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
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.
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,
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:
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."
"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),
The amended injunction (hereafter the "channeling injunction") provided that
In re Quigley Co., supra, 676 F.3d at 48.
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
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 and Pfizer, including Insulag." In re Quigley Co., 449 B.R. at 199. As in the instant case, the Pennsylvania asbestos claimants alleged that Pfizer was an "apparent manufacturer" of Insulag. And, as does the Stein family here, they claimed that Pfizer, by placing "its logo on Insulag packaging" and on advertisements, had "held itself out to consumers as a manufacturer of Insulag." Id. at 200.
When, in response, Pfizer filed a motion, requesting that the bankruptcy court enforce the "channeling injunction" as to those claims, the bankruptcy court granted that motion, holding that the "apparent manufacturer" claims were enjoined by the "channeling injunction" and ordering the Angelos law firm to cease its prosecution of all of its "apparent manufacturer" lawsuits in Pennsylvania state courts. Id. at 198-200. The United States District Court for the Southern District of New York disagreed, however, and reversed that decision, holding that the "apparent manufacturer" claims did not fall within the scope of the "channeling injunction." 449 B.R. 196.
That decision was, in turn, affirmed by the United States Court of Appeals for the Second Circuit. 676 F.3d 45. It avowed that a claim against Pfizer is subject to the "channeling injunction" only when Pfizer's alleged liability for "the conduct of or claims against" Quigley has arisen "as a legal consequence of" one of the four of the following: "(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"; or "(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[.]" Id. at 48, 62.
Thus, as the Second Circuit observed, a claim against Pfizer, based upon a product manufactured by Quigley, that seeks the imposition of liability under such legal doctrines as "piercing the corporate veil," respondeat superior, or successor liability, is subject to the "channeling injunction," as the products liability it alleges "arise[s] as a legal consequence" of Pfizer's ownership, management, or control of Quigley. Id. at 49, 60. But that is not so, declared the Second Circuit, with respect to a claim that Pfizer was an "apparent manufacturer" of a product, actually manufactured by Quigley, because such a claim, explained that court, does not "in any legal sense" depend upon Pfizer's ownership, management, or control of Quigley. Id. at 62.
Predictably, the parties herein filed, in the circuit court, cross-motions for summary judgment as to the issue of whether Pfizer was an "apparent manufacturer" of Insulag. The Stein family claimed, in their motion, that Pfizer, as well as Quigley, had "put out the asbestos-containing Insulag to which [the decedent] was exposed" and that, though Quigley was the manufacturer of Insulag, Pfizer qualified as an "apparent manufacturer" of that asbestos-containing cement. Specifically, it cited advertisements and promotional materials for Insulag, as well as invoices, from sales of Insulag, issued by Quigley, from 1968 to 1974, which displayed both Pfizer's and Quigley's trademarks and, in some instances, stated, beneath those trademarks: "Manufacturers of Refractory Products." That reference to "Manufacturers," maintained the Stein family, was an allusion to both Pfizer and Quigley, and thus established that Pfizer had held itself out as a "manufacturer" of the asbestos-containing Insulag.
Then, as further evidence that Pfizer qualified as an "apparent manufacturer" of Insulag, the Stein family noted that a 1971 end-of-year Pfizer sales report stated the sales price and cost of Pfizer's annual product sales to Bethlehem Steel (which presumably included sales of Insulag) but contained no mention of Quigley (or, for that matter, Insulag); and that each of several filings (Forms 10-K), by Pfizer with the Securities and Exchange Commission ("SEC"), during the 1990's, asserted that "[t]hrough the early 1970's, Pfizer (Minerals Division) and Quigley Company, Inc., a wholly-owned subsidiary, sold a minimal amount of one construction product and several refractory products containing some asbestos."
