REPORTED
IN THE COURT OF SPECIAL APPEALS

OF MARYLAND
No. 1231 Septem ber Term , 2014

______________________________________ HARRIETTE STEIN, PERSONAL REPRESENTATIVE OF THE ESTATE OF

CARL STEIN, et al.

v. PFIZER INC..

______________________________________ Krauser, C.J., Graef f , Kehoe,
JJ.

______________________________________

Opinion by

Krauser, C.J.

______________________________________ Filed: May

31, 2016The issue bef ore us is w hether Pf

izer Inc., appellee, m ay be deem ed an “apparent

m anuf acturer” of an asbestos-containing cem ent, “Insulag,” which purportedly caused the illness and subsequent death of Carl Stein f rom m esotheliom a. The product a t i s sue was

m anuf actured and sold to Mr. Stein’s em ploy er, Bethlehem Steel Corporation, by Quigley , Inc., both bef

ore and af ter it becam e a wholly -owned subsidiary of Pf izer.
If Pf izer d o e s not qualif

y as an “apparent m anuf

acturer,” then it is covered by the “channeling injunction” issued by t h e U n i ted States Bankruptcy Court f or the Southern District of New York, in addressing Quigley ’s petition f or Chapter 11 protection, that bars asbestos-related lawsuits against Quigley or Pf izer, such as the one bef

ore u s , and directs such claim s to a trust f

or consideration and, ultim ately , com pensation. If

, on the other hand,
Pf izer satisf ies the criteria of such a designatio n , then Mr. Stein’s f am ily , appellants, m ay continue to pursue their products liability claim s against Pf izer in t h e C i r c u i t Court f or Baltim ore City , where this m atter was initially f iled by Mr. Stein, bef

ore his death. The Baltim ore City circuit court resolved this issue, by granting sum m ary judgm ent in f avor of P f

i zer, af ter determ ining that it did not qualif y as an “apparent m anuf

acturer.”
W e agree and shall af

f irm

.

I. The Stein Fam ily ’s Law suit Carl Stein (the “decedent”) worked, f rom 1949 through 1985, as a bricklay er f or the Bethl ehem Steel Corporation at its Sparrows Point plant. During his thirty -six y ears of

em ploy m ent at the Spar r o w s P o i nt plant, the decedent purportedly used Insulag, anasbestos-containing cem ent, in the perf orm ance of his dut i e s a t that f acility

. Af

ter the decedent becam e ill, f

rom his exposure to asbestos, he brought an action, in the Circuit Court
f or Baltim ore City , against a num ber of b u s i n e ss entities, which had sold 1 asbestos-containing m aterials to Bethlehem Steel, alleging negligence, breach of warranty , strict liability , f

raud, and conspiracy

. None of these entities is, however, a party to the instant appeal. Then, in April 2012, the decedent, who had, by that tim e, been diag n o s e d with

m esotheliom a, succum

bed to that disease. Fif

teen m onths 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; R o b e r t B. Stein; and Patricia A. Robinson (all of whom we shall collectively ref er to as “the Stein f

am ily ”), f iled an am ended

com plaint, in the sam e action, adding Pf izer Inc., the appellee, as a def endant in that suit, as well as several new counts averring loss of consortium and wrongf ul death. T h e t heory underly ing the Stein f

am ily ’s claim s agai nst Pf izer was that the decedent’s exposure to an asbestos-co n t a i n i n g r e fractory cem ent, called “Insulag,” which was supplied to his em ploy er,

The c o mplaint nam ed the f ollowing entities as def endants: Union Carbide 1 Corporation; John Crane-Houdaille, Inc.; Owens-Illinois Glass Com pany ; General R e f r actories Com

pany ; Koppers Com

pany , Inc.; Universal Ref ractories Com

pany ; A.W

. Chesterton Com

pany ; CBS Corporation; J.H. France Ref ractories Com

pany ; The Goody ear Tire & Rubber Com

pany ; MCIC, Inc.; Metropolitan Lif e Insurance Com

pany ; Genera l E lectric Com

pany ; Bay er Cropscien c e , I n c . ; I n t e r n a t i o n a l P a

p e r C o m p a n y ; C o o p e r I n d

u s t r i e s , Inc.; Ferro Engineering; Foseco, Inc.; Schneider Electric USA, Inc.; Greene, Tweed & Com pany ; W allace & Gale Asbestos Settlement Trust; Malli nckrodt, Inc.; Crown, Cork & Seal Com pany ; Georgia-Pacif

ic, LLC; and Foster W heeler Corporation.

-2-Bethlehem Steel, by Pf izer’s subsidiary , Quigley Com pany , Inc., was a substantial f actor in bringing about his illness and resultant death f rom m esotheliom a and that, because Quigley ’s invoices and m arketing m aterials also bore Pf izer’s tradem arks, as well as i t s o w n , a n d because, in som e instances, the words: “Manuf acturers of

Ref ractory Products,” appeared beneath the exhibition of those corporate designations, Pf izer had, in ef

f ect, held itself out

as a “m anuf

acturer” of Insulag and was theref ore liable f

or the illness and death of Mr. Stein, as an “apparent manufacturer” of that product.

II. Quigley ’s Relationships w ith Pfizer and Bethlehem Steel Q u i g l e y , founded in 1916, m anuf actured and sold ref

ractory products, that is, p r o d u c t s “that retain their strength at high tem peratures,” f

or use in steel m ills, power plants, and ref ineries. 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 , 133 S.
Ct. 2849 (2013). One of the products it m anuf actured and sold, beginning in the 1930’s, was “Insulag,” a heat-resistant cement, which contained asbestos.
In August 1968, Pf

izer acquired all of the stock of Quigley , thereby rendering that corporate entity a wholly -owned subsidiary of Pf izer. In r e Q u i

g l ey Co. , 676 F.3d at 47.
Af ter its acquisition b y P f

izer, Quigley continued to operate as a separate and distinct corporation, d esigning and m anuf acturing its products, and m aintaining its own sales and distribution network, without any participation by Pf izer in those processe s . Yet, its

-3-m arketing and prom otional m aterials, and its invoices, “b e g a n to include the Pf izer nam e, logo, and tradem ark.” Id. (citation and quotation om itted).
Nor did its acquisition by Pf izer af f ect its relationship with Bethlehem S t e e l. It continued to directly supply Bethlehem Steel with Insulag, as it had done, periodically , since 1955, regularly shipping that asbestos-containing product t o t h e decedent’s place of

em ploy m ent, Bethlehem Steel’s Sparrows Point plant, until 1974, when Quigley phased out its m anuf acture of Insulag, in f

avor of producing “Insulag AF,” a non-asbestos c o n taining

cem ent. Af ter the decedent becam e ill, as a result of his purported exposure to asbestos at the plant, he f

iled suit, in the Circuit Court f or Baltim ore City , against Bethlehem Steel and a

num ber of other business entities. During the course of that litigation, he was deposed, and, though he testif

ied in detail as to the products to which he was exposed while working at the Sparrows Point plant, he did not m ention “Insulag,” or, f o r t h a t matter, either Quigley or Pf izer, which is not surprising as, in the com plaint he f

iled, Insulag was not alleged to have been the cause of his illness, and neither Pf izer nor Quigley

were named as “defendants.” 2 Nonetheless, there is no dispute that Insulag was used at the Sparrow s P o i n t plant, by bricklay ers (such as the decedent), f rom 1955 to 1974, which overl a p p e d with the tim e 3

The initial com

plaint is not in the record bef ore us. The only dock et entries in the 2 record are those beginning with the f iling of the am ended com

plaint in 2012, when Pf

izer and Quigley were f irst nam ed as def

endants. According to Quigley ’s answer to an interrogatory in another asbestos-related case, 3 In re Sparrows Point Steel Plant Asbestos Cases , BML-3 (D. Md.), it supplied Insulag to the -4-period, f

rom 1968 to at least the f

iling of this suit, during which Quigley was a wholly -owned subsidiary o f P f

i z e r . Nor is there any dispute that the decedent worked at that plant throughout the tim e period when Insulag was being used there, and there is no disagreem ent that that product was supplied by Quigley

. 4

III. The Quigley Bankruptcy and the “Channeling Injunction” “Af ter the health ef

f ects of asbestos becam e known,” and m ore than 160,000 asbestos-related suits had been f iled against Quigley (approxim ately 100,000 of which also

nam ed “Pf

izer” as a def

endant), Quigley f

iled, in 2004, a bankruptcy petition, under Title 11 of the United States Code (“Chapter 11 ” ), in the United States Bankruptcy Court f or 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, m ost relevant to the issue bef ore
us, “an injunction that would stop all asbestos-related lawsuits against itself and Pf izer.” Id.
At the ou tset of those proceedings, the bankruptcy court “prelim inarily enjoined all asbestos-rela t e d c l a im s f

rom proceeding against both com panies (including those arising
f rom Pf izer’s own products) during the pendency of Quigley ’s bankruptcy proceeding.” Id.

