Petition for Writ of Certiorari — General Dynamics Corp. v. Trevino
Supreme Court brief1989
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1 . FILED
89-376 Fl so 1 ts
JOSEPH F. SPANIOL, JR.
7 CLERK
--
IN THE
Supreme Court of the United States
OCTOBER TERM, 1989
GENERAL DYNAMICS CORPORATION,
. Petitioner,
GLORIA TREVINO, et al.,
Respondents.
PETITION FOR A WRIT OF CERTIORARI TO THE
UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
HERBERT L. FENSTER
Counsel of Record
RAYMOND B. BIAGINI
CHARLOTTE D. YOUNG
MCKENNA, CONNER & CUNEO
1575 Eye Street, N.W.
Washington, D.C. 20005
(202) 789-7500
Attorneys for Petitioner
General Dynamics Corporation
WILSON - EPES PRINTING Co., INC. - 789-0096 - WASHINGTON, D.C. 20001
J
QUESTIONS PRESENTED FOR REVIEW
1. Whether the Fifth Circuit’s decision in Trevino v.
General Dynamics Corp., 865 F.2d 1474 (5th Cir. 1989),
conflicts with Boyle v. United Technologies Corp., 108
S. Ct. 2510 (1988) in holding that the “approval” ele-
ment of the government contractor defense requires proof
that a government official performed a policy level “sub-
stantive review and evaluation” constituting a discretion-
ary act under the Federai ‘fort Claims Act.
2. Whether the Fifth Circuit’s decision in Trevino v.
General Dynamics Corp., 865 F.2d 1474 (5th Cir. 1989),
conflicts with Boyle v. United Technologies Corp., 108
S. Ct. 2510 (1988) in holding that General Dynamics
failed to prove the “approval” element of the government
contractor defense despite undisputed facts that the gov-
ernment was fully aware of the alleged defects in the
product yet chose to use it as designed for thirteen years.
3. Whether the holding by the Fifth Circuit in Trevino
v. General Dynamics Corp., 865 F.2d 1474 (5th Cir.
1989) that government approval under the government
contractor defense can occur only during the design stage,
conflicts with the Fourth Circuit’s post-Boyle decision in
Ramey v. Martin-Baker Aircraft Co., 874 F.2d 946 (4th
Cir. 1989) and the several fededal circuit court decisions
prior to Boyle that approval cen occur after the design
stage where the government subsequently discovers the
defects yet chooses to use the product as designed.
(i)
ii
PARTIES TO THE PROCEEDINGS BELOW
The parties to the proceedings below are:
(1) Gloria Trevino Parker, plaintiff, formerly Gloria
Trevino,
(2) Donald and Emily Bloomer,
(3) Maureen Denisha Bond,
(4) Robert and Rose Fitz,
(5) Esther B. Shelton,
(6) the United States of America, and
(7) General Dynamics Corporation.
Pursuant to Sup. Ct. R. 28.1, General Dynamics Cor-
poration has the following parents, subsidiaries (except
wholly-owned subsidiaries) , and affiliates:
Etudes Techniques et Constructions Aerospatiales,
Societe Anonyme
General Dynamics Limited, Mansour-General Dy-
namics Limited
Ankara Hilton
Perdata Corporation
Tusas Aerospace Industries, Inc.
TABLE OF CONTENTS
QUESTIONS PRESENTED FOR REVIEYW ...............
PARTIES TO THE PROCEEDINGS BELOW..............
TABLE OF AUTHORITIES ...................--.--------------+---
OPINIONS BELOW ...............--......-.-.c..ccsnessessecenscecesessnses
JURISDICTION
ee cece cee See ee See SSeS SS SHES ewes He SSSE SSE SSSSSSESSSssseesseresesese
STATEMENT OF THE CASE
we ee wee ee eee eee eee eee ee eee ee eee ee
REASONS FOR ALLOWANCE OF THE WRIT
I. THE FIFTH CIRCUIT’S OPINION CON-
FLICTS WITH THIS COURT’S DECISION IN
BOYLE v. UNITED TECHNOLOGIES COR-
PORATION IN ITS APPLICATION OF THE
DISCRETIONARY FUNCTION EXCEPTION
TO THE GOVERNMENT CONTRACTOR DE-
A. The Boyle Opinion Could Not Have Intended
To Require Proof Of A Policy Level Discre-
tionary Function To Satisfy The Approval
Element Of The Government Contractor
EES eee ey OF a Sa CO
B. To The Extent Some Proof Of Governmental
Discretion Is Required By Boyle, The Trevino
Court Failed To Recognize That It Was
II IN TERI CRIED seisccsncnncessnscncrcnvepntencenecenece
C. The Trevino Court’s Discretionary Function
Test Necessarily Requires Second-Guessing
Of Military Decision-Making And Ultimately
Will Result In Higher Costs To The United
11
12
15
17
iv
TABLE OF CONTENTS—Continued
Page
Il. THE TREVINO COURT’S RIGID DEFINI-
TION OF APPROVAL CREATES A CON-
FLICT AMONG THE FEDERAL CIRCUIT
COURSED GP Bim tabi. 19
A. The Fifth Circuit’s Limited View Of When
And How Approval May Take Place Conflicts
With The Law Established By The Federal
Circuits Prior To And Unchanged By Boyle
Regarding Approval ....................................... 20
B. The Fifth Circuit’s Limited View Of When
And How Approval May Take Place Conflicts
With The Fourth Circuit’s Post-Boyle Inter-
pretation Of Approval ....... Ssuliechietceeshcaileiidtnaismnien 23
TET seit neciinisitesiasiti cilecetttca esi iesinbitarncen icant 25
Vv
TABLE OF AUTHORITIES
CASES Page
In re Air Crash Disaster at Mannheim Germany,
769 F.2d 115 (3d Cir. 1985), cert. denied sub
sebetn., SFE TIE. ROBB CIGD BY nvcceceeneseccsccerenecsecceses ess. 21
Blessing v. United States, 447 F. Supp. 1160 (E.D.
as Be icckihcinniechontatlecidhaihnscvbitagninnetaliniiniattidieinaentaiciation 19
Boyle v. United Technologies Corp., 108 S.Ct. 2510
CIN ead cilcslintaiotisnitnpipenststistnsntshdenciceniahbcniacaningpanecitgeiatinnnibannail passim
Boyle v. United Technologies Corp., 792 F.2d 413
Ce CI dictate saceninietaceen baatiatiiitittaiaitinnaieninen 21
Dowd v. Textron. Inc., 702 F.2d 409 (4th Cir.
1986), cert. denied, 108 S. Ct. 2897 (1988) ....... 21, 24
Dube v. Pittsburgh-Corning Corp., 870 F.2d 790
CRT Be iiaticahicisncetcintileenncisletiiaiainitibicninceririnatins 8,18
Feres v. United States, 340 U.S. 185 (1950) -.......... 4
Gordon v. Lykes Brothers Steamship Co., 835 F.2d
96 (5th Cir.), cert. denied, 109 S. Ct. 73 (1988) .. 17
Harduvel v. General Dynamics Corp., No. 87-3705
(lith Cir. July $1, 1989) ............................. 14, 18, 21, 22
Hendrix v. Bell Helicopter Textron, Inc., 634 F.
Bam. DGGE CHER. Bees BOWED qa nennncvcnnteseenncessn-- 21
Kennewick Irrigation District v. United States,
No. 87-4203 et al. (9th Cir. July 12, 1989) ........... 8,18
Koutsoubos v. Boeing Vertol, 755 F.2d 352 (3d
Cir.), cert. denied, 474 U.S. 821 (1985).............. 21
Myslakowski v. United States, 806 F.2d 94 (6th
Cir. 1986), cert. denied, 480 U.S. 948 (1987)...... 18
Niemann v. General Dynamics Corp., No. 85-5528
(S.D. Ill. June 28, 1989), appeal docketed, No.
89-2577 (7th Cir. July 28, 1989) .................0...... 14
Ramey v. Martin-Baker Aircraft Co., 874 F.2d 946
Cs I aderteinrdesncsdiinanttnistaics EE. SEI CO passim
Ramey v. Martin-Baker Aircraft Co., 656 F. Supp.
984 (D. Md. 1987), aff’d, 874 F.2d 946 (4th Cir.
REET ERE SS, SS RI Pe ea Se 24
Schwindt v. Cessna Aircraft Co., No. CV485-472
reer ree 22
Shaw v. Grumman Aerospace Corp., 778 F.2d 736
(11th Cir. 1985), cert. denied, 108 S. Ct. 2896
vi
TABLE OF AUTHORITIES—Continued
Page
Smith v. Xerox Corp., 866 F.2d 185 (5th Cir.
1989) 10, 20
Trevino v. General Dynamics Corp., 865 F.2d 1474
(Ee Ab) passim
Trevino v. General Dynamics Corp., 876 F. 2d 1154
(5th Cir. 1989) (en bane) 0... 10, 14, 23, 25
Tillett v. J.J. Case Co., 756 F.2d 591 <7th Cir.
1985) .. 21
Tozer v. LTV Corp., 792 F.2d 408 (4th Cir. 1986),
cert. denied, 108 S. Ct. 2897 (1988) _........... 20, 24
STATUTES
Federal Tort Claims Act, 28 U.S.C. § 2680(a)
OSE ae 11-12
IN THE
Supreme Court of the United States
OCTOBER TERM, 1989
No.
GENERAL DYNAMICS CORPORATION,
- Petitioner,
GLORIA TREVINO, et al.,
Respondents.
PETITION FOR A WRIT OF CERTIORARI TO THE
UNITED-STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
General Dynamics Corporation petitions for a writ of
certiorari to review a judgment of the United States
Court of Appeals for the Fifth Circuit affirming the find-
ing by the United States District Court for the Eastern
District of Texas that General Dynamics failed to satisfy
the “approval” element of the government contractor
defense.
OPINIONS BELOW
The opinion of the United States Court of Appeals for
the Fifth Circuit affirming the lower court appears at
865 F.2d 1474 (5th Cir. 1989), and is reproduced in the
Appendix to this Petition at la. The denial by the Fifth
Circuit of General Dynamics’ Petition for Rehearing En
Bane and the accompanying dissenting opinion by four
Fifth Circuit judges appears at 876 F.2d 1154 (5th Cir.
1989) and also is reproduced in the Appendix at 32a.
The opinion of the Eastern District of Texas is published
2
at 626 F. Supp. 1830 (E.D. 1986) and also is reproduced
in the Appendix at 40a.
JURISDICTION
The opinion of the United States Court of Appeals for
the Fifth Circuit was filed on February 24, 1989. The
Fifth Circuit’s denial of General Dynamics’ Petition for
Rehearing En Banc was filed June 25, 1989. The judg-
ment was entered on July 6, 1989. General Dynamics
seeks a writ of certiorari pursuant to the provisions of
28 U.S.C. § 1254(1) (1982).
STATEMENT OF THE CASE
This case arises out of an accident which occurred on
January 16, 1982, in which five Navy divers died within
the diving chamber of the U.S.S. GRAYBACK, a Navy
submarine. The U.S.S. GRAYBACK had been on maneu-
vers off the coast of the Philippine Islands when the acci-
dent occurred. The five divers had just returned to the
submarine after conducting demolition exercises at sea.
While the divers were inside the flooded diving chamber
of the GRAYBACK, one of the divers, Mr. Bloomer, was
supposed to open the ventilation valve to allow air in as
he drained the chamber of its water. Mr. Bioomer failed
to completely open the ventilation valve. As the water
drained from the chamber, a vacuum formed, causing the
divers to lose consciousness and drown.
In the early 1960s, the Navy had decided to convert
the U.S.S. GRAYBACK from a missile-carrying subma-
rine to one which was capable of allowing divers to exit
the submarine to conduct exercises in the open sea and
then to re-enter the submarine through a flooded diving
chamber. In its 339-page Circular of Requirements, the
Navy established the basic design concept for the diving
chamber. The Navy then chose one of its own shipyards,
Mare Island Naval Shipyard located off the coast of Cali-
ns S li soe oom
3
fornia, to develop the detailed design for the chamber
and actually to build, test and install it into the U.S.S.
GRAYBACK.
Because of the Viet Nam war, the Navy experienced
manpower shortages in the 1960s. Specifically, Mare Is-
land Naval Shipyard contracted with General Dynamics
to borrow hourly drafismen who were then relocated
from Groton, Connecticut, to work literally alongside
the Navy design personnel in a large “bull-pen” in
the Navy’s own facility at Mare Island. Between 1966
and 1968, these personnel supplemented the existing
Navy staff and assisted them in generating some of the
detailed working drawings for the design of the diving
chamber. Each working drawing generated by General
Dynamics personnel had on its face a review and ap-
proval block which ultimately set forth the signatures of
several Navy personnel, including the Navy Assistant
Design Superintendent of Mare Island who “approved”
the drawing. Appendix at 63a.
After 1968, all General Dynamics personnel left Mare
Island and the Navy alone continued on its own to gen-
erate working drawings for the diving chamber design.
In about 1969, the Navy alone built the chamber pursu-
ant to the design and installed it into the U.S.S. GRAY-
BACK. The Navy then conducted sea trials with the
newly converted submarine. During these trials, that
is, before use, and then thereafter through its own over-
haul, maintenance and use of the chamber between 1969
and 1982, the Navy became aware of and was repeatedly
alerted to the very characteristics of the chamber at is-
sue, i.e., that the ventilation valve was difficult to open
and that it was difficult for a diver to discern whether
it was fully open. Nevertheless, the Navy chose not to
alter the design but, rather, trained its divers to deal
with these various features. Between 1969 and 1982, the
Navy used the U.S.S. GRAYBACK diving chamber 555
times without mishap.
4
The families of the divers first sued the United States
under the Federal Tort Claims Act, but the suit was dis-
missed pursuant to Feres v. United States, 340 U.S. 135
(1950). In 1982, the families of the divers sued General
Dynamics Corporation in tort for damages and General
Dynamics filed a contractual indemnity cross-claim
against the United States. In Trevino v. General Dy-
namics Corp., 626 F. Supp. 1330 (E.D. Tex. 1986), Ap-
pendix at 40a, the United States District Court for the
Eastern District ‘of Texas concluded inter alia that Gen-
eral Dynamics had not proven the government contractor
defense because it had not shown that the government
had approved reasonably precise specifications for the div-
ing chamber.’
The district court assessed that General Dynamics was
80% negligent in the design of the chamber and the
Navy was 20% negligent in failing to maintain the cham-
ber and adequately train its divers in its use. The dis-
trict court noted that because the Navy was immune
from tort liability, its finding of Navy negligence was of
no consequence. The district court ultimately assessed
damages against General Dynamics in the amount of
$4.25 million and found that the United States was not
liable to General Dynamics on the contractual indemnity
claim.
General Dynamics appealed the decision on numerous
grounds. Following the Supreme Court’s opinion in Boyle
v. United Technologies Corp., 108 S. Ct. 2510 (1988),
which established the government contractor defense as
a matter of federal common law, the United States Court
1 This conclusion was directly at odds with the explicit admission
of the United States Navy made to the court in its post-trial brief
that “the Navy approved the working drawings” (Post-Trial Brief
of Defendant/Cross-Defendant United States at 15) (dated Nov. 25,
1985), and that “whatever General Dynamics’ degree of participa-
tion in the design decisions .. . the basic design for such a cham-
ber was the Navy’s.” Id. at 9.
data tanh
5
of Appeals for the Fifth Circuit rendered its opinion in
Trevino on February 23, 1989. The Fifth Circuit af-
firmed the lower court’s decision, concluding that Gen-
eral Dynamics had not proven the “approval’’ element
of the defense.? The Fifth Circuit vacated the lower
court’s findings regarding the United States’ indemnity
obligations. On June 26, 1989, the Fifth Circuit denied
General Dynamics’ Petition for Rehearing En Banc, with
a vigorous dissent filed by Circuit Judge Jolly and joined
by three other judges. 876 F.2d 1154 (5th Cir. 1989) ;
Appendix at 32a.
The Fifth Circuit panel reached the following conclu-
sions which are material to the consideration of the ques-
tions presented in this Petition:
(1) “The U.S.S. GRAYBACK was designed and
constructed in the late 1950s as a missile-carrying
submarine. .. . In the late 1960s the GRAYBACK
was converted to a personnel-carrying submarine
capable of dispatching divers underwater.” Trevino
v. General Dynamics Corp., 865 F.2d at 1476; Ap-
pendix at 3a.
(2) “The Navy established the basic design con-
cept for the modifications to the GRAYBACK in a
339-page circular of requirements (COR) describing
the design concept . .. [and] selected Mare Island
Naval Shipyard (MINS) as the site for the design
and conversion work.” 865 F.2d at 1476; Appendix
at 3a.
(3) “In 1966 and 1967 the Navy contracted with
General Dynamics Corporation Electric Boat Divi-
sion to do the design work on the diving hangar.
The contracts required General Dynamics to produce
2 This conclusion by the Fifth Circuit was directly contrary to
the explicit admission made on the record to the court by the United
States Navy that “there is no serious question in this case that the
Navy indeed approved the final plans .. .” and that “General
Dynamics has met this element of the Boyle test.” Letter Brief of
the United States at 8 (dated Aug. 15, 1988).
6
working drawings of the hangar... .” 865 F.2d
at 1476; Appendix at 3a.
(4) “After General Dynamics completed the draw-
ings, the Navy “did undertake to reviev’ the working
drawings for compliance with the COR.” 865 F.2d at
1487 n.14; Appendix at 26a n.14.