The evidence proffered by Pfizer, and relied upon by the circuit court in granting summary judgment, included the following unrebutted testimonial statements and documents: the deposition testimony of Louis Killian, the former plant manager of Quigley's New Jersey factory where Insulag was manufactured, stating that, even after Pfizer acquired Quigley, it "had no role in running Quigley's business" and "had no input whatsoever"; an affidavit of that same individual, asserting that, "[f]ollowing its acquisition by Pfizer, Quigley continued to operate as a separate and independent corporation, manufacturing, selling, and marketing Insulag as it had done prior to the stock purchase" of its shares by Pfizer; the deposition testimony of Terence Gallagher, a former Pfizer attorney and member of Quigley's board of directors, stating that Quigley, after its 1968 acquisition by Pfizer, "was a separate corporation and subsidiary of Pfizer," that no Quigley employees held positions with Pfizer, and that the only Pfizer employees, who held positions with Quigley, were several high-ranking Pfizer employees who sat on Quigley's board of directors; the deposition testimony of Susan M. Raterman, C.I.H., an industrial hygienist and an expert witness for the Stein family, stating that, to her knowledge, "Quigley was responsible for manufacturing" Insulag; and the deposition testimony of three Bethlehem Steel employees, who had worked in the Brick Department and were responsible for purchasing the supplies used at the Sparrows Point plant, collectively asserting that Insulag was manufactured and sold by Quigley.
Moreover, in response to the Stein family's heavy reliance on and repeated references to the phrase: "Manufacturers of Refractory Products" and its placement on Quigley products beneath the trademarks of both Pfizer and Quigley, Pfizer presented an assortment of Quigley invoices and
In ruling on the cross-motions for summary judgment, the circuit court, while acknowledging that the "documents that have been produced ... do mention both names on the letterhead," stressed that "[t]hey don't say anything explicit about the manufacturer other than this phrase `manufacturers of Insulag' ... which is the logo that ... Quigley had long used," that is, long before its acquisition by Pfizer.
The court further observed:
The court then declared:
During the pendency of this appeal, the Stein family filed, in this Court, a motion, requesting that we exercise our discretion, under Maryland Rule 5-201, and take judicial notice of additional documentary evidence, which, it claims, contradicts Pfizer's contention that, both before and after its 1968 acquisition of Quigley, the marketing and promotional materials of Quigley included the plural designation: "Manufacturers of Refractory Products." We decline to do so, as the Stein family does not claim that it did not have an opportunity to present this evidence below. To do otherwise would run afoul of Maryland Rule 8-131(a), which confines the scope of our appellate review to matters which were before the circuit court.
A circuit court may grant summary judgment if there is "no genuine dispute as to any material fact," and "the party in whose favor judgment is entered is entitled to judgment as a matter of law." Md. Rule 2-501(f). In reviewing a circuit court's grant of summary judgment, we must construe all facts, as well as the inferences that may reasonably be drawn from those facts, in a light most favorable to the non-moving party, in this case, appellants. May v. Air & Liquid Sys., Inc., 446 Md. 1, 8, 129 A.3d 984 (2015). Because a grant of summary judgment is predicated upon a ruling on a question of law and not a dispute of fact, our review is de novo. Id.
Before proceeding any further with our analysis of the issues, we feel impelled to provide an account of the history of the "apparent manufacturer" doctrine, tracing its decisional evolution in the context of the successive Restatements issued by the American Law Institute, notably: the Restatement of Torts ("the First Restatement"), then the Restatement (Second) of Torts ("the Second Restatement"), and finally, the Restatement (Third) of Torts: Products Liability ("the Third Restatement"). We believe that account will provide some helpful assistance in understanding the development and current nature and scope of the "apparent manufacturer" doctrine and thereby provide guidance in addressing the central question of this appeal: whether Pfizer was an "apparent manufacturer" of Insulag.
References to what was to become known as the "apparent manufacturer" doctrine first appeared in judicial decisions
Restatement of Torts, § 400 (1934).
That articulation of what was to be dubbed the "apparent manufacturer" doctrine confined the application of that doctrine to just sellers and distributors of goods or, in other words, only to those in the chain of distribution of the product in question, a constraint reaffirmed by comment a to that section, which defined, "one who puts out a chattel," as "any one who supplies it to others for their own use or for the use of third persons, either by sale or lease or by gift or loan." And a central feature of that doctrine, though unexpressed in the body of Section 400, was, according to comment c to Section 400 of the First Restatement, a buyer's reliance upon the care taken by the seller, who puts out a product as if it were his own. As that comment explained: "By putting a chattel out as his own product," a seller "causes it to be used in reliance upon his care in making it" and, consequently, is liable, as an "apparent manufacturer," if, "because of some negligence in its fabrication or through lack of proper inspection during the process of manufacture, the article is in a dangerously defective condition which the vendor could not discover after it was delivered to him." Or, as it was more succinctly put by the Supreme Court of Errors of Connecticut,
The appellate decisions rendered during the early years of the "apparent manufacturer" doctrine either expressly or impliedly employed an objective "reliance" test, in determining whether an individual or entity should be deemed an "apparent manufacturer" for liability purposes. That is, the test was whether a reasonable consumer would have relied upon a business's label or advertising materials in purchasing the product at issue. See, e.g., Swift & Co. v. Blackwell, 84 F.2d 130, 132 (4th Cir.1936); Swift & Co. v. Hawkins, 174 Miss. 253, 164 So. 231, 231-32 (1935); Slavin v. Francis H. Leggett & Co., 114 N.J.L. 421, 177 A. 120, 121 (N.J.Sup.Ct. 1935); Burkhardt, supra, 161 A. at 391; Thornhill v. Carpenter-Morton Co., 220 Mass. 593, 108 N.E. 474, 491 (1915); Willson v. Faxon, Williams & Faxon, 208 N.Y. 108, 101 N.E. 799, 800-01 (1913).
