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Arnold v. McDonnell Douglas Corp.5/18/1999
Court concluded the federal interests in procurement contracts were essentially the same as the federal interest in the performance contract at issue in Yearsley.
Landowner now asks us to ignore Boyle's rationale and origin, and to refuse to "extend" Boyle to apply to the performance aspect of contractor's procurement contract. We cannot, however, ignore that the government contractor defense was first invoked by private contractors seeking to avoid liability for damages arising out of the performance of public works projects. See, e.g., Yearsley, 309 U.S. 18; Myers v. United States, 323 F.2d 580 (9th Cir. 1963); see generally, Burgess v. Colorado Serum Co., Inc., 772 F.2d 844, 846 (11th Cir. 1985); Note, The Government Contractor Defense: Should Manufacturer Discretion Preclude Its Availability, 37 Me.L.Rev. 187 (1985); Note, The Government Contract Defense in Strict Liability Suits for Defective Design, 48 U.Chi.L.Rev. 1030 (1981).
While in recent years the defense has become "a favorite shield" of military procurement contractors, the rationale behind the defense is an extension of sovereign immunity. " n circumstances in which the government would not be liable, private contractors who act pursuant to government directives should not be liable." Burgess, 772 F.2d at 846 (quoting Hansen v. Johns-Manville Products Corp., 734 F.2d 1036 (5th Cir. 1984, en banc), cert. denied, 470 U.S. 1051 (1985).
It would be illogical to limit the availability of the defense solely to product liability claims arising out of purely procurement aspects of government contracts. "If a contractor has acted in the sovereign's stead and can prove the elements of the defense, then he should not be denied the extension of sovereign immunity that is the government contractor defense." Burgess, 772 F.2d at 846. We conclude the property damage nature of landowner's claims and the performance nature of the contract does not prevent application of the government contractor defense.
III. Preemption of State Law
The government contractor defense operates to preempt state law where (1) the field of activity involves a uniquely federal interest; and (2) a significant conflict exists between an identifiable federal policy or interest and the operation of state law, or the application of state law would frustrate specific objectives of federal legislation. Boyle, 487 U.S. at 507.
A. Uniquely Federal Interest
Although landowner's specific claim herein alleges negligence by contractor in the operation of aircraft, contractor was performing the flights involved herein pursuant to a contract involving the manufacture of and sales to the United States of military aircraft. The Supreme Court has left no doubt that the procurement of equipment by the United States is an area of uniquely federal interest. Id. at 506-7. Thus, contractor's activity involves a uniquely federal interest.
B. Significant Conflict
The Court's analysis in Boyle of whether applicable federal and state laws resulted in a significant conflict relied on the discretionary function exception of the Federal Tort Claims Act ("FTCA"). The FTCA authorizes damage suits against the United States for harm caused by the negligent or wrongful conduct of government employees, to the extent that a private person would be liable under state law. 28 U.S.C.A. section 3-146(b) (1993). The FTCA, however, expressly retained the government's immunity from claims "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." 2
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