Opposition Brief — Eagle-Picher Industries, Inc. v. United States

BER ORAS S Le ores,

Supreme Court, U.S,

\») (3 | MA

Nos. 88-1382 and 88-1418 Y 24 1989

NIOL, JR.

In the Supreme Court of the Gnited States

OCTOBER TERM, 1988

EAGLE-PICHER INDUSTRIES, INC., PETITIONER

Vv.

UNITED STATES OF AMERICA

RAYMARK INDUSTRIES, INC., PETITIONER

ve

UNITED STATES OF AMERICA

ON PETITIONS FOR A WRIT OF CERTIORARI TO

THE UNITED STATES COURT OF APPEALS

FOR THE FEDERAL CIRCUIT

BRIEF FOR THE UNITED STATES IN OPPOSITION

WILLIAM C. BRYSON

Acting Solicitor General

STUART E. SCHIFFER

Acting Assistant Attorney General

J. PATRICK GLYNN

HAROLD J. ENGEL

DAVID S. FISHBACK

Altorneys

Department of Justice

Washington, D.C. 20530

(202) 633-2217

QUESTIONS PRESENTED

Petitioners, manufacturers of asbestos insulation prod-

ucts, were sued after shipyard workers were exposed to

their products and contracted asbestos-related diseases.

Petitioners then sought to pursue third-party tort and con-

tract actions seeking contribution and indemnity from the

United States, the employer of the shipyard workers and

the owner of the vessels on which they worked. The ques-

tions presented are:

1. Whether the petitioners may pursue such third-

party actions against the United States on a tort theory

when the governing substantive law bars third-party tort

actions in the absence of direct tort liability to the under-

lying plaintiffs, and the United States has no such liability

to those plaintiffs.

2. Whether the court of appeals correctly concluded

_ that petitioners’ third-party actions against the United

States could not be maintained under the Little Tucker Act

on an implied reverse warranty theory.

(1)

TABLE OF CONTENTS

Page

Gils ive ccas saci esses oh I na a eg l

ic. yn enc okt ase ee aes Bee ee l

| ee ois) Oi ree Sage Pee essa hi 2

kk sou bk ao bak sce esc es ee sec eesees 8

ee bp edna vse nese eseees 18

TABLE OF AUTHORITIES

Cases:

Alameda Complex Asbestos Litigation, In re, 251 Cal.

EE) ee 18

All Asbestos Cases, In re, 603 F. Supp. 599 (D. Haw.

1984), petition granted, No. 89-15329 (9th Cir. Mar. 10,

I ia-'g: 3

All Maine Asbestos Litigation, In re:

$81 F. Supp. 963 (D. Me. 1984) vacated, 772 F.2d

1023 (ist Cir. 1985), cert. denied, 476 U.S. 1126

Ty. yyy 64.5 SUR GS Pe ee eee he

$81 F. Supp. 963 (D. Me. 1984), aff'd, 854 F.2d 1328

(Fed. Cir. 1988) . esate, SOU

American Ship Building Co. v. United States, 654 F.2d

75 (Ct. Cl. 1981) 7

Bell Helicopters v. United States, 833 F.2d 1375 (9th Cir.

1987) 14

Boyle v. United Technologies Corp., 108 S. Ct. 2510

(1988) . 7, 8,17

Butner v. United States, 440 U.S. 48 (1979) 15

Christoff v. Bergeron Indus., Inc., 748 F.2d 297 (Sth Cir

1984) mn y

Colombo v. Johns-Manville Corp., 601 F. Supp. 1119

(E.D. Pa. 1984) 16

Cook v. Exxon Shipping Co., 762 F.2d 750 (9th Cir

1985), cert. denied, 475 U.S. 1047 (1986) 1]

Director, Office of Workers’ Compensation Programs \

Perini North River Associates, 459 U.S. 297 (1983) 10

Doyle v. Rhodes, 101 Ul.2d 1, 461 N.E.2d 382 (1984) 13

(111)

IV

Cases — Continued: Page

Drake v. Raymark Industries, Inc., 772 F.2d 1007 (Ast Cir.

1985), cert. denied, 476 U.S. 1126 (1986) ......... 4,9, 11, 13

Eagle-Picher Industries, Inc. v. United States, 846 F.2d

888 (3d Cir.), cert. denied, 109S. Ct. 490 (1988) ...... 8, 9, 12

Executive Jet Aviation v. City of Cleveland, 409 U.S.

ee APE oo SSR OR ek ee eee ee ees )

General Electric Co. v. United States, 813 F.2d 1273 (4th

Cir. 1987), vacated, 108 S. Ct. 743 (1988) ............ 14

General Dynamics Asbestos Cases, In re, 539 F. Supp.

CO a A CUED 5 isc Src ete Ree ea ees Oc aes 4

Glass v. Stahl Specialty Co., 97 Wash.2d 880, 652 P.2d

Fame Aptis ser age CURE 3 SPOR “15

Gordon v. Lykes Bros. Steamship Co., 835 F.2d 96 (Sth

Cir.), cert. denied, 109 S. Ct. 73 (1988) .............. 17

Graco, Inc. v. Colberg, Inc., 162 Cal. App. 3d 322, 208

Cal. Rptr. 461 (1984), cert. denied, 474 U.S. 820 (1985) 13

Hall v. Hvide Hull No. 3, 746 F.2d 294 (Sth Cir.), cert.

em, SPA US. BO CHI iia s vce ois vl eis hee bans 10

Harville v. Johns-Manville Products Corp., 731 F.2d 775

CRU S ROI a tee tae et iG we es y

Holland v. Sea-Land Service, Inc., 655 F.2d 556 (4th Cir.

