JM Eagle

In 1982, Formosa Plastics purchased the eight plants comprising the plastic-pipe operations of Johns Manville to form J-M Manufacturing, headquartered in Livingston, New Jersey.

In November, 2005, Walter Wang acquired 100 percent of the company from Formosa Plastics. J-M Manufacturing grew to a 14-plant enterprise by 2007, when it acquired the second largest plastic-pipe manufacturer, PW Eagle. The company relocated its headquarters to Los Angeles in 2008.

Lawsuits

In 2006, JM Eagle, then known as J-M Manufacturing, faced a whistleblower lawsuit. In January 2006, an engineer accused JM Eagle of selling billions of dollars' worth of defective pipe to states and municipalities around the United States, and the company was sued under the federal False Claims Act. A Los Angeles jury found JM Eagle liable for failing to make 100 percent of its pipe, according to Underwriters Laboratories standards, though an Underwriters Laboratories engineer testified that the company never fell out of compliance during repeated audits. The whistleblower, John Hendrix, had been fired after a customer complained Hendrix had attempted bribery to favorably resolve a warranty claim.

Only two of the five municipalities suing in the first phase of the trial reported any defective pipe, and two others, the state of Nevada and Norfolk, Virginia, both admitted they continued to purchase JM products while aware of the allegations in the lawsuit. JM Eagle sued Phillips & Cohen for libel for post-verdict comments suggesting its products are dangerous and defective.

J-M Manufacturing was involved in a federal qui tam action brought on by various public entities, but while the lawsuit was pending law firm Sheppard Mullin Richter & Hampton went on to represent one of the public entities involved. Both clients had signed engagement agreements stating they had waived any such conflicts of interest, but the agreements did not disclose the specific conflicts, and Shepard did not advise either client of the conflicts. In August 2018, the California Supreme Court reversed a fee award that had been granted in favor of the law firm, maintaining that the firm's conflict of interest invalidated its entire agreement with J-M Manufacturing, including the arbitration clause, and thereby rendered its fee award a nullity.