Opinion ID: 2382536
Heading Depth: 1
Heading Rank: 3

Heading: The Government Contract Defense in Design Defect Cases

Text: In federal law, the government contract defense derives from Yearsley v. Ross Construction Co., 309 U.S. 18, 60 S.Ct. 413, 84 L.Ed. 554 (1940), where the Supreme Court found the defendant contractor not liable for erosion incident to a federal construction project on the Missouri River. The Court reasoned that the contractor should not be held liable for executing the government's will so long as the contractor had valid authority to perform the contract. 309 U.S. at 20-21, 60 S.Ct. at 414. More recent suits against the United States Government and its contractors and suppliers have concerned servicemen injured by military equipment, forcing a development in the contours of the defense in light of Feres v. United States, 340 U.S. 135, 71 S.Ct. 153, 95 L.Ed. 152 (1950) and Stencel Aero Engineering Corp. v. United States, 431 U.S. 666, 97 S.Ct. 2054, 52 L.Ed.2d 665 (1977). Feres bars suits against the federal government by injured servicemen or their survivors for damages from injuries suffered incident to military service, limiting them to veteran's benefits. Stencel extends this doctrine to bar indemnity actions by government contractors against the federal government for damages paid by such contractors to members of the military, or their dependents, for injuries suffered in the course of military service. Stencel does not discuss the government contract defense, but presents a situation in which justice would appear to require the extension of the defense in the strict products liability context. Stencel Aero Engineering manufactured pilot emergency ejection equipment to Air Force specifications for installation in fighter aircraft manufactured by Rockwell North American. After the equipment had failed, resulting in pilot death, the company sought Air Force permission to install a design Stencel considered safer, but permission was refused. Instead, the Air Force instituted its own design changes, with which Stencel then complied. The pilot's widow and another pilot injured later during an emergency ejection won recovery against Stencel for defective design, but Stencel was denied indemnity against the United States Government which had insisted upon the design. The Court explained that to permit petitioner to proceed. . . here would be to judicially admit at the back door that which has been legislatively turned away at the front door. Stencel, 431 U.S. at 673, 97 S.Ct. at 2054, 52 L.Ed.2d at 665. Judicial inquiry into government specifications would involve second-guessing military orders, and would often require members of the armed services to testify in court as to each other's decisions and actions. The paramount interests of the United States government mandated that the contractor be granted no relief. Recent leading opinions nationally on the government contract defense to design defects suits include McKay v. Rockwell International Corp., 704 F.2d 444 (9th Cir. 1983), cert. denied, 464 U.S. 1043, 104 S.Ct. 711, 79 L.Ed.2d 175 (1984) (admiralty); In re Agent Orange Product Liability Litigation, 534 F.Supp. 1046 (E.D.N.Y. 1982), cert. denied, 465 U.S. 1067, 104 S.Ct. 1417, 79 L.Ed.2d 743 (1984) (state tort law); and Brown v. Caterpillar Tractor Company, 696 F.2d 246 (3d Cir. 1982) ( Brown I ), 741 F.2d 656 (3d Cir. 1984) ( Brown II ) (Pennsylvania law). While the rules of law these cases establish are not binding upon us, an examination of their holdings is appropriate in arriving at our own conclusions.