1981), cert. denied, 455 U.S. 919 (1982) .............. 9

Johansen v. United States, 343 U.S. 427 (1952) ......... 12

_ Jones & Laughlin Steel Corp. v. Pfeifer, 462 U.S. 523

(URE racer a eee Ore ene een any 3

Ketchum vy. Gulf Oil Corp. , 798 F.2d 159 (Sth Cir. 1986). . 13

LaBarge v. Mariposa County, 798 F.2d 364 (9th Cir.

1986), cert. denied, 481 U.S. 1014 (1987) ............. 14

Lockheed Aircraft Corp. v. United States, 460 U.S. 190

ERE Cat veces Or aes Sh ra oe a eee. 13, 14

McCarthy v. The Bark Peking, 716 F.2d 130 (2d Cir.

1983), cert. denied, 465 U.S. 1078 (1984) ............. 10

McKay v. Rockwell International Corp., 704 F.2d 444

(9th Cir. 1983), cert. denied, 464 U.S. 1043 (1984) ..... 18

Patterson vy. United States, 359 U.S. 495 (1959) .. 2.2... 12

Perkins vy. Marine Terminals Corp., 673 F.2d 1097 (9th

Les BEE Lk cae oa bee na ee 1]

Pichoff v. Bisso Towboat Co., 748 F.2d 300 (6th Ci .

SEE Sen se ere ce Le ee ee eee 13

Cases — Continued: Page

Ramos v. Universal Dredging Corp., 653 F.2d 1353 (9th

re es ee ol Sone ig a ew a dns eb nek ES 11

Richendollar v. Diamond M Drilling Co., 819 F.2d 124

(Sth Cir.), cert. denied, 108 S. Ct. 296 (1987) ......... 10

Rohde v. Southeastern Drilling Co., 667 F.2d 1215 (Sth

el ene ee Pary bag ks bce yh eed a 11

Sample v. Johnson, 771 F.2d 1335 (9th Cir. 1985) ....... 11

Santisteven v. Dow Chemical Co., 506 F.2d 1216 (9th

RE ree Pe ety hie Seave atin eid aes yd bik 6 aa 6 5

Seas Shipping Co. v. Sieracki, 328 U.S. 85 (1946) ....... 8-9

Thibodaux v. Atlantic Richfield Co., 580 F.2d 841 (Sth

Cir. 1978), cert. denied, 442 U.S. 909 (1979) .......... 11-12

United Airlines, Inc. v. Wiener, 335 F.2d 379 (9th Cir.),

cert. dismissed, 379 U.S. 951 (1964) ................. 14

United States v. Hohri, 482 U.S. 64 (1987) .......0..... 5

Weyerhaeuser S.S. Co. v. United States, 372 U.S. 597

keg Tae eiptie yk Sh a NE aS a oes 13

Statutes:

Amti-Detecseacy Act. 31 U.3.0. 1341 .... 2. -cc cece siaes 5

Federal Tort Claims Act, 28 U.S.C. 1346(b) ............ 2

ee ES Sc ban ene ena ee eo 2

ee Pei ros aa a ee are t Vas

ee aN ante ah tr i ste tt 17

Longshore and Harbor Workers’ Compensation Act, 33

U.S.C. 901 ef seq.:

33 U.S.C. 902(3) (1982 & Supp. IV 1986) .......... 11

Ty PE aT org i Soa tad Ona 4, 12

RE cra re ein 4 aoe asad Sida 3, 4, 6,

9, 10, 11, 12

Longshore and Harbor Workers’ Compensation Act

Amendment of 1984, Pub. L. No. 98-426, § 5(a)(1),

en et RRS en AD SU hse Sng bp aw on e's 3

ee ee es A, BLED oo soo ne Be ee ee 2

Be ta Ta pte te apa atl a a a a a 2

SO IES tre cle esate dx 8 ws ib arb om borne Ka aso. 2, 12

ee ee Cs anh S pds dee eure eae orme 5

Vi

Statutes — Continued: Page

Wash. Rev. Code Ann. (1988):

§ 4.22.03) 55558 15

§ 422.9203) <..) ee 15

Jn the Supreme Court of the Anited States

OCTOBER TERM, 1988

No. 88-1382

EAGLE-PICHER INDUSTRIES, INC., PETITIONER

V.

UNITED STATES OF AMERICA

No. 88-1418

RAYMARK INDUSTRIES, INC., PETITIONER

V.

UNITED STATES OF AMERICA

ON PETITIONS FOR WRITS OF CERTIORARI TO

THE UNITED STATES COURT OF APPEALS

FOR THE FEDERAL CIRCUIT

BRIEF FOR THE UNITED STATES IN OPPOSITION

OPINIONS BELOW

The opinion of the court of appeals (Pet. App. la-20a)!

is reported at 858 F.2d 712. The opinion of the district

court (Pet. App. 21a-45a) is reported at 649 F. Supp. 149.

JURISDICTION

The judgment of the court of appeals (Pet. App

462-47a) was entered on September 28, 1988. A petition

'“Pet. App.” citations are to the appendix to the petition in No.

88-1382.

(1)

2

for rehearing was denied on November 21, 1988 (Pet.

