Bailey v. McDonnell Douglas Corp.

United States Court of Appeals,
Fifth Circuit.
No. 92-2184.
Penny BAILEY, Individually and as Next Friend of Elizabeth Bailey and Bryan Bailey, Minors,
and as Personal Representative of the Estate of John Bailey, Deceased, Plaintiffs-Appellants,
v.
McDONNELL DOUGLAS CORPORATION, Defendant-Appellee.
April 29, 1993.
Appeal from the United States District Court for the Southern District of Texas.
Before DUHÉ and BARKSDALE, Circuit Judges, and HUNTER, Senior District Judge.1
BARKSDALE, Circuit Judge:
At issue in this second appeal of this Texas product liability action is the effect of the
government contractor defense, as formulated in Boyle v. United Technologies Corp., 487 U.S. 500,
108 S. Ct. 2510, 101 L. Ed. 2d 442 (1988), when claims of both manufacturing and design defects are
asserted. Penny Bailey appeals the summary judgment awarded McDonnell Douglas (M-D) in her
wrongful death action concerning an M-D aircraft. Following summary judgment for M-D based on
the go vernment contractor defense, an appeal to this court, and remand for clarification of the
summary judgment order, the district court amended that order to include Bailey's manufacturing
defect claim, as well as her design defect claim. We REVERSE as to the former.
I.
Air Force Major John M. Bailey was killed in 1987 when his aircraft, an F-4D "Phantom II"
twin-engine jet fighter manufactured by M-D2, crashed during a "pitch-out" landing approach to
Carswell Air Force Base, near Fort Worth.3
1
Senior District Judge of the Western District of Louisiana, sitting by designation.
2
The aircraft had been delivered in 1967.
3
The pitch-out is a standard maneuver, in which the pilot overflies a portion of the runway then
breaks away, executing a tight, high-speed, steeply banked 360-degree turn back toward the
runway, with the aircraft descending at a relatively rapid rate. The maneuver proceeded smoothly
at first, but when the aircraft should have leveled out, it remained in a steep bank, its nose
In February 1988, Penny Bailey, Major Bailey's wife, sued M-D under Texas law for wrongful
death, claiming strict liability for, and negligence in, the design, manufacture, and sale of a defective
product, and the failure to warn of dangers associated with that product. Throughout the litigation,
it was undisputed that the crash was caused, at least in part, by a failure in the bellows assembly in
the aircraft's longitudinal feel trim system, which relates to control of the aircraft's "pitch", or nose
up/nose down movement.4 Bailey's theory of liability was that a defect in the metallurgic content of
the bellows canister caused a loss of bellows pressure during the flight; that Major Bailey's response
to the resulting "heavy stick" sensation was to "over control" the aircraft with a number of rapid
movements on the control stick; and that the rapid stick inputs caused the controls to "lock" with
the plane in a nose-down position. The alleged tendency of the controls to lock formed the basis of
the design defect claim, and the alleged metallurgic defect in the bellows canister formed the basis of
the manufacturing defect claim. M-D denied that the controls had locked, and asserted that the
bellows failure was caused by careless maintenance of the system by Air Force personnel, not by any
product defect.
In November 1989, after extensive discovery, M-D moved for summary judgment, contending
that the basis of Bailey's theory of liability had eroded when the two Air Force investigators who had
studied the remains of the flight control system recanted their "imprecise" use of the term "lock" in
their report to describe what happened to the controls. Bailey contested this, and also presented the
affidavit of her expert, Dr. Paul Packman, who articulated the theory of manufacturing defect, based
upon his observation of an unusual crack in the remains of the bellows canister. Although, as noted,
the complaint contained a manufacturing defect claim, this was the first time that the manufacturing
defect theory was articulated.
continuing to drop as it rapidly lost altitude, and ultimately crashed.
