Mary Carley v. Wheeled Coach

COWEN, Circuit Judge

Plaintiff summary judgment Mary grant Carley appeals caused an de- her claim for alleged injuries dismissing personal defendant Wheeled in an ambulance manufactured defect sign Industries, The issue in this Coach"). Coach Inc. ("Wheeled appeal assert is whether the manufacturer of nonmilitary may product defense, v. United recognized in a strict 108 S. Ct. 2510 (1988), Technologies Corp., that based defect. We conclude action liability design products con- contractor defense is available nonmilitary However, under federal common law. because Wheeled tractors that the United States Coach failed to it warned prove but not to in its ambulance known to Wheeled Coach of dangers will reverse the we summary judgment grant government, and remand for trial.

I. em- is an medical technician Plaintiff Mary Carley emergency at St. Islands of Health Croix ployed by Virgin Department 2, 1988, as a On she was on and duty riding Hospital. September in a Ford II liter am- E-350 6.9 Type diesel-powered passenger Coach, a Florida bulance manufactured Wheeled by corporation. an an While the ambulance was en route to the scene of emergency, The ambu- automobile failed to properly yield right-of-way. lance made an evasive maneuver and over. suffered Carley flipped back, a herniated disk. A to her knee including police injuries that ambulance officer who witnessed the accident reported in a and safe manner an situ- was driven reasonable emergency ation.

The ambulance manufactured Wheeled Coach was by pursuant with the United States General to a contract (No. GS-OOF-89100) Services Administration The GSA solicited bids for the ("GSA"). of the ambulance in with the Federal manufacture compliance KKK-A-1822B, 1, 1985, for Ambulance dated Specification June which was into the contract. After Wheeled Coach incorporated ambulance, ex- a GSA assurance completed quality inspector it, amined concluded it with contract complied specifications, it and released for shipment. filed suit Wheeled

On Coach April Carley against No. strict District Court of Islands (Civ. 89-94), Virgin alleging and breach the manu- from products liability warranty arising facture and sale an ambulance with a defect. Carley claimed that the ambulance was to turn over unreasonably prone intended use because of an center of during excessively high grav- One of the affirmative raised Wheeled defenses Coach was ity. contractor defense. Wheeled Coach claimed that it was immune from because it built the ambulance in the of its under a contract with the United performance obligations States government.

Wheeled Coach moved for and the district summary judgment court the motion. The court concluded either federal granted common law or Islands law and that Virgin governed dispute, law, under either contractor defense is body available contractors and was established nonmilitary Wheeled Coach a matter as of law. moved for reconsidera- Carley tion on the that Florida law law Florida does grounds applies, contractor defense for recognize nonmilitary Indus., Inc., 2d contractors. See Dorse World 513 So. Armstrong motion, The district court denied her con- (Fla. 1987). that even if this suit were state law instead of cluding governed by law, federal common Islands law would and render Virgin apply Wheeled Coach immune. Carley appealed.

The district court had under 28 U.S.C. 1332(a)(1) jurisdiction § and we have under 28 U.S.C. Our (1988). (1988), jurisdiction § review of a Clement v. Con- grant summary judgment plenary. solidated Rail 963 F.2d Cir. We the (3d 1992). Corp., apply same test as the district court under Fed. R. Civ. P. 56(c), asking fact, not, a whether there remains issue of material and if genuine whether is entitled as a matter of moving party judgment law. Id. We view all facts and all inferences therefrom light most favorable to the in this case the nonmoving party, plaintiff Id. Carley.

II. In v. United Technologies Corp., 108 S. Ct. 2515-16 Court held that (1988), Supreme a before state tort law is action involv applied products liability defense, it must first be determined ing whether state law is in conflict with the federal interests significant associated with federal contracts. The Court an procurement nounced a test for when state tort law is three-prong determining federal common law in a suit con displaced by against military tractor: defects in cannot be

Liability military equipment law, to state when the United States (1) imposed, pursuant ap- (2) proved reasonably precise specifications; equipment conformed to those warned (3) specifications; supplier the United States about in the use of the dangers equip- ment that were known but not to the United supplier States. 2518;

Id. at S. Ct. at Aircraft Maguire Hughes met, If all three (3d 1990). are prongs govern ment contractor defense is established and the defendant manufac turer is immune from under state law. the Court con specifically applied

tractor defense in the context of a contract. military procurement The defendant manufacturer built a with an al military helicopter defective hatch in with legedly escape compliance specifications 502-03, 108 the United States. 487 U.S. at S. Ct. at 2513. provided Court, however, did not address whether con tractor defense is also available to manufacturers of nonmilitary an issue which has in author- products, generated significant split

314 that the to both mili- We conclude Boyle ity.1 reasoning applies and contractors.2 tary nonmilitary that a few areas

The Court observed involving uniquely initially interests so committed to federal control the Consti federal fire the United States that state law is tution laws of preempted 504, at where federal common law. Id. and replaced, necessary, by at The identified areas 108 S. Ct. 2514. Court two of unique the United States under its concern: the to obligations rights contracts, at United States v. id. 108 S. Ct. 2514 (citing 2389, Co., 580, 592-94, 412 Ct. Little Lake Miscere Land 93 S. 1 This is evident in cases both before and after the landmark decision in split have de The held contractor Boyle. following opinions States, 1421, fense is available to all manufacturers: Boruski v. United 803 F.2d Co., 844, (11th (7th 1986); 1430 Cir. v. Colorado Serum 772 F.2d 846 Cir. Burgess 1985); (W.D. 1992); v. F. Price Grumman 806 Wis. Corp., Supp. Johnson Inc., 1359, (E.D. 1985); v. 603 F. n.3 Pa. In re 1361-62 Tempo, Supp. Chateaugay 818, rev'd, 1991), (S.D.N.Y. (Bankr. 132 B.R. 823-27 S.D.N.Y. 146B.R.339 Corp., 1992); 805, v. Alameda Vermeulen Court of 251 Cal. Superior County, Rptr. Constructors, (Cal. 1988); Ct. McDermott v. TENDUN 511 A.2d 809-10 690, App. denied, (N.J. 1986). (N.J. Div.), 696 Ct. cert. 526 A.2d 134 Super. App. have held that the defense is following opinions available to manufacturers of In re Hawaii Federal only products: Cases, 806, (9th 1992); v. Dia Asbestos 960 F.2d 810-12 Cir. Nielsen George Co., 1450, 1452-55(9th 1990); mond Paint In re Chateaugay 892 Vogel States, 339, (S.D.N.Y.1992); v. F. 146 B.R. 348-51 United 568 Corp., Johnston 110, (D. 1983); 356-58 Kan. v. Whittaker 551 F. Supp. Supp. Jenkins (D. 1982); (Ala. 562 So. 2d 114 Haw. Pietz Orthopedic Equip. — 1269; denied, , Dorse, (1990); 2d at 1989). cert. 111 S. Ct. 75 513 So. U.S.— Fabricators, Inc., (N.Y. N.Y.S. 2d Ct. v. Penn Metal Reynolds Sup. 118, 121(N.Y. Ct. 1990);In re New York Asbestos 542 N.Y.S.2d. City Litig., Sup. 1989). us "a reach The dissent accuses of taking giant leap, exponentially expanding Brennan's Dissent at 14. The dissent also cites to of Boyle." Typescript Justice dissent in its "forcefully" argued Boyle support argument against judicial However, law, even in this limited context. Judge exercise of federal common Brennan's further observation that Becker's dissent omits Justice that we have done could be manner precise majority opinion applied here: [Fjor contractor defense is breath- the Court's discovered Government newly like the CH-53D It only military equipment takingly sweeping. applies that the Fed- (so tell) far I can made-to-order any gadget but as

helicopter, after NASA's Chal- eral Government might purchase previewing plans —from old mail cars. shuttle to the Postal Service's lenger space J., (Brennan, Ct. at dissenting). 487 U.S. at 108 S. and the civil

2396-97 of federal officials for actions (1973)), liability taken in the course of their id. at 108 S. Ct. at 2514-15 duty, Erwin, 292, 295, Westfall v. 484 U.S. S. Ct. (citing neither of these two lines of involved a (1988)). Though precedent federal interest to the the basis for military, they unique provided of the contractor defense. See id. judicial recognition 504-07, at S. Ct. at 2414-15.