App. 48a-49a). The petitions for writs of certiorari were

filed on February 21, 1988. The jurisdiction of this Court

is invoked under 28 U.S.C. 1254(1).

STATEMENT

1. Albert and Shirley Lopez were among the numerous

plaintiffs who sued petitioners and other manufacturers of

asbestos insulation products used at the United States’

Puget Sound Naval Shipyard. They alleged that Mr.

Lopez and others like him, who were civilian employees of

the United States, had been harmed by exposure to the

asbestos contained in petitioners’ products.” The plaintiffs

did not sue the United States: Since the shipyard workers

were government employees, their exclusive remedy

against the United States lay under the Federal Employees’

Compensation Act (FECA), which provides no-fault com-

pensation for work-related injury or death. 5 U.S.C. 8101,

8116(c). After the Lopezes settled their claim with peti-

lioners, the petitioners, who had joined the United States

as a third-party defendant, sought relief against it under

the Federal Tort Claims Act (FTCA), 28 U.S.C. 1346(b),

2671-2680, and the Little Tucker Act, 28 U.S.C.

1346(a)(2).

The district court granted the government’s motion to

dismiss the third-party actions. Pet. App. 2la-45a. With

? The shipyard workers included members of various trades. The

plaintiffs alleged that the shipyard workers were exposed to asbestos

dust when insulation containing asbestos was cut, which occurred

both in workshops on land and aboard ships, and when old insulation

was ripped out of ships. The plaintiffs claimed that petitioners and

other manufacturers had failed to warn of the products’ dangers or

take other precautions to prevent injuries to the shipyard workers.

Lopez was a pipe fitter, pipe coverer, and insulator at the Puget Sound

Naval Shipyard from 1947 to 1984. Pet. App. 3a.

respect to petitioners’ tort claims, the court first noted (id.

at 23a) that the federal government is liable under the

FTCA “in the same manner and to the same extent as a

private individual under like circumstances.” 28 U.S.C.

2674. In the State of Washington, causes of action for tort

indemnity have been abolished by statute, and contribu-

tion is available only against parties who are liable in tort

to the underlying plaintiffs. Since private employers in

Washington tet participating in the state’s workers’ com-

pensation program are immune from all tort actions by

their employees, they are also immune from third-party

actions. Pet. App. 29a-30a. Because the federal govern-

ment, aS a compensation-paying employer under the

FECA, is similarly immune from suit by its employees, the

district court concluded that the United States is immune

from petitioners’ third-party tort suits. Jd. at 3la-32a.

Although that ruling may have been sufficient to

dismiss all the third-party tort claims, the district court

went on to reject the argument that the third-party actions

could be maintained because Lopez could have proceeded

with a “dual capacity” vessel owner claim against the

United States under the Longshore and Harbor Workers’

Compensation Act (LHWCA), 33 U.S.C. 905(b). Under

Section 905(b), as construed in Jones & Laughlin Steel

Corp. v. Pfeifer, 462 U.S. 523 (1983), a private shipyard,

while generally immune from tort actions brought by its

employees, could be sued in tort by its employees for its

negligence as “vessel owner,” and therefore was subject to

suits by third parties in that capacity.’ The district court

3 Congress amended Section 905(b) in 1984 to bar all actions by

shipyard employees against their employers, and hence all third-party

actions as well. Longshore and Harbor Workers’ Compensation Act

Amendment of 1984, Pub. L. No. 98-426, § 5(a)(1), 98 Stat. 1641.

However, that amendment does not apply here because Congress gave

4

ruled that even if analogous private liability were tracked

through the LHWCA rather than under state law, the

claims against the United States could not survive. First,

the court explained that since the FECA bars all direct ac-

tions, “an employer subject to the LHWCA * * * does not

abide in circumstances similar to the United States.” Pet.

App. 32a. Second, the court noted, Section 903(Li) “ex-

pressly excepts from coverage [under the LHWCA]

employees of the United States or any of its agencies.” Pet.

App. 32a. Third, the court agreed with the First Circuit’s

conclusion “that ‘§ 905(b) implicitly requires that a tort be

consummated within the admiralty jurisdiction to be

cognizable under the statute.’ ” /d. at 33a (quoting Drake

v. Raymark Industries, Inc., 772 F.2d 1007, 1014 (1985),

cert. denied, 476 U.S. 1126 (1986)). The court then con-

cluded, as have all the courts of appeals to consider the

question, that claims by shipyard workers injured by ex-

posure to asbestos lack the requisite maritime nexus for

admiralty jurisdiction. Pet. App. 33a. Accordingly, even

apart from the FECA, Lopez could not have maintained

an action against the United States under Section 905(b).4

The district court then turned from petitioners’ tort

theory to petitioners’ implied reverse warranty claim. That

the amendment prospective application only, and Lopez’s exposure to

asbestos occurred before 1984.

