RETHINKING BOYLE V UNITED
TECHNOLOGIES CORP. GOVERNMENT
CONTRACTOR DEFENSE:
JUDICIAL PREEMPTION OF THE
DOCTRINE OF SEPARATION
OF POWERS?
LARRY J. GUSMAN
Non potest rex gratiamfacere cum injuria et damno aliorum.1
INTRODUCTION
The goal of state products liability law is to protect consumers
from defectively designed, manufactured, or inherently dangerous
products. 2 Courts have consistently held manufacturers or their
1. The King cannot confer a favor on one subject which occasions injury and loss to
others. Blackstone, Commentaries, Book IV at 398-99 (Cooley, 4th ed. 1899); see Hoffa v.
Saxbe, 378 F. Supp. 1221, 1229 (D.D.C. 1974) (recognizing ancient maxim as describing
"[t]he King, as sovereign, could forgive any offense against the crown but could not absolve a
subject's liability to another party because to do so would be to extinguish the personal rights
of a private suitor."; BLACK'S LAW DICTIONARY 953 (5th ed. 1979).
2. See Greenman v. Yuba Power Prod., Inc., 59 Cal. 2d 57, 63, 377 P.2d 897, 901, 27
Cal. Rptr. 697, 701 (1962) (noting that purpose of strict liability is to insure that manufacturers, rather than consumers, bear cost of injuries caused by defective products); Escola v.
Coca-Cola Bottling Co., 24 Cal. 2d 453, 461, 150 P.2d 436, 440 (1944) (Traynor, J., concurring) (declaring that responsibility for defective products should be fixed wherever it will effectively reduce hazards); MacPherson v. Buick Motor Co., 217 N.Y. 382, 389, 111 N.E. 1050,
1054 (1916) (stating manufacturers owe duty of care in design, inspection, and fabrication of
product not only to immediate purchaser but to all foreseeable users); see also Epstein, Products
Liability: The Searchfor the Middle Ground, 56 N.C.L. REV. 643, 659-60 (1978) (commenting that
goal of products liability law is consumer protection, loss spreading, and economic efficiency);
Cowan, Some Policy Bases of ProductsLiability, 17 STAN. L. REV. 1077, 1091 (1965) (noting that
strict liability forces manufacturers to internalize product injury costs and encourages manufacturers to discover and reduce risks).
State courts have interpreted the term "defectively designed" to mean either a design that
is unreasonably dangerous, Thibault v. Sears, Roebuck & Co., 118 N.H. 802, 807, 395 A.2d
843, 846 (1978), or a design that creates an unreasonable risk, notwithstanding the fact that
the product was meticulously manufactured according to detailed plans and specifications,
Robinson v. Package Mach. Co., 49 N.Y.2d 471,480, 403 N.E.2d 440, 443, 426 N.Y.S.2d 717,
720 (1980). A manufacturing defect is a mistake in the manufacturing process which involves
an accidental variation in the product. See Thibault, 118 N.H. at 807, 395 A.2d at 846 (finding
that "design defect" occurs when product is manufactured in conformity with intended design
391
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THE AMERICAN UNIVERSITY LAW REVIEW
[Vol. 39:391
contractors liable to third parties based on theories of negligence or
strict liability for the defective design or manufacture of their product. 3 The United States, however, in its capacity as a contractor, can
escape liability because sovereign immunity is available as an affirmative defense 4 to any suit against the federal government unless the
government has expressly consented to be sued. 5 As a result of the
government's policy of contracting with private parties for goods
and services, 6 the extent to which the federal government's immubut design itself poses unreasonable dangers to consumers); see also O'Brien v. Muskin Corp.,
94 N.J. 169, 180, 463 A.2d 298, 304 (1983) (holding manufacturer liable even if product is
carefully produced); Corbin v. Camden Coca-Cola Bottling Co., 60 N.J. 425, 431, 290 A.2d
441,444 (1972) (noting that manufacturing defect is found where majority of products do not
conform to design). See generally Birnbaum, Unmasking the Testfor Design Defect: From Negligence
[to Warranty]to Strict Liability to Negligence, 33 VAND. L. REV. 593 (1980) (exploring problems of
imprecise judicial analysis of notion of design defect and history of products liability law);
Keeton, Product Liability and the Meaning of Defect, 5 ST. MARY'S L.J. 30 (1973) (discussing cases
that define defect and goal of state products liability law); Annotation, ProductsLiability:Modern
Cases Determining Whether Product is Defectively Designed, 96 A.L.R.3d 22 (1979) (discussing cases
determining whether product is defectively design and state goals of protection).
3. See Fabian v. E.W. Bliss Co., 582 F.2d 1257, 1263 (10th Cir. 1978) (finding defective
design for punch press safety controls presented unreasonable risk); Leichtamer v. American
Motors Corp., 67 Ohio St. 2d 456, 462, 424 N.E.2d 568, 574 (1981) (findingjeep roll bar
defectively designed for specified purpose).
To prove that a product was negligently designed, a plaintiff must show that the manufacturer failed to exercise due care in designing its product. See McIsaac v. Didriksen Fishing
Corp., 809 F.2d 129, 132 (1st Cir. 1987) (noting that analysis in negligent design cases focuses on whether product is designed with reasonable care to eliminate avoidable dangers,
citing Uloth v. City Tank Corp., 376 Mass. 874, 878, 884 N.E.2d 1188, 1191 (1978)), Under a
strict-liability theory, a plaintiff must prove that the product was "in a defective condition
unreasonably dangerous to the user or consumer" at the time of sale. Greenman, 59 Cal. 2d at
64, 377 P.2d at 901, 27 Cal. Rptr. at 701; RESTATEMENT (SECOND) OF TORTS § 402A (1965).
If a state has adopted the rule of strict liability embodied in section 402A, a party must
establish that the product was defective and the defect rendered the product unreasonably
dangerous such that the defective product was the primary cause of the user's injury. See
MADDEN, PRODucTs LIABILITY
§ 8.1, at 287-93 (1988). A defective product is one that is un-
reasonably dangerous, i.e. dangerous to an extent beyond that which the ordinary user of the
product would contemplate with the ordinary knowledge common to the community as to the
product's characteristics. Id. at 287. But see Syrie v. Knoll Int'l, 748 F.2d 304, 306 (5th Cir.
1984) (holding that, under Texas law, manufacturer did not have duty to warn of hazards
discovered years after product had been manufactured and sold, nor duty to recall product to
correct deficiencies).
A plaintiff may also sue for breach of warranty. See U.C.C. § 2-213 (1987) (providing for
express warranty by affirmation, promise, description, or sample); U.C.C. § 2-314 (1987)
(providing for implied warranty of merchantability); U.C.C. § 2-315 (1987) (providing for implied warranty of fitness for particular purpose). See generally Comment, U.C.C. Warranty Disclaimers and the "No Waiver" Provision of the Deceptive Trade Practices and Consumer Protection Act:
Can the Conflict Be Resolved?, 18 TEx. TECH. L. REV. 211 (1987) (discussing consumer's ability to
waive statutory protection under Texas Deceptive Trade Practices Act); see 1 R. HURSCn & H.
BAILEY, AMERICAN LAW OF PRODucrs LIABILITY (SECOND) § 4.2 (1974) (discussing theory of
misrepresentation, application of res ipsa loquitur, and consumer as third party beneficiary to
manufacturer's contract with dealer, as examples of fictions and barriers to recovery).
4. An affirmative defense divests the court of subject matter jurisdiction. FED. R. Civ.
P. 12(b)(1); see Schrader v. Hercules, Inc., 489 F. Supp. 159, 161 (W.D. Va. 1980) (holding
that sovereign immunity defense is complete bar to suit).
5. See infra notes 38-61 and accompanying text (discussing sovereign immunity
defense).
6. See Federal Acquisition Regulations, 48 C.F.R. §§ 7.300-7.307 (1987) (prescribing
1990]
BOYLE V. UNITED TECHNOLOGIES CORP.
393
nity shields private contractors from product liability pursuant to a
government contract remains unclear. 7 In an effort to resolve this
8
uncertainty, the courts created the government contractor defense.
The government contractor defense is an affirmative defense
which bars all product liability claims against the government contractor regardless of the theory of liability. 9 Courts have justified
the government contractor defense on the basis of the federal government's sovereign immunity and public policy interests such as
safeguarding military procurement processes from state interferpolicies and procedures for government acquisitions of commercial or industrial products and
services).
7. Compare Foster v. Day & Zimmerman, Inc., 502 F.2d 867, 874-75 (8th Cir. 1974)
(finding governmental contractual indemnification cannot artificially create sovereign immunity) and Whitaker v. Harvell-Kilgore Corp., 418 F.2d 1010, 1014 (5th Cir. 1969) (rejecting
claim of contractor immunity) with Green v. ICI Am., Inc., 362 F. Supp. 1263, 1267 (E.D.
Tenn. 1973) (finding contractor entitled to claim immunity by applying Tennessee law) and
Myers v. United States, 323 F.2d 580, 583 (9th Cir. 1963) (noting that claims against contractor are claims against government, and, therefore, court of claims has exclusive jurisdiction to
hear and determine suit). See generally Lenherr v. NRM Corp., 504 F. Supp. 165, 175 (D. Kan.
1980) (applying Kansas law and holding manufacturer strictly liable even though manufacturer's employer designed defective machine).
8. Courts and commentators have used various terms to describe this defense. See
Yearsley v. W.A. Ross Constr. Co., 309 U.S. 18, 21 (1940) (declaring government agency
defense); Shaw v. Grumman Aerospace Corp., 778 F.2d 736, 743 (11 th Cir. 1985) (defining
military contractor defense), cert. denied, 108 S. Ct. 2896, reh'g denied, 109 S. Ct. 10 (1988);
Hansen v. Johns-Manville Prod. Corp., 734 F.2d 1036, 1044-45 (5th Cir. 1984) (en banc)
(noting government specification defense), cert. denied, 470 U.S. 1051 (1985); McKay v.
Rockwell Int'l Corp., 704 F.2d 444, 448 (9th Cir. 1983), cert. denied, 464 U.S. 1043 (1984)
(pronouncing government contractor defense); Merritt, Chapman & Scott Corp. v. Guy F.
Atkinson Co., 295 F.2d 14 (9th Cir. 1961) (considering government contract defense); Pratt v.
Hercules, Inc., 570 F. Supp. 773, 803 (D. Utah 1982) (setting forth derivative immunity defense); In re "Agent Orange" Prod. Liab. Litig., 506 F. Supp. 762, 792 (E.D.N.Y. 1980) (addressing government contract defense). See also Ausness, Surrogate Immunity: The Government
Contract Defense and ProductsLiability, 47 OHIo ST. L.J. 985, 996-1012 (1986) (identifying government contract defense); Note, Government Contract Defense: Sharingthe ProtectiveCloak of Sovereign Immunity After McKay v. Rockwell Int'l Corp., 37 BAYLOR L. REV. 181 (1985) (outlining
government contract defense); Note, The Government Contract Defense: Should ManufacturerDiscretion Preclude its Availability?, 37 ME. L. REV. 188 (1985) (discussing government contract defense); Note, Liability of a Manufacturerfor Products Defectively Designed by the Government, 23
B.C.L. REV. 1051 (1982) (describing government contract defense).
9. A non-government third party may assert an affirmative defense based on sovereign
immunity, but the defense will not be a complete bar to suit. Schrader v. Hercules, Inc., 489
F. Supp. 159, 161 (W.D. Va. 1980). Rather, the defense must be established on summary
judgment or at trial. Id.; see also Koutsoubos v. Boeing Vertol Co., 755 F.2d 352, 354 (3d Cir.)
(noting elements to prove affirmative government contractor defense), cert. denied, 474 U.S.
821 (1985). Further, the non-government third party may assert an affirmative defense only if
there is statutory basis for the defense. Pratt v. Hercules, Inc., 570 F. Supp. 773, 803 (D. Utah
1982) (citing McQueary v. Laird, 449 F.2d 608, 610, 612 (10th Cir. 1971)); see Wilson v. Boeing Co., 655 F. Supp. 766, 772 (E.D. Pa. 1987) (applying Koutsoubos three part government
contract defense test); In re "Agent Orange" Prod. Liab. Litig., 534 F. Supp. 1046, 1055
(E.D.N.Y. 1982) (enumerating three elements of defense), cert. deniedsub nom. Diamond Shamrock Chem. Co., 465 U.S. 1067 (1984); Ausness, Surrogate Immunity: The Government Contract
Defense and Products Liability, 47 OHIo ST. L.J. 985, 985-86 (1986) (identifying government contractor defense as affirmative defense); see also notes 149-54 and accompanying text (discussing government contractor defense and strict liability).
THE AMERICAN UNIVERSITY LAW REVIEW
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ence. 10 Antithetical to this view, however, the Supreme Court has
consistently held that the sovereign immunity defense applies only
to federal agencies, their officers, employees, and instrumentalities. 1 ' Moreover, the Court has mandated that the sovereign immunity defense only attaches to a non-governmental entity if a statute
or regulation expressly confers governmental responsibility.' 2 The
issue in numerous products liability cases, therefore, is whether a
government contractor may share in the sovereign immunity of the
United States in the absence of legislation immunizing government
contractors from product liability cases involving design defects.
In Boyle v. United Technologies Corp. 13 the Supreme Court resolved
the "shared immunity" issue and recognized that even in the absence of legislation immunizing government contractors for design
defects, the liability of government contractors is a "uniquely federal interest" requiring that federal common law preempt state
products liability law. 14 Accordingly, the Court held that in military
equipment design defects cases, state products liability law is displaced when the United States approved reasonably precise specifications and the equipment manufactured conformed to those
specifications. 15 In addition, to prevent the contractor from withholding knowledge of risks, the Court required the contractor to
warn the United States about dangers in the use of the equipment
known to the contractor but not to the government. 16 Based on
these concerns, the Court held that a contractor would not be liable
for defectively designing any type of government product, regard7
less of the theory of liability.'
The Court's decision in Boyle marked a significant departure from
previous Supreme Court decisions involving government contractor
immunity.18 Prior to Boyle, the Court consistently refrained from extending any type of immunity to government contractors and left
that determination and responsibility to Congress.' 9 Indeed, the
10. See infra notes 152-54 and accompanying text (discussing public policy interest justification for government contractor defense).
11. See infra notes 42-61 and accompanying text (discussing scope of sovereign immunity
defense).
12. See infra notes 53-61 and accompanying text (discussing requirements for extending
government's sovereign immunity interests).
13. 108 S. Ct. 2510 (1988).
14. Boyle v. United Technologies Corp., 108 S. Ct. 2510, 2518 (1988).
15. Id. at 2518.
16. Id.
17. Id.
18. See infra notes 41-61 and accompanying text (discussing limitations of governmental
immunity to private contractors).
19. See infra note 56 and accompanying text (discussing extending or restricting scope of
government's immunity defense in tax, admiralty, and federal procurement cases).
1990]
BOYLE V. UNITED TECHNOLOGIES CORP.
395
Court had recognized that a private contractor could not share in
the federal government's immunity absent a20constitutional rule of
law exonerating the contractor from liability.
The Court's effort in Boyle to provide a federal common law derivative sovereign immunity defense 21 is inherently suspect and in violation of the separation of powers doctrine. 2 2 In essence, the Court
has intruded into an area where Congress exercises exclusive plenary powers pertaining to its sovereignty. 23 By relying on a federal
preemption analysis to displace state products liability law, the
Court in Boyle effectively barred any recovery for individuals harmed
by a product designed by a government contractor. Thus, the Court
frustrated the state's goal of protecting the consumer or user from
injuries or death caused by defectively designed and manufactured
products. 2 4 By barring recovery, the Supreme Court functioned as
25
the writer of laws, rather than the interpreter of laws.
This Note evaluates whether the Supreme Court's creation of a
federal common law defense that immunizes a contractor who designs and manufactures defective government products and equipment contravenes Congress' exclusive plenary authority to expand,
restrict, or waive the federal government's sovereign immunity in-.
terests. Part I reviews the legal and historical basis for the government contractor defense. Part II sets forth the facts and holding of
Boyle v. United Technologies. Part III criticizes the Court's formulation
of a government contractor defense based in federal common law
and the Court's failure to address the separation of powers question
presented in Boyle. Part IV recommends that an alternative "design
and control" balancing test approach or a narrow military contractor exception to the state products liability laws be adopted until
Congress enacts legislation immunizing federal contractors. This
Note concludes that although the Supreme Court can legitimately
create federal common law when a federal statute or cognizable federal or constitutional interest exists, the Court cannot create a fed20. Sloan Shipyards v. U.S. Fleet Corp., 258 U.S. 459, 567 (1922); see infra notes 49-56
and accompanying text (analyzing constitutional rule of law requirement for exonerating private contractor from liability).
21. See Pratt v. Hercules, Inc., 570 F. Supp. 773, 796-809 (D. Utah 1982) (analyzing derivative sovereign immunity); see also Schrader v. Hercules, Inc., 489 F. Supp. 159, 161 (W.D.
Va. 1980) (declaring that derivative sovereign immunity defense must be established at trial
and not as complete bar to suit).
22. See infra notes 265-83 and accompanying text (analyzing separation of powers
question).
23. Id.
24. Boyle v. United Technologies Corp., 108 S. Ct. 2510, 2518 (1988).
25. See United States v. Gilman, 347 U.S. 507, 513 (1954) (deferring to Congress on
questions of policy concerning United States right of indemnity over employees).
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THE AMERICAN UNIVERSITY LAW REVIEW
[Vol. 39:391
eral common law government contractor defense. By creating this
defense, the Court infringed on Congress' exclusive plenary authority to expand, restrict, or waive the federal government's sovereign
immunity interests. Similarly, the Court's effort to formulate a federal common law defense to immunize government contractors creates a serious separation of powers conflict.
I.