And, at least one federal appellate court took "reliance" a step further and promulgated an "actual reliance" test. Under that test, a claimant must show not only that it was reasonable to rely upon the
It is important to keep in mind, however, that, when the First Restatement was published, setting forth the "apparent manufacturer" doctrine, products liability law, at that time, differed from its current manifestation in two significant respects: First, actual manufacturers of defective products and mere non-manufacturing sellers of those products were not generally subject to the same tort rules; and, second, the doctrine of strict liability had not yet gained much currency.
Indeed, at the time that the First Restatement was issued, a non-manufacturing seller of a defective product was usually (unless deemed an "apparent manufacturer") held to a lesser duty than the manufacturer of that commodity. The general rule, then, was that, in the "absence of misrepresentation or of negligence in the selection of goods, an intermediate distributor [was] liable to a customer only for defects discoverable upon reasonable inspection, unless he ha[d] represented that he was the actual manufacturer[.]" Swift & Co. v. Blackwell, supra, 84 F.2d at 132. If he had, the First Restatement imposed a greater duty on him than the duty placed on a non-manufacturing seller or distributor.
In other words, while an actual manufacturer of a chattel had a duty to warn potential users of any danger that might arise from its intended use, Restatement of Torts, §§ 388, 394,
But, when a non-manufacturing seller or distributor of a chattel was deemed an "apparent manufacturer," under Section 400 of the First Restatement, such a person or entity was held to the
Furthermore, at the time of the First Restatement, unlike today, tort liability of the supplier of a defective chattel, whether the supplier was an actual manufacturer, a non-manufacturing seller, or an "apparent manufacturer," was predicated upon proof of some negligent act. See Restatement of Torts, §§ 394-398. In instances where an "apparent manufacturer" had not, itself, committed a negligent act, the plaintiff, in a tort-based products liability action, had to prove that someone in the distribution chain, typically the actual manufacturer, was negligent, as a prerequisite to the imposition of liability on an "apparent manufacturer."
When, in 1965, the Restatement (Second) of Torts ("the Second Restatement") was issued, it included a revised Section 400, which was nearly identical to its predecessor, Section 400 of the First Restatement. Comment d to Section 400 of the Second Restatement, in expounding upon the reliance-based rationale for the "apparent manufacturer" doctrine, which had been set forth in the First Restatement, explained that an "apparent manufacturer" "frequently" induces consumer reliance in two ways: by causing a chattel "to be used in reliance upon his care in making it"; and by causing a chattel "to be used in reliance upon a belief that he has required it to be made properly for him and that the actor's reputation is an assurance to the user of the quality of the product." Restatement (Second) of Torts, § 400, cmt. d (1965).
While leaving largely undisturbed the explication of the "apparent manufacturer" doctrine that appeared in the First Restatement, the Second Restatement broke new ground by adding Section 402A, entitled "Special Liability of Seller of Product for Physical Harm to User or Consumer," to its text, which extended the liability of sellers by prescribing a doctrine of strict liability as to those in the chain of distribution. Specifically, it stated that "[o]ne who sells any product in a defective condition
During the decade that followed the publication of the Second Restatement, most state appellate courts that addressed this issue
That development, some courts and commentators believed, called into question whether the "apparent manufacturer" doctrine retained any relevance, since the strict liability of Section 402A appeared to now "provide a remedy for consumers injured by unsafe products," which was the "aim" of the "apparent manufacturer" doctrine. Hebel v. Sherman Equip., 92 Ill.2d 368, 65 Ill.Dec. 888, 442 N.E.2d 199, 202 (1982); see David G. Owen and Mary J. Davis, 2 Owens & Davis on Products Liability,
But, in the years following the widespread adoption of strict products liability, the "apparent manufacturer" doctrine did not fall into desuetude. In fact, state and federal courts began to apply that doctrine to entities outside the chain of distribution of defective products, such as trademark licensors.
