Opinion ID: 726718
Heading Depth: 2
Heading Rank: 2

Heading: Government Contractor Defense--Design Defect Claim

Text: 14 In Boyle v. United Technologies Corp., 487 U.S. 500, 108 S.Ct. 2510, 101 L.Ed.2d 442 (1988), the Supreme Court held that, under certain circumstances, government contractors are shielded from state tort liability for products manufactured for the Armed Forces of the United States. There is a significant conflict, the Supreme Court held, between state law that would hold government contractors liable for design defects in military equipment and the uniquely federal interest in immunizing the trade-off between greater safety and greater combat effectiveness. Id. at 511-12, 108 S.Ct. at 2518. The government contractor defense is derived from the government's immunity from suit when the performance of a discretionary function is at issue, the Court explained, and the selection of the appropriate design for military equipment to be used by our Armed Forces is assuredly a discretionary function. Id. at 511, 108 S.Ct. at 2518 (citing the Federal Tort Claims Act, 28 U.S.C. § 2680(a)). 15 The Supreme Court established a three-part test to determine if the government contractor defense applies: 16 Liability for design defects in military equipment cannot be imposed, pursuant to state law, when (1) the United States approved reasonably precise specifications; (2) the equipment conformed to those specifications; and (3) the supplier warned the United States about the dangers in the use of the equipment that were known to the supplier but not to the United States. 17 Id. at 512, 108 S.Ct. at 2518-19. The first two elements of the Boyle test ensure that the design feature in question was considered by a Government officer, and not merely by the contractor itself. Id. The third element is necessary to eliminate any incentive that the government contractor defense may create for contractors to withhold knowledge of risks.
18 As the district court recognized, the first prong of the Boyle test--whether the government has approved reasonably precise specifications--involves a number of different considerations. We must determine whether, and to what extent, the Marine Corps delegated discretion over the design of the MK-48 to Oshkosh. We also must discern whether the Marine Corps' approval of the design was meaningful, or merely a formality, and whether the specifications at issue were reasonably precise. 19 Our colleagues in other circuits have enumerated some of the considerations that inform the determination of whether the government has approved reasonably precise specifications for purposes of the government contractor defense. In Stout v. Borg-Warner Corp., 933 F.2d 331 (5th Cir.), cert. denied, 502 U.S. 981, 112 S.Ct. 584, 116 L.Ed.2d 609 (1991), the Fifth Circuit held that government contractor defense is available where review [of the project] involved, inter alia, [the contractor's] submission of detailed drawings at various progressive stages of the design, critical design reviews where [government] engineers critiqued [the contractor's] work, and, finally, the production of prototype models tested and evaluated for months by the [government] for its actual performance. Id. at 336. The Eleventh Circuit has held that Boyle 's first condition is satisfied where the design of the military hardware was the product of a  'continuous back and forth'  between the government and the contractor. Harduvel v. General Dynamics Corp., 878 F.2d 1311, 1320 (11th Cir.1989) (quoting Koutsoubos v. Boeing Vertol, 755 F.2d 352, 355 (3d Cir.), cert. denied, 474 U.S. 821, 106 S.Ct. 72, 88 L.Ed.2d 59 (1985)), cert. denied, 494 U.S. 1030, 110 S.Ct. 1479, 108 L.Ed.2d 615 (1990). Indeed, [i]t is this salient fact of governmental participation in the various stages of the [equipment's] development that establishes the military contractor defense. Kleemann v. McDonnell Douglas Corp., 890 F.2d 698, 700-01 (4th Cir.1989), cert. denied, 495 U.S. 953, 110 S.Ct. 2219, 109 L.Ed.2d 545 (1990); see Trevino v. General Dynamics Corp., 865 F.2d 1474, 1480 (5th Cir.) (noting that, if the government engages in meaningful review of the design, the first element of the Boyle test is established), cert. denied, 493 U.S. 935, 110 S.Ct. 327, 107 L.Ed.2d 317 (1989). 20 With these considerations in mind, we agree with the district court that Oshkosh has satisfied the first element of the Boyle test. The government's participation in the design of the MK-48 was, in both a procedural and a substantive sense, extensive. Procedurally, the design of the MK-48 evolved through a cooperative and continuous back and forth between the Marine Corps and Oshkosh. Harduvel, 878 F.2d at 1320. The Marine Corps also exercised, through a detailed set of performance and dimension specifications, a considerable amount of substantive input into the design of the MK-48. The design process, viewed as a whole, establishes that the Marine Corps made a series of discretionary decisions concerning the design of the MK-48 and its suitability for military mission requirements. 