Sparrows Point plant f

rom 1955 until 1960, and then again, f rom 1967 until 1974. The Stein f

am ily and Pf izer disagree as to whether Stein’s exposure to Insulag was 4 a substantial f

actor in causing his death. That issue was, understandably , not addressed by the circuit court, in granting Pf izer’s m otion f

or sum m ary judgm ent, and theref ore, it is not relevant to this appeal.
-5-That injunction was subsequently am ended, i n a ccordance with 11 U.S.C. § 524(g), to 5
channel asbestos-related lawsuits against either Quigley or Pf izer or both to a trust, largely
f unded by Pf izer, f or review and possible compensation of such claims. The am ended injunction (hereaf ter the “channeling injunction”) provided that during the pendency of Quigley ’s chapter 11 case, all parties

. . . are hereby stay ed, restrained and enjoined f rom com m encing or continuing any legal action against Pf izer alleging that Pf

izer is directly or indirectly liable f or the conduct of

, claim s against, or dem ands on Quigley to the extent such alleged liability of Pf izer arises by reason of

— (I) Pf izer’s ownership of a f

inancial interest in Quigley , a past or present af

f iliate of Quigley , or a predecess o r i n interest of Quigley ; (II) Pf izer’s invo l v e me n t in the m anagem ent of Quigley or a predecesso r in interest of Quigley ; or service as an of f icer, director or empl oy ee of

Quigley or a related party ; (III) Pf izer’s provision of insurance t o Quigley or a related party ; (IV) Pf izer’s involvem ent in a transaction changing the corporate structure, or in a loan or other f ina n c i a l t ransaction af f ecting the f

inancial con d ition, of Quigley or a related party , including but not lim ited to— (aa) involvem ent in providing f inancing (debt or equity ), or advice to an entity involved in such a transaction; or

11 U.S.C. § 524(g) authorizes “a bankruptcy court to enter, along with conf irm ation 5 of a reorganization plan, an injunction ‘channeling’ certain classes of claim s to a trust set up in accordance with the reorganization plan, which tr u s t w i l l t hen m ake pay m ents to both present and f

uture claim ants.” In re Quigley Co. , 676 F.3d 45, 59 (2d Cir. 2012). -6-(bb) acquiring or selling a f inancial interest in an entity as part of such a transaction. In re Quigley Co. , supra , 676 F.3d at 48. 6
B e c a u se Pf

izer f ell “within the ring of f

ire created by asbestos litigation,” I n r e Quigley Co. , 449 B.R. at 202, the “channeling injunction” at issu e , h ere, covered m ost, though not all asbestos-related claims against P f izer, Quigley ’s parent com pany . 7

IV. The Scope of the “Channeling Injunction” Af ter the “channeling injunction” was issued by the bankruptcy court, a controversy

arose as to its scope when, “[ b]eginning in 1999,” The Law Of f ices of Peter G. Angelos, PC (the sam e law f

irm that represents the Stein f am ily in this appeal), “com m enced lawsuits in Pennsy lvania on behalf of plaintif f s who had been exposed to asbestos-containing products sold by Quigley and Pf

izer, including Insulag.” In re Quigley Co. , 449 B.R. at 199. As in the instant case, the Pennsy lvania asbe s t o s claim ants alleged that Pf izer was an “apparent

m anuf acturer” of Insulag. And, as does the Stein f am ily here, they claim ed that Pf izer, by

Quigley ’s reorganization plan was ultim ately approved by the bankruptcy court. In 6 re Quigley Co. , No. 04-15739(SMB) (Bankr. S.D.N.Y. Aug. 16, 2013). As the New York f

ederal district court noted in In r e Q u i g l ey Co. , 449 B.R. 196 7 (S.D.N.Y. 2011), the “channeling injunctions m ay also cover certain ty pes of claim s against third parties related to the debtor, such as the debtor’s insurer or corporate af f iliates[ .]” Id. at 202. -7-placing “its l o g o o n Insulag packaging” and on advertisem ents, had “held itself out to

consum ers as a m anuf

acturer of Insulag.” Id. at 200.
W hen, in response, Pf

izer f iled a m otion, requesting that the bankruptcy court enf orce the “channeling injuncti o n ” a s t o those claim s, the bankruptcy court granted that m otion, holding that the “apparent m anuf acturer” claim s were enjoined by the “channeling injunction” and ordering the Angelos law f irm to cease its prosecution of all of its “apparent

m anuf acturer” lawsuits i n P e nnsy lvania state courts. Id. at 198-200. The United States District Court f

or the Southern District of New York disagreed, however, and reversed that decision, holding that the “apparent m anuf acturer” claim s did not f

all within the scope of the “channeling injunction.” 449 B.R. 196. That deci s ion was, in turn, af f irm ed by the United States Court of Appeals f or the Second Circuit. 676 F.3d 45. It avowed that a claim against Pf izer is subje c t t o the “channeling injunction” only when Pf izer’s alleged liab i l i ty f

or “the conduct of or claim s against” Quigley has arisen “as a legal consequence of ” one of the f

our of the f

ollowing: “(I)
P f i zer’s ownership of a f

inancial interest in Quigley , a past or present af f iliate of Quigley ,

or a predecessor in interest of Quigley ”; “(II) Pf izer’s involvem ent i n t h e managem ent of Quigley or a predecessor in interest of Quigley ; or service as an of f icer, director or em

ploy ee of Quigley or a related party ”; “(III) Pfizer’s provision of insurance to Quigley or a related party ”; or “(IV) Pf

izer’s involvem ent in a transaction changing the corporate structure, or in

-8-a loan or other f inancial transaction af

f ecting the f

inancial condition, of Quigley or a related party [ .]” Id. at 48, 62. Thus, as th e S econd Circuit observed, a claim against Pf izer, based upon a product

m anuf actured by Quigley , that seeks the im position of liability under such legal doctrines as “p i e r c i ng 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 Pf izer’s ownership, m anagem ent, or control of Quigley

. Id. at 49, 60. But that is not so, declared the Seco n d C i r c u i t, with respect to a claim that Pf izer was an “apparent

m anuf acturer” of a product, act u a l l y ma n uf actured by Quigley , because such a claim , explained that court, does not “in any legal sense” depend upon Pf izer’s ownership,

m anagem ent, or control of Quigley

. Id. at 62.

V. Cross-m otions for Sum m ary Judgm ent Predictably , the parties herein f iled, in the circuit court, cross-m otions f or sum m ary judgm ent as to the issue of whether Pf izer was an “apparent m anuf acturer” of Insulag. The Stein f am ily claim ed, in their m otion , t hat Pf izer, as well as Quigley , had “put out the asbestos-containing Insulag to which [ the decedent] was exposed” and that, though Quigley

w a s t h e manuf

acturer of Insulag, Pf

izer qualif

ied as an “apparent m anuf acturer” of th a t asbestos-containing cem ent. Specif ically , it cited advertisem ents and prom otional m aterials
f or Insulag, as well as invoices, f rom sales of Insulag, issued by Quigley , f rom 1968 to 1974,

-9-which display e d both Pf izer’s and Quigley ’s tradem arks and, in som e instances, stated, beneath those tradem arks: “M a n u f a c t urers of Ref

ractory Products.” That ref erence to “Manuf acturers,” maintained the Stein f am ily , was an allusion to both Pf izer and Quigley , and thus establis h e d t h a t Pf izer had held itself out as a “m anuf acturer” of the asbestos-containing Insulag. Then, as f

urther eviden c e t h a t Pf

izer qualif

ied as an “apparent m anuf acturer” of Insulag, the Stein f

am ily noted that a 1971 end-of -y ear Pf izer sales report sta t e d t h e s a l e s price and cost of Pf

izer’s annual product sales to Bethlehem Steel (whi c h presum ably included sales of Insulag) but contained no m ention of Quigley (or, f or that m atter, Insulag); and that each of several f ilings (Form s 10-K), b y P f i z e r w ith the Securities and Exchange
Com m ission (“SEC”), during the 1990’s, asserted that “[ t]hrough the early 1970’ s , P f izer (Minerals Division) and Quigley Com pany , Inc., a wholly -owned subsidiary , sold a m inim al

am ount of one construction pr o d u c t and several ref ractory products containing som e asbestos.” The evidence prof

f ered by Pf

izer, and relied upon by the circuit court in granting

s u m m a r y j u d g m e n t , i n c l u d e d t

h e fo l l o wing unrebutted testim onial statem e n t s a n d d o c u m e n t s : the deposition testim ony of Louis Killian, the f orm er plant m anager of Quigley ’s New Jersey f actory where Insulag was m anuf actured, stating that, even af ter Pf izer acquired Quigley , it “had no role in running Quigley ’s business” and “had no input whatsoever”; an af f idavit of that sam e individual, asserting that, “[ f ]ollowing its acquisition by Pf izer, Quigley continued