The Court also relied v. W.A. Construc- Ross heavily Yearsley tion 309 U.S. 60 S. Ct. in (1940) (cited 506, 108 S. Ct. at in which a construction 2515), company damaged of landowners while dikes property riparian constructing pur- suant ato contract with the United States The con- government. struction was authorized an act of project Congress federal officials. The Court held that the contractor supervised by law, be could not held liable for under state damages reasoning that "if out the was con- authority carry project validly [the] ferred, is, if what was done was within the constitutional of there is no on the of the contractor power Congress, liability part its will." Id. at S. Ct. at 414. executing rationale,

This same which is to mili equally applicable contractors, underlies the modern tary nonmilitary govern ment contractor A defense. contractor is who private compelled by should, a contract an for the United States in perform obligation circumstances, some share the of United sovereign immunity States. the contractor in was an of the Though Yearsley agent States, id., United while the and the present contractors, case were this distinction was not independent signifi 505-06, 108 cant to the Court in See 487 U.S. at S. Ct. at 2515. Boyle. The Court the federal in a interest contract regarded performance as the same as the federal interests in Yearsley being essentially contracts. See id. con procurement liability independent "[T]he tractors work for the Federal Government... is an area performing n.1, federal Id. interest." at 505 108 S. Ct. at 2515 n.1. uniquely on an contractor who en imposition liability independent ters into a contract with the United States im procurement directly federal interest plicates significant completion work. See id. at 108 S. Ct. at That 2515. government's signifi cant federal interest exists of whether regardless procurement contract or in nature. nonmilitary that there is The Court in unique Boyle acknowledged all in which the interest contracts government procures equip 506-07, 108 ment, S. See id. at those with military suppliers. just described how tort actions Ct. at 2515-16. The Court against gov "The can harm the ernment contractors government: imposition the terms of will affect on Government contractors directly decline to manu either the contractor will Government contracts: Government, its or it will raise facture the by design specified be of the United States will Either the interests directly way, price. Thus, 507, 108 at without the Id. at S. Ct. 2515-16. affected." govern defense, and for it would be more difficult ment contractor costly would suffer The government acquire products. whether it a for this economic harm regardless procured product civilian use. or military contractor de

The reason for making strongest all is the Court's fense available to contractors express rejection defense, and its reliance in the Feres doctrine as the basis of the function of the Federal Tort stead on the discretionary exception 487 U.S. 28 U.S.C. See 2680(a) (1988). Claims Act ("FTCA"), Boyle, § 510-11, The doctrine renders the at 108 S. Ct. at 2517-18. Feres from tort for to servicemen United States immune injuries serv of or in the course of incident to out military activity arising 135, 146, 153, 159 States, 71 S. Ct. (1950); ice. Feres v. United 340 U.S. States, 431 U.S. v. United see also Stencel Aero Eng'g Corp. 673-74, in States not liable for S. Ct. 2059 (1977) (United to serv demnification of damages paid courts Prior to service). iceman Boyle, injured during military of the con considered Feres to be source generally Vertol, See, Div. of Boe tractor defense. Koutsoubos e.g., Boeing 821, 106 denied, S. cert. 474 U.S. 755 F.2d 354 (3d Cir.), ing Int'l 704 F.2d 449 (9th v. Rockwell Ct. (1985); McKay denied, In S. Ct. 711 (1984). cert. 464 U.S. Cir. 1983), Boyle, however, de Feres as the basis for the the Court explicitly rejected it fense, is too broad because the Feres doctrine reasoning immune for caused would render contractors any by injuries nar too standard purchased by government, equipment decisions because it would state row military permit regulation civilians. tort actions brought by Boyle, through Feres, which at 2517-18. Instead of on 108 S. Ct. only relying applies service, the Court instead relied out of to torts military arising FTCA, function which discretionary exception applies action in both matters. military nonmilitary The FTCA authorizes suits the United States for damages against caused the tortious conduct of injuries any employee within the of his to the same extent that acting scope employment, a would be liable under law. state 28 U.S.C. private person however, This waiver of does 1346(b) (1988). sovereign immunity, § claim . . . based the exercise or apply "[a]ny upon perform- ance or the failure to exercise or function perform discretionary or on the of a federal anor of the Gov- duty part agency employee ernment, whether or not the discretion involved be abused." Id. the Court stated that the 2680(a). function discretionary § of the FTCA the outlines of a con- exception suggests "significant flict" between federal interests and state law in the procurement context which would of state law. 487 U.S. at justify displacement 511, 108 S. Ct. at 2518. Court concluded that the selection of the armed forces is equipment designs discretionary function within the of section 2680(a), meaning following reasons: of often involves not military equipment designs]

[Selection but as to the merely analysis engineering judgment balancing technical, considerations, of and even social in- many military, the trade-off between and cluding specifically greater safety combat effectiveness. And we are further of the view greater of these permitting "second-guessing" judgments through state tort suits contractors would the same ef- against produce fect to be avoided the FTCA The finan- sought by exemption. cial burden of the contractors would judgments against be if not to ultimately passed through, substantially totally, itself, United States since defense contractors will predictably cover, raise their to or to insure lia- prices against, contingent for the Government-ordered bility designs.

Id. at S. Ct. at 2518 (citation omitted). Though govern- ment contracts for do not involve considera- nonmilitary products effectiveness, tions of combat all of the other reasons cited policy the Court in contractor defense are by support government and To to military nonmilitary procurements.3 equally applicable determine the of design nonmilitary product, and sometimes analysis may may engage complex engineering economic, technical, or in favor of other trade off product safety social considerations. If contractors were nonmilitary protected defense, financial bur- contractor their increased by did what com The Court in not define considerations Boyle precisely "greater bat effectiveness" are decision to government's implicated than inward. It CH-53D hatch to outward rather helicopter's escape open considerations, effectiveness as several listed combat one of merely policy which combine to constitute the exercise of a government's "discretionary defense. function" that triggers Notwithstanding omission, this Becker's dissent makes a and the undefined Judge leap equates concerns, consideration of "combat effectiveness" with "national security" Dissent and with sensitive decisions." id. at military Typescript "highly The dissent insists estab thereby Boyle soundly (emphasis original). is on concerns lishes that contractor defense "premised 22; ("[T]he Id. at see also id. at 28 concern in military." to unique because its about costs onto the is passing liability government meaningful relation the acute federal interest in interference with the avoiding to judicial design military equipment."). Quite and which illus- contains contrary. Boyle language examples to, but trate that the concern about combat effectiveness is not paramount with, mentioned, such rather is on an the other concerns equal footing policy considerations, technical, and social military, as engineering analysis, When these factors costs of contractors. judgments against present, passed-on to constitute a conflict" in the "significant analysis combine it manufac- in favor of applying contractor defense's application argue stated that "it is that the Fed- turers of The Court nonmilitary products. plain interest of equipment strictly eral Government's procurement [not suits such as one." present equipment] implicated U.S. at 108 S. Ct. at 2515. those situations identify for the Secondly, searching limiting principle between an identifiable federal interest where a conflict" exists "significant law, an the Court used an illustration involving and the of state operation of nonmilitary obviously piece equipment: If, the and installation the United States contracts for purchase for example, unit, the the but not cooling pre- of an air-conditioning specifying capacity construction, a the manufacturer of cise manner of state law imposing upon not be a a care to include a certain feature would safety such units of duty Government, neither it but would identical duty anything promised be contrary. Therefore, 509, at we with simply disagree Judge Id. at 108 S. Ct. 2517. in in of the gov- Becker's assertion that the concerns articulated support defense are somehow "unique" equipment ernment contractor procurement. Also,

dens would to the state pass through government. allowing tort actions contractors who have against nonmilitary complied effect, would, with in contracts state author government empower ities to decisions the de "second-guess" policy respecting for use in civilian See United States v. sign products projects. S.A. de Viacao Aerea Rio Grandese Empresa Airlines), (Varig 797, 814, 104 U.S. S. Ct. (1984) (The discre purpose function is to tionary exception prevent "judicial 'second-guessing' social, and administrative decisions eco legislative grounded nomic, and the medium of an action in political policy through tort.").

