MICHAEL S. SILVERSTEIN and
ROSEANNE SILVERSTEIN, husband
and wife,
Plaintiffs-Appellants,
v.
NORTHROP GRUMMAN
CORPORATION, a Delaware
corporation formerly known as
GRUMMAN CORPORATION, a New York
corporation, GRUMMAN ALLIED
INDUSTRIES, INC., a New York
corporation, GENERAL MOTORS
CORPORATION, a Delaware corporation,
Defendants-Respondents
and
GARY W. STROMBERG, CHARLES J.
KOWALSKI,
Defendants.
Argued February 4, 2004 - Decided March 10, 2004
Before Judges Kestin, Cuff and Winkelstein.
On appeal from the Superior Court of New Jersey, Law Division, Middlesex County,
MID-L-10630-96.
Andrew R. Jacobs argued the cause for appellants (Epstein, Fitzsimmons, Brown, Gioia, Jacobs
& Sprouls, attorneys; Mr. Jacobs, of counsel; Mr. Jacobs, Ronald Leibman, and Allison
Kinnier, on the brief).
James N. Tracy argued the cause for respondent, General Motors Corporation (Tansey, Fanning,
Haggerty, Kelly, Convery & Tracy, attorneys; Mr. Tracy, of counsel and on the
brief).
Philip W. Crawford argued the cause for respondents Northrop Grumman Corporation, Grumman Corporation
and Grumman Allied Industries, Inc. (Gibbons, Del Deo, Dolan, Griffinger & Vecchione, attorneys;
Mr. Crawford, on the brief).
The opinion of the court was delivered by
WINKELSTEIN, J.A.D.
Michael Silverstein (plaintiff), while an employee of the United States Postal Service (USPS),
was seriously injured when the postal vehicle he was driving, known as an
LLV (Long Life Vehicle), rolled over after being struck by a car.
See footnote 1 He
and his wife, who has asserted a
per quod claim, have raised a
strict liability claim against the corporate defendants (General Motors (GM) and Grumman) for
defective design of the LLV. They assert the vehicle's defective design caused it
to roll over when struck by the car. Judge Ciccone granted summary judgment
to the corporate defendants, and dismissed plaintiff's complaint against them based on the
"government contractor defense," which, when successfully raised, preempts state law claims against federal
government contractors. See Boyle v. United Techs. Corp.,
487 U.S. 500, 512-14,
108 S. Ct. 2510, 2518-20,
101 L. Ed.2d 442, 458-59 (1988).
In this appeal, we are called upon to decide two issues: first, whether
the government contractor defense applies to nonmilitary contracts; and second, if it does,
have the corporate defendants established each element of the Boyle test so as
to qualify for the defense. We answer both questions in the affirmative. The
government contractor defense may be raised by nonmilitary contractors; and here, the corporate
defendants have successfully established all of the elements enunciated by the United States
Supreme Court in Boyle to qualify for the defense. Accordingly, we affirm.
I. FACTUAL BACKGROUND
A. The Accident
Plaintiff was injured on October 28, 1994, while driving a 1993 LLV, a
right-side operated vehicle, on Hamilton Street in Franklin Township. While attempting to make
a left turn, plaintiff's vehicle was struck in the rear by another vehicle.
The impact caused the LLV to roll onto its right side and slide
along the pavement, pinning plaintiff's right arm beneath it. As a result of
the injuries plaintiff sustained in the accident, his right arm was amputated.
B. Design and Development of the LLV
In the early 1980's, the USPS decided to seek bids for a new
mail delivery truck to replace the Jeep-type vehicle, known as the DJ-5, which
the USPS had used for many years. Each DJ-5 was being replaced approximately
every eight years, and the USPS wanted a vehicle that could last twenty-four
years, which would result in significant cost savings. The new vehicle would be
known as the "Long Life Vehicle" or LLV.
Before it drafted the specifications for the LLV, the USPS had gained substantial
knowledge about vehicle design and rollover stability through its experience with the DJ-5.
That vehicle had been involved in numerous rollover accidents, generating over two dozen
lawsuits alleging it was unstable. In fact, the rollover issue was featured on
a television news magazine show. As a result, the USPS authorized a study
of the vehicle's possible stability problem, from which the USPS concluded that the
DJ-5 was not unstable.
The USPS does not design vehicles; rather, it prepares performance specifications and seeks
a design from manufacturers based on those specifications. For this reason, when the
USPS developed detailed specifications for the LLVs, which it put out to bid
on March 20, 1984, it sought written technical proposals from the manufacturers. The
specifications contained express dimension requirements for the vehicle, as well as requirements concerning
design, safety, ease of maintenance, and fuel economy. The design of the vehicle
was required to comply with all federal motor vehicle safety standards. According to
Robert St. Francis, the Director of the USPS Office of Fleet Management, whose
responsibilities included developing specifications for vehicles and vehicle acquisitions, the USPS was "careful
to draft specifications [for the LLV] that would not require any of the
[proposed vehicles] to exhibit unstable characteristics," because the USPS was "acutely aware" of
stability issues based on its experience with the DJ-5.
