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

Green trend boosts plastic building materials business in China

August 29, 2014 9:42 am ET

The greening of China's domestic building materials market is giving the plastics industry a boost.    More

Image

Obituary: Frank Nissel, Welex Inc. co-founder

August 28, 2014 1:01 pm ET

Friends, family and business acquaintances will remember Nissel as an urbane, outgoing machinery executive, an expert on extrusion, a globalist who...    More

Image

Truce? ACC, US Green Building Council agree to work together on LEED

August 28, 2014 12:08 pm ET

The American Chemistry Council (ACC) and the U.S. Green Building Council (USGBC) announced Aug. 27 that they will be working together on a new...    More

Image

Canadian thermoformer ICI gets new financial backing

August 26, 2014 3:11 pm ET

Innovative Composites International Inc. (ICI) will get a $1.5 million infusion in the form of a loan and equity funding to cover a corporate...    More

Image

Megadyne buying Belt Corp. of America

August 26, 2014 10:35 am ET

In a move aimed at building its specialty belting manufacturing and fabrication operations, Jason Industrial Inc. — Megadyne SpA's wholly owned ...    More

Market Reports

Thermoformed Packaging 2014 Market Review & Outlook North America

This in-depth report analyzes economic and market trends, legislative/regulatory activity impacting supply and demand, business opportunities and threats, materials pricing, manufacturing technology, as well as growth strategies being implemented by thermoformed packaging companies.

Learn more

Pipe, Profile & Tubing Extrusion in North America 2014

U.S. demand for extruded plastics is expected to grow by 3 percent in 2014, with PVC remaining the largest segment.

Plastic pipe will post the strongest gains through 2018, continuing to take market share from competing materials in a range of markets.

Our latest market report provides in-depth analysis of current trends and their financial impact on the pipe, profile and tubing extrusion industry in North America.

Learn more

2014 Injection Molding Industry Report

GROWTH, OPPORTUNITY IN SIGHT FOR INJECTION MOLDERS IN 2014

In the wake of the economic turbulence earlier in this decade, molders today find themselves in much better shape. Molders are gaining a competitive advantage by investing in people, equipment and seeking inroads into new markets on a global scale.

Growth in the injection molding industry is going to be driven by low financing costs and a continued move to reshore some business.

Learn more

Upcoming Plastics News Events

September 10, 2014 - September 12, 2014Plastics Caps & Closures 2014

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

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

More Events