Joint Eastern and Southern Dist. New York Asbestos Litigation, In re
| Decision Date | 20 February 1990 |
| Docket Number | D,Nos. 391-394,EAGLE-PICHER,EAGLE--PICHER,s. 391-394 |
| Citation | 897 F.2d 626 |
| Parties | , Prod.Liab.Rep.(CCH)P 12,391 In re JOINT EASTERN AND SOUTHERN DISTRICT NEW YORK ASBESTOS LITIGATION. Elvira GRISPO as Administratrix of the Estate of Joseph Grispo Deceased and Elvira Grispo Individually, Appellees, v.INDUSTRIES, INC., Appellant. Dominick FUSCO, Appellee, v.INDUSTRIES, INC., Appellant. Charles Patrick HYNES, Appellee, v.INDUSTRIES, INC., Appellant. Hyman STONE and Gussie Stone, Appellees, v.INDUSTRIES, INC., Appellant. ockets 89-7667, 89-7669, 89-7677 and 89-7679. |
| Court | U.S. Court of Appeals — Second Circuit |
Joe G. Hollingsworth, Washington, D.C. (Paul G. Gaston, Spriggs & Hollingsworth, Washington, D.C., George F. Hritz, Davis, Markel & Edwards, New York City, of counsel), for appellant Eagle-Picher.
Donald I. Marlin, New York City, for appellees Hynes and Grispo.
Stanley J. Levy, New York City, for appellees Stone and Fusco.
Before OAKES, Chief Judge and MINER and RUBIN, * Circuit Judges.
This case, an interlocutory appeal under 28 U.S.C. Sec. 1292(b) (Supp. V 1987), raises an issue of first impression in this Circuit and one of undoubtedly considerable importance to the many people now litigating claims against military contractors for injuries suffered due to asbestos exposure. In Boyle v. United Technologies Corp., 487 U.S. 500, 108 S.Ct. 2510, 101 L.Ed.2d 442 (1988), the Supreme Court recognized a federal common law defense for military contractors which, in certain instances, displaces duties imposed pursuant to state tort law. In the proceedings below, the United States District Court for the Eastern District of New York, Charles P. Sifton, Judge, by an order dated June 27, 1989, denied the motion of appellant Eagle-Picher Industries, Inc. ("Eagle-Picher") for summary judgment based upon the "military contractor defense" and, in turn, granted summary judgment for appellees striking the defense. We accepted certification of the appeal and now consider whether Boyle bars a state law failure-to-warn action seeking recovery for injuries alleged to have occurred from exposure to asbestos-based cement used at the Brooklyn Navy Yard during World War II. 1
Because we review this case following a grant of summary judgment against Eagle-Picher, we necessarily accept all allegations in the light most favorable to Eagle-Picher. Appellees ("the workers") are three persons, and the survivor of a fourth, who had worked at the Brooklyn Navy Yard around the time of World War II: Joseph Grispo and Dominick Fusco from 1941 to 1945, Charles Hynes from 1941 to 1946, and Hyman Stone from 1942 to 1944. The claims are that each of the workers was exposed during his respective time of employment to an asbestos-based cement, alternately referred to as "Eagle 66" or "Super 66," manufactured by Eagle-Picher and used on Navy ships under construction or repair at the Navy Yard.
As the record indicates in some detail, the Navy subjected the cement to fairly precise design and testing specifications, with the most important such specification mandating that the product contain a substantial concentration of asbestos, which Navy engineers deemed necessary to withstand temperatures in excess of 500 degrees Fahrenheit.
Along with its specifications regarding product content, the Navy also issued instructions pertaining to the product's packaging, packing, and labeling. A typical one of the relevant Navy guidelines instructed:
G-1. Packaging.--Unless otherwise specified, commercial packages are acceptable under this specification.
G-2. Packing.--Unless otherwise specified, the subject commodity shall be delivered in substantial commercial containers of the size commonly used, so constructed as to insure safe delivery by common or other carriers to the point of delivery at the lowest rate, and to withstand storage, rehandling, and reshipment without the necessity for further repackaging.
G-3. Shipping containers.--Unless otherwise specified, shipping containers shall be marked with the name of the material, the type, and the quantity contained therein, as defined by the contract or order under which the shipment is made, the name of the contractor, the number of the contract or order, and the gross weight. 2
In the proceedings below, Eagle-Picher moved for summary judgment, arguing that the military contractor defense recognized in Boyle precluded recovery by the workers in this case. The workers all cross-moved for summary judgment striking the defense.