LEGAL BACKGROUND:
THE GOVERNMENT CONTRACTOR DEFENSE
The competing policy interests of state and federal government
products liability clainis against the government contractor pose a
dilemma for the courts. 26 The state's products liability policy interest is based on the judgment that consumers need more protection
from dangerous products than warranty law provides. 27 State
courts, therefore, have held, in products liability claims based on
strict liability, that public policy demands that responsibility will be
fixed not on whether a manufacturer is negligent, but on whether
the manufacturer will most effectively reduce the hazards to life and
health. 28 The federal interest, however, derives from the Constitution's supremacy 2 9 and plenary powers clauses, 30 which grant Congress exclusive legislative authority over its own spheres of federal
activities so that the United States government is free from unwarranted state intrusion and regulation of federal interests.3'
The conflict between state and federal interests has arisen within
the field of government defense contracts, as military contractors
have now found themselves to be prime targets for products liability
actions involving defective design. 32 Courts have sought to protect
26. Compare McKay v. Rockwell Int'l Corp., 704 F.2d 444, 451 (9th Cir. 1983) (holding
that under immunity principle, if government approved reasonably precise specifications,
contractor is not subject to § 402A strict liability for design defect), cert. denied, 464 U.S. 1043
(1984) with Shaw v. Grumman Aerospace Corp., 778 F.2d 736, 745-46 (11 th Cir. 1985) (recognizing narrow exception to products liability law that states contractor not liable only if
contractor did not participate in design process), cert. denied, 108 S. Ct. 2896 (1988), reh'g
denied, 109 S. Ct. 10 (1988).
27. East River Steamship Corp. v. Transamerica Delaval, Inc., 476 U.S. 858, 866 (1986).
28. Escola v. Coca Cola Bottling Co., 24 Cal. 2d 453, 462, 150 P.2d 436, 441 (1944)
(concurring opinion); Greenman v. Yuba Power Prod. Inc., 59 Cal. 2d 57, 63, 377 P.2d 897,
901, 27 Cal. Rptr. 697, 701 (1962); see supra notes 2-3 and accompanying text (discussing
cases and policy behind strict liability).
29. U.S. CONsT. art. VI, c. 2.
30. Id. art. I, § 8, cl. 18.
31. Hancock v. Train, 426 U.S. 167, 178 (1976) (quoting Mayo v. United States, 319 U.S.
441, 445 (1943)); see also infra note 56 and accompanying text (discussing Court's authority to
waive, extend, or restrict government contractor tax immunity).
32. See, e.g., Shaw v. Grumman Aerospace Corp., 778 F.2d 736 (11 th Cir. 1985) (reviewing military helicopter design), cert. denied, 108 S. Ct. 2896, reh'g denied, 109 S. Ct. 10 (1988);
Bynum v. FMC Corp., 770 F.2d 556 (5th Cir. 1985) (considering military cargo carrier design); In re Air Crash Disaster at Mannheim Germany, 769 F.2d 115 (3d Cir. 1985) (identifying
military helicopter design); Tillett v.J.1. Case Co., 756 F.2d 591 (7th Cir. 1985) (characteriz-
1990]
BOYLE
V. UNITED TECHNOLOGIES CORP.
397
the federal interest concerning "the preservation of exclusive control over military matters in the legislative and executive branches of
the federal government."' 33 In order to resolve the dilemma between competing state and federal interests, the courts created the
34
government contractor defense.
The government contractor defense allows a contractor "to share
in the government's immunity" from a products liability suit based
upon public policy grounds.3 5 Because the defense is founded upon
federal policy considerations, some courts have held that the standards of tort law do not apply to a government contractor.3 6 Consequently, two major considerations emanate from the government
contractor defense. First, can a private contractor share in the federal government's sovereign immunity defense? Second, do considerations of federalism preclude the state from imposing tort liability
standards against a government contractor?3 7 In order to evaluate
properly the rationale for the government contractor defense, it is
essential to examine the scope of the federal government's liability
and its sovereign immunity defense and define the government contractor's liability and applicable defenses.
ing military front-end loader design); Koutsoubos v. Boeing Vertol Co., 755 F.2d 352 (3d Cir.
1985) (discussing military helicopter design); McKay v. Rockwell Int'l Corp., 704 F.2d 444
(9th Cir. 1983) (describing military ejection seat design), cert. denied, 464 U.S. 1043 (1984);
Pratt v. Hercules, Inc., 570 F. Supp. 773 (D. Utah 1982) (examining military weaponry); In re
"Agent Orange" Prod. Liab. Litig., 534 F. Supp. 1046 (E.D.N.Y. 1982), modified, 597 F. Supp.
Diamond Shamrock Chem. Co.
740 (E.D.N.Y. 1984) (comparing defoliant), cert. deniedsub noma.
v. Ryan, 465 U.S. 1067 (1984).For state cases, see Casabianca v. Casabianca, 104 Misc. 2d 348, 428 N.Y.S.2d 400 (1980)
(examining military kitchen equipment); Sanner v. Ford Motor Co., 144 NJ. Super. 1, 364
A.2d 43 (1976) (viewing militaryjeep design), aff'd, 154 NJ. Super. 407, 381 A.2d 805 (1977),
cert. denied, 75 NJ. 616, 384 A.2d 846 (1978). For non-military examples, see Burgess v. Colorado Serum Co., 772 F.2d 844 (11th Cir. 1985) (en banc) (discussing brucellosis vaccine);
Hansen v.Johns-Manville Prod. Corp., 734 F.2d 1036 (5th Cir. 1984) (en banc) (commenting
on asbestos).
33. Bynum v. FMC Corp., 770 F.2d 556, 571 (5th Cir. 1985) (comparing federal and
state interests).
34. See infra notes 176-88 and accompanying text (comparing government contractor
formulations).
35. Johnston v. United States, 568 F. Supp. 351, 356 (D. Kan. 1983); see infra notes 15285 and accompanying text (analyzing public policy considerations of government contractor
defense).
36. See Shaw v. Grumman Aerospace Corp., 778 F.2d 736, 743 (11th Cir. 1985) (recognizing military contractor defense based exclusively on constitutional separation of powers
theory); Bynum v. FMC Corp., 770 F.2d 556, 574 (5th Cir. 1985) (concluding that federal
interests rooted in separation of powers concerns required creation of federal common law
government contractor defense); see also infra notes 244-81 and accompanying text (discussing
federalism issue and separation of powers question).
37. One court has determined that basic considerations of federalism require a two-tier
analysis to determine whether federal common law provides a government contractor defense. Bynum v. FMC Corp., 770 F.2d 556, 568 (5th Cir. 1985). The court in Bynum concluded that holding the government contractor liable under state tort liability would infringe
on the federal government's sovereignty interest in military equipment acquisition, thus requiring the creation of a federal common law government contractor defense. Id. at 574.
398
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1.
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Liability of the Federal Government
The Government's soveriign immunity defense
The traditional formulation of the sovereign immunity doctrine
provides that the government cannot be sued without its consent.3 8
Moreover, the Supreme Court has held that if the United States consents to be sued, it may prescribe the terms and conditions on which
it consents and may withdraw its consent whenever it desires. 39
When the government consents to be sued, the Court has mandated
that consent must always be derived from a congressional act or
from a voluntary submission to the trial court's jurisdiction.4 0
In Brady v. Roosevelt Steamship Co. ,41 the Supreme Court addressed
the scope of the government's sovereign immunity defense. 4 2 In
Brady, the Supreme Court examined whether the Suits in Admiralty
Act made private operators non-suable for their torts. 43 The Court
held that the Suits in Admiralty Act did not deprive Brady's estate of
44
the right to sue the private contractor for damages.
Brady arose when a United States customs inspector was killed
while boarding the merchant marine vessel S.S. Unicoi.4 5 The
United States Maritime Commission owned the S.S. Unicoi but the
Roosevelt Steamship Company operated the vessel under a government contract. 46 The contract gave Roosevelt Steamship Company
a right of exoneration or indemnity against the United States Mari38. See Larson v. Domestic & Foreign Commerce Corp., 337 U.S. 682, 704 (noting that
public policy dictates whether government consents to suit), reh "gdenied, 338 U.S. 682 (1949);
Maricopa v. Valley Nat'l Bank, 318 U.S. 357, 362 (1943) (commenting that no suit may be
maintained against United States without its consent); United States v. Sherwood, 312 U.S.
584, 586 (1941) (citing cases that historically show government cannot be sued without its
consent); The Siren, 74 U.S. (7 Wall.) 152, 154 (1868) (noting immunity extends to United
States property); Beers v. Arkansas, 61 U.S. (20 How.) 527, 529 (1858) (noting that sovereign
consent is established principle of jurisprudence); United States v. Clarke, 33 U.S. (8 Pet.)
436, 443 (1834) (declaring that there must be congressional authority to sue United States).
39. See Bowen v. Public Agencies Opposed to Social Security Entrapment, 477 U.S. 41,
52 (1986) (concluding that contractual arrangements remain subject to sovereign's subsequent legislation, citing Merrion v.Jicarilla Apache Tribe, 455 U.S. 130, 148 (1982)); Lynch v.
United States, 292 U.S. 571, 581 (1933) (holding that Congress retained power to withdraw
consent at any time).
40. Sloan Shipyards v. United States Fleet Corp., 258 U.S. 459, 567 (1922); see The Siren, 74 U.S. (7 Wall.) 152, 154 (1868). For statutory waivers of the government's contract
and tort immunity, see Tucker Act of 1887 (Act of March 3, 1887), 24 Stat. 505 (codified as
amended at 28 U.S.C. § 1346 (1982)); Federal Tort Claims Act, Pub. L. No. 79-601, §§ 401422, 60 Stat. 842 (1946) (codified at 28 U.S.C. §§ 1291, 1346, 1402, 1504, 2110, 2401-02,
2411-12, 2671-80 (1982)).
41. 317 U.S. 575, reh'g denied, 318 U.S. 799 (1943).
42. Brady v. Roosevelt S.S. Co., 317 U.S. 575, 583 (1943).
43. Id. at 577.
44. Id. at 584-85.
45. Id. at 576.
46. Id.
1990]
BOYLE V. UNITED TECHNOLOGIES CORP.
399
time Commision. 4 7 The issue was whether the private contractor
48
could actually share in the government's sovereign immunity.
The Court recognized two principles regarding the extension of
the government's immunity interests. 4 9 First, Congress has the
power to grant or withhold immunity from suit on behalf of a governmental corporation and to private operators. 50 Second, contract
rights cannot create immunity privileges. 5 ' Based on these principles, the Supreme Court in Brady concluded that Congress did not
extend the government's immunity to the private contractor and
that the Court likewise should refrain from doing so because there
52
was no clear Congressional policy demanding such a result.
As Brady illustrates, it is axiomatic that only Congress has the
power to expand, restrict, or waive the government's sovereign immunity interests.5 3 Similarly, the Court has consistently held that it
47. Id. at 582.
48. Id. at 577.
49. Id. at 580-83.
50. Id. at 580. The Court has also held that any extension of the government's immunity
must come from Congress through only a constitutional rule of law. Sloan Shipyards v.
United States Fleet Corp., 258 U.S. 549, 566-67 (1922); see Robert C. Herd & Co. v. Krawill
Mach. Corp., 359 U.S. 297, 303-08 (1959) (holding that agents are liable for all damages
unless statute exonerates agent from liability). In Herd, the Supreme Court addressed
whether a bill of lading that limits a carrier's liability to $500 extended to its agent, a negligent
stevedore. Id. at 298-300. The carrier's contract had a provision whereby the carrier's liability was limited to $500. Id. at 298. The carrier's agent, however, had negligently damaged
some goods in transit and was sued for the extent of the loss. Id. The agent sought protection under the carrier's contract provision that limited liability. Id. The Court ruled that the
agent was liable for damages and that the contract provision did not provide insulation from
suit. Id. at 308. The Court noted that an agent is liable for his negligence and that any shield
from liability must come from a constitutional rule of law to exonerate the agent from liability.
Id. at 304-05.
51. Brady, 317 U.S. at 583; cf. Guaranty Trust & Safe Deposit Co. v. Green Springs and
Melrose R.R., 139 U.S. 137, 143 (1891) (noting that rights of grantors and assigns do not flow
to intervening lien holders). The rights of principal and agent inter se are not the measure of
the right of third persons against either of them for their torts. Brady, 317 U.S. at 583. Contract rights only provide the parameters to their legal obligations to each other. With respect
to the federal government, any derogation of the sovereign's contract rights must be explicit
through a valid statutory basis. Id. Any change in the contract with.regard to rights of third
parties suing on the contract or in tort for damages must come from the statfte. Id. The
Court cannot construe beyond the four corners of the document; therefore, any dimunition of
rights of recovery, such as the establishment of the government contractor defense, must
originate from the legislative branch. Id.
52. Brady, 317 U.S. ar 584.
53. See California v. Arizona, 440 U.S. 59, 65-66 (1979) (stating that Congress has broad
powers over sovereign immunity of United States); Brady v. Roosevelt S.S. Co., 317 U.S. 575,
580 (1943) (recognizing that Congress has authority to immunize private operators of government vessels from tort liability). Plenary authority is granted exclusively to Congress in U.S.
CoNsT. art. VI, cl. 2, and U.S. CONsT. art. I, § 8, cl. 18. See supra notes 38-40 and accompanying text (discussing power of Congress to determine when government consents to be sued);
cf.Three Affiliated Tribes of Forts Berthold Reservation v. Wold Engines, 476 U.S. 877, 890
(1986) (noting that tribal immunity, like federal immunity, is subject to Congress' plenary
control and definition); Santa Clara Pueblo v. Martinez, 436 U.S. 49, 58, (1978) (commenting
that Congress has superior and plenary control of Indian tribal sovereignty in same manner as
federal sovereignty).
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cannot extend the waiver of sovereign immunity more broadly than
Congress statutorily directs. 5 4 Because the justification for the sovereign immunity defense is based on public policy concerns, 55 Congress alone has, within its exclusive plenary authority, the power to
56
expand, restrict, or waive its immunity interests.
54. United States v. Shaw, 309 U.S. 495, 502 (1940); see also United States v. Orleans, 425
U.S. 807, 813 (1976) (noting that due regard must be given to exceptions when Congress
waived tort immunity in Federal Tort Claims Act); supra note 38 (citing cases concerning congressional waiver of immunity).
55. Ramey v. Martin-Baker Aircraft Co., 656 F. Supp. 984, 988 (D. Md. 1987); see Johnston v. United States, 568 F. Supp. 351, 354 (D. Kan. 1983) (enumerating several justifications
for government contract defense); Green v. ICI America, Inc., 362 F. Supp. 1263, 1264-65
(E.D. Tenn. 1973) (suggesting that government contract defense can be used to shield contractor from liability when contract performed in non-negligent manner according to government specifications and at direction of government officials).
For cases that recognize the government contractor defense based on the separation of
powers over matters concerning government procurement and defense, see Tozer v. LTV
Corp., 792 F.2d 403 (4th Cir. 1986), cert. denied, 108 S.Ct. 2896 (1988); Shaw v. Grumman
Aerospace Corp., 778 F.2d 736 (11th Cir. 1985); Koutsoubos v. Boeing Vertol Co., 755 F.2d
352 (3d Cir. 1985); McKay v. Rockwell Int'l Corp., 704 F.2d 444 (9th Cir. 1983); In re "Agent
Orange" Prod. Liab. Litig., 534 F. Supp. 1046 (E.D.N.Y. 1982). For background on the development of sovereign immunity, see Note, Rethinking Sovereign Immunity After Bivens, 57 N.Y.U.
L. REV. 597, 604-21 (1982) (describing history and development of sovereign immunity doctrine); Byse, ProposedReforms in Federal "'Nonstatutory"JudicialReview: Sovereign Immunity, Indispensible Parties,Mandamus, 75 HARV. L. REV. 1479, 1484 (1962) (identifying practical or policy
justification of sovereign immunity as avoidance of undue judicial intervention in legislative
branch affairs); Note, Developments in the Law - Remedies Against the United States, 70 HARV. L.
REV. 827, 829-30 (1957) (providing historical perspective to development of sovereign immunity defense and subsequent Court formulated remedies).
56. See Washington v. United States, 460 U.S. 536, 540 (1983) (holding that Congress
alone can confer tax immunity); United States v. New Mexico, 455 U.S. 720, 737 (1982) (holding that Congress must take responsibility to immunize federal contractors from state gross
receipts and compensating tax); United States v. County of Fresno, 429 U.S. 452, 464 (1977)
(analyzing basis for tax immunity on legal incidence test); United States v. Boyd, 378 U.S. 39,
49-50 (1964) (noting that Congress repealed statutory tax exemption of federal contractors);
United States v. City of Detroit, 355 U.S. 466, 474 (1958) (stating that Congress can confer
statutory immunity); United States v. Gilman, 347 U.S. 507, 511-13 (1954) (noting that Congress is better suited than judiciary in selection of policy considerations); Kern-Limerick, Inc.
v. Scurlock, 347 U.S. 110, 122 (1954) (finding that government was real purchaser, and,
therefore, tax levied on contractor was unconstitutional); Carson v. Roane-Anderson Co., 342
U.S. 232, 234 (1952) (citing power of Congress to create tax immunities stemming from
power to preserve and protect validly authorized functions under U.S. CONsT. art. I, § 8, cl.
18, which provides that Congress shall have power "to make all Laws which shall be necessary
and proper for carrying into Execution the foregoing Powers, and all other Powers vested by
this Constitution in the Government of the United States, or in any Department or Officer
thereof."); Penn Dairies, Inc. v. Milk Control Comm'n, 318 U.S. 261, 269 (1943) (holding that
in limited circumstances state can regulate federal contractors who furnish supplies or render
services to federal government); Brady v. Roosevelt S.S. Co., 317 U.S. 575, 580-81 (1942)
(acknowledging that Congress has power to immunize private operators of government vessels for torts under Suits in Admiralty Act); Keifer & Keifer v. Reconstruction Fin. Corp., 306
U.S. 381, 389-90 (1939) (noting that Congress can endow government corporation with immunity from suit); James v. Dravo Contracting Co., 302 U.S. 134, 161 (1937) (holding that
power of Congress to grant tax immunity status to government contractors protects performance and functions of national government). Contra Yearsley v. W.A. Ross Constr. Co., 309
U.S. 18, 20-21 (1940) (finding no liability to contractor if contractor is agent or officer of
government); Green v. ICI Am., Inc., 362 F. Supp. 1263, 1267 (E.D. Tenn. 1973) (applying
Tennessee law and entitling contractor to sovereign immunity defense). See generally supra
notes 38-61 (describing power of Congress in matters relating to sovereign immunity).
1990]
BOYLE V
UNITED TECHNOLOGIES CORP.
401
The decision in Brady was one of the last Supreme Court cases
decided prior to Congress' enactment of the Federal Tort Claims
Act (FTCA).5 7 The FTCA generally waives the government's sovereign immunity. 58 The Court's decision in Brady, however, is representative of the underlying legal basis for the FTCA because the
Court provided the legal framework whereby the Court's equitable
powers are limited by the legislative process. 5 9 Consequently, the
Supreme Court cannot expand the waiver of sovereign immunity
more broadly than Congress directs, 60 nor conversely, extend deriv61
ative sovereign immunity to contractors.
