Opinion ID: 2611875
Heading Depth: 1
Heading Rank: 2

Heading: common law defense

Text: In 1988, the United States Supreme Court held that, as a matter of federal common law, under certain circumstances liability under state tort law for injury or death caused by products could not be imposed on those supplying the products to the government under contracts with the United States. Boyle v. United Technologies Corp., 487 U.S. 500, 101 L.Ed.2d 442, 108 S.Ct. 2510 (1988). Prior to Boyle, the government contract defense had been recognized, but Boyle defined the defense in terms of a type of federal preemption, identified the underpinnings of the defense, and set forth requirements for displacement of state law. In Boyle, a Marine helicopter pilot drowned after his aircraft crashed into the ocean and the escape hatch, which opened outward, failed to open because of ocean water pressure holding it shut. The family sued the manufacturer, which had manufactured the helicopter pursuant to government design specifications, alleging the hatch design was defective. In formulating a federal common law defense, the Court characterized it as a form of federal preemption, which will occur provided certain conditions are met. First, uniquely federal interests must be identified. The Court identified two areas it had previously found to contain uniquely federal interests, the obligations to and rights of the United States under its contracts and civil liability of federal officials for actions taken in the course of their duty. Boyle, at 504, 505. The Court reasoned these closely related areas of uniquely federal interest apply as well to civil liabilities arising out of the performance of federal procurement contracts. Boyle, at 505-06. The Court said the fact that the area of federal procurement of equipment is an area of uniquely federal interest did not end the inquiry, but instead established a necessary, not a sufficient, condition for the displacement of state law. (Footnote omitted.) Boyle, at 507. The Court then identified a second condition which must be met before the federal defense would apply, i.e., a significant conflict exists between an identifiable federal policy or interest and the operation of state law, or the application of state law would frustrate specific objectives of federal legislation. (Citations omitted.) Boyle, at 507 (quoting Wallis v. Pan American Petroleum Corp., 384 U.S. 63, 68, 16 L.Ed.2d 369, 86 S.Ct. 1301 (1966); United States v. Kimbell Foods, Inc., 440 U.S. 715, 728, 59 L.Ed.2d 711, 99 S.Ct. 1448 (1979)). The Court said the conflict need not be as great as that which must exist for ordinary preemption, [b]ut conflict there must be. Boyle, at 508. As a limiting principle to aid in identifying when a significant conflict arises, the Court looked to the discretionary function exception to the Federal Tort Claims Act (FTCA), 28 U.S.C. § 2680(a) (1988), which excepts from the government's consent to suit any claim based upon the exercise of discretionary function on the part of a federal agency or a government employee. In so doing, the Court rejected the view of the Ninth Circuit that the Feres-Stencel doctrine acts as a limiting principle. (Under that doctrine, the FTCA does not extend to members of the military who sustain what would otherwise be an actionable wrong, and the United States is not liable to indemnify a private defendant for damages paid to a military person who is injured in the course of military service. See generally 3 American Law of Products Liability 3d § 45:4, at 15-16 (Timothy E. Travers managing ed., 1990).) The Court reasoned that the selection of the appropriate design for military equipment is within the discretionary function, as it often involves judgment as to the balancing of many technical, military, and even social considerations, including tradeoffs between safety and greater combat effectiveness. Boyle, at 511. Moreover, if state tort claims were allowed against defense contractors, the financial burden of judgments would be passed on to the government in the form of higher prices, contrary to the discretionary function exception purpose to insulate the government from financial liability. Boyle, at 511-12. The Court then agreed with the scope of the displacement of state law as identified in McKay v. Rockwell Int'l Corp., 704 F.2d 444, 451 (9th Cir.1983), cert. denied, 464 U.S. 1043 (1984): 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. Boyle, at 512. The Court then explained the relationship of these requirements to the discretionary function underpinning the defense: The first two of these conditions assure that the suit is within the area where the policy of the discretionary function would be frustrated  i.e., they assure that the design feature in question was considered by a