* The court also rejected petitioners’ claim that, due to their “special

relationship” with the government, the United States should be held

liable to them in tort. It stated: “In urging that noncontractual indem-

nity is available in the case at bar, Eagle-Picher is stretching legal con-

cepts beyond their rational borders. To hold the Government liable to

Raymark and Eagle-Picher for the Government’s alleged negligent use

of these manufacturers’ alleged defective products is a convoluted at-

tempt to reshuffle liability. This attempt carries With it no logic or

justice.” Pet. App. 35a. The court further noted that Washington’s

Statutory abolution of tort indemnity likewise compelled dismissal of

ihis claim. /d. at 36a.

claim, brought under the Little Tucker Act, sought indem-

nification from the United States on the ground that, by

buying petitioners’ products, the government had implied-

ly warranted to use those products safely. The petitioners

based their claim on the proposition that the asbestos in-

sulation products sold to the Navy complied with various

military specifications. The district court concluded that

to accept petitioners’ arguments “ ‘would truly turn “in-

demnity on its head,” Santisteven v. Dow Chemical Co.,

506 F.2d [1216] at 1219 [9th Cir. 1974], since the represen-

tation that a product is safe for its intended use normally

flows from the manufacturer to the purchaser, not vice

versa.’ ” Pet. App. 43a (quoting /n re General Dynamics

Asbestos Cases, 539 F. Supp. 1106, 1112 (D. Conn.

1982)). Like the district court in the Jn re All Maine

Asbestos Litigation, 581 F. Supp. 963-(D. Me. 1984),

vacated in part on other grounds, 772 F.2d 1023 (Ist Cir.

1985), cert. denied, 476 U.S. 1126 (1986), the district court

here found it “ ‘well established that a vendor/vendee rela-

tionship creates no implied agreement by the buyer to in-

demnify the seller for injuries resulting from the use of the

purchased product.’” Pet. App. 44a (quoting 581 F.

Supp. at 981).°

2. The Federal Circuit affirmed. Pet. App. la-20a.°

As to the tort claims, the court made clear that it was rely-

ing on Ninth Circuit law. Jd. at 4a, 14a. It stated that the

$ The district court also concluded that allowing petitioners’

reverse implied warranty action to proceed would be contrary to the

Anti-Deficiency Act, 31 U.S.C. 1341. The court determined that the

Anti-Deficiency Act would prohibit an express indemnity agreement

between the United States and a seller, and reasoned that no such im-

plied agreement could be lawful. Pet. App. 38a-41a. The court of ap-

peals did not rely on that approach. /d. at Ya.

° Petitioners had appealed to the Ninth Circuit, which transferred

the case to the Federal Circuit because of the Litthe Tucker Act claim.

See 28 U.S.C. 1295(a)(2); United States v. Hohri, 482 U.S. 64 (1987).

6

district court had “convincingly show[ed]” that, under

Washington law, “an employer who carried appropriate

workmen’s compensation insurance would not be liable to

indemnify third parties who were obliged to pay damages

to the worker for having negligently caused or contributed

to his injury.” Jd. at 19a. It also agreed with the district

court and the First Circuit that Lopez would not have been

able to bring an action against the United States in its

capacity as vessel owner under the LHWCA, so that there

was no basis for a third-party action under Section 905(b).

Pet. App. 18a-19a.’

As to the contract claims, the court of appeals first

noted that to establish Tucker Act jurisdiction a claimant

must allege the violation either of the express terms of a

contract or of a contract obligation implied in fact; an

implied-in-law obligation does not state a claim under that

Act. Pet. App. Sa. It also noted that “it is not now con-

tended that the contracts or purchase orders contained any

written warranties to sellers.” /bid. Thus, the question was

whether an implied-in-fact obligation could be discerned.

The court found that only where the “circumstances

strongly supported a factual inference that a warranty was

implied” had the courts found such an obligation (/d. at

7a), and held that there were no such circumstances al-

leged here. To the contrary, the court of appeals agreed

with the district court that “an implied warranty relating to

the use by the buyer after delivery, and warranting it

would not harm the seller is novel, and no reason is shown

why anyone could have supposed at the date of sale by any

inference from the circumstances” that such a warranty

had been made. /d. at 8a-9a. The court’s “appreciation of

’ The court further concluded that petitioners could not bring suit

“under traditional judge-made admiralty law” because admiralty

jurisdiction is lacking in cases involving the construction or repair of

vessels. Pet. App. ISa.

the bizarre and novel nature of the ‘reverse warranty’ here

asserted, and its lack of support in the alleged facts or the

court decisions,” led it to conclude that “the Tucker Act

does not provide means to enforce the alleged warranty

here.” Jd. at 10a. In response to petitioners’ arguments

that an obligation should be implied because the govern-

ment had provided specifications to manufacturers of

asbestos insulation products, and the products were used

for military purposes, the court noted that petitioners “do

not know and cannot tell us whether the government

specifications differed at all from those of private

customers of Raymark and Eagle-Picher, or if they did,

whether the difference related to the asbestos content of

the material supplied.” Jd. at 7a-8a.

The court of appeals also rejected petitioners’ attempt to

hold the government liable on the theory that it had failed

to disclose superior knowledge regarding the hazards of

asbestos. See American Ship Building Co. v. United—

States, 654 F.2d 75 (Ct. Cl. 1981). The court stated that

the government could “reasonably suppose Raymark and

Eagle-Picher knew enough about asbestos and its perils

not to need to learn more about it from the government.”

Pet. App. lla-12a. Indeed, it expressed its “wonderment

that anyone could have known more about the hazards of

asbestos than those responsible companies who used it as

raw material in the production of insulation.” Jd. at 10a.

