A former independent pipe salesman has filed suit against J-M Manufacturing Co. Inc., alleging the company failed to hydrostatically test 100 percent of its municipal PVC water pipe.
Stan Price of Richardson, Texas, filed the complaint June 15 in U.S. District Court in New Orleans, but the case was under seal until last week.
The suit was filed under the federal False Claims Act, which allows private citizens to sue for any alleged fraud perpetrated against the government. If the case is successful, Price is eligible for a share of the decision.
Officials from J-M Manufacturing of Livingston, N.J., refused comment. However, a J-M executive previously said the company does test all of its C-900 and C-905 PVC pipe.
"The reason for the suit is to attempt to get manufacturers to test to specification and to make that happen," Price said in an April 11 telephone interview. "At certain points, J-M relaxed the 100 percent in C-900 and C-905 testing in all their plants. It's our belief that the evidence that will be developed will bear that out."
Court documents allege that J-M "intentionally delivered" large quantities of untested C-900 and C-905 pipe to federal, state and local governments in Texas and other states. Further, the documents allege that J-M labeled the pipes as American Water Works Association certified.
The testing standards set forth by AWWA call for pressure testing of each piece of pipe, said Bob Walker, executive director of Dallas-based Uni-Bell PVC Pipe Association.
"From an association standpoint, we hate this because it does cast a cloud over the industry," Walker said. "While it may imply, it really shouldn't suggest that the products are not quality products."
John Wilber, AWWA standards program manager, said that group assumes that all manufacturers test their pipe.
"Our standard is to test every piece, and if they're not testing every piece, they're not meeting the standard," he said.
A year ago, the federal government, Price and North American Pipe Corp. reached an $800,000 settlement agreement for a similar case. At the time, J-M engineering director Kaider Liao stated: "We have a policy — we have to test each pipe. We spent a lot of money to buy the machinery."
Liao estimated spending a minimum of $10,000 each month per extrusion line. According to Plastics News data, J-M has 179 extrusion lines in 14 North American plants.
According to information from the False Claims Act Legal Center, violators of the act are liable for three times the dollar amount that the government is defrauded, plus civil penalties of $5,000-$10,000 for each false claim.
Once the defendant has been served, the suit is handled like any other civil case, and resolution of the case may take five or more years.