After function to the discretionary exception FTCA indicates the of the contractor Id. defense. scope government S. 108 Ct. at 2518. We therefore must consider whether when, a function with knowl government performs discretionary risks, it determines of a edge safety design nonmilitary prod uct and it a contract. If such action falls within procures through then the is immune from tort exception, liability, and the should be able to raise the supplier defense. States,

In Dalehite v. United U.S. 73 S. Ct. a 956 (1953), loaded with ammonium nitrate fertilizer in a Texas ship exploded harbor. The fertilizer was contractors at produced by private gov- ernment The Court plants according specifications. held that the was not liable for caused injuries because it function under 28 explosion performed discretionary U.S.C. when it 2680(a) the fertilizer planned § shipment program, fertilizer, determined and determined ingredients methods for 37-42, it. See id. at 73 S. coating, storing, shipping Ct. at 969-71. The Court stated that the function ex- discretionary "includes more than the initiation of and activ- ception programs ities. It also includes determinations made executives or administrators or schedules of establishing plans, specifications Where there is room for operations. decision policy judgment there is discretion." Id. at 73 S. atCt. 968 (footnote omitted). Other courts have held that when the determines aof or it func roadway bridge, performs discretionary tion under section and is immune from 2680(a) tort for in caused defects See Miller juries v. United by alleged design. States, denied, 710 F.2d 666-67 cert. (10th Cir.), 153, States, F.2d 158-59 Ct. 352 v. United 568 104 S. (1983); Wright 824, denied, U.S. S. Ct. 94 (1978); Cir. cert. 439 99 1977), (10th 263, States, F. 268 Mich. (W.D. 1992); Schmitz v. United 796 Supp. States, 268, The Baum v. United 765 F. 275-76 Md. (D. 1991). Supp. under section also a function discretionary performs it a decision when makes 2680(a) regarding design, purchase, and resale of Post Office vehicles and therefore is not liable for in those See v. American caused defects vehicles. injuries Jurzec 1116, 1118-20 Motors 856 F.2d Cir. (8th 1988) (government's Corp., sale of with of its rollover cursory warning postal jeep propensity States, 94, a v. United 806 F.2d was act); discretionary Myslakowski Cir. sale of with no 1986) 99 (6th (government's postal jeep warning denied, a of its rollover was cert. 480 act), discretionary propensity 948, 107 v. S. Ct. 1608 Ford American Motors 770 (1987); 465, States, F.2d 467 Cir. v. United 582 F. (5th 1985) (same); Shirey the evaluation of (D.S.C. 1984) (same). Supp. "[B]oth hazards, actual or the decision to a suspected proceed par hazards, ticular manner in of those are discretion light protected acts, Ford, to tort claims in the district court." 770 ary subject F.2d at 467. The Post Office's decision to or sell order discretionary with hazards is vehicles postal particular design analogous GSA's of ambulances other (or procurement nonmilitary products) with Both fall within the potentially dangerous designs. scope section 2680(a).

The Court in contractor defense Boyle premised FTCA, be- on the function and we discretionary exception when lieve that the function discretionary performs it with an awareness of its dangers. procures nonmilitary product defense is We therefore conclude that the available to contractors.4 nonmilitary v. Serum

Our is consistent with Colorado Burgess holding States, 772 F.2d Cir. Boruski United (11th 1985), that the court held (7th 1986). Burgess, Gillette, The Several scholars have reached the same conclusion. See R. Cass & C. Risk, 77 Va. Government Contractor Defense: Contractual Allocation of Public Matasar, (1991); L. M. & R. Court and the Rev. Green Supreme De Products Crisis: Lessons from Government Contractor Liability Boyle's fense, 637, 685, Lofton, Note, (190); 63 S. Cal. L. Rev. 688-91 C. Expansion Defense; to Vaccine Manufac Government Contractor Applying turers, (1992). 70 Tex. L. Rev. 1280-82 contractor defense was not limited to government military prod- ucts and therefore be could raised the manufacturer of a bru- cellosis vaccine. After the defense in observing originated cases contractors from out of immunizing private liability arising work 18, 772 F.2d at 846 at public projects, (citing Yearsley, 413; States, 60 S. Ct. at v. United 323 580 Cir. (9th Myers 1963)), the court concluded that the rationale defense is the exten- sion of and that in circumstances where the sovereign immunity, liable, would not be actors government private acting pursuant directives Thus, should not be liable either. Id. government court reasoned that it would be to limit the defense to mili- illogical contractors, because contractor who acts tary any sovereign's stead and meets the test should not be denied the ex- three-prong tension of that is the sovereign immunity government Id.; Boruski, defense. accord 803 F.2d at 1430 of a (manufacturer swine flu vaccine could raise contractor defense) (cit- government 772 F.2d at 846). ing Burgess,

The courts in and Boruski concluded that the Burgess underlying rationale of the contractor defense —the extension of government government's actors who sovereign immunity private per- form their to the not limited to obligations government military —is That is still valid after procurement. which states reasoning that the of the as codified in sovereign immunity U.S.C. the rationale 2680(a) for the contrac- provides § tor defense. See 487 U.S. at 108 S. Ct. at 2518-19.5 Our Circuit, conflicts with the law of the Ninth holding which limits the contractor defense to contractors. military See Cases, In re Hawaii Federal Asbestos 960 F.2d 810-12 (9th Cir. 1992); Nielsen v. Diamond Paint 892 F.2d George Vogel Nielsen, 1452-55 (9th 1990). the court focused on lan- that the federal guage interest inherent Boyle stating unique all contracts sufficient, but not procurement condi- necessary, dissent, As n.2, Becker observes in fudge his Dissent at 25 Typescript Burgess and Boruski applied government contractor defense under Alabama and Illinois law However, rather respectively, than under federal common law. courts' decision to the defense to apply nonmilitary contractors was not based authorities, on of state law. analysis on Relying the courts concluded that the sovereign immunity should extend to con private tractors who their perform to the obligations See government. Burgess, 846; Boruski, F.2d at 803 F.2d at 1430. This is consistent reasoning with Boyle. tion for law. F.2d at 1454 state displacement (citing Boyle, at at that the 108 S. Ct. The court reasoned 2516). govern- ment contractor defense should be limited to military procure- concerns, ments because focused its id. analysis at and because state law to civilian applying procurements would not cause a conflict with federal significant enough policy law, state id. 1455. justify displacement Cases, In In re Hawaii Federal Asbestos the same court further that the Court's of a con- argued Supreme disapproval tractor defense for of stock model procurements helicopters by number and of standard indicates the de- "any equipment" fense should not to available on the' com- apply products readily 509, 510, mercial market. 960 F.2d at 811 at (quoting Boyle, 108 S. Ct. at The court stated that 2517). do nonmilitary products the involve same and sensitive decisions as highly complex but instead are manufactured in to the military products, response broader needs and desires of and will private purchasers already have the costs of tort factored into their Id. ordinary price.

We with the of the Court of respectfully disagree position Ap for the Ninth Circuit. Neither we nor the Court in peals Supreme have that the federal in interest con suggested procurement sufficient, itself, tracts is to the by government justify defense. The test those three-prong specifically distinguishes pro curement contracts which involve functions of discretionary gov ernment from those which do not. 487 U.S. at 108 S. Ct. at 2518-19. Satisfaction of the test insures that the manufacturer is immune when the exercised discretion with only government to the a Id. at at in S. Ct. respect dangers design. product's 2518. the Court stated that if the By way example, government a ordered model number of stock quantity helicopters equipped outward, with a hatch the have a would not opening 509, Id. at Ct. at interest in that feature. 108 S. significant particular 2517. This indicates that does not example perform function when it with orders standard discretionary equipment out to the feature which a dan regard particular design may pose It is the of discretion in exercise ger. approving and not whether was or military product design, product nature, in which determines whether nonmilitary contractor defense is appropriate. interests,

We are aware federal na- that some such as significant But tional are contracts. security, military unique procurement interests, such as sec other preventing judicial significant decisions, and lim ond-guessing government's public policy burdens, financial are both implicated iting government's and the basis formed military nonmilitary procurements for non The selection of Boyle. government's designs holding can involve decisions that are as com sometimes military products and sensitive as the selection of military plex products. Though contractors, id. at military holding Boyle specifically applied fed 108 S. Ct. and the Court several times mentions the 511-12, 108 id. at S. Ct. eral interest military equipment designs, at the Court was the narrow be merely answering question fore it rather than of a con foreclosing possibility defense tractor contractors. rationale nonmilitary of the federal Court's interest underlying holding protection — FTCA, to the id. embodied function discretionary exception S. Ct. at applies nonmilitary pro 2519— curement contracts alike. We therefore hold that the government contractor defense is available to the manufacturers of nonmilitary as a matter of federal common law. products We consider whether defendant Wheeled now Coach has satis fied the test of the contractor defense. The three-prong government defendant bears the burden of each element of the defense. proving Beaver Power Co. v. National & Valley Eng'g Contracting 1210, 1217 n.7 Where a defendant has moved for (3d 1989). it must establish that there is no issue summary judgment, genuine of material fact as to each element the Id. defense.

