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Sunday, November 17, 2013

Federal jury finds JM Eagle liable for fraud for making, selling faulty pipes

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LOS ANGELES (Legal Newsline) — A federal jury on Thursday found JM Eagle, one of the largest pipe manufacturers in the world, liable for knowingly manufacturing and selling to government entities substandard plastic pipe that was used in water and sewer systems in various states.

As a result of the decision, JM Eagle, formerly known as J-M Manufacturing, will have to pay out an undetermined amount of damages to Nevada, New Mexico and Virginia and 42 cities and water districts that joined the whistleblower lawsuit, and dozens of other states, cities and water districts that bought JM Eagle pipe but didn’t join the suit.


The seven-week civil trial, held in a federal district court in Los Angeles, focused on the company’s efforts to cut costs by using shoddy manufacturing practices to make weaker, albeit more profitable, polyvinyl chloride, or PVC, pipe.

“The jury obviously decided that JM Eagle management cared only about the amount of pipe JM produced, not the quality of that pipe,” said Eric Havian, an attorney with Phillips & Cohen LLP, who argued the case on behalf of the plaintiffs.

“JM Eagle deceived outside inspection agencies and ignored over a decade of failing test results.”

Nevada Attorney General Catherine Cortez Masto, in a statement Thursday, called the situation a “budget nightmare.” The state was one of the largest purchasers of JM Eagle pipe and experienced many failures because of it.


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