2.
Discretionaryfunction exception
The federal government annualy spends billions of dollars on
projects that people and institutions perform under a government
contract or grant. 62 The government's contract specifications, however, may contain design defects that, if followed by the contractor,
might cause injury or death to government employees or other consumers and users. 63 The United States government in its capacity as
a contractor, manufacturer, or certifier, therefore, may be held lia-ble with respect to tort claims under FTCA in the same manner and
64
extent as a private individual under like circumstances.
The FTCA is a limited waiver of the government's sovereign immunity, which prior to 1946 had barred individuals from recovering
in tort actions against the government. 65 The United States, however, is statutorily exempt from any claim that is based upon an act
57. Federal Tort Claims Act, Pub. L. No. 79-601, §§ 401-422, 60 Stat. 842 (1946) (codified at 28 US.C. §§ 1291, 1346, 1402, 1504, 2110, 2401-2402, 2411-2412, 2671-2680
(1982)).
58. Id.
59. Brady, 317 U.S. at 581 (concluding Congress, not courts, could define limits of sovereign immunity).
60. United States v. Shaw, 309 U.S. 495, 502 (1940).
61. See supra notes 50-52 and accompanying text (discussing Congress' power to immunize private contractors).
62. In 1986, for example, the federal government, through the Department of Defense,
entered into 15 million contracts, about 52,000 per day, with some 60,000 prime contractors
and hundreds of thousands of other suppliers and sub-contractors involving billions of dollars. KORB, The Defense Budget and American Defense Annual 1986-1987, at 41 (J. Kruzel
ad. ed. 1986). A majority of the government products liability litigation involves military
hardware. See supra note 32 (providing cases).
63. See supra note 8 (listing government contractor cases).
64. Federal Tort Claims Act, 28 U.S.C. § 2674 (1982).
65. See Dalehite v. United States, 346 U.S. 15, 24-26 (1953) (providing legislative background and history); Feres v. United States, 340 U.S. 135, 139-40 (1950) (providing historical
background to FTCA); Ausness, SurrogateImmunity: The Government Contract Defense and Products
Liability, 47 OHIO ST. L.J. 985, 988 (1986) (discussing policy underlying strict products liability
and rationale for government contractor defense); Note, Liability of a Manufacturerfor Products
Defectively Designed by the Government, 23 B.C.L. REv. 1025, 1025 n.l (1982) (analyzing scope of
manufacturers' liability for design defect in products sold to federal government).
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THE AMERICAN UNIVERSITY LAW REVIEW
[Vol. 39:391
or omission of a government employee's exercise of due care in the
execution of a statute or regulation, or a discretionary function or
duty. 6 6 The statute further provides that the federal government
remains immune from any claim for damages arising out of injuries
to those in military service. 67 These two FTCA statutory exceptions
provided the Supreme Court with the legislative framework to construe and interpret the extent of the government's waiver of sovereign immunity in the landmark cases of Dalehite v. ' United States"8
and Feres v. United States.6 9 The courts have specifically used the underlying rationale for the discretionary function and the armed services exceptions to justify the federal policy basis for the government
70
contractor defense.
The discretionary function exception to the FTCA is an affirmative defense that divests the court of subject matter jurisdiction of
the underlying matter. 71 The purpose of this exception is to mark
the boundaries of Congress' willingness to impose tort liability on
the federal government and to prevent judicial second guessing of
72
legislative and administrative decisions.
The first Supreme Court case to interpret the FTCA's discretionary function language was Dalehite v. United States.73 In Dalehite, the
Court addressed both the scope of the FTCA's discretionary function exception and whether the government could be found strictly
liable under the FTCA statutory scheme. 74 The case arose out of
66. Federal Tort Claims Act, 28 U.S.C. § 2680(a) (1982).
67. Id. § 2680j).
68. 346 U.S. 15 (1953).
69. 340 U.S. 135 (1950).
70. See infra notes 71-95 and accompanying text (discussing discretionary function exception and Feres-Stenceldoctrine as federal policy justification for government contractor immunity). Compare Dolphin Gardens, Inc. v. United States, 243 F. Supp. 824, 827 (D. Conn. 1965)
(concluding that imposition of liability on government contractor would render government's
discretionary function immunity meaningless) with McKay v. Rockwell Int'l Corp., 704 F.2d
444, 450 (9th Cir. 1983) (holding under Feres-Stenceldoctrine that military contractor should
not be liable for design defect in military equipment), ceri. denied, 464 U.S. 1043 (1984).
71. Berkovitz v. United States, 108 S. Ct. 1954, 1957 (1988); see FED. R. Civ. P. 12(b)(l)
(providing affirmative defense in pleading or motion for lack of subject matter jurisdiction).
72. United States v. S.A. Empresa de Viacao Aerea Rio Grandense (Varig Airlines), 467
U.S. 797, 808, 814 (1984).
73. 346 U.S. 15 (1953).
74. Dalehite v. United States, 346 U.S. 15, 35-36, 43-45 (1953). The plaintiffs sued the
government for four areas of alleged negligence. Id. at 23. First, the government was careless
in drafting and adopting the particular fertilizer program as a whole. Id. Second, the government failed to investigate the problems associated with the shipment of the fertilizer. Id.
Third, the government failed to provide a safe plan of manufacture. Id. Finally, the government failed to supervise properly the storage and loading of the fertilizer. Id. The trial court
held in plaintiff's favor, but the circuit court reversed, holding that the War Department's
adoption of a fertilizer export program was a discretionary act and, therefore, the government
was immune from any injury arising out of the program. In re Texas City Disaster Litig., 197
F.2d 771, 778-81 (5th Cir. 1952), aff'd sub. nom. Dalehite v. United States, 346 U.S. 15 (1983).
1990]
BOYLE V. UNITED TECHNOLOGIES CORP.
403
the 1947 Texas City disaster, which occurred when a cargo vessel
loaded with fertilizer exploded in port. 7 5 The Court held that the
government was immune under the FTCA discretionary function
exception because the acts in question were decisions mandated at a
planning, rather than at an operational level. 76 The Court enunciated the "planning-operational" distinction as the formula for determining when the discretionary function exception barred a suit
against the government. 7 7 Planning level decisions usually contain
an evaluation of such factors as the political, economic, or social effects of a particular plan or policy, 78 whereas operational level decisions relate to the ordinary day-to-day operations of the
government. 79 Accordingly, the Court held that the discretionary
function or duty exception precludes suits charging negligence in
executive determinations in establishing plans, specifications or
80
schedules of operations.
In addressing the strict liability issue, the Court in Dalehite held
that the government was not liable for damages under the FTCA
when the plaintiff seeks to recover under a "liability without fault"
theory.8 1 The resolution of the strict liability issue in Dalehite did
not turn on whether the conduct of the government was negligent in
handling ultrahazardous material, but rather on the statutory construction of the FTCA.8 2 The Court interpreted the FTCA statutory
language "negligent or wrongful act or omission of any employee of
75. Dalehite, 346 U.S. at 17.
76. Id. at 42.
77. For an analysis of the Court's planning-operational distinction, see Comment, The
Discretionary Function Exception and Mandatory Regulations, 54 U. CHI. L. REV. 1300, 1311-15
(1987) (tracing Supreme Court's creation and development of discretionary function exception to FTCA liability through planning operational distinction); Ausness, SurrogateImmunity:
The Government ContractDefense andProductsLiability, 47 OHIo ST. LJ.985, 988-90 (1986) (referring to planning-operational distinction as most widely used formula for determining when
suit is barred by discretionary function exception to FTCA); Comment, Scope of the Discretionary
Function Exception under the Federal Tort Claims Act, 67 GEO. L.J. 879, 884-93 (1979) (discussing
inconsistencies in post-Dalehite treatment of planning-operational distinction in tort claims
against government); Zillman, The Changing Meanings of Discretion: Evolution in the Federal Tort
Claims Act, 76 MIL. L. REV. 1, 5-6 (1977) (noting that commentators have not generally supported planning-operational distinction); Comment, Federal Tort Claims: A Critique of the Planning Level-OperationalTest, I1 U.S.F.L. REV. 170, 179-97 (1976).
78. Dalehite, 346 U.S. at 35-36; see Swanson v. United States, 229 F. Supp. 217, 220 (N.D.
Cal. 1964) (explaining planning-operational distinction).
79. Dalehite, 346 U.S. at 42. See American Exch. Bank v. United States, 257 F.2d 938, 941
(7th Cir. 1958) (noting that GSA's failure to install handrail on post office steps is operational
level function); Swanson v. United States, 229 F. Supp. 217, 221 (N.D. Cal. 1964) (finding
decision to develop fail-safe modification of aviation elevator mechanism is planning level
function, but design or modification or manner of installation is non-discretionary, operational level function).
80. Dalehite, 346 U.S. at 35.
81. Id. at 45.
82. Id. at 44.
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the Government,
83
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to mean a uniform federal limitation of the type
of act government employees committed for which the government
has consented to be sued. 8 4 Because the Act and underlying congressional testimony required some type of misfeasance or nonfea-
sance, the Court held the government was not liable for damages
under a strict liability or absolute liability theory. 8 5
The Court in Dalehite and its progeny 8 6 focused on the character
and nature of the government's action from manufacturing 8 7 to the
government certification process. 8 8 Each case reflected the inherent
difficulty in applying the planning-operational level distinction to
different factual situations. In contrast to the development of a hap-
hazardly defined determination of whether the discretionary function exception bars a suit against the government, the Supreme
Court has been succinct in limiting recovery in the area of military
personnel claims brought under the FTCA.8 9
3.
Feres-Stencel doctrine
In Feres v. United States,9 0 the Supreme Court addressed the issue
83. Id. at 33 (citing 28 U.S.C. § 1346(b) (1982)).
84.
Id. at 44-45 (citing to Hearingsbefore a Subcommittee of the Senate Committee on theJudidary
on S. 2690, 76th Cong., 3d Sess. 43-44 (1946)). The Court recognized that if Congress
wanted the FTCA to cover absolute liability, Congress could have used more suitable models
for such a requirement. Id. (giving example of Suits in Admiralty Act, (Act of March 9, 1920),
c. 95, § 2, 41 Stat. 525 (codified in 46 U.S.C. §§ 741-52 (1920)); see also Laird v, Nelms, 406
U.S. 797, 802-03 (1972) (affirming Dalehite'sno strict liability or absolute liability requirement
against government).
85. Dalehite, 346 U.S. at 45.
86. See Berkovitz v. United States, 108 S. Ct. 1954, 1964-65 (1988) (holding that discretionary function exception will not apply when federal statute, regulation or policies specifically prescribes course of action); United States v. S.A. Empresa de Viacao Aerea Rio
Grandense (Varig Airlines), 467 U.S. 797, 807-14 (1984) (holding that nature of conduct,
rather than status of actor governs whether discretionary function exception applies), reh 'g
denied sub nom. United States v. United Scottish Ins., 468 U.S. 1226 (1985); Rayonier, Inc. v.
United States, 352 U.S. 315 (1957) (rejecting "uniquely governmental" activity basis for discretionary function exception); Indian Towing Co. v. United States, 350 U.S. 61 (1955) (holding that decision to install lighthouse was discretionary and that United States was liable
under FTCA for its negligent operation).
87. Dalehite, 346 U.S. at 38-42.
88. Berkovitz v. United States, 108 S. Ct. 1954, 1961 (1988) (discussing FDA certification process); United States v. S.A. Empresa de Viacao Aerea Rio Grandense, 467 U.S. 797,
804-05 (1984) (dealing with FAA certification process), reh g denied sub nom. United States v.
United Scottish Ins., 468 U.S. 1226 (1985).
89. See Johnson v. United States, 481 U.S. 681 (1987) (alleging air traffic control negligence for Coast Guard helicopter crash); United States v. Shearer, 473 U.S. 52 (1985) (kidnapping and murder of serviceman); Chappell v. Wallace, 462 U.S. 296 (1983) (alleging racial
discrimination); Stencel Aero Eng'g Corp. v. United States, 421 U.S. 666 (1977) (involving
National Guardsman suing government and third party manufacturer, and third party seeking
indemnification against government); United States v. Brown, 348 U.S. 110 (1954) (allowing
recovery for negligent operation after serviceman was no longer on active duty); Feres v.
United States, 340 U.S. 135, 137 (1950) (alleging negligence in barracks fire).
90. 340 U.S. 135 (1950).
1990]
BOYLE V. UNITED TECHNOLOGIES CORP.
405
of the federal government's liability for service-related injuries to
members of the armed forces. 9 1 The Court held that the FTCA did
not waive the government's immunity with respect to injuries to servicemen which arose out of or incident to service and limited a serviceman's recovery to the Veterans' Benefits Act. 92 The Court
extended the Feres doctrine in Stencel Aero Engineering Corp. v. United
Slates93 by holding that government contractors who paid damages
to members of the military or their dependents are barred from recovering against the federal government in third-party indemnity
actions. 9 4 Courts have subsequently relied on the Feres-Stencel doc91. Feres v. United States, 340 U.S. 135, 138 (1950).
92. Id. at 145-46; see Veterans' Benefits Act, Pub. L. No. 85-857, § 1, 72 Stat. 1105 (codified as amended at 38 U.S.C. §§ 101-5228 (1982 &Supp. III 1985)); seealso Note, United States
v. Johnson: Feres Doctrine Gets New Life and Continues to Grow, 38 Am. U.L. REV. 185, 198-203
(1988) (analyzing underlying rationale and recognizing Feres as only judicially created exception to FTCA).
The underlying rationale for the Court's decision in Feres was to construe the FTCA in a
workable, consistent, and equitable fashion to fit into an entire statutory system of remedies
against the government. Feres, 340 U.S. at 139. The Court gave three specific reasons for
barring a serviceman's suit against the government. First, the Court observed that the purpose of the FTCA was not to create new causes of action, but rather to allow suits against the
government in like circumstances that a private individual would assert. Id. at 141-42. The
Court found that there were no like circumstances in private sector liability and, therefore,
concluded that the FTCA could not be construed as authorizing such claims against the government. Id. at 142. Second, the Court recognized that the relationship between the government and members of the armed forces was "distinctively federal in character." Id. at 143.
Therefore, federal authority rather than fifty differing state authorities governed the scope,
nature, and legal incidents of the relationship between service persons and the government.
Id. at 143-44. Finally, the Court noted that the compensation program for injured servicemen
provided favorable recoveries when compared with most workman's compensation statutes.
Id. at 145. The Court concluded that Congress did not intend to create a new cause of action
for service-connected injuries. Id. at 159.
93. 431 U.S. 666 (1977).
94. Stencel Aero Eng'g Corp. v. United States, 431 U.S. 666, 674 (1977). Stencel involved a third-party indemnity claim against the United States. Id. at 667-68. A National
Guard officer was permanently injured when the ejection system malfunctioned during a midair emergency. Id. The National Guardsman filed suit against Stencel Aero Engineering Corporation, the manufacturer of the ejection system, and the United States alleging the emergency ejection system malfunctioned due to individual and joint negligence. Id. Stencel then
cross-claimed against the United States for indemnification charging the government with
faulty ejection system specifications. Id. The United States moved for summary judgment
against the National Guardsman, contending Feres barred the officer's recovery for damages
and moved for dismissal of Stencel's cross-claim because Feresalso barred a third party indemnity action for monies paid to military personnel who could not recover directly from the
United States. Id. at 668-69. The district court, relying on the Feres doctrine, granted the
government's motion for summary judgment against the National Guardsman based on Feres
and dismissed the manufacturer's cross claim. Id. at 669. Stencel appealed to the Eighth
Circuit, which affirmed the district court decision in Stencel Aero Eng'g Corp. v. United
States, 536 F.2d 765 (1976). The Supreme Court affirmed, Stencel Aero Eng'g Corp. v.
United States, 431 U.S. 666 (1977).
The Court's underlying rationale in Stencel was to reiterate and modernize the basis of the
Feres doctrine. Note, UnitedStates v. Johnson: Feres DoctrineGets New Life and Continuesto Grow, 38
AmI. U.L. REV. 185, 207-08 (1988). The Court not only reaffirmed the Feres doctrine but also
noted that if the government indemnified petitioner Stencel, the National Guardsman would
be judicially admitted through the back door while he had been legislatively turned away at
the front. Stencel, 431 U.S. at 673 (citing Laird v. Nelms, 406 U.S. 797, 802 (1972)).
406
THE AMERICAN UNIVERSITY LAW REVIEW [Vol. 39:391
trine to bar servicemen suits against government contractors for
service-related injuries.9 5
Because the government's contract may fix specific and precise
conditions to implement federal objectives, 9 6 contractors are responsible for compliance with the government's contract specifications, even though those specifications may conflict with state
prerogatives in contract or tort law. 97 Consequently, to escape liability, government contractors have plead a derivative sovereign immunity defense based on their contractual relationship with the
government. 98 In order to understand properly the government
contractor defense, an examination of the government's contractual
relationship with private contractors is necessary.
B.
Liability of the Government Contractor
A private contractor is liable to a third party for damages as a
result of the defective design or manufacture of its products and
equipment in a products liability action that is based in negligence,
breach of warranty, or strict liability in tort. 9 9 These types of stateprescribed duties of care are the basis of a private contractor's liability. 10 0 Unlike the private contractor's state-prescribed duties of
care, however, the government contract determines the scope of a
government contractor's liability.1 0 1 Specifically, the type of specifications that the government contract requires defines the parameters of a government contractor's liability. Therefore, an
examination into the two basic types of government specifications,
design and performance, is required.
1.
The basisfor government contractor liability: the contract's specification
A procurement contract generally contains government design
specifications, which set forth in detail the materials to be used and
95. See McKay v. Rockwell Int'l Corp., 704 F.2d 444, 448 (9th Cir. 1983) (identifying
Feres and Stencel as doctrine and basis for government contractor tort liabilit); immunity), cert.
denied, 464 U.S. 1043 (1984); see also infra notes 152-85 and accompanying text (discussing
policy considerations for government contractor defense).
96. See United States v. Orleans, 425 U.S. 807, 815-16 (1976) (discussing conditions of
contractor responsibility for compliance with government contract specifications).
97. See infra notes 100-08 and accompanying text (analyzing two types of government
contract specifications, design, and performance).
