Ford Motor Co. cannot be held liable in a case involving asbestos-containing auto parts manufactured and distributed by its subsidiary in the United Kingdom, the state Superior Court has ruled.
A three-judge panel Wednesday upheld Philadelphia Court of Common Pleas Judge Arnold L. New’s grant of summary judgment in favor of Ford. The panel was composed of Judges Kate Ford Elliott and Sallie Updyke Mundy, and Senior Judge John L. Musmanno.
The suit was filed by Paul Rowland in 2011 and continued by way of Amy Smith, the administratrix of his estate. Rowland alleged that exposure to Ford of Britain and Borg & Beck Britain (BorgWarner’s English subsidiary) parts in Britain contributed to his development of mesothelioma. New granted summary judgment in favor of Ford in January.
Musmanno wrote in the Superior Court’s memorandum that Smith claimed on appeal that the parts Rowland was exposed to were marketed as Ford products and that Ford had significant control over its subsidiary.
In response to the plaintiff’s appeal, Musmanno said the court adopted the reasoning set out in New’s January opinion, in which New wrote that Rowland did not pierce the corporate veil of Ford Motor Co. Ltd. (referred to as Ford of Britain).
New said a plaintiff must demonstrate that a parent company controls the subsidiary to a significant degree in order for piercing to be appropriate, providing evidence that the subsidiary was undercapitalized, the entities did not adhere to corporate formalities, or that the entities intermingled their affairs or funds.
“Plaintiff essentially seeks to hold defendant Ford Motor Co. liable based on its normal parent-subsidiary relationship with Ford of Britain,” New said. “Plaintiff has not demonstrated the level of domination and control necessary to pierce the corporate veil.”
Rowland did not sue Ford of Britain or Borg & Beck Britain, only their U.S. parent companies, New said. Rowland claimed that the parent companies “directly or indirectly” produced and supplied the parts at issue.
The alleged exposure occurred in Uttoxeter, England, from 1967 to 1983. There, Rowland’s father was an auto mechanic who used the Ford of Britain brakes and Borg & Beck Britain clutches at his garage. According to New, those parts were manufactured and supplied in England.
Rowland testified to having inhaled dust when he visited his father’s garage and when he came into contact with his father’s person and clothing at home.
Rowland also claimed to have been exposed to “original” Ford brakes on a single occasion when he and his father inspected Rowland’s 1990 Ford Mustang in Maryland, according to New, two years after Rowland moved to the United States.
New concluded, however, that compared to the alleged frequent exposure in England, Rowland’s one-time exposure in Maryland was minimal in terms of developing mesothelioma.
According to New, Rowland argued that Ford “dominated and controlled” Ford of Britain by including its financial information in Ford’s annual reports, approving Ford of Britain’s officers and directors, and supervising its operations and product lines, among other things. Ford claimed that its English subsidiary was a fully funded, independent manufacturer of parts.
The court was not persuaded by Rowland’s argument to pierce Ford of Britain’s corporate veil, New said.
“A case for piercing is not made out by merely showing the parent owned the subsidiary, the parent exercised some control over the subsidiary, and/or the parent and the subsidiary had similar names,” New said.
In his second argument, Rowland claimed that Ford and BorgWarner were liable as “apparent manufacturers” of the products in question.
New said according to the Restatement (Second) of Torts, a defendant may be liable as an apparent manufacturer of a product it does not actually manufacture but nonetheless “puts out as his own.”
Citing Brandimarti v. Caterpillar Tractor, New explained the state Superior Court ruled that Caterpillar was the apparent manufacturer of a forklift made by its subsidiary, Towmotor. The court reasoned that because the Towmotor forklift displayed the Caterpillar name, a purchaser could reasonably believe that he or she was buying a Caterpillar product.
However, New determined in Rowland’s case that the Ford name was not synonymous with Ford Motor Co. and that Borg & Beck Britain was its own, distinct company also. He added that “there is no indication that a[n] English user of the Ford of Britain and Borg & Beck parts would have thought those parts were manufactured by defendants Ford Motor Co. and BorgWarner.”
New said there was insufficient basis to hold Ford and BorgWarner liable for the parts Rowland’s father used in England.
“Ford Motor Co. and BorgWarner had little to no control over the ‘Ford’ and ‘Borg & Beck’ parts, and there is no indication that those parts were ‘put out’ as Ford Motor Co. and BorgWarner’s.”
Ford was represented by Sharon L. Caffrey and Robert L. Byer of Duane Morris.
“We are happy that the Superior Court judges after independently reviewing this case concluded that Judge New’s careful analysis of the issues was correct,” Byer said.
Benjamin Shein of the Shein Law Center in Philadelphia represented the plaintiff and did not return a call seeking comment.
(Copies of the 18-page opinion in Smith v. Ford Motor, PICS No. 14-1355, are available from The Legal Intelligencer. Please call the Pennsylvania Instant Case Service at 800-276-PICS to order or for information.) •