N.Y. Court Ruling May Open Door for More Asbestos Suits Against Pfizer

April 11, 2012

A New York federal appellate court ruling yesterday could allow more asbestos liability suits to proceed against pharmaceutical giant Pfizer.

The appellate court’s decision affirms the previous ruling last year from U.S. District Court for the Southern District of New York. The ruling found that the Pfizer is not immune from asbestos liability suits over its bankrupt unit Quigley Co.

The appellate court’s decision explained that, in the decades from the 1930’s through the 1970’s, some Quigley products, including a product known as “Insulag,” which was primarily used as an insulator in high heat environments, contained asbestos. Pfizer acquired Quigley in 1968, the latter becoming Pfizer’s wholly-owned subsidiary.

Post-acquisition, various marketing materials for Quigley products, including Insulag, “began to include the Pfizer name, logo, and trademark,” according to the court documents.

After the hazardous effects of asbestos became widely known, more than 160,000 plaintiffs filed asbestos-related suits against Quigley. Many of these suits also named Pfizer as a defendant. Quigley filed for Chapter 11 bankruptcy in 2004.

Pfizer, on behalf of Quigley, reached a monetary settlement with the majority of plaintiffs, offering some $430 million, as Quigley filed for bankruptcy to seek injunction protection from further lawsuits.

The bankruptcy court ruled that Quigley’s bankruptcy protection prevented certain types of Quigley-related asbestos lawsuits against Pfizer.

But a leading lawyer for plaintiffs, a famed asbestos liability attorney Peter Angelos, cited the “apparent manufacturer” theory of liability. He argued that since Quigley had used the Pfizer name and logo on its product packaging, the drugmaker is still liable for lawsuits.

“At least some of these suits sought to hold Pfizer liable in connection with products containing asbestos and manufactured by Quigley under an ‘apparent manufacturer’ theory of liability as set out in Restatement (Second) of Torts § 400,” according to the federal appeals court.

“The Angelos suits alleged that Pfizer’s logo appeared on Quigley’s advertising and the packages of Quigley’s asbestos-containing products. Under § 400, “[o]ne who puts out as his own product a chattel manufactured by another is subject to the same liability as though he were its manufacturer,” the federal appeals court stated in its ruling yesterday.

The case is In re Quigley Company, U.S. Court of the Appeals for the Second Circuit. The latest court decision can be read on the U.S. Court of the Appeals website.

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