-10-to operate as a separate and independent corporation, m anuf acturing, selling, and m arketing Insulag as i t h a d d o n e p rior to the stock purchase” of its shares by Pf izer; the deposition testim ony of Terence Gallagher, a f orm er Pf izer attorney and m em

ber of Quigley ’s board of directo rs, stating that Quigley , af ter its 1968 acquisition by Pf izer, “was a separate corporation and subsidiary of Pf izer,” that no Quigley em

ploy ees held positions with Pf izer, and that the only Pf

izer em ploy ees, who held positions with Quigley , wer e several high-ranking Pf

izer em ploy ees who s a t o n Q u igley ’s board of directors; the deposition testim ony of Susan M. Raterm an, C.I.H., an industrial hy gienist and an expert witness f or the Stein f am ily , stating that, to her knowledge, “Quigley was r e s p onsible f or m anuf acturing” Insulag; and the deposition testim ony of three Bethlehem Steel em ploy ees, who had worked
i n t h e B r ick Departm ent and were responsible f or purchasing the supplies used at th e Sparrows Point plant, collectively asserting that Insulag was m anuf actured an d sold by Quigley

. Moreover, in response to the Stein f am ily ’s heavy reliance on and repeated ref erences
to the phrase: “Manuf

acturers of Ref

ractory Products” and its placem ent o n Q u i g l e y products beneath the tradem arks of both Pf izer and Quigley , Pf

izer presented an assortm ent of Quigley invoices and s a l e s brochures, all of which bore dates preceding Quigley ’s acquisition by Pf

izer, which display ed only the Quigley tradem ark, and which, nonetheless, stated: “Manuf

acturers of

Ref ractory Products.”

-11-In ruling on the cross-m otions f or sum m ary judgm ent, the circuit court, while acknowledging that the “docum ents that have been produced

. . . do m ention both nam es on the letterhead,” stressed that “[ t]hey don’t say any thing explicit about the m anuf acturer other than this phrase ‘m anuf

acturers of Insulag’

. . . which is the logo that . . . Quigley had long used,” that is, long bef

ore its acquisition by

Pf izer. The court f

urther observed:
I don’t think a reasona b l e person could rely in any way , if that were required, upon Pf

izer as the m anuf

acturer

. . . particularly given [ the docum ents] were provided t o s o p histicated people involved in the industry

. The court then declared:
I do not believe that a reasonable person under all the circum stances provided to m e in this c a s e could com e to the con c lusion f

rom the docum ents that Pf izer was the m anuf

acturer of the product.

VI. Motion to Take Judicial Notice During the pe n d e n c y o f this appeal, the Stein f am ily f iled, in this Court, a m otion, requesting that we exercise our discr e t i o n , u nder Mary land Rule 5-201, and take judicial notice of additional docum entary evidence, which, it claim s, contradicts Pf izer’s contention that, both bef

ore and af

ter its 1968 acquisition of Quigley , the m arketin g and prom otional

m aterials of Qui g l e y included the plural designation: “Manuf acturers of Ref

ractory Products.” W e decline to do so, as the Stein f am ily does not claim t h a t i t d i d n o t h ave an

-12-opportunity to present this evidence below. To do otherwise would run af oul of Mary land Rule 8-131(a), which conf ines the scope of our appellate review to m atters which were bef ore the circuit court.

VII. Standard of Review
A circuit court m ay grant sum m ary judgm ent if there is “no genuine dispute as to any

m aterial f act,” and “the party in whose f avor judgm ent is entered is entitled to judgm ent as

a matter of law.” Md. Rule 2-501(f ). In reviewing a circuit court’s grant of sum ma r y judgm ent, we m

ust construe all f

acts, as well as the inf

erences that m ay reasonably be drawn
f rom those f

acts, in a light m ost f

avorable to the non-m oving party , in this case, appellants. May v. Air & Liquid Sys., Inc. , 446 Md. 1, 8 (2015). Because a grant of sum m ary judgm ent is predicated upon a ruling on a question of law and not a dispute of f a c t , our review is de

novo. Id.

VIII. History of the “Apparent Manufacturer” Doctrine Bef ore proceeding any f

urther with our analy sis of the i s s u e s , we f eel im pelled to provide an account of the history of the “apparent m anuf acturer ” d o c t r i n e, tracing its decisional evolution in the context of the s u c cessive Restatements issued by the Am erican
Law Institute, notably : the Restatement o f T o r t s (“the First Restatement ”), then the
Restatement ( Second

) of Torts (“the Second Restatement ”), a n d f inally , the Restatement

-13-( Third

) of Torts: Products Liability (“the Third Restatement ”). W e believe that account will provide som e helpf

ul assistance in understanding the developm ent and current nat ure and
scope of the “apparent m anuf acturer” doctrine and thereby provide guidance in addressing the central question of

this appeal: whether Pf

izer was an “apparent

m anuf acturer” of

Insulag.
A. Ref erences to what was to bec o me known as the “apparent m anuf acturer” doctrine
f irst appeared in judicial decisions of the early twentieth century

. By the 1930’s, this 8
doctrine had gained enough notoriety that it was included in the 1934 publication of the First
Restatement , as Section 400, under the rubric: “Vendor Selling as His Own Product Chattel Made by Another.” It asserted:
One who puts out as his own product a chattel m anuf actured by another i s s u b

ject to the sam e liability as though he were its m anuf acturer. Restatement of Torts , § 400 (1934). That articulation of what was to be dubbed the “apparent m anuf acturer” doctrine conf ined the application of that doctrine to just sellers and distributors of goods or, in other

w o r d s , only to those in the chain of distribution of the product in question, a constra i n t reaf f irm ed by com m ent a to that section, which def ined, “one who puts out a chattel,” as “any

W illson v. Faxon, W

illiams & Faxon , 101 N.E. 799 (N.Y. 1913), and T h o rnhill v. 8 Carpenter-Morton Co. , 108 N.E. 474 (Mass. 1915). -14-one who supplies it to others f or their own use or f

or the use of third persons, either by sale

or lease or by gif

t or loan.” And a central f eature of that doctrine, though unexpressed in the body of Section 400, was, according to com m ent c to Section 400 of the First Restatement ,

a buy er’s reliance upon the care t aken by the seller, who puts out a product as if it were his

own. As that c o mm ent 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 m anuf

acturer,” if

, “because of som e negligence in its f abrication o r t hrough lack of proper inspection during the process of m anuf acture, the article is in a dangerously def ective condition which the vendor could not discover af ter it was delivered to him .” Or,

as it was m ore succinctly put by the Suprem e Court of Errors of Connecticut, in a decision 9
which cited a “Tentative Draf t” of what would l a t e r b e c o m e Section 400 of the First
Restatement , a seller, by “putting out a chattel as his own product” and thereby “induc[ ing] reliance,” by the purchasing public, “upon his care in m aking it,” is estopped f rom deny ing his identity as its m anuf

acturer. Burkhardt v. Armour & Co. , 161 A. 385, 391 (Conn. 1932) (citation and quotation om itted). The appellate decisions rendere d d u r i ng the early y ears of the “apparent

m anuf acturer” doctrine either expressly or im pliedly em

ploy ed an objective “reliance” test, in determ ining whether an individual or entity should be deem ed an “apparent m anuf acturer”
f or liability purposes. That is, the test was whether a reasonable consum er would have relied

That court is now known as the Supreme Court of Connecticut. 9
-15-upon a business’s label or advertising m aterials 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 , 164 So. 231, 231-32 (Miss. 1935); Slavin v. Francis H. Leggett & C o
. , 177 A. 120, 121 (N.J. Sup.
Ct. 1935); Burkhardt , supra , 161 A. at 391; Thornhill v. Carpenter-Mor t o n Co. , 108 N.E. 474, 491 (Mass. 1915); W illson v
. F

a x o n , W illiams & Faxon , 101 N.E. 799, 800-01 (N.Y. 1913). And, at least one f ederal a p p e l l a te court took “reliance” a step f urther and
p r o mu l gated an “actual reliance” test. Under that test, a claim ant m ust show not only that it was reasonable to rely upon the seller’s representation that it was the “ a p p a rent

m anuf acturer” of the def

ective product at issue but that he or she “actually ” did so. Carney

v. Sears, Roebuck & Co. , 309 F.2d 300, 304 (4th Cir. 1962) (apply ing Virginia law) (stating that “the basic test is whether or not the vendee reasonably believed in and relied upon the vendor’s apparent manufacture of the product”).
It is im portant to keep in m i n d , however, that, when the First Restatement was published, setting f

orth the “apparent m anuf

acturer” doctrine, products liability law, at that tim e, dif f ered f rom its current m anif

estation in two signif

icant respe c t s : First, actual

m anuf acturers of def

ective products and m ere non-m anuf acturing sellers of those products

were not generally subject to the sam e tort rules; and, second, the doctrine of strict liability had not y et gained m

uch currency

.

