Court Dismisses Hundreds of Counts Against JM Eagle

December 2010

Rulings Show Continued Unraveling of Case Against World's Largest Plastic Pipe Maker

Los Angeles - December 6, 2010 — Today, U.S. District Court Judge George H. Wu issued rulings granting various motions to dismiss making it more difficult for the plaintiffs contingency fee law firm Phillips & Cohen LLP to pursue its so-called whistleblower case against JM Eagle. Since the federal governments decision not to intervene in this lawsuit earlier this year, this latest development further demonstrates the unraveling of the case initiated by a dishonest former employee who was terminated in 2005 for soliciting a kickback from a customer of the plastic pipe manufacturer.

Judge Wu dismissed hundreds of common law claims sought to be included by various states and municipalities. This is a significant setback to plaintiffs counsel as the firm was seeking to pile on extraneous claims in the hope that it would make their baseless lawsuit against JM Eagle appear more credible.

The Judge also granted JM Eagle's motion to strike racially insensitive and derogatory language that plaintiffs counsel included in the lawsuit about the company's owners' Taiwanese ethnicity. Despite receiving letters from several prominent civil rights and community organizations protesting the needless use of the offensive language, plaintiffs counsel refused to remove the references voluntarily. Judge Wu ordered the language stricken from the complaint after JM Eagle argued that the wording was "immaterial" and "impertinent."

JM Eagle vigorously defends the quality of its pipe, denies any allegations it knowingly sold pipe of substandard quality and believes that the decisions today will likely hasten the demise of the unfounded claims against it.

The number of states participating in the lawsuit has steadily declined since the complaint was unsealed in February of this year. In October, Delaware became the sixth government entity to opt out of the lawsuit - following California, Florida, Massachusetts, Indiana and the U.S. government (in whose name the complaint was initially filed).

"These rulings are a major victory for us," said Neal Gordon, JM Eagles' vice president of marketing. “Coupled with other setbacks, this ruling demonstrates what we have been saying all along - this lawsuit is without merit. We remain confident that as more facts of this case are revealed it will be clear that JM Eagle manufacturers only high-quality products and these allegations are completely false."

JM Eagle stands 100% behind the quality of its pipe. Earlier this year, the company announced an unprecedented, 50-year warranty that protects customers against manufacturing defects in its products. In addition, the number of claims against the company's pipe over the last 10 years has been miniscule - at a rate of less than one-tenth of one percent. And most of those claims related to installation or other non-manufacturing errors.