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| Failure to Warn Limitations to the Government Contractor Defense
September 14, 2009
On September 9, 2009, the California Court of Appeals affirmed that failure to warn claims are not barred by the government contractor defense. However, the court ordered a new trial based on inconsistencies in the jury's reasoning: the jury's finding of the defendant's negligent failure to warn is logically and legally inconsistent with the jury's finding that the defendant was not liable for strict product liability failure to warn (Oxford v. Foster Wheeler, 2009). The court in Oxford also held that the affirmative government contractor defense may apply to negligence claims as well as strict liability claims. Finally, the court rejected plaintiffs' argument that the government contractor defense did not apply because similar boilers supplied by the defendant were sold commercially.
This case involved decedent Calvin Oxford's exposure to asbestos between 1963 and 1967 while repairing boilers in the United States Navy. Among the causes of action, plaintiffs alleged negligence and product liability. The defendant asserted the government contractor defense as an affirmative defense to plaintiffs' allegations. Defendant asserted that its asbestos containing boilers had been manufactured in accordance with contract specifications imposed by the United States government. The assertion was supported by evidence at trial.
The jury, using a special verdict form, found against the plaintiffs on their product liability claim for design defect and failure to warn, but found in favor of plaintiffs on their claim of negligence. The jury further found that the defendant Foster Wheeler had met the three-prong test of Boyle v. United Technologies, which lays out the requirements of the government contractor defense.
The court implicitly faulted the verdict form which did not direct the jury to stop filling out the form once it made a positive finding on the affirmative defense. In addition, the court found there was no explanation how the jury could find the defendant negligent for failure to warn while also finding that the boilers were not defective with respect to its warnings. The jury's finding may have been reconcilable had the plaintiffs argued that the defendant had some continuing duty to warn about dangers it discovered after the boilers were manufactured. However, the plaintiffs made no such argument.
The court also stated the affirmative government contractor defense was not limited to strict product liability claims. It may be used in negligence claims or any other applicable claims. The affirmative government contractor defense may relieve a defendant of its duty under state tort law when there is a significant conflict between the contractor's duty under state law and under the government contract to comply with government regulations. A defendant may use this defense if the U.S. government approved reasonably precise specifications, the equipment conformed to the specifications and the supplier warned the U.S. government about the dangers in the use of the equipment that were known to the supplier, but not the U.S. government.
Finally, the court also rejected plaintiffs' argument that defendant's boilers were not "military equipment" because boilers similar to the ones used by the Navy were also sold by defendant to commercial users. Defendant's boilers were designed pursuant to exceedingly detailed and precise military specifications that required the use of asbestos in many instances. The commercial availability of a product is not dispositive with respect to the government contractor defense.
The case was remanded for a new trial because of the irreconcilable inconsistencies in the verdict as to the defendant's liability. The case is noteworthy for suppliers with potential liability because of the broad availability of the government contractor defense beyond strict liability and the rejection of any "commercial availability" exclusion to the government contractor defense.
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Related Practice Areas: Asbestos Litigation
Related Attorneys: Andrew Nelson, Florence McClain, Thomas G. Scully, Kevin E. Whelan
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