-16-Indeed, at the tim e that the First Restatement was issued, a non-m anuf acturing seller of a def ective product was usually (unless deem ed an “apparent m anuf acturer”) held to a lesser duty than the m anuf acturer of that com

m odity

. The general rule, then, was that, in the “absence of m isrepresent a tion or of negligence in the selection of goods, an interm ediate distributor [ was] liable to a custom er only f or def ects dis coverable upon reasonable inspection, unless he ha[ d] represented that he was the actual m anuf acturer[ .]” Swift & Co.

v. Blackwell , supra , 84 F.2d at 132. If he had, the First Restatement im posed a greater duty on him than the duty

placed on a non-manufacturing seller or distributor.
In other words, while an actual m anuf acturer of a chattel had a duty to warn potential

users of any danger that m ight arise f rom its i n t e n d e d use, Restatement of Torts , §§ 388, 394, a non-m anuf

acturing seller or d i s t ributor of that chattel generally did not. And, 10 although an actual m anuf acturer had a duty “to exercise reasonable care in the m anuf acture of a chattel which, unless caref ully m ade,” presented “an unreasonable risk of causing

Specif ically , Section 394 of the First Restatement provided that “[ t]he m anuf acturer 10 of a chattel, which he knows to be, or to be likely to b e , dangerous f or use, is subject to liability as stated in §§ 388 to 390,” where, am ong other things, a duty to warn others of the danger was im

posed; and the ensuing Section 395 provided that a “m anuf acturer who f

ails to exercise reasonable care in the m anuf acture of a chattel which, unless caref ully m ade, he should recognize as involving an unre a s o n a b l e risk of causing substantial bodily harm to those who lawf

ully use it f

or a purpose f

or which it is m anuf

actured and to those whom the supplier should expect to be in the vicinity of its probable use, is subject to liability f or bodily harm c a u s e d t o t h e m by its lawf ul use in a m anner and f or a purpose f

or which it is m anuf actured.” Restatement of Torts , §§ 394, 395. -17-substantial bodily harm ” to its user, Restatement of Torts , § 395, a non-m anuf acturing seller or distributor of

that chattel generally

had no such duty

. But, when a non-m anuf

a c t u r i n g seller or distributor of a chattel was deem ed an “apparent m anuf

acturer,” under Section 400 of the First Restatement , such a person or entity

was held to the sam e duty of care borne b y t h e a c t u a l ma nuf acturer. The scope of that

11 liability w a s n o t , y et, however, extended to tradem ark licensors or other non-sellers. That extension did not occur until the 1970’s, when, f or the f irst tim e, tradem ark licensors were held to be, under certain circumstances, “apparent m anuf acturers.”
F u rtherm ore, at the tim e of the First Restatement , unlike today , tort liability of the supplier of a def

ective chattel, whether t h e s u p p l i er was an actual m anuf acturer, a

The f ollowing is a sam

pling of cases where non-m anuf acturing sellers of def

ective 11 g o ods were held to the sam e duty of care as an actual m anuf acturer, under the “apparent m anuf ac t u r er” doctrine: W

illson v. Faxon, W

illiams & Faxon , 101 N.E. 799 (N.Y. 1913); Thornhill v. Carpenter-Morton Co. , 108 N.E. 474 (Mass. 1915); Tiedje v. Haney , 239 N.W

. 611 (Minn. 1931); Burkhardt v. Armour & Co. , 161 A. 385 (Conn. 1932); Slavin v. Francis H. Leggett & Co. , 177 A. 120 (N.J. Sup. Ct. 193 5 ) ; S w i f t & Co. v. Hawkins , 164 So. 231 (Miss. 1935); Swift & Co. v. Blackwel l , 8 4 F

. 2 d 1 30 (4th Cir. 1936); Dow Drug Co. v. Niema n , 1 3 N

. E.2d 130 (Ohio Ct. App. 1936); Armour & Co. v. Leasure , 177 Md. 393 (1939); Gordy v. Pan American Petroleum Corp. , 193 So. 29 (Miss. 1940); Commoners of S t a t e Ins. Fund v. City Chem. Corp. , 48 N.E.2d 262 (N.Y. 1945); Chapman Chemical Co. v. Taylor, for use and benefit of W

ilson , 222 S.W .2d 820 (Ark. 1949); Markel v. Spencer , 171 N.Y.S.2d 770 (App. Div. 1958); Rauch v. American Radiator & Standard San. Corp. , 104 N.W .2d 607 (Iowa 1960); Sears, Roeb u c k & Co. v. Morris , 136 So. 2d 883 (Ala. 1961); Carney v. Sears, Roebuck & Co. , 309 F.2d 300 (4th Cir. 1962) (apply ing Virginia law); Ford Motor Co. v. Mathis , 322 F.2d 267 (5th Cir. 1963) (apply ing Texas law); Putnam v. Erie City Mfg. Co. , 338 F.2d 911 (5th Cir. 1964) (apply ing Texas law); Standard Motor Co. v. Blood , 380 S.W .2d 651 (Tex. Civ. App. 1964). -18-non-m anuf

acturing seller, or an “apparent m a n u fa c t u r e r , ” w as predicated upon proof of som e negligent act. See Restatement of Torts , §§ 394-398. In instances where an “apparent

m anuf acturer” had not, itself

, com m itted a negligent act, the plainti ff, i n a tort-based products liability action, had to prove that som eone in the distribution chain , ty pically the actual

m anuf acturer, was negligent, as a prerequisite to the im position of liability on an “apparent

m anuf acturer.” 12
B.
W hen, in 196 5 , t h e Restatement ( Second ) of Torts (“the Second Restatement ”) was issued, it included a revised Section 400, which was nea r l y i d e n t ical to its predecessor, Section 400 of the First Restatement

. Com m ent d to Section 400 of the Second Restatement , in expounding upon the reliance-based rationale f or the “apparent manufacturer” doctrine, which had been set f

orth in the First Restatement , explained that an “apparent m anuf acturer”
“f requently ” induces consum er reliance in two way s: by causi n g a c h a ttel “to be used in reliance upon his care in m aking it”; and by causing a chattel “to be used in reliance upon a belief that he has required it to be m ade properly f or him and that the actor’s reputation is an

An exam ple of the application of this dated doctrine can be f ound in Burkhardt v. 12 Armour & Co. , supra , 161 A. 385. There, a consum er suf f ered a m ortal injury f

rom eating the contents of a can of corned beef

. Em bedded in the beef

was a thin piece of

tin, which, when it was swallowed by that consum er, caused f atal lacerations to her esophagus. Id. at 387. Although the Am erican distributor of that def ective canned f

ood product was h e ld liable to the decedent consum er’s estate, as an “apparent ma n uf acturer,” that liability was based upon the negligence of the Argentinian packer of the def ective product. Id. at 391. Accord Thornhill v. Carpenter-Morton Co. , 108 N.E. 474 (Mass. 1915); W illson v. Faxon, W illiams & Faxon , 101 N.E. 799 (N.Y. 1913). -19-assurance to the user of the quality of the product.” Restatement ( Second ) of Torts , § 400,

cm t. d (1965).
W hile leaving largely undisturbed the explication of the “apparent m anuf acturer” doctrine that appeared in the First Restatement , the Second Restatement broke new ground by adding Section 402A, entitled “Special Liability of Seller of Product f or Phy sical Harm
to User or Consum er,” to its text, w h i c h e x tended the liability of sellers by prescribing a doctrine of

strict liability

as to those in the chain of distribution. Specif ically , it stated that “[ o]ne who sells any product in a def ective condition unreasonably dangerous to the user or

consum er or to his property ” was liable f or any phy sical h arm caused by that condition to “the ultim ate user or consum er, or to his property ,” even when “the seller ha[ d] exercised all possible care in the preparation and sale of his product.” Or, as expressed in com m ent f to 13

In its entirety , Section 402A provides: 13 (1) One who sells any product in a def ective condition unreasonably dangerous to the user or consum er or to his property is subject to liability f or phy sical harm thereby caused to the ultim ate user or consumer, or to his property , if (a) the selle r is engaged in the business of selling such a product, and (b) it is expected to and does reach the user or consum er without substantial change in the condition in which it is sold. (2) The rule stated in Subsection (1) applies although (a) the seller has exercised all possible care in the p reparation and sale of

his product, and -20-Section 402A, strict liability “applies to any person engaged in the bu siness of selling

products f

or use or consum

ption,” including “any

m anuf acturer of such a product” as well

a s “any wholesale or retail dealer or distributor.” Restatement ( Second ) of Torts , § 4 0 2 A ,

cm t. f

. During the decade that f

ollowed the publication of the Second Restatement , m ost state appellate courts that addressed this issue adopted the strict liabilit y d o c t r ine of Section 14
402A. Those states were joined by Mary land’s Court of Appeals, in Phipps v. General
Motors Corp. , 278 Md. 33 7 , 3 4 6, 352-53 (1976), where our highest Court adopted both Section 402A and its “of

f icial com m ents” as part of Mary land com m on law. Thereaf ter, in all jurisdictions that had adopted Section 402A (including Mary land), strict products liability