The USPS received three proposals in response to the 1984 request. Among them,
was a September 1984 joint submission by Grumman and GM. The LLV they
proposed had its origins in the GMC S-10 Blazer (Blazer). Their LLV was
"expected to have similar stability and handling characteristics as the [Blazer]," but because
the "[s]tability of a vehicle is a very complex parameter[, it] . .
. can only be fully defined when the vehicle is driven." USPS engineers
also recognized that the LLV was not expected to handle like a passenger
vehicle because, as a sport utility vehicle, it had a higher center of
gravity than a typical automobile.
During the proposal phase of the procurement process, the contractors would submit written
questions to the USPS contracting officer, and the USPS would supply the technical
answers in writing. The technical proposals would then be reviewed by a USPS
technical team to determine if they were acceptable.
The bidders were also required to furnish a technical proposal vehicle (TPV) for
examination and testing before a contract could be awarded. The TPV was to
be a "facsimile of the final version that embodies as many features of
the final design as possible."
In 1985, after receiving the proposals but before awarding the contract, a team
of USPS personnel, along with independent contractor Booz-Allen & Hamilton, Inc., performed and
monitored physical and dynamic (driving) tests on the TPVs based upon "postal test
criteria." They tested for total compliance with the specifications. The manufacturers' representatives were
also present during testing. Rating the LLV superior to the DJ-5, the primary
driver for the USPS team, who had experience both as a professional mechanic
and race car driver, concluded that the Grumman LLV was "a magnificent vehicle"
and "handled beautifully." Based on Grumman's technical proposal, the USPS Engineering department believed
the LLV would be "inherently more stable" than the Blazer because of its
lower center of gravity, lighter aluminum body, and wider rear track.
While the USPS tested the LLV prior to awarding the contract, so did
Grumman/GM. During this preproduction testing in April 1985, Robert Taylor, a GM development
engineer, co-authored a memo listing several incidents of the front wheel of the
vehicle lifting off the ground. He considered the condition unacceptable because it meant
a lack of proper control of the "front to rear suspension." Taylor suggested
the problem could be resolved with changes to the front and rear spring
and front and rear stabilizer bar. He recommended obtaining additional data so the
LLV design group could "determine the feasibility of incorporating the recommended changes to
the existing LLV design." He explained that although the vehicle was not "unstable,"
the condition nonetheless was one he "would not approve for production as a
design." The information concerning the front wheel lift was not shared with the
USPS.
Booz-Allen issued its report of the USPS test results in April 1985, concluding
that the Grumman TPV "completed the testing . . . with no failure
of major vehicle components or subsystems." In May, the USPS notified Grumman that
its TPV had successfully completed the first step of the solicitation process. According
to St. Francis, the other two bidders' vehicles "physically fell apart or were
destroyed during the test phase," while Grumman's TPV "passed the test without an
incident."
Both the technical proposal and the specifications, which were revised as of March
26, 1986, were incorporated into the contract that the USPS awarded to Grumman/GM
in April 1986. The contract called for Grumman/GM to build 99,150 LLVs. The
contract price was more than $1.1 billion and the term of the contract
was to continue through January 1993, with options to extend. All LLVs were
to be constructed in accordance with the 1986 specifications and the contractor's technical
proposal. Grumman/GM would present the USPS with a "first article" (the first vehicle
off the production line) by September 15, 1986, which the USPS would examine
and test, and would either approve or reject. The LLV to be delivered
under the terms of the contract was to be "of the same overall
design and materials as the Contractor's successful Technical Proposal Vehicle." The specifications called
for the LLV to be "ruggedly constructed and highly maneuverable," while the safety
characteristics "shall obviate hazards to personnel and property. . . . [t]otal design
shall incorporate the best principles of ruggedness, roadability, safety of operation, ease of
handling, cargo loading, and minimum scheduled preventative maintenance servicing."
The contract called for the USPS to be involved with testing the LLV.
Particular test conditions were specified, including testing for vehicle stability and handling characteristics.
The specifications set forth various "quality assurance provisions," one of which required that
a road test of the vehicle be performed by USPS personnel. This test
was specifically included in the specifications to allow the USPS to assess the
rollover stability of the LLV. The USPS retained the right to reject the
vehicle if it was not satisfied with the test results. The specifications stated:
Road Test - The vehicle shall be driven by a USPS representative a
sufficient distance to determine its operating and handling characteristics . . . .
The vehicle shall be closely observed for ease of handling and general roadworthiness,
i.e., stability, undesirable sway tendency, off-tracking, acceleration, deceleration (including braking) . . .
. Evidence of poor handling qualities of roadworthiness characteristics or failure of the
vehicle to maintain safety [at various speeds and grades] . . . shall
be cause for rejection of the vehicle.
The contract also permitted the USPS to perform quality conformance examinations on randomly
selected models, to ensure that the quality performance requirements were maintained throughout production.
In April 1987, the USPS notified Grumman/GM that it had approved the test
vehicle. Production began, and the first LLVs were put in service that year.
