Trevino v. General Dynamics Corp.

• Decision Date: 23 February 1989
• Docket Number: 87-2175,Nos. 86-2965,s. 86-2965
• Citation: 865 F.2d 1474
• Parties: , 57 USLW 2515, Prod.Liab.Rep.(CCH)P 12,061 Gloria TREVINO, et al., Plaintiffs-Appellees, v. GENERAL DYNAMICS CORP., Defendant-Appellant. Gloria TREVINO, et al., Plaintiffs, v. GENERAL DYNAMICS CORP., Defendant-Cross Claim Plaintiff-Appellant, v. UNITED STATES of America, Defendant-Cross Claim Defendant-Appellee.
• Court: U.S. Court of Appeals — Fifth Circuit

Page 1474

865 F.2d 1474

1991 A.M.C. 910, 57 USLW 2515,

Prod.Liab.Rep.(CCH)P 12,061

Gloria TREVINO, et al., Plaintiffs-Appellees, v. GENERAL DYNAMICS CORP., Defendant-Appellant.

Gloria TREVINO, et al., Plaintiffs, v. GENERAL DYNAMICS CORP., Defendant-Cross Claim Plaintiff-Appellant, v. UNITED STATES of America, Defendant-Cross Claim Defendant-Appellee.

Nos. 86-2965, 87-2175.

United States Court of Appeals Fifth Circuit.

Feb. 23, 1989.

Herbert L. Fenster, Lawrence M. Farrell, Raymond B. Biagini, Risa H. Rahinsky, McKenna, Conner & Cuneo, Washington, D.C., for General Dynamics Corp.

Michael J. Maloney, Houston, Tex., John Daly, Atty., Robert S. Greenspan, Civ. Div., U.S. Dept. of Justice, Washington, D.C., Wayne Fisher, Houston, Tex., Thomas W. Kopf, U.S. Atty., Beaumont, Tex., Hugh Johnston, Trial Atty., Torts Branch, Civ. Div., Dept. of Justice, Washington, D.C., for Gloria Trevino, et al. and U.S.

Appeals from the United States District Court for the Eastern District of Texas.

Before REAVLEY, HIGGINBOTHAM and SMITH, Circuit Judges.

REAVLEY, Circuit Judge:

The families of Navy divers killed in a Navy submarine diving chamber brought this products liability action under the Death On The High Seas Act, 46 U.S.C.App. Sec. 761 et seq., and the federal Admiralty law, 28 U.S.C. Sec. 1333, against General Dynamics Corporation, the designer of the chamber. General Dynamics also filed a cross-claim against the United States claiming that, in the event it was found liable to the plaintiffs, the United States would be liable to General Dynamics under a contractual indemnification clause. Trial was to the court, which held that General Dynamics was liable for the deaths of the divers and that the United States was not liable to General Dynamics under the indemnification clause. Trevino v. General Dynamics Corp., 626 F.Supp. 1330 (E.D.Tex.1986). We affirm the judgment for the families of the divers against General Dynamics and vacate, for lack of jurisdiction, that part of the judgment favoring the United States on contractual indemnity.

I. Factual Background

On the night of January 16, 1982, five United States Navy divers died in an accident aboard the submarine U.S.S. GRAYBACK. The ventilation valve, which allowed air to enter the flooded diving chamber, was not fully open; and as the divers drained the water, a vacuum formed in the chamber.

The U.S.S. GRAYBACK was designed and constructed in the late 1950s as a missile-carrying submarine. It was equipped with two large cylindrical pressure chambers on its forward deck, which were used as storage hangars for the missiles. In the late 1960s the GRAYBACK was converted to a personnel-carrying submarine capable of dispatching divers underwater. One portion of that conversion was the installation of a diver lock-in/lock-out system in the cylindrical pressure chambers. The Navy established the basic design concept for the modifications to the GRAYBACK in a 339-page circular of requirements ("COR") describing the design concepts, including two pages describing the design of the diving hangar and a one-page diagram of the flood and drain system, and selected Mare Island Naval Shipyard ("MINS") as the site for the design and conversion work.

In 1966 and 1967 the Navy contracted with General Dynamics Corporation Electric Boat Division to do the design work on the diving hangar. The contracts required General Dynamics to produce working drawings of the hangar and the lock-in/lock-out system and to assume full responsibility for all necessary technical research, to review its work product to assure compliance with the COR, and to conduct all quality assurance, including inspection of the end product, before issue to the Navy. General Dynamics supplied 37 employees, who worked on-site at MINS and produced 71 pages of detailed working drawings. Each of the drawings was signed by a government employee in a box marked "approved." After General Dynamics completed the drawings, their employees left MINS, and the Navy performed all the manufacturing and conversion work on the GRAYBACK.