(b) the us e r or consum er has not bought the product f rom or entered into any

contractual relation with the seller. In Greenman v. Y

uba Power Products, Inc. , 377 P.2d 897 (Cal. 1963), a sem inal 14 decisio n , rendered several y ears bef ore the publication of the Second Restatement , the Suprem e Court of Calif

ornia adopted the doctrine of strict liability as to a m anuf

acturer of a def e c t i v e product, whose m alf unction resulted in personal injury to its user. Af ter p u blication of the Second Restatement , which, rely ing in part upon Greenm a n , e x t e n d e d s t r i c t liability to all s e l l ers “engaged in the business of selling” products, m ost state appellate courts f ollowed su i t a n d adopted Section 402A. See , e.g. , O. S. Stapley Co. v. Miller , 447 P.2d 248 (Ariz. 1968); Hiigel v. General Motors Corp. , 544 P.2d 983 ( C o l o . 1975); Garthwait v. Burgio , 216 A.2d 189 (Conn. 1965); W est v. Caterpillar Tractor Co., Inc. , 336 So. 2d 80 (Fla. 1976); Suvada v. W hite Motor Co. , 210 N.E.2d 182 (Ill. 1965); Ayr-W ay Stores, Inc. v. Chitwood , 300 N.E.2d 335 ( Ind. 1970); McCormack v. Hankscraft Co. , 154 N.W .2d 488 (Minn. 1967); Rosenau v. City of New B r u n s w i c k , 238 A.2d 169 (N.J. 1968); Keener v. Dayton Elec. Mfg. Co. , 445 S.W .2d 362 (Mo. 1969); Codling v
. P a g l ia , 298 N.E.2d 622 (N.Y. 1973); Lonzrick v. Republic Steel Corp. , 218 N.E. 2d 185 (Ohio 1966); W ebb v. Zern , 220 A.2d 853 (Pa. 1966); McKisson v. Sales Affiliates, Inc. , 416 S.W .2d 787 (Tex. 1967). -21-was im

posed o n a l l e n t i t ies in the distribution chain of a def ective product, f

rom the

m anuf acturer to the retail seller. That developm ent, som e courts and com m entato r s b e l ieved, called into question whether the “apparent m anuf acturer” doctrine retained any relevance, since the strict liability of Section 402A appeared to now “provide a rem edy f or consu me r s i n

j u r ed by unsaf

e products,” which was the “aim ” of the “apparent m anuf acturer” doctrine. Heel v. Sherman Equip. , 442 N.E.2d 199, 202 (Ill.1982); see David G. Owen and Mary J. Davis, 2 Owens & Davis on Products Liability , § 16:15, at 636 (4th ed. 2014). 15 But, in the y ears f

ollowing the wide s p r e a d a d option of strict products liability , the “apparent m anuf

acturer” doctrine did not f all into desuetude. In f

act, state and f

ederal courts began to apply that doctrine to entities outside the chain of distribution of def ective products,

In Hebel v. Sherman Equip. , 442 N.E.2d 199 (1982), the Suprem e Court of Illinois 15 noted that the “ i mp o s i t i on of tort liability based on a def endant’s status as the ‘apparent m anuf acturer’ of a harm -causing product predate[ d] by som e y ears the advent of the doctrine of strict liability in tort of suppliers of unreasonably unsaf e chattels.” Id. at 201. Then, o b serving that the “aim of the [ ‘apparent m anuf acturer’] doctrine clearly was to provide a rem edy f or consum ers injured by unsaf e products,” an “objectiv e [ n ow] achieved by the doctrine of strict products liability ,” it went on to declare that the “ f u nction of the apparent-manufacturer doctrine has, as it were, been absorbed by the theory of sellers’ strict liability in tort f or injuries caused by

unreasonably

unsaf e products.” Id. at 202.
Som e com

m entators agreed. In 2 Owens & Davis on Products Liability , § 16:15, at 636 (4th ed. 2014 ) , t h e authors of that text opined that, in light of “the f all of the privity def ense, the spread of ef

f ective d i s c o v e r y techniques f or uncovering both the identity and production m ethods of m anuf acturers, and, m ost im

portantly , the ad o p t i on of a general doctrine of strict products liability in t o rt,” the “apparent m anuf acturer” doctrine becam e “quaintly obsolete.” -22-such as tradem ark licensors. In so doing, those courts f requently relied upon com m ent d 16

to Section 400 of the Second Restatement , which f irst appeared as a 1948 revision to the First
Restatement . It provided in part:

The actor puts out a chattel as his own product in two t y p es of cases. The f

irst is where the actor appears to be the manuf acturer of the chattel. The second is where the chatte l appears to have been m ade particularly f or the actor. In the f

irst ty pe of case the actor f

requently causes the chattel to be used in reliance upon his care in m aking it; in the second, he f requently causes the chattel to be used in reliance upon a belief that he has required it to be m ade prop e r l y f o r him and that the actor’s reputation is an assurance to the u ser of the quality of the product.

. . . Thus, one puts out a chattel as his ow n product w hen he puts it out under his nam e or affix es to it his trade nam e or tradem ark. W hen such identif ication is ref

erred to on the label as an indication of the quality or wholesom eness of the chattel, there is an added em phasis that the user can rely upon the reputation of

the person so identif

ied.
Restatement ( Second

) of Torts , § 400 cm t. d ( e mp h a s i s added). In sum , com m ent d

seem ingly im

posed “apparent ma n u f

acturer” liability on one who “af f ixes to [ a def

ective product] his trade nam e or tradem ark,” regardless of whether that individual or entity play ed no role in the m anuf

acture or distribution of

that product. Thereaf ter, judicial decisions considering the applicability of t h e “apparent

m anuf acturer” doctrine, under Sec t i o n 4 0 0 of the Second Restatement , to tradem ark licensors

See , e.g. , Carter v
. Joseph Bancroft & Sons Co. , 360 F. Supp. 1103, 1107 (E.D. 16 Pa.1973); Connelly v. Uniroyal, Inc. , 389 N.E.2d 155, 161, 163 (Ill. 1979); Brandimarti v. Caterpillar Tractor Co. , 527 A.2d 134 (Pa. Super. Ct. 1987). -23-f

e ll “roughly into three categories” : (1) decisions “holding that a non[ -]seller tradem ark 17
licensor could be held liable as an apparent manufacturer if it exercised substantial control

over the production of the product” ; (2) decisions “holding that a non[ -]seller trad e ma r k 18
licensor m ay be held liable as an apparent m anu f a c t u r e r , despite having had little or no participation in the design or m anuf acture of a product, by reason of the likelihood that buy ers or users of the product would rely on the tradem ark as an assurance of the product’s quality ” ; and (3) decisions “which declined to h o l d t r a d em ark licensors liable under the

19 apparent m anuf

acturer doctrine in circum stances in which they had little or no involvem ent in the design or m anuf

acture of the product.” As we shall see, in the f ollowing subsection 20

See Lou v. Otis Elevator Co. , 933 N.E.2d 140, 147 (Mass. App. Ct. 2010). 17 See , e.g. , Connelly v. Uniroyal, Inc. , 389 N.E.2d 155, 161, 163 (Ill. 1979) (holding 18 that a tradem ark licensor could be f ound liable as an “apparent m anuf acturer” of a def

ective tire where the licensor was not in the distribution chain but owned 95 per cent of the shares of the actual m anuf

acturer, and the actual m anuf acturer f ollowed “detailed inf

orm ation as to the [ m anuf

acturing] m ethods, processes and f orm ulas” provided by

the licensor). See , e.g. , Carter v. Joseph Bancroft & Sons Co. , 360 F. Supp. 1103, 1107 (E.D. 19 Pa.1973) (im

posing “apparent m anuf

acturer” liability upon a tradem ark licensor where it perm itted the actual m anuf acturer to state on its “label that the article was made according to specif ications and quality standards prescribed and controlled by [ the licensor]”); Brandimarti v. Caterpillar Tractor Co. , 527 A.2d 134 (Pa. Super. Ct. 1987) (holding that a tradem ark licensor could be liable as an “apparent m anuf acturer” of a def

ective f orklif t, actually m anuf

actured by its subsidiary , based upon its decision to “perm it its nam e to appear on the equipm ent,” thereby inducing “others to purchase the product in reliance on the skill and reputation associated with [ its] nam e”). See , e.g. , Harrison v
. B

. F

. G oodrich Co. , 881 So.2d 288 (Miss. Ct. App. 2004); 20 Burkert v. Petrol Plus o

f N a u g atuck, Inc. , 579 A.2d 26 (Conn. 1990); Hebel v. Sherman Equip. , 442 N.E.2d 199, 202 (Ill.1982). -24-of

this opinion, application of the “apparent m anuf acturer” doctrine to tradem ark licensors led to the developm ent of an alternative test, f or determ ining whether a non-selling def endant should be deem ed an “apparent m anuf acturer,” in a produ c t s liability action, nam ely , the “enterprise liability ” test.
C.
In 1998, the “apparent m anuf acturer” doctrine was presented, in a slightly m odif ied
f orm , in the Restatement ( Third ) of Torts: Products Liability (hereinaf ter “the Thir d
Restatement ”), in Section 14, which is entitled “ S e l ling or Distributing as One’s Own a Product Manuf

actured by

Another.” That section states, in pertinent part:
One engaged in the business of selling or otherwise distributing products who s e l l s or distributes as its own a product m anuf actured by another is subject t o t h e sam e liability as though the seller or distributor were the product’s m anuf acturer. The author s of the Third Restatement acknowledged that the adoption of strict liability , in t h e y ears f

ollowing the publication of the Second Restatement , called into question the continued vitality of the “apparent manufacturer” doctrine, noting that [ a]f ter i n c l u sion of § 402A in the Restatem ent, Second, im posing strict liability on all com m ercial s e l l e r s of def ective products f or harm caused by product def ects, i t was questionable whether § 400 rem ained r e levant in the context of products liability

. On c e § 4 0 2A im posed strict liability on all product sellers it m ade little, if any , dif f erence whethe r the seller of a def ective product was a retailer or a manufacturer.
Restatement

( Third ) of Torts: Products Liability , § 14, cm t. a (1998).