§ The court added that petitioners’ effort to secure reimbursement

from the United States here was “logically inconsistent” with the result

in Boyle v. United Technologies Corp., 108 S. Ct. 2510 (1988). In

Boyle, this Court extended to government contractors the govern-

ment’s immunity from direct suit arising from injuries caused by

defectively designed military products when “(1) the United States ap-

proved reasonably precise specifications; (2) the equipment con-

formed to those specifications; and (3) the supplier warned the United

States about the dangers in the use of the equipment that were known

ARGUMENT

1. All three courts of appeals to have considered the

matter—the court below, the First Circuit in /n re All

Maine Asbestos Litigation (PNS Cases), 772 F.2d 1023

(1985), cert. denied, 476 U.S. 1126 (1986), and the Third

Circuit in Eagle-Picher Industries, Inc. v. United States,

846 F.2d 888, cert. denied, 109 S. Ct. 490 (1988)—have

concluded that manufacturers of asbestos products used at

government shipyards may not maintain third-party tort

actions against the United States. Each of the arguments

petitioners now make in support of their contention that

the tort question warrants review by this Court was made

in one or the other (or both) of their prior petitions for

writs of certiorari. This Court declined to review the deci-

sions of the First and the Third Circuits and, since the

Federal! Circuit has now followed their lead, there is no

reason for this Court to review its decision.

a. Like the First Circuit, the court of appeals here cor-

rectly concluded that “[nJegligence claims under

[LHWCA] section 905(b)[] are those covered by federal

maritime principles.” Pet. App. 17a. The common law of

admiralty recognized various actions available to shipyard

workers, including a strict liability action for “unsea-

worthiness” by longshore workers injured on a vessel lying

in navigable waters. See Seas Shipping Co. v. Sierack1, 328

to the supplier but not to the United States.” /d. at 2518. Thus, the

court of appeals explained, if petitioners were as blameless as they

assert, “there should be no damage awards on which to base claims for

government indemnity or contribution.” Pet. App. 13a. In any event,

the court of appeals concluded, this “conflict of logic between the

government contractor defense and the logic on which the third party

alleged liability of the government here is based * * * is a factor

counseling caution when we are asked to extend Tucker Act liability

on new and novel grounds, only superficially based on the case law as

known hitherto.” /bid.

9

U.S. 85 (1946). Congress enacted Section 905(b) in 1972 to

replace that unseaworthiness action with a negligence ac-

tion comparable to that available to longshore and harbor

workers at common law. See, e.g., Drake, 772 F.2d at

1013-1014. As the First and now the Federal Circuits have

concluded, Congress did not intend that negligence action

to extend beyond the scope of admiralty jurisdiction.

Rather, like the unseaworthiness claim and the common

law negligence claim, a plaintiff may bring suit under Sec-

tion 905(b) only if the suit satisfies the jurisdictional re-

quirements of admiralty law.? As the Third Circuit

recognized, all the courts of appeals to have considered the

matter have concluded “that asbestos-related claims by

land-based ship workers bear no significant relationship to

traditional maritime activity” (846 F.2d at 896), and thus

are Outside admiralty jurisdiction as set forth in Executive

Jet Aviation, Inc. v. City of Cleveland, 409 U.S. 249, 268

(1972). Consequently, there is no basis for such claims

under Section 905(b), and hence no basis for third-party

actions such as those brought by petitioners.

Eagle-Picher argues (Pet. 12-15) that the conclusion that

the maritime nexus test of Executive Jet must be satisfied

in order to bring an action under Section 905(b) conflicts

with decisions of the Fifth, Second, and Ninth Circuits.

There is no conflict. With respect to the Fifth Circuit, as

%See Holland v. Sea-Land Service, Inc., 655 F.2d 556, 559 (4th Cir.

1981), cert. denied, 455 U.S. 919 (1982) (Section 905(b) did not

“enlarge the traditional jurisdiction of admiralty over maritime

torts”); Christoff v. Bergeron Indus., Inc., 748 F.2d 297, 298 (Sth Cir.

1984) (Section 905(b) “neither extended the boundaries of traditional

admiralty jurisdiction nor converted ordinary tort claims against

vessels into federal questions independent of admiralty”); Harville v.

Johns-Manville Products Corp., 731 F.2d 775, 787 n.9 (11th Cir.

1984) (Section 905(b), “rather than creating a new cause of action,

merely preserves certain preexisting remedies to injured workers

against third parties”).

10

noted in our brief in opposition to the petitions filed seek-

ing review of the First Circuit’s decision, there may never

have been a conflict in result between the First Circuit’s

decision and the Fifth Circuit’s decision in Hall v. Hvide

Hull No. 3, 746 F.2d 294, cert. denied, 474 U.S. 820

(1985). Since that time the Fifth Circuit, sitting en banc in

Richendollar v. Diamond M Drilling Co., 819 F.2d 124,

125-126, cert. denied, 108 S. Ct. 296 (1987), explicitly

ruled (contrary to language in Ha//) that the maritime

nexus test must be met in order for a tort to be actionable

under Section 905(b).'° Thus, there is no longer even a

colorable conflict with the Fifth Circuit. Indeed, the court

below correctly cited the Fifth Circuit’s decision in Richen-

dollar in support of its conclusion that plaintiffs must

establish a maritime nexus to bring suit under Section

905(b). Pet. App. 17a.

