Pfizer Isn’t Shielded From Some Asbestos Claims, Court Rules

Pfizer Inc. isn’t entitled to protection from some asbestos claims related to its non-operating bankrupt Quigley Co. unit, according to a federal appeals court ruling.

Quigley, founded in 1916, made three products for the steel industry from the 1940s to the 1970s that contained asbestos. Pfizer bought Quigley in 1968, and the company stopped most operations in 1992, filing for bankruptcy in 2004. Pfizer has said it never made or sold any Quigley products, and some claimants hadn’t released Pfizer from alleged “derivative liability.”

U.S. Bankruptcy Judge Stuart Bernstein that found Quigley’s bankruptcy barred certain lawsuits against Pfizer. A May 2011 decision in district court reversed the order, and Pfizer had appealed that ruling.

“We affirm the district court,” three judges said in today’s ruling that upheld the May decision. In doing so, they found that the law firm Peter G. Angelos can sue Pfizer based on manufacturer liability under Pennsylvania law.

Angelos began bringing lawsuits against Pfizer in 1999, saying that because the drug company’s logo appeared on Quigley products, it should have liability for the asbestos-containing products.

Evaluating Options

Christopher Loder, a spokesman for Pfizer, said the company was disappointed in the court’s decision and is evaluating its options.

“It is important to note that the court’s ruling is procedural and does not address the merits of the underlying claims, which we strongly dispute,” Loder said: “In the history of this litigation, Pfizer has never been found derivatively or directly liable for injuries allegedly caused by Quigley’s asbestos-containing products.”

During Quigley’s bankruptcy, a committee of creditors known as the “Ad Hoc Committee of Tort Victims” asked in October 2010 to have Quigley’s bankruptcy dismissed so it could bring tort claims, which are otherwise blocked by bankruptcy law.

Bernstein had said that Pfizer had manipulated the bankruptcy process, and refused to allow Quigley to exit Chapter 11 court protection under a deal with Pfizer.

Asbestos claims against Quigley may total $4.45 billion during the next 42 years, according to testimony cited by Bernstein in September 2011. In November of that year, Pfizer reported a $701 million third-quarter charge for asbestos litigation related to Quigley.

Lawyers for the U.S. Trustee, an arm of the Justice Department, had asked the bankruptcy court to end Quigley’s Chapter 11, citing the fact that creditors alleging asbestos-related health issues have been unable to sue New York-based Pfizer during the case, and many of them have died.

The case is In re Quigley Co., 04-15739, U.S. Bankruptcy Court, Southern District of New York (Manhattan). The appeals case is 11-2635, 11-2767, 2nd U.S. Circuit Court of Appeals (Manhattan).

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