Application of the Government Contractor Defense by Subcontractors
Government contractors can face lawsuits based in tort when the products they provide cause injury or death. In the classic example, a military plane crashes and results in the death of its operator. Then, the estate of the decedent sues the contractor that manufactured the plane. The plaintiff institutes legal proceedings against the commercial entity instead of the government to avoid an immunity defense and bar to recovery.
However, the U.S. Supreme Court has extended immunity to contractors by establishing the government contractor affirmative defense. It is a three-part test that if met shields a government supplier from liability for tort claims.
In Boyle v. United Technologies Corp., 487 U.S. 500 (1988), the Court held that if a contractor can show 1) the government approved reasonably precise specifications, 2) the equipment conformed to those specifications, and 3) the supplier warned the United States about dangers in the use of the equipment known to the supplier but not to the United States, then it will be immune from tort liability.
But, what about subcontractors? Can subcontractors advance the government contractor defense? Yes, at least in Texas. In Feldman v. Kohler Co., 918 S.W.2d 615, 625 (Tex. App.--El Paso 1996), writ denied (Aug. 1, 1996), a mechanic who was injured from a vehicle radiator used for government purposes sued the subcontractor who designed and built the radiator (along with everyone else in the supply chain). The subcontractor asserted the government contractor defense. Plaintiff challenged the application of the defense, arguing the subcontract was not a party to the government contract and therefore was unable to take the position it was immune from suit.
The court determined that the government contractor defense may “trickle down” to subcontractors after 1) being presented with no authority that it could not and 2) reasoning that should a subcontractor become liable, it would pass on the increased costs to the prime who would then pass it to the government, which is the type of circumstance disapproved of by the Supreme Court in Boyle. Feldman at 625. “The main purpose of the government contractor defense is to prevent the pass-through of costs that would occur if contractors were held liable for the discretionary acts of the government. Boyle, 487 U.S. at 511–12, 108 S.Ct. at 2518–19.
The Feldman court, citing a Fifth Circuit case, opined that the government contractor defense applies equally to defective design and failure to warn cases. Id. at 625 citing Garner v. Santoro, 865 F.2d 629, 635–36 (5th Cir.1989). Ultimately, the court determined that not only did the defense “trickle down,” but it then applied the Boyle test in concluding that the subcontractor established all prongs of the Boyle test as to the plaintiff’s defective design claim, but did not on its failure to warn claim.
The take away here is that Texas precedent exists holding that the government contractor defense applies to subcontractors. Accordingly, should a subcontractor be sued in tort, it will want to consider asserting this defense, provided it has the necessary requisites to mount a reasonably successful Boyle analysis.