Document rxzBxzv67NDJKJZw5evK5OK7q

FILE NAME: Military Specifications (MS) DATE: 1984 DOC#: MS010 DOCUMENT DESCRIPTION: Legal - Memo of the US in Opposition to Defendants' Motions for Summary Judgment, and in Support Plaintiffs' Motions for Summary Judgment F *d. I. Civ. p. 26(b)(3) S e e , James Julian, Inc, v. IyItheon C o m p a n y , 93 F.R.D. 138, 144 (D. Del. 1982y w h e r e i a aincff's eouasel had prepared a binder of documents Vo be produced by Defendants and ehe Coure/held: \ h e ehreehold iasue can be dispensad v^Lth quickly. The binder coaeaiaa a all percentage of chV extensive documents reviewed by p l a i n t i f f 's counsel. la selecting aad ordering a few^ docuameeaetas ouc of ehousaada counsael could poee help bue revyal iaporeaae aspects of his understanding of eChe ase. Indeed, in a case such as Chis, invoalving extensive docuaene discovery, Ah s process seiectioa and discillaeion Lf ofeea aore critical ehaa pure legal research./ There can be ao douKt ehsc ee lease in ehe first/instance ehe binder* were encieisd eo proeeccio^ as work produce. \ \ j Kvea if ehe ^oure ere co eonelude ehae ehe docuaeaes soughe by PCC were\d i s c o v e r a b l s , PCC has^/feiled eo aaks che requisita ehoviag o r n e a d uader Fsd. R.^Civ. P. 26(b)(3). The docuaeaes which che Government r t H d aad organised are available for revi'^w by che public wich che aasiscaace of archive eaployeee. ^CC had Che ejfae opporeuaicy as did \ ehe Government. Moreovey, on Mareh^28, 1984 aad oa May 17, 1984, ehe Coveraaeae aade^ proposal^ co eaeer taco a coordiaeeed discovery e firt wher^ia procedures were oueliaed for reerieval, reviso, ehd exchaage ot \ / asbestos-relatad docuaeaes.^ PCC/aever respoaded eo ehe propoeal. Othera heve encaad neo sgreeaeacs wich ehe Coveraaene. \ i \ ! ORDIR AFFIRMING SPECIAL MASTER'S OROCR MO. 6 - 3 / ; / ) / / ; \ le would be inequitable ee allow PCC co sic idle while relying oa che efforts of/ others t^o retrieve, review sad organise docuaenee available co PC(^. Accordingly, ehe Special Mastel?' Order No. 6 is Honorable Walter T. McGovern UNITED STATES DISTRICT COURT IN THE WESTERN DISTRICT OP WASHINGTON AT SEATTLE HUGH P. TEFFT, et ux., Plaintiffs. V. A.C. & S . ine., et al., Defendants. ) ) No. C84-154M ) ) MEMORANDUM OP THE UNITED ) STATES IN OPPOSITION TO } DEPENDANTS' MOTIONS FOR ) SUMMARY JUDGMENT, AND ) IN SUPPORT OP PLAINTIFFS* ) MOTIONS FOR SUMMARY JUDG) MENT, ON THE GOVERNMENT ) CONTRACT DEFENSE Pittsburgh Corning Corporation, Raymark Industries, Inc., and Pibreboard Corporation seek to avoid all liability in ehe eapeioned ease and ewo accompanying caeea by virtue of the "government contract defense." Motions for summary judgment have been filed by all defendants and by the plaintiff asbestos victims. The United States hereby urges the Court to deny defendants* motions and enter summary judgment in favor of the aebestoa victims. There is no justifies tion in law, policy or equity for granting cnoew r8Ar.i5ccrars the shelter of the government contract defense. USA's MEMORANDUM REGARDING MOTIONS FOR SUMMARY JUDG MENT ON GOVERNMENT CONTRACT OEFENSE.................. 1 U.S. DEPARTMENT OP JUSTICE P.0. BOX 340, BEN FRANKLIN STA. WASHINGTON, DC 20044 (202) 724-6715 I. FACTUAL BACKGROUND Hugh Tefft worked as an insulation erainee ae Puget Sound Naval Shipyard in 1954-55 end as an insulator and then insulation foreman from I960 to the present. He now has asbestosis, but con tinues to work. The United States hce awarded Mr. Twett a lump *u payment under ehe Federal Employee Compensation Act (PECA), the worker's compensation scheme for federal employees. William Raines has been employed ae Puget Sound Naval Shipyard sines I960, largely as an electrician. He too* has asbestosis but is seill able to work. Mr. Raines will be eligible for payments under the Federal Employees Compensation Act as his illness progresses. Albert Marry was employed ae an insulator at Puget Sound Naval Shipyard during the years 1929-30, 1933-47 and 1948-65. Mr. Marry died in 1968 as a consequence of asbestos. This case is being pursued of behalf of his estate. In this litigation Tefft, Raines and