The design of the LLV conformed to USPS performance requirements for rollover stability.
On December 22, 1989, an LLV in use in the Chicago area rolled
over in an accident. Upon learning of this accident, on January 2, 1990
a USPS employee notified Grumman, raising the issue of the vehicle's stability. Another
rollover accident occurred on December 7, 1992, in Florida, involving USPS employee Michael
Diaz. When Grumman learned of this accident it did not immediately notify the
USPS. Over the term of the contract, however, the USPS tracked accidents involving
the LLV and its employees, such as Diaz, as it did with the
DJ-5.
Despite the accidents, on at least two occasions the USPS exercised its option
to purchase additional LLVs under the contract. Ultimately, the USPS purchased approximately 167,000
LLVs. Grumman also marketed a commercial equivalent of the LLV to the general
public, to the postal service in Canada, and to other countries.
II. GOVERNMENT CONTRACTOR DEFENSE
In Boyle, the government contractor defense was applied in the context of a
military procurement contract. 487 U.S. at 502, 108 S. Ct. at 2513, 101
L. Ed.
2d at 451. David Boyle was a United States Marine helicopter
co-pilot who was killed when the helicopter in which he was flying crashed
off the coast of Virginia Beach, Virginia during a training exercise. Ibid. He
drowned when he was unable to escape from the helicopter. Ibid. His father
brought an action claiming that the manufacturer defectively designed the co-pilot's emergency escape
system, which ultimately caused Boyle's death. Id. at 503, 108 S. Ct. at
2513, 101 L. Ed.
2d at 452.
On appeal from a jury verdict in favor of the plaintiff, the Fourth
Circuit reversed, finding the manufacturer was protected from liability under state law based
on the "military contractor defense." See Boyle v. United Techs. Corp.,
792 F.2d 413, 414 (4th Cir. 1986), cert. granted,
479 U.S. 1029,
107 S. Ct. 872,
93 L. Ed.2d 827 (1987). The Supreme Court agreed with the
Court of Appeals that the government contractor defense was applicable, but remanded for
clarification of the Circuit Court's decision. Boyle, supra, 487 U.S. at 514, 108
S. Ct. at 2519-20, 101 L. Ed.
2d at 459.
In arriving at its conclusion, the Court reasoned that the liability of outside
contractors performing work for the federal government was an area of uniquely federal
interest because the imposition of liability on those contractors would "directly affect the
terms of Government contracts: either the contractor will decline to manufacture the design
specified by the Government, or it will raise its price." Id. at 506-07,
108 S. Ct. at 2515-16, 101 L. Ed.
2d at 454. Thus, to
safeguard this federal interest, the Court articulated a three-prong test, which, if met,
would entitle a government contractor to immunity from state tort law claims. Id.
at 512, 108 S. Ct. at 2519, 101 L. Ed.
2d at 458.
The Court held that a contractor will not be liable in tort under
state law to third parties where the contractor proves: "(1) the United States
approved the 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 512, 108 S. Ct. at 2518,
101 L. Ed. 2d at 458. When these three elements are present, state tort law "significantly
conflicts with federal interests" and is displaced by federal common law. Yeroshefsky v.
Unisys Corp.,
962 F. Supp. 710, 715 (D.Md. 1997).
The Court grounded the scope of the displacement in the discretionary function exemption
of the Federal Tort Claims Act (FTCA),
28 U.S.C.A.
§2680(a). Boyle, supra, 487
U.S. at 511,
108 S. Ct. 2518, 101 L. Ed.
2d at 457.
This exception renders inapplicable the FTCA's waiver of sovereign immunity to any claim
"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."
Carley v. Wheeled Coach,
991 F.2d 1117, 1121 (3d Cir.) (quoting 28 U.S.C.
§ 2680(a)), cert. denied,
510 U.S. 868,
114 S. Ct. 191,
126 L. Ed. 2d 150 (1993). Thus, the government contractor defense applies to "actions requiring the
exercise of discretion by 'a federal agency or employee of the Government.'" Yeroshefsky,
supra, 962 F. Supp. at 716 (quoting
28 U.S.C.A.
§2680(a)). Whether the government
exercised discretion is determined by the application of the first two prongs of
the three-prong test, which assure that "the design feature in question was considered
by a Government officer, and not merely by the contractor itself." Boyle, supra,
487 U.S. at 512, 108 S. Ct. at 2518,
101 L. Ed 2d
at 458.
III. APPLICATION OF GOVERNMENT CONTRACTOR DEFENSE TO NONMILITARY CONTRACTS
Prior to Boyle, the federal common-law defense that screened military government contractors from
liability in products liability actions existed under what was known as the Feres-Stencel
doctrine. See Feres v. United States,
340 U.S. 135, 146,
71 S. Ct. 153, 159,
95 L. Ed. 152, 161 (1950) (based on distinctly federal character
of relationship between the United States Government and members of its armed forces,
finding soldier precluded from suing United States for injuries caused by negligence of
soldier's superior officers or Government if injuries incident to military service); Stencel Aero
Eng'g Corp. v. United States,
431 U.S. 666,
97 S. Ct. 2054,
52 L. Ed.2d 665 (1977) (in military context, extending Feres to indemnity claims).
This doctrine had been limited in its application to torts arising out of
military service. Carley, supra, 991 F.
