Procedurally 'tortured' plastic pipe case positioned for trial again

The "tortured procedural history," as it's been called by the presiding judge, of a federal case against the world's largest manufacturer of plastic pipe is about to enter its next chapter.

The case pitting five municipalities against JM Manufacturing Co. Inc. started in 2006. A Central District jury found the company liable in 2013, and in October, the case will enter the second phase of litigation to determine damages owed. United States of America et al. v. J-M Manufacturing Co. Inc., 06-00055 (C.D. Cal., filed Jan. 17, 2006).

What started as a standard false claims case against JM Manufacturing for allegedly selling faulty tubing to state and local governments has fractured into a decade-long litigation with a fair share of sideshows.

Featured among the starring cast is U.S. District Judge George H. Wu, who bifurcated the case in 2011 in an attempt to save time and costs, only to have the case last over a decade with a phase two trial still forthcoming.

David Bernick, an attorney for Paul Weiss Rifkind Wharton & Garrison LLP who made his reputation defending tobacco companies and breast implant manufacturers, has spearheaded JM's post-trial strategy. Since bringing him on, the company has sued plaintiffs' attorneys from Phillips & Cohen for defamation for allegedly overstating the jury's decision in a press release, a suit that went to appeals and was subsequently returned to the lower court. J-M Manufacturing Co. Inc. v. Phillips & Cohen, LLP 247 Cal. App. 4th 87 (2016).

Last week, the defense filed 25 motions in limine to exclude various testimony regarding the company's liability. In a published tentative ruling, Wu called Bernick's lengthy contentions of the jury's 2013 verdict against JM "true to form."

Representing plaintiffs, a class of five municipalities, are attorneys from Constantine Cannon LLP and an array of U.S. attorneys from around the country. In 2013, Wu decided the verdict would only apply to the five named plaintiffs, despite arguments from lead plaintiffs' attorney Eric R. Havian that the verdict should apply to similar cases filed against the company under the theory of collateral estoppel, according to court documents.

The exemplar plaintiffs are: Calleguas Municipal Water District in Thousand Oaks, Commonwealth of Virginia on behalf of the City of Norfolk, Palmdale Water District, South Tahoe Public Utility District, state of Nevada on behalf of the city of Reno.

All the players came together in court last week when Wu heard arguments pertaining to plaintiffs' motions to exclude expert opinions. Wu published a tentative but continued the motions until Aug. 16. According to his tentative, he is still expecting an Oct. 9 trial date with an estimated length of 30 days.

Looming large is the jury verdict, which found JM failed to produce 100 percent of its pipe in compliance with industry standards, though records show some expert witnesses testified no manufacturers are able to produce 100 percent of products without defects.

As indicated by Wu's characterization of the defense team, Bernick has argued the validity of the verdict at every turn, winning a minor victory when Wu limited the verdict to the five named plaintiffs in 2013.

But Wu's most recent tentative reaffirms the court's position, "The court has already ruled that the phase one jury's factual findings, both explicit and implicit (where necessary to the validity of the verdict) will be binding in phase two of the trial."

According to court documents, plaintiffs' attorneys will be proceeding with a "benefit of the bargain" rule of assessing damages, with municipalities seeking the value of the contract with JM.