Albert Harry's estate eoek damages from the manufacturers of the asoestos-containlng products to which they were exposed at Puget Sound Naval Shipyard. Pittsburgh Corning, Raymark and Pibrebeard are attempting to avoid making any paymene whatsoever to ehese workers by claiming that all fault lies with the government. Plaintiffs have not sued the United States, and could not do so bocause the Federal Employees Compensation Act, like most worker's compensation systems, guaran tees specified compensation for occupational injuries in exchange for waiver of the right to pursue tort claims against the employer. Nevertheless, the interests e env u m c u scat. m y suoaeanniaiiy USA's MEMORANDUM REGARDING MOTIONS FOR SUMMARY JUDG MENT ON GOVERNMENT CONTRACT DEFENSE................... 2 U.S. DEPARTMENT OP JUSTICE P.0. ROX 340, BEN FRANKLIN WASHINGTON, DC 20044 (202) 724-6715 STA. Copyright 1984 ANDREW S PU BLICA TIO N S. INC. P. 8,995 Reproduction strictly prohibited without permission. af fe ;ted by the ruling on the government contract defense in this case. Each yaar tha Unitad Statas nagotiatas contracts worth billions of dollars* many of which could ba affactad by an exten sion of tha government contract dafansa to this typa of situation* As tha country's largest employer* tha Unitad Statas must ba con cerned with maintaining incentives for govarnmant contractors to provide equipment and materials which can ba used safely by federal employees. Tha Unitad Statas also has a direct intarase in ensuring that the asbestos industry does not so distort tha govarnmant contract defense-- which is intended to assist tha govarnmant by facilitating procurement-- that it becomes a tool for transferring tort liability from tha asbestos manufacturers to tha purchasers of their products. The Unitad Statas believes that it would ba a tragic misuse of tha government contract defense to absolve Pittsburgh Corning* Raymark and Fibreboard of liability in these cases. Part XI below demonstrates that tha govarnmant contract defense cannot properly ba applied in these cases. Part XIX demonstrates that even if tha !defense would apply were the five elements identified by this Court met* Pittsburgh Corning* Fibreboard and Raymark have each failed to establish the requisite elements. `l | XX. THE GOVERNMENT CONTRACT DEFENSE | OPES NOT APPLY TO THESE CASES | In September* 1982* this Court ruled that during tha period when these claims arose tha eommon law of tha State of Washington recognised a 'government contract defense* as an aspect of the USA's MEMORANDUM REGARDING MOTIONS FOR SUMMARY JUDG MENT ON GOVERNMENT CONTRACT DEPENSE.................. 3 U.S. DEPARTMENT OF JUSTICE P.0. BOX 340* BEN FRANKLIN WASHINGTON, DC 20044 (202) 724-6715 STA. containing insulation products or sell them for use by the Unitad States; (b) defendants' insulation products were not designed to meet any unique governmental need and were sold to a wide commer cial market; (c) the United states did not control the design* content* labeling or manufacturing process for defendants' insula tion products; (d) the defendants were at least equal partners in the development of the specifications governing their products; (e) the government contract defense does not shield a manufacturer from liabiltiy for its own negligence; and (f) public policy considerations weigh heavily against application of the defense in these cases. A. DEFENDANTS WERE NOT COMPELLED TO PRO DUCE INSULATION PRODUCTS OR TO SELL THEM FOR USE BY THE UNITED STATES Defendants do not allege thee they were ever compelled* by law or otherwise* to produce the thermal ineulaeion products at issue here or to sell them for use by the United States. These products |were manufactured and sold solely as a function of the desire of 'the defendant corporations and their management to maximize profit. ' B. DEFENDANTS' ASBESTOS-CONTAINING PRO DUCTS WERE NOT DESIGNED TO MEET ANY | UNIQUE GOVERNMENTAL OR MILITARY NEED ! The government contract defense is most frequently recognized !in the context of military procurement* where the government has requested a contractor to participate in the development of a weapon system or piece of complex equipment to meet e specific military need. The vest majority of the eases cited by the defendants USA'S MEMORANDUM REGARDING MOTIONS FOR SUMMARY JUDG MENT ON GOVERNMENT CONTRACT DEFENSE................... S U.S. DEPARTMENT OF JUSTICE P.O. BOX 340* BEN FRANKLIN STA. WASHINGTON* OC 20044 (202) 724-6715 "ordinary tort and agency law principles as applied to independent contractors.