A settlement is possible in the 10-year-old whistleblower lawsuit over the durability of PVC pipe.
Los Angeles-based PVC pipe maker JM Eagle and the government entities seeking monetary damages for products that a jury found did not meet industry standards are scheduled to meet with a settlement mediator on Dec. 8 in California.
The parties selected U.S. Magistrate Judge Jay C. Gandhi to preside over what could be the resolution of the whistleblower lawsuit filed almost 10 years ago on Jan. 17, 2006.
In all, 43 cities, states and water districts that purchased some $2.2 billion of pipes from the world's largest PVC pipe producer from 1996-2006 signed onto the lawsuit, which alleges violation of the False Claims Act. The business was called J-M Manufacturing Co. at the time.
The plaintiffs contend J-M falsely represented uniform compliance with pipe strength and durability requirements set by Underwriters Laboratories and the American Water Works Association. Whistleblower John Hendrix, a former JM engineer, accused the company of misrepresenting the quality of its products after switching to a cheaper PVC compound and speeding extrusion lines. The crux of the plaintiffs' case is that JM customers got the luck of the draw.
The trial was split into two phases. Five “exemplar” plaintiffs that bought JM pipe for 26 water projects in Reno, Nevada; Norfolk, Va., and Palmdale, South Tahoe and Thousand Oaks, Calif., went first. After seven weeks of testimony, jurors ruled in their favor in November 2013.
The second half of the trial for the other 38 plaintiffs has not started but a hearing was held Oct. 29. A related brief says the plaintiffs “don't have to identify all 10,000 claims in order to get discovery.”
A court order regarding the settlement conference says confidential mediation statements should be filed by Dec. 1 with itemized list of damages and relief sought as well as summaries of the estimated length of trial and whether a court or jury trial is expected.
The court order also says decision-makers with “full settlement authority” must be present Dec. 8 and keep their schedules clear the full day. In addition, representatives from insurance companies that are contractually required to defend or to pay damages assessed within policy limits must attend and be able to settle claims without consulting a superior.
The J-M pipes in the litigated projects are buried under streets in the three states and almost all are in the service with pressurized water running through them and no problems of leaking, bursting, cracking or splitting. However, the whistleblower called the lifespan of the pipes into question.