(5) “{T]he Navy performed all the manufactur-
ing and conversion work [for the diving chamber]
on the GRAYBACK.” 865 F.2d at 1477; Appendix
at 3a.
(6) “The defective aspects of the design and the
dangers of the vacuum were so obvious that the Navy
must be charged with knowledge of the defect; yet
the Navy built the diving hangar as designed and
operated it for thirteen years.” 865 F.2d at 1487
n.13; Appendix at 25a n.13.
(7) “The Navy operated the submarine for 13
years without mishap, although Navy personnel noted
on at least four occasions that the ventilation valve
control was difficult to turn.” 865 F.2d at 1477;
Appendix at 4a.
(8) “The Navy had control over the product and
had every opportunity to exercise discretion over the
design. This the Navy did not do.” 865 F.2d at
1487 n.13; Appendix at 25a n.13.
(9) The Navy “knew that the system as designed
could create a partial vacuum.” The Navy “could
see that the final design included no safety devices.”
865 F.2d at 1487; Appendix at 27a.
(10) “The Navy chose to use the GRAYBACK as
designed and dealt with the possibility of a vacuum
by training its employees rather than modifying the
submarine. Furthermore, the Navy exacerbated the
dangers by failing to lubricate the shaft of the valve
properly, making it more difficult to turn and more
likely that a diver would not realize that it was
partially closed.” 865 F.2d at 1488-89; Appendix at
29a.
7
(11) “[{T]he Navy’s method of dealing with the
dangers in the design were effective for thirteen
years.” 865 F.2d at 1489; Appendix at 29a.
REASONS FOR ALLOWANCE OF THE WRIT
In Boyle v. United Technologies Corp., 108 S. Ct. 2510
(1988), this Court defined the three elements of the gov-
ernment contractor defense:
Liability for design defects in military equipment
cannot be imposed, pursuant to state law, when (1)
the United States approved reasonably precise specifi-
cations; (2) the equipment corformed to those specifi-
‘cations; and (8) the supplier warned the United
States about the dangers in the use of the equipment
that were known to the supplier but not to the United
States.
108 S. Ct. at 2518. Because the Fifth Circuit in Trevino
found that General Dynamics met the second and third
elements of the defense, 865 F.2d at 1487; Appendix at
26-27a, the sole issue addressed in this Petition is the
first, or “approval,” element of the defense.
The Fifth Circuit’s opinion in Trevino, issued not even
one year after Boyle, essentially dismantles and emas-
culates the government contractor defense by adopting an
unworkable interpretation of Boyle’s approval test.* In
Boyle, this Court stated that the approval element is sat-
isfied so long as it is demonstrated that the design feature
in question was “considered” not only by the contractor
but also by a government official. 108 S. Ct. at 2518.
Commenting that “[t]he Supreme Court’s use of the
terms ‘approved’ and ‘considered’ is unfortunate,” 865
F.2d at 1481 n.7; Appendix at 18a, the Fifth Circuit
proceeded to redefine those terms so as to render this
Court’s choice of words meaningless.
3 Notably, in an opinion dissenting from the Fifth Circuit’s de-
nial of General Dynamics’ Petition for Rehearing, Circuit Judge
Jolly stated that “Trevino has effectively rewritten the Supreme
Court’s test for government contractor immunity given in Boyle.”
876 F.2d at 1155; Appendix at 34a.
8
-The Trevino court’s microscopic focus on the word
“approval,” unwarranted by Boyle, begins with the state-
«nent that mere government “rubber stamping” of con-
tractor specifications will not suffice, a standard which
General Dynamics does not dispute. 865 F.2d at_ 1485-86;
Appendix at 23a-24a. The court proceeded, however, to
the other end of the spectrum, holding that if the con-
tractor participates in the design of military equipment,
the government’s approval” of that design must embody
the exercise of a discretionary function under the Federal
Tort Claims Act. To show “approval” or “consideration”
under Trevino, a government contractor must show that
the government official performed a “substantive review
and evaluation” rising to the level of a policy decision.
865 F.2d at 1486; Appendix at 23a.
By unconditionally importing into the government con-
tractor defense the body of law interpreting the discre-
tionary function exception, Trevino introduced into the
elements of the defense an entire area of legal analysis
clearly not intended by this Court.* Under Trevino, the
government must insert itself into the design process to
such an extent that it may as well have generated the
design itself.
Moreover, the Fifth Circuit’s impossible test for ap-
proval reaches far beyond the Boyle requirement, placing
artificial limits on when and how government approval
can take place. In this respect the Trevino decision con-
flicts directly with the established law in the federal cir-
cuits, prior to (and unchanged by) Boyle, that “ap-
proval” can occur during or after the design phase. In
contrast, the Fifth Circuit held that approval can only
occur during the design phase of the product and then
4 Notably, there is currently extraordinary tension among the
federal circuits regarding the parameters of the discretionary func-
tion exception. Compare Dube v. Pittsburg-Corning Corp., 870 F.2d
790 (1st Cir. 1989) with Kennewick Irrigation District v. United
States, No. 87-4203 et al. (9th Cir. July 12, 1989).
vi cw so cual
9
only through an expert evaluation of written design spec-
ifications. Under Trevino, government approval cannot
occur after such time even where, as here—and as the
court found—the military itself: (a) actually builds the
product at issue; (b) uses it for 13 years as designed;
(c) knows of the alleged defec’x for the entire period of
use; and (d) elects not to alter the design. Trevino’s
unwarranted fixation on the design phase completely
eclipses this Court’s choice of the word “approval.”
This approval test also is in direct conflict with a post-
Boyle decision from the United States Court of Appeals
for the Fourth Circuit, which has established that pro-
longed use of a military product by the government with
knowledge of the defect constitutes approval and accept-
ance of that design. As Circuit Judge Jolly stated simi-
larly in his opinion dissenting from the Fifth Circuit’s
denial of General Dynamics’ Petition for Rehearing:
[Although the Boyle Court chose thé word “ap-
prove”,] the panel in Trevino finds that the term
“approve” as used in Boyle actually means to estab-
lish reasonably precise specifications, id. at 1479; it
actually means to “choose” a design feature, id. at
1480; it actually means to exercise judgment or policy
choice, id. at 1484; it actually means to substantively
review and evaluate, id. at 1487 n.12; in short, it
actually means to exercise a discretionary function
within the strict meaning of the FTCA. We learn
further in Trevino that one cannot “approve” a design
by full awareness and acceptance of that design,
defect and all, for thirteen years, id.; and finailiy,
we learn that “approve” is a term that cannot be
applied to work done by someone else, id. at 1486
(“If the government delegates its design discretion to
the contractor and allows the contractor to develop
the design, the government contractor defense does
not apply....”)..
876 F.2d at 1155; Appendix at 35a (emphasis in origi-
nal).
10
Notably, the Fifth Circuit’s Trevino opinion directly
conflicts with another opinion issued in the same circuit
on the same day. In Smith v. Xerox Corp., 866 F.2d 135
(5th Cir. 1989), the Fifth Circuit affirmed the district
court’s decision entering judgment for the military con-
tractor on the basis of the government contractor defense.
In particular, the Smith panel adopted pre-Boyle case law
that approval could occur not only through a review of
specifications but also through a review of the product
itself. Jd. at 187-38 (discussing favorably the Fourth
Circuit’s recognition that approval can occur where the
military reviews and approves a mock-up of the equip-
ment). The Smith court also found that the lower court
properly allowed the defense “in light of the government’s
acceptance and extended use” of the product. Jd. at 139
(emphasis added). Thus, the Smith panel implicitly re-
jected the narrow Trevino approval test by acknowledg-
ing that approval can take place in ways other than a
substantive, policy-level review of reasonably precise
specifications. Even Circuit Judge Jolly, the author of
Smith, acknowledged that his analysis in Smith would
“surely have been different” had the Trevino approval test
been the applicable law at the time. 876 F.2d at 1156;
Appendix at 38a.
Not only does Boyle’s rationale embrace a _ broader
“approval” test which would cover these subsequent
events, but the practical and direct result of Trevino’s
unduly limited interpretation is to eliminate the protec-
tion from tort liability afforded to military contractors
and to deter contractors from participating in design ef-
forts. The Trevino court’s wholesale importation of the
discretionary function test into the government contractor
defense inexorably will force the courts to second-guess
governmental judgments regarding the design of military
weaponry, for no contractor could prove that a “substan-
tive” evaluation by the military took place without prob-
ing the depth and merit of that evaluation. Because the
approval test of the government contractor defense will
igi
ie Nest oot é
11
be rendered impossible for military contractors to prove
under Trevino, the Boyle decision itself will be rendered
a nullity.
Therefore, if the Fifth Circuit’s narrow definition of
approval is allowed to go unreviewed by this Court, gov-
ernment contractors will not only be subjected to incon-
sistent legal definitions of approval, but also, at least in
the Fifth Circuit, will be essentially denied the protection
of the government contractor defense. Moreover, plain-
tiffs will easily plead around the Trevino test and—win
or lose—will force the courts at trial to examine in depth
military decision-making relating to equipping the armed
forces. This Court should grant this Petition to minimize
any further multifarious pronouncements from the lower
courts and to ensure that their approach to the govern-
ment contractor defense does not proceed down various
inconsistent and illogical paths so soon after Boyle.
I. THE FIFTH CIRCUIT'S OPINION CONFLICTS
WITH THIS COURT’S DECISION IN BOYLE ov.
UNITED TECHNOLOGIES CORPORATION IN ITS
APPLICATION OF THE DISCRETIONARY FUNC-
TION EXCEPTION TO THE GOVERNMENT CON-
TRACTOR DEFENSE
The Boyle Court began its consideration of the govern-
ment contractor defense with the issue of whether such
a defense could exist “in the absence of legislation spe-
cifically immunizing Government contractors from liabil-
ity for design defects.” 108 S. Ct. at 2513. Ultimately,
this Court concluded that liability for design defects can-
not be imposed, as a matter of federal common law, where
the three elements of the defense were met. Jd. at 2518.
This Court found the requisite “significant conflict” to
justify displacement of state law in the policies under-
lying the discretionary function exception to the Federal
12
Tort Claims Act (“FTCA”), 28 U.S.C. § 2680(a) (1982).
Id. at 2517.5
In Boyle, the discretionary function exception provided
a “statutory provision that demonstrates the potential
for, and suggests the outlines of, ‘significant conflict’
between federal interests and state law in the context
of government procurement.” 108 S. Ct. at 2517. The
first two elements of the defense, approval and conform-
ance, “assure that’ the suit is within the area where the
policy of the ‘discretionary function’ exception would be
frustrated.” Id. at 2518. ;This Court’s reliance on the
discretionary function exception left unresolved to what
extent, if any, the body of law addressing that exception
should be imported into the government contractor de-
fense. It does not appear, however, that the Boyle deci-
sion intended to engraft the entire body of FTCA discre-
tionary function exception law on to the government con-
tractor defense.®
A. The Boyle Opinion Could Not Have Intended To
Require Proof-Of A Policy Level Discretionary
Function To Satisfy The Approval Element Of The
Government Contractor Defense
At the Fifth Circuit, General Dynamics argued that
this Court’s reliance on the discretionary function ex-
ception was intended only to signal the necessary thresh-
old conflict with state law to justify and trigger applica-
tion of federal common law. The Fifth Circuit disagreed,
finding instead that this. Court intended essentially to
j
5 Under that exception, the government is exempt from consent to
suit for any claim “based upon the exercise or performance or the
failure to exercise or perform a discretionary function or duty on
the part of a federal agency or an employee of the Government,
whether or not the discretion involved be abused.” 28 U.S.C.
§ 2680 (a).
6 The law regarding the discretionary function exception is itself
pertubated and in a high state of conflict among the circuits. See
n.4, supra.
Ws a
13
replace “approval” with “exercise of discretion.” * Thus,
rather than using the exception as a precondition which
“suggests the outlines” of the defense, 108 S. Ct. at 2517,
the Trevino court held that when the contractor partici-
pates in the design of military equipment, the govern-
ment’s approval of that design “must constitute a dis-
cretionary function.” 865 F.2d at 1480; Appendix at 10a
(emphasis added). The Fifth Circuit held: “If the gov-
ernment contractor exercised the actual discretion over
the defective feature of the design, then the contractor
will not escape liability via the government contractor
defense” unless “the government’s cognizance of the rele-
vant design features ... [is] on par with that of the
government contractor.” 865 F.2d at 1480, i481 n.7;
Appendix at lla, 18a n.7. The government’s approval
must “involve the use of policy judgment.” 865 F.2d
at 1472; Appendix at 10a.
The Trevino requirement that governmental “approval”
cannot exist without a policy level cognizance by the gov-
ernment of relevant design features “on par with that
of the government. contractor” will not only overly burden
an already arduous design process for military equip-
ment, but will stifle the contractor’s creative participation
in that process. As such, the defense is stripped of one
of its primary objectives: to encourage and protect con-
tractors’ participation in the design of military equip-
ment. 108 S. Ct. at 2518. If the contractor can only
show approval by showing that the government, not the
contractor, made all the design choices, the contractor’s
participation in the design process becomes meaningless.
™ The Trevino court noted that Boyle “imports into this area of
the law ...a rich case law defining what the government’s exer-
cise of discretion is and what it is not.” 865 F.2d at 1483; Ap-
pendix at 18a.
14
This Court in Boyle could not have intended the first
element of the government contractor defense to become
so burdened. In his opinion dissenting from the Fifth
Cireuit’s denial of General Dynamics’ Petition for Re-
hearing, Circuit Judge Jolly suggested the role of the
discretionary function exception:
Mr. Justice Scalia specifically explained that gov-
ernment ‘“‘approvai” assures that the design is within
the area where the discretionary function policy
would not be frustrated, because it assures that the
design feature in question was considered by a gov-
ernment officer and not “merely by the contractor
itself.” Boyle, 108 S. Ct. at 2518. This explanation
appears immediately after the use of the word “ap-
proved” and gives it its meaning. That government
involvement be “within the area” does not mean that
strict compliance with all of the elements of the dis-
cretionary function exception is required. Indeed,
the Court indicated that the discretionary function
exception only “suggests the outlines of ‘significant
conflict’ between federal interests and state law in
the context of government procurement.” 108 S. Ct.
at 2517. .
876 F.2d at 1156; Appendix at 36a (emphasis in origi-
nal).®
8 Since Boyle, other lower courts have agreed with the view that
this Court’s use of the discretionary function exception was only
intended to provide a basis for conflict to justify the displacement
of state law. None have adopted the “discretionary function”
approval test required by Trevino. E.g., Harduvel v. General Dy-
namics Corp., No. 87-8705 (11th Cir. July 31, 1989); Ramey v.
Martin-Baker Aircraft Co., 876 F.2d 946 (4th Cir. 1989); accord
Niemann v. General Dynamics Corp., No. 85-5528 (S.D. Ill. June 28,
1989) (first prong of Boyle test does not require production of
evidence that government exercised discretionary judgment), appeal
docketed, No. 89-2755 (7th Cir 1989).
ee en eer, oe
ies TUR 2 Ce ee at Dp ee ct one >
tt hee Maia DOO AE
15
B. To The Extent Some Proof Of Governmental! Dis-
cretion Is Required By Boyle, The Trevino Court
Failed To Recognize That It Was Present In This
Case
Even if this Court did intend for government contrac-
tors to show some exercise of discretion by the govern-
ment to establish approval, there can be no question but
that such discretion was exercised in this case. The un-
disputed facts are: (1) the Navy chose itself, rather than
General Dynamics, to build the diving chamber from the
design and to instail it into the U.S.S. GRAYBACK; (2)
the Navy discovered the design features at issue when
it tested the chamber before placing it in service; (3) the
Navy chose to place the chamber into service knowing of
the design characteristics at issue; (4) the Navy con-
tinued to note, within the first years of its use, the very
features that allegedly caused the accident but nonethe-
less chose to use the chamber as designed; and (5) the
Navy chose to address these design characteristics in the
chamber not by redesigning it but by training its per-
sonnel around these features. All of these conscious and
knowing decisions by the Navy represent elections which
are the very essence of approval. Thus, even assuming
Trevino’s use of the discretionary function test is ap-
propriate, the Trevino court erred in its application of
that test.
In Boyle this Court placed no time limits on when
discretionary acts constituting approval had to be made
or whether they could be made only through a review of
specifications as opposed, for example, to a review of the
vroduct itself. In affirming the district court’s finding
that General Dynamics failed to meet the approval eie-
ment of Boyle, however, the Trevino panel focused solely
on whether the Navy had exercised its discretion during
the design phase by substantively evaluating written spec-
ifications. 865 F.2d at 1480; Appendix at 11-12a. The
Fifth Circuit completely ignored its own statements
16
which establish without question that the Navy exercised
discretion through a series of decisions at various points
in time. As the Trevino opinion states:
(1) “[Tjhe Navy performed all the manufactur-
ing and conversion work on the GRAYBACK.” &65
F.2d at 1477; Appendix at 3a.
(2) “The Navy operated the submarine for 13
years without mishap, although Navy personnel noted
on at least four occasions that the ventilation valve
control was difficult to turn.” 865 F.2d at 1477;
Appendix at 4a.
(3) “Because both General Dynamics and the Navy
knew that the system as designed could create a
partial vacuum, and because both the Navy and Gen-
eral Dynamics could see that the final design included
no safety devices, liability of General Dynamics could
not be based upon non-disclosure of these dangers.”