4
Because of the size and weight of the F-4D, a pilot cannot adequately control it by manual
means. Therefore, it is controlled by hydraulic power, which removes the pilot's sense of feel as
he grasps the control stick. The feel trim system is designed to simulate the forces a pilot would
feel if he were controlling the plane manually. It is operated by a bellows system that uses air
pressure differentials to transmit the artificial "feel" to the pilot's hand. It is undisputed that the
accident was caused, at least in part, by a loss of bellows pressure in the longitudinal section of
the feel trim system.
M-D moved to strike Dr. Packman's affidavit, contending that it untimely introduced a new
theory of liability. While that motion was pending, Dr. Packman retreated from his position, at least
somewhat, when the results of a metallurgic examination of the bellows components conflicted with
his theory.5 Ultimately, in August 1990, the district court denied M-D's motion to strike the affidavit,
and also denied summary judgment, citing a genuine issue of material fact.
Shortly before those rulings, M-D filed a second motion for summary judgment (which
eventually gave rise to this appeal), relying on the government contractor defense. In its supporting
memorandum, it discussed only the control system's alleged tendency to lock, although, as noted, the
metallurgic defect theory had already surfaced. Likewise, despite M-D's prayer that all claims be
dismissed with prejudice, Bailey made no mention of the metallurgic defect theory in opposing the
motion. In response, Bailey did, however, incorporate, inter alia, the discovery materials and
affidavits in the record. In January 1991, the district court granted the motion and dismissed the case.
Bailey appealed, conceding that her design defect claim was properly dismissed, but
contending that her manufacturing defect claim was not.6 In late 1991, our court affirmed summary
judgment on the government contractor defense and the design defect claim, but vacated and
remanded for further consideration of the manufacturing defect issue, stating that it was unclear
whether the district court had intended to dismiss that claim. Bailey v. McDonnell Douglas Corp.,
947 F.2d 1486 (5th Cir. Oct. 21, 1991) (unpublished).
In January 1992, the district court heard oral argument, then amended its prior order to
include that claim in the summary judgment. This appeal springs from that order.
II.
The government contractor defense, as formulated in 1988 by the Supreme Court in Boyle,
5
The parties dispute the extent to which Dr. Packman abandoned his theory. Although he
admitted that there was no evidence of a metallurgic defect in the area of the suspicious crack, he
retained some suspicion about the cause of the bellows leak and wanted to "finish off that last five
percent" of his investigation. It is unclear whether he still suspected some type of manufacturing
defect. At oral argument in our court, Bailey reiterated that her manufacturing defect claim was
based on the theory of metallurgic defect in the canister.
6
Bailey has not challenged the disposition of her failure to warn claim.
generally immunizes government contractors from civil liability arising out of the performance of
federal procurement contracts. 487 U.S. at 505-06, 108 S.Ct. at 2515. It is a federal common law
doctrine whereby state law is preempted in certain situations because it presents a "significant
conflict" with identifiable federal interests. Id. at 507, 108 S.Ct. at 2516. Specifically, it is designed
to protect the exercise of discretion by government officers in "the selection of the appropriate design
for military equipment to be used by our Armed Forces". Id. at 511, 108 S.Ct. at 2518.
The defense stems from the immunity enjoyed by the United States from claims based on the
performance of so-called "discretionary functions", pursuant to the Federal Tort Claims Act (FTCA),
28 U.S.C. § 2680(a).7 Boyle, 487 U.S. at 511, 108 S. Ct. at 2518. The rationale behind the defense
is that, in its absence, the financial burden of liability judgments against government contractors
ultimately would be passed through to the United States. Id. at 511-12, 108 S.Ct. at 2518. As noted
in Boyle: "It makes little sense to insulate the Government against financial liability for the
[discretionary decision] that a particular feature of military equipment is necessary when the
Government produces the equipment itself, but not when it contracts for the production." Id. at 512,
108 S.Ct. at 2518.
In order to effectuate this objective, Boyle provides that "[l]iability for design defects in
military equipment cannot be imposed, pursuant to state law, 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. (emphasis added). "The first two of these conditions
assure that the suit is within the area where the policy of the "discretionary function' would be
frustrated—i.e., they assure that the design feature in question was considered by a Government
officer, and not merely by the contractor itself." Id. "The third condition is necessary because, in its
absence, the displacement of state tort law would create some incentive for the manufacturer to
withhold knowledge of risks, since conveying that knowledge might disrupt the contract but
7
Section 2680(a) creates an exception to the consent to suit otherwise established by the
FTCA, 28 U.S.C. § 1346(b).
withholding it would produce no liability." Id.