-25-Nonetheless, com m ent c to Section 14, largely echoing the com m ents to Section 400

of the First and Second Restatements , which we have previously discussed, appe a red to 21 retain the rationale, if

not the test, of “consum er reliance,” as to non-manufacturing sellers of def ective products. Com m ent c to Section 14 provides that, when “a com m ercial seller sells a product m anuf

actured by another under its own tradem ark or logo, the seller is liable

as though it were the m anuf acturer of the product” because “the seller is presum ed to cause the product to be u s e d o r consum ed, in part at least, in reliance on the seller,” or, in other words, the “seller’s reputation is an implied assurance of the quality of the product[ .]” Recognizing, h o wever, that som e courts had begun to apply the “apparent

m anuf acturer” doctrine to entities outside the chain of distribution of def ective products, the d r a f ters of the Third Restatement attem pted to clarif

y , in com m ent d to Section 1 4 , w h e n non-sellers, specif

ically tradem ark licensors, m ay be held liable f or def ective products, under an “apparent manufacturer” theory :

d. Liability of trademark licensors. The rule stated in this Section does not, by its term s, apply to the owner of a tradem ark who licenses a m anuf

acturer to place the licensor’s tradem ark or logo on the m anuf

acturer’s product and distribute it as though m anuf actured by the licensor. In such a case, even if purchasers of the product m ight assum e that the tradem ark owner was the m anuf acturer, the licensor does not “sell or distribute as its own a product m anuf

actured by another.” Thus, the m an uf acturer

See Restatement of Torts , § 400, cm t. c; Restatement ( Second ) of Torts , § 4 0 0 , 21 CMT. d. -26-m ay be liable under §§ 1- 4, but the licensor, w ho does not [22] sell or otherw ise distribute products, is not liable under this Section of this Restatement.
Tradem ark licensors are liable for harm caused by defective products distributed under the licensor’s tradem ark or logo w hen they participate s u b stantially in the design, m anufacture, or distribution of the li c e n s ee’s products. In these cir c u mstances they are treated as sellers of the products bearing their tradem arks. (Em phasis added.)
A cursory reading of

com m ent d could easily lead to the m istaken conclusion that it has abandoned “reliance,” either as a rationale underly ing the “apparent m anuf acturer” doctrine or as a test f

or determ ining its applicability to a particul a r def endant. Because, however, the very prem ise of com me n t d i s its applicability to tradem ark licensors, that

com m ent, by im

plication, incorporates “reliance,” to a lim ited extent. For, as has long been recognized, consum ers have com e “to rely m ore and m ore upon tradem arks and tradenam es

as sy m bols of quality and guaranties of satisf action.” Frank I. Schechter, The Rational Basis of Trademark Protection , 40 Harv. L. Rev. 813, 824 (Apr. 1927).
Consum er reliance upon trademarks as sy m bols of product quality , in turn, supplies the underly ing rationale f

or im position of “apparent m anuf acturer” liability on what is, af ter

Sections 1 through 4 of the Third Restatement set f orth the general rules of products 22 liability

. Although it is not directly relevant to this case, we f eel im pelled to no t e t h a t t h e Court of Appeals has expressly disapproved Section 2 and has declined to adopt it as the law of Mary land, choosing instead to retain Section 402A of the Second Restatement , including its “consum er expectations” test, in all strict products liability actions in Mary land. Halliday v. Sturm, Ruger & Co. , 368 Md. 186, 193-209 (2002). -27-all, a class of non-selling def endants, that is, tradem ark licensors. As one com m entator has explained i t , t h e “apparent m anuf acturer” doctrine, as applied to tradem ark licensors,
“f ocuses on what the tradem ark owner did to induce consum ers to believe that the tradem ark

owner actually m anuf

actured the goods in question and purchase those goods in reliance on this specif

ic belief .” David J. Frankly

n, The Apparent Manufacturer Doctrine, Trademark
Licensors and the Third Restatement of Torts , 49 Case W

. Res. L. Rev. 671, 693 (Sum m er, 1999). But, while com m ent d has not abandoned the “reliance” r a t i o n a l e underly ing the “apparent m anuf

acturer” doctrine, it does represent a shif t “away f rom the earlier em

phasis

on a consum er’s reliance on the presence of a t r a d e m ark as indicative of ‘an assurance of quality ,’ in f

avor of an approach that f

ocuses on whether the tradem ark owner in f act actively worked to assure the quality o f t h e t r a d e marked product.” Erin K. Higgins, W hat’s in a Name? Possibly, Strict Liability as an Apparent Manufacturer , 78 Def

. Couns. J. 355, 359 (July 2011). Its test, f

or determ ining whether a trade ma r k l i c e n sor should be deem ed an “apparent m anuf

acturer,” f ocuses on the licensor’s p a rticipation “in the design, m anuf acture,

or distribution of the licensee’s products” and is predicated on what has been designated the “enterprise liability ” test, according to which “a tradem ark licensor m ay be held vicariously liable f or the torts of its licensee if the licensor is a ‘signif ican t p articipant’ in the overall enterprise that places a def ective product into the stream of com m erce.” Frankly n, supra , at

-28-706. It thereby f ocuses “alm ost entirely on the licensor’s control over, or involvem ent in, its licensee’s af

f airs.” Id.

IX . The Tests for Determining Wh ether an Entity is an “Apparent Manufacturer”

and Their Application to the Instant Case As our review of the history of the “apparent m anuf acturer” doctrine has shown, three

tests f or determ ining whether an entity m ay be f ound to be an “apparent m anuf acturer” have

em erged f

rom the caselaw: “objective” reliance test, “actual” reliance test, and wh a t h as been described as the “enterprise liability ” test, as set f orth in com m ent d to Section 14 of the Third Restatement

. Unf ortunately , the only two Mary land decisions, Armou r & C o
. v. Leasure , 177 Md. 393 (1939), and Telak v. Maszczenski , 248 Md. 476 (1968), that address the “apparent m anuf

acturer” doct r i n e d o not designate a specif ic test to be applied. But, 23

on the other hand, no m atter which of the three tests we em

ploy , we reach the sam e result:
Pf izer cannot be deem ed an “apparent m anuf acturer” of Insulag, under the f acts of this case.

In Armour & Co. v. Leasure , 177 Md. 393 (1939), the Court of Appeals, in two 23 s entences and without analy sis, m erely stated that the non-m anuf acturing Am erican distributor of the def

ective product at issue “put it out as its own product, and thereby becam e subject to the sam e liability as though it were the original m anuf acturer.” Id. at 412 (citing Restatement of Torts , § 400). And, in Telak v. Maszczenski , 248 Md. 476 (1968), where the identity of the actual m anuf acturer of the purportedly def ective p r o duct at issue was “unm istakably clear,” the Court of Appeals held that “apparent m anuf acturer” liability could not be im posed on a non-m anuf

acturing seller of

that product. Id. at 487. -29-A. “Objective” Reliance Test

A m ajority of state and f

ederal appellate courts that have co n s i d e r e d this question have applied an objective test in determining reliance, that is, whether a reasonable consum er

w o u l d h a v e r e l ied upon a label or advertising m aterials of a product in purchasing it. A n early statem ent of this test appeared in Swift & Co. v. Blackwell , supra , 84 F.2d at 132, where the United States Court of Appeals f or the Fourth Circuit held that a wholesaler of a d e f e ctive can of evaporated m ilk was liable as an “apparent m anuf acturer” because “th e
average reader would certainly conclude f rom a perusal of the label that the goods in the can were the product of

