Stein v. Pfizer Inc.

• Decision Date: 31 May 2016
• Docket Number: No. 1231, Sept. Term, 2014.,1231, Sept. Term, 2014.
• Citation: 228 Md.App. 72,137 A.3d 279
• Parties: Harriette STEIN, Personal Representative of the Estate of Carl Stein, et al. v. PFIZER INC.
• Court: Court of Special Appeals of Maryland

228 Md.App. 72

137 A.3d 279

Harriette STEIN, Personal Representative of the Estate of Carl Stein, et al.

v.PFIZER INC.

No. 1231, Sept. Term, 2014.

Court of Special Appeals of Maryland.

May 31, 2016.

Jeffrey J. Utermohle (Thomas P. Kelly, Craig M. Silverman, Law Office of Peter G. Angelos, PC, on the brief) Baltimore, MD, for appellant.

Sheila L. Birnbaum (Hayden A. Coleman, Quinn, Emanuel, Urquhart & Sullivan, LLP, New York, NY, Patrick C. Smith, DeHay & Elliston, LLP, Baltimore, MD), all of the brief, for appellee.

Panel: KRAUSER, C.J., GRAEFF and KEHOE, JJ.

KRAUSER

, C.J.

The issue before us is whether Pfizer Inc., appellee, may be deemed an “apparent manufacturer” of an asbestos-containing cement, “Insulag,” which purportedly caused the illness and subsequent death of Carl Stein from mesothelioma

. The product at issue was manufactured and sold to Mr. Stein's employer, Bethlehem Steel Corporation, by Quigley, Inc., both before and after it became a wholly-owned subsidiary of Pfizer.

If Pfizer does not qualify as an “apparent manufacturer,” then it is covered by the “channeling injunction” issued by the United States Bankruptcy Court for the Southern District of New York, in addressing Quigley's petition for Chapter 11 protection, that bars asbestos-related lawsuits against Quigley or Pfizer, such as the one before us, and directs such claims to a trust for consideration and, ultimately, compensation. If, on the other hand, Pfizer satisfies the criteria of such a designation, then Mr. Stein's family, appellants, may continue to pursue their products liability claims against Pfizer in the Circuit Court for Baltimore City, where this matter was initially filed by Mr. Stein, before his death.

The Baltimore City circuit court resolved this issue, by granting summary judgment in favor of Pfizer, after determining that it did not qualify as an “apparent manufacturer.” We agree and shall affirm.

I. The Stein Family's Lawsuit

Carl Stein (the “decedent”) worked, from 1949 through 1985, as a bricklayer for the Bethlehem Steel Corporation at its Sparrows Point plant. During his thirty-six years of employment at the Sparrows Point plant, the decedent purportedly used Insulag, an asbestos-containing cement, in the performance of his duties at that facility. After the decedent became ill, from his exposure to asbestos, he brought an action, in the Circuit Court for Baltimore City, against a number of business entities,¹ which had sold asbestos-containing materials to Bethlehem Steel, alleging negligence, breach of warranty, strict liability, fraud, and conspiracy. None of these entities is, however, a party to the instant appeal.

Then, in April 2012, the decedent, who had, by that time, been diagnosed with mesothelioma

, succumbed to that disease. Fifteen months later, in July of 2013, his widow, Harriette Stein, individually, and as the personal representative of his estate, together with his surviving children, Carl B. Stein, Jr.; Mark A. Stein; Robert B. Stein; and Patricia A. Robinson (all of whom we shall collectively refer to as “the Stein family”), filed an amended complaint, in the same action, adding Pfizer Inc., the appellee, as a defendant in that suit, as well as several new counts averring loss of consortium and wrongful death. The theory underlying the Stein family's claims against Pfizer was that the decedent's exposure to an asbestos-containing refractory cement, called “Insulag,” which was supplied to his employer, Bethlehem Steel, by Pfizer's subsidiary, Quigley Company, Inc., was a substantial factor in bringing about his illness and resultant death from mesothelioma

and that, because Quigley's invoices and marketing materials also bore Pfizer's trademarks, as well as its own, and because, in some instances, the words:

“Manufacturers of Refractory Products,” appeared beneath the exhibition of those corporate designations, Pfizer had, in effect, held itself out as a “manufacturer” of Insulag and was therefore liable for the illness and death of Mr. Stein, as an “apparent manufacturer” of that product.

II. Quigley's Relationships with Pfizer and Bethlehem Steel

Quigley, founded in 1916, manufactured and sold refractory products, that is, products “that retain their strength at high temperatures,” for use in steel mills, power plants, and refineries. In re Quigley Co., 449 B.R. 196, 198 (S.D.N.Y.2011)

, aff'd, 676 F.3d 45, 48, 59 (2d Cir.2012), cert. denied sub nom.

Pfizer, Inc. v. Law Offices of Peter G. Angelos, ––– U.S. ––––, 133 S.Ct. 2849, 186 L.Ed.2d 908 (2013). One of the products it manufactured and sold, beginning in the 1930's, was “Insulag,” a heat-resistant cement, which contained asbestos.

