Judge wants more information on Formosa settlement

By Catherine Kavanaugh
Staff Reporter

Published: December 19, 2013 7:01 pm ET
Updated: December 19, 2013 7:16 pm ET

Related to this story

Topics Construction, Pipe/Profile/Tubing, Extrusion, Legal
Companies & Associations J-M Manufacturing Co. Inc.

A federal judge has postponed his decision on a $22.5 million settlement proposed to resolve a False Claims Act (FCA) lawsuit between resin supplier Formosa Plastics Co. USA (FPC-USA) and 45 government entities that bought questionable PVC pipe made with its materials by JM Eagle.

U.S. District Judge George Wu said Dec. 19 that he wants additional information from the parties before he approves or rejects the settlement. He set a new court date of Jan. 16 to issue his ruling as to whether the dollar amount Formosa is ready to pay is fair, reasonable and adequate.

Formosa, a Taiwan-based plastics giant, was sued along with JM Eagle by a whistle blower, three states, and 42 cities and water districts over the questionable quality of PVC pipe produced and sold to the plaintiffs from 1996-2006.

Formosa is the former parent company of JM Eagle, which is the largest PVC pipe extruder in North America, according to Plastics News' ranking.

As co-defendants in the lawsuit filed back in 2006, Formosa and JM Eagle are proceeding on a couple different legal tracks. Formosa reached a mediated settlement with the plaintiffs but doesn’t admit any liability while JM Eagle is fighting the allegations that it violated the FCA in a two-phase trial.

The first part of the trial ended Nov. 14 with a jury finding JM Eagle liable for making false claims about PVC pipe produced and sold to the plaintiffs in the 10-year period. JM plans to appeal.

Jurors said the pipe maker “falsely represented uniform compliance” with two industry standards — American Water Works Association C905 and Underwriters Laboratories 1285 — on the 50-page verdict form that they filled out.

However, the jury verdict form does not say any of the plaintiffs received defective or substandard pipe. And, defense attorneys argued there is no evidence that any of the pipe in the ground ever burst, leaked, cracked or failed to perform.

A new jury will be seated to determine what, if anything, JM Eagle owes during the next phase of the trial.

In the meantime, JM Eagle attorneys had asked the judge not to approve the proposed settlement — at least not yet, in essence pitting JM Eagle owner, Walter Wang, against Formosa, which was founded by his late father, Taiwanese billionaire Y.C. Wang.

Formosa lawyers questioned the timing of JM Eagle’s attempt to block or postpone the settlement. In a legal brief filed Dec. 13, they noted that JM Eagle did not object when the court ordered the parties to mediation, or when the settlement was disclosed, or when Formosa was given a conditional dismissal from the first phase of the trial.

The proposed settlement is the result of weeks of extensive negotiations involving retired Chief U.S. Magistrate Judge Edward Infante as the mediator.


Comments

Judge wants more information on Formosa settlement

By Catherine Kavanaugh
Staff Reporter

Published: December 19, 2013 7:01 pm ET
Updated: December 19, 2013 7:16 pm ET

Post Your Comments


Back to story


More stories

Image

EEOC suing movable wall maker Hufcor

September 29, 2014 3:09 pm ET

Movable wall and partition maker Hufcor Inc. is facing a federal lawsuit from the U.S. Equal Employment Opportunity Commission after violating...    More

Worker fatally injured at Kansas plant

September 25, 2014 1:25 pm ET

A 51-year-old man died from injuries sustained in an industrial accident at Vinylplex Inc., a Pittsburg, Kan.-based PVC pipe extruder for potable...    More

Image

Worker injured in fire at Primex sheet plant

September 24, 2014 5:37 pm ET

UPDATED — A Primex Plastics Corp. worker burned in an electrical accident at the company’s Mesquite, Nev., plant will recover, according...    More

Image

Delta Plastics gives farmers new tool to conserve water

September 24, 2014 2:24 pm ET

Delta Plastics, which manufactures polyethylene irrigation tubes, or polytubes, is offering farmers in the Mississippi Delta free access to a web-...    More

Image

ADS opens California distribution yard

September 23, 2014 12:39 pm ET

Pipe maker Advanced Drainage Systems, Inc. opened its third facility in northern California, this time a stocking and distribution yard in Alviso to i...    More

Market Reports

Plastics in Mexico - State of the Industry Report

This report analyzes the $20 million dollar plastics industry in Mexico including sales of machinery & equipment, resins and finished products.

Our industry analysis highlights macro industry trends and micro trends faced by companies that do business in Mexico. The report also provides key industry statistics and forecasts to anticipate future industry expansion.

Learn more

Plastics Caps & Closures Market Report

The annual recap of top trends and future outlook for the plastics caps & closures market features interviews with industry thought leaders and Bill Wood’s economic forecast of trends in growing end markets. You will also gain insight on trends in caps design, materials, machinery, molds & tooling and reviews of mergers & acquisitions.

Learn more

Injection Molders Market Report & Ranking 2014

This special package contains our 132-page 2014 Market Report on the Injection Molding segment and our exclusive 2014 RANKINGS database of 500+ Injection Molders for a discounted package price.

Learn more

Upcoming Plastics News Events

January 14, 2015 - January 14, 2015Plastics in Automotive

February 4, 2015 - February 6, 2015Plastics News Executive Forum 2015

June 2, 2015 - June 3, 2015Plastics Financial Summit - Chicago 2015

September 16, 2015 - September 18, 2015Plastics Caps & Closures - September 2015

More Events