2d at 1121. The Boyle Court rejected the
Feres-Stencel doctrine as a basis for government contractor immunity; instead, it rested its
decision in the discretionary function exception of the FTCA. Boyle, supra, 487 U.S.
at 510-11,
108 S. Ct. 2517-18, 101 L. Ed.
2d at 456-57. The
majority decision of the Court did not directly comment upon whether the government
contractor defense would be applicable in the context of nonmilitary contracts.
In Carley, supra, the Third Circuit was faced with that question. 991 F.2d
at 1118. Finding that the same policy concerns were present regardless of whether
the contract was military-related, the court concluded that the defense was available to
nonmilitary contractors. Ibid. The court said:
Though government contracts for nonmilitary products do not involve considerations of combat effectiveness,
all of the other policy reasons cited by the [Boyle] Court in support
of the government contractor defense are equally applicable to military and nonmilitary procurements.
To determine the design of a nonmilitary product, the government sometimes may engage
in complex engineering analysis and may trade off product safety in favor of
other technical, economic, or social considerations. If nonmilitary contractors were not protected by
a government contractor defense, their increased financial burdens would pass through to the
government. Also, allowing state tort actions against nonmilitary contractors who have complied with
government contracts would, in effect, empower state authorities to "second-guess" federal policy decisions
respecting the design of products for use in civilian projects.
[Id. at 1121-22 (citation and footnote omitted).]
While the federal courts are split over the issue, the majority have agreed
with Carley, and have concluded that the government contractor defense extends to nonmilitary
contracts. See Yeroshefsky, supra, 962 F. Supp. at 717 (acknowledging split, but expressly
following Carley); Wisner v. Unisys Corp.,
917 F. Supp. 1501, 1509-10 (D.Kan. 1996)
(citing Carley); Fagans v. Unisys Corp.,
945 F. Supp. 3, 6 n.3 (D.D.C.
1996) (noting Carley); Guillory v. Ree's Contract Serv.,
872 F. Supp. 344, 346
(S.D. Miss. 1994) (citing Carley); Richland-Lexington Airport Dist. v. Atlas Props.,
854 F.
Supp. 400, 422 (D.S.C. 1994) (citing Carley as the rule in Third, Seventh
and Eleventh Circuits); Lamb v. Martin Marietta Energy Sys.,
835 F. Supp. 959,
966 (W.D.Ky. 1993) (following Carley); Johnson v. Grumman Corp.,
806 F. Supp. 212,
217-18 (W.D.Wis. 1992) (government contractor defense applied in nonmilitary context involving design of
component of the LLV at issue here, but Grumman denied summary judgment based
on material issues of fact as to whether government sufficiently reviewed design of
component); Haltiwanger v. Unisys Corp.,
949 F. Supp. 898, 902 (D.D.C. 1996) (applying
Boyle standard to claims by postal employees for injuries stemming from operation of
postal equipment, but not expressly addressing nonmilitary application of defense). But cf. In
re Hawaii Fed. Asbestos Cases,
960 F.2d 806, 812 (9th Cir. 1992) (government
contractor defense not available to manufacturers of products that were not "specialized items
of military equipment," but "goods sold on the ordinary commercial market"); In re
Chateaugay Corp.,
146 B.R. 339, 351 (Bankr. S.D.N.Y., 1992) (government contractor defense limited
to military context); Nielsen v. George Diamond Vogel Paint Co.,
892 F.2d 1450,
1453-55 (9th Cir. 1990) (court did not read Boyle to extend to nonmilitary
products).
Although a minority of courts may differ, we find persuasive the reasoning of
the lion's share of the federal courts that the government contractor defense applies
to nonmilitary, as well as military contracts. Three significant policy reasons that underlie
the defense apply in the context of both military and nonmilitary contracts. First,
without having the government contractor defense available, the government may lose the flexibility
it needs to trade-off certain safety factors for other economic or technical considerations.
Carley, supra, 991 F.
2d at 1121-22. Second, nonmilitary contractors may pass their increased
financial burdens to the public, or the contractors may not bid for the
work. Ibid. And third, "allowing state tort actions against nonmilitary contractors who have
complied with government contracts would, in effect, empower state authorities to 'second-guess' federal
policy decisions respecting the design of products for use in civilian projects." Id.
at 1122.
The Boyle Court also rejected the Feres-Stencel rule, which was fashioned upon the
distinct federal character of the relationship between the United States and its armed
forces. The rejection of this basis for the government contractor defense weighs against
limiting the defense solely to military contracts. See Boyle, supra, 487 U.S. at
510-11, 108 S. Ct. at 2517-18, 101 L. Ed.
2d at 456-57.