The design concept, as stated in the COR, called for a "control bubble," a plexiglass enclosure that would be lighted and filled with air while the diving hangar was flooded, from which a diver could operate all the controls necessary to drain the diving hangar. General Dynamics's design, however, placed the hand wheel control for the ventilation valve adjacent to, but not controllable from, the control bubble. ¹ General Dynamics's design did not include a lighted position indicator on the ventilation valve control, a remote valve position indicator, vacuum gauges, safety interlocks, or any other type of warning or safety device to prevent a vacuum or to notify the divers or the crew inside the submarine ("the dry side") of the presence or possibility of a vacuum. The Navy operated the submarine for 13 years without mishap, although Navy personnel noted on at least four occasions that the ventilation valve control was difficult to turn. The Navy never performed nor required a formal design/safety review of the GRAYBACK's diving system prior to the accident.

Following the accident, the Navy conducted an investigation and concluded that the accident was caused by "a combination of design deficiency, material defect, unsound operating procedures, and personnel error." Specifically, the Navy found the following four design deficiencies: that there was no safety interlock mechanism to prevent the opening of the hangar drain valve when the main vent valve was not fully opened; that the only valve position indicator on the main vent valve was a metal tab that was underwater and could not be seen when draining the hangar; that there was no remote position indicator that could be seen from the dry side of the hangar; and that the general design of the hangar made proper maintenance of the main vent valve extremely difficult, "if not impossible." Trevino v. General Dynamics Corp., 626 F.Supp. at 1332-33. The district court found that both the Navy and General Dynamics were negligent and that the design was dangerously defective. General Dynamics was negligent in failing (1) to provide for a safety interlock device, (2) to provide for a valve position indicator that is visible when draining the hangar, (3) to provide for a remote position indicator that could be seen from the dry side, (4) to design the valve so that proper maintenance was possible, (5) to adhere to the Navy's COR requiring that the vent valve be controllable from the control bubble, (6) to warn the Navy about the dangers associated with the design's potential to create a partial vacuum, and (7) to warn or instruct the Navy concerning the failure to provide for basic safety and warning devices. The Navy was negligent in failing (1) to provide for basic safety features in its COR, (2) to perform sufficient operational testing, (3) to conduct a formal design review of the system, and (4) to properly lubricate and maintain the shaft to the main hangar vent valve. The court attributed 80% of the fault to General Dynamics and 20% of the fault to the Navy. ² Although many aspects of the faulty design and the improper maintenance of the system contributed to the accident, the fundamental design defect was that the design of the hangar made it impossible for the diver who was draining the system to know whether the vent valve was fully open and that there was no backup system of any sort to prevent a vacuum or to warn the diver or the crew if the diver did begin to drain the hangar while the vent valve was partially closed. None of the parties on appeal question the correctness of the finding that the design was defective.

The parties do dispute whether General Dynamics, as a government contractor, is responsible for the injuries caused by its defective design. The principal question presented in this case is what are the contours of the government contractor defense recognized by the United States Supreme Court in Boyle v. United Technologies Corp., --- U.S. ----, 108 S.Ct. 2510, 101 L.Ed.2d 442 (1988).

II. A Government Contractor's Derivative Immunity

Prior to the Boyle decision, this circuit and others had recognized under federal common law a defense that protected government contractors from liability in products liability actions based on injuries to servicemen caused by defectively-designed military equipment. See Bynum v. FMC Corp., 770 F.2d 556, 574 (5th Cir.1985); see also Tozer v. LTV Corp., 792 F.2d 403, 406 (4th Cir.1986), cert. denied, --- U.S. ----, 108 S.Ct. 2897, 101 L.Ed.2d 931 (1988); Shaw v. Grumman Aerospace Corp., 778 F.2d 736, 738 (11th Cir.1985); In re Air Crash Disaster at Mannheim Germany on Sept. 11, 1982, 769 F.2d 115, 122 (3d Cir.1985), cert. denied, Schoenborn v. Boeing Co., 474 U.S. 1082, 106 S.Ct. 851, 88 L.Ed.2d 891 (1986); Tillett v. J. I. Case Co., 756 F.2d 591, 597 (7th Cir.1985); McKay v. Rockwell Int'l Corp., 704 F.2d 444, 451 (9th Cir.1983), cert. denied, 464 U.S. 1043, 104 S.Ct. 711, 79 L.Ed.2d 175 (1984). This immunity for government contractors was derived from the government's immunity under the Feres-Stencel doctrine. ³ See Bynum, 770 F.2d at 565; see also McKay, 704 F.2d at 449 ("The reasons for applying the government contractor defense to suppliers of military equipment with design defects approved by the government parallel those supporting the Feres-Stencel doctrine."). Bynum established the following elements for the government contractor defense:

To establish the government contractor defense, a military contractor m ust first demonstrate that the government is immune from liability under t h e Feres-Stencel doctrine.... Second, the military contractor must prove th at the government established reasonably precise specifications for the all egedly defective military equipment and that the equipment conformed to tho se specifications.... Finally, it must be shown that the military con...