Second Circuit: Pfizer lost protection against asbestos suits

NEW YORK - Because Pfizer used its logo on asbestos-containing products made by a company it acquired, lawsuits brought in Pennsylvania by the Law Offices of Peter Angelos may proceed, an appeals court has ruled.
The U.S. Court of Appeals for the Second Circuit ruled April 10 that suits against Pfizer over the Insulag, which was produced by Quigley Co., are not barred by a preliminary injunction.

The injunction was designed to help Quigley, which was purchased by Pfizer in 1968, reorganize itself through bankruptcy proceedings and ensure insurance funds were left for the company to establish a trust out of which asbestos claimants would be paid.

"We are confident that the Angelos reading of the statutory language at issue here is the correct one," Judge Debra Ann Livingston wrote.

"Section 524(g) is designed to 'facilitate the reorganization and rehabilitation of the debtor as an economically viable entity,' as well as "make it possible for future asbestos claimants to obtain substantially similar recoveries as current claimants.'

"Needless to say, barring the prosecution of claims bearing only an accidental nexus to an asbestos bankruptcy is less than tangentially related to that objective."

Quigley began making the product Insulag in the 1930s, and Pfizer began to use the Pfizer name, logo and trademark on marketing materials after it purchased the company.

Quigley and Pfizer shared a number of insurance policies that were to be used to form Quigley's bankruptcy trust. Trusts are independent of the tort system and are used to pay out asbestos claims against companies that filed for bankruptcy reorganization, an option afforded those companies under federal law.

Quigley's bankruptcy court imposed a preliminary injunction in 2004 that prevented all parties from filing claims against Pfizer while Quigley's chapter 11 case was pending.

The injunction was modified in 2007, preventing claims against Pfizer over its ownership or management of Quigley.

Eight years earlier, Angelos' firm began bringing lawsuits against Pfizer in Pennsylvania. Those suits brought up the issue of Pfizer using its name and logo on the packaging of and advertising for the product.

The Angelos' firm says its suits fall outside the scope of the injunction. Though the bankruptcy court disagreed, a district court judge and the Second Circuit ruled for the firm.

Angelos called Pfizer an "apparent manufacturer" because of the presence of its name and logo on the products.