Day Pitney Helps Win Whistleblower Verdict

(PARSIPPANY, NJ, November 25, 2013)—A Day Pitney legal team, along with co-counsel from Phillips & Cohen and McKool Smith, secured a major court victory against JM Eagle, one of the world’s largest manufacturers of plastic pipes, in a whistleblower suit brought by state and municipal governments. 

In a unanimous verdict issued on November 14, a California federal jury found that JM Eagle knowingly manufactured and sold to government entities substandard plastic pipe that was used in water and sewer systems in various states around the country – opening JM Eagle up to potentially significant damages.

New Jersey commercial litigation partner Elizabeth J. Sher and a team of lawyers at Day Pitney have worked on this case since 2009, representing the whistleblower and former JM employee John W. Hendrix , along with the Commonwealth of Virginia, and 29 California government entities who intervened in the lawsuit. The lawsuit was brought under the federal False Claims Act and similar state and local false claims laws, which encourage private citizens to sue companies that are defrauding the government and recover funds on its behalf.

The seven-week civil trial in federal district court in Los Angeles was the culmination of seven years of litigation that began in 2006. In the past three years, more than 1,700 filings filled the court docket and dozens of hearings were held on individual issues. During trial more than 30 witnesses testified, many of them current and former JM Eagle employees, including JM Eagle President and sole owner Walter Wang. The jury also saw more than 300 JM Eagle documents, including emails and internal test reports.

As a result of the decision, JM Eagle will have to pay an as yet-undetermined amount of damages to Plaintiffs, which include the States of Nevada and New Mexico and the Commonwealth of Virginia, and 42 California cities and water districts, all of which intervened in  the “qui tam” (whistleblower) lawsuit, as well as dozens of other states, cities and water districts that bought JM Eagle pipe but did not join the lawsuit. The trial, which highlighted the claims of five exemplar government entities, exposed JM Eagle’s deliberate efforts to cut costs by using shoddy manufacturing practices to make weaker but more profitable polyvinyl chloride (PVC) pipe.

About Day Pitney

Day Pitney LLP is a full-service law firm with close to 300 attorneys in Boston, Connecticut, New Jersey, New York, and Washington, DC. The firm offers clients strong corporate and litigation practices, with experience on behalf of large national and international corporations as well as emerging and middle-market companies and individuals.