* Order Granting Pittsburgh c o m i n g ' s Motions to Amend* September IS* 1982* ee 2. That decision rested heavily on two conslderatione. First, the Court concluded that the government contractor defense wee a corollary to the fundamental tort law prlnclpla that liability should rase with the party exercising actual control. One consequence of this principle* the Court con cluded* la that under Washington law an independent contractor acting under the detailed direction and control of his employer is not liable for his aetiona. Id. The Court viewed the govern ment contract defense is an expression of this tredielonel relation ship between control and liability and made clear that the defense would not apply in these asbestos cases unless it is established thee the United States exercised such pervasive control over the manufacture of the insulation products at issue that the manufac turers became mere servants of the United States. | Second* the Court felt that public policy conslderatione favored recognition of the defense in certain circumstances* because this would serve to preserve tax revenues. The Court reasoned that the United States might have difficulty contracting for needed goods and services, or might be compelled to pay higher prices* if government contractors feared exposure to tore liability. The United States firmly believes that neither of thess rationales will support the application of the government contract defense to these asbestos cases. As shown below* (a) the united State did not compel the defendants to manufacture asbestos- USA's MEMORANDUM REGARDING MOTIONS FOR SUMMARY JUDG MENT ON GOVERNMENT CONTRACT OCFENSE.................. 4 U.S. DEPARTMENT OF JUSTICE P.O. BOX 340* BEN FRANKLIN WASHINGTON. OC 20044 (202) 724-6715 STA. arose in this military context. E.g.* McKav v. Rockwell Inter national Coro.. 704 f .2d 444 (9th Cir. 1983) (ejection seat in Naval aircraft); Brown v. Caterpillar Tractor Co . * 696 F.2d 246 (3rd Cir. 1982) (bulldozer with rifle esse and without protective i canopy); Hubbs v. United Technologies. 574 F.2d 96 (E.O. PS. 1983) (military helicopter); and Koutaoubos v. Boeing Vertol. 553 F. Supp. 340 (E.O. Pa. 1982) (military helicopter). Recognition of the defense in this context turns on factors limited to the military setting* e* consistent application of the Feres/Stencel doctrine* which oers manufacturers from recovering from the government for damages paid to Injured members of the military* Feres v. United States. 340 U.S. 135 (1980); Stencel Aero Engineering Corp. v. United States* 431 U.S. 666 (1966), and the need to avoid secondguessing by the judiciary of military decisions. See McKay v. Rockwell International, supra* at 449-450. ' The insulation products at issue here were not designed or ^old for any unique governmental or military use. To the contrary* these exact products wsre simultaneously marketsd and sold to a Iariety of commercial and industrial users* who utilized the products n the same way they wsrs uasd by the Navy. Sales to the united I! States for all purposas* both military and non-military* wsre often Inly a small fraction of total sales. | The only asbestos-containing thermal insulation product manu factured by Pittsburgh Corning wee Unibeetos* a pre-molded pipe covering consisting of 95% asbestos. Pittsburgh Corning manu factured this produet or almost ifl years, from July 1, 1962 until USA's MEMORANDUM REGARDING MOTIONS FOR SUMMARY JUDG MENT ON GOVERNMENT CONTRACT DEFENSE................... 