865 F.2d at 1487; Appendix at 27a.
(4) “The Navy actually did the manufacturing
and conversion work. The defective aspects of the
design and the dangers of the vacuum were so ob-
vious that the Navy must be charged with knowledge
of the defect; yet the Navy built the diving hangar
as designed and operated it for thirteen years.” 865
F.2d at 1487 n.13; Appendix at 25a n.13.
(5) “The Navy chose to use the GRAYBACK as
designed and dealt with the possibility of a vacuum
by training its employees rather than by modifying
the submarine. . . . [T]he Navy’s method of dealing
with the dangers in the design were effective for
thirteen years.” 865 F.2d at 1488-89; Appendix at
29a.
(6) “The Navy had control over the product and
had every opportunity to exercise discretion over the
design.” 865 F.2d at 1487 n.13; Appendix at 25a
n.13.
Assuming arguendo that an exercise of discretion is
necessary under Boyle, the Trevino court’s view of when
17
and how this exercise must take place cannot be recon-
ciled with case law addressing that exception even in the
Fifth Circuit. E£.g., Gordon v. Lykes Brothers Steamship
Co., 835 F.2d 96 (5th Cir.) (discretion exercised after the
injury-causing asbestos was incorporated into the ships
on which plaintiff worked), cert. denied, 109 S. Ct. 73
(1988). Indeed, the Fifth Circuit’s statement that the
Navy had control over the product and had “every oppor-
tunity to exercise discretion over the design’ acknowl-
edges exactly that: discretionary acts constituting ap-
proval are not and should not be arbitrarily limited in
time. 865 F.2d at 1487 n.13; Appendix at 25a n.13.
Thus, even assuming this Court intended the discretion-
ary function exception to replace the “approval” element
of the government contractor defense, General Dynamics
provided more than adequate proof that the government
exercised its discretion in this case. The 7’revino court’s
requirement that the exercise of discretion can only occur
during the design stage has no precedential or rational
basis.
C. The Trevino Court’s Discretionary Function Test
Necessarily Requires Second-Guessing Of Military
Decision-Making And Ultimately Will Result In
Higher Costs To The United States
The Trevino court’s unwarranted requirement that the
first element of the government contractor defense must
rise to the level of a “substantive review and evaluation
of the relevant design features” is flawed for yet another
reason: its detrimental impact on military decision-mak-
ing and increased costs to the United States. 865 F.2d —
at 1486; Appendix at 23a. When, as Trevino requires,
the trier of fact “must locate the actual exercise of the
discretionary function,” 865 F.2d at 1480; Appendix at
lla, and then must find that this exercise of discretion
“involve[s] the use of policy judgment,” 865 F.2d at
1480; Appendix at 10a, that trier of fact is inevitably
forced to do something specifically prohibited by Boyle:
18
“second-guess” the military’s “judgment as to the bal-
ancing of many technical, military, and even social con-
siderations, including specifically the trade-off between
greater safety and greater combat effectiveness.” 108 S.
Ct. at 2517.°
The inquiry that Trevino requires in order to “locate
the discretion” and determine if it was a “policy level
decision” unavoidably leads a court down a slippery slope
of delving into military decisions.’° While the Fifth Cir-
cuit advised future triers of fact not to evaluate the
“quality” of the government’s review, 865 F.2d at 1480-
81; Appendix at 11-12a, in fact lower courts will be
compelled to do just that. Indeed, in searching for “dis-
cretion,” even the Trevino court. itself was drawn into
examining the competence of the government officials who
approved General Dynamics’ working drawings. 865 F.2d
at 1487 n.12; Appendix at 25a n.12 (“The government’s
use of clearly unqualified individuals to review and ap-
prove highly technical design work . . . may be evidence
that the government does not intend to exercise design
discretion.” (emphasis added) ).
®As Justice Powell recently stated, writing for the Eleventh
Circuit, the judiciary is “the branch of government least competent
to review” sensitive military decisions. Harduvel v. General Dy-
namics Corp., No. 87-3705, slip op. at 35385 (11th Cir. July 31,
1989).
10 Case law addressing the discretionary function exception con-
firms this point: Was there—or did there have to be—a “conscious
decision” by the military when it approved the defect? E.g.,
Kennewick Irrigation District v. United States, No. 87-4203 et al.
(9th Cir. July 12, 1989). Was the military acting at an “opera-
tional” or “planning level” when it made the choice? E.g., Mysla-
kowski v. United States, 806 F.2d 94 (6th Cir. 1986), cert. denied,
489 U.S. 948 (1987). Was the military’s choice a “traditional gov-
ernment function?” E.g., Dube v. Pittsburgh-Corning Corp., 870
F.2d 790 (1st Cir. 1989). If so, was the choice “susceptible of dis-
cretion?” Jd. As these and other cases show, an extraordinary
controversy is rapidly developing among the circuits over the ex-
tent to which the government must actually act in order to exer-
cise its “discretion.”
19.
In addition to ignoring this Court’s admonition against
judicial intrusion into military decisions, the Trevino
court also ignored this Court’s stated goal of ensuring
that the government does not ultimately bear the burden
of these state law tort suits. In Boyle, this Court warned
that the financial burden of state law tort suits “would -
ultimately be passed through, substantially if not totally,
to the United States itself” if-contractors are not pro-
tected by the defense. 108 S. Ct. at 2518. The Trevino
court disagreed: “Actual review and evaluation . . . does
come at a cost to the government.” 865 F.2d at 1480-81
n.5; Appendix at 12a n.5 (emphasis added).
The inevitable second-guessing of military judgments
and increased costs to the government resulting from
the Trevino opinion completely undermines Boyle, and, at
bottom, starkly reveals the unworkability of importing
discretionary function exception case law into the gov-
ernment contractor defense. The difficulty with which
the courts have grappled with the parameters of the ex-
ception highlights how inappropriate it is as an element
of the government contractor defense. The exception does
not, as the Fifth Circuit claims, bring a “rich case law”
to the government contractor defense. As one court
stated, “[r]jather than a seamless web, however, we find
the law in this area to be a patchwork quilt.” Blessing
v. United States, 447 F. Supp. 1160, 1167 (E.D. Pa.
1978).
II. THE TREVINO COURT'S RIGID DEFINITION OF
APPROVAL CREATES A CONFLICT AMONG THE
FEDERAL CIRCUIT COURTS OF APPEAL
As is discussed above, it appears that the Boyle Court
never intended the first element of the government con-
tractor defense to be defined by the myriad of case law
on the discretionary function exception to the Federal
Tort Claims Act. Rather, the reference in Boyle to the
exception was intended to provide the requisite threshold
20
conflict for adoption of federal common law. A review
of the cases both before and after Boyle shows that, with
the exception of the Fifth Circuit, the courts below have
adopted a simpler, broader approval test which had been
established by the majority of the federal circuits prior
to Boyle.
A. The Fifth Circuit’s Limited View Of When And
How Approval May Take Place Conflicts With The
Law Established By The Federal Circuits Prior
To And Unchanged By Boyle Regarding Approval
In carefully choosing the words “considered” and “ap-
proval” to define the first element of the government
contractor defense, this Court in no way suggested that
such consideration is limited to a specific point in the
design process."* The established law in the majority of
the federal circuits, unchanged by Boyle, recognizes ap-
proval in at least four forms:
(1) approval of working drawings or design speci-
fications; !”
11 Although in this Petition General Dynamics argues that “ap-
proval” can and did take place after the design was complete, Gen-
eral Dynamics in no way admits that approval did not take place
during the design phase. For example, the Navy, through the De-
partment of Justice, took the position at trial that there was a con-
tinuous back and forth discussion between the Navy and General
Dynamics during the design stage. In fact, five Navy officials at
successive levels of seniority formally reviewed and approved the
drawings in question, some of which were actually drafted not by
General Dynamics personnel but, remarkably enough, by the Navy
itself. Thus, essentially the Navy approved its own drawings. Ap-
pendix at 63a. Because the Fifth Circuit set forth adequate facts
to show that later approval took place, however, General Dynamics
has not raised the issue of that earlier approval in this Petition.
12 F.g., Smith v. Xerox Corp., 866 F.2d 1385 (5th Cir. 1989);
Trevino, 865 F.2d at 1480; Tozer v. LTV Corp., 792 F.2d 403, 408
(4th Cir. 1986), cert. denied, 108 S. Ct. 2897 (1988).
21
(2) approval through “back-and-forth” discussions
conducted during the design process; **
(3) approval through examination and acceptance
of a prototype or mock-up; * or -
(4) approval through extended use of the equip-
ment as produced.”
Logically, approval of a design can take place at any
point in time prior to the injury at issue; timing is
essentially irrelevant. As one court recently stated:
The Court believes that, contrary to what plaintiff
asserts, the relevant time to evaluate the first prong
is not limited to the time when the Air Force origi-
nally took delivery of the O-2 aircraft. The Air
Force’s later decisions regarding the equipment may
13 F’.g., Harduvel v. General Dynamics Corp., No. 87-3705 (11th
Cir. July 31, 1989) ; Koutsoubos v. Boeing Vertol, 755 F.2d 352, 355
(3d Cir.), cert. denied, 474 U.S. 821 (1985); Boyle v. United
Technologies Corp., 792 F.2d 418, 414 (4th Cir. 1986).
14 F.g., Ramey v. Martin-Baker Aircraft Co., 874 F.2d 946 (4th
Cir. 1989) ; accord In re Air Crash Disaster at Mannheim Germany,
769 F.2d 115, 123 (3d Cir. 1985) (Army inspection and modifica-
tion of the prototype aircraft “alone is sufficient to satisfy the
level of government participation in design so as to constitute
‘approval’”) (emphasis added), cert. denied sub nom. 474 U.S.
1082 (1986); Boyle v. United Technologies Corp., 792 F.2d at 414-
15 (approval proven by the Navy’s review and approval of a mock-up
aircraft) ; see also Tillett v. J.I. Case Co., 756 F.2d 591, 599 (7th
Cir. 1985) (defendant proves approvai element of defense solely
on the basis of the government’s approval of a prototype, i.e., after
design and after construction).
15 F.9., Dowd v. Textron, Inc., 792 F.2d 409, 412 (4th Cir. 1986)
(where Army had been using helicopter, knowing of defect, for
over twenty years, approval test is “amply established’), cert. de-
nied, 108 S. Ct. 2897 (1988); see also Harduvel v. General Dynam-
ics Corp., No. 87-3705, slip op. at 3540 (11th Cir. July 31, 1989)
(“[glovernment review and approval of design and production
methods continued after production began”); Hendrix v. Bell Heli-
copter Textron, Inc., 634 F. Supp. 1551, 1554 (N.D. Tex. 1986)
(court finds military approval of the design because all the allegedly
defective helicopters are still in operation).
22
constitute approval of reasonably precise specifica-
tions.
Schwindt v. Cessna Aircraft Co., No. CV485-472, mem.
op. at 7 (S.D. Ga. Aug. 31, 1988) ; see Harduvel v. Gen-
eral Dynamics Corp., No. 87-3705, slip. op. at 3542 (11th
Cir. July 31, 1989) (government contractor defense proven
where Air Force was aware of design defect and “([dle-
spite its knowledge . . . continued to fly the hundreds of
F-16’s in operation, and to purchase additional ones’).
In finding that General Dynamics failed to show “ap-
proval” by the Navy even where the Navy knew of the
very characteristics at issue in this case, accepted the
design with such features, built the chamber with these
characteristics, and chose to train around them for thir-
teen years, the Fifth Circuit set a standard for “ap-
proval” which conflicts with federal circuit case law
defining the defense. The 7'revino court’s fixation on one
particular indicia of approval—approval of working
drawings and whether mere “rubber stamping” took
place—ignores the other evidence which the courts before
and after Boyle have uniformly acknowledged demon-
strate approval.
The one definition of approval which is no longer viable
after Boyle is that previously enunciated by the Eleventh
Circuit in Shaw v. Grumman Aerospace Corp., 778 F.2d
736 (11th Cir. 1985), cert. denied, 108 S. Ct. 2896 (1988).
The Shaw approval test, like the Trevino approval test,
focused on whether an informed government approval oc-
curred during the design phase.’** Both Trevino and Shaw
16 The Shaw test required a showing that: “(1) the contractor
did not participate, or only participated minimally, in the design
of the defective equipment; or (2) the contractor timely warned the
Government of the risks of the design and notified it of alternative
designs reasonably known by it, and the Government, although fore-
warned, clea.ly authorized the contractor to proceed with the dan-
gerous design.” Boyle, 108 S. Ct. at 2518 (emphasis supplied).
require a court to compare the nature and level of con-
tractor and government participation during the design
stage. This Court rejected Shaw, however, holding that
“(while this formulation may represent a perfectly rea-
sonable tort rule, it is not a rule designed to protect
the Federal interest embodied in the ‘discretionary func-
tion’ exemption.” Boyle, 108 S. Ct. at 2518.
It is clear that the Trevino result—no approval even
in the face of full acceptance with knowledge—cannot
coexist with Boyle or other case law. As Circuit Judge
Jolly stated in his dissenting opinion:
I agree with the panel that “approve” is not synon-
ymous with “rubber stamp.” It does seem to me,
however, that when the government furnishes 339
pages of specifications and involves a review team
with the plans, “rubber stamp” is not an apt descrip-
tion of the government’s involvement. Generally
speaking, I would think that in this case if the gov-
ernment considered the plans and affirmatively as-
sented to them, it has “approved’’; or if the govern-
ment, in the panel’s words, was “charged with the
knowledge of the defect” and accepted the design,
especially for a period of years with no complaint, it
has “approved” contract specifications within the
meaning of Boyle.
876 F.2d 1156; Appendix at 36a.
B. The Fifth Circuit’s Limited View Of When And
How Approval May Take Place Conflicts With The
Fourth Circuit’s Post-Boyle Interpretation Of
Approval
In addition to conflicting with the Lroad approval test
outlined by the case law prior to Boyle and adopted by
this Court in Boyle, the Trevino court’s narrow defini-
tion of when and how approval can take place conflicts
with the Fourth Circuit’s interpretation of Boyle. In
Ramey v. Martin-Baker Aircraft Co., 874 F.2d 946 (4th
Cir. 1989), the Fourth Circuit considered the government
24
contractor defense, explicitly holding that the approval
element of Boyle may be established in two ways: (1)
proof that the government’s review of the specifications
was more than a rubber stamp; or (2) a showing that
the military continued using the product, even therch it
knew of its defective feature. Ramey’s adoption ot the
traditional broad approval test cannot be reconciled with
Trevino’s narrow test.
In Ramey, the plaintiff was injured while trying to
remove an ejection seat from the cockpit of a Navy F-18
fighter aircraft. Martin-Baker Aircraft Company manu-
factured the ejection seat as a subcontractor to McDonnell
Douglas, the designer and producer of the F-18. De-
fendant Martin-Baker asserted that it was immune from
liability based on the government contractor defense, and
the district court agreed. Ramey v. Martin-Baker Air-
craft Co., 656 F. Supp. 984 (D. Md. 1987), aff'd, 874
F.2d 946 (4th Cir. 1989).
On appeal, the Fourth Circuit applied the defense as
adopted by this Court in Boyle, affirming that the con-
tractor had proven the three elements. With respect to
the approval element of Boyle, the Fourth Circuit stated
that there are “two routes” by which the approval ele-
ment may be established. The Ramey court held that,
first, “‘[t]he length and breadth of the [military’s]
experience with the [component]—and its decision to con-
tinue using it—amply establish government approval of
the alleged design defects.’” 874 F.2d at 950 (quoting
Dowd v. Textron, 792 F.2d at 412). Second, “the de-
fense will be permitted to a participating contractor so
long as government approval of a design ‘consists of
more than a mere rubber stamp”” Jd. (quoting Tozer,
792 F.2d at 407-08). The court held that the evidence
produced by Martin-Baker established either test, finding
inter alia that the Navy was aware of the possible haz-
ards of the ejection seat configuration prior to the acci-
dent and that the Navy had approved a prototype or
“mock-up” of the design. Jd,
25 cE
It is the Fourth Circuit’s conclusion that Martin-Baker
‘adequately showed approval through the “length and
breadth” of the military’s experience with the component
that directly conflicts with the Fifth Circuit’s conclusion
that General Dynamics did not. In both cases the Navy
approved the design—in Ramey through approval of a
mock-up, in Trevino by building the equipment itself and
then actually discovering the design features in question
through testing. In both cases, the Navy had prolonged
experience with the allegedly defective component. In
both cases, the Navy was aware of the possible hazards
the component presented. In both cases, the Navy chose
to continue using that component with full knowledge.
Yet in Ramey these facts established approval; in T're-
vino they did not. The incongruity of these two federal
circuit court opinions alone is adequate and proper
grounds for this Court to grant this Petition for a writ of
certiorari.
CONCLUSION
As Circuit Judge Jolly stated in his opinion dissenting
from the Fifth Circuit’s denial of General Dynamics’
Petition for Rehearing En Banc:
The United States Supreme Court, only less than
a year ago specifically chose to use the word “ap-
prove” when it held that “Liability for design de-
fects in military equipment cannot be imposed, pur-
suant to state law, when (1) the United States ap-
proved reasonably precise specifications.” In doing
so, the Court selected a less demanding word than
any of the synonyms it might have chosen... .