The concept of cloaking a contractor doing business with the federal government with
immunity from state tort law is not new in this state. Two New
Jersey pre-Boyle cases have recognized that when a government contractor strictly adheres "to
the plans and specifications owned and provided by the Government," the contractor should
not be held liable in tort for a product design defect. See McDermott
v. TENDUN Constructors,
211 N.J. Super. 196, 206 (App. Div.) (contractor, strictly adhering
to plans and specifications provided by government, had no discretion, and therefore not
liable for defective design of mail conveyor causing death of mail handler), certif.
denied,
107 N.J. 43 (1986); Sanner v. Ford Motor Co.,
154 N.J. Super. 407, 409 (App. Div. 1977) (Ford immunized from liability in manufacturing army Jeep
vehicle without seatbelts, because it "strictly adhered" to government's plans and specifications), certif.
denied,
75 N.J. 616 (1978).
In support of his argument that the government contractor defense is not available
beyond the military context, plaintiff cites to Anzalone v. WesTech Gear Corp.,
271 N.J. Super. 522 (App. Div. 1994), aff'd by an equally divided court,
141 N.J. 256 (1995), cert. denied,
516 U.S. 1046,
116 S. Ct. 706,
133 L. Ed.2d 662 (1996). Anzalone involved a lawsuit by a civilian naval
employee who had a portion of his hand severed by a ram tensioner
a component of a system used to transfer fuel and supplies between ships
while aboard a naval tanker. Id. at 524-25. The plaintiff claimed the device
was defectively designed because it lacked safety features that could have prevented his
injury. Id. at 524. The Law Division granted the manufacturer summary judgment, in
part based on the government contractor defense. Ibid. We reversed because the contract
contained "no specifications with respect to safety devices." Id. at 535. In other
words, we determined that the record did not reflect that the government exercised
any discretion concerning the safety of the equipment at issue. Id. at 535-37.
The alleged defective instrumentality was left solely to the manufacturer's discretion. Id. at
533-34.
Here, on the other hand, the record is replete with evidence that the
USPS exercised its discretion with regard to the design aspects of the LLV,
including the specifications and tests that involved the LLV's stability. The USPS made
numerous demands about the size and capacity of the LLV, some of which
clearly impacted the vehicle's stability. According to St. Francis, because of the USPS's
prior experience with the DJ-5's rollover problems, road test requirements were included in
the specifications to allow the USPS, not Grumman or GM, to assess the
vehicle's rollover stability. The 24,000-mile test, to be conducted by the USPS, not
the contractors, was intended to ensure that handling characteristics, including stability, were consistent
with the specifications. Based on the test results, the USPS could approve or
reject the test vehicle.
The government's involvement in the design and the stability testing of the LLV
distinguishes the case from
Anzalone, where the Navy took no part in the
design or testing of the safety features of the ram tensioner. Here, the
USPS did what we said the Navy omitted to do in Anzalone.
See footnote 2
Still additional support for extending
Boyle to nonmilitary contracts exists. That may be
found in the language of Justice Brennan's prophetic dissent in that case. Concluding
that the majority's interpretation of the government contractor defense was "breathtakingly sweeping," the
dissent believed it to be applicable:
not only to military equipment . . . but . . . to
any made-to-order gadget that the Federal Government might purchase after previewing plans from
NASA's Challenger Space Shuttle to the Postal Service's old mail cars. The contractor
may invoke the defense in suits brought not only by military personnel .
. . or Government employees, but by anyone injured by a Government contractor's
negligent design . . . .
[Boyle, supra, 487 U.S. at 516, 108 S. Ct. at 2520, 101 L.
Ed.
2d at 460. (Brennan, J., dissenting)].
As one district court judge subsequently noted, "significantly, the Boyle majority left this
interpretation unchallenged." Yeroshefsky, supra, 962 F. Supp. at 716.
Accordingly, we conclude that the government contractor defense is available to nonmilitary contractors,
such as Grumman and GM in this case.
IV. THREE-PRONG BOYLE TEST
A. Reasonably Precise Specifications
The first prong of the three-prong Boyle test requires that the contractors establish
that the government approved reasonably precise specifications. Boyle, supra, 487 U.S. at 512,
108 S. Ct. at 2518, 101 L. Ed.
2d at 458. Plaintiff contends
that because the specifications did not mention the term "rollover resistance," they were
not reasonably precise. Nor, claims plaintiff, did the USPS perform tests adequate to
evaluate the LLV's alleged propensity to roll over. These arguments are not persuasive.
In enunciating the first two prongs of the three-part test, the Boyle Court
expressed a need to assure that "the suit is within the area where
the policy of the 'discretionary function' would be frustrated" if the defense were
not applied. Ibid. Here, the record contains substantial evidence that the USPS exercised
its discretionary functions: by creating the specifications that went into the final design
of the LLV; testing the vehicle for stability; and retaining the right to
approve the final design and reject any vehicles that did not comply with
the specifications.