98. See Pratt v. Hercules, Inc., 570 F. Supp. 773, 801-02 (D. Utah 1982) (identifying contractor's derivative sovereign immunity defense); Schrader v. Hercules, Inc., 489 F. Supp.
159, 161 (W.D. Va. 1980) (requiring contractor to have agency or instrumentality relationship
with government before derivative immunity attaches).
99. See supranotes 3-4 and accompanying text (discussing products liability basis for negligence and strict liability suits).
100. See supra note 3 (noting various duties imposed by state products liability statutes).
101. Tibshraeny Bros. Constr. v. United States, 6 Cl. Ct. 463, 468 (1984).
1990]
BOYLE V
UNITED TECHNOLOGIES CORP.
the manner in which the work is to be performed.10 2 The contractor
is not permitted to deviate from the specifications.10 3 The government is ultimately responsible for the design, any related omissions,
4
errors, or deficiencies in the specifications.10
By contrast, a performance contract contains specifications stating
the desired performance characteristics for the manufactured product but does not prescribe the manner in which they are to be accomplished. The contractor is given discretion to decide how to
achieve the government's design, engineering, or performance requirements.' 0 5 Absent an express assumption of responsibility by
the government, the government contractor is responsible for the
06
method of performance and success.
The primary difference between the procurement contract and
the performance contract focuses on which party is responsible for
the contract specifications. The courts have found that the critical
factor defining which party should be held to warrant or guarantee
the efficiency and safety of a specification is the nature and degree of
the government contractor's involvement in the specification process. 10 7 Similarly, a court can use a two-pronged "design and con102. See J.L. Simmons Co. v. United States, 412 F.2d 1360, 1362 (Ct. Cl. 1969) (distinguishing design specifications from performance specifications); see also Stuyvesant Dredging
Co. v, United States, 834 F.2d 1576, 1582 (Fed. Cir. 1987) (describing and contrasting design
and performance specifications); Shaw v. Grumman Aerospace Corp., 778 F.2d 736, 745
(1 th Cir. 1985) (dividing product specifications into two types: quantitative, detailed and
precise, and qualitative, general or performance based), cert. denied, 108 S. Ct. 2896 (1988);
Monitor Plastics Co., ASBCA 1447, 72-2 B.C.A. (CCH) 9626 (1972) (noting that contractor
is given discretion and election as to how to meet contractual obligations under performance
contracts).
103. SeeJ.L Simmons Co., 412 F.2d at 1362.
104. See Stuyvesant Dredging Co. v. United States, 834 F.2d 1576, 1582 (Fed. Cir. 1987);
J.L Simmons Co., 412 F.2d at 1373-74; Monitor Plastics Co., ASBCA 1447, 72-2 B.C.A. (CCH)
9626 (1972); see also Spearin v. United States, 248 U.S. 132, 137-38 (1918) (identifying implied warranty existed in government supplied design specifications); Patten, The Implied Warranty That Attaches to Government Furnished Design Specifications, 31 FED. B.J. 291, 306-07 (1972)
(identifying government mandates performance as underlying rationale for implied warranty
to design specifications).
105. See Stuyvesant DredgingCo., 834 F.2d at 1582;J.L. Simmons Co., 412 F.2d at 1362; Monitor Plastics Co., ASBCA 1447, 72-2 B.C.A. (CCH) 9626 (1972).
106. See Helene Curtis Indus. v. United States, 312 F.2d 774, 777 (Ct. Cl. 1963) (holding
that contractor is liable under performance specifications if government made no representations, had no duty to disclose information, and did not improperly interfere with performance); Trevino v. General Dynamics Corp., 626 F. Supp. 1330, 1335-36 (E.D. Tex. 1986)
(finding that specifications were performance type and contractor held liable for defective
design), aff'd, 865 F.2d 1474 (5th Cir. 1989); Remco Hydraulics, Inc. v. United States, 209 Ct.
Cl. 717, 718 (1976) (holding that government did not assume responsibility for recommending gauge design and subsequent performance).
107. See Shaw v. Grumman Aerospace Corp., 778 F.2d 736, 745 (1 lth Cir. 1985) (discussing standard which measures responsibility for design judgments and extent of contractor
involvement), cert. denied, 108 S. Ct. 2896 (1988).
In government contracts law, the Court of Claims had established parameters for determining the contractual responsibility for design and performance specifications. The specifica-
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trol test" to determine a government contractor's contractual
tions were either government drafted specifications, proposed contractor specifications that
were incorporated into the government contract, or government specifications drafted in reliance on contractor technical information. See Bethlehem Corp. v. United States, 462 F.2d
1400, 1404 (Ct. Cl. 1972) (per curiam) (finding that contractor assumed risk of non-performance even though government drafted specifications, because government drafted those specifications in reliance upon extensive information provided by contractor); Hol-Gar Mfg. Corp.
v. United States, 360 F.2d 634, 638 (Ct. Cl. 1966) (holding that when government provides
defective design specifications, contractor is entitled to equitable adjustment for efforts to
comply with defective specifications); Austin Co. v. United States, 314 F.2d 518, 520-21 (Ct.
Cl. 1963) (holding that contractor who voluntarily drafted specifications that were incorporated into government contract was not entitled to equitable adjustment), cert. denied, 375 U.S.
830 (1963).
For example, in Hol-Gar Mfg. Corp. v. United States, 360 F.2d 634 (Ct. Cl. 1966), the
Court of Claims held that Hol-Gar was entitled to recover for damages under a breach of
warranty claim for amounts expended in its attempts to comply with government furnished
defective specifications. Hol-Gar Mfg. Corp., 360 F.2d at 638. The court found that the Air
Force had drafted and provided detailed specifications for electric generators that Hol-Gar
was to assemble. Id. Hol-Gar built the generators according to the government specifications
but it could not meet the Air Force stated performance requirements because the government
specifications were defective. Id. HoI-Gar then sued in Claims Court after the contracting
officer and the Armed Services Board of Contract Appeals denied Hol-Gar's claims for the
added costs that were necessary to comply with the alterations in the Air Force's defective
design specifications for the electric generators. Id. at 635.
Hol-Gar prevailed on a breach of implied warranty theory entitling a plaintiff damages
equal to the amount expended for its attempts to comply with the defective government design specifications. Id. at 638. The Court of Claims found that Hol-Gar assembled the generator sets adhering to the government specifications, but the assembled generators could not
meet the desired government performance requirements. Id. The court concluded that the
government was completely responsible for the defective design specifications, and therefore,
Hol-Gar was able to recover for damages under a breach of implied warranty theory. Id.
Thus, Hol-Gar provides a clear example of how the nature and degree of the government
contractor's involvement in the specification process can affect its liability.
In Austin Co. v. United States, 314 F.2d 518 (Ct. Cl. 1963), the Court of Claims held that
the Austin Company, which voluntarily prepared specifications for a digital data recording
and transcribing system that was ultimately incorporated into the government contract, was
not entitled to recover for amounts expended in its attempts to comply with the design specifications. Id. at 521. After reviewing the government's proposed design specifications for a
system that had never been previously manufactured or developed, the Austin Company concluded that the system could not be manufactured with the required precision needed to conform to the government performance requirements. Id. at 518. The Austin Company then
submitted a technical proposal modifying the government specifications, which were subsequently incorporated into the specifications of the contract. Id. at 519. The Austin Company
later discovered that it was impossible to manufacture the digital data recording and transcribing system because of a phenomenon called "jitter." Id. at 519.
The relevant issue before the Court of Claims was whether the Austin Company was entitled to recover the added costs it incurred in its effort to manufacture the recording and
transcribing system. Id. The court found that the Austin Company failed to perform because
it had designed a system that it could not successfully manufacture. Id. at 520-21. The Austin
Company claimed the "jitter" phenomenon was beyond the control or fault of Austin Company, and, therefore, the Austin Company should recover under the exculpatory clause of the
contract. Id. at 519. The court held that because the Austin Company had substituted its
specifications for those of the government, the Austin Company had fully assumed the risks of
impossibility of performance and was bound by specifications of its own making. Id. at 52021. Accordingly, the court followed the line of cases holding liable a contractor who exercised
discretion in achieving the government's design, engineering, or performance requirements.
Id.
In Bethlehem Corp. v. United States, 462 F.2d 1400 (Ct. Cl. 1972), the Court of Claims
examined the question of who was liable for government specifications that were drafted in
reliance on contractor provided technical information. The Department of the Army's Cold
1990]
BOYLE V. UNITED TECHNOLOGIES CORP.
409
liability. l0 8 The analytic framework of the design and control test
requires the court to first determine whether the contract is either a
0 9
design specification or a performance specification contract.1 The
second prong requires the court to then determine who was responsible for the specifications." 0 The risk of loss falls on the responsible party."'
Because the government contract is the basis of a contractor's liability for the defective design of a product," 2 under state products
liability law, the government contractor could be held liable for any
damages arising out of the design specifications of the government
contract, regardless of the nature of the contractor's involvement in
the specification process." 3 State courts have held private contractors liable for defective designs that created an unreasonable risk,
notwithstanding the fact that the product was meticulously made according to detailed plans and specifications.1 4 A government contractor, however, may be able to defeat liability by virtue of his
Regions Research and Engineering Laboratories ("Laboratory") contacted Bethlehem Corporation, along with other manufacturers, to determine what equipment might be available to
simulate certain environmental conditions. Id. at 1401. After learning that no shelf items
entirely met the Laboratory's needs, the Laboratory sent out questionnaire forms showing the
type of environmental test chamber it needed and the performance requirements it desired.
Id. Bethlehem Corporation responded to the questionnaire form, as well as to the numerous
telephone calls from the Laboratory requesting additional information. Id. The Laboratory
then prepared the specifications for an environmental test chamber based on the information
received from Bethlehem Corporation. Id. at 1402. Bethlehem Corporation was awarded the
contract but could not meet all the performance specifications, and it subsequently filed for a
termination of the contract under impossibility of performance. Id.
The Court of Claims rejected Bethlehem Corporation's argument that the contract as written was impossible to perform within the known state of art. Id. at 1403. The court upheld
the Armed Services Board of Contract Appeals finding that the Laboratory prepared the specifications after Bethlehem Corporation represented that the performance requirements could
be met. Id. Under such circumstances, Bethlehem Corporation could not argue that the contract was impossible to perform, and, therefore, Bethlehem Corporation assumed the risk of
non-performance. Id.
These three cases illustrate the parameters for determining the party contractually responsible for design or performance specifications. Because government contractor tort liability
arises out of the performance of a government contract, these contractual obligations and the
nature and degree of a government contractor's involvement in the specification process also
provide the analytic framework for government contractor tort liability.
108. See Tibshraeny Bros. Constr. v. United States, 6 Cl. Ct. 463, 467-68 (1984) (identifying two-pronged test to determine liability of parties in dispute over time delays and extra
costs because of failure to provide complete and accurate electrical control drawings).
109. Id. at 467.
110. Id.
111.
Id.-at468.
112. See supra notes 100-08 and accompanying text (discussing government contractor's
basis for contract and tort liability).
113. See O'Brien v. Muskin Corp., 94 NJ. 169, 181,463 A.2d 298, 304 (1983) (observing
that policy judgment is standard to measure product defect, not manufacturer's standard).
114. See id. at 180, 463 A.2d at 304 (determining that under strict liability, design defects
should be measured against policy standard); Robinson v. Package Mach. Co., 49 N.Y.2d 471,
480, 426 N.Y.S.2d 717, 720, 403 N.E.2d 440, 443 (1980) (finding manufacturer liable if product poses unreasonable risk of harm even if meticulously made); see also Annotation, Products
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contract with the government and defend under the contract specification defense, government agency defense, or government contractor defense. 11
5
2. Government contractordefenses to liability
Historically, government contractors who have strictly complied
with government design specifications have been able to plead three
types of defenses to liability for any damages arising from such specifications: the contract specifications defense, 1 6 the government
agency defense,1 17 and the government contractor defense.", In
general, the justification for each of the defenses focused on the
type of relationship between the parties and the extent of the contractor's involvement in the specification process.1 1 9 For example,
the contract specification defense is based on ordinary negligence
principles arising out of strict compliance with the government contract specifications, 20 whereas the grounds for the government
agency defense are based on whether there exists a principal and
12
agent relationship between the government and the contractor. '
Finally, the justification for the government contractor defense is
122
based on shared immunity and public policy interests.
Liability: Modern Cases Determining Whether Product is Defectively Designed, 96 A.L.R.3d 22 (1979)
(presenting overview of cases holding that product is defectively designed).
115. See infra notes 123-92 and accompanying text (analyzing three available government
contractor's defenses).
116. See United States v. Spearin, 248 U.S. 132, 136 (1918); J.S. Casement & Co. v.
Brown, 148 U.S. 615, 623 (1892); Robbins v. City of Chicago, 71 U.S. (4 Wall.) 657, 678-79
(1866); Challoner v. Day & Zimmermann Inc., 512 F.2d 77, 82 (5th Cir. 1975), vacated and
remanded on choice of law grounds, 423 U.S. 3 (1975) (per curiam); Littlehale v. E.I. du Pont de
Nemours & Co., 268 F. Supp. 791, 802-03 (S.D.N.Y. 1966), aft'd, 380 F.2d 274 (2d Cir. 1966)
(per curiam); Ryan v. Feeney & Sheehan Bldg. Co., 239 N.Y. 43, 43-44, 154 N.E. 321, 321-22
(1924).
117. See Yearsley v. W.A. Ross Constr. Co., 309 U.S. 18, 21 (1940); Shaw v. Grumman
Aerospace Corp., 778 F.2d 736, 739 (11th Cir. 1985), cert. denied, 108 S. Ct. 2896 (1988);
Green v. ICI Am., Inc., 362 F. Supp. 1263, 1266 (E.D. Tenn. 1973).
118. See Shaw v. Grumman Aerospace Corp., 778 F.2d 736, 740-43 (11th Cir. 1985), cert.
denied, 108 S. Ct. 2896 (1988); Bynum v. FMC Corp., 770 F.2d 556, 565-66 (5th Cir. 1985);
McKay v. Rockwell Int'l Corp., 704 F.2d 444, 448-50 (9th Cir. 1983), cert. denied, 464 U.S.
1043 (1984); In re "Agent Orange" Prod. Liab. Lit., 534 F. Supp. 1046, 1054-55 (E.D.N.Y.
1982), cert. deniedsub nom. Diamond Shamrock Chem. Co. v. Ryan, 465 U.S. 1067 (1984); hI re
"Agent Orange" Prod. Liab. Lit., 506 F. Supp. 762, 770-71 (E.D.N.Y. 1980), rev'd on other
grounds, 635 F.2d 987 (2d Cir. 1980), cert. deniedsub nom. Chapman v. Dow Chem. Co., 454 U.S.
1128 (1981).
119. See infra notes 123-92 and accompanying text (discussing justification for contract
specification, government agency, and government contractor defenses).
120. See infra notes 123-28 and accompanying text (discussing underlying rationale for
contract specification defense).
121. See infra notes 129-46 and accompanying text (discussing underlying rationale for
government agency defense).
122. See infra notes 148-92 and accompanying text (discussing underlying rationale for
government contractor defense).
1990]
a.
BOYLE V. UNITED TECHNOLOGIES CORP.
411
Contract specifications defense
The first defense available to a government contractor is the contract specification defense. This defense applies to products manufactured to the order and specification of either a government or
private contract.1 23 Based on ordinary negligence principles, courts
have held that a contractor would not be liable for any damages,
direct or consequential, that result from an employer's specifications, unless those specifications were so obviously defective and
dangerous that a reasonable contractor would be put on notice that
the work was dangerous and likely to cause injury. 124 The Supreme
Court in Spearin v. United States 125 applied this common law standard
of conduct to federal procurement contracts.1 26 The Court held
that when the government provides plans and specifications that are
to be explicitly followed, the government warrants that the design
specifications would produce satisfactory results, thus absolving a
contractor from liability for defective specifications.1 2 7 Typically,
the contract specification defense was applied to public works contracts.' 28 The Supreme Court also addressed the scope of the con123. See Bynum v. FMC Corp., 770 F.2d 556, 563 (5th Cir. 1985) (noting that contract
specification defense was standard of conduct applicable to either government or private contracts); Johnston v. United States, 568 F. Supp. 351, 354 (D. Kan. 1983) (identifying that
contract specification defense was based on negligence standards). For cases involving the
contract specifications defense in the context of public works, see Merritt, Chapman & Scott
Corp. v. Guy F. Atkinson Co., 295 F.2d 14 (9th Cir. 1961) (discussing cofferdam construction); Salliotte v. King Bridge Co., 122 F. 378 (6th Cir. 1903) (noting bridge construction),
cert. denied, 191 U.S. 569 (1903); Dolphin Gardens, Inc. v. United States, 243 F. Supp. 824 (D.
Conn. 1965) (describing dredging).
For cases involving contract specifications defense in the context of defective manufacture,
see McGonigal v. Gearhart Indus., 851 F.2d 774, 777 (5th Cir. 1988) (holding that government contractor defense does not apply in mismanufactured military equipment); Foster v.
Day & Zimmermann, Inc., 502 F.2d 867, 873-74 (8th Cir. 1974) (finding that negligent manufacture of grenade does not entitle contractor to benefit of governmental immunity); Green v.
ICI Am., Inc., 362 F. Supp. 1263, 1267 (E.D. Tenn. 1973) (applying Tennessee law to find
operator of TNT plant for U.S. Army entitled to share in sovereign immunity of United States
because Army exercised high degree of control and supervision over TNT plant).
124. See United States v. Spearin, 248 U.S. 132, 136 (1918); Bynum v. FMC Corp., 770
F.2d 556, 563 (5th Cir. 1985); Ryan v. Feeney & Sheehan Bldg. Co., 239 N.Y. 43, 46, 145 N.E.
321, 321-22 (1924); see also RESTATEMENT (SECOND) OF TORTS § 404 comment a (1965) (commenting that contractor not subject to liability if specified design is insufficient to make product safe). This defense was based on the presumption that a contractor will lack the expertise
to evaluate the specifications, and, therefore, will not be held to the higher standard of care
required for a designer. Johnston v. United States, 568 F. Supp. 351, 354 (D. Kan. 1983).
125. 248 U.S. 132 (1918).
126. Spearin v. United States, 248 U.S. 132, 136-37 (1918).
127. Id.; see Utility Contractors, Inc. v. United States, 8 Cl. Ct. 42, 49 (1985) (noting that
in design specifications, absent any contract provisions, government implicitly warrants that
satisfactory performance will result), aff'd without opinion, 790 F.2d 90 (Fed. Cir.), cert. denied,
479 U.S. 827 (1986).
128. See supra note 123 (citing public works cases where contract specification defense was
applied).