A. The the first contractor defense prong government requires that the United States reasonably approved precise specifications. 487 U.S. at S. Ct. at 2518. it is Though necessary only create, that the rather than the government approve, specifications, Koutsoubos, see 755 F.2d at in this case the itself created and the the defective approved specifications allegedly ambulance.

The GSA solicited bids for construction of an ambulance pur- suant to the terms of GSA Solicitation No. FCAP-X6-70785- The that the N-12-9-86. solicitation ambulance be built requires "Star-of-Life with the Federal for the compliance Specifications Ambulance," KKK-A-1822B, Wheeled Coach dated 1985. June awarded the and entered into a contract with the GSA. was project itself, The text of the contract consists of the solicitation form App. at and the ambulance incorporates specifications, App. 157-83A. Both documents were exhibits in of Wheeled support describe in ex- Coach's motion. summary judgment Together, they ambulance, haustive detail the of the the vehicle's including design to be dimensions mechanical weight, systems, equipment carried on board. fea-

With to the ambulance's center of respect gravity, case, ture at issue in this state that ambu- specifications "[t]he lance manufacturer shall locate the center of (CG) gravity determine and assure the body pur- ambulance/ambulance chaser that the CG of the ambulance to the completed complies 'CG' set the chassis manufacturer." at 161. The parameters App. with, and thus in- specifications require compliance of the manufacturer of van chassis. corporate, guidelines The manufacturer is the Ford is- Motor Company. guidelines sued Ford with its 1987 E-350 6.9 liter diesel van incomplete chassis state that the vertical distance from the to the com- ground vehicle center of should not exceed 43 inches for pleted gravity 8,000 than at 243. Al- vehicles to or equal greater pounds. App. these Wheeled Coach to though guidelines permitted place center of below the maximum gravity anywhere height forty- inches, three need not the manufacturer of deprive all discretion to a feature in order for pertaining particular design estab- contractor defense to Wheeled Coach apply. lished as a matter of law that the government approved reasonably first precise specifications, satisfying prong contractor defense.

B. The second of the contractor defense prong requires that the manufactured the defendant conformed to by product U.S. at 108 S. Ct. at government's Boyle, specifications. Wheeled 2518. of its motion for support summary judgment, Coach submitted the affidavits of its sales manager Robert Paul and its mechanical Holzapel engineering supervisor that Wheeled Coach built the Carlton. The affidavit states Holzapel ambulance in absolute with the GSA's specifications. compliance The ambulance was GSA assur- inspected by quality completed with ance who determined that ambulance inspector, complied it contract released specifications shipment Virgin 194-97; at id. at Islands. see also 187-88 of (Notice Inspection App. and U.S. Government Bill of The Carlton affidavit states Lading). that the ambulance was manufactured according government's and that Carlton tests and measurements specifications, performed on the ambulance that the of its center of indicating height gravity level, is 36.5 inches above which meets the ground government's it be no than 43 inches. Id. 241-42. requirement higher Plaintiff offered no affidavits or other evidence in Carley opposi- tion to Wheeled Coach's motion for We con- summary judgment. clude that Wheeled Coach established as a matter of law that the ambulance conformed to the government's specifications, satisfy- the second of the contractor defense. ing prong

C. The third contractor defense re prong that the warned the United States about the dan quires supplier in the use of its that were known to the but gers product supplier not to the United States. 487 U.S. at 108 S. Ct. at 2518. The district court took notice "of the fact that the judicial govern tests, ment conducts numerous crashworthiness and the well known rollover vehicles center of problems having high grav at 247. The court concluded that the third there ity." App. prong fore was satisfied because Wheeled Coach could not have been more aware than the ambulance's tendency rollover. We "A noticed fact must be one not disagree. judicially to reasonable in that it is either known (1) subject dispute generally within the territorial the trial court or (2) jurisdiction capable accurate and determination resort to sources whose accu ready cannot be Fed. R. Evid. The 201(b). racy reasonably questioned." facts noticed the district court are not reason judicially beyond able and therefore do not Rule 201(b). dispute satisfy vehicles, various tests on but the government may perform and nature of those tests are not matters of common quantity nor are a source whose knowledge, they readily provable through Likewise, cannot be the district accuracy reasonably questioned. determined, court could have reasonable beyond dispute, the rollover of vehicles with centers of propensities high gravity are well little, known. Most know if people probably anything, about how centers of cause vehicular accidents. The high gravity facts noticed the district court are not the kind judicially ascertainable See, facts that Rule readily 201(b). Police satisfy e.g., man's Benevolent Ass'n v. Washington (3d Twp., 1988) (court took notice of appeals judicial township's police denied, cert. S. regulations), Ct. 1637 Gov (1989); ernment Testamark, of the Islands v. 528 F.2d Virgin (3d Cir. 1976) error to (no take notice of court records indicat judicial defendant's But see ing conviction). Town Sound prior & Custom Inc. v. Motors 959 F.2d Tops, 494-95 Chrysler n.40 (3d Cir.) (court could not take notice that of au judicial standardizing tosound was systems automotive cert. prevalent industry), — denied, —, 113 S. Ct. 196 (1992).

Aside facts, from the noticed there is no evidence judicially on record that Wheeled Coach warned the GSA showing about in its ambulance that were dangers known to Wheeled Coach but not to the GSA. Wheeled Coach offered the evidence which only we have deemed sufficient the first two of the satisfy prongs test. three-part submitted no Though affidavits or plaintiff Carley other evidence in to Wheeled Coach's motion sum opposition her failure to did mary judgment, not relieve Wheeled respond Coach of its burden of its entitlement proving summary judg ment. See Fed. R. Civ. P. Beaver 56(e); Power 883 F.2d at Valley 1217 n.7. Wheeled Coach failed to meet its burden.

Wheeled Coach that in the absence of evidence argues any op- motion, its it established the posing defense that it built the ambulance in accordance with the showing gov- Coach, ernment's effect, Wheeled that its specifications. argues satisfaction of the first two of the defense also satisfies the prongs third We prong. disagree.

The third contractor defense prong pre vents the of state law where the manufacturer has displacement built a to the product but according government's specifications has not informed the of known risks. 487 U.S. at 512-13, 108 S. Ct. at 2518-19. The Court Supreme specifically the third manufacturers adopted from an prong prevent having incentive to withhold manufacturer, of risks. Id. A knowledge

therefore, of all be relieved of the cannot proving responsibility contractor defense. three elements of the government Furthermore, that the has refused to hold this court consistently as of law defense is established a matter contractor government the that the manufacturer informed a substantial absent showing in of its See of known risks the use Maguire, product. government at 72 affirmed where unrebutted F.2d dep (summary judgment that indicated and memorandum osition engineering testimony In re Air known risks manufacturer disclosed Army); safety 115, 124-25 Cir. F.2d (3d Disaster at Mannheim Crash Germany, accidents, about two 1985) (uncontradicted testimony prior of modification manufac by proposed Army's specific rejection defect, established knowl turer to correct accident-causing Army's entitled manufacturer n.o.v.), of risks and safety judgment edge denied, v. Cater S. Ct. 851 cf. Brown (1986); cert. Cir. (3d Tractor 254-56 1982) (summary pillar be in of manufacturer reversed where contract favor judgment as manufacturer and was unclear to whether tween Army protec Unlike had to be installed on tractor-bulldozer). tive canopy Disaster, the this case is and In re Air Crash record in Maguire between Wheeled Coach and the GSA devoid of communications of is there the risks of centers Nor any high gravity. pertaining that the knew evidence other government competent indicating center of that of ambulance's give height gravity might The or vehicle to rollover. dangerous government propensity inches above dered an ambulance with center of to 43 gravity up vehicle. alone do finished These facts ground inspected establish, law, of that knew as as a matter government about associated with the ambu much as Wheeled Coach the risks A fact exists as lance's center of issue of material genuine gravity.6 (5th 1985). Wheeled Coach v. FMC 770 F.2d 556 argues Bynum of We grant summary disagree. Bynum, plaintiff supports judgment. defect in a carrier manufactured cargo was an injured alleged ("FMC"). two defendant FMC the first stipulated Corp. parties defense were and that FMC satisfied prongs knew of no in its vehicle not known to the See id. patent dangers government. F.2d at at 577 & n.31 test four-prong recognized McKay, (applying test). are identical to FMC sub in which second fourth through prongs had mitted the affidavit of its that FMC no manager, engineering stating car- alleged cargo accident defect knowledge any prior involving to whether Wheeled Coach informed the dangers the use of its ambulance known to Wheeled Coach but not known to the government.

