How the courts protect contractors whose weapons kill G.I.s; Bell Helicopter's lawyers are indemnifying the defense industry.

• Author: Thompson, Mark

HOW THE COURTS PROTECT CONTRACTORS WHOSE WEAPONS KILL G.I.s

On May 26, 1981, the main rotor blade of the Bell Cobra helicopter that Army Major Douglas Dowd and Navy Lieutenant Robert Ellis were flying snapped off and buzzsawed through the cockpit, killing them both. Dowd and Ellis were added to the list of some 250 U.S. servicemen killed over the past 20 years in nearly 70 accidents aboard similar Bell helicopters. The crashes were linked to a phenomenon known as "mast bumping,' which occurs when Bell's patented, two-bladed rotor see-saws excessively as it spins, snapping the mast that fastens the rotor blade to the rest of the helicopter.

Alerted to the long-standing and never-fixed mast problem that killed their husbands, the pilots' widows filed suit against Bell Helicopter Textron, Inc., contending the company should have done more to guard against the crash. After a three-week federal court trial in early 1985, the jury sided with the widows and awarded them $3.65 million in damages. Bell appealed that verdict to the trial judge, who, in a sternly-worded order, upheld the award as just.

But then Bell appealed to the 4th U.S. Circuit Court of Appeals. In the jury trial, Bell had argued mainly that there was nothing wrong with its design, and that the crash was the fault of the pilots. It also had tested out a new argument, an argument that it emphasized in its appeal to the 4th Circuit: Bell maintained that responsibility for its own design of the rotor system, regardless of its merits or flaws, rested solely with the U.S. government.

In May, the appellate court agreed that responsibility for the design, and the liability for it, shifted to the government once the Pentagon approved Bell's blueprints--even though Bell retained an active patent on the rotor system at the time of the crash and therefore clearly still claimed the design as its own.

Deputy Secretary of Defense William H. Taft IV wasn't fazed by the ruling of the 4th Circuit. "There is a system of compensation for people in the service and their survivors that is designed to provide compensation for them,' Taft said the morning after the 4th Circuit's decision. "None of this is to say that the government doesn't have a remedy against a contractor for defective equipment.'

But the Pentagon rarely exercises its available remedies against contractors, including simply buying elsewhere; after two decades of accidents, the military is now paying Bell millions of dollars to reduce the chances of mast bumping--even though it knows that Bell's top lawyer urged his company to pay for the fixes itself years ago.

In addition, government compensation for accidents cannot serve as a spur toward safer designs since it is awarded regardless of fault and paid by unwitting taxpayers. The roughly $800 monthly that Mrs. Dowd and her children now receive from the government is not likely to prod Bell to correct design flaws; repeated multimillion dollar jury verdicts against Bell might.

Unfortunately, the 4th Circuit's decision to overturn the jury verdict isn't unprecedented. It traces a furrow plowed, with a strong push from the nation's defense contractors, by other federal appellate courts. With those courts' quiet but growing approval, the defense industry--in a torrent of seemingly mundane legal briefs staking out a novel legal theory--has shirked responsibility for what juries repeatedly have ruled are illdesigned weapons.

As a result of these new legal arguments, servicemen are on the verge of losing their right to sue contractors if they believe they have been injured by a poorly designed weapon. That doesn't mean they can turn around and sue the military: a 1950 Supreme Court decision prevents them from suing the government, primarily because of the corrosive effect such lawsuits could have on military discipline. The contractors' novel theories soon may be tested before the Supreme Court. If they're upheld, defense contractors rarely could be held responsible for their own design flaws.

Springing into inaction

Over the past three years, defense contractors have convinced five of the six appellate courts ruling on the issue that liability stemming from poor design of the nation's arsenal rests with the Pentagon once the government signs off on a contractor's blueprints.

The sole countrary decision is now before the Supreme Court. Last December, the 11th Circuit Court interpreted the evolving "government contractor defense' more narrowly than the other five courts and upheld an $841,000 jury award to the family of an aviator killed in the crash of a Navy A-6 plane designed by the Grumman Corporation. Later this fall, after all interested parties have filed briefs, the Supreme Court will decide whether to review the 11th Circuit's decision.

The chance that the Supreme Court might allow the 11th Circuit's decision to stand has electrified the nation's defense contractors. In April, more than 1,500 of them joined in a friend-of-the-court brief asking the high court's justices to affirm, once and for all, that defense contractors are not responsible for the design of their weapons once they receive the U.S. government stamp of approval. "If a manufacturer of a military weapons system can establish certain facts regarding the military's role in the design or approval of the weapons system, the federal courts must not second-guess the military's design decisions,' says the brief, which was drafted by the same four attorneys who wrote Bell's winning petition in the 4th Circuit appeal. The 11th Circuit's ruling, they wrote, "would endanger the close working relationship between the military and the manufacturers of weapons systems that is essential to the preservation and advancement of national defense.'

Joining the contractors in supporting a broader government contractor defense are their insurance underwriters, who stand to lose millions of dollars if the 11th Circuit's...