As also noted in our brief in opposition in the First Cir-

cuit case, there has never been a conflict with the Second

Circuit’s decision in McCarthy v. The Bark Peking, 716

F.2d 130 (1983), cert. denied, 465 U.S. 1078 (1984). There

the Second Circuit had originally concluded that the plain-

tiff, who worked on a permanently anchored vessel used

as a Museum, was not eligible for compensation under the

LHWCA and therefore could not bring an action under

Section 905(b). After the ruling in Director, Office of

Workers’ Compensation Program v. Perini North River

Associates, 459 U.S. 297 (1983), that it is not necessary to

meet the maritime nexus test in order to be covered for

'0 The en banc court stated: “We further hold that to be cognizable

under § 905(b), a tort must occur on or in navigable waters * * * and

there must be the traditional admiralty nexus. As a consequence, we

now reject the suggestion made in Hall, 746 F.2d at 302-303, that the

pre-Executive Jet/Foremost Insurance test for a maritime tort was

codified in § 905(b) by the 1972 amendments to the Longshore and

Harbor Workers’ Act.” 819 F.2d at 125-126.

1]

workers’ compensation purposes under 33 U.S.C. 902(3)

(1982 & Supp. IV 1986), this Court remanded the McCar-

thy case for reconsideration. The Second Circuit ordered

the case to go forward, but, as the First Circuit noted, it

“was not asked, and did not consider whether § 905(b)

jurisdiction required that the Executive Jet nexus test be

Satisfied.” 772 F.2d at 1017 n.10.!!

Similarly, there is no conflict with the Ninth Circuit

decisions cited by Eagle-Picher (Pet. 14-15). Like the

McCarthy case, Cook v. Exxon Shipping Co., 762 F.2d

750 (9th Cir. 1985), cert. denied, 475 U.S. 1047 (1986),

was a tort suit in which-no issue concerning the maritime

nexus of the alleged tortious behavior was raised. Perkins

Vv. Marine Terminals Corp., 673 F.2d 1097 (9th Cir. 1982),

which is cited by petitioners now and was cited by them in

their petitions in the First Circuit case, did not concern a

tort suit at all, but rather involved the question whether

certain employees were covered by the LHWCA for pur-

poses of receiving workers’ compensation. It is well settled

that “maritime employment” status under 33 U.S.C.

902(3) (1982 & Supp. IV 1986) for workers’ compensation

purposes is a broader concept than “maritime nexus” for

determining admiralty jurisdiction over a tort action. See

Ramos v. Universal Dredging Corp., 653 F.2d 1353, 1359

(9th Cir. 1981); Sample v. Johnson, 771 F.2d 1335, 1344

(9th Cir. 1985). Accord, Rohde v. Southeastern Drilling

Co., 667 F.2d 1215, 1218-1219 (Sth Cir. 1982); Thibodaux

'! The First Circuit further explained that “Perini was concerned

solely with compensation, not with maritime tort jurisdiction, and

these two boundaries have for a long time been quite distinct.” Drake,

772 F.2d at 1018. Thus, contrary to Raymark’s contention (Pet.

20-24), there is no conflict between this Court’s decision in Perini and

the conclusion that a tort plaintiff under Section 905(b) must establish

a Maritime nexus.

12

v. Atlantic Richfield Co., 580 F.2d 841, 846 n. 14 (Sth Cir.

1978), cert. denied, 442 U.S. 909 (1979).!?

b. The alternative basis for dismissal of the tort claims

adopted by the district court —that the United States’ im-

munity to direct suit is a circumstance mandating dismissal

when private parties who are immune to direct suit are in-

sulated from third-party tort liability —is also correct. The

Third Circuit adopted that argument in its Eagle-Picher

decision (846 F.2d at 891-895), and both the First Circuit

in the All Maine Asbestos Litigation (772 F.2d at

1028-1029) and the court below (Pet. App. 19a) com-

mented favorably on it; no court of appeals has rejected

that approach. Petitioners mistakenly argue that Section

8116(c) of the FECA (which makes clear that federal

employees may not sue the United States'?), and Section

903(b) of the LHWCA (which excepts federal employees

from that Act) should not be taken into account in making

the FTCA-mandated determination whether “a private in-

dividual under like circumstances” (28 U.S.C. 2674) would

be liable. In petitioners’ view, those bars to direct govern-

ment liability are irrelevant and the United States should

be analogized to a private shipyard owner without such

statutory protections. But the FTCA refers to the liability

of private parties “under like circumstances,” and immuni-

ty to direct suit by the underlying plaintiff is a cir-

cumstance that may not be ignored. See, e.g., Eagle-

Picher Industries v. United States, 846 F.2d at 890.

'2 Thus, the Federal Circuit’s prediction of how the Ninth Circuit

would have ruled here was correct. Moreover, the Ninth Circuit has

granted interlocutory review of the Hawaii District Court’s ruling in /n

re All Asbestos Cases, 603 F. Supp. 599 (1984), petition granted, No.

89-15329 (Mar. 10, 1989), and shortly will consider whether asbestos

workers may maintain suits under Section 905(b).

'3 See Johansen v. United States, 343 U.S 427, 436-440 (1952); Par-

terson v. United States, 359 U.S. 495, 496 (1959).

13

Petitioners’ argument that this approach is inconsistent

with this Court’s decision in Lockheed Aircraft Corp. v.