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tract specification defense in Yearsley v. WA. Ross Construction Co., 12 9
which many courts and commentators have recognized as the origin
of the government contractor defense.' 3 0
b.
Government agency defense: Yearsley rationale
The second defense available to government contractors is the
government agency defense, or Yearsley defense. The Supreme
Court articulated the rationale for this defense in Yearsley v. WA.
Ross Construction Co., 131 which held that a contractor is shielded from
liability when the contractor acts pursuant to the authority and direction of the federal government. 3 2 This case arose when a contractor, acting under an Act of Congress and under the supervision
of the United States Chief Engineer, used large paddle boats to
build two dikes in order to produce artificial erosion to improve navigation of the Missouri River.' 3 3 The dikes and the paddle boats
diverted the river channel and ultimately eroded a private land34
owner's ninety-five acres of land.
Yearsley alleged a fifth amendment taking of his property. 3 5 The
Court stated that if a fifth amendment taking had occurred, the gov36
ernment should be liable for its decision to divert the river.'
Moreover, the Court held that unless the contractor exceeded his
authority or that the authority was not validly conferred, there were
no grounds for holding the government's agent liable for simply
37
carrying out the government's request.'
The Court in Yearsley enunciated and broadened the contract
specification principles relating to a government contractor's liability in the context of government public works law. First, the Court
129. 309 U.S. 18 (1940).
130. See Bynum v. FMC Corp., 770 F.2d 556, 564 (5th Cir. 1985); McKay v. Rockwell Int'l
Corp., 704 F.2d 444, 448 (9th Cir. 1983), cert. denied, 464 U.S. 1043 (1984). But see Shaw v.
Grumman Aerospace Corp., 778 F.2d 736, 739-40 (11 th Cir. 1985) (finding that military government contractor defense is compelled because of separation of powers between judiciary
and executive branches, and that term "government agency defense" better described Yearsley
rationale); Koutsoubos v. Boeing Vertol, 553 F. Supp. 340, 341 (E.D. Pa. 1982) (recognizing
Yearsley rationale "to shield government contractors from liability when they complied with
government specifications"), aff'd, 755 F.2d 352 (3d Cir. 1985), cert. denied, 474 U.S. 821
(1985). See generally Ausness, Surrogate Immunity: The Government Contract Defense and Products
Liability, 47 Onio ST. LJ. 985, 994 (1986) (recognizing Yearsley as allowing government to
carry out essential functions and providing origin of modern defense); Note, Liability ofa Alanufacturerfor Products Defectively Designed by the Government, 23 B.C.L. REv. 1025, 1049-55 (1982)
(recognizing Yearsley as form of immunity for federal contractors).
131. 309 U.S. 18 (1940).
132. Yearsley v. W.A. Ross Constr. Co., 309 U.S. 18, 20 (1940).
133. Id. at 19.
134. Id. at 20.
135. Id.
136. Id. at 22.
137. Id. at 20-21.
1990]
BOYLE V. UNITED TECHNOLOGIES CORP.
413
stated that a contractor is not liable for any incidental injury or dam138
age resulting from the performance of a government contract.
This principle, however, is subject to the rule that a contractor is
liable for damages to a third party if the contractor was negligent in
performing the contract. 3 9 Second, the Court stated that a contractor is not liable for damages arising out of the work performed if the
contractor is deemed to be an agent or officer of the federal government.1 40 The Supreme Court, however, has concluded that at least
in tax immunity cases, sharing in the government's immunity is only
appropriate when the United States, an agency, or an instrumentality is so closely connected to the contractor that the two cannot real4
istically be viewed as separate entities.' '
138. Id. See generally Annotation, Right of Contractorwith Federal, State, or Local Public Body to
Latter's Immunity from Tort Liability, 9 A.L.R.3d 382 (1966) (comparing state and federal cases
entitling public contractors to share in governmental immunity in public works context).
The Yearsley rationale also represented the Court's formulation that in cases where the government is involved as a party in interest, the plaintiffs must select orjoinder the appropriate
party. See FED. R. Civ. P. 19. In Yearsley, the real party in interest was the federal government.
Yearsley v. W.A. Ross Constr. Co., 309 U.S. 18, 21 (1940). The Court never used the term
"immunity" in the decision because the case involved jurisdictional questions, not questions
of substantive tort law. The Court's fifth amendment analysis substantiates this position. Id.
at 22.
139. SeeJ.S. Casement & Co. v. Brown, 148 U.S. 615, 622 (1893); Robbins v. Chicago, 71
U.S. (4 Wall.) 657, 679 (1866); Merritt, Chapman & Scott Corp. v. Guy F. Atkinson Co., 295
F.2d 14, 16 (9th Cir. 1961); Gulf Refining Co. v. Mark C. Walker & Son Co., 124 F.2d 420,
427 (6th Cir. 1942), cert. denied, 316 U.S. 682 (1942);Johnston v. United States, 568 F. Supp.
351, 356 (D. Kan. 1983); see also Converse v. Portsmouth Cotton Oil Ref. Corp., 281 F. 981,
987 (4th Cir. 1922) (holding contractor cannot escape liability to third party when performance was negligent), cert. denied, 260 U.S. 724 (1922); Western Contracting v. Titter, 255 Md.
581, 589-90, 258 A.2d 600, 605 (1969) (upholding general principle that contractors are liable for negligence in execution of government contract); Valley Forge Gardens v. James D.
Morrissey, Inc., 385 Pa. 477, 123 A.2d 888, 891 (1956) (affirming principle that sovereign
immunity does not extend to private contractors performing work for state, but that contractors' non-liability is based on privity in contract with state or its instrumentality and absence
of negligence or willful tort).
140. Yearsley v. W.A. Ross Constr. Co., 309 U.S. 18, 20-21 (1940). This requirement that
a non-governmental entity be deemed a government agent or officer was made a part of the
FTCA, Pub. L. No. 89-506, § 8, 80 Stat. 307 (1966) (codified and amended at 28 U.S.C.
§ 2671 (1989)). Further, the Code defines "federal agency" to include the executive departments, the military departments, independent establishments of the United States, and corporations primarily acting as instrumentalities of the United States, but does not include any
contractor with the United States. Id. The Yearsley rationale, therefore, must be examined in
light of legislation which authorizes what types of individuals or entities share in the government's immunities. Private contractors are excluded, but Congress did note that those persons acting on behalf of a federal agency in an official capacity, whether temporarily or
permanently in the service of the United States, are to be included. Id. A non-governmental
individual or entity, therefore, must have a validly conferred statutory authority to be acting
on behalf of the government in order to obtain immunity. See supra note 47 and accompanying text (discussing how immunity defense can be applied to non-governmental entities).
141. See United States v. New Mexico, 455 U.S. 720, 740-41 (1982) (noting that professional interests between contractors and government are not complete because relationship
has been created for limited and carefully defined purposes). In New Mexico, the Supreme
Court analyzed the contractual relationship between the federal government and its contractors with respect to state taxation of federal contractors and contractors' immunity from taxation. Id. at 733. The contractors sought tax immunity from New Mexico's gross receipts and
414
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The viability of the government agency defense beyond the public
works context became somewhat tenuous as courts recognized the
difficulty in establishing a government-agent relationship 142 or altogether declined to consider a Yearsley defense rationale. 143 Since
Justice Traynor's introduction of strict liability in 1962 in Greenman
v. Yuba Power Products, Inc., 14 4 some courts have held that in design
defect cases, the contract specifications defense and government
agency defense do not protect the government contractor from liability.' 45 These strict products liability cases focused on the defeccompensating tax and argued they were government "procurement agents," and therefore,
the state could not impose the tax. Id. at 726-27. The Court rejected the contractors' argument that they were government procurement agents, noting that prior to 1977, the government's contract did not refer to the contractors as federal agents. id. at 726. Moreover, the
Court found that the subsequent amendments to the contract, which was modified to read
that the contractor "acts as an agent," added nothing of substance to the agreement and was
done two years after the commencement of the litigation. Id. at 727.
The Court reiterated several principles concerning the contractual relationship between the
government and the private contractor. First, in order to acquire tax immunity status, the
contractor's relationship must be incorporated into the government structure in order to
make it a government instrumentality. Id. at 736 (citing United States v. Boyd, 378 U.S. 39,
48 (1964)). Second, tax immunity status is not dependent upon an agency relationship with
the federal government. Id. at 733 (citingJames v. Dravo Contracting Co., 302 U.S. 134, 154
(1937)). Third, immunity may not be conferred simply because the tax has an effect on the
United States, and the Court regarded as constitutionally irrelevant that the United States
would have to reimburse all the contractor's expenditures. Id. at 734 (citing Alabama v. King
& Boozer, 314 U.S. 1, 9 (1941)). Finally, the Court concluded that the only circumstance
where tax immunity is appropriate occurs when the tax directly burdens the United States, an
agency, or an instrumentality so closely connected that the two cannot realistically be viewed
as separate entities. Id. at 735. Thus, the contractor "must stand in the Government's
shoes." Id. at 736 (quoting City of Detroit v. Murray Corp., 355 U.S. 489, 503 (1958)); see
Whitaker v. Harvell-Kilgore Corp., 418 F.2d 1010, 1013-14 (5th Cir. 1969) (rejecting contractor's claim to share in government's sovereign immunity because contract had indemnity
agreement and contractor was required to carry liability insurance). But see Green v. ICI Am.,
Inc., 362 F. Supp. 1263, 1267 (E.D. Tenn. 1973) (applying Tennessee law to find United
States Army exercised high degree of control over contractor-operated TNT plant which
under Tennessee law entitled contractor to share in sovereign immunity of United States).
The principles and standards relating to government contractor tax immunity should equally
apply to all types of derivative immunity defenses.
142. Bynum v. FMC Corp., 770 F.2d 556, 564 (5th Cir. 1985).
143. Shaw v. Grumman Aerospace Corp., 778 F.2d 736, 740 (11th Cir. 1985), cert. denied,
108 S. Ct. 2896 (1988).
144. 59 Cal. 2d 57, 27 Cal. Rptr. 697, 377 P.2d 897 (1962). In this landmark decision, the
California Supreme Court eliminated the requirement that an injured party prove manufacturer's or seller's negligence in a products liability action. Greenman v. Yuba Power Prod.,
Inc., 59 Cal. 2d 57, 61, 27 Cal. Rptr. 697, 701, 377 P.2d 897, 901 (1962). The court pronounced that strict liability does not turn upon whether a manufacturer or seller was negligent, but whether the product was unreasonably dangerous to the user or consumer. Id., 27
Cal. Rptr. at 700, 377 P.2d at 900.
145. See Challoner v. Day & Zimmermann, Inc., 512 F.2d 77, 82 (5th Cir.) (noting that
strict liability cases do not require proof of negligence of manufacturer but only require that
product be defective), vacated on choice of law grounds, 423 U.S. 3 (1975); Lenherr v. NRM
Corp., 504 F. Supp. 165, 175 (D. Kan. 1980) (applying Kansas law and observing that manufacturer liable under theory of strict liability even though employer designed defective
machine); see also Bynum, 770 F.2d at 563 (commenting that courts are divided on whether
common law standard of liability, which is based upon negligence, provides protection in
strict liability suits).
1990]
BOYLE V. UNITED TECHNOLOGIES CORP.
415
tive product's design and not on the culpability or negligence of the
contractor or manufacturer. 146 The gravamen of a cause of action
in strict liability, therefore, is the safety of the product, not the conduct of the seller. Subsequently, government contractors searched
for an underlying principle that would afford them substantial protection, which is found in the modem government contractor
147
defense.
c.
Government contractordefense
The government contractor defense, unlike the contract specification defense, is not based on ordinary negligence principles but on
an extension of the government's sovereign immunity defense.' 4 8
Developed out of the principles enunciated in Yearsley, courts have
held the defense to be a complete bar to any products liability claim
based in negligence, breach of warranty, or strict liability in tort.149
Courts have recognized that if a contractor manufactures a product
according to the government's specifications, that contractor should
be entitled to share in the government's sovereign immunity defense and thus be protected to the same extent that the government
would have been protected had it manufactured the product itself.' 5 0 Courts have reasoned that when a contractor acts under the
authority and direction of the goverment, it shares in the government's immunity.'l 5 Public policy considerations have been the
146. See supra notes 2-3 and accompanying text (discussing differences between negligence and strict liability cases).
147. Bynum, 770 F.2d at 564-67.
148. See Burgess v. Colorado Serum Co., 772 F.2d 844, 846 (1 1th Cir.) (applying Alabama
law and commenting that government contractor defense is extension of sovereign immunity
and should not be limited to military contracts), reh'g denied, 772 F.2d 844 (11 th Cir. 1985);
Zinck v. ITT Corp., 690 F. Supp. 1331, 1333 (S.D.N.Y. 1988) (noting defense grew out of
historic principle of sovereign immunity) (citing Yearsley v. W.A. Ross Constr. Co., 309 U.S.
18 (1940)); Ramey v. Martin-Baker Aircraft Co., 656 F. Supp. 984, 987 (D. Md. 1987) (noting
that government contractor defense is founded on sovereign immunity); Johnston v. United
States, 568 F. Supp. 351, 356 (D. Kan. 1983) (characterizing government contractor defense
as sharing government's immunity). Some courts have also characterized the government
contractor defense as an amalgamation of two traditional defenses, the contract specification
and Yearsley defenses. Bynum v. FMC Corp., 770 F.2d 556, 561 (5th Cir. 1985). But see Shaw
v. Grumman Aerospace Corp., 778 F.2d 736, 739-41 (1Ith Cir. 1985) (identifying contract
specifications defense and government agency defense), cert. denied, 108 S. Ct. 2896 (1988).
149. See McKay v. Rockwell Int'l, 704 F.2d 444,451 (9th Cir. 1983); In re "Agent Orange,"
534 F. Supp. 1046, 1055-66 (E.D.N.Y. 1982), cert. denied sub nom. Diamond Shamrock Chem.
Co. v. Ryan, 465 U.S. 1067 (1984).
150. Burgess, 772 F.2d at 846; Ramey, 656 F. Supp. at 987;Johnston, 568 F. Supp. at 356.
Some courts have required that the government should be immune from liability before a
contractor can raise the defense. See McKay, 704 F.2d at 451 (requiring government to be
immune under Feres-Stenceldoctrine); Bynum, 770 F.2d at 567 (adopting McKay test); Trevino
v. General Dynamics, 626 F. Supp. 1330, 1334-35 (E.D. Tex. 1986) (interpreting McKay formulation), aft'd, 865 F.2d 1474 (5th Cir. 1989).
151. See supra notes 129-46 and accompanying text (discussing 1earsley defense and its
application to government contractors).
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[Vol. 39:391
court's primary justification for extending the government's sovereign immunity defense to the government contractor. 152 For example, some courts have stated that the purpose of the defense is
to impose liability on the proper party and to prevent the increase in
contractor's risk of loss from being passed to the government, which
would defeat the purpose of governmental immunity.' 5 3 Other
courts have concluded that the defense is necessary to the smooth
and predictable
operation
of government
procurement
5 4
programs. 1
Only a few courts have specifically addressed the issue of whether
a government contractor is able to share in the government's immunity. 15 5 In Foster v. Day & Zimmermann, Inc., 15 6 the United States
Court of Appeals for the Eighth Circuit held that the doctrine of
sovereign immunity may not be extended to cover the fault of a private corporation in cases involving strict liability.' 5 7 Although the
152. See Tozer v. LTV Corp., 792 F.2d 403, 405 (4th Cir. 1986) (identifying public policy
interest as protecting separation of powers and safeguarding military procurement process
from state interference), cert. denied, 108 S. Ct. 2897 (1989); Shaw v. Grumman Aerospace
Corp., 778 F.2d 736, 743 (11th Cir. 1985) (identifying public policy interest as separation of
powers and judicial deference to executive), cert. denied, 108 S. Ct. 2896 (1988); Koutsoubos v.
Boeing Vertol, 755 F.2d 352, 354-55 (3d Cir. 1985) (protecting government's immunity interest expressed in "Agent Orange" doctrine as public policy interest), cert. denied, 474 U.S. 821
(1985); McKay v. Rockwell Int'l Corp., 704 F.2d 444, 449 (9th Cir. 1983) (supporting FeresStencel doctrine as policy reason behind government's immunity interest); cert. denied, 464 U.S.
1043 (1984); In re "Agent Orange" Prod. Liab. Litig., 534 F. Supp. 1046, 1055 (E.D.N.Y.
1982) (identifying public policy interest as protecting government's ability to decide on needs
and specifications for military weaponry).
In formulating the defense, the courts have generally agreed that the contractor was required to prove that the government established the specifications for the product and that
the product conformed to those specifications. Additionally, courts have required the government contractor to prove it had warned the United States about dangers in use of equipment
known to the contractor but not the government. Compare In re "Agent Orange" Prod. Liab.
Litig., 534 F. Supp. 1046, 1055 (E.D.N.Y. 1982) (listing three criteria for judgment dismissing
all government contractor claims) with McKay v. Rockwell Int'l Corp., 704 F.2d 444, 451 (9th
Cir. 1983) (adding requirement that government is immune under Feres-Stencel doctrine to
"Agent Orange" criteria), cert. denied, 464 U.S. 1043 (1984).
153. Yearsley v. W.A. Ross Constr. Co., 309 U.S. 18, 22 (1940); McKay v. Rockwell Int'l
Corp., 704 F.2d 444, 449 (9th Cir. 1983); In re "Agent Orange" Prod. Liab. Litig., 506 F.
Supp. 762, 792 (E.D.N.Y. 1980); see also Dolphin Gardens, Inc. v. United States, 243 F. Supp.
824, 827 (D. Conn. 1965) (noting that decision to pile odorous dredgings rested with government and contractor was not liable for government failing to provide safeguard against escaping fumes).
154. See Shaw v. Grumman Aerospace Corp., 778 F.2d 736, 743 (11 th Cir. 1985); Brown
v. Caterpillar Tractor Co., 696 F.2d 246, 250 (3d Cir. 1982); In re "Agent Orange" Prod.
Litig., 534 F. Supp. 1046, 1054 (E.D.N.Y. 1982).
