LOS ANGELES — This September a class action lawsuit was filed on behalf of private commercial property owners and water utilities potentially seeking millions of dollars from JM Eagle for knowingly supplying substandard polyvinyl chloride (PVC) pipe.
Filed in U.S. District Court, Central District of California, by Birka-White Law Offices and Farella, Braun & Martel LLP, the lawsuit asks the court to certify a nationwide class action on behalf of all persons or entities who installed substandard JM Eagle pipe.
The class action lawsuit alleges that from at least 1997 through at least Jan. 1, 2009, the majority of the PVC pipe manufactured and sold by J-M Manufacturing Co. Inc. (JM Eagle's corporate predecessor), was below the minimum strength required by applicable industry standards.
This class action follows a whistleblower lawsuit filed in the U.S. District Court, Central District of California, which was unsealed February 2010. Nevada, Virginia, Delaware, Tennessee, San Diego, Sacramento, San Jose, the Los Angeles Department of Water and Power and 39 other California municipalities and water districts are seeking millions of dollars in damages from JM Eagle and its former parent company, Formosa Plastics Corp. (USA), for supplying PVC water and sewer pipes that the suit alleges the manufacturer knew were substandard.
According to Mary A. Inman, a San Francisco attorney with Phillips & Cohen LLP, which represents the whistleblower, the Commonwealth of Virginia, the State of Tennessee and 25 California cities and water districts, the judge issued a tentative ruling in September and the case will not be dismissed, it will survive and head into the next phase.
Marcus Galindo, JM Eagle’s spokesperson, told CONTRACTOR that the company is in the process of reviewing the specifics of the allegations in this complaint and that it seems to be based strictly on the whistleblower case filed in 2006 by a disgruntled former employee. Regarding the whistleblower case, JM Eagle is now waiting on the judge’s final decision on the company’s motion to dismiss it.
“We stand 100% behind the quality of our products,” said Galindo. “We do that with our 50-year warranty. We’ve also had independent labs come in on a regular basis unannounced to test and audit product. The plastic pipe industry is very heavily regulated, and we have 22 manufacturing plants across the U.S. now. We have to be very technologically advanced for what we do and to operate so many facilities in the country.”
“Our case [class action lawsuit] may include public agencies not represented in the whistleblower case,” said David M. Birka-White of Birka-White Law Offices in Danville, Calif. “Depending on what the judge decides we may represent them too. At the minimum we represent private owners of commercial property, commercial buildings, shopping centers, and any kind of commercial property and all private water agencies.”
This filing seeks reimbursement of all sums paid by the class members to JM Eagle, and for all other damages caused by the sale and installation of substandard pipe.
“Because JM Eagle is perhaps the world’s largest manufacturer of PVC pipe, the impact on the plaintiffs is substantial,” said Birka-White. “The damages are not only the cost of the pipe, but also include damages for reduced useful life of the product, diminution in property values, and damage for replacing entire water systems.
“The allegations are two fold,” explained Birka-White. “No. 1 — when they (JM Eagle) went through the process of certifying some of their products, they cherry-picked the materials they submitted for testing. This is saying they were non-representative materials. No. 2 — over an extended period of time they manufactured product that was below criteria set by UL and NSF.
“To sell a product like this you need to be certified. In order to have authority to use stamps and put them on product, you need to be certified and promise that all product manufactured meets the standards. If the pipe doesn’t meet the standard you can’t use the stamp. That is what you agree too — that all pipes meet the standards. If you are placing a stamp on a pipe, knowing that the pipe doesn’t meet the standards, you are misrepresenting the quality of the pipe.
“We are saying JM was in the unique position of knowing whether or not product met standards and they sold product that they knew didn’t meet standards, and no one else was in the position to know this,” concluded Birka-White.
Galindo, the JM Eagle spokesman, countered, “We get audited more than 450 times a year by independent agencies that come in and test products at random, and we have never lost a certification in 26 years. With that kind of level of oversight, what is being alleged in the original suit and this suit [class action lawsuit] is impossible.
“While we are still reviewing the specifics of the accusations in this new complaint, it appears to be nothing more than a parasitic lawsuit based strictly on a meritless federal whistleblower case filed in 2006 by a fired ex-employee of JM Eagle.”
“Any allegation that JM Eagle produced inferior or substandard quality product is baseless and verifiably untrue,” said Galindo. “JM Eagle prides itself on producing the highest quality plastic pipe in the industry and stands 100% behind its products with its unmatched 50-year warranty.”
JM eagle’s 50-year warranty was announced and release April 5, 2010.
“The warranty covers 50 years vs. any of our competitors’ warranties, which are typically one or at the most five years,” said Galindo. “The key things in the warranty that we changed, that other manufacturing companies don’t do, is we cover cost for reinstallation. So, that means if someone has a problem with pipe, and it’s a manufacturer defect shown through third party independent testing, we would then cover the cost of not only the pipe, but the labor, equipment rental, landscaping, repaving of street, etc. We cover all of those costs.”
According to Galindo, the company has been offering this warranty for quite some time.
“It’s been a long standing, unwritten policy with us,” said Galindo. “We have had people come to us years later, and if there was an issue, we stepped up and took accountability and paid for all these things. Here we’ve been doing this, and it seemed we should make it official. We’ve made it official now, by putting it in the actually written warranty.”
The 50-year warranty is retroactive, covering any new breaks on products from when the company was JM Manufacturing, established in 1983. Anyone who purchased pipe from JM Manufacturing or JM Eagle will be covered by the 50-year warranty on water transmission and distribution products.
JM Eagle’s website also states the following concerning its quality standards and the 50-year extended warranty: “No company in our industry has passed as rigorous a test of its products as we have. Every bit of research has found that JM Eagle not only meets quality standards but exceeds many of those standards as well. With the addition of our unprecedented 50-year extended warranty there is no question JM Eagle has and will always stand behind the quality of its pipe.”
PVC maker sued for pipe failures