Sen. Dan Gelber Calls on Attorney General to Protect Florida Consumers and Hold Manufacturers Accountable

Four years after first joining with several other states claiming millions of dollars in current and ongoing damages allegedly caused by substandard plastic pipeline, the Florida attorney general’s office has yet to make up its mind on whether it will pursue the class action suit to recover the money.

On Tuesday, state Senator Dan Gelber (D-Miami Beach) called on the Attorney General to do just that.

“In the four years since the filing of this complaint, your office has failed to take action and has potentially allowed Floridians to suffer serious financial damage as a result of fraud. Florida’s consumers deserve that this complaint be fully investigated to determine if wrongdoing was committed,” wrote Gelber in a letter hand-delivered to Attorney General Bill McCollum.

“Florida has one of the largest and best-equipped attorney general offices in the nation. I urge your office to deploy those resources to ensure Florida’s consumers are protected and the manufacturer is held accountable.”

At issue is polyvinyl chloride (PVC) pipeline manufactured by Los Angeles-based JM Eagle and its predecessor company, which was sold throughout the country to cities, towns and counties including in Florida, primarily for use in water and sewer system installations.

A former employee of the company turned whistleblower alleged that the pipe was below industry standards, and deceptively sold to customers in order to boost company profits. The pipe, which is supposed to last for 50 years, has been faulted not only for leaks and breakages, but fires and explosions, some of these occurring within the first year of use.

The litigation outlining the alleged fraud and shoddy production was first filed as a qui tam or whistleblower suit in federal court in 2006. Florida was among the states involved in the action, noting that it was seeking treble damages and penalties under the state’s False Claims Act, and alleging that the substandard pipe was purchased by “state governmental entities, agencies, or subdivisions (including but not limited to counties and school districts).”

According to court documents, the state also claimed that “the Florida State Government has suffered million of dollars in damages and continues to be damaged.”

Gelber also underscored the fact that in the same year in which the lawsuit was drafted, “the Orange County Center Against Domestic Violence in Orlando, which houses adults and children, accepted 3,000 feet of the company’s water and sewer PVC pipes.”

Last week, as the suit was unsealed and the confidentiality requirements cloaking the qui tam action were lifted, documents revealed that although the initiating states such as Nevada and Virginia were pursuing the fraud allegations, Florida was still on the fence, leaving the state’s consumers exposed and potentially on the hook.

The failure to move forward was troubling, Gelber said. “The Florida Attorney General needs to follow the lead of Nevada and Virginia and join forces to protect our citizens as others are protecting theirs. It shouldn’t take another four years to tilt the scales of justice in the right direction.”

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Links to the lawsuit and a story published last week by the New York Times on the issue appear below. The State of Florida’s allegations begin on page 60 of the complaint:

http://admin.phillipsandcohen.lawoffice.com/CM/NewsSettlements/US%20ex%20rel%20Hendrix%20v.%20JM%20-%20FAC.pdf

http://www.nytimes.com/2010/02/12/business/12pipes.html?scp=1&sq=jm%20eagle&st=cse