A series of recent product liability asbestos cases against Pfizer Inc. have been unsuccessful. In June 2014, a Baltimore City Circuit Court granted summary judgment for Pfizer, the third such court to rule that Pfizer is not liable for injuries resulting from a product made by Quigley, Inc., a company owned by Pfizer for many years.
Asbestos is a chemical that was added to many industrial and household products until the 1980s. It is the only known cause of Mesothelioma, a rare and dangerous type of cancer. During the last several decades, many plaintiffs have successfully recovered millions of dollars in damages in product liability lawsuits against the manufacturers of products with asbestos.
Background on the Lawsuits Against Pfizer Inc.
Although Pfizer primarily develops and manufactures pharmaceutical drugs, it was also the parent company of Quigley Company from 1968 to 1992. Quigley was the maker of several insulation products containing asbestos, including one product called Insulag.
In 2004, Quigley filed for bankruptcy because of high number of asbestos-related lawsuits. Because Pfizer continued to own large amounts of Quigley stock up until the bankruptcy, Pfizer contributed $1 billion to Quigley’s bankruptcy trust fund in exchange for a channeling order, which stated that Pfizer cannot be sued for its ownership, management, or control of Quigley.
However, the United States Court of Appeals for the Second Circuit ruled that Pfizer could be held liable if the plaintiffs could successfully show that Pfizer was the “apparent manufacturer” of Insulag. To date, no court has found Pfizer liable as an apparent manufacturer.
Products Liability and the Apparent Manufacturer Doctrine
Typically, in products liability lawsuits, a plaintiff is able to choose whether they want to sue the seller of a good, a distributor, or a manufacturer. Sometimes this gets tricky when the company (Quigley) that manufactures a product is itself owned by another company (Pfizer).
The apparent manufacturer doctrine states that a company that “puts out as his own product a chattel manufactured by another” can be liable in a products liability lawsuit. First Restatement of Torts § 400.
For example, if a company puts its name or trademark on goods that are produced by another company, it may be held liable for a defect. However, the courts in the Pfizer litigation have held that there is another requirement: that the apparent manufacturer must also be involved in the sale or distribution of the product. Thus the courts have held that although Pfizer owned stock in Quigley, it is not liable under the apparent manufacturer doctrine because it was not involved in the sale or distribution of Quigley’s products.