21 The evidentiary materials submitted to the district court establish that Oshkosh and the Marine Corps worked closely together on the development of the MK-48, from its planning stages through full production. The initial proposal called for the exhaust system to be placed on the right side of the vehicle, away from the single fifty-five gallon fuel tank on the left side. When the Marine Corps insisted upon having a larger fuel capacity, however, a second fuel tank was added to the right side of the vehicle. A second increase in the fuel capacity requirement resulted in the expansion of the twin fuel tanks to seventy-five gallons each, crowding the exhaust system even further. At one point during the design process, moreover, the government reduced the overall height limitation from 102 inches to 96 inches. This change in the height specification required the exhaust pipe, which lies directly above and parallel to the right side fuel tank, to be moved six inches closer to the fuel tank. It is clear, therefore, the Marine Corps did not leave the critical design decisions to the private contractor, Trevino, 865 F.2d at 1480, but rather that the Corps worked with Oshkosh every step of the way. See Harduvel, 878 F.2d at 1320; Kleemann, 890 F.2d at 700-01. 22 The Marine Corps needed the MK-48 to have two seventy-five gallon fuel tanks; the ability to ford through five feet of water; the ability to restart a stalled engine while fording; the ability to fit into an 8 feet X 8 feet X 20 feet shipping container; and the ability to be transported externally by helicopter. This combination of specifications cabined significantly the placement of the exhaust system and the fuel tanks. Each seventy-five gallon fuel tank requires over ten cubic feet of space, and the exhaust pipe itself is approximately twelve inches in diameter. The district court was justified in concluding, as a matter of law, that this combination of specifications prevented Oshkosh from complying both with its contractual obligations and the state-prescribed duty of care. Boyle, 487 U.S. at 509, 108 S.Ct. at 2517; see Harduvel, 878 F.2d at 1316 (Application of ordinary tort law to military designs is not appropriate, for the government 'is required by the exigencies of our defense effort to push technology toward its limits and thereby incur risks beyond those that would be acceptable for ordinary consumer goods.' ) (quoting Tozer v. LTV Corp., 792 F.2d 403, 406 (4th Cir.1986), cert. denied, 487 U.S. 1233, 108 S.Ct. 2897, 101 L.Ed.2d 931 (1988)). Nor does the fact that Oshkosh may have retained some discretion to position the fuel tanks and exhaust system within the envelope permitted by the specifications, standing alone, defeat the government contractor defense. See Boyle, 487 U.S. at 513, 108 S.Ct. at 2519 (The design ultimately selected may well reflect a significant policy judgment by the Government officials whether or not the contractor rather than those officials developed the design. It does not seem to us sound policy to penalize, and thus deter, active participation in the design process, placing the contractor at risk unless it identifies all design defects.); see, e.g., Wheeled Coach, 991 F.2d at 1125 (Although [the applicable specification] permitted [the contractor] to place the center of gravity anywhere below the maximum height of forty-three inches, the government need not deprive the manufacturer of all discretion pertaining to a particular design feature in order for the government contractor defense to apply.). 23 The record is clear, moreover, that the various stages of Marine Corps approval exceeded mere rubber stamping of Oshkosh's work. See Trevino, 865 F.2d at 1480 (When the government merely accepts, without any substantive review or evaluation, decisions made by a government contractor, then the contractor, not the government, is exercising discretion). The Marine Corps considered-and rejected--a number of design modifications, including the integration of armor and explosion suppressant materials into the design of the fuel system. 3 This is not a case where the government simply accepted, without substantive review or evaluation, the contractor's exercise of discretion in meeting a given performance standard. See Boyle, 487 U.S. at 509, 108 S.Ct. at 2517. 24 The record in this case supports the district court's conclusion that, given the Marine Corps' involvement in the design process and its substantive input, the configuration of the fuel and exhaust systems amounts to the type of deliberate trade-off between military mission requirements and safety concerns that is at the heart of the government contractor defense. See Boyle, 487 U.S. at 511, 108 S.Ct. at 2518 ([P]ermitting 'second guessing' of these [trade-off] judgments through state tort suits against contractors would produce the same effect sought to be avoided by the FTCA exemption [for discretionary conduct].); Kleemann, 890 F.2d at 700 (same). 4
25 To establish the second element of the Boyle test, Oshkosh must demonstrate that the MK-48 conformed to the reasonably precise specifications approved by the government. Boyle, 487 U.S. at 512, 108 S.Ct. at 2518. The plaintiffs assert that the MK-48 failed to conform to two of the specifications in the production contract: (1) the requirement that the vehicles comply with Federal Motor Carrier Safety Regulation 393.83, 5 see R.23, Ex.E, at p 3.2.9; and (2) the requirement that the vehicles be complete in all respects, id. at p 3.1. 6 Specifically, the plaintiffs submit that Oshkosh located the exhaust pipe where it likely will result in the ignition of the MK-48's fuel supply, in violation of FMCSR 393.83, and that, given this propensity, the MK-48 was not complete in all respects as ordinarily would be delivered in the heavy truck transport industry. 