876 F.2d at 1155; Appendix at 34a (quoting Boyle, 108
S. Ct. 2518).
Historically, the approval element of the government
contractor defense has been a-simple concept. By over-
defining the word, the Trevino court has created a morass
of confusion unwarranted and unintended by the Su-
preme Court in Boyle. The Trevino definition necessarily
26
draws the judiciary into second-guessing the military, for
the court cannot locate the government’s exercise of dis-
eretion and perform the required analysis of that dis-
cretion without probing the quality and character of the
military’s review. Finally, the Trevino definition of ap-
proval will discourage contractor participation in the
design of military equipment, for under Trevino if the
contractor undertakes to design military products, the
government’s discretionary decision-making will virtually
make the government a clone for all of the contractor’s
design choices.
Respectfully submitted,
HERBERT L. FENSTER
Counsel of Record
RAYMOND B. BIAGINI
CHARLOTTE D. YOUNG
McKENNA, CONNER & CUNEO
1575 Eye Street, N.W.
Washington, D.C. 20005
(202) 789-7500
Attorneys for Petitioner
Date: September 1, 1989 General Dynamics Corporation
APPENDICES
la
UNITED STATES COURT OF APPEALS
FIFTH CIRCUIT
Nos. 86-2965, 87-2175
GLORIA TREVINO, et al.,
Plaintiffs-A ppellees,
v.
GENERAL DYNAMICS CORP.,
Defendant-A ppellant.
GLORIA TREVINO, et al.,
Plaintiffs,
v.
GENE? AL DYNAMICS CORP.,
Defendant-Cross Claim
Plaintiff-Appellant,
Vv.
UNITED STATES OF AMERICA,
Defendant-Cross Claim
Defendant-Appellee.
Appeals from the United States District Court
for the Eastern District of Texas
Feb. 23, 1989
2a
Herbert L. Fenster, Lawrence M. Farrell, Raymond B.
Biagini, Risa H. Rahinsky, McKenna, Conner & Cuneo,
Washington, D.C., for General Dynamics Corp.
Michael J. Maloney, Houston, Tex., John Dd&y, Atty.,
Robert S. Greenspan, Civ. Div., U.S. Dept. of Justice,
Washington, D.C., Wayne Fisher, Houston, Tex., Thomas
W. Kopf, U.S. Atty., Beaumont, Tex., Hugh Johnston,
Trial Atty., Torts Branch, Civ. Div., Dept. of Justice,
Washington, D.C., for Gloria Trevino, et al. and U.S.
Before REAVLEY, HIGGINBOTHAM and SMITH,
Circuit Judges.
REAVLEY, Circuit Judge:
The families of Navy divers killed in a Navy sub-
marine diving chamber brought this products liability
action under the Death On The High Seas Act, 46 U.S.C.
App. § 761 et seq., and the federal Admiralty law, 28
U.S.C. § 1833, against General Dynamics Corporation,
the designer of the chamber. General Dynamics also filed
a cross-claim against the United States claiming that, in
the event it was found liable to the plaintiffs, the United
States would be liable to General Dynamics under a con-
tractual indemnification clause. Trial was to the court,
which held that General Dynamics was liable for the
deaths of the divers and that the United States was not
liable to General Dynamics under the indemnification
clause. Trevino v. General Dynamics Corp., 626 F. Supp.
1330 (E.D.Tex.1986). We affirm the judgment for the
families of the divers against General Dynamics and
vacate, for lack of jurisdiction, that part of the judg-
ment favoring the United States on contractual indemnity.
I. Factual Background
On the night of January 16, 1982, five United States
Navy divers died in an accident aboard the submarine
U.S.S. GRAYBACK. The ventilation valve, which al-
8a
lowed air to enter the flooded diving chamber, was not
fully open; and as the divers drained the water, a vacuum
formed in the chamber.
The U.S.S. GRAYBACK was designed and constructed
in the late 1950s as a missile-carrying submarine. It was
equipped with two large cylindrical pressure chambers
on its forward deck, which were used as storage hangars
for the missiles. In the late 1960s the GRAYBACK was
converted to a personnel-carrying submarine capable of
dispatching divers underwater. One portion of that con-
version was the installation of a diver lock-in/lock-out
system in the cylindrical pressure chambers. The Navy
established the basic design concept for the modifications
to the GRAYBACK in a 339-page circular of require-
ments (“COR”) describing the design concepts, including
two pages describing the design of the diving hangar
and a one-page diagram of the flood and drain system,
and selected Mare Island Naval Shipyard (“MINS”) as
the site for the design and conversion work.
In 1966 and 1967 the Navy contracted with General
Dynamics Corporation Electric Boat Division to do the
- design work on the diving hangar. The contracts re-
quired General Dynamics to produce working drawings
of the hangar and the lock-in/lock-out system and to as-
sume full responsibility for all necessary technical re-
search, to review its work product to assure compliance
with the COR, and to conduct all quality assurance, in-
cluding inspection of the end product, before issue to the
Navy. General Dynamics supplied 37 employees, who
worked on-site at MINS and produced 71 pages of de-
tailed working drawings. Each of the drawings was
signed by a government employee in a box marked “ap-
proved.” After General Dynamics completed the draw-
ings, their employees left MINS, and the Navy performed
all the manufacturing and conversion work on the GRAY-
BACK.
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The design concept, as stated in the COR, called for a
“control bubble,” a plexiglass enclosure that would be
lighted and filled with air while the diving hangar was
flooded, from which a diver could operate all the controls
necessary to drain the diving hangar. General Dynam-
ics’s design, however, placed the hand wheel control for
the ventilation valve adjacent to, but not controllable
from, the control bubble. General Dynamics’s design did
not include a lighted position indicator on the ventilation
valve control, a remote valve position indicator, vacuum
gauges, safety interlocks, or any other type of warning
or safety device to prevent a vacuum or to notify the
divers or the crew inside the submarine (“the dry side”)
of the presence or possibility of a vacuum. The Navy op-
erated the submarine for 13 years without mishap, al-
though Navy personnel noted on at least four occasions
that the ventilation valve control was difficult to turn.
The Navy never performed nor required a formal design/
safety review of the GRAYBACK’s diving system prior
to the accident.
Following the accident, the Navy conducted an investi-
gation and concluded that the accident was caused by
“a combination of design deficiency, material defect, un-
sound operating procedures, and personnel error.” Spe-
cifically, the Navy found the following four design defi-
ciencies: that there was no safety interlock mechanism
to prevent the opening of the hangar drain valve when
the main vent valve was not fully opened; that the only
valve position indicator on the main vent valve was a
metal tab that was underwater and could not be seen
1 General Dynamics argues that the hand wheel was controllable
from the bubble. The plaintiffs concede that a diver could turn the
wheel without leaving the plexiglass enclosure but point out that
the wheel was under water and that the divers were generally fully
submerged when operating the control. It is undisputed that the
hand wheel control was not visible from the air bubble. Therefore,
we accept the district court’s finding that, as a practical matter, the
ventilation valve was not controllable from the air bubble.
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when draining the hangar; that there was no remote
position indicator that could be seen from the dry side of
the hangar; and that the genera! design of the hangar
made proper maintenance of the main vent valve ex-
tremely difficult, “if not impossible.” Trevino v. General
Dynamics Corp., 626 F.Supp. at 1332-33. The district
court found that both the Navy and General Dynamics
were negligent and that the design was dangerously de-
fective. General Dynamics was negligent in failing (1)
to provide for a safety interlock device, (2) to provide
for a valve position indicator that is visible when draining
the hangar, (3) to provide for a remote position indi-
cator that could be seen from the dry side, (4) to design
the valve so that proper maintenance was possible, (5)
to adhere to the Navy’s COR requiring that the vent
valve be controllable from the control bubble, (6) to warn
the Navy about the dangers associated with the design’s
potential to create a partial vacuum, and (7) to warn or
instruct the Navy. concerning the failure to provide for
basic safety and warning devices. The Navy was negli-
gent in failing (1) to provide for basic safety features
in its COR, (2) to perform sufficient operational testing,
(3) to conduct a formal-design review of the system,
and (4) to properly lubricate and maintain the shaft to
the main hangar vent valve. The court attributed 80%
of the fault to General Dynamics and 20% of the fault
to the Navy.? Although many aspects of the faulty de-
2 The trial court noted that the finding as to the Navy “is merely
superfluous as the Court has already ruled that the United States
is immune from the Plaintiff’s direct suit under the Feres-Stencel
doctrine.” 626 F.Supp. at 1333. As will be explained hereafter, the
district court’s findings of negligent conduct by the Navy, with the
exception of its finding that the Navy failed to properly lubricate
and maintain the shaft, are also superfluous because these acts
by the Navy are discretionary functions. The Navy may delegate
the design and testing of military equipment to a private contractor,
~ and the Navy need not perform a design or safety review of the
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sign and the improper maintenance of the system con-
tributed to the accident, the fundamental design defect
was that the design of the hangar made it impossible for
the diver who was draining the system to know whether
the vent valve-was fully open and that there was no
back-up system of any sort to prevent a vacuum or to
warn the diver or the crew if the diver did begin to
drain the hangar while the vent valve was partially
closed. None of the parties on appeal question the cor-
rectness of the finding that the design was defective.
The parties do dispute whether General Dynamics, as
a government contractor, is responsible for the injuries
caused by its defective design.. The principal question
presented in this case is what are the contours of the
government contractor defense recognized by the United
States Supreme Court in Boyle v. United Technologies
Corp., —— U.S. ——, 108 S.Ct. 2510, 101 L.Ed.2d 442
(1988).
II. A Government Contractor’s Derivative Immunity
Prior to the Boyle decision, this circuit and others
had recognized under federal common law a defense that
protected government contractors from liability in prod-
ucts liability actions based on injuries to servicemen
caused by defectively-designed military equipment. See
Bynum v. FMC Corp., 770 F.2d 556, 574 (5th Cir. 1985) ;
see also Tozer v. LTV Corp., 792 F.2d 403, 406 (4th Cir.
1986), cert. denied, —— U.S. ——, 108 8.Ct. 2897, 101
L.Ed.2d 931 (1988) ; Shaw v. Grumman Aerospace Corp.,
778 F.2d 736, 738 (11th Cir. 1985) ; In re Air Crash Dis-
aster at Mannheim Germany on Sept. 11, 1982, 769 F.2d
115, 122 (3d Cir. 1985), cert. denied, Schoenborn v. Boe-
ing Co., 474 U.S. 1082, 106 S.Ct. 851, 88 L.Ed.2d 891
(1986) ; Tillett v. J. I. Case Co., 756 F.2d 591, 597 (7th
contractor’s work. The government is not answerable in court
for its delegation of these decisions when the contractor is negli-
gent.
Ta
Cir. 1985) ; McKay v. Rockwell Int’l Corp., 704 F.2d 444,
451 (9th Cir. 1983), cert. denied, 464 U.S. 10438, 104 S.Ct.
711, 79 L.Ed.2d 175 (1984). This immunity for govern-
ment contractors was derived from the government’s im-
munity under the Feres-Stencel doctrine.2 See Bynum,
770 F.2d at 565; see also McKay, 704 F.2d at 449 (“The
reasons for applying the government contractor defense
to suppliers of military equipment with design defects
approved by the government parallel those supporting the
Feres-Stencel doctrine.”). Bynum established the follow-
ing elements for the government contractor defense:
To establish the government contractor defense, a
military contractor must first demonstrate that the
government is immune from liability under the
Feres-Stencel doctrine. ... Second, the military con-
tractor must prove that the government established
reasonably precise specifications for the allegedly de-
fective military equipment and that the equipment
conformed to those specifications. . . . Finally, it
must be shown that the military contractor warned
the government about errors in the government spec-
ifications or dangers involved in the use of the equip-
ment that were known to the contractor but not to
the government.
770 F.2d at 574. The primary purpose behind this for-
mulation of the defense is to prevent the contractor from
being held liable when the government is actually at fault
3 Feres v. United States, 340 U.S. 135, 71 S.Ct. 153, 95 L.Ed. 152
(1950), held that a soldier may not sue the United States for in-
juries caused by the negligence of his superior officers or the
government if those injuries were incident to his military service.
Stencel Aero Engineering Corp. v. United States, 431 U.S. 666,
97 S.Ct. 2054, 52 L.Ed.2d 665 (1977), extended Feres and held
that the United States is immune from liability to a rovernment
contractor for contribution or indemnity when a soldier has recov-
ered against a government contractor for injuries partially caused
by the negligence of the government.
8a
but is protected by the Feres-Stencel doctrine. See id. at
565.
A. The Boyle Defense
The Supreme Court in Boyle v. United Technologies
Corp., —— U.S. ——, 108 S.Ct. 2510, 101 L.Ed.2d 442
(1988), recognized the government contractor defense.
The Court’s opinion began with fundamentals, noting
that state tort law is preempted by federal common law
in areas of unique federal interests and holding that the
- procurement of equipment by the United States is such
an area. See id. 108 S.Ct. at 2513-15. The scope of the
displacement of state law is defined by the elements of
the defense that the Court adopted.
Liability for design defects in military equipment
cannot be imposed, pursuant to state law, when (1)
the United States approved reasonably precise spec-
ifications; (2) the equipment conformed to those
specifications; and (3) the supplier warned the
United States about the dangers in the use of the
equipment that were known to the supplier but not
to the United States.
Id. at 2518. The Court specifically rejected the Feres-
Stencel doctrine as the basis for this defense, and instead
grounded the defense in the policies underlying the dis-
cretionary function exception of the Federal Tort Claims
Act (FTCA), 28 U.S.C. § 1846(b). Id. at 2517.
With the exception of discarding the first Bynum ele-
ment, the Supreme Court’s articulation of the elements
of the government contractor defense is virtually identi-
cal to the existing Fifth Circuit law. As we noted re-
cently, the Boyle opinion “does not change the law in this
and other Circuits, except to reject the ideological basis
for contractor immunity based upon the Feres doctrine.”
McGonigal v. Gearhart Indus., Inc., 851 F.2d 774, 777
(5th Cir. 1988). Yet that change may be significant. The
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discretionary function exception, 28 U.S.C. § 2680(a), ex-
cepts from the FTCA consent to suit “[a]ny claim...
based upon the exercise or performance or the failure to
exercise or perform a discretionary function or duty on
the part of a federal agency or an employee of the Gov-
ernment, whether or not the discretion involved be
abused.” The Supreme Court noted that this statutory
provision “demonstrates the potential for, and suggests
the outlines of, ‘significant conflict’? between federal in-
terests and state law in the context of government pro-
curement” and held that “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 this provision.” 108 S.Ct. at 2517. The Su-
preme Court’s rejection of the Feres-Stencel doctrine as
the basis for the defense means that the purpose behind
the three elements of the defense is not the attainment of
the policies identified in Feres and in Bynum, but defer-
ence to the discretionary functions of the government.
The district court applied the three elements of the de-
fense almost exactly as stated in Boyle. See 626 F. Supp.
at 1334-35. Although government employees signed each
page of the working drawings indicating their approval
of the design, the district court held that “the level of
review here was not sufficient to constitute ‘approval.’ ”
Id. at 1336. Thus, this case presents the question, un-
resolved by the Supreme Court, of what constitutes “ap-
proval” under the first element of the Boyle defense.
B. “Approval” Under Boyle
Assuming for the moment that the signatures denoting
government approval of General Dynamics’s designs were
made without any sort of review cr evaluation of the
designs, that they were mere bureaucratic rubber stamps,
that they signified at most the government’s decision to
allow General Dynamics to make all of the important
design choices and the government’s confidence in Gen-
10a
eral Dynamics’s ability to do so, would such “approval”
be sufficient to satisfy the first element of the Boyle de-
fense? The majority in Bogle did not define approval,
but the dissent clearly feared such a possibility arising
from the majority’s formulation of the defense: “Re-
spondent is immune from liability so long as it obtained
approval of ‘reasonably precise specifications’—perhaps
no more than a rubber stamp from a federal procurement
officer who might or might not have noticed or cared
about the defects, or even had the expertise to discover
them.” Boyle, 108 S.Ct. at 2519 (Brennan, J., dissent-
ing).* Actually, the sufficiency of the government ap-
proval was not an issue in Boyle. The Fourth Circuit
had noted that the Navy and the contractor had worked
closely together on the design, that there was abundant
evidence of back-and-forth discussions and exchange of
information between the contractor and the Navy, and
that the Navy had reviewed fully and had approved the
final design. Boyle v. United Technologies Corp., 792
F.2d 418, 414-15 (4th Cir. 1986), aff'd, US. —,
108 S.Ct. 2510, 101 L.Ed.2d 442 (1988).
We hold that “approval” under the Boyle defense re-
quires more than a rubber stamp. First, the Court’s
rejection of the Feres-Stencel doctrine in favor of the
discretionary function exception as the basis for the de-
fense tells us that the purpose of the defense is to protect
the discretionary functions of the government and that,
therefore, approval under the defense must constitute a
discretionary function. Second, our reading of the case
law defining the notion of a “discretionary function”
reveals that not all government acts involving some ele-
ment of choice are discretionary functions, but only those
that involve the use of policy judgment. When the gov-
4In Bynum, we also left this question open by refusing to decide
what level of government participation in generating design speci-
fications was necessary to satisfy the approval requirement. See
770 F.2d at 574 n. 23.
lla
ernment merely accepts, without any substantive review
or evaluation, decisions made by a government contrac-
tor, then the contractor, not the government, is exercising
discretion. A rubber stamp is not a discretionary func-
tion; therefore, a rubber stamp is not “approval” under
Boyle.