6 <\ U.S. 0EP6RTMENT OF JUSTICE P.O. BOX 340* BEN FRANKLIN STA. WASHINGTON* OC 20044 (202) 724-6715 Copyright 1984 ANDREW S PU BLICA TIO N S, INC. P. 8,996 Reproduction strictly prohibited without permission. February 1, 1972. The dollar volume of Unibestos sales for each year during this period west Year Unibestos Sales 1962 1963 $ 560,339 1,365,562 1964 1,418,941 1965 1,784,229 1966 2,471,026 1967 2,522,429 1968 1969 3,067,446 2,716,514 1970 2,933,457 1971 2.989.873 5i.sii.31S In total, Pittsburgh Corning sold ovsr 321 million worth of Uni* bsstos. However, total salas to ths Unitsd Statss during this ton year period wars only 3738,470 Lass than 4% of tha Unibastos manufactured by Pittsburgh Corning was sold to tha Unitad Statas Exhibit 1, at 2 This Court's dacision recognizing tha govsrnmsnt contract idsftnss rsstad in part on tha baliaf that Unibastos was only "incidentally sold to privat# concerns." order Granting Pitts* burgh c o m i n g ' s Motions to Amend, Supra, at io. It is now clear (that more than 96% of tha Unibastos manufactured by Pittsburgh Corning wss sold to private industry, and it is the salsa to tha unitad States that ware "incidental.* USA'S MEMORANDUM REGARDING MOTIONS FOR SUMMARY JUDG MENT ON GOVERNMENT CONTRACT OEFENSE....................7 U.S. DEPARTMENT OP JUSTICE P.0. BOX 340, BEN FRANKLIN WASHINGTON, DC 20044 (202) 724*8715 * STA. Pittsburgh C o m i n g continued to promote widespread use of Uni* bastos until tha product was discontinued in 1972. In 1964 Pitts* burgh Corning described Unibastos as appropriate* for practically every high temperature insulation reguirement. Exhibit 3, at 2. In 196S and again in 1969 Pittsburgh Corning claimed that unibastos will do a batter job anywhere the best insulation is needed for piping and equipment." Exhibit 4, at 2* Exhibit S, at 2. Clearly Pittsburgh Corning cannot credibly claim that Unibastos mat any need peculiar to ths United States. Pittsburgh Corning ignores its own salas figures and marketing practices from 1962 to 1972, and instead focuses on efforts more than 25 years earlier by another manufacturer (UNARCO) to ensure that its new product, eventually called Unibastos, would satisfy the then*applicable government specifications relating to pipe covering. The documents submitted by Pittsburgh Corning suggest that in 1935 UNARCO submitted several versions of its new product |for Navy testing and in 1937 the product was approved for purchase. These documents do not establish that UNARCO designed its product to meet any need unique to the Navy or intended that its product 'would be sold exclusively, or even primarily, to the government, jin view of UNARCO's actual practice of marketing and selling Uni* bastos primarily to private industry, a practice followed by Pitts* 'burgh Corning after 1962, it seems clear that in submitting Unibastos for Navy testing UNARCO was simply seeking to assure that the pro duct was eligible for government purchase, thus assuring a larger potential market. Approval by the Navy was also an attractive USA's MEMORANDUM REGARDTNG MOTIONS FOR SUMMARY.JUDG MENT ON GOVERNMENT CONTRACT OEFENSE................... 9 U.S. DEPARTMENT OF JUSTICE P.0. BOX 340, BEN FRANKLIN WASHINGTON, OC 20044 (202) 724-6715 STA. This is not surprising in view of the fact that Pittsburgh Cor ning aggressively marketed unibastos as the ideal product for all or almost all high temperature industrial uses. In July, 1962, immedi ately after acquiring the Unibeetos line, Pittsburgh Corning issued e promotional brochure stating at the onset in bold and highlighted type that : Unibeetos-- the only industrial m s u l a - ! tion made in the United States com posed of unique long-fibered Aaorite asbestos -- is now manufactured by Pittsburgh Corning. Rugged and durable, Unibeetos has proved itself an ideal high temperature insulation in the marine, refining, chemical, power and petrochemical fields. Exhibit 2, at 2. in the remainder of the brochure Pittsburgh Corning statss that many industrial users of Unibastos have expressed satisfaction," Exhibit 2, at ?t that "Unibeetos U proven beet for petroleum refineries and petrochemical plants," Exhibit 2, at 8i that "Uni bestos is proven best for pulp and paper mills," Exhibit 2, at 9 land that "Unibastos is proven best for the utilitiee industries" Exhibit 2, at 9} Pittsburgh Corning states that "Unibeetos has supplied superior underground insulation for everything from schools, churehes and colleges to hospitals, utilities and rail- jroads as well as for processing lines for industrial plants." Exhibit 2, at 9. This brochure mentions only once that Unibeetos Lay also be appropriate for governmental usest `Unibeetos has proved itself in the widest range of industrial, commercial, and government installations*" Exhibit 2, at 8* USA'S MEMORANDUM REGARDING MOTIONS FOR SUMMARY JUDG MENT ON GOVERNMENT CONTRACT DEFENSE............. . 