair to United States consumers and 7 businesses that foreign manufacturers and producers 8 often seek to avoid judicial consideration of their ac- 9 tions by asserting that United States courts lack 10 personal jurisdiction over them; 11 (4) those who benefit from exporting products 12 to United States markets should expect to be subject 13 to the jurisdiction of at least one court within the 14 United States; 15 (5) exporting products to the United States 16 should be understood as consent to the account- 17 ability that the legal system of the United States en- 18 sures for all manufacturers and producers, foreign, 19 and domestic; 20 (6) exporters recognize the scope of opportuni- 21 ties presented to them by United States markets but 22 also should recognize that products imported into 23 the United States must satisfy Federal and State 24 VerDate Sep 11 2014 02:04 Jul 23, 2019 Jkt 089200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H3737.IH H3737 kjohnson on DSK79L0C42 with BILLS 7 •HR 3737 IH safety standards established by statute, regulation, 1 and common law; 2 (7) foreign manufacturers should recognize that 3 they are responsible for the contracts they enter into 4 with United States companies; 5 (8) foreign manufacturers should act respon- 6 sibly and recognize that they operate within the con- 7 straints of the United States legal system when they 8 export products to the United States; 9 (9) United States laws and the laws of United 10 States trading partners should not put burdens on 11 foreign manufacturers and producers that do not 12 apply to domestic companies; 13 (10) it is fair to ensure that foreign manufac- 14 turers, whose products are distributed in commerce 15 in the United States, are subject to the jurisdiction 16 of State and Federal courts in at least one State be- 17 cause all United States manufacturers are subject to 18 the jurisdiction of the State and Federal courts in 19 at least one State; and 20 (11) it should be understood that, by reg- 21 istering an agent for service of process in the United 22 States, the foreign manufacturer or producer ac- 23 knowledges consent to the jurisdiction of the State 24 in which the registered agent is located. 25 VerDate Sep 11 2014 02:04 Jul 23, 2019 Jkt 089200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\H3737.IH H3737 kjohnson on DSK79L0C42 with BILLS 8 •HR 3737 IH SEC. 4. DEFINITIONS. 1 In this Act: 2 (1) APPLICABLE AGENCY.—The term ‘‘applica- 3 ble agency’’ means, with respect to covered prod- 4 ucts— 5 (A) described in subparagraphs (A) and 6 (B) of paragraph (4), the Food and Drug Ad- 7 ministration; 8 (B) described in paragraph (4)(C), the 9 Consumer Product Safety Commission; 10 (C) described in subparagraphs (D) and 11 (E) of paragraph (4), the Environmental Pro- 12 tection Agency; and 13 (D) described in subparagraph (F) of 14 paragraph (4)— 15 (i) the Food and Drug Administra- 16 tion, if the item is intended to be a compo- 17 nent part of a product described in sub- 18 paragraphs (A) and (B) of paragraph (4); 19 (ii) the Consumer Product Safety 20 Commission, if the item is intended to be 21 a component part of a product described in 22 paragraph (4)(C); and 23 (iii) the Environmental Protection 24 Agency, if the item is intended to be a 25 component part of a product described in 26 VerDate Sep 11 2014 02:04 Jul 23, 2019 Jkt 089200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\H3737.IH H3737 kjohnson on DSK79L0C42 with BILLS 9 •HR 3737 IH subparagraphs (D) and (E) of paragraph 1 (4). 2 (2) COMMERCE.—The term ‘‘commerce’’ means 3 trade, traffic, commerce, or transportation— 4 (A) between a place in a State and any 5 place outside of the State; or 6 (B) which affects trade, traffic, commerce, 7 or transportation described in subparagraph 8 (A). 9 (3) COMMISSIONER OF U.S. CUSTOMS AND BOR- 10 DER PROTECTION.