In considering the first element of the Boyle defense
in a case like this one, the trier of fact will deter-
mine whether the government has exercised or dele-
gated to the contractor discretion over the product de-
sign. The government exercises its discretion over the
design when it actually chooses a design feature. The
government delegates the design discretion when it buys
a product designed by a private manufacturer; when it
contracts for the design of a product or a feature of a
product, leaving the critical design decisions to the pri-
vate contractor; or when it contracts out the design of
a concept generated by the government, requiring only
that the final design satisfy minimal or genera! stand-
ards established by the government. If the government
delegates the design discretion to the contractor, the ex-
ercise of that discretion does not revert to the govern-
ment by the mere retention of a right of “final approval”
of a design nor by the mere “approval” of the design
without any substantive review or evaluation of the rele-
vant design features or with a review to determine only
that the design complies with the general requirements
initially established by the government. The mere signa-
ture of a government employee on the “approval line” of
a contractor’s working drawings, without more, does not
establish the government contractor defense. The trier of
fact should not evaluate the wisdom or quality of any
government decision, but must locate the actual exercise
of the discretionary function. If the government contrac-
tor exercised the actual discretion over the defective fea-
ture of the design, then the contractor will not escape
liability via the government contractor defense—the gov-
12a
ernment’s rubber stamp on the design drawings notwith-
standing.®
That Boyle requires more than a rubber stamp is clear
from its formulation of the elements of the defense, each
of which serve to locate the exercise of discretion in the
government. Under the first element the government
must approve reasonably precise specifications. The re-
quirement that the specifications be precise means that
the discretion over significant details and all critical de-
sign choices will be exercised by the government. If the
government approved imprecise or general guidelines,
then discretion over important design choices would be
left to the government contractor. The same is true for
the second element, which requires that the equipment
conform to the specifications. If the contractor were free
to deviate from the government’s specifications, then dis-
5 General Dynamics takes issue with the trial court’s conclusion
that under any other reading of the approval requirement “the
government contractor’s defense would seem always to apply and
contractors would never be liable for a defective product because
the government would always be in a position to approve a con-
tractor design.” 626 F.Supp. at 1337. But the district court was
correct. If the signature of a government employee on a design
drawing in a box marked “approved” establishes the first element
of the government contractor defense as a matter of law, govern-
ment contractors would make sure that they would never face lia-
bility for defective design of military equipment merely by bar-
gaining for a guarantee that some federal employee would place
his signature at the bottom of every sheet of paper involved in the
design of a product and thus confer the government’s “approval.”
Such a provision likely would be agreed to by the government
because it would come at absolutely no cost. Actual review and
evaluation of design decisions, however, does come at a cost tu
the government. That is why the government must decide wheiner
to exercise the design discretion itself or to delegate that discre-
tion to the government contractor. As the district court noted
“Tijn the real world, although the government and the contractor
may jointly work together in producing specifications, the level of
participation always varies. Sometimes the government’s partici-
pation is minimal at best. That is the very case here.” Id.
Se ech abe
NO et a A oe
—
cretion over the design choices would be exercised by the
contractor, not by the government.* Boyle noted that
“(t]he first two of these conditions assure that the suit
is within the area where the policy of the ‘discretionary
function’ would be frustrated—i.e., they assure that the
design feature in question was considered by a Govern-
ment officer, and not merely by the contractor itself.” 108
S.Ct. at 2518.7 It would be absurd, then, to fashion a
rule that allowed liability when the specifications were
not sufficiently precise or when the contractor deviated
from the specifications while disallowing liability when
the federal officer signing the design approval did not
review or understand the specifications or care whether
the contractor deviated from them. As we noted in
Bynum, the purpose of the test is to deny the defense to
a government contractor ‘that is itself ultimately re-
sponsible for the design defect.” 770 F.2d at 574.
The third element of the Boyle defense requires that
the government contractor warn the government when
®It could be asserted that the second element functions only to
remove the government contractor defense for manufacturing de-
fects, and is not about discretion at all. But Boyle specifically
stated that the three elements established a defense to “[l]liability
for design defects in military equipment.” 108 S.Ct. at 2518. A
manufacturer is liable for manufacturing defects no matter who
designed or approved the specifications. As we noted in McGonigal,
“military contractor immunity does not apply in cases of defective
manufacture.” 851 F.2d at 777.
™The Supreme Court’s use of the terms “approved” and “con-
sidered” is unfortunate. Taken out of context these terms might
suggest that a rubber stamp is sufficient. But we must note that
the term “considered” is linked in the sentence to the notion of
a discretionary function and is meant to indicate that the govern-
ment has exercised discretion. The exercise of a discretionary
function cannot be equated with a rubber stamp approval. More-
over, the Court’s statement indicates that the government’s cogni-
zance of the relevant design features must be on a par with that
of the government contractor. At a minimum, the federal officer
approving the design must not only sign it but know what is there.
14a
the contractor has information which the government
lacks. This element clearly contemplates that the govern-
ment’s approval of the design will involve informed de-
cisions and considered choices. As we noted in Bynum,
the primary purpose of the warning element is “to
enable the government to make determinations as to the
design and use of military equipment based on all readily
available information.” Jd. at 574. The Court’s inclusion
of a warning element must indicate that approval re-
quires some level of evaluation and review; otherwise a
government contractor might argue one day that it
should have the benefit of the defense despite its failure
to give a warning because the government had rubber-
stamped the design, because the information withheld
would have been of no use to the government and was not
desired by the government, and because the provision of
the information would not have affected the government’s
“approval” of the design. The Supreme Court noted that
the warning requirement prevents the defense from creat-
ing an incentive to withhold information: “We adopt
this provision lest our effort to protect discretionary
functions perversely impede them by cutting off informa-
tion highly relevant to the discretionary decisions.” 108
S.Ct. at 2518. That purpose would be a farce if the gov-
ernment could approve specifications without evaluating
them.
In discussing the federal interests involved, Boyle gives
two hypothetical cases in which the government contrac-
tor defense would not apply. First, if the United States
contracts for the purchase and installation of an air con-
ditioning unit, specifying the cooling capacity but not the
precise manner of the construction, and the state law re-
quired a duty of care to inelude a certain safety feature,
“no one suggests that state law would generally be pre-
empted in this context.” 108 S.Ct. at 2516. Second, if a
federal procurement officer orders, by model number, a
quantity of stock helicopters that happen to be equipped
15a
with improperly designed escape hatches, the govern-
ment’s order would not establish its significant interest
in that particular design. “That would be scarcely more
reasonable than saying that a private individual who
orders such a craft by model number cannot sue for the
manufacturer’s negligence because he got precisely what
he ordered.” Jd. These examples do not square with an
interpretation of the Boyle defense that contemplates ap-
proval without evaluation. In both cases the government
has no interest in the defective design feature because
the contractor, not the government, exercised discretion
over the design choice. If discretion is unimportant to
approval, if the government may approve by rubber
stamp, then the government ought to be able to approve
the design by accepting and using the air conditioning
unit or by ordering and accepting delivery of the helicop-
ters. Boyle clearly indicates that such “approval” would
be insufficient.
Decisions in the circuit courts prior to Boyle also sup-
port our holding. The Third Circuit flatly held that the
government’s approval must consist of “more than a
mere rubber stamp.” In re Aircrash Disaster, 769 F.2d
at 122. The Third Circuit held that the government’s
approval of a design satisfies the first element of the gov-
ernment contractor defense if it comes “after a substan-
tive review of the specifications.” Jd. at 123. The case
of Shaw v. Grumman Aerospace Corp., 593 F.Supp. 1066
($.D.Fla.1984), affd, 778 F.2d 736 (11th Cir.1985),
cert. denied, U.S. ——, 108 S.Ct. 2896, 101 L.Ed.2d
930 (1988), presents almost exactly the same relation-
ship between the United States Navy and a military con-
tractor as we find in the present case. Shaw concerned
defects in the design of the Navy’s A-6 aircraft. The
district court found that the Navy provided general per- |
formance, mission and criteria specifications to Grum-
man, that Grumman exclusively designed the aircraft and
submitted the detailed specifications to the Navy, that
16a
the Grumman drawings were routinely examined and
approved by Navy personnel, that the Navy did not eval-
uate the design data or check the accuracy or compliance
of the drawings, that Grumman in fact had final control
of the design of the aircraft, that Grumman decided to
use a defectively-designed stabilizer system on the air-
craft, and that the Navy was not aware of the design
defect at the time of approval. Jd., 593 F.Supp. at 1070-
73. Moreover, after the defect was discovered by the
Navy, the Navy requested Grumman to solve the problem:
Grumman designed “self-retaining bolts” for the stabilizer
system, and the Navy installed them as instructed, but
this modification was also defective. 778 F.2d at 738.
Although the district court explicitly found the Navy had
approved the defective design, both the district court and
the Eleventh Circuit discounted that approval because
it was merely a rubber stamp. The Eleventh Circuit
noted that the Navy “relied” on Grumman’s advice and
that the approval did not constitute an “informed mili-
tary decision.” Jd. at 747. The Eleventh Circuit affirmed
the holding that the military contractor defense was not
available to Grumman, but that court went further and
changed the elements of the defense. The new defense
did not examine the exercise of discretion but keyed im-
munity to the level of contractor participation in the de-
sign process. See id. at 746.
The Supreme Court in Boyle specifically rejected the
Eleventh Circuit’s formulation of the military contractor
defense: “[I]t does not:seem to us sound policy to pen-
alize, and chus deter, active contractor participation in
the design process, placing the contractor at risk unless
it identifies all design defects.” 108 S.Ct. at 2518. Boyle
rejected the Shaw formulation of the defense because it
was not “designed to protect the federal interests em-
bodied in the ‘discretionary function’ exception.” Jd. But
the Supreme Court never indicated that the result
17a
reached in Shaw was incorrect.* The district court in
Shaw had applied the formulation of the defense that
was adopted in Boyle and held the Navy’s “approval” of
the A-6 was insufficient to satisfy the government con-
tractor defense. See 593 F.Supp. at 1074.
Not only does a careful analysis of the elements of the
government contractor defense suggest that a rubber
stamp is insufficient approval, the Supreme Court’s rejec-
tion of the Feres-Stencel doctrine and recognition of the
discretionary function exception as the basis for this de-
fense mandates that result. In McKay v. Rockwell Int’l
Corp., 704 F.2d 444 (9th Cir.1983), the Ninth Circuit
was confronted with an older case that had apparently
conditioned the government contractor defense upon the
exercise of design discretion. In Merritt, Chapman &
Scott Corp. v. Guy F. Atkinson Co., 295 F.2d 14 (9th
Cir.1961), a private firm had contracted with the govern-
ment to build a dam, and the contract had specified the
location, height, and some performance requirements of
the upstream cofferdam but left the design, materials
and method of construction to the discretion of the con-
tractor. The Ninth Circuit held that the government
contractor defense was not available to shield the con-
tractor from liability for damages caused by the collapse
of the defective cofferdam. Jd. at 15-16. The McKay
court concluded “[u]nder these circumstances, Merritt,
Chapman properly precludes the government -ontractor
rule. When only minimal or only very generai require-
ments are set for the contractor by the United States the
rule is inapplicable.” 704 F.2d at 450. But the McKay
court went on to hold that “[t]he situation is different
where the United States reviewed and approved a de-
tailed set of specifications.” Jd. (emphasis added). But
8In fact, the Supreme Court denied the petition for writ of
certiorari, —— U.S. ——, 108 S.Ct. 2896, 101 L.Ed.2d 930 (1988),
and a petition for rehearing, —— U.S. , 109 S.Ct. 10, 101
L.Ed.2d 961 (1988), in the Shaw case after its decision in Boyle.
18a
the question remained how much review is necessary and
what constitutes approval. The Ninth Circuit held that
“lijt is at this point that the Feres-Stencel doctrine
comes sharply into focus,” id., and concluded that the
Feres-Stencel doctrine required a broader application of
the rule than Merritt, Chapman might suggest, id. 704
F.2d at 450-51. Yet, the Supreme Court in Boyle re-
jected F'eres-Stencel as the basis of the government con-
tractor defense both because it was too narrow in that it
did not cover suits by civilians and because it was too
broad in precluding recovery for some injuries that were
not in any way the result of the exercise of government
discretion. See Boyle, 108 8.Ct. at 2517. Boyle rejected
the Feres-Stencel doctrine because it defines the federal
interests in terms of the military subject matter of the
case, regardless of whether any discretion was exercised
by the government.
The Supreme Court’s choice of the discretionary func-
tion exception is also important because it imports into
this area of the law the policies underlying that provi-
sion, which are quite different from those underlying the
Feres-Stencel doctrine, and a rich case law defining what
the government’s exercise of discretion is and what it is
not. The Feres-Stencel doctrine is strictly based on sep-
aration of powers concerns and the need to prevent any
sort of “second-guessing” of military orders by civilian
courts. See Stencel Aero Engineering Corp. v. United
States, 481 U.S. 666, 673, 97 S.Ct. 2054, 2059, 52 L.Ed.2d
665 (1977).° The discretionary function exception also
seeks to “prevent judicial ‘second-guessing’ of legislative
and administrative decisions grounded in social, economic,
and political policy through the medium of an action in
® See also Tozer, 792 F.2d at 406 (holding that the pre-Boyle
military contractor defense is heavily dependent on Feres doctrine
considerations and that the defense seeks to prevent courts from
second-guessing military decisions); Bynum, 770 F.2d at 563
(same).
ae
ee ek
19a
tort.” United States v. S.A. Empresa de Viacao Aerea
Rio Grandense (Varig Airlines), 467 U.S. 797, 814, 104
| §.Ct. 2755, 2765, 81 L.Ed.2d 660 (1984). However, this
policy is balanced against the “broad and just purpose”
of the FTCA to compensate victims of negligence in the
conduct of governmental activities. Indian Towing Co.
v. United States, 350 U.S. 61, 68, 76 S.Ct. 122, 126, 100
L.Ed. 48 (1955).
Courts have found it “unnecessary—and indeed im-
possible—to define with precision every contour of the
discretionary function exception.” Varig Airlines, 467
U.S. at 818, 104 S.Ct. at 2764; see also Williamson v.
United States Dept. of Agric., 815 F.2d 368, 374-75 (5th
Cir.1987) (noting the difficult task of divining the bound-
aries of governmental discretion). The Supreme Court
has held that the discretionary function exception turns
on “the nature of the conduct, rather than the status of
the actor,” that the provision covers acts by all federal
employees, regardless of rank, if the challenged acts are
of the “nature and quality” to fall within the exception.
Varig Airlines, 467 U.S. at 813, 104 S.Ct. at 2764. The
court must determine whether the judgment exercised is
of the kind that the discretionary function exception was
designed to shield.. Berkovitz by Berkovitz v. United
States, —— U.S. ——, 108 S.Ct.1954, 1959, 100 L.Ed.2d
531 (1988). The courts have been adamant about one
point, however: not all decisions made by government
employees are covered by the discretionary function ex-
ception. “Every act of a rational being involves some
choices,” and the discretionary function exception must
be read carefully or it will totally insulate the govern-
ment from tort liability. Collins v. United States, 783
F.2d 1225, 1233-34 (5th Cir.1986) (Brown, J., concur-
ring). Courts have generally drawn a line between deci-
sions at a planning level, or decisions that exercise policy
judgment, and decisions at a operational level, or deci-
sions that are merely incident to carrying out a govern-
20a
ment policy. See Dalehite v. United States, 346 U.S. 15,
35-36, 73 S.Ct. 956, 968, 97 L.Ed. 1427 (1958). “Dis-
cretionary decision-making . . . is accompanied by non-
discretionary acts of execution, whether termed opera-
tional, ministerial, or clerical.” Payton v. United States,
679 F.2d 475, 480 (5th Cir. Unit B 1982) (en banc).
Once the government makes a discretionary decision, the
discretionary function exception does not apply to subse-
quent decisions made in the carrying out of that policy,
“even though discretionary decisions are constantly made
as to how those acts are carried out.” Wysinger v.
United States, 784 F.2d 1252, 1253 (5th Cir.1986). The
decisions of this circuit have been extraordinarily careful
to avoid any interpretation of the dis.retionary function
exception that would embrace any governmental act
merely because some decision-making power was exercised
by the official whose act was questioned. See, e.g., Den-
ham v. United States, 834 F.2d 518, 520 (5th Cir.1987)
(noting that the “government’s approach would subsume
practically any decision within the discretionary function
exception and thereby vitiate the FTCA”); Smith v.
United States, 375 F.2d 248, 246 (5th Cir.) (noting that
a broader reading of the exception would destroy the
“corpuscular vitality” of the Federal Tort Claims Act),
cert. denied, 389 U.S. 841, 88 S.Ct. 76, 19 L.Ed.2d 106
(1967).
Although the planning/operational distinction does not
always work, a government decision, at a minimum, must
involve judgment or policy choice to fall within the
discretionary function exception. See Berkovitz, 108 S.Ct.
at 1958-59; Dalehite, 346 U.S. at 34, 73 S.Ct. at 967.
The discretionary function exception “properly construed,
therefore protects only governmental actions and deci-
sions based on considerations of public policy”; discre-
tionary decisions involve “the permissible exercise of
policy judgment.” Berkovitz, 108 S.Ct. at 1959. The
Boyle Court noted that the selection of the appropriate
ae eens Sa hath
a ll a cle ls cli al
2la
design for military equipment to be used by our armed
forces is a discretionary function because it involves
“not merely engineering analysis but judgment as to the
balancing of many technical, military, and even social
considerations, including specifically the trade-off between
greater safety and greater combat effectiveness.” 108
S.Ct. at 2517.
