Product injuries and the Flat Earth

     Much has been written about the shrinking world of commerce and how the world has become "flat", enabling competition from continents away.  In the United States, this has also generated controversy as a "race to the bottom" since many good jobs, particularly in manufacturing, are being moved overseas where labor costs are low and worker's rights and safety are negligible.

     The recent controversy over toy recalls raises additional issues of safety and liability, particularly for Michigan residents.  So far in 2007, 24 toys have been recalled in the United States, including all of the "Thomas the Train" toys [in the case of Thomas, the issue is the use of lead paint].  All of these recalled toys were manufactured in China--along with 70 to 80 percent of all toys sold in the U.S. 

     A number of other Chinese products have also been recalled in the past few months, including poisonous tooth paste.  Clearly, "cheap" products from a loosely regulated economy bear additional safety risks that Americans had been accustomed to ignore.

     These products bear an additional risk for Michigan residents, since after tort "reform" the seller of the product is not legally responsible for defects or injuries they cause.  Further, the Chinese government doesn't allow its industries to be sued (particularly since most are government-owned).  As a result, when a "Thomas" occurs in Michigan, if it causes catastrophic injuries to someone, no one is responsible and has to stand behind it.

     Prior to "reform" large retailers like Wal Mart and K Mart required their suppliers to purchase substantial insurance policies to indemnify the seller and protect the consumer.  Since they are no longer amenable to suit in Michigan, they no longer add this requirement to their purchasing terms, and if the company has an insurance contract, it is not available to injured Michigan consumers.