It seems odd that a company primarily involved in human pharmaceutical research, development and production is on the hook for nearly $1 billion in damages to the victims of asbestos-related diseases. But that’s exactly the situation in which drug maker Pfizer finds itself.
Recently the U.S. Supreme Court declined Pfizer’s appeal to a ruling from the U.S. Court of Appeals for the Second Circuit, which decided a number of lawsuits linking Pfizer to a company it previously owned interest could go forward. The Court of Appeals decision allows litigation to proceed that would hold Pfizer accountable for $964 million to be put into a settlement fund for people who have claims related to asbestos exposure resulting in illness and death.
Asbestos is known to cause diseases including asbestosis, a severe scarring of the lungs, and mesothelioma, a rare and deadly cancer that affects the lining of the lungs, abdomen and occasionally the heart. There is no known cure for mesothelioma. More than 10,000 people each year are diagnosed with asbestos-related diseases.
Pfizer is linked to the litigation because it previously owned Quigley Company, Inc., which made heavy insulation for heavy industry. The purchase was part of a diversification plan that included a minerals, pigments and metals division. The Quigley insulation was used in projects operated by this division.
The Quigley insulation contained asbestos. Quigley filed bankruptcy in 2004, facing 160,000 lawsuits related to asbestos exposure. Pfizer says this bankruptcy should protect it from liability in these lawsuits.
The Courts disagree. Federal Judge Stuart Bernstein issued a ruling that will allow Quigley to exit bankruptcy and hold its former owner, Pfizer, responsible for contributing to the settlement fund.
There are still a number of individual lawsuits not part of the settlement fund that are pending in this litigation. Pfizer says it will contest these lawsuits.