In ruling upon Eagle-Picher's summary judgment motion and the workers' cross-motions, the district court found that Eagle-Picher had not established a "significant conflict" within the meaning of Boyle between the applicable labeling requirements and any state law duties to warn which may exist in this case. 3 Accordingly, the district court denied Eagle-Picher's motion for summary judgment and granted the workers' motions for summary judgment striking the defense.
For the reasons discussed below, we affirm the district court's order insofar as it denies Eagle-Picher's motion for summary judgment, but vacate its order insofar as it grants the workers' motions striking the military contractor defense, and remand for further proceedings consistent with this opinion.
Prior to addressing the particular contentions at issue in this case, we consider it worthwhile to address briefly the Supreme Court's decision in Boyle.
In Boyle, a Marine helicopter co-pilot was drowned when his helicopter crashed off the coast of Virginia Beach and he was trapped inside by a defectively designed escape hatch. Because the escape hatch only opened outward, it could not open when submerged and subjected to water pressure. The co-pilot's father sued the helicopter's manufacturer under a Virginia state law design defect theory. Following a jury verdict in favor of the co-pilot's father, the Supreme Court granted certiorari to consider if and when federal law provided a defense for military contractors sued under state law.
The Court ruled federal law does provide such a defense, reasoning that the "uniquely federal" interest in regulating the liabilities of military contractors working for the Government warranted granting military contractors a federal common law defense displacing state law tort duties. But the Court limited the defense to when a state tort law duty poses a "significant conflict" with the duties imposed under a federal contract. See Boyle, 108 S.Ct. at 2515-16.
The Court found that the policies underlying the discretionary function exception to the Federal Tort Claims Act ("FTCA"), 28 U.S.C. Sec. 2680(a) (1982), which reserves the Government's sovereign immunity for claims arising out of the Government's discretionary policy-making decisions, furnished the rationale for a military contractor defense in instances in which state tort law duties come into significant conflict with a contractor's obligations under a federal contract. The Court considered the Government's selection of design of military equipment a paradigmatic policy decision that the discretionary function exception shields from the type of judicial "second-guessing" which would come from the ordinary operation of state tort law. See Boyle, 108 S.Ct. at 2517-18 (citing United States v. Varig Airlines, 467 U.S. 797, 814, 104 S.Ct. 2755, 2765, 81 L.Ed.2d 660 (1984)). Without a congruent defense for military contractors acting pursuant to government design specifications, it reasoned, the discretionary function exception would lose much of its force. If faced with liability for carrying out the Government's directions, military contractors would pass the costs back to the Government through higher prices, thereby reimposing upon the Government the risks which stem from policy decision-making and thus frustrating the objective of the discretionary function exception of insulating the Government from those risks. See Boyle, 108 S.Ct. at 2518.
In outlining the scope of the military contractor defense, the Court prefaced its explanation by observing that the military contractor defense would not always displace state tort law, because state tort law does not inevitably conflict with duties imposed upon military contractors under federal contract. For instance, it noted, a federal contract for an air conditioner which specified cooling capacity but not design would not displace state law duties requiring a particular design, because such state duties, while adding to what the federal contract called for, would not be contrary to the federal contract. See id. at 2516. Similarly, the Court noted in Boyle, if the Government had ordered the helicopter in question from "stock," state law requiring that the escape hatch open inward would not be displaced. By ordering from stock, the Government would have signified its ambivalence as to the escape hatch's design and its tacit acceptance of whatever design state law might mandate. See id. By contrast, on the facts in Boyle, the Court observed, the duties imposed by the federal contract and state law did significantly conflict. The federal contract required that the escape hatch open outward; state law required that it open inward. In the Court's view, such a sharp conflict necessitated that federal law displace the state law design defect claim. See id.
Delineating the specific boundaries of the military contractor defense, the Court held that the defense displaces a state tort law design duty "when (1) the United States approved reasonably precise specifications; (2) the equipment conformed to those specifications; and (3) the supplier warned the United States about the dangers in the use of the equipment that were known to the supplier but not to the United States." Id. at 2518 (citing McKay v. Rockwell Int'l Corp., 704 F.2d 444, 451 (9th...
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