8 U.S. DEPARTMENT OF JUSTICE P.O. ROK 340, REN FRANKLIN WASHINGTON, OC 20044 (202) 724-6715 STA. selling point in marketing the new product to industrial users. Thus the materials submitted by Pittsburgh Corning certainly do not show, as claimed, that Unibestos was designed to meet any need special to the United States. They show only that UNARCO Intended unibestos to be the widely-used, general purpose high temperature insulation product which it soon became. All insulation products at issue manufactured by Fibrebosrd and Raymark were similarly designed for wide industrial use and actually enjoyed large commercial sales. Neither Fibrebosrd nor Raymark has claimed that its products were designed specifically for sale to or use by the United States. C. THE UNITED STATES 010 NOT CONTROL THE DESIGN, CONTENT, LABELING, OR MANUFACTURINC PROCESS FOR DEFENDANTS * PRODUCTS The govrnsu,rtt contract defense can apply, by law and logic, only where a government specifieaeion mandated the aspect of the product which caused the injury. Ths Tort and Produce Liability Reform Ace, which codified the existing common law of Washington jon this point, expressly provides that the defense is avali vable only "(w)hen the injury-causing aspect of the product was, at ijthe time of manufacture, in compliance with a specific mandatory 'government contract specification relating to design or warnings." ;RCW 7.72.050(2). In the instant cases plaintiffs' injuries were 1 caused by the release of asbestos fiber from defendants' products. Whether and how much asbestos fiber is released into the air when insulation is removed from its packaging, cut to size, installed or USA'S MEMORANDUM REGARDING MOTIONS FOR SUMMARY JUDG MDEENrTsNOsNe..G..O..V.E..R..N..M..E..N..T...C..O..N..T..R..AiCoT U.S. DEPARTMENT OF JUSTICE P.O. BOX 340, SEN FRANKLIN STA. WASHINGTON, DC 20044 (202) 724-6715 Copyright 1984 ANDREW S PU BLICA TIO N S. INC. P. 8,997 Reproduction strictly prohibited without permission. removed is a function of many design and manufacturing factors. Including (i) whether asbastos was used In the product; (11) which typa of asbastos was usad (soma typas of asbastos ara raora likely to eausa disaasa than others); (lit) tha length of tha fibers salactad (also an important factor in tha health impact); (iv) tha percentage of asbastos in tha product; (v) tha other materials mixed with or surrounding tha asbastos; and (vl) tha process by which tha various materials ara bound together. Nona of tha spaelfleatlona at issue in these eases imposed significant controls or limitation on tha design decisions which together eraatad tha injuryeausing*aspect of defendants1 insulation products. Tha federal government issues materials specifications in order to ensure that tha materials purchased can be used as intended. This goal could sometimes be accomplished simply by designating a particular product by brand name. However, the government is also vitally interested in fostering competition among suppliers in order to maintain or reduce the price of tha product, and in generating new and better products. Consequently the United States ordinarily buys through reference to specifications I which concisely list the technical features which must be satisfied by any item purchased under the specifications. In some situations, often dealing with the development of new equipment or weapons systems, the united States will use a 'design* specification, dealing with how the product must be designed, and possibly mahufac* tured. In purchasing the vast majority of the items needed to operate the government, however, the United States makes use of USA'S m e m o r a n d u m r e g a r d i n g MOTIONS FOR SUMMARY JUDG MENT ON GOVERNMENT CONTRACT OEPENSE.................. 