Of Boyle's three conditions, in issue is the second—conformity with government
specifications. As noted, the district court previously held, and our court affirmed, that M-D was
entitled to invoke the defense with respect to Bailey's design defect claim, which was based on the
control system's alleged tendency to lock. This holding included a finding that the feel trim system,
including any tendency to lock, conformed to the government's specifications (Boyle's second
condition). On remand, M-D contended that this finding of conformity on the design defect claim
compelled a like ruling on the manufacturing defect claim. Bailey countered by contending first, that
the Packman affidavit established a material fact issue as to a manufacturing defect8; and second,
that, in any event, because the government contractor defense applies only to design defect claims,
the summary judgment motion did not implicate the manufacturing defect claim.
In ruling, the district court stated that Bailey "fail[ed] ... to articulate the precise nature of the
manufacturing defect", and that her only "theory of the case [was] that a defect in the design of the
feel trim system ... caused the ... lock and that this occurrence" caused the crash. It then agreed with
M-D, and reasoned that its prior finding that "the aircraft conformed to those specifications"
necessarily precluded the existence of a manufacturing defect. It concluded:
Because the Court previously determined, and the Court of Appeals affirmed, that no
fact questions exist concerning whet her the plane conformed to the Government's design
specifications, the Court is of the opinion that the manufacturing defect question has been
resolved. As stated by the Eleventh Circuit Court of Appeals:
To say that a product failed to conform to specifications is just another way of saying
that it was defectively manufactured.
Harduvel v. General Dynamics Corp., 878 F.2d 1311 (11th Cir.198[9] ) [, cert. denied, 494
U.S. 1030, 110 S. Ct. 1479, 108 L. Ed. 2d 615 (1990) ].
In relying on the statement from Harduvel (quoted by our court in Mitchell v. Lone Star Ammunition,
Inc., 913 F.2d 242, 247 (5th Cir.1990)), the district court apparently assumed that the converse must
also be true—i.e., that a claim of manufacturing defect is equivalent to an allegation that the
equipment failed to conform to specifications. In the district court's apparent estimation, therefore,
8
Bailey also made reference to other possible manufacturing defects that Dr. Packman might
address. Obviously, the district court could consider only material in the record.
the question of conformity with specifications could never be divorced from the question of
manufacturing defect.
Thus, the district court did not apply the defense to Bailey's manufacturing defect claim. In
fact, as noted, the theory supporting it was not really argued. After stating that there was a genuine
issue of material fact on the manufacturing defect, Bailey contended that the motion did not apply to
that defect. The district court simply used the finding of conformity—made while considering only
the design defect theory—to preclude the existence of any manufacturing defect. We address that
ruling first.
After reviewing that ruling, we face two other related—and principal—issues: (1) whether
Bailey's labeling her claim as one for a manufacturing defect precludes, per se, application of the
government contractor defense; and (2) if not, and in light of the fact that the district court did not
rule on whether there was a material fact issue regarding the manufacturing defect claim, whether
summary judgment was nonetheless appropriate because Bailey failed to properly present her
manufacturing defect theory in opposition to the motion. As always, we review an award of summary
judgment de novo, using the same standards as are applied by a district court. E.g., Solomon v.
Walgreen Co., 975 F.2d 1086, 1089 (5th Cir.1992).
A.
As stated, before reaching the two principal issues, we address the district court's broad ruling
that a manufacturing defect claim is equivalent to asserting that the item failed to conform to
specifications. We hold that, for two reasons, it erred.