155. Compare Foster v. Day & Zimmermann, Inc., 502 F.2d 867, 873-74 (8th Cir. 1974)
(holding that doctrine of sovereign immunity may not be extended to cover fault of private
corporation) with Green v. ICI Am., Inc., 362 F. Supp. 1263, 1267 (E.D. Tenn. 1973) (applying Tennessee law and holding that contractor was entitled under Tennessee law to share in
government's sovereign immunity).
156. 502 F.2d 867 (8th Cir. 1974).
157. Foster v. Day &Zimmermann, Inc., 502 F.2d 867, 874 (8th Cir. 1974) (citing Whitaker v. Harvell-Kilgore Corp., 418 F.2d 1010 (5th Cir. 1969)). Fosterarose when a hand gre-
1990]
BOYLE V. UNITED TECHNOLOGIES CORP.
417
court held that the government's sovereign immunity defense does
not extend to government contractors, this decision can be distinguished as a case involving defective manufacturing rather than defective design.1 58
In another case, Green v. ICI America, Inc., 15 9 the court held that
under Tennessee law, the contractor was entitled to claim immunity
from sUit 1 60 as long as it was not negligent in the performance of the
public authority's order. 16 1 Again, this case is easily distinguishable
because the underlying legal theory is based upon contract specifications, not upon a performance specification contract involving
design.'
62
As is evident in many of the previously mentioned cases, the
courts have been imprecise concerning the scope and nature of the
government contractor defense with regard to design and performance specifications.' 6 3 Courts have consistently held in government
design specification cases that the government bears the risk of loss
associated with the designs. 164 For example, in Merritt, Chapman &
Scott Corp. v. Guy F. Atkinson Co., 1 6 5 the Fifth Circuit held that plain-
tiffs seeking recovery for damages must look to the government for
relief, provided that the contractor was not negligent in the performance of the contract. 66 In Merritt, the court examined Merritt's
''government contract defense" and found that the contractor was
liable because the contract specifications were found to be performance specifications.' 67 As with all performance specifications, the
68
risk of loss falls on the contractor.
Recently, however, the government contractor defense has been
nade prematurely exploded in plaintiff's hand at the Fort Benning training facility. Id. at 869.
Plaintiff sued in strict liability and was awarded damages. Id. The Eighth Circuit noted that
the government's specifications did not call for the defendant to make defective hand grenades. Id. at 874 n.5.
158. Id. at 874.
159. 362 F. Supp. 1263 (E.D. Tenn. 1973).
160. Green v. ICI Am., Inc., 362 F. Supp. 1263, 1266-67 (E.D. Tenn. 1973).
161. Id.
162. See id. at 1264 (identifying immunity for contractor who non-negligently performs
design contract according to government specifications).
163. See Shaw v. Grumman Aerospace Corp., 778 F.2d 736, 745-46 (requiring contractor
to demonstrate it did not prepare specifications); In re "Agent Orange," 534 F. Supp. 1046,
1056 (E.D.N.Y. 1982) (stating that if contract requirements were performance specifications
rather than design, government contract defense would be far more restrictive in
formulation).
164. See supra note 104 and accompanying text (discussing design specification liability).
165. 295 F.2d 14 (9th Cir. 1961).
166. Merritt, Chapman & Scott Corp. v. Guy F. Atkinson Co., 295 F.2d 14, 16 (9th Cir.
1961).
167. Id. at 15.
168. See supra notes 100-05 and accompanying text (discussing liability for design and performance specifications).
418
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[Vol. 39:391
widely used in cases involving the manufacturing and designing of
government military equipment.1 69 The courts have enunciated two
analytically distinct yet congruent rationales for the government
contractor defense in the military procurement context. Although
the majority of courts agree that the government contractor defense
is an extension of the government's sovereign immunity defense explicated in the Feres-Stencel doctrine, 70 other courts have based the
defense on broad public policy interests pertaining to the separation
of powers doctrine. 17 1 In the seminal case, In re "Agent Orange" Product Liability Litigation,'7 2 Judge Pratt articulated, for the first time,
that public policy considerations compel the government contract
defense. 73 In particular, the court in "Agent Orange" pronounced
that the purpose of the government contractor defense was to permit the government to wage war in whatever manner the government deemed advisable. 174 Considerations of cost, time of
production, risks to participants, risks to third parties, and any other
factors used to determine the applicability of a particular weapon
75
are uniquely military questions.1
In contrast, the court in McKay v. Rockwell InternationalCorp.176 expressed the view that the public policy rationale supporting a government contractor defense was to prevent the subversion of the
underlying policies of governmental immunity established in the
Feres-Stencel doctrine. 7 7 The court in McKay further noted that be169. For cases involving manufacturing, see McGonigal v. Gearhart Indus., 851 F.2d 774,
777 (5th Cir. 1988) (holding that government contractor defense does not apply in mismanufactured military equipment); Foster v. Day & Zimmerman, Inc., 502 F.2d 867, 873 (8th
Cir. 1974) (finding that negligent manufacture of grenade does not entitle contractor to benefit of governmental immunity); and Green v. ICI Am., Inc., 362 F. Supp. 1263, 1267 (E.D.S.D.
Tenn. 1973) (applying Tennessee law to find that operator of TNT plant for U.S. Army entitled to share in sovereign immunity of United States because Army exercised high degree of
control and supervision over TNT plant).
170. See supra note 148 (citing cases stating sovereign immunity as underlying basis for
defense).
171. See infra note 173 and accompanying text (discussing government contractor defense
in context of military procurement and separation of powers doctrine).
172. 534 F. Supp. 1046 (E.D.N.Y. 1982), cert. denied sub nor. Diamond Shamrock Chem.
Co., 465 U.S. 1067 (1984).
173. In re "Agent Orange" Prod. Liab. Litig., 534 F. Supp. 1046, 1054 n.l (E.D.N.Y.
1982); see Shaw v. Grumman Aerospace Corp., 778 F.2d 736 (11th Cir. 1985), cert. denied, 108
S. Ct. 2896, reh'g denied, 109 S. Ct. 10 (1988); Bynum v. FMC Corp., 770 F.2d 556, 571 (5th
Cir. 1985).
174. In re "Agent Orange", 534 F. Supp. at 1054 n.l.
175. Id.; see Shaw, 778 F.2d at 740-41 (recognizing defense based exclusively on constitutional separation of powers doctrine that compels judiciary to defer to legislative or executive
branch in military matters); Bynum, 770 F.2d at 571 (overriding federal interest is preservation
of exclusive control of military matters from state interference).
176. 704 F.2d 444 (9th Cir. 1983), cert. denied, 464 U.S. 1043 (1984).
177. McKay v. Rockwell Int'l Corp., 704 F.2d 444, 451 (9th Cir. 1983), cerl. denied, 464
U.S. 1043 (1984); see supra notes 88-94 and accompanying text (discussing Feres-Stencel
doctrine).
1990]
BOYLE V. UNITED TECHNOLOGIES CORP.
419
cause the federal government need not indemnify a private contractor for damages paid to military personnel, it would be consistent to
avoid imposing on the contractor liability that should be properly
attributed to the government.1 7 8 The court then formulated the
four elements of the defense which, if proven by the contractor,
would serve to immunize it from liability.1 7 9 The contractor had to
first prove that the government was immune from liability under the
Feres-Stencel doctrine.1 8 0 Second, the contractor had to prove that
the government established or approved reasonably precise specifications.' 8 ' Third, it had to prove that the equipment conformed to
the government's specifications, and finally, that it had warned the
government of patent errors in the specifications or known dangers
involved in the use of the equipment.18 2 Thus, the primary purpose
behind this formulation is to prevent the contractor from being liable when the government is actually at fault but is protected by the
Feres-Stencel doctrine.
The court in Shaw v. Grumman Aerospace Corp. ,183 however, viewed
the government contractor defense more narrowly. 18 4 The court
recognized a "military contractor defense" based exclusively on the
theory of separation of powers. 185 The Shaw formulation focused
on the party responsible for the specifications.1 8 6 The court held
that there were two ways a contractor could escape liability.18 7 First,
if the contractor affirmatively proved that it did not participate or
only minimally participated in the design of the equipment or products, the contractor could escape liability.' 8 8 Second, the contractor
would also not be held liable if it timely warned the military of the
design risks and notified the government of alternative designs yet
was still authorized to proceed with the dangerous design. 189 The
court noted that the overriding objective of the Shaw test is to determine whether or not a military judgment to proceed with the dangerous design was made.19 0 If there was military approval beyond a
178.
179.
180.
McKay, 704 F.2d at 450.
Id. at 451.
Id.
181. Id.
182. Id.
183. 778 F.2d 736 (11 th Cir. 1985).
184. Shaw v. Grumman Aerospace Corp., 778 F.2d 736, 741-42 (11th Cir. 1985), cert.
denied, 108 S. Ct. 2896 (1988).
185. Id. at 743.
186. Id. at 745.
187. Id. at 745-46.
188. Id. at 746.
189. Id.
190. Id.
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[Vol. 39:391
mere "rubber stamp," 19 1 then the contractor is absolved from liability. Conversely, if there was no military approval, then the contractor is subject to the customary strictures of state product liability
law.19 2
II.
FACTS AND HOLDING OF BOYLE V
UNITED TECHNOLOGIES CORP.
In Boyle v. United Technologies Corp.,193 the United States Supreme
Court addressed the issues surrounding government contractor tort
liability. A sharply divided Court ruled five to four that government
contractors are not liable for design defects in military equipment.1 94 Moreover, the Court preempted state law and held that a
contractor is not liable for defective design when the United States
approves reasonably precise specifications and when the equipment
manufactured conforms to those specifications.' 95 To prevent the
contractor from withholding knowledge of risks, the Court further
required the contractor to warn the United States about dangers in
the use of the equipment known to the contractor but not to the
government.' 9 6 The Supreme Court's decision in Boyle failed to address whether a contractor can actually share in the government's
sovereign immunity defense, and thereby marked a significant departure from the Court's treatment of government contractor immunity. The Court's ultimate formulation of the government
contractor defense also abrogated the plenary powers of Congress.
Finally, the Court's government contractor defense applies not only
to military design contracts but also to a host of other federal
97
products. 1
A.
Facts
On April 27, 1983, First Lieutenant David A. Boyle, a United
States Marine helicopter copilot, had taken off from an aircraft carrier as part of a training exercise.' 9 8 Allegedly due to mechanical
failure,' 99 the CH-53D helicopter crashed into the Atlantic Ocean
191. Id.
192. Id.
193. 108 S.Ct. 2510 (1988).
194. Boyle v. United Technologies Corp., 108 S. Ct. 2510, 2518 (1988).
195. Id.
196. Id.
197. See id. at 2516 (recognizing that scope of government contractor immunity cannot be
based on Feres doctrine because it would not prevent civilian claims against government); see
also Burgess v. Colorado Serum Co., 772 F.2d 844, 846 (en banc) (holding that government
contractor defense equally applies to non-military contractors), reh'g denied, 778 F.2d 793
(11th Cir. 1985).
198. Boyle, 108 S. Ct. at 2513.
199. Id.
1990]
BOYLE V. UNITED TECHNOLOGIES CORP.
421
near Virginia Beach, Virginia, with four persons aboard. 20 0 Three
persons escaped from the helicopter without serious injury; Lieutenant Boyle, however, could not open his escape hatch, and subse20 1
quently drowned.
Lieutenant Boyle's father, on behalf of the estate, brought suit in
the United States District Court for the District of Virginia against
the manufacturer of the CH-53D helicopter, the Sikorsky Division of
United Technologies Corporation. 20 2 Boyle's estate alleged negligence and breach of warranty in the design of the CH-53D's egress
20 3
system and in the servicing of the helicopter's control system,
claiming that the design defects and the negligent repair work
caused Lieutenant Boyle's death. 20 4 Sikorsky defended in part by
relying on the military contractor defense, under which Sikorsky was
required to establish that the military approved reasonably detailed
specifications for the design of the allegedly defective weapons
20 5
system.
The district court instructed the jury that Sikorsky would be immune from suit if Sikorsky. proved by a preponderance of the evidence three things. First, Sikorsky must show "that the United
States Navy established or approved the specifications for the copilot egress system." 20 6 Second, Sikorsky must demonstrate that
200. Boyle v. United Technologies Corp., 792 F.2d 413,414 (4th Cir. 1986) (per curiam),
aff'd, 108 S. Ct. 2510 (1988).
201. Boyle, 108 S. Ct. at 2513.
202. Id.
203. Boyle, 792 F.2d at 413-14.
204. Boyle, 108 S.Ct. at 2513. First, in order to open the window emergency exit alongside the copilot's seat, the copilot must turn an escape hatch handle that, in some configurations, may be within four inches of a device called the collective stick. Second, the copilot's
window opened outward after the escape hatch handle was turned. Id. Boyle contended that
the design was defective because it was difficult to open the window after a crash at sea while
the helicopter is sinking because of the water pressure. Id.
205. Boyle v. United Technologies Corp., 792 F.2d 413,414 (4th Cir. 1986) (per curiam),
aff'd, 108 S. Ct. 2510 (1988).
One of Sikorsky's employees provided detailed testimony regarding the pre-manufacturing
procedures for the CH-53D. Brief for the United States as Amicus Curiae Supporting Affirmance at 3, Boyle v. United Technologies Corp., 792 F.2d 413 (4th Cir. 1986) (No. 86-492)
[hereinafter United States Amicus Brief]. The process began inJanuary 1962 when the Navy
issued a performance type specification, which described in general those tasks the Navy
wanted the CH-53 to perform. Id. It also included a request for proposals. Id. at 3-4. In
addition to the performance type specifications, a number of Department of Defense specifications, including specifications issued in 1959 for the design of helicopters, constrained the
contractors in their work building the CH-53. Id. at 4. Following proposal submission, the
Sikorsky Division of the United Aircraft Corporation (now United Technologies Corporation)
obtained the contract to build the CH-53. Id. Following extensive discussions between Sikorsky and Navy employees, the Navy in November 1962, issued detailed specifications for the
CH-53, and, in December 1962, issued demonstration requirements. Id. As part of this process, Sikorsky was required to build a cockpit mock-up, and its configuration was approved.
Id. Sikorsky's cockpit design for the CH-53D version of the helicopter-the version Lieutenant Boyle was flying-was not different from the Navy-approved design. Id.
206. United States Amicus Brief, supra note 205, at 4.
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the helicopter conformed to those specifications. 20 7 Third, Sikorsky
must prove "that the United States Navy knew as much or more
than the defendant about the helicopter's hazards and defendant
did not need to warn the government of the dangers involved in the
use of the equipment." 20 8 The court instructed the jury that it could
also find Sikorsky liable if it concluded that it had negligently serviced the helicopter. 20 9 The jury returned a general verdict finding
Sikorsky liable for $725,000.210 Sikorsky's motion for judgment
notwithstanding the verdict, based upon the military contractor de2 11
fense, was denied.
The United States Court of Appeals for the Fourth Circuit reversed and remanded the case to the district court with directions to
enter judgment for Sikorsky. 2 12 The Fourth Circuit found, as a matter of Virginia law, that there was insufficient evidence to show that
Sikorsky was negligent in servicing the CH-53D helicopter. 21 3 The
court also found, as a matter of federal law, that Sikorsky satisfied
21 4
the requirements of the military contractor defense.
Boyle's estate petitioned the United States Supreme Court for a
writ of certiorarion three issues. 2 15 Boyle's first contention was that
federal law provided no shield from liability to government contractors for military equipment design defects. 2 16 Second, Boyle argued
alternatively that even if a defense should exist, the Fourth Circuit
inappropriately formulated the conditions of such a defense. 2 17 Finally, Boyle contended that the Fourth Circuit should have remanded the case for a jury to determine whether Sikorsky had
2 18
established the elements of the defense.
B.
The Supreme Court Decision
The threshold issue in Boyle was whether there was any justification in federal law for shielding government contractors from liabil207. Id.
208. Id.
209. Id. at 5.
210. Id.
211. Id. at 6.
212. Boyle v. United Technologies, 792 F.2d 413, 414 (4th Cir. 1986), cerl. granted, 479
U.S. 1029 (1987), affd, 108 S. Ct. 2510 (1988).
213. Id. at 415-16.
214. See id. at 414-15 (stating that "back-and-forth" discussions between Navy and Sikorsky were sufficient to establish government approval of design and that duty to warn government of hazards was not brought into question).
215. Boyle v. United Technologies Corp., 108 S. Ct. 2510, 2513 (1988).
216. Id.
217. Id.
218. Id.
1990]
BOYLE V. UNITED TECHNOLOGIES CORP.
423
ity for design defects.2 19 In writing for a five-to-four majority,
Justice Scalia rejected Boyle's contention that there was no such justification.2 20 The Court held that even in the absence of legislation
specifically immunizing government contractors from liability for
design defects, there were a few areas involving "uniquely federal
interests" 2 2 1 that were exclusively federal or vitally affected the interests, powers, and relations of the federal government such that
2 22
the federal common law preempted and replaced state law.
Although the Court found that there were uniquely federal interests identified between a private contractor and the federal government because of the obligations and duties that arose from either
the procurement or performance contract, the Court emphasized
that this merely established the necessary prerequisite for the displacement of state law. 2 23 The Court identified two conditions
whereby a state law would be displaced: 2 24 first, if there was a significant conflict between federal policy and the state law opera219. Id.
220. Id.
221. Id. at 2514 (quoting Texas Indus., Inc. v. Radcliff Materials, Inc., 451 U.S. 630, 640
(1981)). The Court's uniquely federal interests test stated that federal law including federal
common law preempts state law. Id. (citing United States v. Kimbell Foods, Inc., 440 U.S.
715, 726-29 (1979) (noting that federal law governs questions involving rights of United
States arising under nationwide federal programs such as Small Business Administration and
Farmers Home Administration loan programs and courts shall decide application based on
national interest)); Banco Nacional de Cuba v. Sabbatino, 376 U.S. 398, 426 (1964) (stating
that federal judicially formulated principles are needed to protect uniquely federal interests
that are derived from federal statute); Howard v. Lyons, 360 U.S. 593, 597 (1959) (holding
that courts are to determine extent of governmental privilege in absence of legislation);
Clearfield Trust Co. v. United States, 318 U.S. 363, 366-67 (1943) (holding that absent congressional act, federal courts shall create rule of law); D'Oench, Duhme & Co. v. FDIC, 315
U.S. 447, 457-58 (1942) (noting that where offense contravenes general federal policy,
although not federal act, it is still unlawful)). Thus, the scope of displacement depends entirely on the restriction and infringement of the state law on the federal interest.