IV. We hold that the contractor defense is available to law, contractors under federal common but a nonmilitary genuine issue of material fact exists as to whether Wheeled Coach satisfied the third of that defense of dan- prong by warning known to Wheeled Coach but not gers to the We government. therefore will reverse the and remand grant summary judgment the case to the district court. If Wheeled Coach establishes at trial that it satisfied the third contractor de- prong fense, then federal common law state law and Wheeled preempts Coach is not liable for the defect in its ambulance. alleged design

If Wheeled Coach fails to establish the contractor defense, then the district court must determine whether Wheeled Coach is liable event, under state law. In that the district court will consider alternative defenses raised Wheeled and Coach whether Islands or Florida law this case.7 The Virgin dis- governs decide, trict court need not as whether Carley's appeal suggests, Islands law a Virgin contractor defense or recognizes whether that contractors, defense to applies nonmilitary light our that the contractor defense is available holding contractors under federal common law. nonmilitary BECKER, Circuit Judge, concurring dissenting. v. United S.

Using Boyle 108 Ct. Technologies Corp., as a (1988), has a announced springboard, majority sweep- affidavit, rier or similar vehicles which it manufactured. This combined with affidavits, and the lack of stipulations was any sufficient to es- opposing tablish the third and sustain a prong grant summary Id. judgment. whether, view, We need not decide in our the evidence in be would Bynum sufficient to establish the third prong government contractor defense as a matter of law. We observe that only the defendant in Bynum offered a higher degree of proof of its support motion than did Wheeled summary judgment fact, Coach. In Wheeled Coach offered no the third proof but satisfy prong, instead relied merely the court's upon notice that it had taking judicial been satisfied. 7 We do not find it to decide necessary of the conflict laws Carley's appeal decided question the district court. under which federal federal common law rule of ing lia- from tort share the contractors immunity government's may view, dealt extended which has In bility. my majority and was with contracts premised military equipment only In so far its limits. to the concerns beyond logical military, unique on the domain of has encroached Congress doing, majority defense I hold the that of the states. would inapplicable such as the one issue. contracts nonmilitary government conclusion, whether I must reach In view of question my here as a matter of state contractor defense applies from that the law. I believe making estopped plaintiff judicially law law rather than Islands her that Florida ap- Virgin argument law, and conclude that the I look to Islands therefore Virgin plies. view, rule for an defense does not my immunity govern- apply. with the of strict ment contractors is inconsistent prod- principles Islands. while I ucts Accordingly, Virgin liability applied order of the with the the summary judgment agree majority remanded, and the case and in that district court must be reversed I would direct the district court to concur in the judgment, respect of either a federal or conduct in the absence Virgin proceedings extent, I re- defense. To Islands government dissent. spectfully

A. when a mili- the test for announced following identifying Boyle the from share immunity prod- may government's tary uct liability: cannot be im- defects in for military equipment

Liability design law, when the United States (1) to state ap- posed, pursuant the (2) reasonably specifications; equipment proved precise the warned to those (3) conformed supplier specifications; of the United States about the the use the dangers equip- but the United that were known to the not to ment supplier States. S. Ct. at 2518 In added). 487 U.S. at my (emphasis

Boyle, view, not lend itself to the does majority's expansive reading, Boyle that rules of fed- of the well-established principle especially light be drawn and eral common law should narrowly imposed only rare circumstances where there a conflict" between a "significant law, federal interest and the of state see Wallis Pan application 63, 68, American Petroleum S. Ct. infra Part I.C.

(1966); I the with the first in the deci agree majority step Boyle sion —the Court's conclusion that a there is federal inter "uniquely est" in civil out of of potential liability arising performance contracts, federal see 487 U.S. at 108 S. procurement Boyle, contract, Ct. at might apply any government military 2514-15— However, or as Scalia's nonmilitary. (for opinion Justice demonstrates, of majority) procurement "[t]hat equipment by the United States is an area . of federal interest. . uniquely merely sufficient, establishes not a condition for necessary, displacement of state Id. at law." S. Ct. at 2516. state law Displacement with federal common law is where there exists a permissible only conflict . . an . between identifiable federal or "significant policy interest and the of state law." Id. I (citations omitted). operation cannot with the assertion that such a agree majority's "significant conflict" is involved whenever the federal exercises discretion in the context of an contract. See ordinary procurement 8, 9, 13-14. Majority Typescript conflict" at issue in identifying "significant

Court looked first to the function" of the "discretionary exception Federal Tort Act Claims which immunizes federal em- (FTCA), from tort where the basis for tort ployees agencies claim is the exercise aof or function "discretionary duty part of a an or 28 U.S.C. agency employee government." After that the 2680(b). "selection determining § appropriate used our Armed Forces is assur- military equipment function within the of this edly discretionary meaning provi- sion," 487 U.S. at 108 S. Ct. at the Court out the spelled reasons for contractors tort from lia- particular military shielding law, via federal common reasons are which either bility unique or context. Court heightened military explained "often involves design military equipment merely engineer- technical, but as to the ing analysis balancing judgment many considerations, and even social including specifically between combat greater safety greater Boyle, trade-off effectiveness." 511, 487 U.S. at Ct. at 108 S. 2518 added). (emphasis that, this of the concludes Parsing key portion Boyle, majority effectiveness, aside from concerns about combat "all of the other 331 the the in of cited Court reasons support policy to and nonmili- are contractor military defense equally applicable at in 9. This reading, my tary procurement." Majority Typescript view, it be true some While that the Court's distorts may reasoning. as of the the Court in of the reasons mentioned Boyle part policy from tort contractors military shielding justification deci- interests in (i.e., discretionary protecting government's technical, concerns) economic or social sions may apply involving context, 9, at these see outside of the Majority Typescript military between a fed- create the same of conflict concerns do not degree law that exists in the and the of state eral interest military operation context, be national must balanced where safety against product security.1 whether federal

The are courts Boyle's gov- split question can extended to contracts for non- ernment contractor defense be However, at n.l. See 6 Majority Transcript equipment. has addressed that other federal court only appeals specifically 18, v. Yearsley reliance on W.A. Ross Construction majority's defense all (1940), S. Ct. as a basis for its extension of Boyle govern view, also, at 6-7. is in See unavailing. Majority Typescript ment contracts my a on the Clause the Court barred suit for based damages Takings Yearsley, built who had a dam had allegedly a contractor against as see Type eroded the land. But the majority recognizes, Majority plaintiffs' 6-7, in found that contractor was an Yearsley agent at Court script States, at like the defendant in the case the United and not contractor private 414; at Dorse Armstrong bar. 309 U.S. at 60 S. Ct. see also Yearsley, Industries, Inc., (Fla. 1987) n.4 share 513 So.2d (entity may World under when activities Yearsley only performing governmental immunity true with v. Penn government); Reynolds within agency relationship scope 414, 416, 550 Fabricators, Inc., 1990) 2d 146 Misc. 2d N.Y.S. 812 (Sup. Metal (because in actual with Yearsley agency defendant was relationship seek is from case of distinguishable private government, Yearsley decided It bears was noting Yearsley also ing government immunity). Federal Claims which drastically to the Tort Act passage prior Thus, suits. Yearsley the federal from tort immunity reduced government's 524-25, 108 the issue in this case. See 487 U.S. at Boyle, of minimal relevance to J., (Brennan, S. Ct. at 2525 dissenting). Moreover, only was relied on in Court's Yearsley support pre- civil there is a federal interest" limiting conclusion that liminary "unique con- that arise of the performance government procurement liabilities out discussed, I do not the existence of "unique tracts. As I have dispute However, such an interest is not here. existence of sufficient interest" Ct. at of state law. See 108 S. justify displacement 2518. the issue has refused to extend the to nonmili- defense contracts for Co., In Nielsen v. Diamond Paint tary equipment.2 George Vogel 892 F.2d 1450 (9th 1990), Cir. the Ninth Circuit held that the Boyle not a defense did extend suit a to products liability brought by civilian of a the employee Army Corps Engineers against paint for manufacturer incurred while a for dam the injuries painting The that defendants were entitled to Corps. argued they summary under because in manufactured the ac- judgment Boyle they paint cordance with did not government-approved specifications know of were unknown to the Re- any dangers government. that, this the Ninth Circuit reasoned the jecting argument, although Court in the based defense contractor Supreme Boyle in behind the function part policies discretionary exception FTCA, to the "the behind the defense remains rooted con- policy Nielsen, siderations to the 892 F.2d at 1454.3 peculiar military." 2 cases, Co., The relies on two majority pre-Boyle Colorado Serum Burgess States, (11th 1985) F.2d 844 Cir. (7th and Boruski v. United 803 F.2d Cir. However, 1986). at 12-13. make clear Majority Typescript majority fails to that the federal courts in these were cases law ver pre-Boyle state applying sions of contractor defense (Burgess applied law, contractor defense under Alabama while Boruski defense as applied law). matter of Illinois cases did deal These thus not with the different very concerns involved when federal courts rules federal common law to impose law. See Part state infra I.C. displace post-Boyle Several decisions the Fifth and Eleventh do Circuits suggest that those courts view the Boyle defense as to for non extending contracts (11th See Glassco v. Miller military equipment. 966 F.2d 641 Equipment 1992); Cir.), Cir. Trevino v. Dynamics (5th General 865 F.2d 1474 cert. denied, However, (1989). 110 S. Ct. 327 these cases Boyle applied to did military equipment and therefore address or decide the specifically issue. 3 The Ninth Circuit reaffirmed its as limited to recently Boyle govern reading Cases, ment contracts for Hawaii Fed. equipment In re Asbestos military (9th 960 F.2d 806 1992). Asbestos manufacturers invoke the sought defense to tort Boyle claims on behalf individuals from brought injured to asbestos dust while in the U.S. The held that exposure serving Navy. court insulation, the asbestos contracted although for was not mili military, (which was not tary therefore defense equipment subject Boyle defense"). court referred to as a rule of throughout "military law common articulated immunizes con explained, court with to the . . . "only tractors respect military equipment they produce [be makes and sensitive military highly complex decisions regarding cause] of new use." Because development at 811. equipment military with the Ninth Circuit's conclu