In August 1968, Pfizer acquired all of the stock of Quigley, thereby rendering that corporate entity a wholly-owned subsidiary of Pfizer. In re Quigley Co., 676 F.3d at 47

. After its acquisition by Pfizer, Quigley continued to operate as a separate and distinct corporation, designing and manufacturing its products, and maintaining its own sales and distribution network, without any participation by Pfizer in those processes. Yet, its marketing and promotional materials, and its invoices, “began to include the Pfizer name, logo, and trademark.” Id. (citation and quotation omitted).

Nor did its acquisition by Pfizer affect its relationship with Bethlehem Steel. It continued to directly supply Bethlehem Steel with Insulag, as it had done, periodically, since 1955, regularly shipping that asbestos-containing product to the decedent's place of employment, Bethlehem Steel's Sparrows Point plant, until 1974, when Quigley phased out its manufacture of Insulag, in favor of producing “Insulag AF,” a non-asbestos containing cement.

After the decedent became ill, as a result of his purported exposure to asbestos at the plant, he filed suit, in the Circuit Court for Baltimore City, against Bethlehem Steel and a number of other business entities. During the course of that litigation, he was deposed, and, though he testified in detail as to the products to which he was exposed while working at the Sparrows Point plant, he did not mention “Insulag,” or, for that matter, either Quigley or Pfizer, which is not surprising as, in the complaint he filed, Insulag was not alleged to have been the cause of his illness, and neither Pfizer nor Quigley were named as “defendants.”² Nonetheless, there is no dispute that Insulag was used at the Sparrows Point plant, by bricklayers (such as the decedent), from 1955 to 1974,³ which overlapped with the time period, from 1968 to at least the filing of this suit, during which Quigley was a wholly-owned subsidiary of Pfizer. Nor is there any dispute that the decedent worked at that plant throughout the time period when Insulag was being used there, and there is no disagreement that that product was supplied by Quigley.⁴

III. The Quigley Bankruptcy and the “Channeling Injunction”

“After the health effects of asbestos became known,” and more than 160,000 asbestos-related suits had been filed against Quigley (approximately 100,000 of which also named “Pfizer” as a defendant), Quigley filed, in 2004, a bankruptcy petition, under Title 11 of the United States Code (“Chapter 11”), in the United States Bankruptcy Court for the Southern District of New York. In re Quigley Co., supra, 449 B.R. at 199

. In its petition, Quigley sought court approval of a reorganization plan and, most relevant to the issue before us, “an injunction that would stop all asbestos-related lawsuits against itself and Pfizer.” Id.

At the outset of those proceedings, the bankruptcy court “preliminarily enjoined all asbestos-related claims from proceeding against both companies (including those arising from Pfizer's own products) during the pendency of Quigley's bankruptcy proceeding.” Id. That injunction was subsequently amended, in accordance with 11 U.S.C. § 524(g)

,⁵ to channel asbestos-related lawsuits against either Quigley or Pfizer or both to a trust, largely funded by Pfizer, for review and possible compensation of such claims.

The amended injunction (hereafter the “channeling injunction”) provided that

during the pendency of Quigley's chapter 11 case, all parties ... are hereby stayed, restrained and enjoined from commencing or continuing any legal action against Pfizer alleging that Pfizer is directly or indirectly liable for the conduct of, claims against, or demands on Quigley to the extent such alleged liability of Pfizer arises by reason of—

(I) Pfizer's ownership of a financial interest in Quigley, a past or present affiliate of Quigley, or a predecessor in interest of Quigley;

(II) Pfizer's involvement in the management of Quigley or a predecessor in interest of Quigley; or service as an officer, director or employee of Quigley or a related party;

(III) Pfizer's provision of insurance to Quigley or a related party;

(IV) Pfizer's involvement in a transaction changing the corporate structure, or in a loan or other financial transaction affecting the financial condition, of Quigley or a related party, including but not limited to—

(aa) involvement in providing financing (debt or equity), or advice to an entity involved in such a transaction; or

(bb) acquiring or selling a financial interest in an entity as part of such a transaction.

In re Quigley Co., supra, 676 F.3d at 48

.⁶

Because Pfizer fell “within the ring of fire created by asbestos litigation,” In re Quigley Co., 449 B.R. at 202

, the “channeling injunction” at issue, here, covered most, though not all asbestos-related claims against Pfizer, Quigley's parent company.⁷

IV. The Scope of the “Channeling Injunction”

After the “channeling injunction” was issued by the bankruptcy court, a controversy arose as to its scope when, “[b]eginning in 1999,” The Law Offices of Peter G. Angelos, PC (the same law firm that represents the Stein family in this appeal), “commenced lawsuits in Pennsylvania on behalf of plaintiffs who had been exposed to asbestos-containing products sold by Quigley...