Restatement (Second) of Torts, § 400 cmt. d (emphasis added). In sum, comment d seemingly imposed "apparent manufacturer" liability on one who "affixes to [a defective product] his trade name or trademark," regardless of whether that individual or entity played no role in the manufacture or distribution of that product.
Thereafter, judicial decisions considering the applicability of the "apparent manufacturer" doctrine, under Section 400 of the Second Restatement, to trademark licensors fell "roughly into three categories"
In 1998, the "apparent manufacturer" doctrine was presented, in a slightly modified form, in the Restatement (Third) of Torts: Products Liability (hereinafter "the Third Restatement"), in Section 14, which is entitled "Selling or Distributing as One's Own a Product Manufactured by Another." That section states, in pertinent part:
The authors of the Third Restatement acknowledged that the adoption of strict liability, in the years following the publication of the Second Restatement, called into question the continued vitality of the "apparent manufacturer" doctrine, noting that
Restatement (Third) of Torts: Products Liability, § 14, cmt. a (1998).
Recognizing, however, that some courts had begun to apply the "apparent manufacturer" doctrine to entities outside the chain of distribution of defective products, the drafters of the Third Restatement attempted to clarify, in comment d to Section 14, when non-sellers, specifically trademark licensors, may be held liable for defective products, under an "apparent manufacturer" theory:
(Emphasis added.)
A cursory reading of comment d could easily lead to the mistaken conclusion that it has abandoned "reliance," either as a rationale underlying the "apparent manufacturer" doctrine or as a test for determining its applicability to a particular defendant. Because, however, the very premise of comment d is its applicability to trademark licensors, that comment, by implication, incorporates "reliance," to a limited extent. For, as has long been recognized, consumers have come "to rely more and more upon trademarks and tradenames as symbols of quality and guaranties of satisfaction." Frank I. Schechter, The Rational Basis of Trademark Protection, 40 Harv. L.Rev. 813, 824 (Apr.1927).
Consumer reliance upon trademarks as symbols of product quality, in turn, supplies the underlying rationale for imposition of "apparent manufacturer" liability
But, while comment d has not abandoned the "reliance" rationale underlying the "apparent manufacturer" doctrine, it does represent a shift "away from the earlier emphasis on a consumer's reliance on the presence of a trademark as indicative of `an assurance of quality,' in favor of an approach that focuses on whether the trademark owner in fact actively worked to assure the quality of the trademarked product." Erin K. Higgins, What's in a Name? Possibly, Strict Liability as an Apparent Manufacturer, 78 Def. Couns. J. 355, 359 (July 2011). Its test, for determining whether a trademark licensor should be deemed an "apparent manufacturer," focuses on the licensor's participation "in the design, manufacture, or distribution of the licensee's products" and is predicated on what has been designated the "enterprise liability" test, according to which "a trademark licensor may be held vicariously liable for the torts of its licensee if the licensor is a `significant participant' in the overall enterprise that places a defective product into the stream of commerce." Franklyn, supra, at 706. It thereby focuses "almost entirely on the licensor's control over, or involvement in, its licensee's affairs." Id.
As our review of the history of the "apparent manufacturer" doctrine has shown, three tests for determining whether an entity may be found to be an "apparent manufacturer" have emerged from the caselaw: "objective" reliance test, "actual" reliance test, and what has been described as the "enterprise liability" test, as set forth in comment d to Section 14 of the Third Restatement. Unfortunately, the only two Maryland decisions, Armour & Co. v. Leasure, 177 Md. 393, 9 A.2d 572 (1939), and Telak v. Maszczenski, 248 Md. 476, 237 A.2d 434 (1968), that address the "apparent manufacturer" doctrine do not designate a specific test to be applied.
