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KOUTSOUBOS v. BOEING VERTOL

December 22, 1982

Spiros KOUTSOUBOS, Administrator of the Estate of James Koutsoubos
v.
BOEING VERTOL, DIVISION OF THE BOEING COMPANY and the Boeing Company



The opinion of the court was delivered by: POLLAK

 On the evening of March 21, 1979, James Koutsoubos was one of three Navy crewmen who, with two Navy pilots, were assigned to a helicopter training flight off the Florida coast. The training flight was a simulated rescue in which the helicopter was to find and then hover over a floating smoke flare guiding the rescuers to the putative accident victim. The helicopter made several approaches to the flare; on the fourth approach, the helicopter hit the water. It turned over and then floated upside down for several minutes. Koutsoubos and his two fellow crewmen were killed.

 Plaintiff, Koutsoubos' father, brought this action under the Death on the High Seas Act, 46 U.S.C. §§ 761-768, to recover damages for his son's death. Defendants Boeing Vertol and the Boeing Company manufactured the helicopter and supplied it to the Navy pursuant to a contract between the Navy and the Boeing Company. Proceeding on a theory of strict liability, plaintiff alleges that the helicopter was defective: "unsafe, unairworthy and dangerously unfit for its intended use." Complaint para. 8(a).

 Defendants have moved for summary judgment, relying on the "government contract defense," which, so defendants contend, shields government contractors from liability to third parties for design defects in products supplied to government specifications. Plaintiff, contending that the defense is inapplicable in a product liability setting, asks that the defense be stricken and that summary judgment be denied.

 I.

 The Supreme Court first recognized the government contract defense in Yearsley v. Ross Construction Co., 309 U.S. 18, 60 S. Ct. 413, 84 L. Ed. 554 (1940). In Yearsley, the Court ruled that the defendant, a company that performed work under a contract with the federal government, was not liable for injury to private property resulting from its work improving navigation of the Missouri river: "If this authority to carry out the project was validly conferred, that is, if what was done was within the constitutional power of Congress, there is no liability on the part of the contractor for executing its will." Id. at 20-21, 60 S. Ct. at 414-415. Subsequently, state and federal courts have used the Yearsley rationale to shield government contractors from liability when they complied with government specifications. *fn1"

 Plaintiff challenges the applicability of Yearsley and the government contract defense in this case. Because plaintiff's negligence claims, see 28 U.S.C. § 2680(a), and strict liability claims, see Laird v. Nelms, 406 U.S. 797, 92 S. Ct. 1899, 32 L. Ed. 2d 499 (1972), against the government would be barred by sovereign immunity, he argues that "fundamental fairness" requires permitting him to assert those claims against defendant. The cases, however, explain why this argument must be rejected. "First, tort liability principles properly seek to impose liability on the wrongdoer whose act or omission caused the injury, not on the otherwise innocent contractor whose only role in causing the injury was the proper performance of a plan supplied by the government . . . . Before any societal benefit can be derived from the deterrent effects of tort liability, however, the party in a position to correct the tortious act or ommission must be held accountable for the damages caused and thus motivated to prevent future torts." In re "Agent Orange" Product Liability Litigation, 506 F. Supp. 762, 793-94 (E.D.N.Y.1980). Second, "to impose liability on the contractor . . . [when the government is immune from suit] would render the Government's immunity . . . meaningless, for if the contractor was held liable, contract prices to the Government would be increased to cover the contractor's risk of loss from possible harmful effects of complying with decisions of executive officers authorized to make policy judgments." Dolphin Gardens, Inc. v. United States, 243 F. Supp. 824, 827 (D.Conn.1965). *fn2"

 In an opinion recently handed down in the context of the "agent orange" product liability litigation now pending in the Eastern District of New York, Judge George C. Pratt has discussed the government contract defense and set forth the elements that a defendant must prove in order to prevail. See In re "Agent Orange" Product Liability Litigation, 534 F. Supp. 1046 (E.D.N.Y.1982). In essence, the defense shields a manufacturer from liability if the product causing the injury complied strictly with government contract specifications concerning design. Accordingly, Judge Pratt ruled that the suppliers of agent orange, who asserted the government contract defense in law suits initiated by Vietnam veterans and members of their families, would have to prove:

 
1. That the government established the specifications for "Agent Orange";
 
2. That the "Agent Orange" manufactured by the defendant met the government's specifications in all material respects; and
 
3. That the government knew as much as or more than the defendant about the hazards to people that accompanied use of "Agent Orange."

 534 F. Supp. at 1055. The burden would be on a defendant to prove these three elements, in addition to establishing that it had one or more contracts with the government under which the particular product that caused the injury was supplied.

 The first element would demand proof that the government established the design and specific characteristics of the product. If, however, the contract "set forth merely a 'performance specification,' as opposed to a specified product, then the government contract defense would be far more restricted . . . ." Id. at 1056.

 The second element would require comparison between the government's specifications and the characteristics of the product. If methods of manufacture were specified, they would be examined as well. "Failure of a defendant to conform to the specifications would defeat the defense only if the discrepancy ...


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