United States, 460 U.S. 190 (1983)—an argument made in

the unsuccessful petitions seeking review of the First and

Third Circuit decisions —is without merit. Lockheed sim-

ply held that the FECA itse/f does not bar third-party tort

actions arising out of injuries to federal employees. The

Court explained that “the governing substantive law”

would determine whether the government’s immunity

from direct suit would result in dismissal of FTCA third-

party tort actions based on underlying suits by FECA-

covered plaintiffs. 460 U.S. at 199. Thus, where the gov-

erning substantive law permits third-party tort suits

against those parties who are immune to direct suits by the

underlying plaintiffs, third-party FTCA suits may pro-

ceed. See, e.g., Weyerhaeuser S.S. Co. v. United States,

372 U.S. 597 (1963) (in a case arising out of a maritime

collision under the old divided damages rule, contribution

against the United States would be permitted because im-

munity to direct suit was irrelevant to such cases); Doyle v.

Rhodes, 101 Ill.2d 1, 461 N.E.2d 382 (1984) (under Illinois

law, immunity of employer from direct suit does not im-

munize it from third-party tort suits). But both the

LHWCA and Washington law —the governing substantive

law here — preclude third-party tort suits against those im-

mune from direct suits.'* Therefore, third-party FTCA

'# The district court explained (Pet. App. 26a-30a) that, under

Washington law, neither employees nor third parties may maintain

tort actions against employers. Similarly, in the absence of a dual

capacity suit, an LHWCA employer may not be held liable to an

employee (see, e.g., Pichoff v. Bisso Towboat Co., 748 F.2d 300 (6th

Cir. 1984)) or a third party (see, e.g., Drake, 772 F.2d at 1019-1022;

Ketchum vy. Gulf Oil Corp., 798 F.2d 159, 161-163 (Sth Cir. 1986);

Graco, Inc> v. Colberg, Inc., 162 Cal. App. 3d 322, 330-335, 208 Cal.

Rptr. 461, 470, 473 (1984), cert. denied, 474 U.S. 820 (1985)).

14

claims based on injuries to federal employees—who are

denied a direct cause of action in tort against the United

States — must be dismissed.'*

1S This analysis is identical to that made by the Ninth Circuit in

United Airlines, Inc. v. Wiener, 335 F.2d 379, 403-404, cert. dis-

missed, 379 U.S. 951 (1964). The court of appeals there, anticipating

the approach set forth in Lockheed, ruled that an airline could not

recover tort indemnification from the United States for payments

made by the airline to government employee plaintiffs, on the ground

that the applicable state law barred recovery against those not liable in

tort to the underlying plaintiffs. See Lockheed, 460 U.S. at 193 n.3

and 199.

Similarly, in LaBarge v. Mariposa County, 798 F.2d 364, 367 (9th

Cir. 1986), cert. denied, 481 U.S. 1014 (1987), and Bell Helicopters v.

United States, 833 F.2d 1375, 1378 (9th Cir. 1987)—cases relied upon

by Eagle-Picher in its petition in the Third Circuit case —the court at-

firmed dismissals of third-party tort actions against the United States

where the government’s all-encompassing immunity from direct suit

was mirrored almost perfectly in the immunity of a private employer

under the state workers’ compensation bar. While those two cases did

not involve the question of what happens when the privately-

applicable workers’ compensation immunity to direct suit is nos all-

encompassing (as would be the case under the LHWCA if a Section

905(b) suit were available against the employer), the Ninth Circuit

recognized that the basic policy of the governing substantive law must

control. The FTCA does not instruct a court to disregard immunities

uniquely applicable to the United States on the ground that no such

immunity could apply to a private party. In LaBarge, the court stated:

“(T]he statutory language [of the FTCA] refers not to private persons

under “the same circumstances,” but to those under similar cir-

cumstances. * * * Because the federal government could never be ex-

actly like a private actor, a court’s job in applying the standard [for

liability under the FTCA] is to find the most reasonable analogy.” 798

F.2d at 367. Virtually identical language is found in Bel//, 833 F.2d at

1378. Accord, General Electric Co. v. United States, 813 F.2d 1273,

1275 n.1 (4th Cir. 1987), vacated and remanded on other grounds, 108

S. Ct. 743 (1988) (noting that the FTCA “uses the term ‘like cir-

cumstances,’ rather than ‘the same’ or ‘identical,’ circumstances”).

_

15

c. Petitioner Raymark contends (Pet. 14-18) that the

court Of appeals erred in affirming the district court’s

dismissal of its claims for tort indemnification on the basis

of Washington state law. Questions of state law do not or-

dinarily warrant review in this Court (see, e.g., Butner v.

United States, 440 U.S. 48, 57-58 (1979)) and, in any

event, Raymark misstates the law of Washington. Wash-

ington’s 1981 Tort Reform Act explicitly abolished the

right of tort indemnity in all cases where trial on the

underlying claims had not taken place by July 26, 1981.

Wash. Rev. Code Ann. §§ 4.22.040(3), 4.22.920(2)(1988).

Since no trial in the instant case was held before that date,

there can be no tort indemnity claim. Thus, Raymark’s

reliance (Pet. 16) on two 1978 state cases — decided three

years before the legislature changed the law —is misplaced.

Raymark’s further reliance on Glass v. Stahl Specialty

Co., 97 Wash. 2d 880, 885, 652 P.2d- 948 (1982), is likewise

without merit. There, the Washington Supreme Court, in-

terpreting the Tort Reform Act, made clear that an

employer’s insulation from third-party liability could be

circumvented only by “agreements” between the employer

and the putative indemnitee and that “any intent to pro-

vide for indemnification must be clearly expressed in the

agreement.” 97 Wash. 2d at 885-886, 652 P.2d at 951; see

Pet. App. 28a. No allegation was made here of such an ex-

press agreement, and even if such an allegation had been

made, it would have been a claim in contract and thus

would be actionable, if at all, only under the Tucker Act.