A of courts have number agreed to contracts for sion equipment. applies only Bankr. re 339 (S.D.N.Y. 1992) See In (Boyle Chateaugay Corp., suit defense not brought by injured applicable products defective manufacturer allegedly postal against postal employee So. 2d 155 (Ala. v. 562 Pietz vehicle); Orthopedic Equip. denied, defense is limited to cert. 1989) military equipment), (Boyle v. Penn Metal Fabrica 111 S. Ct. 75 (1990); 498 Reynolds tors, Inc., 2d N.Y.S. 2d 811 1990) 146 Misc. 550 (Sup. (Boyle for defense does not to apply government responsible re In New York Asbestos vehicle); manufacture of City Litig., postal 118, 121 42, 46, 542 defense 1989) 144 Misc. 2d N.Y.S.2d (Boyle (Sup. used not to claim asbestos does involving liability products apply However, in material that was not strictly military equipment).4 to contracts for other have courts applied Boyle nonmilitary equip F. 212 Wis. See v. Grumman 806 (W.D. ment. Supp. Johnson contract mail de defense to for 1992) (Boyle applies procurement Court, Alameda Vermeulen v. vehicle); County, livery Superior Dist. defense (1st 1988) Cal. 3d Cal. Rptr. (Boyle App. contracts). and to nonmilitary military government applies equally has I believe that the Ninth Circuit sounder ap- adopted It federal interest in was the heightened shielding govern- proach. and the national not ment decisions security, merely involving officials, which exercise of discretion by justified government rare in to take the extreme and Court's decision Boyle Supreme a rule law. No state law with of federal common step displacing manufactured with the needs of the special the asbestos insulation "was not mind," be id. at the court held that the manufacturers could military in instead of to tort as would be had exposed liability, just they private party, contracted the insulation. for government, which within The courts have not addressed with the issue of precision products under "military context constitute equipment" Boyle, See, F.2d 331 issue is before us here. Stout e.g., Borg-Warner Corp., not air unit (5th Cir.) discussion that an (assuming Army conditioning without Missile Mobile Unit was used to cool Hawk System Repair military equipment denied, defense), (1991); to cert. S. Ct. 584 subject Boyle was therefore Cases, (9th 1992) (holding but see Hawaii Fed. Asbestos 960 F.2d 806 was and was in buildings military equipment asbestos insulation Navy above, defense), discussed n.3. supra therefore not subject Boyle such interest decision in this justifies case to extend majority's defense to all Boyle contractors.5

B. bases its decision to extend majority nonmilitary that, contracts in on the if part premise contractors are defects, for will subject liability they pass the costs of that on to the See liability government. Majority Type- at 7-9. Concern that script bear government may indirectly some of the costs of the not, it liability products purchases my view, a sufficient state law with a justification displacing judge- made rule for contractors. immunity

The Court did not here, as the does suggest majority that a conflict" between federal "significant interests and state law exists time the costs of tort are every on to the passed gov- ernment Rather, context, contractor. read cost concern articulated in was that the Boyle passing liability costs for defects from contractors to design the military government would have the effect of sensitive second-guessing highly military decisions the balance between involving equipment safety combat effectiveness. See 2518; 487 U.S. at 108 S. Ct. at words, Part I.A. In other the concern in supra about Boyle passing costs on to the liability because of its government meaningful 5 The that majority suggests Boyle's of the Feres rejection doctrine as the source of defense, the government contractor and the Court's reliance instead on the A, function discretionary to the FTC is exception a strong indication that the Court Supreme intended to extend the government contractor defense to all government contracts. See at Majority 7-8.1 do not read Typescript that the way. Boyle, Court it that could not explained on Feres as a rely basis for the government contractor defense because the Feres doctrine was both too

broad and too narrow. The Court concluded that Feres was too broad in that it would immunize government contractors from suits by members of the armed services even when the products that caused their were injuries designed without government the input. Conversely, Court concluded that Feres was too services, narrow because it would cover only members of the armed However, not civilians injured by military equipment. the Court did not sug that an gest additional reason for avoiding Feres and instead to the looking function discretionary was that exception the discretionary function exception is not limited the to military context. As the Ninth Circuit explained, although the Court the "changed intellectual of the defense moorings from the Feres doctrine to the [,]... function discretionary the exception behind the policy defense remains Nielsen, rooted in considerations to the peculiar military." at F.2d 1454-55. in inter- the federal interest to acute relation avoiding judicial with ference the military equipment.6 design Indeed, the too the relied on cost theory by majority proves much, made the a for time every government purchases product sector, into the costs (factored the price) liability private potential I with the the While are to agree majority government. passed would this economic harm suffer that regard- government "[t]he use," civilian whether it for or less of product procured the likelihood that will Majority Typescript it from costs of bear indirectly liability products procures state law does not sector justify displacement private law. Carolina v. federal common Cf. South with rule of sweeping 505, 521, Baker, (non- 108 S. Ct. 1365-66 (1988) entities of costs on pass discriminatory private imposition does not burden them on unconstitutionally federal functions). definition,

Moreover, defense, contractor ap- defects, defects. and not to See manufacturing only design plies Ammunition, Inc., 245 (5th Star Mitchell Lone States, v. United 568 F. As the noted 1990). court Supp. Johnston Kan. since for defects is (D. 1983), liability manufacturing defense, not shielded argument defense is to prevent passing liability purpose to the carries little costs on weight. not certain that con- it is

Additionally, subjecting government defects results tractors necessarily signifi- to the As Brennan costs pointed cantly greater government. Justice out:

The tort is on the that system assumption imposi- premised tion of actors whose liability encourages prevent any injury 6 in the first its explain The Court also invoked cost concern part analysis, directly that contractors will affect "imposition liability ing decline to the terms of contracts: either contractor will manu it or will raise its Either price. facture design specified government, United will be Boyle, the interests of the States affected." 487 way, directly 507, 108 at Ct. at 2515-16. But the Court made this only support U.S. S. point is a federal interest" in potential its conclusion there preliminary "unique civil liabilities that arise out of the federal con performance exists, an but the tracts. As I I that such interest exist agree have explained, interest" is not sufficient to displacement ence of federal justify "unique I.A; 507, at at 2516. state law. See Part 487 U.S. 108 S. Ct. supra cost exceeds cost of If the expected prevention. system should, as it Government contractors will working to avoid certain the deaths of equipment (like soldiers injuries or Government which would be certain to burden employees) the Government. 530, at

487 U.S. at 108 S. Ct. J., (Brennan, see also dissenting); v. 444, Rockwell Int'l McKay (9th 1983) (Al Corp., arcon, J., (contractors with better records will se dissenting) safety cure less insurance and will those expensive liability pass savings, as well as the benefits of on to the cert. greater safety, government), denied, 1043, 104 464 U.S. S. Ct. 711 Johnston, (1984); 568 F. Supp. 357 (same). short, the cost avoidance rationale does not the dis- justify of state law with a

placement federal products liability judge-made rule for all view, contractors. In immunity de- my termination whether cost concerns of state justify preemption tort law with a federal contractors, rule for immunity so, and if rule, the nature and of such a lies in the domain of scope Congress.

