Pfizer Not an “Apparent Manufacturer” of Refractory Products Used at Shipyard; Summary Judgment Affirmed Court of Appeals of Washington, June 26, 2017

Plaintiff Margaret Rublee appealed the summary judgment dismissal against defendant Pfizer, Inc. The decedent, Vernon Rublee, was a machinist at the Puget Sound Naval Shipyard from 1965-1980 and died of mesothelioma in 2015. The appellate court affirmed summary judgment for Pfizer.

While at the shipyard, he worked on steam turbines with asbestos lagging. In replacing the lagging they used two refractory products — Insulag and Panelag. Both the decedent and other workers testified as to seeing “Pfizer” on the bags. Quigley Company made the products, which both contained asbestos until the early 1970s. Although Pfizer acquired Quigley in 1968 as a wholly owned subsidiary, Quigley continued all operations, sales, and distributions of the products. In 2004 Quigley filed for bankruptcy; in 2013 the United States District Court for the Southern District of New York approved a reorganization plan that created an asbestos injury trust to compensate claimants, and enjoined parties from suing Quigley for asbestos-related injuries. While this injunction also prevented claims against Pfizer based on its control of Quigley, it did not prevent claims against Pfizer as an “apparent manufacturer.”

The plaintiff relied on Section 400 of the Second Restatement, which states that “[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 legal community commonly called this “apparent manufacturer liability.” First, the court concluded that although no Washington appellate court has adopted this section, if it were to come before the Washington Supreme Court, it would be applied. The court then looked to other courts’ application of Section 400 for persuasive authority.

Courts generally applied one of three tests for apparent manufacturer liability – objective reliance; actual reliance; and “enterprise liability.” In this case, the plaintiff’s evidence did not satisfy any of these tests. The majority of courts applied the objective reliance test, or whether a reasonable consumer would have relied upon a label or advertising materials of a product in purchasing it. Courts appeared to use the viewpoint of the purchasing public. The court agreed with Pfizer in that this test should be applied from the viewpoint of the agents who actually purchased the refractory product, not an ordinary, reasonable consumer. Thus here, the plaintiff was required to show that a reasonable purchaser of refractory materials — the shipyard —would have relied upon Pfizer’s reputation and assurances of quality in purchasing the products. The record contained several marketing items containing Pfizer’s logo, but it was alongside Quigley’s, which was more prominent. Reasonable readers would not infer that Pfizer made these products. Further, the affidavit from the plaintiff’s expert stating that Pfizer logos would confuse consumers was taken from the viewpoint of an ordinary member of the public, not the purchasers from the shipyard. None of the evidence suggested that industrial purchasers would think Pfizer made the products.

The plaintiff’s claim likewise failed under the actual reliance test, which asked whether the plaintiff showed that he or she actually and reasonably relied upon the apparent manufacturer’s trademark, reputation, or assurances of product quality in purchasing the defective product at issue. Few courts have required actual reliance. The third test, enterprise liability, asked whether the defendant participated substantially in the design, manufacture or distribution of the defective product, and required the defendant’ trademark to appear on the product. The plaintiff’s evidence failed this test as well, and few courts have applied it.

Finally, the plaintiff’s theory of liability based on comment d to § 400 failed. Comment d indicated that a company could be liable as an apparent manufacturer if it “affixes to [the product its] trade name or trademark.” The comment explained that when a label identified the company “as an indication of the quality or wholesomeness of the chattel, there is an added emphasis that the user can rely upon the reputation of the [company].” The comment also specified that a trademark “licensor, who does not sell or otherwise distribute products, is not liable under this Section of this Restatement.”

Thus, the court stated: “A company that, like Pfizer, placed its logo on a product but did not sell it or ‘participate substantially in [its] design, manufacture, or distribution’ should not expect to be held liable for harms the product caused. On this record, any liability Pfizer incurred would stem not from representing itself as the dangerous products’ manufacturer but from owning the company that did manufacture and sell the products.”

Read the full decision here.

 


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