Opinion ID: 2382536
Heading Depth: 1
Heading Rank: 4

Heading: The McKay Formulation

Text: Navy pilots Lieutenant Commander McKay and Lieutenant Carson were each killed during emergency ejections from fighter aircraft manufactured by Rockwell International under contract to the United States. Autopsies indicated that the two pilots were probably killed by injuries sustained during ejection. The Ninth Circuit in McKay reversed substantial recoveries which had been won by the decedents' estates on theories of products liability under Sections 388, 389 and 402A of the Restatement of Torts (Second). The Court extensively discussed the government contract defense in the context of a products liability suit against the supplier of military ordnance and remanded for determination of the application of the government contract defense to defendant Rockwell International. The Ninth Circuit propounded several reasons to extend the government's Feres-Stencel immunity to military suppliers in McKay. First, the government's immunity would be undermined by cost-spreading through contract price increases if military suppliers were not extended protection from suits for government contract design defects. Second, the judiciary would be thrust into reviewing the decision-making process of the military if contractors were held liable for design defects created or approved by the government. Courts might also have to determine whether the use to which the service personnel had put the equipment constituted an abuse of the product (for which there would be no liability), even though the user was correctly carrying out direct military orders. Adjudication of the propriety of military commands would thus be unavoidable if abuse of the product were at issue. Although judges must decide cases from fields of endeavor of which they know little, their otherwise omnicompetence confronts its limits in military matters. At this point . . . separation of powers becomes a proper concern. McKay 704 F.2d at 449. Third, contractors producing state-of-the-art equipment for military use often possess no negotiating leverage and are compelled by federal law to produce weapons of war under contracts of adhesion. Exigencies of our defense effort . . . push technology towards its limits and thereby incur risks beyond those that would be acceptable for consumer goods. 704 F.2d at 449-50. Finally, a narrowly-circumscribed government contract defense provides incentives for the suppliers of military equipment to consult and collaborate with the government in the development and testing of equipment. 704 F.2d at 450. The McKay court accepted the government contract defense in design defect cases for suppliers of military equipment under these circumstances: (1) the United States is immune from liability under Feres and Stencel; (2) the supplier proves that the United States established, or approved, reasonably precise specifications for the allegedly defective military equipment; (3) the equipment conformed to those specifications; and (4) the supplier warned the United States about patent errors in the government's specifications or dangers involved in the use of the equipment that were known to the supplier but not to the United States. 704 F.2d at 451.