First, it is possible to have an allegedly defective feature about which the government
specifications are silent. For example, if the government specifications regarding the bellows canister
did not specify the type or quality of metal to be used, a metallurgic defect in the canister would not
be inconsistent with a finding that the canister conformed to specifications.9
9
We note that if a court were applying the defense to a claim based upon such a feature (which
the district court did not do), Boyle's first condition—reasonably precise specifications—would
probably be in issue with respect to that feature. E.g., Trevino v. General Dynamics Corp., 865
F.2d 1474, 1486 (5th Cir.) (first condition lacking where government specifications set only
general performance standards for a submarine hangar diving chamber, and were "silent" on
Second, Boyle makes clear that the requirements of "reasonably precise specifications" and
conformity with them refer to the particular feature of the product claimed to be defective. 487 U.S.
at 512, 108 S. Ct. at 2518 (the first two conditions address "the design feature in question") (emphasis
added); see also Trevino v. General Dynamics Corp., 865 F.2d 1474, 1486 (5th Cir.1989) (Boyle
protects government contractors from liability only where "discretion over the design feature in
question was exercised by the government") (emphasis added).10 Here, there were two allegedly
defective features—the control system's tendency to lock and the bellows canister's metallurgic
content. M-D's evidence in support of its motion established only that the first feature conformed to
government specifications. No evidence was introduced to support a finding that the canister's
metallurgic content conformed with government specifications. The scope of the district court's
finding, therefore, is limited to the particular feature in issue when it was made, notwithstanding its
broad wording to the contrary.11
B.
We next consider whether the manufacturing defect label precludes, per se, application of
the defense; and, if not, and even though the district court did not determine whether there was an
issue of material fact, whether summary judgment was nonetheless appropriate because Bailey failed
precise location of allegedly defective vent valve and safety devices), cert. denied, 493 U.S. 935,
110 S. Ct. 327, 107 L. Ed. 2d 317 (1989).
In Boyle, the Court explained this situation as one in which "the [state law] duty
sought to be imposed on the contractor is not identical to one assumed under the contract,
but is also not contrary to any assumed". 487 U.S. at 509, 108 S.Ct. at 2517. "If, for
example, the United States contracts for ... an air conditioning-unit, specifying the cooling
capacity but not the precise manner of construction, a state law imposing ... a duty of care
to include a certain safety feature would not be a duty identical to anything promised the
Government, but neither would it be contrary". Id. In that case, "[t]he contractor could
comply with both.... No one suggests that state law would generally be pre-empted in this
context". Id.
10
This principle clarifies the statement: "[t]o say that a product fails to conform to
specifications is just another way of saying that it was defectively manufactured". Mitchell, 913
F.2d at 247. Obviously, not all deviations from specifications will constitute defective (i.e.,
unreasonably dangerous) conditions. This statement logically refers, therefore, only to the
particular deviation that is alleged to be defective.
11
Naturally, had both features been better presented to the district court before the motion was
decided, this problem would not have arisen.
to present adequate evidentiary support for her theory of manufacturing defect in opposition to M-D's
motion.12 Asserting here, as she did to the district court on remand, that, as a matter of law, the
defense can apply only to "design defect" claims, Bailey maintains that she had no burden to present
her manufacturing defect theory in opposition to M-D's motion, in spite of M-D's prayer that all
claims be dismissed. Initially, we note that, although Boyle involved only a design defect claim, the
Court did not indicate whether the defense was limited to that situation.13
1.
