Stout v. Borg-Warner Corp., BORG-WARNER

• Citation: 933 F.2d 331
• Decision Date: 13 June 1991
• Docket Number: No. 90-8294,BORG-WARNER,90-8294
• Parties: Prod.Liab.Rep.(CCH)P 12,835 Kendall STOUT, Plaintiff-Appellant, v.CORPORATION, et al., Defendants, Fairchild-Hiller Stratos Division, Defendant-Appellee.
• Court: United States Courts of Appeals. United States Court of Appeals (5th Circuit)

Page 331

933 F.2d 331

Prod.Liab.Rep.(CCH)P 12,835

Kendall STOUT, Plaintiff-Appellant, v. BORG-WARNER CORPORATION, et al., Defendants, Fairchild-Hiller Stratos Division, Defendant-Appellee.

No. 90-8294.

United States Court of Appeals,

Fifth Circuit.

June 13, 1991.

Rehearing and Rehearing En Banc

Denied July 15, 1991.

Susan Larsen, El Paso, Tex., for plaintiff-appellant.

James L. Gallager, Scott A. Agthe, Scott, Hulse, Marshall, Feuille, Finger & Thurmond, El Paso, Tex., for defendant-appellee.

Appeal from the United States District Court for the Western District of Texas.

Before WISDOM, JOLLY and DAVIS, Circuit Judges.

E. GRADY JOLLY, Circuit Judge:

In this product liability action, Kendall Stout, a former United States Army Corporal, caught his hand in a fan. He brought suit against Fairchild-Hiller Stratos Division of Fairchild Industries, Inc. ("Fairchild"), the designer and manufacturer of a 38,000 BTU air conditioning unit used by the United States Army to cool its Hawk Missile System Mobile Repair Unit. It was while he was attempting to repair the air conditioning unit that his right hand was caught in the rotating blades of the unit's condenser fan. He appeals the district court's award of summary judgment granting Fairchild immunity from Stout's defective design and failure to warn claims under the government contractor defense set forth in Boyle v. United Technologies Corp., 487 U.S. 500, 108 S.Ct. 2510, 101 L.Ed.2d 442 (1988). We affirm.

I

Kendall Stout was a United States Army air conditioning repair technician stationed at Fort Bliss, Texas. On September 6, 1985, he lost four of his fingers and one-half of his thumb on his right hand while attempting to repair a VEA4-3A air conditioning unit. He was injured while checking for blockage in the Freon system by manually feeling the temperature differences in the copper lines running from the unit's compressor. To conduct this inspection, Stout had removed the side panels of the air conditioner while the unit was still in operation. There is a factual dispute as to whether the suction created by the condenser fan forced his right hand across the fan's rotating blades or whether Stout himself inadvertently flinched his hand across the blades. The Army, however, after conducting an investigation, concluded that the accident was caused by Stout's own negligence, which supports the latter version of how the accident happened.

The VEA4-3A air conditioner is used by the United States Army to cool the Hawk Missile System Mobile Repair Unit. The air conditioner mounts on the side of the Hawk radar repair shelters. It serves to maintain controlled atmospheric conditions inside the shelter, preventing damage to the sensitive computers and radar systems essential to the performance to the Hawk Missile System.

The Army Corps of Engineers had developed the predecessor to the VEA4-3A air conditioner known as the VEA4-3. In the early 1960s, the Army Corps of Engineers at Fort Belvoir's Army Research and Development Center wrote and issued initial specifications for a redesigned VEA4-3 air conditioner for specific use with the Hawk Missile System. The Army's initial specifications included engineering design drawings and required shop drawings and pre-production models. The Army's specifications for the unit's condenser fan were as follows:

Air-handling components. All air fans shall be of the continuous-duty type, statically and dynamically balanced.

Fan motors. The evaporator and condenser fan motors shall be of continuous-duty type, totally enclosed, and fungus-proofed and shall be equipped with permanently lubricated ball bearings. The motors shall be equipped with thermal overload protectors sized to prevent motor operation above the safe operating temperature for which the motor is rated.

Notably, these specifications did not provide for, or prohibit, the installation of a safety device, such as a wire screen to cover the condenser fan.

In 1966, Fairchild was awarded the contract to redesign the VEA4-3. Fairchild performed a detailed engineering analysis, including engineering calculations to select components for the VEA4-3A that would comply with the Army's specifications. This detailed engineering analysis was then reviewed and approved by Army engineers.