222. See Boyle, 108 S. Ct. at 2514. The Court cited two examples of "uniquely federal
interests" that required federal preemption. First, federal law exclusively governed the obligations and rights of government contracts. Id. (citing United States v. Little Lake Misere
Land Co., 412 U.S. 580, 592-94 (1973); Priebe & Sons, Inc. v. United States, 332 U.S. 407,
411 (1947); National Metro. Bank v. United States, 323 U.S. 454,456 (1945); Clearfield Trust
Co. v. United States, 318 U.S. 363, 366-67 (1943)). Second, federal law governed the "civil
liabilities of federal officers for actions taken in the course of their duty." Id. (citing Westfall
v. Erwin, 108 S. Ct. 580 (1988); Howard v. Lyons, 360 U.S. 593, 597 (1959); Barr v. Matteo,
360 U.S. 564, 569-74 (1959) (plurality opinion)). The Court then considered that the two
prior examples of "uniquely federal interests" also applied to the civil liabilities arising out of
the performance ofprocurement contracts. Id. (referring specifically to Yearsley v. W.A. Ross
Constr. Co., 309 U.S. 18 (1940), as justification for holding uniquely federal interest existed
in procurement contracts as well as in performance contracts).
223. Boye, 108 S. Ct. at 2515. Justice Scalia adopted modest terminology, preferring to
use the term "displacement of state law" rather than "federal preemption" and noting that it
was possible to analyze the distinction in terms of "federal-law reference to state law for rule
of decision." Id. at 2515 n.3.
224. Id. at 2515.
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THE AMERICAN UNIVERSITY LAW REVIEW
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tion;225 and, second, if the "application of state law would frustrate
the specific objectives of federal legislation. ' 2 26 Moreover, once a
determination has been made with regard to whether displacement
is to occur, the Court then must decide on the scope of
2 27
displacement.
The Court identified two limiting principles that provided the
requisite conflict between a uniquely federal interest and state law:
the Feres doctrine and the Federal Tort Claims Act (FTCA) discretionary function exception. 2 28 The Court analyzed the Fourth Circuit's reliance on the Feres doctrine as the federal policy or interest
that significantly conflicted with state products liability laws.2 29 According to the Fourth Circuit, military contractor's tort liability conflicted with the Feres doctrine because the "increased cost of the
contractor's tort liability would be added to the price of the contract, and '[s]uch pass-through costs . . . [h]ave defeat[ed] the purpose of the [government's] immunity .... ,,230
The Court, however, rejected the Feres rationale as providing results that were too broad and in some respects too narrow in
scope. 23 ' The Court reasoned that a Feres justification for the government contractor defense was too broad because it protected the
manufacturer from all service-related tort claims.23 2 The Court was
concerned that in those situations where the manufacturer is able to
comply with both its contractual obligations with the government
and the state-imposed duty of care, state law would not be preempted. 233 By allowing the manufacturer immunity from all service225. Id. (quoting Wallis v. Pan American Petroleum Corp., 384 U.S. 63, 68 (1966)).
226. Id. (citing United States v. Kimbell Foods, Inc., 440 U.S. 715, 728 (1979)).
227. See id. at 2515-16 (noting continuum of preemption from complete preemption of
state law to preemption of parts only). In one case, the Court held that the federal interest
may require a uniform rule, whereby federal rules would replace the entire body of state law.
See Clearfield Trust Co. v. United States, 318 U.S. 363, 366-67 (1942) (holding that uniform
federal rules must govern rights and obligations of United States commercial paper). In another, the Court held that the conflict may be narrower and only particular elements of state
law are superseded. See United States v. Little Lake Misere Land Co., 412 U.S. 580, 595
(1973) (refusing to extend federal law to all United States land acquisition agreements but
extending to instant law).
228. Boyle, 108 S. Ct. at 2517-18.
229. Id. at 2517; see supra notes 90-98 and accompanying text (discussing Feres-Stencel
doctrine).
230. Boyle, 108 S. Ct. at 2517 (citing Tozer v. LTV Corp., 792 F.2d 403, 408 (4th Cir.
1986), cert. denied, 108 S. Ct. 2897 (1988)).
231. Id.
232. Id.
233. Id. at 2516. The Court provided two examples of where state law would not be preempted. First, federal law would not preempt state law in cases where the government contracts for the purchase and installation of an item and gives only general performance
standards, leaving a contractor discretion in the design and manufacturing process. Id. Second, state law would not be preempted if the government purchased from the contractor an
off-the-shelf item. Id.
1990]
BOYLE V. UNITED TECHNOLOGIES CORP.
425
related tort claims under the Feres doctrine without regard to a duty
analysis, the Court concluded that Feres in this instance was overly
broad in scope. 23 4 The Court also determined that reliance on Feres
would produce results that were too narrow. 23 5 Because Feres covers
only service-related injuries, and not militarily-caused injuries to civilians, the Court determined that Feres would also preclude civilian
tort claims. 23 6 The Court, therefore, decided not to adopt the Feres
doctrine as the source of the conflict between federal procurement
interests and the operation of state products liability law because
Feres was unsuitable for the purpose of establishing the underlying
23 7
rationale for the government contractor defense.
After rejecting the Feres doctrine as the basis of the government
contractor defense, the Court then examined the FTCA as a possible source of a statutory provision that provided the "significant
conflict" between a federal policy or interest and state products liability law in the context of government procurement and performance contracts. 23 8 The Court adopted the FTCA discretionary
function exception 23 9 as the federal policy that presented a significant conflict with state tort law. 240 The Court's justification was
predicated on the assumption that selecting the appropriate military
equipment was a discretionary function within the meaning of the
exception found in the FTCA. 24 1 The Court stressed that the "second-guessing" of the judgment of the government official through
state tort action against the government contractor "would [have]
produce[d] the same effect sought to be avoided by the [Federal
Tort Claims Act] exception." 24 2 Similarly, the Court believed that
the tort judgments*of the state courts would be passed through to
the United States because the defense contractors would "raise their
prices to cover, or to insure against, contingent liability for Govern234.
235.
Id. at 2517.
Id.
236. Id.
237. See id. at 2517-18 (noting potential conflict between liability of government for government-produced items and contractually-produced items).
238. Id.
239. Federal Tort Claims Act, ch. 646, 62 Stat. 984, 984 (1948) (codified at 28 U.S.C.
§ 2680(a) (1982)). The discretionary function exception provides in pertinent part:
(a) Any claim based upon an act or omission of an employee of the Government,
exercising due care, in the execution of a statute or regulation, whether or not such
statute or regulation be valid, or 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.
Id.
240.
241.
242.
Boyle, 108 S. Ct. at 2517-18.
Id. at 2517.
Id. at 2517-18.
426
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ment-ordered designs. 2 4 3
After establishing that there was a significant conflict between the
federal policy illustrated in the FTCA discretionary function exception and observing that the application of state products liability
laws frustrated the objectives of the government's immunity incorporated in the FTCA, the Court then addressed the scope of displacement of state law. 244 The Supreme Court agreed with the
Fourth and Ninth Circuit's scope of displacement 24 5 but the Court
eliminated the circuit courts' requirement that the government had
to be immune under the Feres-Stencel doctrine.2 4 6 The Court substituted the FTCA discretionary exception rationale for the Feres doctrine. 2 47 The Court thus held that a government contractor could
not be held liable for design defects in military equipment when
three elements of the defense were proven: 248 first, the United
States approved reasonably precise specifications; second, the
equipment conformed to those specifications; and finally, the
government contractor warned the United States about dangers in
the use of equipment known to the contractor but not to the
24 9
government.
Justice Scalia then addressed Boyle's second contention that the
Eleventh Circuit's government contractor defense formulation as
explicated in Shaw 2 50 should be the basis for the scope of displacement. 251 The Court rejected Boyle's contention, noting that the
rule in Shaw was a rule that was "not designed to protect the federal
interest embodied in the 'discretionary function' exception" but
rather a well-formulated tort rule. 252 The Court noted that government officials may have exercised policy judgment in selecting the
ultimate design "whether or not the contractor rather than th[e] officials developed the design." 2 53 Accordingly, the Court rejected
the Eleventh Circuit's Shaw formulation as the basis for the government contractor defense. 254
The Supreme Court then addressed Boyle's final contention that
243. Id. at 2518.
244. Id.
245. Id.
246. See id. at 2517 (discussing and rejecting Fourth Circuit's analysis).
247. Id. at 2517-18.
248. Id. at 2518; see supra text accompanying notes 176-92 (comparing and contrasting
McKay and Shaw formulations of government contractor defense).
249. Boyle, 108 S. Ct. at 2518.
250. Shaw v. Grumman Aerospace Corp., 778 F.2d 736, 746 (1985).
251. Boyle, 108 S. Ct. at 2518.
252. Id.; see supra text accompanying notes 183-92 (discussing Shaw government contractor formulation).
253. Boyle, 108 S. Ct. at 2518.
254. Id.
1990]
BOYLE V. UNITED TECHNOLOGIES CORP.
427
the Fourth Circuit erred in not remanding for a jury determination
of whether the elements of the defense were met. 2 55 The Court decided to remand the case in order to determine whether the govern2 56
ment contractor defense had been established in Boyle.
Moreover, if the Court of Appeals rules that no reasonable jury
was inapplicable,
could find that the government contractor defense
25 7
then the Court of Appeals judgment will stand.
Justice Brennan dissented, joined by Justices Marshall and Blackmun, and assailed the Court's decision as "legislation of a rule" denying Lieutenant Boyle's family compensation that the state law
assured them. 25 8 Declaring the newly discovered government contractor defense as breathtakingly sweeping, Justice Brennan criticized the majority's central premise of federal preemption as
immunizing the government contractor at the expense of the state's
sovereignty interest in its historic police powers. 2 59 Justice Brennan
pointed out that the majority opinion created a federalism tension
because the Court's "power to create federal common law controlling the federal government's contractual rights and obligations does
not translate into a power to prescribe rules that cover all transactions or contractual relationships collateral to government contract."' 260 Justice Brennan concluded that the majority had
misconstrued the fundamental justification for federal preemption
of state law, and that congressional action, not the Court's creative
255. Id. at 2518-19.
256. Id. at 2518.
257. Id. at 2519.
258. Id. at 2520 (Brennan, J., dissenting); see id. at 2528 (Stevens, J., dissenting) (filing
similar but separate dissent on issue of rulemaking).
259. Id. at 2521 (Brennan,J., dissenting). Justice Brennan claimed that there had to be a
clear and manifest purpose of Congress to preempt the historical police powers of the state
and that there must be an underlying constitutional text or federal statute to assert it. Id.
(citing Puerto Rico Dep't of Consumer Affairs v. Isla Petroleum Corp., 108 S. Ct. 1350, 1353
(1988)). Justice Brennan further noted that Congress had addressed but had not decided to
supersede state law in the area of government contractor liability. Id. (citing failure of Congress since 1979 to pass legislation conferring indemnification of civil liability to government
contracts).
260. Id. at 2522 (Brennan, J., dissenting) (citing Miree v. DeKalb County, 433 U.S. 25, 27
(1977)). Justice Brennan noted in particular that the whole of the majority's analysis was
premised on the proposition that the government would indirectly absorb any tort liability
and, therefore, burden governmental functions to compel the Court to act when Congress has
chosen not to do so. Id. at 2527-28 (Brennan, J., dissenting). Justice Brennan pointed out,
however, that such indirect burdens on the government are legally irrelevant. Id. at 2526
(Brennan, J., dissenting) (citing South Carolina v. Baker, 108 S. Ct. 1355 (1988)). Moreover,
Justice Brennan called the Court's exercise to implement a policy as a conversion into law a
proper subject left to the legislature. Id. at 2528 (Brennan, J., dissenting). Justice Stevens'
separate dissent reiterated a similar concern, remarking that the selection of a policy is a
function "more appropriately for those who write the laws rather than those who interpret
them." Id. at 2529 (Stevens, J., dissenting) (quoting United States v. Gilman, 347 U.S. 507,
511-13 (1954)).
428
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26 1
powers, should resolve this issue.
III.
CRITICAL ANALYSIS OF BOYLE V. UNITED TECHNOLOGIES CORP.
The Supreme Court's decision in Boyle v. United Technologies Corp.
is incorrect for two reasons. First, the Court created a new class of
non-governmental employees and allowed that class to share in the
government's sovereign immunity defense. 2 62 Through the rubric
of federal common law, the Court erroneously usurped the exclusive plenary powers of Congress, thus creating a separation of powers question. 2 63 Second, the majority's reliance on a federal
preemption analysis is analytically weak because the Court failed to
recognize that there is congressional intent regarding government
contractor immunity, which could be found in either a constitutional
264
text or a federal statute.
A. JudicialPreemption of the Separation of Powers Doctrine
Rather than addressing Boyle's contention that there was nojustification in federal law for shielding government contractors from liability for design defects, the Supreme Court framed the issue as
one involving federal preemption of state products liability laws.2 6 5
The Court misconstrued the implications of Boyle's argument. The
importance of Boyle's contention was that the Court was inherently
unable to immunize government contractors from liability for design defects because the Court has no underlying jurisdiction to create a new protected class of non-governmental employees that is
2 66
entitled to the sovereign immunity defense of the United States.
261. Id. at 2528 (Brennan, J., dissenting) (citing United States v. Standard Oil, 332 U.S.
301,314-15 (1947)).
262. Id. at 2524 (Brennan, J., dissenting) (recognizing majority's analysis extends immunity to non-governmental employees).
263. See infra text accompanying notes 266-83 (arguing that Court failed to recognize that
Congress alone has power to enlarge, restrict, or waive government's sovereign immunity
interests).
264. See infra notes 284-95 and accompanying text (discussing statutes and regulations
that express Congressional intent not to immunize government military contractors).
265. Boyle v. United Technologies Corp., 108 S.Ct. 2510, 2513 (1988).
266. See supra notes 38-61 and accompanying text (discussing government's sovereign immunity defense and extent of Court's jurisdiction).
The Court stated that it was not addressing whether to extend immunity to nongovernment
officials. Boyle, 108 S. Ct. at 2514 n.l. Justice Scalia pointed out, however, that "the immunity
of federal officials ... might extend ... to nongovernmental employees' such as a government
contractor... [b]ut we do not address this issue, as it is not before us." Id. at 2514. The
Court was mistaken. The scope of displacement of state tort law that the Court proposed was
identified as "the three limiting criteria for contractor immunity." Id. at 2517. Moreover, the
government contractor defense is expressly based on a shared or derivative immunity from
the United States Government. See supra notes 148-54 and accompanying text (discussing
basis of government contractor defense). Additionally, Justice Brennan properly noted that
the majority cited Yearsley as a case immunizing a government contractor yet that case "has
1990]
BOYLE V UNITED TECHNOLOGIES CORP.
429
Authority to immunize government contractors from negligent design tort liability is exclusively reserved to the plenary and special
powers of Congress in matters relating to the government's sovereign immunity interest. 26 7 The Court has consistently held that the
scope of the government's sovereign immunity defense only applies
to the federal government, its agencies and instrumentalities, and
26 8
the officers or employees of those agencies or instrumentalities.
Moreover, Congress has specifically exempted government contractors from the protection of the FTCA. 2 69 The Court has also mandated that any extension of the government's sovereign immunity
interest must in fact be accomplished through statute. 2 70 Although
the Court is able to create federal common law in those areas implicating uniquely federal interests, 2 71 the Supreme Court cannot interstitially create or legislate policy in areas involving the exclusive
plenary powers and sovereignty of the United States. 2 72 In its
proper focus, the issue is whether the Court has the power to grant
immunity absent a clear statutory proscription.
The Court in Boyle, however, created a significant separation of
never been read to immunize the discretionary acts of those who perform[ed] service contracts for the Government." Id. at 2525 (Brennan, J., dissenting).
267. See supra notes 53-56 and accompanying text (discussing Congress' exclusive plenary
powers and sovereign immunity interests).
268. See United States v. Orleans, 425 U.S. 807, 813-14 (1976) (noting application to government employees while performing duties of office); Logue v. United States, 412 U.S. 521,
526-27 (1973) (excluding independent contractors from coverage by definition); Keifer &
Keifer v. Reconstruction Fin. Corp., 306 U.S. 381, 388-89 (1939) (concluding that government is not conduit of immunity to contractors who perform its work); see also Gibson v.
United States, 567 F.2d 1237, 1242-43 (3d Cir. 1977) (limiting respondeat superior liability of
United States for negligence of government contractor), cert. denied, 436 U.S. 925 (1978).
Congress codified the Court's decisions in Federal Tort Claims Act, ch. 753, § 402, 60 Stat.
842 (1946) (codified as amended at 28 U.S.C. § 2671 (1982)).
269. See Federal Tort Claims Act, ch. 753, 60 Stat. 842 (1946) (codified as amended at 28
U.S.C. § 2671 (1982)); see also supra notes 41-61 (discussing government's sovereign immunity
defense and constitutional limitations).
270. See Sloan Shipyards Corp. v. United States Shipping Bd. Emergency Fleet Corp., 258
U.S. 549, 566-67 (1922) (stating that non-governmental corporation seeking to share in immunity of sovereign required constitutional rule of law to exonerate corporation); see also
Brady v. Roosevelt S.S. Co., 317 U.S. 575, 580 (1943) (commenting that Congress has "power
to grant tort immunity to private operators of government vessels"); Pratt v. Hercules, Inc.,
570 F. Supp. 773, 802-03 (D. Utah 1982) (noting doctrine of derivative sovereign immunity
was available to arms manufacturer where its activities were integrated with United States
Naval plant operations and furthered military defense under discretionary grant of sovereign
power to Department of Defense Explosive Safety Board); supra notes 38 and 48 and accompanying text (discussing requirements for extending government's sovereign immunity interests). See generally Defense Production Act of 1950, ch. 932, 64 Stat. 798, 798-822 (codified as
amended at scattered sections of 50 U.S.C. (1982)) (authorizing, inter alia, President to require
performance of contracts necessary to promote national defense).
271. Texas Indus., Inc. v. Radcliff Materials, Inc., 451 U.S. 630, 640 (1981); United States
v. Little Lake Misere Land Co., 412 U.S. 580, 593-94 (1973).
272. See supra notes 50-56 and accompanying text (discussing plenary powers of Congress); see also United States v. Gilman, 347 U.S. 507, 511-13 (1954) (declining to create policy
where issues presented questions of policy which Congress has yet to address).