Government officer, and not merely by the contractor itself. The third condition is necessary because, in its absence, the displacement of state tort law would create some incentive for the manufacturer to withhold knowledge of risks, since conveying that knowledge might disrupt the contract but withholding it would produce no liability. We adopt this provision lest our effort to protect discretionary functions perversely impede them by cutting off information highly relevant to the discretionary decision. Boyle, at 512-13. [13] Boyle concerned a claim involving military equipment. Here, there is no dispute on appeal that the helicopter was a piece of military equipment manufactured according to precise government design specifications. The fact that the helicopter was later transferred to a private party does not preclude applicability of the defense. See, e.g., Glassco v. Miller Equip. Co., 966 F.2d 641 (11th Cir.1992) (applying Boyle analysis where leather lineman's belt which was manufactured for use by the military in the Korean War broke and allegedly caused injury to civilian who had owned the belt for 5 years). The same policy considerations identified in Boyle apply whether the product remains in military use or ultimately ends up in civilian hands. [2] Also, the fact that helicopters in the Huey series were sold commercially does not mean that the helicopter was not military equipment. See Jackson v. Deft, Inc., 223 Cal. App.3d 1305, 1319, 273 Cal. Rptr. 214 (1990) (where product is manufactured for the military per government specifications within Boyle 3-prong test, and incidentally sold commercially as well, the product is still military equipment), review denied (Dec. 12, 1990). Bell argues extensively that it has satisfied Boyle 's 3-prong test, but does so with respect to design defect specifications. [3] In fact, the bulk of Bell's argument on this issue is an attempt to show satisfaction of the Boyle test with respect to design specifications. Bell's position appears to be that compliance with design specifications gives rise to the defense where failure to warn is alleged. Timberline, however, does not dispute on appeal that Bell has complied with design specifications, but takes the position that compliance with design specifications does not give rise to the defense where failure-to-warn claims are at issue. [14] We agree with Timberline that the federal common law government contractor's defense does not preclude a legitimate postmanufacture failure-to-warn claim where the only compliance with any government contract specifications is with design specifications. For this reason, whether Bell has shown it complied with design specifications is largely irrelevant. Contrary to Bell's apparent position that compliance with design specifications in accord with Boyle gives rise to the common law defense as to any failure-to-warn claim, many courts have held that failure-to-warn claims are independently subject to the Boyle v. United Technologies Corp., 487 U.S. 500, 101 L.Ed.2d 442, 108 S.Ct. 2510 (1988) analysis. See, e.g., Jackson v. Deft, Inc., supra ; Garner v. Santoro, 865 F.2d 629 (5th Cir.1989); In re Joint E.&S. Dist. N.Y. Asbestos Litig., 897 F.2d 626 (2d Cir.1990) (hereafter In re Joint Litig.); Dorse v. Armstrong World Indus., 716 F. Supp. 589 (S.D. Fla. 1989), aff'd sub nom. Dorse v. Eagle-Picher Indus., Inc., 898 F.2d 1487 (11th Cir.1990); In re Haw. Fed. Asbestos Cases, 960 F.2d 806 (9th Cir.1992); see generally 3 American Law of Products Liability 3d § 45:34. The court in In re Joint Litig., at 630 rejected the argument that compliance with design specifications gives rise to the defense as to a failure-to-warn claim, saying that we do not see how a federal contract specification requiring a certain product design conflicts with state law requiring a certain set of warnings incident to use of that product or design. The court also rejected the argument that the defense would be rendered a dead letter if liability could be imposed for failure-to-warn where it could not be imposed for defective design, saying that [a]s the Boyle Court pointedly explained, [C]onflict there must be. Boyle, 108 S.Ct. at 2516. To us, a plaintiff's ability to pursue a failure-to-warn claim when Boyle may foreclose a design defect claim is not indicative of some loophole inadvertently left open by Boyle, but rather demonstrates a crucial lack of the necessary conflict between state and federal warning requirements. Indeed, it is not unreasonable to imagine that ... government contracts often may focus upon product content and design while leaving other safety-related decisions, such as the method of product manufacture or the nature of product warnings, to the contractor's sole discretion. In these instances, state law design requirements are