We first must determine whether the "manufacturing defect" label on Bailey's claim precludes,
per se, application of the government contractor defense to it. On first glance, our court's decisions
regarding the scope o f the defense may seem inconsistent. In McGonigal v. Gearhart Industries,
Inc., 851 F.2d 774 (5th Cir.1988), we stated: "it remains the law of this Circuit [after Boyle ] that
military contractor immunity does not apply in cases of defective manufacture: "federal law provides
no defense to the military contractor that mismanufactures military equipment' ". Id. at 777 (quoting
Bynum v. FMC Corp., 770 F.2d 556, 573 n. 21 & 574 (5th Cir.1985)). In Trevino, 865 F.2d at 1481
n. 6, we reiterated: "[a] manufacturer is liable for manufacturing defects no matter who designed or
approved the specifications". Likewise, in Mitchell, 913 F.2d at 246-47 & n. 9, we rejected an
argument that the defense applied to a manufacturing defect resulting from the government's design
of the manufacturing process, st ating that this would "extend the defense unnecessarily".
Furthermore, in Skyline Air Service, Inc., v. G. L. Capps Co., 916 F.2d 977, 980 (5th Cir.1990), we
stated that manufacturing defect claims are "arguably not covered by the [defense]". (Emphasis
added.)
In contrast to these statements, however, we stated in Smith v. Xerox Corp., 866 F.2d 135,
12
As she did in district court at the remand hearing, Bailey contends that Dr. Packman's
affidavit did present a genuine issue of material fact, even after his subsequent retreat. For the
reasons discussed infra, we need not reach this issue and instead assume, without deciding, that
the affidavit did not create a genuine issue of material fact.
13
For the reasons explained infra, we interpret Boyle's statement that the defense bars
"[l]iability for design defects ", 487 U.S. at 512, 108 S. Ct. at 2518 (emphasis added), to mean
liability for defects in the government specifications.
137 (5th Cir.1989), handed down by a different panel on the same day as Trevino, that "Boyle ... held
that the government contractor defense applies to both negligence and strict liability actions, as well
as to other state law tort claims". We then affirmed a summary judgment based on the defense that
dismissed all claims, including manufacturing defect, design defect, failure to warn, and breach of
warranty. Id. at 141.
After carefully reviewing these and other cases, we conclude that the seeming inconsistencies
stem from uses of the term "manufacturing defect", instead of nonconformity with government
specifications, and the term "design defect", instead of a defect in the government specifications.14
Although usually there will be no significant difference between these terms and the intended
meanings, that will not always be the case. As explained above, a manufacturing defect is not
necessarily equivalent to nonconformity with government specifications, because those specifications
may be silent about some features, making possible the existence of a manufacturing defect in spite
of conformity with the specifications. Likewise, such silence in the specifications may leave room for
design discretion by the manufacturer, making possible the existence of a design defect in spite of
conformity with the government specifications.15
Furthermore, the denomination of a claim as one of "manufacturing defect" or "design defect"
is a matter of state law, which varies by state. In Harduvel, for example, the Eleventh Circuit was
faced with a presumption under Florida law that "where a product is destroyed in an accident, and
the plaintiff presents evidence to negate possible causes other than a product defect, an inference of
manufacturing defect arises". 878 F.2d at 1317. Thus, although the alleged defect was one inherent
in the government specifications, the plaintiff's recovery was for manufacturing defect because the
aircraft was almost completely destroyed.
Because of such peculiarities in state law, the Harduvel court held that the state law
14
Throughout this opinion, we use the term "government specifications" rather than
"government designs" to avoid further confusion over terminology.
15
Again, we note that where the government specifications are silent with respect to the
particular feature in issue, Boyle's first condition—government approved reasonably precise
specifications—would probably be in issue if the defense were applied to that feature.
denomination of a claim as one of "design" or "manufacturing" defect could not govern the
applicability of the government contractor defense. Id. It explained: "[w]ere this not so, state law
could operate either to defeat the defense or to expand it improperly, and the defense could not be
applied with the uniformity that is a key justification for application of federal common law". Id. It
concluded that, despite its state law label, the claim was for a design defect for purposes of federal
law, precluding recovery.
We agree with the Eleventh Circuit that whether the defense will apply cannot be determined
by the label attached to the claim. Strict adherence to the three Boyle conditions specifically tailored
for the purpose will ensure that the defense is limited to appropriate claims. In evaluating an assertion
of the defense, therefore, the state law label on the claim(s) sought to be dismissed is irrelevant.