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powers question by formulating a common law government contractor's defense. 2 73 If the division of governmental power is to be distributed among the three branches of government so as to prevent
the accumulation of legislative, executive, or judicial power in the
same hands, 274 the decision in Boyle represents a step by the judiciary toward playing a legislative role. The Court in Boyle erroneously
disregarded legislation defeated in Congress with regard to government contractor liability. 2 75
Moreover, by relying on a preemption analysis, the Court modified and abridged the substantive rights of litigants. 2 76 The Court's
government contractor defense is a substantial dilution of the rights
of third-parties to sue a contractor for his negligence. 2 77 The Court
failed to recognize that the rights of principal and agent inter se are
not the measure of "the rights of third person against either of them
for their torts." 2 78 The government contract, therefore, cannot create immunity rights unless Congress expressly provides for them in
a statute immunizing contractors. 279 In addition, the Court has also
enlarged the jurisdiction of courts in abrogation of the separation of
powers principle because the government contractor defense is an
affirmative defense that is jurisdictional and procedural in nature.2 8 0
273. Boyle v. United Technologies Corp., 108 S. Ct. 2510, 2513-14 (1988).
274. See THE FEDERALIST No. 47, at 138-45 U. Madison) (R. Fairfield 2d ed. 1981) (discussing need to prevent accumulation of power in same hands in order to prevent tyranny);
THE FEDERALIST No. 51, at 158-63 (J. Madison) (R. Fairfield 2d ed. 1981) (discussing separation of powers). Compare U.S. CONST. art. I, § 1 (stating that "All legislative Powers herein
granted shall be vested in a Congress .... ) with id. art. III, § I (stating that "The Judicial
Power of the United States, shall be vested in one supreme Court . . ."). Both dissenting
opinions criticized the majority's determination as one resulting in a legislative decision
rather than one premised on legal principles that did not violate the principle of separation of
powers. Boyle, 108 S. Ct. at 2520, 2528 (Brennan, J., and Stevens, J., dissenting).
275. Boyle, 108 S.Ct. at 2519-20 & n.1 (Brennan, J., dissenting).
276. See United States v. Sherwood, 312 U.S. 584, 590 (1941) (noting lack ofjudicial authority to alter federal jurisdiction of litigants' substantive rights). The dissent noted that
Boyle represented a suit between two private parties. Boyle, 108 S. Ct. at 2521 (Brennan, J.,
dissenting). Justice Brennan reiterated that the Court had "steadfastly declined to impose
federal contract law on relationships that are collateral to the federal contract, or to extend
[governmental] ...immunity beyond federal employees." Id. (Brennan, J., dissenting). The
majority's position, however, enlarges the rights and defenses of the private contractor based
on its government contract. Id. at 2520 (Brennan, J., dissenting). Unless Congress specifically grants authority for an agency to immunize the tortious acts of its contractor, the
Supreme Court's formulation of a government contractor defense contravenes the separation
of powers doctrine.
277. See Brady v. Roosevelt S.S. Co., 317 U.S. 575, 581 (1943) (positing that granting
agent immunity would dilute claimants' rights).
278. Id. at 583.
279. See id. (discussing area for congressional act before extending immunity to non-governmental contractor); see also supra notes 40-56 and accompanying text (discussing need for
congressional statute necessary to absolve or immunize private contractor).
280. See supra note 9 and accompanying text (identifying government contractor defense
as affirmative defense based on federal government's sovereign immunity defense of lack of
subject matter jurisdiction).
1990]
BOYLE V. UNITED TECHNOLOGIES CORP.
The Court created the government contractor defense and enlarged
its jurisdiction by diminishing the substantive rights of third-party
plantiffs, thus abrogating Congress' plenary power over the jurisdic81
tion of the courts.2
The significance of the Court's decision in Boyle is that it immunizes a contractor who would normally be liable for defectively designing a product. Prior to Boyle, the Court had consistently
recognized the rule that a contractor is liable for his negligence. 28 2
Indeed, the Court has recognized that for a private contractor to
share in the immunity of the government, the Court requires a constitutional rule of law-a statute-that exonerates the contractor liability.283
Accordingly, the Supreme Court's government contractor
defense, which was created under the rubric of preemption of state
tort law, violated the separation of powers doctrine.
B. Federal Preemption of State Tort Law
The majority's federal preemption analysis is analytically weak because in any preemption analysis "[t]he purpose of Congress is the
ultimate touchstone." 28 4 The Court in Boyle failed to recognize that
Congress has repeatedly refused to immunize government contractors.2 8 5 Justice Brennan pointed out that although government con-
tractors have urged Congress to limit contractor liability since
281. See California v. Arizona, 440 U.S. 59, 66 (1979) (commenting on broad congressional power over all but original jurisdiction); United States v. Sherwood, 312 U.S. 584, 58990 (1941) (recognizing that congressional authority conferred to court to make rules of procedure for exercise of jurisdiction is not authority to enlarge that jurisdiction or "to modify,
abridge or enlarge the substantive rights of litigants or to enlarge or diminish the jurisdiction
of federal courts"); see also Act ofJune 25, 1948, ch. 646, 62 Star. 961 (codified as amended in
28 U.S.C. § 2072 (1982) (noting that "rules shall not abridge, enlarge or modify any substantive right")).
282. See, e.g., Brady, 317 U.S. at 581 (discussing that employer government corporation
was immune, but employer's agent was liable for tort); Sloan Shipyards v. United States Shipping Bd. Emergency Fleet Corp., 258 U.S. 549, 567 (1922) (noting that employer's agent is
answerable for negligent acts);J.S. Casement & Co. v. Brown, 148 U.S. 615, 623 (1893) (finding that contractors are responsible for all injuries resulting from their negligence); McGonigal v. Gearhart Indus., 851 F.2d 774, 777 (5th Cir. 1988) (observing that Boyle "does not apply
in cases of defective manufacture," and thus contractor is liable for negligence in
manufacturing).
283. See Robert C. Herd & Co. v. Krawill Mach. Corp., 359 U.S. 297, 303-04 (1959) (requiring statute or valid contract to exonerate agent from liability); Sloan Shipyards v. United
States Shipping Bd. Emergency Fleet Corp., 258 U.S. 459, 567 (1922) (denoting "constitutional rule of law" exception to general rule of liability under law).
284. Metropolitan Life Ins. Co. v. Massachusetts, 471 U.S. 724, 747 (1985) (citing Malone
v. White Motor Corp., 435 U.S. 497, 504 (1978)); see also Puerto Rico Dept. of Consumer
Affairs v. Isla Petroleum Corp., 108 S. Ct. 1350, 1354-55 (1988) (noting that historic police
powers of state are not meant to be superseded unless there is clear and manifest congressional intent).
285. See Boyle, 108 S. Ct. at 2519-20 & n.1 (Brennan, J., dissenting).
432
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1979,286 Congress has not passed any legislation immunizing government contractors or granting them indemnification. 28 7 On the
contrary, Congress has passed legislation making contractors guarantee their contract performance. 28 8 Moreover, Congress has expressly declared that it would not reimburse government
contractors "for the cost of commercial insurance that protects
against the cost .
.
. of correcting the contractor's own defects in
28 9
materials or workmanship. "
Although there was no underlying statute immunizing government contractors, the Court's use of the uniquely federal interest
test was still inappropriate. The Court failed to recognize that in
every uniquely federal interest, there must be an underlying constitutional provision or statute. 2 90 No federal preemption exists without a constitutional text or a federal statute to assert it.291 In Boyle,
there was no constitutional provision or federal statute for the
Court to assert the government contract defense.
The Court, however, relied on and adopted the FTCA discretionary function exception as an underlying federal policy that conflicted with the state products liability laws. 2 9 2 This reliance is
misplaced. The scope of the discretionary function exception only
protects governmental actions and decisions based on considerations of public policy, not on the tortious conduct of a private con286. Id. (Brennan, J., dissenting).
287. Id. (Brennan, J., dissenting); see Stencel Aero Eng'g Corp. v. United States, 431 U.S.
666, 673-74 (1977) (holding that government contractors are barred from seeking third-party
indemnification from government in military suits). Congress has provided for indemnification of military research or development contracts. Act of Aug. 10, 1956, ch. 1041, 70A Stat.
134 (codified as amended in 10 U.S.C. § 2354 (1988)).
288. See Act of Oct. 19, 1984, Pub. L. No. 98-525, Title XII, § 1234 (a), 98 Stat. 2601,
2601-03 (codified at 10 U.S.C. § 2403(a)-(h) (1988)) (guaranteeing contract performance and
payment to correct failure at no cost to government).
289. Act of Oct. 12, 1982, Pub. L. No. 97-295, § 1(29)(A), 96 Stat. 1293, 1293 (codified at
10 U.S.C. § 2399 (1982)), repealed by Act ofJuly 19, 1988, Pub. L. No. 100-370, § 1(0(2)(B),
102 Stat. 846 (stating that no funds appropriated to Department of Defense can be used to
reimburse government contractor for cost of commercial insurance), restated in 10 U.S.C.
§ 2324(e)(l)(L) (1988) by Act of July 19, 1988, Pub. L. No. 100-370, § l(l)(2)(A), 102 Stat.
846.
290. Puerto Rico Dept. of Consumer Affairs v. Isla Petroleum Corp., 108 S. Ct. 1350,
1355 (1988).
291. Id. Unlike the case where a federal statute has been implicated, but no congressional
authority to formible rules exist, see Clearfield Trust Co. v. United States, 318 U.S. 363, 367
(1942) (stating that "[i]n absence of an applicable Act of Congress it is for the federal courts
to fashion the governing rule of law according to their own standards"), Boyle represents the
case where no underlying federal statute or constutional text is implicated. The Court dramatically modified the substantive right of litigants and enlarges its own jurisdiction by procedurally allowing a government contractor to assert an affirmative defense to liability without
statutory authority. See supra note 9 and accompanying text (discussing affirmative defense
requirements); see also supra notes 276-283 and accompanying text (discussing need for congressional statute to absolve or immunize contractor).
292. Boyle v. United Technologies Corp., 108 S. Ct. 2510, 2517-18 (1988).
1990]
BOYLE V. UNITED TECHNOLOGIES CORP.
433
tractor who has no privileged relationship with the government
except through a contract. 29 3 The government contract cannot create immunity rights unless Congress expressly provided for such
rights in a statute immunizing contractors. 29 4 Moreover, federal
policy considerations generally stem from statutory provisions and
the FTCA's coverage likewise has been limited only to the federal
government. 2 95 Consequently, the Court has substantially altered,
293. The discretionary function exception protects the "nature of the conduct, rather
than the status of the actor." United States v. S.A. Empresa de Viaco Aerea Rio Grandense
(Varig Airlines), 467 U.S. 797, 813 (1984). Although the basis of the discretionary function is
to "prevent judicial 'second-guessing' of legislative and administrative decisions grounded in
social, economic, and political policy through the medium of an action in tort," VarigAirlines,
467 U.S. at 814, the discretionary function will not apply when a federal statute, regulation, or
policy specifically prescribes a course of action for an employee to follow. Berkovitz v. United
States, 108 S. Ct. 1954, 1958 (1988). In Boyle, although the majority correctly pointed out the
broad implications of finding that the selection of the appropriate design for military equipment is a discretionary function, the Court failed to recognize the fatal flaw in its assumption
that a government officer's choice is assuredly discretionary.
For example, in Boyle, the petitioner argued that the design of the escape-hatch mechanism
for the CH-53D helicopter was defectively designed and was the proximate cause of Lieutenant Boyle's death because it would not operate as called for in the specifications. By the
Court's reasoning, the acceptance of the design of the escape-hatch mechanism that Sikorsky
wholly developed pursuant to the Department of Navy's performance specifications would be
a type of discretionary function that would exempt the government from liability, as well as
the independent contractor, if the helicopter were to injure someone.
The Court's reasoning is flawed because the specification to provide for an escape-hatch
mechanism for the CH-53D helicopter was a non-discretionary contract item, and shielding
the independent contractor for defectively designing the mechanism in lieu of a properly
designed escape hatch is not what the discretionary function exception sought to protect.
The discretionary function exception protects the ability of the government to select one
course of action over another in the valid exercise of a policy judgment based on considerations of public policy. See supra note 86 and accompanying text (discussing discretionary function exception based on public policy considerations). The government's ability to "decide"
or "choose" or "select" will be protected, but not the defective product itself, especially if the
private contractor negligently designed the product. See Swanson v. United States, 229 F.
Supp. 217, 221 (N.D. Cal. 1964) (finding private contractor negligently designed fail-safe
modification of aircraft elevator mechanism). Moreover, there was no contemplation of a
broad public policy consideration in the design of an escape hatch; it was a mandatory contract line item that had no implied or expressed "trade-off between greater safety and greater
combat effectiveness." Boyle, 108 S. Ct. at 2517.
The Court correctly identified that a government officer must consider the design features
but failed to indicate the extent of how precise the specifications are to be. Moreover, there
must be a showing of a volitive act of acceptance by government agents or officers in their
selection and ratification of a product that a private contractor designed and manufactured
with the knowledge of possible dangers in the equipment. Congress, however, has granted
procurement officials authority to reject a product if the product is found to be defective. See
supra notes 288-89 (discussing private contractor's guarantee of performance); Act of Nov. 8,
1985, Pub. L. 99-145, Title IX, § 911(a)(1), 99 Stat. 682 (codified as amended at 10 U.S.C.
§ 2324 (1988) (passim) (codifying allowable costs under defense contracts)). Consequently, a
government contractor is able to defeat a third-party claim but still be liable to the government, resulting in a repayment and anomalous predicament that the government is able to
recover for the defective equipment but the injured plaintiff cannot.
294. See Brady v. Roosevelt S.S. Co., 317 U.S. 575, 583-84 (1943) (discussing need for
congressional legislation to exonerate third party from liability).
295. Federal Tort Claims Act, ch. 753, 60 Stat. 842 (1946) (codified as amended at 28
U.S.C. § 2671 (1982)) provides in pertinent part:
As used in this chapter and sections 1346(b) and 2401(b) of this title, the term "Fed-
434
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modified, abridged, or enlarged litigants' substantive rights without
the constitutional authority or jurisdiction to create a federal common law rule protecting government contractors. Rather, such a
29 6
rule must originate in the legislative branch.
IV.
RECOMMENDATION
The Supreme Court should adopt a design and control test that is
used to determine responsibility for government contract design
and performance specifications. The analytic framework of the design and control test would require a court to determine which party
was responsible for the specifications and thereby allocate the risk of
loss on the responsible party. The critical element in the design and
control test focuses on which party primarily designs and controls
the specifications process. 297 Subsequently, in government procurement contracts, the government would still be responsible for
the design and any related omission, errors, and deficiencies in the
specifications. Notwithstanding any negligence in manufacturing,
the private contractor would be absolved of any liability.
In government performance contracts, whereby a contractor is
given discretion to achieve government performance requirements,
the contractor would be responsible for the method of performance
and success, absent an express assumption of governmental responsibility. Because the government contractor primarily designs and
controls the specifications process, the risk of loss should be allocated to the contractor. In those instances where the government
exercises primary control during the specifications process, the risk
of loss should be allocated to the government. 298
One of the ramifications of the Court's government contractor defense is that the Court did not declare what constituted approval of
reasonably precise specifications. Under a design and control test,
the risk of loss would be imposed on the party who controlled the
specification process regardless of the approval process. The fact
that the government would delegate its discretion to the contractor
and that the government would "approve" the design is of no moeral agency" includes the executive departments, the judicial and legislative
branches, the military departments, independent establishments of the United
States, and corporations primarily acting as instrumentalities or agencies of the
United States, but does not include any contractor with the United States.
Id.
296.
See United States v. Gilman, 347 U.S. 507, 511 (1953) (recognizing that creation of
new doctrine or "questions of policy" is function of Congress).
297.
See supra notes 102-11 and accompanying text (discussing role of design and per-
formance specifications in design and control test).
298.
Id.
1990]
BOYLE V. UNITED TECHNOLOGIES CORP.
435
ment; the contractor in this instance would be held liable if the court
finds that it was the contractor that actually designed and controlled
the specification process. Unless a statute, regulation, or indemnification agreement exonerated the contractor from liability, the contractor will be held liable for this negligence.
The ultimate goal of the design and control test is to make the
culpable party liable for its negligence whether that party is the government or the private contractor. Any defense, such as the Court's
government contractor defense, abrogates sound constitutional and
tort principles because it immunizes contractors from negligent tort
claims by virtue of their contract with the federal government without regard to the contractor's role in the specification process. The
design and control test provides the analytic framework by which
liability can be apportioned between the government and the private contractor. Nonetheless, because the government and private
contractor's liability could be premised on the basis of comparative
negligence, 2 99 the goals of tort recovery under state products liability law and the goals of federal autonomy would be preserved.
CONCLUSION
Until Boyle v. United Technologies Corp., the Supreme Court had held
private contractors liable for their negligence in design and performance specification contracts. The Court in Boyle altered the law
of litigants' rightful recovery in derogation of Congress' authority to
control its government contracts. Indeed, Congress has not left the
formulation of the government contractor defense to the vagueries
and indeterminate concepts of equity jurisprudence of the courts,
but has occupied the government procurement contract field
30 0
through the establishment of comprehensive regulations.
The judicial fear that pass-through costs will burden the Treasury
is illusory because such costs are statutorily prohibited and legally
irrelevant.3 0 1 Any expansion of a government contractor's rights or
defenses appropriately should originate from Congress and not the
judiciary. The government contractors, therefore, have been judicially admitted through the "back door" what Congress has legisla299. See United States v. M.O. Seckinger Co., 397 U.S. 203, 216-17 n.20 (1970) (noting
that each party is liable according to negligence of each). The Supreme Court approved the
comparative negligence analysis in Seckinger whereby a contractor's negligence was offset by
the amount of the government negligence. Id. at 215-16.
300. See Federal Acquisition Regulations System, 48 C.F.R. § 1-6101 (1987). The regulation states that it has been "established for the codification and publication of uniform policies and procedures for acquisition by all executive agencies." Id. § (A)(1.01).
301. See supra note 141 (discussing as constitutionally irrelevant pass-through costs to
government).
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[Vol. 39:391
tively turned away at the front.30 2 Ultimately, the Supreme Court in
Boyle has changed the ancient maxim, non potest rex gratiamfacerecum
injuria et damno aliorum, to "the Court acting as the Sovereign, conferred a favor on one subject which occasioned injury and loss to
others."
302.
See Laird v. Nelms, 406 U.S. 797, 802 (1972).