displaced, although state law warning requirements are not. In re Joint Litig., at 631. The court further disagreed that failure-to-warn claims should be subject to the defense where there had been compliance with design specifications because permitting the failure-to-warn claim would lead to pass-through costs from the contractor upon the government. The court said that although the Court's decision in Boyle was motivated in part by the desire to limit pass-through costs, that consideration is not dispositive. In re Joint Litig., at 631. If it were, the court reasoned, the Court in Boyle could simply have granted military contractors a blanket immunity from all state tort liability. In re Joint Litig., at 631. This reasoning is sound. The Court in Boyle expressly recognized that the government contractor defense would not apply in the case of items purchased from stock, or standard equipment (as opposed to items manufactured in accord with precise government specifications). Boyle, at 510. Yet, the financial burden resulting from judgments for defects in stock or standard equipment would be passed on to the government through increased costs, just as in the case of items manufactured per government specifications. Thus, pass-through of costs alone is not a sufficient basis for application of the defense. The manufacturer in In re Joint Litig. also argued that the record there showed that the government had made a discretionary decision not to warn, and that imposing liability for failure to warn would conflict with the exercise of that discretion. The court rejected this argument, in the course of its analysis commenting that [s]tripped to its essentials, the military contractor's defense under Boyle is to claim, The Government made me do it. Boyle displaces state law only when the Government, making a discretionary, safety-related military procurement decision contrary to the requirements of state law, incorporates this decision into a military contractor's contractual obligations, thereby limiting the contractor's ability to accommodate safety in a different fashion. In re Joint Litig., at 632. This reasoning, that the defense applies in the case of a failure-to-warn claim only if there are precise government specifications pertaining to warnings, has been followed by other courts. E.g., In re Haw. Fed. Asbestos Cases, 960 F.2d 806 (9th Cir.1992); Jackson v. Deft, Inc., 223 Cal. App.3d 1305, 273 Cal. Rptr. 214 (1990), review denied (Dec. 12, 1990). In Dorse v. Armstrong World Indus., Inc., 716 F. Supp. 589 (S.D. Fla. 1989), aff'd sub nom. Dorse v. Eagle-Picher Indus., Inc., 898 F.2d 1487 (11th Cir.1990), the court agreed that Boyle is not strictly limited to design defect cases, Dorse, at 590, but then said that the 3-part test of McKay (the 3-prong test of Boyle ) is necessarily limited to design defect cases. The court held that the government contractor defense did not apply to the failure-to-warn claim because there was no conflict between the state-imposed duty of care and the government contractual duty. The court observed that the government specifications did not contain any prohibitions of warnings on the product, and the manufacturer could have complied with both the state law tort duty and the government contract. Dorse, at 591. Although the present case involves a postmanufacture failure-to-warn claim, much of the analysis in In re Joint Litig. applies as well in the context of a postmanufacture failure-to-warn claim as in the context of a claim of failure to warn of defects known at the time of manufacture. There is no inevitable conflict between complying with state tort law postmanufacture warnings requirements and complying with government design specifications; a manufacturer is not compelled by government design specifications to ignore state tort law requiring postmanufacture warnings. In reaching its conclusion that the government contractor defense applies, the trial court here relied upon an unpublished federal district court decision also involving failure of a 42-degree gearbox in a Huey helicopter used in civilian logging operations. Thompson v. Bell-Helicopter Textron, Inc., No. 2:XX-XXXX-X & 2:XX-XXXX-X (D.C.S.C. Oct. 10, 1990). Much of the unpublished magistrate's report, approved by the District Court, concerns whether the government approved reasonable precise specifications for design. The report briefly addresses the question of a postmanufacture duty to warn, and refuses to impose a state common law duty to warn upon a military contractor. The report reasons that if the third prong of Boyle is satisfied as to any design defect, any duty to warn is discharged. However, the court in In re Joint Litig. rejected the notion that any duty to warn is encompassed by the third prong of the Boyle displacement test and that this