Bakersfield Out of Lawsuit Against JM Eagle

Federal Court Judge Grants California City's Bid to Dismiss from Case Against Plastic Pipe Maker

LOS ANGELES, July 25, 2011 /PRNewswire-USNewswire/ -- A federal judge has granted the City of Bakersfield's dismissal from the so-called whistleblower case against plastic pipe manufacturer, JM Eagle. U.S. District Judge George H. Wu overruled objections by plaintiff's counsel, Phillips & Cohen, and granted a dismissal motion filed by the Office of the City Attorney to have its name removed from the ever-shrinking list of intervenors in the qui tam case. The troubled lawsuit accuses JM Eagle, the world's largest manufacturer of plastic pipe, of knowingly selling faulty pipe to its government customers.

"Phillips & Cohen had four years to manipulate government entities to join this complaint – even if they had never purchased our pipe and at no expense – with the promise that they'd all share a monetary award," said Neal Gordon, JM Eagle's vice president of marketing.  "Once they learned the truth about our products and quality, states began fleeing from this suit. Now cities and municipalities in California are doing the same."

Bakersfield is the first California municipality to reverse itself and drop out. More entities are in the process of filing similar motions before the case goes to trial.

In his decision granting the dismissal motion filed by the Office of the City Attorney for the City of Bakersfield, Judge Wu wrote that the city was reassured by the fact that whatever JM Eagle pipe they had in use was covered by a retroactive 50-year warranty the company extended to its customers in April 2010.

"We're grateful to Judge Wu for granting Bakersfield's motion to drop out of this baseless lawsuit," said Camilla Eng, general counsel for JM Eagle. "We stand 100 percent behind the quality of our products and look forward to appearing before His Honor in December and vigorously defending our good name and quality-control measures against whatever plaintiff parties remain by then."

The City of Bakersfield is the latest in a series of states, municipalities and utilities to flee from the flagging suit.  The federal government was the first to decline to intervene in early 2010 following a three-year Department of Justice investigation.  There is clear evidence that John Hendrix, the fired ex-employee who brought the lawsuit, was also the architect of a kickback scheme to defraud JM Eagle. The company has a sworn affidavit confirming that he offered to inflate a claim in return for money to be sent directly to his home.

Since the federal government's declination, only four states elected to intervene. And in a rare reversal, two of those four states – Tennessee and Delaware – have since withdrawn their interventions. Other states that have opted out of joining the suit include: California, Massachusetts, Indiana, Illinois and New York, as well as the District of Columbia.

Many officials the company has met with to date have stated they were unknowingly listed in the complaint and had never had an issue with -- or even bought -- JM Eagle pipe.

About JM Eagle

With 22 manufacturing plants throughout North America, JM Eagle manufactures the widest array of high-grade, high-performance polyvinyl chloride and high-density polyethylene pipe across a variety of industries and applications including utility, solvent weld, electrical conduit, natural gas, irrigation and water/sewage.  More information can be found at www.jmeagle.com.

SOURCE JM Eagle