—The term ‘‘Commissioner of 11 U.S. Customs and Border Protection’’ means the 12 Commissioner responsible for U.S. Customs and 13 Border Protection of the Department of Homeland 14 Security. 15 (4) COVERED PRODUCT.—The term ‘‘covered 16 product’’ means any of the following: 17 (A) Drugs, devices, and cosmetics, as such 18 terms are defined in section 201 of the Federal 19 Food, Drug, and Cosmetic Act (21 U.S.C. 20 321). 21 (B) A biological product, as such term is 22 defined in section 351(i) of the Public Health 23 Service Act (42 U.S.C. 262(i)). 24 VerDate Sep 11 2014 02:04 Jul 23, 2019 Jkt 089200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\H3737.IH H3737 kjohnson on DSK79L0C42 with BILLS 10 •HR 3737 IH (C) A consumer product, as such term is 1 used in section 3(a) of the Consumer Product 2 Safety Act (15 U.S.C. 2052). 3 (D) A chemical substance or new chemical 4 substance, as such terms are defined in section 5 3 of the Toxic Substances Control Act (15 6 U.S.C. 2602). 7 (E) A pesticide, as such term is defined in 8 section 2 of the Federal Insecticide, Fungicide, 9 and Rodenticide Act (7 U.S.C. 136). 10 (F) An item that is intended to be a com- 11 ponent part of a product described in subpara- 12 graph (A), (B), (C), (D), or (E) but is not yet 13 a component part of such product. 14 (5) DISTRIBUTE IN COMMERCE.—The term 15 ‘‘distribute in commerce’’ means to sell in commerce, 16 to introduce or deliver for introduction into com- 17 merce, or to hold for sale or distribution after intro- 18 duction into commerce. 19 SEC. 5. REGISTRATION OF AGENTS OF FOREIGN MANUFAC- 20 TURERS AUTHORIZED TO ACCEPT SERVICE 21 OF PROCESS IN THE UNITED STATES. 22 (a) REGISTRATION.— 23 (1) IN GENERAL.—Beginning on the date that 24 is 180 days after the date on which the regulations 25 VerDate Sep 11 2014 02:04 Jul 23, 2019 Jkt 089200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\H3737.IH H3737 kjohnson on DSK79L0C42 with BILLS 11 •HR 3737 IH are prescribed pursuant to subsection (e)(1) and ex- 1 cept as otherwise provided in this subsection, the 2 head of each applicable agency shall require foreign 3 manufacturers and producers of covered products 4 distributed in commerce to establish a registered 5 agent in the United States who is authorized to ac- 6 cept service of process on behalf of such manufac- 7 turer or producer for the purpose of any State or 8 Federal regulatory proceeding or any civil action in 9 any State or Federal court relating to such covered 10 product, if such service is made in accord with the 11 State or Federal rules for service of process in the 12 State in which the regulatory action or case is 13 brought. 14 (2) LOCATION.—The head of each applicable 15 agency shall require that an agent of a foreign man- 16 ufacturer or producer registered under this sub- 17 section with respect to a covered product be located 18 in a State with a substantial connection to the im- 19 portation, distribution, or sale of the covered prod- 20 uct. 21 (3) DESIGNATION AND ACCEPTANCE.— 22 (A) DESIGNATION BY FOREIGN MANUFAC- 23 TURERS AND PRODUCERS.—The head of each 24 applicable agency shall require each foreign 25 VerDate Sep 11 2014 02:04 Jul 23, 2019 Jkt 089200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\H3737.IH H3737 kjohnson on DSK79L0C42 with BILLS 12 •HR 3737 IH manufacturer and producer described in para- 1 graph (1) to provide to the applicable agency a 2 written designation of the agent established by 3 the foreign manufacturer or producer pursuant 4 to paragraph (1) that— 5 (i) is signed by an official or employee 6 of the foreign manufacturer or producer 7 who has authority to appoint an agent; 8 (ii) contains the full legal name, prin- 9 cipal place of business, and mailing ad- 10 dress of the foreign manufacturer or pro- 11 ducer; and 12 (iii) contains a statement that the 13 designation is valid and binding on the for- 14 eign manufa [Text truncated for display. 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