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

Geist Plastics changes name to Lincoln Plastics

October 23, 2014 12:31 pm ET

Custom profile extruder Geist Plastics Inc. is changing its name to Lincoln Plastics, the company announced Oct. 23.    More

Image

Omega buys Vinylex, adds capacity, locations

October 21, 2014 1:48 pm ET

Profile extruder Omega Plastics LLC has expanded its stake in the market by acquiring Vinylex Corp.    More

Image

Atkore expands in PVC conduit, buying American Pipe & Plastics

October 20, 2014 6:06 pm ET

Atkore International Inc. of Harvey, Ill., has acquired PVC conduit maker American Pipe & Plastics Inc. of Kirkwood, N.Y., which serves the...    More

Image

Report: Suspected former Nazi with plastic connection collecting Social Security

October 20, 2014 3:52 pm ET

UPDATED — A one-time plastics executive in Akron is among dozens of suspected former Nazis who have been collecting U.S. Social Security...    More

Image

Bavarian Polymers adds 3 extrusion lines in Tennessee

October 16, 2014 1:16 pm ET

Bavarian Polymers Inc. CEO Robert Weishaeupl credits the company's new vinyl windows systems and its strategic location near Nashville, Tenn., as a co...    More

Market Reports

Plastics Recycling Trends in North America

This report is a review and analysis of the North American Plastics Recycling Industry, including key trends and statistics based on 2013 performance. We examine market environment factors, regulatory issues, industry challenges, key drivers and emerging trends in post-consumer and post-industrial recycling.

Learn more

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 analysts provide insight on business trends, foreign investment, top end markets and plastics processing activity. The report also provides important data on exports, production, employment and value of plastics products manufactured.

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

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