Stein v. Pfizer Inc.
137 A.3d 279
| Md. Ct. Spec. App. | 2016Background
- Quigley Co. manufactured Insulag, an asbestos-containing refractory cement, and sold it to Bethlehem Steel from the 1930s through 1974; Quigley became a wholly owned Pfizer subsidiary in 1968.
- After acquisition, Quigley continued to operate independently (manufacture, design, sales) though some invoices and marketing materials displayed both Quigley and Pfizer names/logos and sometimes the legend “Manufacturers of Refractory Products.”
- Carl Stein, a Bethlehem bricklayer, was diagnosed with mesothelioma and his estate amended suit to add Pfizer, alleging Pfizer was an “apparent manufacturer” of Insulag and thus liable for his death.
- Quigley later filed Chapter 11; the bankruptcy court issued a §524(g) channeling injunction directing most asbestos claims against Quigley (and many against Pfizer) to a trust; scope of that injunction as to “apparent manufacturer” claims was litigated in the Quigley appeals.
- The Baltimore City Circuit Court granted Pfizer’s summary judgment motion, holding Pfizer was not an apparent manufacturer; the Court of Special Appeals affirmed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Was Pfizer an “apparent manufacturer” of Insulag? | Stein family: Pfizer’s name/logo on Quigley invoices/ads and the phrase “Manufacturers of Refractory Products” held Pfizer out as a manufacturer, creating apparent-manufacturer liability. | Pfizer: Quigley manufactured and sold Insulag independently; Pfizer did not design, manufacture, or distribute Insulag and its parent-company name on materials did not make it an apparent manufacturer. | No — summary judgment for Pfizer: no reasonable finder could conclude Pfizer was an apparent manufacturer. |
| Does the bankruptcy “channeling injunction” bar the apparent-manufacturer claim? | Stein: if Pfizer is an apparent manufacturer, claim proceeds in state court; otherwise claims are channeled to trust. | Pfizer: many claims are channeled; but apparent-manufacturer claims may fall outside injunction per Second Circuit precedent. | Court did not reach application because Pfizer was not an apparent manufacturer; discussion follows Second Circuit holdings that apparent-manufacturer claims are generally outside the injunction’s four statutory categories. |
| What legal test governs apparent-manufacturer liability here? | Stein: reliance on trademark/logo and documents creates a jury question under reliance or enterprise theories. | Pfizer: application of objective or actual reliance or enterprise-liability test fails because Bethlehem was a sophisticated purchaser and Quigley was the known supplier; no substantial participation by Pfizer. | Court analyzed three tests (objective reliance, actual reliance, enterprise liability) and found Pfizer fails under each. |
| Judicial notice of extra-record materials submitted on appeal? | Stein family sought judicial notice of additional documents allegedly showing Pfizer’s holding out. | Pfizer opposed; appellee argued evidence was available below and not properly before appellate court. | Denied — appellate court declined to consider evidence not presented to the trial court (Md. Rule 8-131(a)). |
Key Cases Cited
- In re Quigley Co., 676 F.3d 45 (2d Cir. 2012) (interpreting scope of §524(g) channeling injunction and holding apparent-manufacturer claims do not arise from the listed bases for the injunction)
- In re Quigley Co., 449 B.R. 196 (S.D.N.Y. 2011) (bankruptcy court proceedings addressing injunction scope and enforcement)
- Hebel v. Sherman Equip., 442 N.E.2d 199 (Ill. 1982) (objective apparent-manufacturer reliance must be judged from viewpoint of purchasing public/sophisticated purchaser context)
- Phipps v. Gen. Motors Corp., 278 Md. 337 (1976) (Maryland adoption of Restatement (Second) §402A strict products liability principles)
- Telak v. Maszczenski, 248 Md. 476 (1968) (if identity of actual manufacturer is unmistakably clear, a non-manufacturing seller cannot be an apparent manufacturer)
- Lou v. Otis Elevator Co., 933 N.E.2d 140 (Mass. App. Ct. 2010) (enterprise-liability approach: trademark owner liable where it substantially participated in design/manufacture/distribution)