C. decision to extend the defense to all majority's Boyle govern- ment contractors flies in the face of the doctrine that long-standing federal common law state law in "few and re- may replace only stricted" Wheeler, instances. 647, 651, Wheeldin v. 83 S. Ct. see also (1963); Miree v. De Kalb 433 County, S. 97 Ct. (1977); Wallis Pan American Petroleum 384 U.S. at view, 86 S. Ct. at 1304. In not the my Congress, broad, is the institution to create judiciary, proper policy- driven rule for contractors.7 immunity private government

The Court's decision in to fashion a rule of federal com- mon law contractors from tort was shielding con- troversial. Brennan in his dissent argued forcefully Justice should decide whether legislators, and to what extent judges, contractors should share the private government im- government's from tort munity liability: considered, has but Congress never various versions of a federal passed, govern See, ment contractor defense. H.R. 99th 2d e.g., (1986); Sess. Cong., S. 2441, 99th 2d (1986). Sess. Cong., so, hav- . . remained silent —and . has conspicuously

Congress Government contractors a sustained resisted campaign by ing The Court —unelected and them some defense. legislate into unaccountable to unabashedly stepped people —has Lt. a rule the breach to family denying Boyle's legislate view, them .... this that the state assures my compensation and the to fashion Court lacks both authority expertise a rule .... such 515-16, 108 J., dissent S. Ct. at 2520-21 (Brennan, 487 U.S. at id. at 108 S. Ct. 2528-29 see also omitted); (footnote

ing) that is better J., (Stevens, dissenting) (arguing legislature new, Michael D. an rule); to create entirely policy-driven equipped Matasar, A. Court and the Products Green and Richard Supreme Government Contractor Crisis: Lessons Defense, Boyle's Liability from 637, that rather L. Rev. 714-26 (1990) 63 S. Cal. (arguing Congress, Court, institution to establish than the is gov- proper Note, Fed- Paula G. defense); ernment contractor Curry, Expanding The Government and Diminished eral Interests Rights: Plaintiff 337, 31 B.C. L. Rev. 371-73 (1990) Contractor (arguing Defense, have left the creation of a novel federal Court should govern- ment contractor defense to Congress). have taken a contro- Court Boyle may

Although Supreme takes a versial the majority today giant leap, exponentially step, reach In so seems to doing, majority expanding Boyle. the long-standing principle ignore concern, rule in an area of national enactment of a federal

[t]he so, state law in and the decision whether to doing displace made not the federal insu- generally by judiciary, purposefully but lated from democratic people through pressures, their elected in Congress. representatives Illinois, 304, 312-13, S. Ct. Milwaukee v. 58 S. Ct. see also Erie R. Co. v.

(1981); Tompkins, the Federal Consti- in matters (1938) governed by ("Except the law to be case is tution or Acts of Congress, applied any the law of the State."). not, con has as decided to immunize yet,

Congress n.7. are there "clear and tractors from tort See Nor liability. supra Government, which . . . will substantial interests of the National if the state law is United States suffer damage applied," major Yazell, 352, 86 S. Ct. 507 to hold nonmili (1966), contractors liable for As I defects. have government tary discussed, an acute national interest in deci shielding government sions the cre regarding design military equipment justified of a limited ation rule of federal common law in But here the Boyle. has articulated no such substantial national interest to majority jus manufacturers of tify immunizing nonmilitary equipment through a rule of federal common law.II.

Because I would hold that federal contractor Boyle's government case, defense does not to the defendant I this must con- apply sider whether a contractor defense is available to the defendant as a matter of state law.

I address the choice of law Car- plaintiff's argument only briefly. that the court erred the law of argues ley appeal applying Islands (the and instead should have Virgin place injury) applied the law of Florida (the Without manufacture).8 place reaching merits choice’ of law I would hold that Carley's argument, is from her of law choice Carley judicially estopped making argu- ment. Not did fail to raise the until only Carley argument after district court but she had granted summary judgment, previously in her Memorandum in to Defendant's Motion argued Opposition that Islands law should be Summary Judgment Virgin applied than federal common law (rather under after the dis- Boyle). Only trict court held that Islands law should "Virgin incorporate so," has defense if it done did already submit that Florida law should be This court has Carley applied. held that a from as "consistently judicial estoppel precludes party a in a inconsistent with one suming position legal proceeding pre asserted." Government of v. Islands viously Virgin Paniagua, F.2d Cir. see Muslin (3d 1990); also Live Frelinghuysen Inc., stock n.1 (7th 1985) Managers, (acqui escence in court's choice of law amounts to waiver of any objection Because district court was unsure whether applicability govern law, ment contractor defense was by federal or state the court held governed defense was available as a matter of either or Islands Virgin law. The court concluded then that the same defense set out in three-pronged to all under law. applies contractors Islands Virgin scenario, I believe Given this is choice). such Carley judicially law that Florida should from apply.

estopped arguing a contractor de- will address whether Accordingly/I a I note as matter of Islands law. fense exists Virgin preliminarily a contractor defense exists whether question law different from whether such as matter of Islands Virgin law, Part I. as a of federal common see defense exists matter supra discussed, restrict I of federalism As have long-standing principles law with the of federal courts to state displace judge- authority Part I.C. Such feder- made of federal common law. See rules supra court, when as the alism do not come into this concerns sitting play Islands, is asked decide whether Court of the to Virgin Supreme a of contractor defense as some version the government applies law. matter of Islands common Virgin for a There is no Islands of Virgin precedent govern- application 402A of ment contractor defense.9 Section the Restatement (Sec- Torts, of which strict in the ond) liability Virgin governs products Morse, Islands, F.2d v. Fairbanks 610 154 n.8 (3d see Murray I, tit. silent Cir. V.I. Code Ann. 4 is on whether (1967),10 1979); § claim, a a there is such defense be to strict may liability applied Thus, law I look to no Islands on this issue. must statutory Virgin tenets law in the Islands and to the of strict general liability Virgin the for the contractor defense determine rationales the defense as a matter of Islands com- whether Virgin adoption v. Clark mon law is warranted. See Polius Equipment our role as the Court (3d 1986) ("In Supreme control, . . . must Islands when the Restatement does not we Virgin be that the law which better apply approach, represents rule."). or minority majority Aside the district court's offhand assertion this case Islands Virgin from defense, law and a few lines of incorporate should with- similarly dicta in an district court which assumed unpublished opinion Islands, (or out that the defense should applies deciding apply) Virgin 1986/80, (D.V.I. see Nielsen Oshkosh Truck Civ. No. at 1-3 slip op. 13, 1988), I aware of no Islands cases that mention the Apr. Virgin am other defense. I, V.I. Ann. tit. rules in the Restatements the rules of Code as adopts § contrary. decision in the Islands the absence local laws Virgin

Section 402A that if a who is in the business of provides person or sells manufactures the selling manufacturing and/or product "in a defective condition to the product unreasonably dangerous user or consumer or to his is lia- property!, person] subject harm caused to the ultimate user or con- bility physical thereby sumer, to or his Restatement of Torts 402A. (Second) property." § even where "the seller has exercised all Liability imposed possi- ble care and sale his Id. preparation product." Morse, court, v. Fairbanks this Is- Murray announcing Virgin law, lands behind 402Á: explained policies § on the defect rather than By focusing legal inquiry product the defendant's conduct and bur- thereby easing plaintiff's den of strict endeavors to proof, risk liability theory place of economic loss on the manufacturers of defective products, the loss and not it on an in- thereby spreading saddling solely nocent loss, consumer. Because manufacturers bear the injured strict also has the desirable effect of manu- deterring facturers and sellers from unsafe into the introducing products stream of commerce. 158; Dobbs,

610 F.2d at see Dan B. E. Robert Keeton & generally Owen, David G. Prosser and Keeton on Torts ed. (5th 692-94 § 1984) the rationales for strict cost (discussing liability, including and sale spreading, of un- compensating injured parties, deterring Thus, 402A, safe Islands, as in the products). applied Virgin § places great emphasis protecting potentially injured persons by for caused defects and providing compensation injuries by design manufacturers and sellers to and sell safer by encouraging produce products.

