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LOS ANGELES - A class action lawsuit was filed Sept. 7 on behalf of private water utilities and commercial property owners potentially seeking hundreds of millions of dollars from JM Eagle for allegedly knowingly supplying substandard polyvinyl chloride (PVC) pipe for the transmission of water for fire hydrant systems, building fire suppression systems, potable water systems and other applications (Cambridge Lane, LLC, et al. v. J-M Manufacturing Company, Inc., et al., No. cv10 6638, C.D. Calif.).
The lawsuit, filed in the U.S. District Court for the Central District of California, asks the court to certify a nationwide class action on behalf of all persons or entities, including private water utilities, commercial property owners, and potentially some public agencies, who installed the substandard JM Eagle pipe. The filing seeks reimbursement of all sums paid by the class members to JM Eagle, and for all other damages caused by the sale and installation of the substandard pipe.
The class action lawsuit alleges that from at least 1997 through at least Jan. 1, 2009, the majority of the PVC pipe manufactured and sold by J-M Manufacturing Company Inc. (JM Eagle's corporate predecessor) was below the minimum strength required by applicable industry standards.
The lawsuit also alleges that JM Eagle further deceived its customers by cherry-picking pipe samples for testing by outside certification agencies such as Underwriters Laboratories and NSF International, while continuing in its day-to-day operations using a cheaper manufacturing process that produced weaker pipes, but enabled the company to increase its profits.
This class action follows a whistleblower lawsuit filed in the U.S. District Court for the Central District of California that was unsealed in February 2010. The qui tam case represents several states and numerous municipalities and public water districts seeking millions of dollars in damages from JM Eagle for knowingly supplying the substandard PVC pipe. Several states and dozens of other California municipalities and water districts joined that suit after they investigated the allegations and elected to intervene in the case.
"This lawsuit seeks to protect class members who are not included in the whistleblower lawsuit and who now have substandard JM Eagle pipe," said David M. Birka-White of Birka-White Law Offices in Danville, Calif.
The scope and potential damages associated with the deficient pipe are enormous. JM Eagle is the largest PVC pipe manufacturer with annual revenue of $1.6 billion on sales of over 1 billion feet of pipe representing a significant market share.
The class action lawsuit was filed by Birka-White Law Offices and Farella, Braun & Martel LLP of San Francisco. David M. Birka-White, Stephen Oroza and Mindy W. Wong of Birka-White Law Offices and William R. Friedrich and John D. Green of Farella Braun represent the plaintiffs.
Download the complaint.