Boyle v. United Technologies Corp. and the government contractor defense: an analysis based on the current Circuit split regarding the scope of the defense.

• Author: Watts, Sean

In its present form, the federal government contractor defense extends the federal government's immunity from suits by government employees injured by defective equipment to contractors who provide equipment to the government under government-provided specifications.(1) The U.S. Supreme Court attempted to clarify the basis for the defense in Boyle v. United Technologies Corp.,(2) yet important questions about the scope of the defense remain unanswered. Most important, confusion exists over exactly which types of contractors may assert the defense. Specifically, courts disagree whether contractors in nonmilitary procurements should enjoy the protection of the government contractor defense. Lower courts looking to Boyle for the answer to this question have foundered, resulting in a circuit split.(3) Commentators have attacked Boyle by criticizing its status as a decision of federal common law and by denouncing the general suitability of the judiciary to decide such empirical policy questions.

This Note examines the current split among the federal courts of appeals over the intended scope of the federal government contractor defense as articulated in Boyle. Analysis of each side of the split will show that neither side has crafted an approach that is both true to Boyle's adopted rationale and consistent with traditional notions of the interpretation of federal common law. This Note will conclude that Boyle and its progeny have failed to provide an adequate articulation of the federal government contractor defense, and that Congress should address the complex empirical and policy issues presented by a comprehensive government contractor defense.

BACKGROUND: BOYLE V. UNITED TECHNOLOGIES CORP.

On April 27, 1983, a helicopter carrying U.S. Marine helicopter copilot David A. Boyle crashed off the coast of Virginia.(4) Lieutenant Boyle survived the impact of the crash, but drowned when he could not activate the helicopter's escape hatch.(5) Investigators determined that the hatch, which engineers had designed to open outward, failed to operate because of water pressure exerted on the submerged helicopter and because instruments blocked Lieutenant Boyle's access to the hatch.(6) Boyle's heirs and estate filed a diversity action for wrongful death under Virginia state tort law against the helicopter manufacturer Sikorsky.(7) The complaint alleged that Sikorsky had designed the hatch defectively, causing Boyle's death.(8) After the jury in the initial trial returned a verdict for Boyle's estate, Judge Richard Williams, of the U.S. District Court for the Eastern District of Virginia, denied Sikorsky's motion for judgment notwithstanding the verdict.(9) On appeal, the U.S. Court of Appeals for the Fourth Circuit vacated and remanded the case with an order to enter judgment for Sikorsky.(10) The court of appeals held that the "military contractor defense" protected Sikorsky from liability.(11) The court based its decision on the common-law version of the military contractor defense,(12) declaring that a military contractor shared the immunity of the United States when it could demonstrate that: "[(1)] the United States approved reasonably precise specifications for the equipment; [(2)] the equipment conformed to those specifications; and [(3)] the supplier warned the United States about dangers in the use of the equipment that were known to the supplier but not to the United States."(13)

Lieutenant Boyle's estate appealed and the United States Supreme Court granted certiorari.(14) Justice Scalia issued the opinion of a five-justice majority that vacated the Fourth Circuit's decision and remanded the case to the district court.(15) The Court agreed with the Fourth Circuit's general application of the government contractor defense to the facts of Boyle; however, it rejected the Fourth Circuit's rationale and established a version of the defense formed by federal common law.(16)

Justice Scalia's majority opinion expressed disagreement with the petitioner's contention that "in the absence of legislation specifically immunizing Government contractors from liability for design defects, there is no basis for judicial recognition of such a defense."(17) The Court asserted that when state law conflicts with a "uniquely federal interest," the Court could create protection through "so-called `federal common law.'"(18) Citing Texas Industries, Inc. v. Radcliff Materials, Inc.,(19) the Court noted that "a few areas, involving `uniquely federal interests,' are so committed by the Constitution and laws of the United States to federal control that state law is preempted and replaced."(20)

The Court argued that Boyle bordered two areas that involved "uniquely federal interests."(21) First, Justice Scalia noted that the Court had recognized in National Metropolitan Bank v. United States(22) and Clearfield Trust Co. v. United States(23) that the obligations to and the rights of the United States under its contracts were federal interests.(24) Second, the Court mentioned federal officials' immunity from civil liability for actions taken in the course of their duties as another "uniquely federal interest" at issue.(25) The Court conceded that Boyle involved an independent contractor rather than a government official, yet it asserted that liability continued to affect the government's interest in completing its work.(26) In support of its assertion, the Court noted that imposing liability for design defects on independent military contractors would directly affect government contract terms by forcing contractors either to pass liability costs to the government, or to decline to manufacture the government's specified designs.(27) The Court argued that in either case, the issue implicated federal interests.(28)

After establishing that a "uniquely federal interest" was at stake, the Court noted that finding a federal interest was a necessary, but not sufficient, condition for displacing state law.(29) The Court asserted that federal law could displace state law only where a "significant conflict" existed "between an identifiable `federal policy or interest and the [operation] of state law.'"(30) Previously, federal courts of appeals addressing the government contractor defense had recognized the need for a significant conflict in order to displace state law and had relied on the Feres doctrine(31) to settle the conflict between federal and state law.(32) The lower courts reasoned that military contractor liability would be inconsistent with Feres because the contractors would pass the cost of liability to the government and thereby defeat the purpose of governmental immunity for military accidents.(33)

In Boyle, the Court rejected Feres as a limiting principle for determining whether a significant conflict existed between federal interests and state law.(34) It considered the Feres doctrine's rationale flawed in two respects: it was overly-broad and overly-narrow.(35) The Court argued that the Feres doctrine was too broad because it extended immunity to contractors for any injury to military personnel caused by any sort of government equipment.(36) The Court recognized the need to distinguish protection for government contractors who provide government-designed equipment from those who provide "stock" or standard equipment also available for purchase on the open market.(37) Justice Scalia explained that the Feres doctrine's prohibition on all service-related injury claims against the government would allow a manufacturer to assert the government contractor defense without regard to the three limiting criteria adopted by the Fourth Circuit.(38)

Simultaneously, the Court reasoned that asserting the Feres doctrine as a rationale for a government contractor defense produced overly-narrow results.(39) The Court noted because Feres covered only service-related injuries, nothing prevented civilians who were injured by military equipment while on duty from suing the manufacturer.(40) The Court argued such a loophole would defeat the purpose of providing immunity from suits by soldiers and sailors, and would not adequately protect the federal interest in shielding military contractors from liability.(41)

With the above flaws of the Feres doctrine in mind, the Court suggested an alternate outline for demonstrating a "significant conflict" between federal interests and state law.(42) Justice Scalia explained that the discretionary function exception to the Federal Tort Claims Act (FTCA)(43) provided a better limiting principle for determining the presence of a "significant conflict."(44) Through the FTCA, the government allows claimants to sue the United States for damages when government employees cause harm through negligence or wrongful conduct.(45) The Court noted the existence of an exception to this type of governmental consent when "[a]ny claim ... [is] 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."(46)

According to the Court, the discretionary function exception of the FTCA applied when the government "select[ed] ... the appropriate design for military equipment to be used by our Armed Forces."(47) The Court also stated that the military equipment selection process included engineering analysis;(48) technical, military, and social consideration;(49) and specific determinations of "the trade-off between greater safety and greater combat effectiveness."(50) The Court concluded that allowing state tort suits against contractors who implemented the discretionary judgments of government officials would defeat the purpose of the discretionary function exception of the FTCA.(51) The Court reasoned "[i]t makes little sense to insulate the Government against financial liability for the judgment that a particular feature of military equipment is necessary when the...