From Deseret News archives:

Chinese firms hard to sue

U.S. competitors face myriad legal hurdles

Published: Saturday, Feb. 9, 2008 12:12 a.m. MST
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Hangzhou Zhongce, whose products are sold through U.S. distributors and were subject to a recall last year, withdrew the motion after the judge decided to gather evidence regarding jurisdiction. The issue is pending.

A U.S. distributor, Foreign Tires Sales Inc., of Union, N.J., in August said it would recall 255,000 of Hangzhou Zhongce's tires. The National Highway Traffic Safety Administration ordered the recall after the distributor said some were made without a safety feature that prevents treads from separating. Hangzhou Zhongce has said it found no evidence of structural defects or missing safety features.

Killino, of Woloshin & Killino in Philadelphia, said there are times when the expense and effort of suing a Chinese company make it more logical to focus on U.S. companies doing business with them. That was his strategy in August, when he sued California-based Mattel Inc., claiming the world's largest toymaker should pay for testing to determine if children have been exposed to lead from millions of recalled toys. The case is pending.

"Naming a Chinese defendant in that case could slow the case, and we have so much to recover from Mattel" and others, he said.

Story continues below
Indeed, every step in litigation can be an ordeal when the defendant is a Chinese company, said Peter A. Antonucci, a lawyer at Greenberg Traurig in New York who has consulted for Chinese companies.

Just serving the lawsuit on the defendant — the step that tripped up scooter maker Patmont — must be done according to the Hague Convention. The documents must be translated and then sent to China, where the proper government authority must notify the company, he said.

Lawyers said that Chinese authorities often cannot locate the accused companies because the firms are often dissolved and the factory put in the hands of a new company.

"It's very expensive, very expensive and very time-consuming. The fastest I've ever seen it done is three months," Antonucci said. In the United States, service occurs within a few days.

Recent comments

At some point the items get delivered to the U.S. and payment is made...

l | Feb. 9, 2008 at 7:14 p.m.

If we really felt any sympathy for domesitc firms, we'd buy from...

my two cents | Feb. 9, 2008 at 12:14 p.m.

Sounds like a laywer would have a tough time making a living in China...

Dave | Feb. 9, 2008 at 8:05 a.m.

Image

Steve McElvain works on a push scooter at Patmont Motor Werks in Minden, Nev. The scooter company filed an antitrust lawsuit over Chinese trade practices in an effort to level the playing field for American companies asserting claims of product piracy, impure ingredients and unsafe products.

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