A rule that would immunize manufacturers whose private prod- ucts conform to federal or state from government specifications strict defects would conflict with these liability design policies. The most obvious effect of the contractor defense is to government the full cost of accidents from defects on place resulting design both injured parties, thereby thwarting policy compensating and the See Gail injured persons policy risk-spreading. generally Rubin, Comment, The Government Contract in Strict Liability Defense Suits 48 U. Chi. L. Rev. 1030 (1981) Design, (arguing for Defective that the contractor defense should be not government applicable bar strict claims for The defense also con- liability defects). flicts with the deterrence rationale behind strict immuniz- liability: little incentive to scruti- will them contractors give

ing or design speci- nize government-approved government-provided Cass & P. See Ronald A. Clayton fications for dangers. potential Gillette, Contractual Allocation Contractor The Government Defense: Thus, unless the various Risk, 77 Va. L. Rev. 260 (1991). Public defense out- contractor for the rationales strongly 402A, for rec- I can see no behind justification weigh policies § law. Islands common as a matter of such defense Virgin ognizing defense, have ex courts In applying on a fair to tort that it is liability govern simply impose plained with has who ment contractor complied merely See, Vanchieri v. is not at fault. and therefore e.g., specifications 80, 85-86, 514 & New Authority, Exposition Jersey Sports N.J. Liab. re Prod. In (1986); A.2d Orange" Litig., "Agent However, noted, as I have strict 1982). F. 793 (E.D.N.Y. Supp. based on or Islands is not law negligence liability Virgin even if it on the defendant conduct. is "[Liability imposed faulty 'all care in the sale has exercised preparation [its] possible Morse, F.2d at 156 Re v. Fairbanks (citing Murray products.'" v. Honda see also Acosta of Torts (Second) 402A(2)(a)); statement § touchstone of 1983) ("The Motor 717 F.2d 835 (3d character of the manufacturer's conduct 402A ... is that the § its the condition irrelevant only essentially — fact, strict be the trier of fact.").11 is to considered by product be contractor defense should not con 11I note in this that the regard distinct, similar, "contract specifications fused with the though analytically claims involving products defense." The latter defense applies negligence of another (private that are manufactured to the order specifications party Restatement, deals to 404 of the which commentary or governmental). § follows the design with that where a contractor simply negligence, explains another, the "is not to [negligence] liability contractor subject specifications to make the or material turns out to be insufficient if the specified design use, it bad that a obviously chattel safe for unless is so competent be realize that there was a chance that his would grave product danger would 404, (Second) of Torts cmt. a. Because the con unsafe." Restatement ously § (and discussed in the tract defense is in grounded negligence specifications have in the context of it should no negligence), application Restatement only claims, conduct on the of the seller or man to strict where liability faulty part See, have so held. Shaw v. Grum e.g., ufacturer is irrelevant. Several courts denied, 736, (11th 1985), cert. 487 U.S. 778 F.2d 739 Cir. man Aerospace Corp., 77, Zimmermann, Inc., 512 F.2d (1988); Ct. Challoner v. &Day S. 2896 342 for defects to sellers and distributors even liability design applies have manufactured the de- though they may actually allegedly Thus, view, fective the fairness rationale for the product.12 my contractor defense carries little in the strict lia- weight Zimmermann, Inc., context. Accord v. Challoner & 512 bility Day 77, F.2d 83 Cir. vacated and remanded on other (5th 1975), grounds, 3, events, 423 U.S. S. Ct. 96 167 At all that (1975). notion holding contractors liable for designs specified by govern- view, ment is unfair does not of victim outweigh, my policies and deterrence compensation, cost-spreading underpin 402A. §

The doctrine of is also considered a ration- sovereign immunity See, ale for of the contractor defense. application e.g., Beaver Power Co. v. National & 883 Valley Eng'g Contracting 1210, 1215-15 (3d Maremont 1989); 350 Mackey 415, 908, Pa. 504 A.2d 911 Is- (1986). Super. Although Virgin lands has waived the immu- Legislature government's sovereign from claims or a nity personal injury alleging negligence wrongful omission, act or this waiver does not to strict claims. apply liability See V.I. Code Ann. tit. 3408 The United (1992).13 States govern- § Nelms, ment is also immune from strict See Laird v. 406 liability. 92 S. Ct. 1899 Some courts have (1972). explained from strict defects government's immunity liability would be if a contractor who fulfills meaningless private simply terms of contract cannot share the im- government-approved See, Nielsen, 892 F.2d at 1456 often absolve ("Courts munity. e.g., contractors from when following government specifica- tions ... because of their reluctance to ... when the impose liability itself would be immune from suit."). (5th Cir.), 83 vacated and remanded on other S. Ct. grounds, 354; States, Dorse, (1975); v. United F. 513 So.2d at 1267. Supp. Johnston 402A, (Second) Restatement of Torts cmt. c. provides part: § The rule ... in the business of applies any person engaged selling products for use or It therefore manufacturer of such a consumption. applies any wholesale or retail product, any dealer or distributor .... The basis for the rule is the ancient one for the special responsibility safety public undertaken one enters who into business of human supplying beings with which products of their or may endanger safety persons property. 13Moreover, Islands' waiver of Virgin is limited to sovereign immunity $25,000. (1992). See V.I. Code Ann. tit. § for the

I am not The best explanation application persuaded. that suits di- is brought immunity today by restricting sovereign interference with the government, judicial govern- rectly against minimized. See Larson v. Domestic & mental policy-making 682, 703-04, S. Ct. 1468 Commerce Foreign But is a difference between there (1949). subjecting significant such to tort claims liability allowing government directly suits contractors. claims "Surely against private government have a effect contractors will less pronounced against government officials' decisions than suits those officials on against government if the the former are on to the even costs of gov- personally, passed Matasar, 716; Dorse, & S. Cal. L. Rev. at see also ernment." Green as an 513 So.2d at 1268 & n.4 (a private entity acting independent contractor and not as an agent logically government government Travis, Note, Re- cannot share the government's immunity); Jeremy 57 N.Y.U. L. Rev. 618-19 (1982). thinking Sovereign Immunity, Tied with the rationale for sovereign immunity govern- up that if contrac- ment contractor defense is the concern government defects, will tors are for subject liability design they pass if the itself had costs on to the whereas government, government See, made the it would be immune from such liability. product, e.g., on cost rationale as basis for (relying Majority Typescript all the federal contractor defense to extending govern- Vanchieri, ment 514 A.2d at 1326 contractors contractors); ("If never shared their costs of business immunity, doing would be and those costs would be on to the govern- higher passed A.2d at ment entities contractors."); hiring Mackey, contractor defense lower costs to the (government "encourages the reasons discussed bids"). For competitive above, I.B., I an Part am not that interest cut- supra persuaded costs ting government justifies immunizing private government view, contractors from for defects. In liability design my strong interests behind the of strict for policy application victims, defects and de- (compensation injured cost-spreading, unsafe any terring products) outweigh putative lowering cost of result from immuniz- might procurement contractors. ing government short, none of rationales behind so as to convince me

defense 402A outweigh policies § the defense should be as matter of Islands Virgin applied Therefore, with the while I common law. agree majority reversed court must be of the district order summary judgment I remanded, in the and to that extent concur and the case judgment, ab- court to conduct direct the district would proceedings federal or a Islands sence of either a Virgin defense. BROW, Appellant

RONALD

v. FARRELLY, GOVERNOR; ALEXANDER AND POLICE DEPARTMENT STATES VIRGIN ISLANDS UNITED KRIGGER, FRETT; RUDOLPH ITS COMMISSIONER MILTON FINANCE COMMISSIONER BROW, RONALD Appellant GOVERNOR; FARRELLY, STATES UNITED ALEXANDER AND ITS COMMIS- POLICE DEPARTMENT VIRGIN ISLANDS KRIGGER, FRETT; COMMIS- RUDOLPH SIONER MILTON SIONER FINANCE F.2d 1021]

[994 No. 92-7370 of Appeals United States Court Third Circuit for the May

Case Details

Case Name: Mary Carley v. Wheeled Coach

Court Name: Court of Appeals for the Third Circuit

Date Published: Apr 16, 1993

Citation: 991 F.2d 1117

Docket Number: 92-7208

Court Abbreviation: 3rd Cir.