prong is satisfied for all product liability claims where it is satisfied as to a design defect claim. The court in In re Joint Litig. noted the difference between the third prong of the Boyle test and the tort duty to warn. The third prong of Boyle's test ensures a discretionary decision with the benefit of full knowledge of all hazards. In contrast, state tort law duties to warn have the objective of helping those who use or come into contact with the product to protect for their own safety. Apart from their common use of the word `warn,' the two duties bear absolutely no similarity to one another. Consequently, we reject the argument that the third element of the Boyle test preempts state law duties to warn. In re Joint Litig., at 632. We agree with this reasoning. The magistrate's report in Thompson also reasons that the military placed no duty on the manufacturer to give postmanufacture warnings to third party civilian purchasers or operators of helicopters, noting that none of the contracts and specifications included any duty to warn. In this state, RCW 7.72.030(1)(c) sets forth the postmanufacture duty to warn; the statute answers the question about whether, absent the statutory or federal common law government contractor's defenses, Bell would have any duty to issue postmanufacture warnings. The question under Boyle, however, is whether the government has imposed a contractual obligation on the manufacturer which is in conflict with state tort law requirements, giving rise to a defense to the state tort law. Thus, the court's focus in Thompson, on whether the government declined to impose any duty to warn, is not the relevant inquiry when deciding whether the federal government contractor's defense applies in this case. Thompson is not persuasive authority. Bell also maintains, though, that Timberline's failure-to-warn claim is in fact a design defect claim for purposes of the federal common law government contractor's defense, and that merely labeling the claim a failure-to-warn claim is not determinative. If the failure-to-warn claim is merely duplicative of a design defect claim, there is merit to the argument that the defense should apply if the contractor has satisfied Boyle v. United Technologies Corp., 487 U.S. 500, 101 L.Ed.2d 442, 108 S.Ct. 2510 (1988) with respect to design specifications. Cf. Koutsoubos v. Boeing Vertol, 553 F. Supp. 340, 344 (E.D. Pa. 1982) (pre- Boyle case addressing government contractor defense; where failure-to-warn claim is repetitious of design defect claim, if defense applies to design defect claim, it applies to both). However, as discussed above with respect to the state statute issue, Timberline says that the helicopter was not defectively designed for its military purposes. Timberline argues that Bell breached a duty to warn of a danger about which it learned after manufacture, i.e., failure of the -9 gear after repetitive heavy lift operations in commercial activity such as logging operations. In oral argument, Bell's counsel used the facts in Boyle by analogy, intending to show that if there had been a failure-to-warn claim in that case, it would have been duplicative of the design defect claim, and arguing that the same is true in this case. In Boyle, the manufacturer was required by government specifications to design the helicopter with a hatch door which opened outward. Under the allegations in Boyle, if the design had been altered the danger of the hatch failing to open underwater might have been eliminated or reduced. But no warning could have been given which would have reduced the danger resulting from the required design of the hatch door. Thus, the manufacturer had no choice but to comply with contract specifications and could not have issued any effective warning that would have reduced the danger of water pressure holding the hatch door closed. Here, Bell designed the -9 gear in accordance with precise government specifications, and could not alter the design, just as the manufacturer in Boyle could not alter the design. However, unlike the situation in Boyle, a postmanufacture warning could have reduced or eliminated the danger of failure of the -9 gear resulting from repetitive heavy lift operations. As Timberline points out, Bell could have reduced the suggested times between overhauls, suggested alternative means of determining flight hours based upon repetitive lift usage, or prescribed a finite life for the -9 gear. None of these courses would have placed Bell in the position of having to comply with conflicting obligations to follow mandatory government design specifications and to also meet a state tort law duty to give postmanufacture warnings. Bell maintains that if a defect inheres in the design, the claim is not a failure-to-warn claim, but is instead a design defect