Exporting safely to the US

Chinese products sold in the United States have been at the centre of some high-profile legal action over safety. China Business Law Journal asked Steven Napolitano, a partner at Skadden Arps Slate Meagher & Flom in New York and a specialist in product liability, about the issues and strategies to minimize risk

CBLJ: Exports of manufactured goods to the US form a major part of China’s economy. How much should Chinese manufacturers worry about product liability litigation in the US?

Steven Napolitano (SN): There is a negative perception of Chinese products in the US, and there has been some very high-profile product liability litigation. The most prominent issue in the product liability realm right now is the Chinese drywall situation, which has garnered a great deal of attention in the US from both plaintiffs’ lawyers and defence lawyers. (Please see Chinese drywall manufacturers face litigation on page 51.) This drywall litigation is very much fuelling the idea, following on the heels of the lead in toys situation and some of the other scares, that we are getting products from China that simply are not safe, not up to the standards that we expect of our products in the United States. It is a real issue, and it is something that will make it that much harder for Chinese companies to defend the safety of their products.

CBLJ: Who is at risk of a lawsuit in the US in relation to this kind of product liability issue? Is it the Chinese manufacturer of the product, or is it the importer/exporter, or the distributor, or the retailer?

SN: It’s everybody. A basic tenet of US product liability law is that anybody in the stream of commerce can be sued in a product liability case, beginning with the designer and manufacturer of the product, and including any party that was involved in distributing or selling the product. Sometimes even trade associations can be brought into litigation.