Simply because the specifications did not contain the words "rollover resistance" does not
mean the LLV was either designed or tested without regard to whether the
vehicle would roll over. Stability was one of the characteristics that the specifications
expressly cited as a concern for the USPS an area to be monitored
during road tests. According to St. Francis, the road test provision of the
1986 specifications was included as a result of "allegations of poor stability or
rollover resistance" relating to the DJ-5. The specifications provided that as part of
the road test, the LLV was to "be closely observed for ease of
handling and general roadworthiness, i.e., stability, [and] undesirable sway tendency . . .
[with] [e]vidence of poor handling qualities of roadworthiness . . . cause for
rejection."
USPS engineers reviewed the proposals for compliance with these specifications, and the USPS
reserved the right to reject the LLV if, in its judgment, the LLV
did not comply with the rollover stability and other performance requirements. St. Francis
said that even if the manufacturer had warranted that the rollover stability of
the vehicle was satisfactory, the USPS would still have "had to satisfy ourselves."
In fact, the USPS tested the LLV in accordance with those requirements, and
no LLV was rejected because it exhibited unsatisfactory stability characteristics.
The USPS does not dispute that it did not design the LLV. St.
Francis said "the specifics of items are to be left to the manufacturer
who designs the LLV . . . as long as the vehicle they
provide meets the performance requirements as set forth in the Specifications." Yet, while
the USPS did not design the LLV, at the end of the day,
the USPS never relinquished control over whether the design met the USPS's performance
requirements, which included vehicle stability.
St. Francis acknowledged that when it developed the specifications, the USPS was aware
that the LLV would have "handling and stability" limitations, but those limitations were
considered acceptable in that the LLV was a "compromise between handling and utility."
Prior to purchase, the USPS "thoroughly evaluated" the vehicle's ride and stability and,
while aware of its limitations, deemed them acceptable given the "design task to
be a high volume, long life delivery vehicle." As the Third Circuit suggested
in Carley, supra, we should not second-guess this type of federal policy decision.
991 F.
2d at 1122.
The government "need not deprive the manufacturer of all discretion pertaining to a
particular design feature in order for the government contractor defense to apply." Id.
at 1125. "[I]t is necessary only that the government approve, rather than create,
the specifications . . . ." Ibid. (citing Koutsoubos v. Boeing Vertol, Div.
of Boeing Co.,
755 F.2d 352, 355 (3d Cir.), cert. denied,
474 U.S. 821,
106 S. Ct. 72,
88 L. Ed.2d 59 (1985)); see also
Kleemann v. McDonnell Douglas Corp.,
890 F.2d 698, 701 (4th Cir. 1989) (government
participation at various stages of aircraft development establishes military contractor defense), cert. denied,
495 U.S. 953,
110 S. Ct. 2219,
109 L. Ed.2d 545 (1990);
Harduvel v. Gen. Dynamics Corp.,
878 F.2d 1311, 1320-21 (11th Cir. 1989) (government
reviewed and approved design that incorporated government performance specifications), cert. denied,
494 U.S. 1030,
110 S. Ct. 1479,
108 L. Ed.2d 615 (1990); Russek v.
Unisys Corp.,
921 F. Supp. 1277, 1287-88 (D.N.J. 1996) (to meet "reasonably precise"
requirement of Boyle, specifications for computer keyboards need not "specifically negate every possible
modification to the design"); In re Aircraft Crash Litig. Frederick, Md.,
752 F.
Supp. 1326, 1337 (S.D. Ohio 1990) (where testing of aircraft "produced pursuant to
government contract is itself governed by that contract, the rationale of Boyle dictates
that the [government contractor defense] be available to claims arising from alleged omissions
in the testing process"), affd, Darling v. Boeing Co.,
935 F.2d 269 (6th
Cir. 1991); Maguire v. Hughes Aircraft Corp.,
725 F. Supp. 821, 823-24 (D.N.J.
1989) (first Boyle prong met by showing government approval of overall design), affd,
912 F.2d 67 (3d Cir. 1990).
Moreover, where the design process includes on-going dialogue over specifications, which result in
the final product, the "approved reasonably precise specifications" requirement is met. Tate v.
Boeing Helicopters,
55 F.3d 1150, 1154-55 (6th Cir. 1995) (Army and manufacturer engaged
in "back and forth development" of Army helicopter); Quiles v. Sikorsky Aircraft,
84 F. Supp.2d 154, 165-66 (D.Mass. 1999) (first Boyle prong established through evidence
of "continuous back and forth" review process among Army, Navy, Coast Guard and
manufacturer before government gave final approval of helicopter design).
Applying the facts against this legal framework, the first Boyle prong was met.
The USPS did not design the LLV, but Grumman/GM incorporated the USPS performance
specifications into a design that the USPS reviewed, continuously tested, and ultimately approved.
Significantly, the USPS was aware of potential rollover problems through its history with
the LLV's predecessor, the DJ-5, and was sensitive to potential rollover issues both
when it prepared the LLV's specifications and tested the vehicle. In fact, the
specifications that ultimately became the LLV were derived from the DJ-5. The USPS
addressed its stability concerns in the specifications; it road tested the vehicle's stability.