In discretionary function cases, the Supreme Court has
recognized that a government agency may delegate its
discretion to private parties. In Varig Airlines, the gov-
ernment answered a suit against the FAA for certifying
a dangerously defective plane that the responsibility for
safety rests with the airplane manufacturer and that the
government may enforce those safety standards with
“spot checks”; the Court agreed and held that the gov-
ernment’s decision to use spot checks was a discretionary
function. 467 U.S. at 815, 104 S.Ct. at 2765. The Court
specifically noted that the discretionary function excep-
tion protects “policy judgments regarding the degree of
confidence that might reasonably be placed in a given
manufacturer.” Id. at 820, 104 S.Ct. at 2768. In fact,
the Boyle Court noted that “[t]he design ultimately
selected may well reflect a significant policy judgment
by Government officials whether or not the contractor
rather than those officials developed the design.” 108
S.Ct. at 2518.
If the government has chosen to delegate its design
discretion to a private contractor, however, the govern-
10 It must be noted that, although the government’s decision to
delegate its discretion on a matter to a private contractor is itself
a discretionary function, that is not the discretion with which the
government contractor defense is concerned. The discretionary
function at issue in the government contractor defense is that dis-
cretion involved in “selecti{ng] the appropriate design for military
equipment to be used by our armed forces.” 1028 S.Ct. at 2517. The
three elements of the government contractor defense determine
whether the government exercised the design discretion or dele-
gated that discretion to the government contractor.
22a
ment does not exercise a discretionary function by merely
approving the contractor’s work. This circuit confronted
that issue in Butier v. United States, 726 F.2d 1057 (5th
Cir.1984). In Butler the families of eight persons who
had drowned in an underwater depression created by an
Army Corps of Engineers project sued the government
and the private contractors that had performed work
for the Army Corps of Engineers. The project was the
repair of a seawall in Hancock County, Mississippi, that
was damaged in a hurricane. The sand needed for the
repair was obtained by the dredging the Mississippi
Sound, thereby creating a depression in shallow water
near a popular beach. The Army Corps of Engineers
contracted out the operation to Farrell Construction Co.,
who subcontracted parts of it to two other companies.
The contract provided that the Army Corps of Engineers
would retain ultimate control, would approve all plans,
shop drawings, construction practices, methods and ma-
terials and that completion of the project was subject to
the inspection and acceptance by the Corps. The contract
also required the posting of warning signs for swimmers.
The suit alleged that the warnings were inadequate. See
id. at 1059-60. In determining the government’s liability,
this court held that the preparation of the contract was
a discretionary function but that the “controlling, super-
vising, contracting and carrying out of the contract”
were not discretionary; those actions were operational
in nature and did not enjoy immunity under the dis-
cretionary function exception. Jd. at 1062. This court
held that the decisions by the Army Corps of Engineers
to repair the seawall and to dredge the sound were dis-
cretionary, but ‘‘once these decisions were made, the
Government was no longer exercising a discretionary
function.” Jd. at 1063. This is not to say that it is im-
possible for the government to exercise a discretionary
function when supervising a private contractor, but only
that once the government has delegated authority to the
private contractor to make important choices, the gov-
23a
ernment does not exercise a discretionary function by
merely accepting the contractor’s work."
To summarize: The government contractor defense as
reformulated in Boyle protects government contractors
from liability for defective designs if discretion over the
design feature in question was exercised by the govern-
ment. If the government delegates its design discretion
to the contractor and allows the contractor to develop the
design, the government contractor defense does not apply.
If the government has so delegated its discretion to the
contractor, mere government acceptance of the contractor’s
work does not resuscitate the defense unless there is ap-
proval based on substantive review and evaluation of the
contractor’s design choices. A mere rubber stamp by a
federal procurement officer does not constitute approval
11 Our recent case of Gordon v. Lykes Bros. S.S. Co., 8385 F.2d
96 (5th Cir.), cert. denied, —— USS. , 109 S.Ct. 78, 102
L.Ed.2d 50 (1988), illustrates this point. During World War II,
the United States decided to operate a fleet of merchant ships, and
the government gained control of ships that had been built by
private manufacturers and previously owned by private parties and
that had asbestos insulation. The government continued to operate
these ships and expose the sailors to asbestos fibers, and the gov-
ernment did not institute any sort of safety program. Some of the
Gordon plaintiffs sued for injuries caused by this exposure to
asbestos. Although the decisions that caused the sailors to be
exposed to asbestos were seemingly operational, and indeed the
decision to incorporate asbestos into the design of these ships was
made by private parties prior to the government’s gaining con-
trol of them, this court held that the government’s decisions to
expose sailors to asbestos fibers fell within the discretionary
function exception. Jd. at 99. This holding, however, was based
on “a substantial amount of historical evidence” showing that the
decision to expose U.S. sailors to asbestos was a considered policy
choice. Jd. at 100. Although the result is unusual, Gordon does not
mark a departure in Fifth Circuit discretionary function law.
Gordon suggests that the government can exercise discretion in
approval only if the government reviews and evaluates the choices
made by the private contractor.
24a
and does not give rise to the government contractor de-
fense.
C. The District Court’s Application of the Defense
General Dynamics argues that the Navy approved the
design specifications set forth in each of the General
Dynamics’ working drawings, and points to the signature
of a government official in a box marked “approved” at
the bottom of each of the working drawings. The dis-
trict court, however, found that “the level of review here
was not sufficient to constitute ‘approval’.” 626 F. Supp.
at 1336. The district court held that contracts “left de-
sign entirely to the discretion of General Dynamics. The
Navy set only general performance standards leaving the
details to General Dynamics.” Jd. at 1335-36. The dis-
trict court held that the COR promulgated by the Navy
was “silent” on the questions of the precise location of
the main hangar vent valve and the use of warning or
safety devices. “The evidence shows that such determina-
tions were left to the discretion and expertise of the Gen-
eral Dynamics designers assigned to prepare the working
drawings.” Jd. at 1336. These findings are not clearly
erroneous. The record reveals that Navy personnel at
MINS assigned a relatively low priority to the GRAY-
BACK work and delegated their design discretion to Gen-
eral Dynamics. Paul Lawrence, the section leader of the
Navy group in charge of the hangar flood and drain
system design for the GRAYBACK, wrote in a memo to
his superiors at MINS in 1969: “The design work on the
GRAYBACK was initially given a low work priority due
to more important shipyard work. . .. Due to this ex-
tremely heavy workload the piping branches were re-
quired to assign less experienced engineers/technicians to
GRAYBACK than would normally be assigned. In many
cases, farm-in personnel were used to man the GRAY-
BACK work. ... Most of the GRAYBACK design work
was accomplished by farm-in contractor personnel and
not checked by Mare Island experienced technical peo-
ea ree eee ee
:
i
}
|
i
i
4
25a
ple.” ** After the accident, the Navy investigation con-
cluded that one of the problems with the GRAYBACK
design was the absence of a formal Navy design re-
view."* Because the record clearly shows that “General
Dynamics, rather than the government, was ultimately
responsible for the design defects in the [diving] hangar
aboard the GRAYBACK,” id. at 1338, the district court
was correct in holding that the approvai element of the
government contractor defense was not satisfied.
The district court noted that the second element, that
the product comply with the design specifications, was
not implicated in this case because General Dynamics
only did the design work, not the manufacturing of the
12 The district court also noted the “disparity in the level of
experience between the Navy and General Dynamics.” It held that
this imbalance of knowledge prevented the Navy from undertaking
any substantial review of the specifications. 626 F.Supp. at 1337.
It is not for the court to undertake to evaluate the quality of the
government’s review. The only factual question is whether the
government actually exercised design discretion. If the government
intended to exercise its discretion over the design of a product
and a government official undertakes to substantially review, evalu-
ate, and then approve the design, the first element of the Boyle
test is satisfied even if the government official doing the review
was incompetent or negligent. The government’s use of clearly
unqualified individuals to review and approve highly technical
design work, however, may be evidence that the government does
not intend to exercise design discretion but is merely rubber-
stamping the contractor’s design specifications. That seems to be
the case here.
13 Tt must be emphasized that the absence of review is critical
in this case. The Navy actually did the manufacturing and con-
version work. The defective aspects of the design and the dangers
of the vacuum were so obvious that the Navy must be charged
with knowledge of the defect; yet the Navy built the diving hangar
as designed and operated it for thirteen years. The Navy had con-
trol over the product and had every opportunity to exercise discre-
tion over the design. This the Navy did not do. Both the Navy
investigation and the district court faulted the Navy for its failure
to exercise discretion over the design.
26a
product. Jd. at 1837-38. Furthermore, it is undisputed
that the Navy in converting the GRAYBACK followed
General Dynamic’s specifications exactly. The district
court noted, however, “that the system as designed by
General Dynamics did not even conform to the general
requirements provided by the government.” Jd. at 1338.
Under the General Dynamics design the vent valve was
not controllable from the air bubble as required by the
COR. This finding does not go to the second element be-
cause the working drawings, not the COR, were the rea-
sonably precise specifications."
The district court also held that General Dynamics had
failed to prove the final element of the defense, that it
had warned the government about the dangers in the use
of the equipment that were known to the contractor but
not to the United States. The district court committed
two errors in this holding. First, it held General Dy-
namics to a duty to warn the government of dangers
about which it “knew or should have known.” After Boyle
a government contractor is only responsible for warning
the government of dangers about which it has actual
knowledge. Second, the district court held that General
Dynamics should have warned the Navy of the possibility
that a vacuum would form while draining the diving
hangar, even though both the Navy and General Dy-
namics knew or should have known of the dangers asso-
ciated with the system’s potential to create a partial
vacuum. After Boyle, 2 government contractor only has
14The Navy did undertake to review the working drawings for
compliance with the COR but approved the drawings even with
this alleged noncompliance. It is important to note, however, that
such review, mere review for compliance with very general perform-
ance criteria, is insufficient to satisfy the first element of Boyle.
If the government sets very general criteria for a design and
delegates its design discretion over all of the critical details to a
government contractor, the government does not exercise design
discretion by merely reviewing the completed design for compliance
with the general criteria.
27a
the duty to warn the government of dangers of which it
has knowledge but the government does not. Because
both General Dynamics and the Navy knew that the
system as designed could create a partial vacuum, and
because both the Navy and General Dynamics could see
that the final design included no safety devices, liability
of General Dynamics could not be based upon non-
disclosure of these dangers. Because the Navy delegated
its design discretion to General Dynamics, however, and
thus never approved reasonably precise specifications
within the meaning of Boyle, the district court’s holding
that the government contractor defense was not available
to General Dynamics in this case was correct.
III. The Borrowed Servant Doctrine
General Dynamics alternatively argues that its em-
ployees who worked on the design of the GRAYBACK at
MINS were borrowed servants of the Navy and therefore
the Navy, and not General Dynamics, was responsible for
their defective design choices. The district court, how-
ever, held that “General Dynamics was an independent
contractor given discretionary, independent decision-
making authority and, therefore, its employees were not
borrowed servants of the government.” 626 F. Supp. at
1340. Whether an employee of one is a “borrowed
servant” of another is a factual question. Among the
considerations for determining whether a servant has
been borrowed by another employer are who has control
over the employees and the work he is performing, be-
yond mere suggestion of details or cooperation; whose
work is being performed; and who pays the employee.
See Alday v. Patterson Truck Line, Inc., 750 F.2d 375,
876 (5th Cir. 1985). No one factor or combination of
factors is decisive and no test has been fixed to determine
the existence of a borrowed servant relationship. Jd. The
degree of control an employer has over the employee and
the employee’s work, however, has generally been con-
sidered to be the most important of the considerations.
28a
See West v. Kerr-McGee Corp., 765 F.2d 526, 530-31
(5th Cir. 1985); Hebron v. Union Oil Co. of California,
634 F.2d 245, 247 (5th Cir. Unit A Jan. 1981).
The district court’s findings of fact on the government
contractor defense largely answer this issue as well. The
Navy contracted with General Dynamics to have General
Dynamics perform a specific task for the Navy and dele-
gated the Navy’s design discretion over the GRAYBACK
conversion to General Dynamics. The Navy did not,
therefore, control the work of General Dynamics or its
employees. The district court also found it significant
that the Navy hired General Dynamics specifically be-
cause its employees were experienced and would not need
supervision, that the Navy did not intend to control. or
supervise the particulars or actual details of the Gen-
eral Dynamics employees’ work, that the Navy did not
direct the tasks of General Dynamics’s employees but
spelled out specifically their duties in a contract, that
General Dynamics maintained its employer/employee re-
lationship and retained the obligation to pay its employ-
ees, and that General Dynamics maintained an admin-
istrative structure among its employees while they were
at the MINS facility. 626 F. Supp. at 1339-40. The dis-
trict court’s findings are not clearly erroneous.
IV. The Navy’s Negligence
General Dynamics next argues that the district court’s
findings of causation were clearly erroneous and that the
negligence of the United States Navy was the sole cause
of the accident. Under Texas law, “[t]he act of a third
person which intervenes and contributes a condition nec-
essary to the injurious effect of the original negligence
will not excuse the first wrongdoer if that act ought to
have been foreseen.” Clark v. Waggoner, 452 S.W.2d
437, 440 (Tex.1970). General Dynamics, however, notes
that under § 452(2) of the Restatement (Second) of
Torts (1965) the duty to prevent harm to another threat-
29a
ened by the actor’s negligent conduct may be shifted to
a third party if, because of the lapse of time, the magni-
tude of the risk of harm, the character and position of
the third party, his knowledge of the danger or his rela-
tionship to the plaintiff, the failure of the third party
to prevent the harm is a superseding cause. It is unclear
whether Texas recognizes § 452. Cf. French v. Grigsby,
571 S.W.2d 867, 867 (Tex.1978) (“Since the advent of
comparative negligence with the adoption of art. 2212a,
Tex. Rev. Civ. Stat. Ann., this court has sought to abolish
those doctrines directed to the old choice between total
victory and total defeat for the injured plaintiff.”’)
General Dynamics’s design was negligent; however, the
Navy knew or reasonably should have known of the dan-
gers inherent in the design. The Navy ehose to use the
GRAYBACK as designed and dealt with the possibility
of a vacuum by training its employees rather than by
modifying the submarine. Furthermore, the Navy exac-
erbated the dangers by failing to lubricate the shaft
of the valve properly, making it more difficult to turn
and more likely that a diver would not realize that it
was partially closed. Nevertheless, the Navy relied on
General Dynamics’s design expertise, and that reliance
and the Navy’s use of the defective design were foresee-
able by General Dynamics. Moreover, the Navy’s method
of dealing with the dangers in the design were effective
for thirteen years. The district court held that the
Navy’s negligence was not the sole cause of the accident
and that the circumstances of the Navy’s negligence
were not of such a character as to sever the chain of
causation and shift all responsibility from General Dy-
namics to the Navy. The district court found that both
the Navy and General Dynamics were negligent and as-
signed 80% of the fault to General Dynamics and 20%
of the fault to the Navy. We cannot say that those
findings are clearly erroneous.
80a
V. The Indemnification Agreement
The cortracts between General Dynamics and the
United States provide that the government will indem-
nify General Dynamics for liabilities arising out of the
performance of the contract. The district court held that
General Dynamics had failed to satisfy one of the condi-
tions of the contract and was therefore not entitled to
indemnification from the government. We hold, however,
that the district court was without jurisdiction to con-
sider this question, and we therefore vacate the judgment
on this issue.
General Dynamics’s claim is a contract claim, and
the essence ef the claim is to obtain money from the gov-
ernment. The action must proceed, therefore, under the
applicable provisions of federal statutes regarding gov-
ernment contracts. See Amoco Production Co. v. Hodel,
815 F.2d 352, 361 (5th Cir.1987), cert. denied, —— U.S.
—-, 108 S.Ct. 2898, 101 L.Ed.2d 982 (1988). General
Dynamics’s claim is controlled by the Contract Disputes
Act. 41 U.S.C. § 601 et seg. Under the Act, § 609(a) (1),
a contracting party may bring an action directly on the
contract claim against the United States after an adverse
decision by a contracting officer concerning the claim.
All claims by a contractor against the United States
relating to a contract must be submitted in writing to a
contracting officer for a decision. 41 U.S.C. § 605(a).
General Dynamics never did so prior to filing this coun-
ter-claim against the United States. General Dynamics
claims that its tender of a defense of this action to the
United States Justice Department constituted a claim to
a contracting officer. A contracting officer, however, is de-
fined as a person who has the authority to enter into and
administer contracts and make determinations and find-
ings with respect thereto. 41 U.S.C. §601(3). The
Justice Department certainly cannot enter into contracts
for the Navy and is not a contracting officer for the
purposes of the Contract Disputes Act. The decision, or
Se a nse ee
5 eS
mney kd dah
31a:
failure to decide, by a contracting officer is an absolute
jurisdictional prerequisite to filing a suit under the Con-
tract Disputes Act. See Thoen v. United States, 765
F.2d 1110, 1116 (Fed.Cir.1985) ; Paragon Energy Corp.
v. United States, 645 F.2d 966, 971, 227 Ct.Cl. 176
(1981). The district court was therefore without juris-
diction to decide General Dynamics’s cross-claim against
the United States for indemnification.”®
The judgment for plaintiffs against General Dynamics
is AFFIRMED; the judgment on the cross-claim by Gen-
eral Dynamics, seeking contractual indemnity from the
United States, is VACATED.
