JM Eagle Secures Dramatic Turnaround in Qui Tam Trial

Paul, Weiss secured a dramatic turnaround in a bellwether False Claims Act case against JM Eagle, the world’s largest plastic pipe manufacturer. After four weeks of trial, a federal district judge in Los Angeles declared a mistrial after jurors were unable to agree that the exemplar plaintiff water districts and municipalities suffered any damages stemming from an earlier liability finding against JM Eagle.

Paul, Weiss was retained after the liability trial. At that point, the plaintiffs asserted claims on behalf of dozens of governmental entities and publicly forecast damages of $1 billion. Paul, Weiss successfully repositioned the case and obtained rulings that the liability finding applied only to the five exemplar plaintiffs; that the plaintiffs could not seek damages for immediate replacement of all pipe because there was no imminent risk of failure; and that damages could only be awarded based upon the physical properties of the plaintiffs’ pipe.

At trial, Paul, Weiss argued that there was nothing wrong with the pipe at issue, that hard science showed the pipe would not fail prematurely, and that no damages were warranted. At the conclusion of the evidence, the court ruled that the plaintiffs could not claim the construction costs associated with any future pipe failure, which the plaintiffs had asserted pre-trial were $58 million for these five plaintiffs (before trebling), and limited recovery to the cost of the pipe, which was, at most, $1.2 to $2.1 million. After five days examining evidence and seeking multiple clarifications from the court, the jury deadlocked over all the questions they were asked to decide, including the threshold question of whether there was any deficiency in the physical properties of the plaintiffs’ pipe.

The Paul, Weiss team included, among others, litigation partner Jaren Janghorbani.