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From Products Liability Law Daily, November 20, 2017

Government-contractor defense bars injured man’s lawsuit against electrical transformer maker

By Georgia D. Koutouzos, J.D.

The manufacturer of an electrical transformer installed at a federal government facility met the factors established under U.S. Supreme Court precedent entitling the company to assert a government-contractor defense to a design-defect claim by an electrician who sustained personal injury while working on the transformer, the federal court in New Jersey determined, granting summary judgment favoring the manufacturer in the injured man’s product liability lawsuit (Siegman v. Schneider Electric United States, November 17, 2017, Bumb, R.).

After having been severely burned by an arc flash emitted from a live electrical transformer at a Federal Aviation Administration (FAA) building, an electrician hired to work on the transformer filed suit against the transformer’s manufacturer, Schneider Electric United States. Alleging a design-defect theory, the injured man asserted that his injuries could have been prevented by feasible design changes that the manufacturer could have implemented, i.e., a mechanical interlock system that requires the user to turn off the power source with a key before the same key will unlock the access door to the inner workings of an energized transformer.

At the time of his injury, the electrician was working for a firm that had a contract with the FAA to install the at-issue transformer at the agency’s facility. Asserting a government-contractor defense established under U.S. Supreme Court precedent, the transformer maker moved for summary judgment in the injured man’s lawsuit.

Government-contractor defense. In Boyle v. United Technologies Corp., 487 U.S. 500 (1988), the U.S. Supreme Court held as a matter of federal common law that "liability for design defects 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."

When all three elements are established, federal common law preempts state law design-defect claims and those claims must be dismissed. Moreover, although the Boyle case involved defects in equipment procured pursuant to a military contract, the law is well-settled in the applicable appellate jurisdiction that the government-contractor defense applies to both military and nonmilitary contractors.

Approved specifications. The government-contractor defense is available to a contractor that participates in the design of the product, so long as the government’s approval consists of more than a mere rubber stamp. In the instant case, the decision whether to include a mechanical interlock system was FAA’s decision to make and, indeed, the agency’s contracting officer opted not to require one in the specification at issue because he believed no industry safety standard required it.

Furthermore, despite the injured man’s contention that the agency must have left to Schneider’s discretion the decision whether to include an interlock or other similar device, such an inference could not reasonably be drawn in light of contrary testimony by the FAA contracting officer. On the record, a reasonable factfinder only could conclude that the government simply did not rubber stamp the transformer maker’s decision to omit an interlock device. Instead, the government, and not Schneider, made a reasoned decision not to require a mechanical interlock. Therefore, the first prong of the Boyle test was met.

Conformity. The second prong of the test also was met, inasmuch as the injured man did not argue that the transformer did not conform to the specification. The evidence on the record conclusively established conformity, i.e., the specification did not require a mechanical interlock or any other similar device, and the transformer sold by Schneider did not have any such device. In addition, the FAA contracting officer testified that the transformer conformed to the specification.

Warnings. Finally, the injured man extensively quoted deposition testimony that the transformer manufacturer did not warn or "educate" the government about the asserted dangers of omitting a safety interlock device, which was sufficient to raise a fact issue regarding the third prong of the Boyle test. The law is clear in that regard, however: a government contractor only must warn of dangers that are known to the supplier but not to the United States. Rather, only when the contractor is more aware of the danger than the government must the former provide a warning to the latter in order to obtain Boyle protection.

In the case at bar, no reasonable factfinder could conclude on the record that Schneider was more aware than the FAA about mechanical interlock devices and the danger of arc flashes. The FAA contracting officer’s testimony was unequivocal in that regard—he had known about the risk of arc flashes for more than 20 years and did not need such information from the manufacturer because the FAA provided its own training. The injured man failed to point to any contrary evidence and, at most, his evidence supported a conclusion that the transformer maker did not warn the FAA of the risks of arc flashes. Nevertheless, this fact was not dispositive because the relevant inquiry was not simply whether the government had been warned, but rather, whether it had relative knowledge.

The record in the case established that the dangers of arc flashes were common knowledge in the electrical engineering field; therefore, the third and final prong of the Boyle test was met. Accordingly, because there were no genuine disputes of material fact as to the three elements of the government-contractor defense, the transformer manufacturer was entitled to summary judgment on the injured man’s claims.

The case is No. 15-7072 (RMB/AMD).

Attorneys: Andrew J. Rossetti (Rossetti & Devoto, PC) for Robert Siegman. Carl J. Schaerf (Schnader, Harrison, Segal & Lewis) for Schneider Electric United States and Schneider Electric.

Companies: Schneider Electric United States; Schneider Electric

MainStory: TopStory DefensesLiabilityNews IndustrialCommercialEquipNews NewJerseyNews

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