Upon closer analysis, our prior decisions are consistent with this principle. In McGonigal,
for example, despite the above-quoted statement and the fact that the only theory presented was
negligent manufacture, we proceeded to determine that the government contractor defense did not
apply because Boyle's second condition was not met. 851 F.2d at 777. Likewise, in Mitchell, despite
our rejection of the above-mentioned argument, we held that the defense did not apply because the
jury found that the defective mortar shell failed to conform to the government specifications. 913
F.2d at 248. Additionally, when read in context, it is clear that our use of the term "manufacturing
defect" in the above-quoted statement from Trevino refers simply to a failure to meet Boyle's second
condition. 865 F.2d at 1481 n. 6 ("the second element functions [in part] to remove the government
contractor defense for manufacturing defects"). Finally, in Smith, we stated that summary judgment
on the manufacturing defect claim was proper, based on Boyle's second prong. 866 F.2d at 139.
In sum, the government contractor defense does not necessarily apply only to claims labeled
"design defect". Whether it will apply to a particular claim depends only upon whether Boyle's three
conditions are met with respect to the particular product feature upon which the claim is based.16
As stated by the Supreme Court, those conditions are designed to assure that the defense will apply
16
This means, of course, that in cases involving allegations of multiple defective features,
summary judgment may not be appropriate if the defense applies to only some of those features,
unless it is clear which features relate to which claims.
only where the discretionary function policy behind it would be frustrated. Bailey's contention that
M-D's motion necessarily related only to her design defect claim, therefore, lacks merit.
2.
Having determined that M-D's motion based on the defense was not necessarily limited to
Bailey's design defect claim, we must determine whether M-D established entitlement to summary
judgment with respect to the manufacturing defect claim. As noted, in its order on remand, the
district court stated that Bailey "fail[ed] to articulate the precise nature of the manufacturing defect."
But, as also noted, Bailey, at the post-remand hearing, referenced the Packman affidavit on file and
reiterated Dr. Packman's desire to further investigate the possibility of a manufacturing defect.17
Because the government contractor defense is an affirmative one, M-D bore the burden of
proof to establish it. "Where ... the moving party [will bear] the burden of proof at trial, it must come
forward with evidence [on summary judgment] which would entitle it to a directed verdict if the
evidence went uncontroverted at trial." International Shortstop, Inc. v. Rally's, Inc., 939 F.2d 1257,
1264-65 (5th Cir.1991) (internal quotation omitted), cert. denied, --- U.S. ----, 112 S. Ct. 936, 117
L. Ed. 2d 107 (1992). In this situation, only after the moving party meets thi s burden must the
non-moving party produce its "significant, probative evidence". Id. at 1265 (citing Chanel, Inc. v.
Italian Activewear of Florida, Inc., 931 F.2d 1472, 1477 (11th Cir.1991)).
Because M-D did not present evidence that the three Boyle conditions were satisfied with
respect to the metallurgic content of the bellows canister, upon which Bailey's manufacturing defect
claim was based, it did not meet its burden of proof with respect to that claim; and, therefore, the
burden did not shift to Bailey to present evidence to support her claim. In so holding, we emphasize
that the metallurgic defect theory had arisen before M-D moved for summary judgment; it is not
being held to the impossible burden of negating the possibility of yet unarticulated theories of defect.18
17
Additionally, the day before the hearing, Bailey submitted an affidavit by Dr. Packman to that
effect. She agrees that because it was untimely, this affidavit should not have been considered in
the district court.
18
As noted, for the first summary judgment motion, the district court denied M-D's motion to
strike Dr. Packman's affidavit, which articulated the theory.
III.
For the foregoing reasons, the summary judgment as to the manufacturing defect claim is
REVERSED and the case is REMANDED for further proceedings consistent with this opinion.
REVERSED and REMANDED.