” the wholesaler. See also Burkhardt , supra , 161 A. at 391 (upholding trial court’s f

inding that “the ordinary , rea s o n a b l e p e rson reading this label would have
inf erred that Arm our & Co. was the packer o f t h e p r o d u c t”); accord Hebel v. Sherman Equip. , supra , 442 N.E.2d 199 (Ill. 1982); Markel v. Spencer , 171 N.Y.S.2d 770 (App. Div. 1958) ; C h a p m a n Chemical Co. v. Taylor, for use and benefit of W ilson , 222 S.W .2d 820 (Ark. 1949); Commn’rs of State Ins. Fund v. City Chem. Corp. , 48 N.E.2d 262 (N.Y. 1945); Swift & Co. v. Hawkins , supra , 164 So. 231 (M i s s . 1 9 3 5 ); Slavin v. Francis H. Leggett &
Co. , supra , 177 A. 120 (N.J. Sup. Ct. 1935).
In a p p l y ing the “objective” reliance test to the f acts of the instant case, we m ust consider the question whether, in doing so, we should view reliance f rom the vantage point of an ordinary , reasonable consum er or f rom the perspective of a reasonable purchaser, in the

-30-position of the actual purcha s e r . A s t h ere are no Mary land appellate decisions directly on

point, we turn to the decision of the Suprem e Court of

Illinois, in Hebel v. Sherman Equipment , s u

p r a , 4 4 2 N.E.2d 199, f

or assistance, as it involved a very sim ilar set of circum stances. That Ill i n o i s c ase, like the case bef ore us, dealt with the purchase of a def ective product by a com m ercial en t i t y and not by a consum er, which f actually di s t inguishes it, and the instant case, f rom the vast m ajority of “apparent m anuf acturer”

cases. That, of course, is not surprising because, as the Illinois Suprem e Court observed, the “apparent m anuf

acturer” doctrine “was developed in the context of suits by consum ers
aga inst sellers of dangerous chattels,” and “[ nearly all the cases im posing liability on this basis involved] def

endants who were retailers or distributors.” Id. at 202. Rohn Hebel wa s s i x teen y ears old when, while working at the Glenwood Standard Service Station and Car W ash, his f oot was caught in a “convey or,” a com ponent of the service s t a t i o n’s car-washing apparatus. He subsequently brought a products liability suit against Sherm an Industries, Inc., a m anufa c t u r e r o f a u t o m atic car-washing m achinery (which

we shall hereaf

ter ref er to as “Sherm an Equipm ent”), alleging that the “c a r w a s h i ng

m achine,” at the Glenwood station, had been “designed, m anuf actured and sold by Sherm an [ Equipm ent] and that it was in a def ective and unreasonably d a n g e r ous condition.” Id. at 200. The Glenwood station had, in f act, purchased all of its car-washing equipm ent f rom

a distr i b u t or of autom otive cleaning m achinery , Haverberg Auto Laundry Equipm ent

-31-Com

pany . That com

pany , in turn, had obtained “nearly all” of its equipm ent f rom Sherm an Equipm ent (whose products it regularly distributed), except f or t h e “ convey or” at issue,

w h i c h i t had, itself

, designed and m anuf

actured. Id. at 200-01. As it was undisputed t h a t Sherm an Equipm ent did not m anuf acture the def

ective convey or, Hebel claim ed that, since all of the other car-washing equipm ent prom inently display ed Sherm an Equipm ent’s trade

nam e and tradem ark, it should be de e m ed an “apparent m anuf acturer” of the entire apparatus, including the def

ective convey or. Id. at 201. Nonetheless, t h e Suprem e Court of Illinois f ound that Sherm an Equipm ent was not

an “apparent m anuf

acturer” of the purportedly def ective convey or as it had not held itself out to the public “as the m anuf acturer of Haverberg’s convey or.” Id. at 203. The “prim ary rationale f

or im posing liability on the apparent m anuf acturer of a def

ective pr o d u ct,” explained the Illinois court, “is that it has induced the purchasing public to believe that it is the actual m anuf

acturer, and to act on this belief —that is, to purchase the product in reliance

on the apparent m anuf

acturer’s reputation and skill in m aking it.” Id. (citing R e s t a t e m ent ( Second ) of Torts , § 400 cm t. d). Theref ore, “whether a holding out has occurred mu s t b e judged f rom the viewpoint of the purchasing public, and in light of circum stances as of the
tim e of purchase ,” declared that court. Id. (em phasis added). Illinois’s highest court, consequently , rejected the claim that the proper f ram e of ref erence was a “reasonable person in [ Hebel’s] position,” observing:

It is clear, a n d [ Hebel] does not seriously dispute, that the various car-washing m achines m ade by Sherm an [ Equipm ent],

-32-as well as the convey or m ade by Haverberg, were individual pieces of equipm ent which were purchased and sold as separate item s, and apparently

also were operated independently of one another. That a casual observer, view ing the m achines after their purchase and installation, m ight think otherw ise does not m ean that a reasonable purchaser of car-w as h i ng equipm ent, such as Glenbrook, w ould rely on such an im pression. . . . . The m ere fact that [Sherm an Equipm ent’s] m achines, w hich bore its nam e, w ere sold by Haverberg and u s e d by Glenbrook in conjunction w ith a separate , u n l a b e l e d piece of equipm ent does not, w e think, identify S herm an [Equipm ent] in the m ind of the reasonable purchaser as the m aker of t h e unlabeled m achine , or render Sherm an [ E q uipm ent] liable f

or injuries caused by it under the apparent-manufacturer rule. Id. (em phasis added). Apply ing the sound reasoning of Hebel , we c o n c l u d e t h at, to prevail in this case, under the “objective” reliance test, the Stein f am ily m ust show that a reasonable purchaser of ref ractory m aterials, that is, Bethlehem Steel, during the tim e period f rom 1968 to 1974, would have relied upon Pf izer’s reputation and assurances of quality in pu rchasing the ref ractory m aterial at issue, nam ely , Insulag. “That a casual observer” m ight have believed that Pf izer was the manufacturer of Insulag “has no bearing on the issue” bef ore us. Id.

24

But we hasten to add that, in an “apparent m anuf acturer” case involving a consum er 24 product, the rule enunciated in t h e i n stant case becom es, as a practical m atter, m erely a question of whether an ordinary , reasonable consumer purchaser would have relied upon a reputed “apparent m anuf

acturer’s” reputation and assurances of quality in deciding whether to purchase the product at issue. The rule, in the instant case, is dif f erent precisely because the product at issue was not a consum er product, that is, a product “used or bought f or use prim arily f

or personal, f

am ily , or household purposes.” Md. Code (1975, 2013 Repl. Vol.), Com m ercial Law Article, § 9-102(23). F urtherm ore, it was purchased by a sophisticated user. -33-It is clear t h a t, under the “objective” reliance test, the Stein f am ily ’s claim f

ails. Given that Bethlehem Steel was unquestionably a sophisticated purchaser of Insulag and that Insulag was not a consum er product, we believe that no reasonable f act f inder could conclude that a reasonable person, in the position of a Bethlehem Steel purchasing m anager during the period f rom 1968 through 1974, who had purchased Insulag f or decades f

rom Quigley , could hav e p u r chased Insulag in reliance upon Pf izer’s reputation and assurances of quality

. Rather, it is m anif

est that Bethlehem Steel knew, at all relevant tim es, that it was purchasing Insulag f rom Quigley , not Pf

izer. See Telak , supra , 248 Md. at 487 (holding that, where the
i d e n t ity of the actual m anuf acturer of a product was “unm istakably clear,” a wholes a l e distributor of

that product cannot be deemed an “apparent m anuf acturer”).
B. Actual Reliance Test
At least one court, in determ ining whether a def endant is an “apparent m anuf acturer,” has applied an “actual reliance” test, under which a plaintif f m ust prove that he or she actually and re a s o nably relied upon the reputed “apparent m anuf acturer’s” tradem ark, reputation, or assurances of product quality , in purchasing the def e c t i ve product at issue. Carney v. Sears, Roebuck & Co. , supra , 309 F.2d 300, 304 (4th Cir. 1962). Because, in Carney , the pla i n tif f was also the purchaser of the def ective product at issue, the appellate court did not have to consider whether it is the plaintif f ’s actual reliance

or the purchaser’s that is dispositive. In the instant case, regardless of whether we apply the “actual reliance” test f

rom the perspective of the plaintif f (that is, the user) or the wholesale

-34-purchaser, the end result is t h e s a m e. If we assum e that it is the user’s perspective that

governs, then, given the total absence of any m ention, by the decedent in his 1987 deposition testim ony , of any use of or exposure to Insulag, or any m ention whatsoever of Pf izer, i t is clear that there was no reliance by the deceden t suf f icient to deem Pf

izer the “apparent

m anuf acturer” of

that product.
If , on the other hand, we assum e that the purchaser’s perspective governs the application of the “actual reliance” test, then the Stein f am ily ’s claim f

ares no better, as the only evidence establishes that Bethlehem Steel had purchased Insulag directly f rom Quigley
f or m any y ears bef

ore its acquisition by Pf

izer and that, af

ter that corporate acquisition, it continued to do so without interruption. Nor was any evidence adduced that Bethlehem Steel actually relied upon Pf

izer’s trademark, reputation, or assurances of quality , in deciding to purchase Insulag, and theref ore, the Stein f

am ily ’s “apparent m anuf

acturer” claim m

ust f ail, regardless of

whose “reliance” we f

ocus on. C. “Enterprise Liability ” Test
A f ew c o u r t s h a ve not appeared to require that a plaintif f , raising an “apparent

m anuf act urer” claim , show any reliance upon the def endant’s reputation or assurances of quality , apply ing instead the “enterprise liability ” test , that is, whether the def endant “participat e [ d ] s u bstantially in the design, m anuf acture, or distribution” of the def ective product at issue, Restatement ( Third ) of Torts: Products Liability , § 14, cm t. d, provided, of

