The plaintiff alleged exposure to asbestos-containing brakes, clutches and engine parts while working on Ford tractors and passenger cars in Ireland. The plaintiff and his wife brought suit after he developed peritoneal mesothelioma. Ford USA moved for summary judgment, arguing the parts to which the plaintiff alleged exposure were manufactured, distributed and sold by its wholly-owned subsidiary, Ford UK. Ford USA further argued the complaint was devoid of allegations supporting the claim that the court should pierce the corporate veil. While there was no basis for piercing the corporate veil, the Appellate Division nevertheless held that there were factual issues concerning whether Ford USA could be found directly liable and denied Ford USA’s motion. The Court of Appeals reversed.
The court summarized the law of strict liability, stating that it is the manufacturer alone who can fairly be said to know and understand when an article is suitably designed and safely made; however, retailers and distributors may also be strictly liable because they have a continuing relationship with the manufacturers and are in a position to exert pressure for improved safety. The plaintiffs argued a question of fact existed concerning Ford USA’s role in the chain of distribution, in that the evidence established that Ford USA played a direct role in the design and marketing of asbestos parts. However, the record evidence showed that Ford UK, not Ford USA, manufactured and distributed the Ford tractor and vehicle parts. Although the plaintiff’s evidence showed Ford USA providing guidance, this alone was insufficient for strict liability. Further, Ford’s world-wide trademark did not contain directives on what warnings, if any, should be placed on packaging.
While Ford USA could exert pressure on Ford UK, this concept had never been applied to a wholly-owned subsidiary, but instead was routinely applied to sellers, as the sellers were in the best position to pressure manufacturers for safer products. “Ford USA, as the parent corporation of Ford UK, may not be held derivatively liable to the plaintiff under a theory of strict products liability unless Ford USA disregarded the separate identity of Ford UK and involved itself directly in that entity’s affairs such that the corporate veil could be pierced…a conclusion that neither Supreme Court nor the Appellate Division reached in this instance.”