A majority of state and federal appellate courts that have considered this question have applied an objective test in determining reliance, that is, whether a reasonable consumer would have relied
In applying the "objective" reliance test to the facts of the instant case, we must consider the question whether, in doing so, we should view reliance from the vantage point of an ordinary, reasonable consumer or from the perspective of a reasonable purchaser, in the position of the actual purchaser. As there are no Maryland appellate decisions directly on point, we turn to the decision of the Supreme Court of Illinois, in Hebel v. Sherman Equipment, supra, 65 Ill.Dec. 888, 442 N.E.2d 199, for assistance, as it involved a very similar set of circumstances. That Illinois case, like the case before us, dealt with the purchase of a defective product by a commercial entity and not by a consumer, which factually distinguishes it, and the instant case, from the vast majority of "apparent manufacturer" cases. That, of course, is not surprising because, as the Illinois Supreme Court observed, the "apparent manufacturer" doctrine "was developed in the context of suits by consumers against sellers of dangerous chattels," and "[nearly all the cases imposing liability on this basis involved] defendants who were retailers or distributors." Id. 65 Ill.Dec. 888, 442 N.E.2d at 202.
Rohn Hebel was sixteen years old when, while working at the Glenwood Standard Service Station and Car Wash, his foot was caught in a "conveyor," a component of the service station's car-washing apparatus. He subsequently brought a products liability suit against Sherman Industries, Inc., a manufacturer of automatic car-washing machinery (which we shall hereafter refer to as "Sherman Equipment"), alleging that the "car washing machine," at the Glenwood station, had been "designed, manufactured and sold by Sherman [Equipment] and that it was in a defective and unreasonably dangerous condition." Id. 65 Ill.Dec. 888, 442 N.E.2d at 200.
The Glenwood station had, in fact, purchased all of its car-washing equipment from a distributor of automotive cleaning machinery, Haverberg Auto Laundry Equipment Company. That company, in turn, had obtained "nearly all" of its equipment from Sherman Equipment (whose products it regularly distributed), except for the "conveyor" at issue, which it had, itself, designed and manufactured. Id. 65 Ill.Dec. 888, 442 N.E.2d at 200-01. As it was undisputed that Sherman Equipment did not manufacture the defective conveyor, Hebel claimed that, since all of the other car-washing equipment prominently displayed Sherman Equipment's trade name and trademark, it should be deemed an "apparent manufacturer" of the entire apparatus, including the defective conveyor. Id. 65 Ill.Dec. 888, 442 N.E.2d at 201.
Illinois's highest court, consequently, rejected the claim that the proper frame of reference was a "reasonable person in [Hebel's] position," observing:
Id. (emphasis added).
Applying the sound reasoning of Hebel, we conclude that, to prevail in this case, under the "objective" reliance test, the Stein family must show that a reasonable purchaser of refractory materials, that is, Bethlehem Steel, during the time period from 1968 to 1974, would have relied upon Pfizer's reputation and assurances of quality in purchasing the refractory material at issue, namely, Insulag. "That a casual observer" might have believed that Pfizer was the manufacturer of Insulag "has no bearing on the issue" before us.
It is clear that, under the "objective" reliance test, the Stein family's claim fails. Given that Bethlehem Steel was unquestionably a sophisticated purchaser of Insulag and that Insulag was not a consumer product, we believe that no reasonable fact finder could conclude that a reasonable person, in the position of a Bethlehem Steel purchasing manager during the period
At least one court, in determining whether a defendant is an "apparent manufacturer," has applied an "actual reliance" test, under which a plaintiff must prove that he or she actually and reasonably relied upon the reputed "apparent manufacturer's" trademark, reputation, or assurances of product quality, in purchasing the defective product at issue. Carney v. Sears, Roebuck & Co., supra, 309 F.2d 300, 304 (4th Cir.1962).
Because, in Carney, the plaintiff was also the purchaser of the defective product at issue, the appellate court did not have to consider whether it is the plaintiff's actual reliance or the purchaser's that is dispositive. In the instant case, regardless of whether we apply the "actual reliance" test from the perspective of the plaintiff (that is, the user) or the wholesale purchaser, the end result is the same. If we assume that it is the user's perspective that governs, then, given the total absence of any mention, by the decedent in his 1987 deposition testimony, of any use of or exposure to Insulag, or any mention whatsoever of Pfizer, it is clear that there was no reliance by the decedent sufficient to deem Pfizer the "apparent manufacturer" of that product.