15 The government alleges that General Dynamic’s claim failed to
comply with the requirements of §605 in some other important
respects. Although these arguments may have merit, General Dy-
namics never presented that claim to a contracting officer, and we
need not reach any of its other deficiencies.
32a
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
oo
No. 86-2965
GLORIA TREVINO, et al.,
; wi Plaintiffs-Appellees,
versus
GENERAL DYNAMICS CORPORATION,
Defendant-A ppellant.
No. 87-2175
GLORIA TREVINO, et al.,
Plaintiffs,
versus
GENERAL DYNAMICS CORPORATION,
Defendant-Cross Claim
pani ai Plaintiff-Appellant,
versus
UNITED STATES OF AMERICA,
Defendant-Cross Claim
Defendant-A ppellee.
33a
Appeal from the United States District Court for
the Eastern District of Texas
ON SUGGESTION FOR REHEARING EN BANC
(Opinion 2-23-89, 5th Cir., 1989, 865 F.2d 1474)
[Filed June 26, 1989]
Before REAVLEY, HIGGINBOTHAM and SMITH, Cir-
cuit Judges.
PER CURIAM:
Treating the suggestion for rehearing en banc as a
petition for panel rehearing, the petition for panel re-
hearing is DENIED. The judges in regular active serv-
ice of this Court having been polled at the request of one
of said judges and a majority of said judges not having
voted in favor of it (Federal Rules of Appellate Proce-
dure and Local Rule 35), the suggestion tor Rehearing
En Banc is DENIED.
ENTERED FOR THE COURT:
Thomas M. Reavley
United States Circuit Judge
“
34a
E. GRADY JOLLY, Circuit Judge, with whom GEE,
GARWOOD and JONES, Circuit Judges, join dissenting
from denial of petition for rehearing en banc:
... Words strain,
Crack and sometimes break, under the burden,
Under the tension, slip, slide, perish,
Decay with imprecision, will not stay in place,
Will not stay still...
T.S. Eliot, Burnt Norton, Part V.
Because I believe that Trevino has effectively rewritten
the Supreme Court’s test for government contractor im-
munity given in Boyle, I respectfully dissent from the de-
nial of en bane review. Further, I believe that en banc
~ review is necessary because Trevino is at odds with, if
not in conflict with, this circuit’s almost contemporaneous
opinion in Smith v. Xerox, 866 F.2d 135 (5th Cir. 1989),
and that we have a responsibility to clarify ourselves.
Instead, we leave the bench and bar to divide and argue
over whether they can be reconciled, and if not, which
will be followed as the law of the circuit.
I
The United States Supreme Court, only less than a
year ago specifically chose to use the word “approve”
when it held that “Liability for design defects in military
equipment cannot be imposed, pursuant to state law,
when (1) the United States approved reasonably precise
specifications.” Boyle v. United Technologies, 108 S. Ct.
2510, 2518 (1980). In doing so, the Court selected a less
demanding word than any of the synonyms it might have
chosen: c
Approve the most widely applicable, may indicate
varying degrees of admiration. Endorse (or in-
dorse), stronger than approve, implies expression of
support, often by public statement. Sanction adds
authorization, usually official, to approval. Certify
35a
and accredit imply official endorsement gained upon
conforming to set standards. Ratify refers to mak-
ing legal by formal official approval... .
The American Heritage Dictionary (Second College Edi-
tion 1982). Yet the panel in Trevino finds that the term
“approve” as used in Boyle actually means to establish
reasonably precise specifications, id. at 1479; it actually
means to “choose” a design feature, id. at 1480; it ac-
tually means to exercise judgment or policy choice, id.
at 1484; it actually means to substantively review and
evaluate, id. at 1487 n.12; in short, it actually means to
exercise a discretionary function within the strict mean-
ing of the FTCA. We learn further in Trevino that ene
cannot “approve” a design by full awareness and accept-
ance of that design, defect and all, for thirteen years,
id.; and finally, we learn that “approve” is a term that
cannot be applied to work done by someone else, id. at
1486 (“If the government delegates its design discre-
tion to the contractor and allows the contractor to develop
the design, the government contractor defense does not
apply....”).
Indeed, the panel, in departing from any plain mean-
ing of the word, dolorously observes that “the Supreme
Court’s use of the terms ‘approve’ and ‘considered’ is
unfortunate,” id. at 2066, n.7. I would doubt, however,
that the author of Boyle thinks it quite such a mishap.
Mr. Justice Scalia was plainly aware of the precise re-
quirements of exercising a discretionary function. He
was aware that the “selection” of the appropriate design
for military equipment is a discretionary function, 108
S.Ct. at 2517; and he was aware, as Justice Brennan re-
minded him, that the use of the word “approval” might
be construed so broadly as to include rubberstamping, id.
at 2519. Yet, when he concluded the analysis for the
majority, and defined the specific test to be applied, he
chose the word “approve.” He did not hold that the gov-
ernment must “select” the design, or “choose” the design,
36a
or “review and evaluate” the design, or “exercise its
discretion,” or any of the other words the panel seeks to
substitute for “approve.” All of the words that the panel
would force on Mr. Justice Scalia, it should be added,
were immediately before him as he defined the test, and
he chose none of them.
Mr. Justice Scalia specifically explained that govern-
ment “approval” assures that the design is within the
area where the discretionary function policy would not
be frustrated, because it assures that the design feature
in question was considered by a government officer and
not “merely by the contractor itself.” Boyle, 108 S. Ct.
at 2518. This explanation appears immediately after
the use of the word “approved” and gives it its meaning.
That government involvement be “within the area” does
not mean that strict compliance with all of the elements
of the discretionary function exception is required. In-
deed, the Court indicated that the discretionary function
exception only “suggests the outlines of ‘significant con-
flict? between federal interests and state law in the con-
text of government procurement.” 108 S.Ct. at 2517.
I agree with the panel that “approve” is not synony-
mous with “rubber stamp.” It does seem to me, however,
that when the government furnishes 339 pages of spe-
cifications and involves a review team with the plans,
“rubber stamp” is not an apt description of the govern-
ment’s involvement. Generally speaking, I would think
that in this case if the government considered the plans
and affirmatively assented to them, it has “approved”;
or if the government, in the panel’s words, was “charged
with the knowledge of the defect” and accepted the de-
sign, especially for a period of years with no complaint,
it has “approved” contract specifications within the
meaning of Boyle. More specifically, I would suggest that
an appropriate inquiry under the first Boyle prong is to
ask: was the challenged feature disclosed with reasonable
precision in the accepted design documents, and was the
37a
design accepted on behalf of the government by an officer
who had, and knew he or she had, the duty and authority
to decline to accept the challenged design feature on
safety grounds if he or she deemed it appropriate to do
so? I believe this test would be truer to the spirit and
deliberately chosen language of Boyle.
II
I also dissent from the denial of rehearing en banc in
this case because the panel opinion cannot comfortably
coexist with our circuit’s holding in Smith v. Xerox, 866
F.2d 135 (5th Cir. 1989). Both cases were decided on
the same day.
Both Smith and Trevino construe Poyle’s first prong of
the government contractor defense: that the government
have “approved reasonably precise specifications.” The
cases have different focuses, however. At issue in Smith
was whether Xerox, the government contractor, was im-
properly granted summary judgment on its government
contractor defense because it had not been able to produce
its original specifications. In Smith, we looked at the
language “reasonably precise,’ catalogued the informa-
tion Xerox had produced, and found that from the evi-
dence, the specifications that had been produced satisfied
the “reasonably precise” requirements of Boyle. Because
those specifications had been approved by the government,
we found that Xerox had satisfied the first prong of the
Boyle test.
It is true that superficially the holdings of Smith and
Trevino do not appear to be inconsistent. In applying
the first prong of the Boyle test and asking whether the
government “approved reasonably precise specifications,”
we focused in Smith upon the requirement that the spe-
cifications be “reasonably precise,” not that they be “ap-
proved,” which is the focus of the 7J’revino opinion. If,
however, T’revino had been applicable law, our analysis
88a
and holding in Smith would surely have been different,
since the appeal was from the grant of summary judg-
ment and there was little or no evidence in the record on
how extensive the government’s “substantive review and
evaluation,” i.e., approval, had been. Thus, although the
opinions may be able to coexist, they can do so only
because they were simultaneous.
Second, to the limited extent that Smith referred to
“approval,” we quoted the Ninth Circuit in McKay to
the effect that approval meant “examining and agreeing”
to a detailed description of the workings of the system.
Id. at 138. Further, we referred to the Fourth Circuit’s
opinion in Boyle, and found that the Navy had “ap-
proved” reasonably precise specifications, where the con-
tractor and Navy worked together to prepare detailed
specifications, engaging in back and forth discussions,
and where the Navy reviewed the mock-up and approved
the design (all present in Trevino to some extent). Id.
at 138.
Further, we held in Smith that the government had
satisfied its burden on the first prong of the Boyle test,
when the government “reviewed and approved Xerox
final drawings and specifications.” Jd. at 138.
It is thus suggested in Smith that government review
of the contractor’s final precise specifications, followed
by assent, is all that is required for contractor immunity,
which is a considerably less stringent requirement than
imposed by the Trevino panel. Thus, I would suggest that
there is significant potential for conflict between Smith
and Trevino. In any event, conflict or not, analytical
comparison yields confusion. The bench and bar have a
right to a clearer statement from us as to what Boyle
means and how it should be applied.
Finally, I would observe that the Trevino panel’s
microscopic focus on the word “approval,” unwarranted
by Boyle, allows that term to eclipse the significant re-
39a
mainder of the phrase—“of reasonably precise specifica-
tions.” The phrase “approved reasonably precise specifi-
cations” must be interpreted as a whole. It is the ap-
proval “of reasonably precise specifications” that assures
that the government retains veto power over all design
details and assures that “the suit is within the area
where the policy of ‘discretionary function’ would not be
frustrated.” Boyle, 108 S.Ct. at 2518. If Trevino is
sincere when it states that “[t]he requirement that spe-
cifications be precise means that the discretion over sig-
nificant details and all critical design choices will be
exercised by the government; if the government approved
imprecise or general guidelines, then discretion over im-
portant design choices would be left to the government
contractor,” Trevino, at 1418, then it is not clear why
the submission and simple approval of reasonably precise
specifications cannot serve as a proxy for government
involvement in the design decisions.
lil
In sum, I do not think that it is necessary to over-
define the word “approved” in order to make certain in
these cases that the government has sufficiently exercised
its discretion and judgment over the design at issue. With
great respect for those whose views seem to differ, be-
cause I think that this case is enbaneworthy, I respect-
fully dissent from the failure of the court to grant en
bance review.
40a
UNITED STATES DISTRICT COURT
E.D. TEXAS
BEAUMONT DIVISION
Civ. A. No. B-83-573-CA
GLORIA TREVINO, et al.
Vv.
GENERAL DYNAMICS CORPORATION
Feb. 3, 1986
Wayne Fisher, Charles M. Price and Michael J.
Maloney, Fisher, Gallagher, Perrin & Lewis, Houston,
Tex., for plaintiffs.
Herbert L. Fenster, Lawrence M. Farrell and Raymond
B. Biagini, McKenna, Conner & Cuneo, Washington, D.C.,
for defendant.
MEMORANDUM OPINION CONTAINING
FINDINGS OF FACT AND
CONCLUSIONS OF LAW
ROBERT M. PARKER, District Judge.
This case was tried to the Court. It is a case arising
under the Death On The High Seas Act, 46 U.S.C. See-
761 et seq. and Federal Admiralty Law, 28 U.S.C. Sec.
1333. The Court now enters the following findings of
fact and conclusions of law based upon the evidence pre-
sented.
4la
A. THE FACTS
On the night of January 16, 1982, five Navy divers
lost their lives in an accident aboard a Navy submarine,
the USS GRAYBACK. The cause of death was vacuum
induced bends. The accident occurred in the starboard
hangar diving chamber of the GRAYBACK as the divers
were preparing to exit the flooded chamber into the dry
side of the hangar. To exit the chamber, it was neces-
sary to drain the water from the wet side. This was to
be accomplished by Plaintiff, Petty Officer Bloomer, who
was stationed in the “control bubble,” a plexiglass en-
closure from which he was to open the hangar and valve
to allow air into the chamber as the water drained out.
After reporting the valve open, Bloomer opened the drain
valve to drain the water from the hangar.
The five Navy divers died when a vacuum condition
occurred as the chamber was draining. The families of
four of the five deceased Navy divers brought this law-
suit against General Dynamics Corporation and the
United States alleging strict liability, negligence, and
breach of warranty claims.
General Dynamics also filed suit against the United
States claiming that, in the event it was found liable to
the Plaintiffs, the United States would be liable to Gen-
eral Dynamics under a contractual indemnification clause.
This Court, in its September 25, 1985 order, ruled that
the indemnity clause of the contracts here involved are
valid and enforceable and that, therefore, the United
States must as a matter of contract law indemnify Gen-
eral Dynamics for any adjudged liability it may have to
the Plaintiffs. Such liability, however, is contingent upon
whether or not this Court finds General Dynamics has
met the contractual prerequisites for the claimed in-
demnity.
On the eve of trial, the Court, upon the government’s
motion, dismissed the Plaintiff’s direct complaint against
42a
the United States ruling that the United States was im-
mune from such a suit under the Feres/Stencel doctrine.
See Feres v. United States, 340 U.S. 135, 71 S.Ct. 153, 95
L.Ed. 152 (1950), Stencel Aero Engineering Corporation
v. United States, 431 U.S. 666, 97 S.Ct. 2054, 52 L.Ed.2d
665 (1977).
The government, nonetheless, still contends that it can-
not be liable to the Plaintiffs under any legal theory.
However, although it may be true that the government
is immune from liability in a direct suit by the Plaintiffs,
the same cannot be said where the United States has
knowingly and contractually waived its Feres/Stencel im-
munity with respect to the third party suit by the govern-
ment contractor. See Order and Memorandum Opinion
of May 29, 1985, discussing and disposing of this issue.
As will be discussed in more detail later, the deaths of
these divers was caused chiefly by the negligence of Gen-
eral Dynamics in the work that it performed with respect
to the design of the starboard hangar diving system
aboard the GRAYBACK during the conversion of the
GRAYBACK from a missile-carrying submarine to a per-
sonnel-carrying submarine during the 1960’s.
The United States Navy contracted with General Dy-
namics for performance of the design work with respect
to the conversion of the diving system because of General
Dynamics’ experience and expertise in the design of sub-
marine systems. See Plaintiff’s Ex. 152, p. 43, 1. 3-17;
p. 44, 1. 10-17; See also Plaintiff’s Ex. 156 p. 63, 1. 7-27.
To accomplish the conversion of the GRAYBACK, the
United States entered into a series of contracts with Gen-
eral Dynamics. See Plaintiff’s Ex. 1 and 2. In Plaintiff’s
exhibit 1, the scope of the work required of General Dy-
namics is set forth in section 2.7.2, as follows:
The scope of work required of the contractor for
USS GRAYBACK is the furnishing of the engineer-
ing effort needed for the preparation of working
48a
drawings, including rip-out plans, planning depart-
ment instruction sheets, test specifications and other
documents necessary to effect conversion to APSS
and SUBSAVE. The specific areas in which the con-
tractors shall render assistance are: (after which
are listed 24 specific areas of the GRAYBACK con-
version including numerous piping, trim and drain,
flood vent, ventilation, and air systems).
The responsibilities of General Dynamics with respect
to the work that General Dynamics was performing un-
der the contracts is set forth in Section 2.1.4 of the con-
tracts which state:
(1) The contractor shall assume full responsibility
for all technical research necessary to accom-
plish the work specified herein.
(2) All work produced is to be reviewed by the con-
tractor to assure that the conditions set forth in
this circular are complied with.
(3) The contractor is responsible for all quality as-
surance actions pertaining to the design product,
plans, ete., including inspection of the end prod-
uct item before issue.
B. NEGLIGENCE
Following the accident, the United States Navy con-
ducted an investigation, the report and attachments of
which have been introduced into evidence as Plaintiffs’
Exhibits 27, 40, 41A, 41B, 41C, 42 and 43. The United
States Navy found that there were four specific design
deficiencies with respect to the starboard hangar diving
system in the hangar diving system aboard the GRAY-
BACK which contributed to the accident. These four de-
sign deficiencies are stated as follows:
1. There is no safety interlock mechanism to prevent
the opesing of the hangar drain valve when the
main vent valve is not fully opened.
2.
44a
The only valve position indicator on the main
vent valve consists of a metal tab which is under
water and cannot be seen when draining the
hangar.
There was no remote position indicator which can
be seen from the dry side of the hangar.
The general design of the hangar made propel
maintenance of the main vent valve extremely
difficult, if not impossible.
The Court has no quarrel with the findings of the Navy
report, and for the reasons outlined below, concludes that
the effort put forth by the Navy and General Dynamics
in converting the GRAYBACK constituted negligence
which proximately caused the deaths of the divers.
to:
1.
Specifically, General Dynamics was negligent in failing
provide for a safety interlock device to prevent
the opening of the hangar drain valve when the
main vent valve is not fully opened;
provide for a valve position indicator that is
visible when draining the hangar;
provide for a remote position indicator which can
be seen from the dry side of the hangar;
design the hangar so that the main hangar valve
could be properly maintained;
adhere to the Navy’s circular of requirements
(COR) calling for the vent valve to be placed
inside the control bubble rather than outside as
was actually done;
warn the Navy about the dangers associated with
the design’s potential to create a partial vacuum;
and :
warn or instruct the Navy concerning its failure
to provide for basic safety features such as safety
45a
interlocks, vacuum gauges, and vent valve open/
close indicator lights in the Navy’s COR.