2. With respect to the third-party contract claim, the

court below was the first court of appeals to address peti-

tioners’ implied reverse warranty theory. Accordingly,

there is no disagreement in the circuits on that issue either.

Moreover, the district courts have uniformly rejected such

Little Tucker Act claims. See /n re All Maine Asbestos

16

Litigation, 581 F. Supp. 963, 972-974, 980-981 (D. Me.

1984), aff'd, 854 F.2d 1328 (Fed. Cir. 1988); Colombo v.

Johns-Manville Corp., 601 F. Supp. 1119, 1139-1140

(E.D. Pa. 1984); Jn re All Asbestos Cases, 603 F. Supp.

599, 609-612 (D. Haw. 1984). Accordingly, there is no

warrant for review of that claim.

Petitioners assert that the court of appeals based its

decision on factual assumptions not warranted by the

record. See Eagle-Picher Pet. 18-23; Raymark Pet. 24-25.

Even apart from the rule that factual questions do not call

for review by this Court, petitioners’ arguments ignore the

basic thrust of the court of appeals’ decision. That deci-

sion was based not simply on what petitioners alleged, but

also on what petitioners did not—and presumably could

not, in good faith —allege.

In essence, petitiopers claim that the United States im-

pliedly agreed to indemnify them for any tort liability they

might incur as a result of federal employees’ exposure to

the asbestos-containing products they produced in accord-

ance with military specifications. As the courts below

stated, however, such implied reverse warranty claims find

little support in precedent.'® There could be a plausible

basis for such a claim only upon an allegation that the

military specifications differed in a pertinent respect from

products that petitioners had produced for its private com-

mercial customers. Absent a showing that the specifica-

tions so differed, the courts would have no basis for in-

ferring that the government, unlike other purchasers, had

warranted to reimburse petitioners for their own tort

‘6 The court below noted (Pet. App. 8a) that “[e]ven in a ‘reverse

warranty’ claim * * * against a private company where the concept of

implied warranty is not confined to implied-in-fact cases, it has been

held the alleged warranty cannot be implied. White v. Johns-Manville

Corp., 662 F.2d 243 (4th Cir. 1981).”

17

liability based on defects in their products. But petitioners

made no such claim.!’

Moreover, as the court below recognized (Pet. App.

12a-13a), petitioners’ implied reverse warranty claim is in-

consistent with the military contractor defense as set out in

Boyle v. United Technologies Corp., 108 S. Ct. 2510, 2518

(1988). That defense allows a contractor that merely

followed precise government specifications and warned

the government of any dangers known to it, but not to the

governinent, to avoid liability. {n Boyle, the Court found

that the defense could be invoked because “the selection of

the appropriate design for military equipment to be used

by our Armed Forces is assuredly a_ discretionary

function” within the meaning of 28 U.S.C. 2680(a), and

Congress intended to immunize the United States from

tort liability for making such design decisions. 108 S. Ct.

at 2517. See Gordon v. Lykes Bros. Steamship Co., 835

F.2d 96, 100 (Sth Cir.), cert. denied, 109 S. Ct. 73 (1988)

(holding the government’s decision to promulgate

specifications requiring the use of asbestos on ships to be

protected by the discretionary function exception). Thus,

the Court recognized that Congress intended to insulate

military product design decisions from judicial second-

guessing by way of tort suits against the United States or

against contractors following government orders. If, as

'7 Thus, Eagle-Picher’s heavy reliance (Pet. 18-21) on the court of

appeals’ statement that the military specifications for its products were

performance specifications misses the mark. The dispositive factor in

the court of appeals’ analysis was the simple matter that petitioners

were not able to assert that the products it sold to the United States

were in any relevant respect different from those sold to their private

commercial customers. Since the specifications were not alleged to

have been different in any significant respect from those sold commer-

cially, it is irrelevant whether they were design or performance

specifications.

18

petitioners claim, they were asked to sell the government

products with which they were not familiar, and if the

government is the truly culpable party, petitioners would

not be liable to the underlying plaintiffs (as a result of the

military contractor defense), and there would be no basis

for contribution or indemnity on any theory.'®

Finally, a judgment against the United States on an im-

plied reverse warranty theory would be contrary to Con-

gress’s intent, embodied in the discretionary function ex-

ception, to immunize the United States from tort liability

for design decisions involving military products. Cf.

McKay v. Rockwell International Corp., 704 F.2d 444,

449 (9th Cir. 1983), cert. denied, 464 U.S. 1043 (1984).

CONCLUSION

The petitions for a writ of certiorari should be denied.

Respectfully submitted.

WILLIAM C. BRYSON

Acting Solicitor General

STUART E. SCHIFFER

Acting Assistant Attorney General

J. PATRICK GLYNN

HAROLD J. ENGEL

DAVID S. FISHBACK

Altorneys

May 1989

'§ Like the court below (Pet. App. 13a), we do not wish to be

understood as arguing that there is merit to petitioners’ claim in the

nationwide asbestos litigation (see, e.g., Jn re Alameda Complex

Asbestos Litigation, 251 Cal. Rptr. 805, 809-810 (Cal. App. 1988))

that they are, in fact, protected from liability to the underlying plain-

tiffs by the military contractor defense.

sz US. GOVERNMENT PRINTING OFFICE 1989—241-695.00271