Metropolitan News-Enterprise


Friday, September 11, 2009


Page 1


C.A. Clarifies ‘Government Contractor’ Rule, Tosses Verdict




A manufacturer of military equipment may generally be held liable for negligent failure to warn of a defect in the product, the First District Court of Appeal has ruled.

Div. One Wednesday reversed a judgment for more than $1 million against Foster Wheeler LLC, a manufacturer of boilers used on naval ships in the 1960s, saying the San Francisco Superior Court jury reached inconsistent verdicts on the plaintiff’s claims.

The panel, however, rejected the company’s claim that its compliance with Navy specifications constituted a complete defense to the plaintiff’s claim for negligent failure to warn, as to which the jury found Foster Wheeler responsible.

The suit was brought by the widow and children of Calvin Oxford, a former boiler tender. Oxford was diagnosed with mesothelioma—which was attributed to asbestos exposure during his Navy service that required working on marine boilers manufactured by Foster Wheeler—in 2005 and died later that year.

Affirmative Defense

Foster Wheeler denied that exposure to its products were the cause of the cancer, and affirmatively pled the “government contractor” defense, based on Boyle v. United Technologies Corp. (1988) 487 U.S. 500. The court held in that case—in which the trial court held the manufacturer of a Marine Corps helicopter liable after its co-pilot drowned because he could not open the escape hatch—that state tort law may be displaced by federal common law in product liability cases involving military equipment.

The test, the Supreme Court held, is whether—considering the preciseness of the specifications, the extent of the manufacturer’s compliance, and the disclosure of known dangers or the lack thereof—the imposition of tort liability presents a “significant conflict” with federal policy.

The jury, using a special verdict form, found for the defendant on the plaintiffs’ strict liability claims of design defect and failure to warn, but for the plaintiffs on their claim of general negligence. It also found that Foster Wheeler had proved the three elements of the government contractor defense.

Jurors found that the Oxfords suffered more than $2 million in damages, including $1 million in general damages that had to be apportioned among multiple tortfeasors, including the Navy.

Motion Denied

Judge Tomar Mason denied the defendant’s motion for judgment, which it based on the success of its government contractor defense. Mason reasoned that the government contractor defense does not bar claims for negligent failure to warn.

Marin Superior Court Judge Stephen Graham, sitting in the Court of Appeal on assignment, said the trial judge was partially correct.

Both California and federal cases, Graham explained, have held that unless the government contract at issue requires warnings that are significantly different than those required by state law, the imposition of tort liability does not violate federal policy. Otherwise, he said, the defense would protect the contractor’s, rather than the government’s, exercise of discretion.

He went on to say:

“In the present case, the jury was not given a government contractor defense instruction tailored to the failure to warn context.  While we note that the jury’s findings on this defense would appear to preclude liability for claims relating to the design of the boilers, it does not necessarily follow that the defense, as presented to the jury in this case, immunizes defendant from liability as to plaintiffs’ failure to warn claims.  Accordingly, the trial court was correct in concluding that the jury’s verdict on the affirmative defense did not entitle defendant to judgment in its favor.”

Graham went on to say, however, that while the plaintiff was not barred from recovering on a failure-to-warn theory, it was “logically and legally inconsistent” to find that the defendant was not strictly liable—in other words that it did not fail to give required warnings—but that it was liable for negligence.

There was evidence, he acknowledged, that might have led the jury to conclude that Foster Wheeler was negligent in some other manner, such as for failure to adequately test the product. But since the government contractor defense precludes a finding of liability on any theory of negligence other than failure to warn, Graham explained, the finding of negligence cannot be reconciled with the no-strict-liability finding and the case must be retried.

The case is Oxford v. Foster Wheeler LLC, 09 S.O.S. 5581.


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