Nielsen v. George Diamond Vogel Paint Co.

• Decision Date: 09 January 1990
• Docket Number: No. 87-4351,87-4351
• Citation: 892 F.2d 1450
• Parties: , Prod.Liab.Rep. (CCH) P 12,354 Ronald E. NIELSEN, Plaintiff-Appellant, v. GEORGE DIAMOND VOGEL PAINT COMPANY, Defendant-Appellee, and United Coatings, Inc., et al., Defendants.
• Court: U.S. Court of Appeals — Ninth Circuit

Page 1450

892 F.2d 1450

58 USLW 2423, Prod.Liab.Rep. (CCH) P 12,354

Ronald E. NIELSEN, Plaintiff-Appellant, v. GEORGE DIAMOND VOGEL PAINT COMPANY, Defendant-Appellee, and United Coatings, Inc., et al., Defendants.

No. 87-4351.

United States Court of Appeals, Ninth Circuit.

Argued and Submitted Jan. 11, 1989.

Decided Jan. 9, 1990.

Albert J. Bannon, Portland, Or., for plaintiff-appellant.

Gerald E. Montgomery, Portland, Or., and Patrick K. Shine, Spokane, Wash., for defendant-appellee.

Appeal from the United States District Court for the Eastern District of Washington.

Before SCHROEDER, POOLE and NELSON, Circuit Judges.

SCHROEDER, Circuit Judge:

1. INTRODUCTION

This is a diversity action brought by Ronald Nielsen, a former civilian employee of the United States government's Army Corps of Engineers. Nielsen's job for many years was to paint a dam in Idaho. Nielsen sued the manufacturers of paint which he used in the course of his job, alleging that it led to permanent brain damage. The district court granted summary judgment in favor of the defendants, agreeing that any defects in the design of the paint and in warnings on its use were attributable to government specifications, and that under Idaho law the manufacturer would not be liable for damages on either negligence or strict liability principles.

On appeal, the defendants also contend that as a result of the Supreme Court's intervening decision in Boyle v. United Technologies Corp., 487 U.S. 500, 108 S.Ct. 2510, 101 L.Ed.2d 442 (1988), they are entitled to summary judgment as a matter of federal law by virtue of the defendants' contractual relationship to the United States government, which required them to manufacture the paint used at Nielsen's work site in accordance with government-approved specifications. We do not read Boyle to establish the broad immunity for all government procurement contractors urged by the defendants, but we affirm the summary judgment in favor of defendants on most of plaintiff's claims on the basis of Idaho state law.

II. FACTS

Ronald Nielsen was employed by the United States Army Corps of Engineers as a painter from 1975 to 1983. Nielsen worked almost exclusively at the Albeni Falls Dam in Idaho. In September, 1980, Nielsen began experiencing severe headaches, chest pain, disorientation and nausea. He related these symptoms to his exposure to paint products at the Albeni work site. Nielsen also began suffering bouts of depression and changes in personality manifested in outbursts of hypersensitivity, anger, and frustration. Nielsen ultimately quit his job and filed a successful claim under the Federal Employee Compensation Act. His symptoms were diagnosed as solvent-induced brain damage resulting from the inhalation of toxic paint fumes. Nielsen then brought this action against the manufacturers of the paint that he used at the Albeni Falls Dam Project.

Nielsen's complaint alleged that the defendants were liable in strict liability for manufacturing defective and unreasonably dangerous products, and that the products did not contain adequate warnings of the dangers involved in their use or instructions on how to use them safely. The complaint also alleged that the defendants were negligent in producing paints which were dangerous to the ultimate user when safer compositions were available.

The United States District Court for the Eastern District of Washington assumed jurisdiction over Nielsen's products liability action on the basis of diversity of citizenship. 28 U.S.C. § 1332 (1982). The district court determined that the substantive law of Idaho applied because the plaintiff was injured while working in Idaho. The defendant paint manufacturers moved for summary judgment on the grounds that the suit was barred because the defendants were following specifications prepared by the government, and there were no defects in the specifications of which they should reasonably have been aware.

The district court granted summary judgment for the defendants on October 16, 1987. The district court held that the defendants were entitled to summary judgment because the "contract specifications" defense would be available under Idaho law to a contractor who manufactured paint in accordance with government specifications. The court held that the evidence presented by the defendants was sufficient to raise the inference that the United States government had provided reasonably precise specifications to the defendants, and that the defendants did not possess greater expertise than the government with regard to the paint products, and thus were entitled to rely on the government's specifications. There was no contrary showing by the plaintiff. The district court held that a contract specifications defense was available under Idaho law to bar both plaintiff's negligence and strict liability claims for defective design of the paint.