-35-course, that the def endant’s tradem ark appe a r e d o n t h at product. For exam ple, in Lou v. 25
Otis Elevator Co. , 933 N.E.2d 140 (Mass. App. Ct. 2010), the Appeals Court of Massachusetts af

f irm ed the im

position of “apparent m anuf acturer” liability on a tradem ark licensor, because there was suf f ic i ent evidence that it “participated substantially in the design

or m anuf acture of ” the def ective produc t a t i s s u e. Id. at 147-50. Accord Connelly v. 26 Uniroyal, Inc. , 389 N.E.2d 155, 161, 163 (Ill. 1979) (im posing liability on tradem ark licensor because such a licensor “is an integral part of the m arketing enterprise, and its participation
in the prof

its reaped by placing a def ective product in the stream of com m erce presents the

sam e pu b l i c p o licy reasons f or the applicability of strict liability which supported the
im position of such liability on wholesalers, retailers and lessors”) (internal citation om itted); Bathory v. Proctor & Gamble Distrib. Co. , 306 F.2d 22 (6th Cir. 1962) (apply ing Michigan law ) (im posing liability on m arketing subsidiary of m anuf acturing corporation, reasoning 27
that “one departm ent of a m anuf acturing a n d s elling enterprise which puts a dangerous product into the channels of trade [ cannot] escape liability by say ing that it di d not know

As we observed earlier, during our explicat i o n o f t h e history of the “apparent 25 m anuf actu r er” doctrine, “reliance,” under this theory of the “apparent m anuf acturer” doctrine, serves merely

as the rationale, not the test, f or its applicability

. The def ective product at issue, in that case, a n e s c a l a t or in which the plaintif f ’s 26 “hand became trapped,” “prom inently ” bore the def endant’s tradem ark but “no other trade nam e or m ark.” Lou v. Otis Elevator Co. , supra , 933 N.E.2d at 142-43. W e note that, m ore than thirty y ears af ter the decision in Bathory was rendered, the 27 Suprem e Court of Michigan decline d “ t o supplem ent [ its] current products liability jurisprudence with the apparent-manufacturer doctrine.” Seasword v
. H i l t i , I n c
. , 5 3 7 N.W .2d 221, 224 (Mich. 1995). -36-what another departm ent of such an integrated operation was doing”). S e e a lso W atson v. Dillon Cos. , 797 F. Supp. 2d 1138, 1162 (D. Colo. 2011) (apply ing Colorado law) (declining to decide whether reliance is an element of an “apparent manuf acturer” claim). 28
As noted earlier, the “enterprise liability ” test, as articulated in the Third Restatement , applies only to tradem ark licensors. In the instant c a s e , t h e re was no tradem ark licensing
agreem ent between Pf

izer and Quigley , and thus, it would appear t hat the “enterprise liability ” test is inapplicable. But even if their relationship were deemed analogous to that between a tradem ark licensor and its licensee, given that, once Pf izer had acquired Quigley and, thereaf

ter, throughout the relevant tim e period, f rom 1968 to 1974, Pf

izer’s tradem ark appeared on advertisem ents and prom otional m aterials f or Insulag, as well as invoices, f rom sales of Insulag, issued by Quigley , Pf izer would not qualif

y as an “apparent m anuf

acturer,” under that test, because there is no evidence that it participated “substantially ” in the design,

m anuf acture, or distribution of

Insulag. According to the “enterprise liability ” test:

W e m ake one additional observation regarding the “enterprise liabil i t y ” t e s t

. S e v e r a l 2 8 of the cases, cited by the Lou Court, supporting that test, 933 N.E.2d at 147, did not actually consider, expressly or im pliedl y , the “apparent m anuf acturer” doctrine, in holding that tradem ark licensors c o u l d be strictly liable f or def ective products, which bore their tradem arks, provided that those licensors were substantially in v o l v ed in placing such products into the stream of com m erce. See , e.g. , Torres v. Goodyear Tire & Rubber Co. , 786 P

. 2d 939, 945 (Ariz.1990) (im posing liability on tradem ark licensor, under “enterpris e liability ” theory , reasoning that “the brain that so com petently and thorou g h l y directs the entire enterprise m

ust be liable f

or the acts of its appendages”); Kasel v. Remington Arms Co. , 101 Cal. Rptr. 314, 322 (Cal. Ct. App. 1972) (im posing strict liability o n A me r i can am m unition m anuf

acturer f or harm caused by d e f

e c t ive shotgun shell, m anuf actured by M e x i c a n af

f iliate, because Am erican com pany “was an integral part of the com pos i t e business enterprise which placed the def ective shell in the stream

of com m erce”). -37-Trade ma r k l icensors are liable f or harm caused by def

ective products distributed under the licensor’s trade m a r k o r l o g o w h en they participate substantially in the design, m anuf acture, or distribution of the licensee’s products. In th e s e c i rcum stances they are treated as s e l l e rs of the products bearing their tradem arks.
Restatement

( Third ) of Torts: Products Liability , § 14, cm t. d. The St e i n f

am ily asserts that the invoices and prom otional m aterials, issued by Quigley af

ter its acquisition by Pf izer, indicating that both Pf izer and Qui g l e y w e r e

“ Manuf acturers of Ref

ractory Products,” create a jury question of whether Pf izer par t i c i p a t e d “substantially ” in the distribution of Insulag and that, indeed, we should regard Pf izer as a seller of that asbestos-containing product. They attem pt to bolster that a s s e r t i o n w ith the

o b s e r v ation that, af

ter Pf izer’s acquisition of Quigley , certain Pf izer sales reports a n d Securities and Exchang e Com m ission (“SEC”) f ilings included inf

orm ation regarding Quigley ’s sales of

Insulag. Although Pf

izer’s tradem ark appeared on Quigley ’s invoices and p r o mo tional

m aterials, no evidence was presented that P f i zer participated “substantially [ or f or that

m atter, at all] in the design, m anuf acture, or distribution of

” Insulag. For one thing, the Stein
f am ily ’s assertion that the description, “Manuf acturers of Ref

r a c t o r y P r o d u c t s , ” on Quigley ’s invoices and prom otional m aterials, in com bination with the depiction of both Quigley ’s and
Pf izer’s tradem arks, suggests that Pf izer was holding itself out as a m anuf acturer of Insulag, is ref uted by the sim

ple observat i o n that, bef

ore its acquisition by Pf

izer, Quigley issued subst a n t i a l ly sim ilar docum ents, with only its own tradem ark, but nonetheless stated:

-38-“Manuf

acturers of Ref

ractory Products.” Moreover, the invoices and prom otional m aterials indicated no mo r e t h a n that Quigley was a subsidiary of Pf izer, and, as f

or the reports and SEC f ilings, it would be expected that a corporate parent would account f or the sales of

its subsidiaries, and, indeed, Pf izer was legally

obligated to do so in its SEC f ilings.
All of the other evidence indicates, however, that, both bef ore and af ter its acquisition by Pf izer, Quigley m anuf

actured and designed Insulag and sold i t t o Bethlehem Steel, without any signif

icant p articipation by Pf izer. That evidence established that Quigley shipped that product directly to Bethlehem Steel, that Pf izer did not design, m anuf acture, or distribute Insulag, and that Insulag was m anuf actured by Quigley long bef ore its acquisition by Pf izer. Finally , even af

ter construing all of the f ac ts, as well as the inf

erences that m ay reasonably

be drawn f

rom those f acts, in a light m ost f

avorable to the Stein f

am ily , May v.
Air & Liquid Sys., Inc. , supra , 446 Md. at 8, we conclude that the Stein f am ily has f

ailed to

m ake its case that, under any of the three af orem entioned tests, Pf

izer should be deem ed an “apparent m anuf

acturer” of Insular. Accordingly , we af f irm the circuit court’s grant of

sum m ary judgm ent. MOTION TO TAKE JUDICIAL NOTICE D E N IED. JUDGMENT OF THE CIRCUIT C O U R T F O R B A L T I M O R E C I T Y AFFIRMED. COSTS TO BE P AID BY APPELLANTS.

-39-