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January 20, 2015 01:00 AM

Public utilities appeal latest decision in JM Eagle case

Catherine Kavanaugh
Senior Reporter
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    The law firm representing public utilities in a False Claims Act lawsuit against J-M Manufacturing Co. — now called JM Eagle — plans to appeal a trial court ruling that the verdict against the world's largest PVC pipe maker only applies to the five government entities held up as exemplary plaintiffs.

    In all, three states and 42 cities and water districts signed onto the whistleblower lawsuit that questions the quality and lifespan of about $2.2 billion of plastic water and sewer pipes they purchased from 1996-2006.

    However, projects undertaken by just a handful of the plaintiffs were argued during the first phase of the trial in an attempt to streamline the case against the Los Angeles-based company.

    In November 2013, a federal jury in California found JM liable for falsely representing that its products uniformly met industry standards set by Underwriter Laboratories and the American Water Works Association. The verdict, which followed seven weeks of testimony from 30 witnesses and the presentation of some 300 exhibits, addressed projects done in Reno, Nev.; Norfolk, Va.; and Palmdale, South Tahoe and Thousand Oaks, Calif.

    A new jury is to be seated to determine any monetary damages JM owes. But a question remained as to how the second phase of the trial would proceed and which plaintiffs would be eligible to share in any money recovered.

    Last month, U.S. District Court George Wu concluded that the 2013 verdict does not apply to the other plaintiffs and that their allegations against JM would make up Phase 2 of the trial.

    The plaintiffs' lawyers at the law firm of Phillips & Cohen declined comment at the time, but in a recent status report they have indicated their dissatisfaction, saying that by Jan. 22 they will ask the Ninth Circuit of Appeals to look at Wu's decision. They plan to file an interlocutory appeal, which seeks appellate court review of an aspect of a case before it concludes.

    “Plaintiffs presently intend to seek certification of the court's determination that no aspect of the Phase 1 trial would have a preclusive effect with respect to the non-exemplar plaintiffs, a decision that will have significant implications for the remainder of the litigation,” the status report says.

    The plaintiffs' lawyers have said in legal briefs that the evidence and testimony presented in the first part of the trial is not specific to any public utility and that they would introduce “the same voluminous documents showing that J-M was well aware of its non-compliant pipe yet continued to represent that it complied with industry standards.”

    In the same status report, lawyers for JM say the plaintiffs are stalling.

    “For the umpteenth time, the plaintiffs seek to avoid stating their claims with the particularity that would clearly be required if only one plaintiff and project were at issue, substituting through their ‘schedule' a general statement of J-M's conduct and minimal information about the plaintiffs and their projects.”

    In their legal briefs, JM's lawyers say using the verdict to bind the company to all the claims would be a violation of its due process and the plaintiffs' “aspiration to reach some kind of global judgment” should be rejected.

    JM Eagle is represented by Bird, Marella, Boxer, Wolpert, Nessim, Drooks, Lincenber & Rhow, PC.

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