claim. Bell says that any defect in the -9 gear inhered in the original design, and therefore the government contractor defense protects Bell. The opinion which Bell cites for this proposition addresses the distinction between a manufacturing defect and a design defect, and is thus distinguishable. Harduvel v. General Dynamics Corp., 878 F.2d 1311, 1317 (11th Cir.1989), cert. denied, 494 U.S. 1030, 108 L.Ed.2d 615, 110 S.Ct. 1479 (1990). Moreover, the court there said that the proper focus in determining whether a claimed defect is a design defect is the protection of discretionary government functions, and if a defect is one inherent in the product approved by the government, it will be covered by the defense. Harduvel, at 1317. As explained, the claim here is not a claim that the -9 gear was defective for its military purpose, but that a previously unknown danger exists if the helicopter is subjected to repeated heavy lift operations such as logging. The government's discretionary function is not implicated by Timberline's claim. Thus, in this case, there is a postmanufacture failure-to-warn claim that is independent of any design defect claim. Bell says that a further reason for finding the government contractor defense applicable is that holding Bell liable for failing to give a postmanufacture warning would have the same effect as holding Bell liable under a design defect theory, and this would violate Boyle. The three cases upon which Bell relies do not support such a broad conclusion. Two of them, at the cited pages, stand for the proposition that the government contractor defense can apply as an affirmative defense to a failure-to-warn claim, because the policy justifications for the defense apply equally well whether the claim is based upon an allegedly dangerous design or a failure to provide adequate warnings. Nicholson v. United Technologies Corp., 697 F. Supp. 598, 604 (D. Conn. 1988); Niemann v. McDonnell Douglas Corp., 721 F. Supp. 1019, 1025 (S.D. Ill. 1989). We agree with this reasoning. However, neither of these cases supports Bell's position that a postmanufacture failure-to-warn claim is precluded in this case. In the third case, the court refused to rule on any duty to warn, saying the issue was inadequately addressed. Ramey v. Martin-Baker Aircraft Co., 656 F. Supp. 984, 1000 (D. Md. 1987). The Fourth Circuit affirmed the District Court, reasoning, however, that the government was already aware of any risk and therefore the failure-to-warn issue need not be addressed. Ramey v. Martin-Baker Aircraft Co., 874 F.2d 946, 951 n. 10 (4th Cir.1989). Bell also maintains that the defense applies where the government maintains control of the content of flight manuals and revisions to them, and contends that the military maintained such control in this case. In Nicholson v. United Technologies Corp., 697 F. Supp. 598, 602-05 (D. Conn. 1988), the court reasoned that where the government maintained control over the contents of the manual and made revisions to it without consultation with the manufacturer, with government personnel contributing the majority of expertise to the revisions, and where government specifications outlined the requested changes in the manual and identified the specific pages needing alteration, the defense applied. See also In re Aircraft Crash Litig. Frederick, Md., May 6, 1981, 752 F. Supp. 1326, 1366-67 (S.D. Ohio 1990), aff'd sub nom. Darling v. Boeing Co., 935 F.2d 269 (6th Cir.1991). In its Respondent's Brief, Bell has not identified any similar circumstances in this case, and, in fact, the portion of the record to which Bell cites as showing military control of the manual, Clerk's Papers, at 455; Br. of Resp't, at 44, contains nothing pertinent to this argument. Nicholson does not support Bell under these circumstances, and instead supports the proposition that if there had been precise government specifications as to warnings (in a manual or otherwise), and if Bell had complied with those specifications, the federal defense might apply to a failure-to-warn claim. We hold that the government contractor's defense does not apply to the postmanufacture failure-to-warn claim in this case. Our holding accords with Boyle and those courts which hold Boyle applies to failure-to-warn claims. First, there is no conflict which would arise by requiring Bell to comply both with the state postmanufacture duty to warn and its obligation to design the helicopter in conformance with precise government specifications for design. Moreover, the postmanufacture failure-to-warn claim, under the facts here, does not implicate the government's discretionary function. The summary judgment is reversed and this case is remanded for further proceedings. ANDERSEN, C.J., and UTTER, DOLLIVER, DURHAM, SMITH, GUY, JOHNSON, and MADSEN, JJ., concur.