Fairchild next developed a complete preliminary design layout, consisting of several engineering drawings of the assembled configuration and dimensions of the air conditioning unit. The preliminary design layout was submitted to Army engineers for a formal preliminary design review. At this time, the Army engineers critiqued the layout, made changes in the preliminary drawings, and then approved the preliminary design.

Fairchild then prepared detailed drawings from which each component of the unit would be fabricated. As with the initial engineering analysis and the preliminary design layout drawings, these detailed design drawings were submitted to the Army for review, evaluation, and approval and were subject to any changes desired by the Army at a critical design review. The critical design review lasted several days and every component of the VEA4-3A was reviewed by Army engineers.

After the Army granted its final approval of the detailed drawings, the design was "frozen." Any variation by Fairchild from the detailed design at this point would result in automatic rejection of the unit by the Army.

After the detailed design had been approved and the design frozen by the Army, Fairchild was required to fabricate each part specified in the detailed drawings and build prototype models. These models underwent extensive testing for several months by both Fairchild and the Army to analyze and evaluate the VEA4-3A design for actual performance. After the performance testing was completed, the Army spent approximately one month reviewing and evaluating the test results. Thereafter, the Army gave its final approval to the design of the unit and accepted bids for the manufacture of VEA4-3A. Fairchild was awarded the manufacturing contract, and production of the unit began shortly thereafter.

Fairchild also prepared the technical manual for the VEA4-3A. The manual contained a warning about operating the unit without its side panels, as follows:

The operating voltage of this air conditioner is dangerous to persons coming in contact with any part of the electrical system. Severe, possible fatal, shock may result. Disconnect the power source before performing any maintenance or inspection, other than operating tests of the air conditioner.

In addition, the manual accompanying the preceding model, the VEA4-3, contained the following warning:

Never perform maintenance on the air conditioner when the unit is operating.

Always operate the air conditioner with all panel tightly secured to prevent personal contact with electrical components or moving parts.

Stout stated in his deposition that he had been trained to repair air conditioning units at Fort Belvoir, Virginia. He further stated that, notwithstanding the warnings contained in the two manuals, he had been taught to identify problems in the Freon system of such units by taking the side panels off while the unit was still in operation and feeling the lines to determine if the flow of Freon was blocked.

II

On June 16, 1987, Stout filed a products liability action against several defendants. The complaint alleged that the VEA4-3A was unreasonably dangerous because of its defective design because there was no safety device that would prevent contact with the condenser fan while the unit was in operation. The complaint also alleged that the technical manual failed to warn about the danger. After discovery, all defendants except Fairchild were dismissed. Fairchild filed a motion for summary judgment, asserting the military contractor defense set forth by the United States Supreme Court in Boyle v. United Technologies, Inc., 487 U.S. 500, 108 S.Ct. 2510, 101 L.Ed.2d 442 (1988). The district court granted Fairchild's motion for summary judgment, and Stout filed this appeal.

III

We review the district court's summary judgment award using the same standard as that employed initially by the trial court under Rule 56, Fed.R.Civ.P. USX Corp. v. Tanenbaum, 868 F.2d 1455, 1457 (5th Cir.1989). Under Rule 56, summary judgment is proper only where "there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law." In determining whether fact issues exist, we are required to view the evidence in the light most favorable to the nonmoving party.

As is obvious from the foregoing, the issue on this appeal is whether summary judgment was erroneously granted on the grounds that the government contractor defense barred Stout's claims. This issue will be determined by our application of Boyle v. United Technologies, Inc., 487 U.S. 500, 108 S.Ct. 2510, 101 L.Ed.2d 442 (1988), to the undisputed facts.

The Supreme Court in Boyle reformulated the elements of this defense. The Supreme Court recognized that applying state law to hold government contractors liable for design defects in military equipment might significantly conflict with federal interests and policy. The Supreme Court reasoned that in such cases the cost of the court judgment would ultimately be passed through to the government, thus abrogating the immunity otherwise enjoyed by the government in those cases. Such a result was intolerable, and in those circumstances federal policy displaced state law.

The Boyle Court reasoned that the displacement of state law occurs, and that government contractors are immunized from liability for design defects in military equipment under state law, when (1) the government approved reasonably precise specifications; (2) the equipment conformed to those specifications; and (3) the contractor warned the government about the dangers in the use of the equipment that were known to the contractor but not to the government. See...