If, on the other hand, we assume that the purchaser's perspective governs the application of the "actual reliance" test, then the Stein family's claim fares no better, as the only evidence establishes that Bethlehem Steel had purchased Insulag directly from Quigley for many years before its acquisition by Pfizer and that, after that corporate acquisition, it continued to do so without interruption. Nor was any evidence adduced that Bethlehem Steel actually relied upon Pfizer's trademark, reputation, or assurances of quality, in deciding to purchase Insulag, and therefore, the Stein family's "apparent manufacturer" claim must fail, regardless of whose "reliance" we focus on.
A few courts have not appeared to require that a plaintiff, raising an "apparent manufacturer" claim, show any reliance upon the defendant's reputation or assurances of quality, applying instead the "enterprise liability" test, that is, whether the defendant "participate[d] substantially in the design, manufacture, or distribution" of the defective product at issue, Restatement (Third) of Torts: Products Liability, § 14, cmt. d, provided, of course, that the defendant's trademark appeared on that product.
As noted earlier, the "enterprise liability" test, as articulated in the Third Restatement, applies only to trademark licensors. In the instant case, there was no trademark licensing agreement between Pfizer and Quigley, and thus, it would appear that the "enterprise liability" test is inapplicable. But even if their relationship were deemed analogous to that between a trademark licensor and its licensee, given that, once Pfizer had acquired Quigley and, thereafter, throughout the relevant time period, from 1968 to 1974, Pfizer's trademark appeared on advertisements and promotional materials for Insulag, as well as invoices, from sales of Insulag, issued by Quigley, Pfizer would not qualify as an "apparent manufacturer," under that test, because there is no evidence that it participated "substantially" in the design, manufacture, or distribution of Insulag. According to the "enterprise liability" test:
Restatement (Third) of Torts: Products Liability, § 14, cmt. d.
The Stein family asserts that the invoices and promotional materials, issued by Quigley after its acquisition by Pfizer, indicating that both Pfizer and Quigley were "Manufacturers of Refractory Products," create a jury question of whether Pfizer participated "substantially" in the distribution of Insulag and that, indeed, we should regard Pfizer as a seller of that asbestos-containing product. They attempt to bolster that assertion with the observation that, after Pfizer's acquisition of Quigley, certain Pfizer sales reports and Securities and Exchange Commission ("SEC") filings included information regarding Quigley's sales of Insulag.
Although Pfizer's trademark appeared on Quigley's invoices and promotional materials, no evidence was presented that Pfizer participated "substantially [or for that matter, at all] in the design, manufacture, or distribution of" Insulag. For one thing, the Stein family's assertion that the description, "Manufacturers of Refractory Products," on Quigley's invoices and promotional materials, in combination with the depiction of both Quigley's and Pfizer's trademarks, suggests that Pfizer was holding itself out as a manufacturer of Insulag, is refuted by the simple observation that, before its acquisition by Pfizer, Quigley issued substantially similar documents, with only its own trademark, but nonetheless stated: "Manufacturers of Refractory Products." Moreover, the invoices and promotional materials indicated no more than that Quigley was a subsidiary of Pfizer, and, as for the reports and SEC filings, it would be expected that a corporate parent would account for the sales of its subsidiaries, and, indeed, Pfizer was legally obligated to do so in its SEC filings.
All of the other evidence indicates, however, that, both before and after its acquisition by Pfizer, Quigley manufactured and designed Insulag and sold it to Bethlehem Steel, without any significant participation by Pfizer. That evidence established that Quigley shipped that product directly to Bethlehem Steel, that Pfizer did not design, manufacture, or distribute Insulag, and that Insulag was manufactured by Quigley long before its acquisition by Pfizer.
Finally, even after construing all of the facts, as well as the inferences that may reasonably be drawn from those facts, in a light most favorable to the Stein family, May v. Air & Liquid Sys., Inc., supra, 446 Md. at 8, 129 A.3d 984, we conclude that the Stein family has failed to make its case that, under any of the three aforementioned tests, Pfizer should be deemed an "apparent manufacturer" of Insular. Accordingly, we affirm the circuit court's grant of summary judgment.
Some commentators agreed. In 2 Owens & Davis on Products Liability, § 16:15, at 636 (4th ed.2014), the authors of that text opined that, in light of "the fall of the privity defense, the spread of effective discovery techniques for uncovering both the identity and production methods of manufacturers, and, most importantly, the adoption of a general doctrine of strict products liability in tort," the "apparent manufacturer" doctrine became "quaintly obsolete."