26 With respect to each of these contractual provisions, therefore, the plaintiffs rely on the assertion that the MK-48's exhaust pipe is positioned dangerously close to the right side fuel tank. As the district court correctly pointed out, the defect forming the basis of the nonconformities alleged by the plaintiffs is one of design--and not one of manufacture. The plaintiffs do not allege, for example, that one of the MK-48s involved in the accident had a fuel tank that was less sturdy than the fuel tanks installed on all of the other MK-48s manufactured by Oshkosh. Rather, it is the plaintiffs' position that, by virtue of the exhaust system and fuel tank configuration, all of the MK-48s produced by Oshkosh do not conform to the production contract. Stated differently, the plaintiffs allege that the intended configuration of these systems is capable of producing an unintended result. This is the hallmark of a design defect. See Harduvel, 878 F.2d at 1317 (distinguishing between design and manufacturing defects in the context of the government contractor defense). 27 As the Eleventh Circuit explained in Harduvel, however, the assertion of a design defect is itself subject to the Boyle defense: 28 To say that a product failed to conform to specifications is just another way of saying that it was defectively manufactured.... Plaintiff did present substantial evidence that the design--not the manufacture--of the F-16's wiring system was susceptible to dangerous wire chafing, but that claim is subject to the Boyle defense. The [conforming product] condition for application of the defense is present here as a matter of law. 29 Id. at 1321. Given our earlier conclusion that the Marine Corps approved reasonably precise specifications, it is clear that the placement of the exhaust pipe and the fuel tanks satisfies an intended configuration. Id. at 1317. Oshkosh did not deviate from the Marine Corps' specifications; rather, the configuration of the fuel tanks and the exhaust system was determined, to a significant extent, by the Corps' dimension, performance and operation specifications. As in Harduvel, therefore, Boyle 's second element is present here as a matter of law.
30 The third and final element of the government contractor defense requires the contractor to have warned the United States about the dangers in the use of the equipment that were known to the supplier but not to the United States. Boyle, 487 U.S. at 512, 108 S.Ct. at 2518-19. 31 According to Oshkosh, the Marine Corps was aware of the dangers associated with the configuration of the exhaust and fuel systems. This knowledge, Oshkosh submits, can be inferred from the fact that the Corps considered the use of armor and explosion suppressants in connection with the fuel supply. We are unable to accept this proposition. There is no evidence that the Marine Corps considered these improvements to address the risk of an explosion caused by the proximity of the exhaust system to the fuel tanks. From all that appears, the Corps considered these improvements solely to address the risks of enemy fire and accidents during refueling. Under these circumstances, it is difficult to conclude as a matter of law that the Marine Corps possessed this knowledge. As we explain below, however, we do not believe that this factor precludes summary judgment. 32 We are unable to conclude that Oshkosh was aware of any danger associated with the configuration of the fuel tanks and exhaust system that the Marine Corps was not. There is no indication that Oshkosh possessed any greater knowledge than the Marine Corps concerning the likelihood of an exhaust-ignited fuel tank fire. Oshkosh did not conduct any crash tests of the MK-48, and there is no evidence of record to suggest that Oshkosh was aware of any fires or explosions arising from any collision involving the MK-48 before the accident involving Corporals Tate and Oliver. The Marine Corps was responsible for the selection and implementation of all testing for the MK-48s, and the Corps elected not to conduct any crash tests of the vehicles--before or after production. 33 Under these circumstances, there is no basis to believe that Oshkosh possessed any greater knowledge of the risk posed by the configuration of the exhaust pipe and the fuel tanks than did the Marine Corps. Boyle does not require the contractor to warn the government of every possible danger--only those known to it and not to the government. See 487 U.S. at 512, 108 S.Ct. at 2518-19. The evidence of record suggests that Oshkosh and the Marine Corps were equally knowledgeable concerning the likelihood of an exhaust-ignited fire following a side-impact collision and, to the extent that Oshkosh was aware of a danger from the ignition of fuel, we believe that the warnings contained in Oshkosh's Safety Assessment Report are sufficient to communicate that danger to the government for purposes of the government contractor defense. 7 On the record before us, therefore, the district court was justified in concluding that the third requirement of Boyle is satisfied as a matter of law. See also Boyle, 487 U.S. at 513, 108 S.Ct. at 2519. 34 Boyle makes clear that the government contractor defense is intended to protect military contractors from state tort liability when they produce equipment conforming to design specifications adopted by government agencies in the exercise of their discretion. On the basis of this record, we must conclude that this is such a case. Accordingly, we affirm the judgment of the district court with respect to the plaintiffs' design defect claims.