The specifications called for tests to both the technical proposal vehicle and the
first article. Ultimately, the USPS had the right to reject the LLV if
its handling characteristics, which included rollover stability, were found by the USPS not
to conform to its performance requirements. The USPS's involvement in the design and
testing of the LLV more than satisfies the "continuous back and forth" process
needed to establish the first Boyle prong.
Plaintiff cites Trevino v. Gen. Dynamics Corp.,
865 F.2d 1474 (5th Cir.),
cert. denied,
493 U.S. 935,
110 S. Ct. 327,
107 L. Ed.2d 317 (1989), for the proposition that to meet the Boyle test, the government
must do more than "rubber stamp" the specifications. The Trevino court said that
"[w]hen the government merely accepts, without any substantive review or evaluation, decisions made
by a government contractor, then the contractor, not the government, is exercising discretion."
Id. at 1480. We do not take issue with that proposition. However, the
facts in Trevino are distinguishable from those here.
In Trevino, the defendant designed an interlock for submarines allowing divers to pass
in and out of the vessel. Id. at 1476. Five divers died when
the interlock failed. Ibid. Because the Navy "never performed nor required a formal
design/safety review of the . . . diving system prior to the accident[,]"
the court concluded that the government failed to perform any discretionary function related
to the failed product. Id. at 1477. In contrast to the government's lack
of review in Trevino, here, as noted, the USPS approved the specifications and
incorporated into the contract standards by which the stability and handling of the
LLV could be measured. The USPS's actions regarding the design and testing of
the LLV went far beyond what could be considered a rubber stamp.
Yet another route may be taken to ascertain whether the first prong of
the Boyle test is satisfied. During the term of the contract, the USPS
not only purchased the 99,150 LLVs originally promised, but over time it exercised
its option under the contract, purchasing another approximately 68,000 vehicles. This extensive experience
with the vehicle, over many years, in the face of the USPS's knowledge
that some of the LLV's had been involved in rollover accidents, in itself
establishes government approval of the alleged design defect. See Ramey v. Martin-Baker Aircraft
Co. Ltd.,
874 F.2d 946, 950-51 (4th Cir. 1989) (Navy's continued use of
F-18 fighter after experience of potential design problems established first and third Boyle
prongs); Dowd v. Textron, Inc.,
792 F.2d 409, 412 (4th Cir. 1986) (Army's
continued use of helicopter rotor system established approval of alleged design defect), cert.
denied,
487 U.S. 1233,
108 S. Ct. 2897,
101 L. Ed.2d 930
(1988).
B. Conformance to the Specifications
Plaintiff primarily rests his argument that the LLV did not conform to the
USPS specifications on the report of his engineering expert, Michael Kaplan, who concluded
that "the acts of [Grumman/GM] did not conform to the '[s]afety' section of
the [s]pecifications or the [t]echnical [p]roposal incorporated by reference therein." That position is
simply not supported by the record.
St. Francis testified that the design of the LLV conformed to the USPS's
performance requirements for rollover stability. While being driven by experienced USPS personnel, the
LLV was extensively tested for ease of handling and general roadworthiness, including stability
and sway tendency. During the vehicle's manufacture, the USPS maintained inspectors at the
corporate defendants' assembly plant. In fact, the USPS testing was so detailed that
Grumman at one point complained that the tests went beyond the scope of
the contract. Some vehicles were rejected based on the tests. Annual tests, too,
were performed, and according to a USPS engineer, "the [LLVs] consistently demonstrated operational
characteristics consistent with the limitations imposed by the USPS contract." Nevertheless, even assuming,
without granting, that "no attempt [was made by Grumman/GM] to fully evaluate the
LLV's stability" as Kaplan asserts, the specifications reserved the right to the USPS,
not Grumman or GM, to make the determination of how much stability evaluation
was necessary. And that is what it did.
Furthermore, during its tests, no stability problems were discovered by the USPS. According
to a USPS engineer, although there were instances when the quality assurance group
recommended vehicle rejection until identified problems were fixed, no LLV was ever rejected
because of unsatisfactory stability characteristics.
Plaintiff claims the technical stability analysis comparing the Blazer and the LLV was
flawed because the LLV that was actually manufactured "differed in its exact dimensions
from that in the Technical Proposal," referring to Kaplan's conclusion that the tested
Blazer was "approximately 300 lbs. lighter than the vehicle that was actually manufactured."
That argument ignores, however, that the LLV that was ultimately produced was tested
and accepted by the USPS. That the USPS was sufficiently satisfied with the
final version of the LLV to order an additional 68,000 vehicles over the
contract amount, and continued to use the vehicle over many years, supports the
conclusion that the LLV was manufactured in accordance with its specifications. See Yeroshefsky,
supra, 962 F. Supp. at 719. In short, the record here fully supports
that the LLVs conformed to specifications.
C. Warning of Known Danger
We now turn to the third Boyle prong, whether the contractors failed to
warn the USPS of rollover dangers known to them but not known to
the USPS. The purpose of this prong of the Boyle test is to
prevent manufacturers from having an incentive to withhold knowledge of risks. Boyle, supra,
487 U.S. at 512, 108 S. Ct. at 2519,
101 L. Ed 2d
at 458.