Specifically, the Navy was negligent in failing to:
1. provide for basic safety features in its COR
which would prevent a partial vacuum from oc-
curring;
perform sufficient operational testing;
3. conduct a formal design review of the system;
v and
4. properly lubricate and maintain the shaft to the
main hangar vent valve.
The Court apportions the negligence as follows: 80
percent of the fault is attributable to General Dynamics,
20 percent of the fault is attributable to the Navy. Such
a finding as to the Navy, however, is merely superfluous
as the Court has already ruled that the United States is
immune from the Plaintiff’s direct suit under the Feres/
Stencel doctrine. The Court finds no contributory negli-
gence on the part of the Navy divers.
Before the question of damages can be reached, this
Court must address General Dynamics’ three contentions
which, if accepted, would entitle General Dynamics to
the same immunity that the Navy now possesses. The
public policy question, the government contractor’s de-
fense, and the borrowed contractor’s defense, and the bor-
rowed servant doctrine are discussed in turn below.
C. THE PUBLIC POLICY CONSIDERATIONS
General Dynamics argues that as a matter of policy,
the Court should exercise judicial restraint and defer to
the Navy’s conclusions that the design of the hangar vent
system was not defective but was adequate and safe for
its intended purpose and that the direct, proximate cause
of the accident was Plaintiff Bloomer’s failure to open
the hangar vent valve. This Court does not agree.
46a
In Bynum v. FMC Corporation, 770 F.2d 556 (5th
Circuit 1985), the Fifth Circuit endorsed, in its entirety,
the Supreme Court’s admonition of judicial restraint in
reviewing military decisions relating to the armed forces.
Tracing the historical underpinnings of the government
contract defense, the Fifth Circuit noted that the Supreme
“ourt’s emphasis “on judicial restraint in military mat-
ters is, of course, not surprising.” Jd. at 562. The Court
stated that:
It has long been recognized that interference by
civilian courts with military authority inevitably
raises both questions about judicial competency in
this avea and separation of powers concerns.
The Fifth Circuit found that the same policy con-
siderations underlying the Feres/Stencel doctrine also
are at issue “whether the named defendant happens to be
the government or the military contractor.” Id. at 565.
The most important policy consideration in either case
is that “civilian courts would be compelled to second
guess professional military judgment concerning, at least,
the proper equipping of the armed services.” Id.
Public policy, however, does not require any judicial
restraint in this case simply because this Court is not
reviewing military decisions relating to the armed forces.
The Plaintiffs are not challenging a military decision
concerning military operations. The issue is a design
decision concerning design defects in the diving hangar
aboard the GRAYBACK made by General Dynamics de-
signers. This was purely a non-military decision requir-
ing no military expertise. Nor was there a conscious
decision on the part of the military to accept a known
hazard because of military considerations.
By example, if the Army had contracted for the design
of a tank desiring speed and mobility in combat it might
conclude that the tank must be designed with less armor
to reduce weight so as to maximize speed and mobility.
47a
Less armor, of course, would offer more risk and less
protection to the servicemen inside the tank, but this is
clearly a conscious military decision on the part of the
Army to accept a known hazard because of the Army’s
desire for speed and mobility of its tank in combat.
Such a decision would not be reviewable im this Court’s
opinion. That is not the case here. No evidence has been
presented to show that the Navy consciously decided on
this specific diving system design for military reasons,
e.g., to reduce noise under water so as to avoid detection
by the enemy.
Furthermore, the Court has found no authority to the
effect that the accident reports by the military are con-
clusive on liability. There are very few cases which even
discuss whether military accident reports should be given
conclusive weight. The general rule that reports by the
military are not binding on the courts is stated by the
Fifth Circuit in Mac Towing, Inc. v. American Commer-
cial Lines, 670 F.2d 548, 547 (5th Cir.1982).
Finally, General Dynamics and the Navy contend that
even if the Court does not defer to the Navy’s conclu-
sions, considerations of public policy demand that mere
approval by the government of a contractor’s design be
sufficient to preclude recovery by the plaintiffs. As is
discussed more fully later, this Court is not persuaded
that mere approval from a public policy standpoint is
sufficient to preclude recovery.
D. THE GOVERNMENT CONTRACTOR’S DEFENSE
General Dynamics contends that the government con-
tractor’s defense shields General Dynamics from any
liability to the Plaintiffs in negligence. This Court dis-
agrees.
The Lew
The burden of proof regarding the availability of the
government contractor’s defense rests with General Dy-
48a
namics. McKay v. Rockwell International Corp., 704
F.2d 444, 451 (9th Cir.1983), cert. denied, 464 U.S,
1043, 104 S.Ct. 711, 79 L.Ed.2d 175 (1984). General
Dynamics must prove each element of the defense by
preponderance of the evidence. Jd. at 453.
In Bynum, the Fifth Circuit recognized the govern-
ment contractor’s defense as a matter of federal com-
mon law. To establish the government contractor’s de-
fense, a military contractor must:
1. First, demonstrate that the government is im-
mune from liability under the Feres/Stencel
Doctrine...
2. Second, the military contractor must prove that
the government established reasonably precise
specifications for the allegedly defective military
equipment
3. and that the equipment conformed to those speci-
fications...
4, Finally, it must be shown that the military con-
tractor warned the government about errors in
the government specifications or in dangers in-
volved in the case of the equipment that were
known to the contractor but not known to the
government.
Id. at 574.
The Fifth Circuit’s four-prong test conforms to the
trend in the law on the government contractor’s defense
as represented by the Third Circuit’s decisions in
Koutsoubos v. Boeing Vertol, 755 F.2d 352 (8rd Cir.
1985), cert. denied, US. , 106 S.Ct. 72, 88
L.Ed.2d 59 (1985) and In Re Air Crash Disaster at
Mannheim, Germany, 769 F.2d 115 (8rd Cir.1985) ; the
Seventh Circuit’s holding in Tillett v. J.J. Case Co., 756
F.2d 591 (7th Cir.1985); the Ninth Circuit’s decision in
McKay v. Rockwell International Corp., 704 F.2d 444
49a
(9th Cir.1983), cert. denied, 464 U.S. 1048, 104 S.Ct.
711, 79 L.Ed.2d 175 (1984) and the Eleventh Circuit’s
decision in Burgess v. Colorado Serum Co., 772 F.2d 844
(11th Cir.1985).
In the instant case, General Dynamics has failed to
establish by a preponderance of the evidence that the
government contractor’s defense applies. Although Gen-
eral Dynarrics has demonstrated that the government is
immune ‘.om suit under the Feres/Stencel doctrine,
meeting the first prong, it cannot meet the second prong
because it was General Dynamics and not the Navy,
who ultimately “established reasonably precise specifica-
tions” for the diving system. Bynum, 770 F.2d at 574.
Given this finding, the third prong of Bynum is not even
implicated. As to the final prong, General Dynamics
failed not only to warn of the danger of a partial vacuum
but also failed to warn of design deficiencies in the
Navy’s general requirements. Each prong is discussed
in turn below.
The Law Applied
1. The first requirement of the government contrac-
tor’s defense is the presence of Feres/Stencel immunity
on the part of the government. Feres/Stencel immunity
requires that a Plaintiff’s complaint arise from an injury
to a serviceman in the course of activity incident to
military service. Stencel, 431 U.S. at 673, 97 S.Ct. at
2058; Feres, 340 U.S. at 146, 71 S.Ct. at 159. In this
ease, Plaintiff’s complaint arises from the death of
servicemen caused by a partial vacuum in the submarine
starboard hangar diving chamber which the servicemen
were in incident to their service in the United States
Navy. This case, thus, falls squarely within the pro-
tective shield created by Feres/Stencel doctrine. Ac-
cordingly, the government is immune from liability to
the Plaintiffs.
2. The second element of the government contractor’s
defense, as the Ninth Circuit foimulated the defense in
50a
McKay, 704 F.2d at 451, is establishment or approval
by the United States government of reasonably precise
specifications for the allegedly defective product. In this
case, General Dynamics contends that the Navy estab-
lished the specifications for the diving chamber by either
preparing them itself or by reviewing in detail and ap-
proving those prepared by General Dynamics employees.
For the reasons discussed below, this Court does not
agree that the Navy established these specifications or
approved them.
a. The Establishment Question
Under Bynum, it is clear that when the product is
“manufactured in accordance with precise design speci-
fications furnished by the . . . government,” the second
prong of the government contractor’s defense is satis-
fied. Id. at 574 n. 23. Bynum, however, did not address
the “extent to which the government must participate in
generating the design specifications of the military equip-
ment before the government contractor’s defense would
be applicable,” which is directly at issue in this case.
Id.
The contracts involved here left design entirely to the
discretion of General Dynamics. The Navy set only gen-
eral performance standards leaving the details to Gen-
eral Dynamics. Specifically, the United States provided
General Dynamics with mere skeletal guidelines em-
bodied in the COR and schematic line drawings. See
Plaintiff’s Ex. 38 & 39. However, less than two pages of
the COR refer to the conversion of the diving hangar
while the line drawings consist of only a one page
diagram of the flood and drain system. These general
guidelines did not specify the precise location of the main
hangar vent valve and were silent on the existence of
vacuum gauges, indicator lights, or safety interlocks for
the main hangar flood and drain system. The evidence
shows that such determinations were left to the discre-
5la
tion and expertise of the General Dynamics designers
assigned to prepare the working drawings.
The Court credits the testimony of Mr. Bill Milwee,
the Plaintiff’s expert, and is persuaded that General
Dynamics’ designers had to use a great deal of expertise
and discretion in converting the information provided
by the Navy into working drawings. See Plaintiff’s Ex.
5-10. The Court is also persuaded by the testimony of
Mr. Urbani and Mr. Reall, both General Dynamics em-
ployees, and finds that because the system diagrams
were not very detailed, General Dynamics had to use
their own specialized knowledge in converting the dia-
grams into working drawings. See Urbani depo. p. 18;
Reall depo. p. 31, 1. 6-10.
With this sparse information, General Dynamics pro-
duced 71 pages of highly detailed working drawings for
the starboard hangar diving system. Under such circum-
stances, where “only minimal or very general require-
ments are set for the contractor by the United States”
it cannot be seriously maintained by General Dynamics
that it was the governmer.t and not General Dynamics
who “established reasonably precise specifications.” Mc-
Kay, 704 F.2d at 450; cf. Price v. Tempo, Inc., 603 F.
Supp. 1859, 1863 (E.D.Pa. 1985). Simply concluding,
however, that these plans were reasonably detailed speci-
fications of General Dynamics does not dispose of the
second prong of the government contractor’s defense since
the trend in the law is to interpret the phrase “estab-
lished by the government” as including the situation
where the government, after having conducted a detailed
review, approves drawings and specifications on which
the contractor assisted.
b. The Approval Question
From a factual standpoint, the level of review here
was not sufficient to constitute “approval”. Koutsoubous
and Mannheim definitively analyzed this standard of
52a
proof. In Koutsoubous, a helicopter manufactured by
Boeing Vertol crashed causing the deaths of several Navy
pilots. In granting Boeing’s motion for summary judg-
ment on the government contractor’s defense, the Dis-
trict Court concluded that the Navy had established the
specifications by approving them after a substantial re-
view and that Boeing had complied with the specifica-
tions. See Koutsoubous, Memorandum Decision p. 7A,
note 4, Dec. 22, 1982.
In affirming the District Court, the Third Circuit con-
cluded that “government approval of the specifications”
means the process by which the government “examines
and agrees to a detailed description of the workings of
the system.” Koutsoubous 755 F.2d at 355. In Koutsou-
bous, the Third Circuit noted that the District Court
found a “continuous back and forth relationship between
Boeing and the Navy with the Navy always, expectedly
and properly, having the responsibility for and exercis-
ing responsibility for making final decisions as to the
specifications.” Id.
Five months later, the Third Circuit in Mannheim
reaffirmed Koutsoubous on the “approval” standard. In
Mannheim, forty-six persons were killed when a heli-
copter manufactured by Boeing crashed. The Third Cir-
cuit, stated:
The government contractor defense is available to
a contractor that participates in the design of the
product, so long as the government’s approval con-
sists of more than a mere rubber stamp. The defense
is available so long as there is true government par-
ticipation in the design.
769 F.2d at 122 (emphasis added). The Third Circuit
then ordered the District Court to enter judgment for
Boeing on the basis of the government contractor’s
defense.
If approval of the design. of military hardware by
examining agreeing to a detailed description of the work-
53a
ing drawings of the system is sufficient to satisfy the
requirements of the government contractor’s defense,
then there was no such “approval” under the facts of the
case. Although the government’s review did involve some
subjective evaluation of the contents of the plans, the
level of examination did not equate to the amount of
engineering expertise required by General Dynamics to
prepare the plans. Therefore, this Court concludes that
“true government participation in the design” necessary
to constitute approval was lacking. Mannhein, 769 F.2d
at 122.
Under Bynum’s balancing test, General Dynamics’ level
of participation in the design so outweighed the govern-
ment’s level of. participation that it was General Dyna-
mics, who was ultimately responsible for the “reasonably
precise specifications” involved here. Jd. at 574. In the
real world, although the government and the contractor
may jointly work together in producing specifications,
the level of participation always varies. Sometimes the
government’s participation is minimal at best. That is
the very case here.
Given the disparity in the level of expertise between
the Navy and General Dynamics and the “imbalance of
knowledge” about the safety deficiencies in the design at
the time General Dynamics’ specifications were approved,
it cannot be seriously argued that the Navy engaged in
any “substantial review of the specifications.” Mann-
heim, 769 F.2d at 128; See Also Shaw v. Grumman
Aerospace Corp., 593 F.Supp. 1066, 1074 (S.D.Fla.
1984).
The most telling evidence of the limited review which
the work of General Dynamics’ designers and engineers
received is Plaintiff’s Exhibit 28. This exhibit is a memo
prepared by Paul Lawrence to his superiors at Mare
Island Naval Shipyard which discusses the history of
the GRAYBACK design. Mr. Lawrence was the section
leader of the group which prepared the hangar flood and
ee
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drain system drawings. On page 4, paragraph (e), Mr.
Lawrence stated, “Most of the GRAYBACK design work
was accomplished by farmed-in contractor personnel and
not checked by Mare Island experienced technical people.”
General Dynamics was hired-for the expertise and the
experience it possessed. The government neither possessed
the qualifications nor the ability to engage in any sub-
stantial review of General Dynamics’ specification.
Moreover, the design decisions, material to the defects
alleged, required no military expertise, therefore, there
is no justification for insulating General Dynamics from
liability where the government merely approves of the
decision. “In any case, mere Navy approval of the de-
tailed design specifications and drawings developed by
General Dynamics does not make the government con-
tractor’s defense available to it.” Shaw, 593 F.Supp.
at 1074. If it did then under Koutsoubous and Mann-
heim, the government contractor’s defense would seem
always to apply and contractors would never be liable
for a defective product because the government would
always be in the position to approve a contractor design.
The government’s approval in this case is no different
from the approval of any product or design prepared for
the government. If that type of approval is sufficient to
satisfy the second prong, then there would never be a
recovery under any circumstances against defense con-
tractors. Where the government has only given mere
approval, Bynum does not contemplate no recovery un-
der any circumstances against defense contractors. Jd. at
574 n.28.
3. The third element of the defense is compliance with
the government’s specifications. This prong is not im-
plicated in this case because it was General Dynamics
and not the government who established “reasonably
precise specifications” for the defective design. This
Court notes, however, that the system is designed by
General Dynamics did not even conform to the general
requirements provided by the government. Specifically,
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the COR required that the main hangar vent valve be
“controllable from the air bubble and the berthing space.”
See Plaintiff’s Ex. 28, p. 223, 1. 95. The design of the
system by General Dynamics did not conform to this
requirement. The working drawings of the system pre-
pared by General Dynamics shows the main hangar vent
valve located on the vent pipe at a 45 degree angle.
See Plaintiff’s Ex. 6. The testimony of the witnesses in
this case forces the conclusion that the General Dynamics
designer intended that the valve control handle be located
outside the control bubble and berthing space, despite
the government’s instructions to the contrary. This is
where, in fact, the valve was located at the time of
the accident.
4, Finally, to satisfy the fourth and final prong of the
government contractor’s defense, General Dynamics has
the burden to prove that it “warned the United States
about patent errors in the government’s specifications or
about dangers involved in the use of the equipment that
were known to the contractor but not to the United
States.” Bynum, 770 at 574. The fact that there was
no warning is undisputed.
The Navy hired General Dynamics specifically because
it had specialized knowledge of submarine design. Gen-
eral Dynamics assumed the responsibility of advising and
warning the Navy on the safety aspects of the systems
that General Dynamics was designing. See Plaintiff’s Ex.
30. Both the Navy and General Dynamics knew or should
have known of the dangers associated with the system’s
potential to create a partial vacuum absent basic safety
features. The creation of a vacuum and its effect on
humans is a fundamental engineering principle deserv-
ing no further comment. If either General Dynamics or
the Navy had paid sufficient attention to the COR or the
working drawings or had engaged in any quality assur-
ance or operational testing procedures, the problem of a
partial vacuum would have been obvious. General Dy-
56a
namics, howecer, failed to warn the Navy about patent
errors in the government’s general requirements or their
own working drawings.
Specifically, General Dynamics did not warn the Navy
of its failure in the general
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