PVC PIPE
Numerous US cities accuse leading US manufacturer JM Eagle of “massive fraud” / Federal government and various states withdraw from legal action
Although the number of plaintiffs is on a steady decline, leading US PVC pipe manufacturer JM Eagle (Los Angeles, California; www.jmeagle.com) still has to face the accusations of “massive fraud” launched by several cities and water districts located in the state of California. According to numerous media reports, the plaintiffs have accused JM Eagle –established in 2007 when Formosa Plastics Corporation (Livingston, New Jersey / USA; www.fpcusa.com) subsidiary J-M Manufacturing bought its then-competitor PW Eagle (see Plasteurope.com of 29.06.2007) – of manufacturing substandard PVC pipe, which will force municipalities to replace their water and sewage systems earlier than anticipated. The allegations, news sources say, extend as far back as 1990 and include charges of fraud, conspiracy, unjust enrichment, breach of contract, intentional misrepresentation, liability for defective products as well as fraudulent concealment.
The defendants, including company president and CEO Walter Wang, have been accused of using cheap and poor quality materials in their pipe formula, of extruding the pipe at speeds damaging its quality, of cherry-picking pipe for testing purposes, of misrepresenting the pipe’s quality and of causing others to pass these misrepresentations on to the plaintiffs. In response to the claims, JM Eagle said that it “stands 100% behind the quality of its pipe”. In fact, in April last year the pipe manufacturer introduced a 50-year warranty on its engineered thermal plastic-pipe products. Since the action was first brought, numerous states have withdrawn from it, including Tennessee, New York and Columbia.
News sources say the plaintiffs in this case are also intervenors and real parties in interest in a false claims act lawsuit filed in January 2006 by former JM Eagle employee John Hendrix.
When a District Court judge in December last year heard the case launched by Hendrix – whom the pipe manufacturer accuses of soliciting a kickback from customers – he dismissed hundreds of the counts. Earlier in 2010, the US federal government had decided against intervening in the case.
e-Service:
Copy of the qui tam lawsuit filed with the US District Court of California on 5 February 2010 as a PDF document
The defendants, including company president and CEO Walter Wang, have been accused of using cheap and poor quality materials in their pipe formula, of extruding the pipe at speeds damaging its quality, of cherry-picking pipe for testing purposes, of misrepresenting the pipe’s quality and of causing others to pass these misrepresentations on to the plaintiffs. In response to the claims, JM Eagle said that it “stands 100% behind the quality of its pipe”. In fact, in April last year the pipe manufacturer introduced a 50-year warranty on its engineered thermal plastic-pipe products. Since the action was first brought, numerous states have withdrawn from it, including Tennessee, New York and Columbia.
News sources say the plaintiffs in this case are also intervenors and real parties in interest in a false claims act lawsuit filed in January 2006 by former JM Eagle employee John Hendrix.
When a District Court judge in December last year heard the case launched by Hendrix – whom the pipe manufacturer accuses of soliciting a kickback from customers – he dismissed hundreds of the counts. Earlier in 2010, the US federal government had decided against intervening in the case.
e-Service:
Copy of the qui tam lawsuit filed with the US District Court of California on 5 February 2010 as a PDF document
26.04.2011 Plasteurope.com [219231-0]
Published on 26.04.2011