With regard to Nielsen's claim that the defendants were liable for failure to warn of inherent dangers in the products, the court held that the defendants' evidence showed that certain warnings were required by the terms of the contracts to be included in the labels on the paint containers. The court held that Nielsen had failed to come forward with evidence that the required warnings had or had not been complied with when Nielsen used the products, and that Nielsen thus failed to meet his burden of showing that warnings actually provided were inadequate. This appeal followed.

On appeal, Nielsen does not contest the district court's factual findings on the defective design claims. Rather, Nielsen argues that the district court erred in finding that the contract specifications defense was available to these defendants as a matter of Idaho law. Nielsen contends that the failure to warn claim presented triable issues of fact.

We review the district court's grant of summary judgment de novo. Williams v. Edwards Apffels Coffee Co., 792 F.2d 1482, 1484 (9th Cir.1986). We review the district court's determination of state law de novo. Yamaguchi v. State Farm Mutual Auto Ins. Co., 706 F.2d 940, 946 n. 5 (9th Cir.1983); Allen v. Greyhound Lines, 656 F.2d 418, 421-22 (9th Cir.1981).

III. APPLICABILITY OF A GOVERNMENT CONTRACT DEFENSE UNDER FEDERAL LAW

At the time that the district court decided this case, the law of this circuit and others recognized a defense available to military contractors when sued for injuries suffered by military personnel and attributable to defects in products manufactured in accordance with government-approved specifications. See, e.g., Bynum v. FMC Corp., 770 F.2d 556, 564-66 (5th Cir.1985); Tillett v. J.I. Case Co., 756 F.2d 591, 596-97 (7th Cir.1985); McKay v. Rockwell Int'l Corp., 704 F.2d 444, 449 (9th Cir.1983), cert. denied, 464 U.S. 1043, 104 S.Ct. 711, 79 L.Ed.2d 175 (1984). The defense had its origins in the judicially-created Feres doctrine, which was designed to protect the United States government from suits by plaintiffs injured in the course of military service. See Feres v. United States, 340 U.S. 135, 71 S.Ct. 153, 95 L.Ed. 152 (1950). In Feres, the Supreme Court decided that the provisions of the Federal Tort Claims Act did not waive the United States' sovereign immunity for actions based on injuries arising from military service.

This circuit's decision in McKay contains a comprehensive explanation of the background and reasons for making such a defense available to military contractors. See McKay, 704 F.2d at 449-50. Judge Sneed's opinion explains that the roots of the defense lie in the special need for the maintenance of military discipline and the avoidance of litigation "second-guessing" sensitive military decisions. Id. at 449 (citing Stencel Aero Engineering Corp. v. United States, 431 U.S. 666, 673, 97 S.Ct. 2054, 2058-59, 52 L.Ed.2d 665 (1977)). The opinion also explains that permitting the contractor to be held liable would undercut the effectiveness of the immunity that the Feres doctrine was designed to ensure, since contractors would eventually pass off the costs of such litigation to the government in its contract price. Judge Sneed stated that:

[T]he Supreme Court emphasized in Stencel that the United States cannot be directly or indirectly liable to servicemen injured by defective military products. But holding the supplier liable in government contract cases without regard to the extent of government involvement in fixing the product's design and specifications would subvert the Feres- Stencel rule since military suppliers, despite the government's immunity, would pass the cost of accidents off to the United States through cost overrun provisions in equipment contracts, through reflecting the price of liability insurance in the contracts, or through higher prices in later equipment sales.

Id. (footnote omitted)

The defendants argued in the district court that under McKay, they should be insulated from liability because they manufactured the product in accordance with government-approved specifications, even though the injuries were incurred by a civilian in the course of using a product that was not designed for any special military purpose. The district court properly concluded that the military contractor defense as defined in McKay was not applicable.

Following the district court's decision, however, and before this case was briefed on appeal, the Supreme Court decided Boyle v. United Technologies Corp., 487 U.S. 500, 108 S.Ct. 2510, 101 L.Ed.2d 442 (1988). Boyle, like McKay, was an action for injuries suffered in the course of military duties and attributable to allegedly defective equipment designed pursuant to government-approved military specifications. In Boyle, the co-pilot of a military helicopter drowned when he could not escape from the helicopter after it crashed in the sea. Boyle, 108 S.Ct. at 2513. Survivors brought a diversity action against the manufacturer of the helicopter for defective design of the escape hatch,...