To support this allegation, plaintiff faults Grumman/GM for not disclosing to the USPS
the details of the 1992 Diaz lawsuit, where an LLV was struck by
another vehicle and rolled onto its side. This argument lacks merit. As early
as 1990, the USPS had been apprised of the LLV rollover accident in
Chicago. In fact, even prior to that accident, the USPS had been aware
of other accidents involving the LLV. St. Francis said: "[w]e were very .
. . much aware of what was going on with the LLV and
were tracking all performance characteristics of it because of previous problems we had
had with other vehicles."
To successfully assert the government contractor defense, government contractors are not obligated to
warn the government about risks of which the government is already aware. See
Ramey, supra, 874 F.
2d at 951, n.10; In re Air Crash Disaster at
Mannheim Germany,
769 F.2d 115, 124-25 (3d Cir. 1985) (Army had independent knowledge
of transmission defect that led to helicopter crash, relieving manufacturer of duty to
warn Army of defect), cert. denied,
474 U.S. 1082,
106 S. Ct. 851,
88 L. Ed.2d 891 (1986). Here, the USPS was already aware of
the potential rollover problem before the Diaz lawsuit.
Plaintiff contends that the one wheel lift information, which Grumman/GM developed in its
testing, should have been shared with the USPS. Perhaps so. But, the wheel
lift incidents took place with regard to the "pre-production, experimental," version of the
LLV, not the final version that was ultimately produced; and the USPS tested
the LLV and failed to discover a similar problem. A USPS engineer who
tested the vehicles by driving them, said that at no time did any
of the tested vehicles "exhibit any handling or stability characteristics which raised concerns
regarding the trustworthiness of the handling or stability of the product."
Nor does plaintiff's expert explain how, even if the USPS had been given
the one wheel lift results, those results would have impacted its overall knowledge
of the LLV's rollover propensity, or the LLV's stability in general. Plaintiff offers
no support for his allegation that if the USPS had known about "the
front-wheel lift off" information, that knowledge "would likely have led to design changes
in the LLV . . . ." Taylor testified that the one wheel
lift results did not mean the vehicle was unstable, just that it was
not an acceptable design. Nor did Kaplan, plaintiff's engineering expert, believe the one
wheel lift in and of itself was an indication of instability.
Put somewhat differently, plaintiff points to no material circumstances that Grumman/GM knew of,
that the USPS did not, that in any way amounted to a known
risk; or, if a known risk existed, that the USPS was not already
aware of the risk. See Carley, supra, 991 F.
2d at 1127; Ramey, supra,
874 F.
2d at 951.
V. PLAINTIFF'S ESTOPPEL CLAIMS
Plaintiff contends that Grumman/GM should be estopped from utilizing the government contractor defense
for two reasons. First, because the contractors and the USPS contemplated that the
manufacturer would be liable for product liability claims, as evidenced by Grumman's purchase
of product liability insurance. Second, because Grumman/GM ultimately marketed the LLV to private
parties. These arguments are without sufficient merit to warrant discussion in a full
written opinion. R. 2:11-3(e)(1)(E). We add only the following.
The corporate defendants did not objectively manifest in their proposal that they would
accept design responsibility. That they may have purchased a measure of product liability
insurance is not dispositive on that issue. Moreover, that the corporate defendants sold
LLVs to non-USPS buyers after development of the LLV does not bear upon
whether the Boyle test has been met, because the vehicle designed pursuant to
the USPS specifications was not readily available in substantially similar form on the
open market before the development process was completed. See In re Hawaii, supra,
960 F.
2d at 811 (policy behind Boyle not applicable where product plaintiff alleged
defective was readily available on commercial market and not developed on basis of
judgments made by government agency, but rather in response to needs of end-users
in private sector); McKay v. Rockwell Int'l Corp.,
704 F.2d 444, 451 (9th
Cir. 1983) (military contractor defense not applicable to "ordinary consumer product purchased by
the armed forces"), cert. denied,
464 U.S. 1043,
104 S. Ct. 711,
79 L. Ed.2d 175 (1984).
VI. SUMMARY
The question whether Grumman/GM established entitlement to the government contractor defense came before
the Law Division on summary judgment. In addressing such a motion, the court
must consider, in a light most favorable to the nonmoving party, whether the
materials presented create genuine issues of material fact. Brill v. Guardian Life Ins.
Co. of Am.,
142 N.J. 520, 540 (1995).
Here, for the reasons we have stated, we agree with Judge Ciccone that
plaintiff has failed to establish any genuine issues of material fact that would
require resolution by a jury. We conclude that the government contractor defense applies
to nonmilitary contracts, and the corporate defendants have established, as a matter of
law, that the defense applies under the facts of this case.
Affirmed.
Footnote: 1
Claims against the owner and driver of the other vehicle have been dismissed
and are not subject to this appeal.
Footnote: 2 For additional examples of the USPS's involvement with the specifications and testing
of the LLV, please refer to our discussion of whether the USPS approved
"reasonably precise specifications,"
infra, at IV(A).