11 U.S. DEPARTMENT OF JUSTICE P.O. BOX 340, BEN FRANKLIN STA. WASHINGTON, DC 20044 (202) 724-6715 in part because neither mentioned or required asbestos. Exhibit 9, at 3-4; Exhibit 9, at 5. Although the specifications covering the asbestos cloth sold by Raymark required 10% asbestos, these were nevertheless primarily performance specifications, for the manufac turer was left with broad discretion to ehoose the types of asbestos* the length of the asbestos fiber* the materials in which the asbestos is bound, and the manufacturing process, all of whieh affect the degree of the health hasard. The government contract defense cannot properly be applied in this type of situation, where the government exereised little or no real control over the design, content and manufacture of the product. Nor can the defense shelter the manufacturers from plaintiffs' claims based on failure to warn. None of the specifications at issue here contained any provision, directly or through incorpora tion of any packaging provisions, whieh prohibit the attachment of a warning label. John Haas states in his accompanying jdeclaration that to his knowledge "there was no provision in Section S (packaging] of any thermal insulation specification prohibiting suppliers from attaching warning labels." Exhibit 6, at 3. Similarly, Patrick V. Schott, an employee of the Defense Contract Administration Service who periodically visited Pitts burgh C o m i n g ' s Port Allegheny Plant to inspect Unibestos ship ments, testified that he could recall nothing m tne applicable packaging Instructions whieh would have prevented USA'S MEMORANDUM REGARDING MOTIONS FOR SUMMARY JUDG MENT ON GOVERNMENT CONTRACT DEFENSE.................. 13 U.S. DEPARTMENT OF JUSTICE P.0. BOX 340, REN FRANKLIN STA. WASHINGTON, DC 20044 (202) 724-6715 "performance" specifications. This type of specification may contain some general design and content provisions, but focuses largely on the desired performance featurea. Performance specifics tiona do not ordinarily make detailed provisions regarding the design of the product, its contents and ehemical composition, on the manufacturing process. Manufacturers and distributors are free under this type of specification to choose the materials, design, end manufacturing process as long as the performance requirements of the specifications are satiafied. John Haas, who was the Assistant for Speelficationa within the Bureau of Ships (later Naval Sea Systems Command) from 1966 to 1981 and Chairman of the Specifications Control Board from 1968 to 1981, axplalnad the Navy's preference for performance specifieetione as follows in a declaration attached as Exhibit 6; One of tne fundamental distinctions in the pre paration of military specificationa la between those specifications which call for a specific material con tent ("design* or 'content* specifications) and thoaa I calling only for performance characteristics ("perfor- ; manes" specifications). I During my employment at NAVSBA and its prede- ( eeeeora. it wee generally the policy and practice to j write performance rather then design specifieetione, i which encouraged manufacturers to develop new pro ducts and to improve existing ones in order to meet the Navy's needs. As a result, the Navy stimulated ! both cost competition and product development on ; the part of industry. As discussed in detail in Part II below, the specifieetione pursuant 'to which the united States purchased plpe-eoverlng from Pittsburgh Corning and Fibraboard (MIL-1-2781) and insulation blocks from Fibrsboard (MIL-I-2B19) were undoubtedly performance specifications. USA'S MEMORANDUM REGARDING MOTIONS FOR SUMMARY JUDG MENT ON GOVERNMENT CONTRACT 0EFENSE. .... ............ 12 U.S. DEPARTMENT OF JUSTICE P.O. ROX 340, BEN FRANKLIN STA. WASHINGTON, DC 20044 (202) 724-6715 Pittsburgh Corning from placing a warning label on Its Unibestos packages. Exhibit 10, at SO. D. The Manufacturers were At Leest Equal Partners In The Development of Product Specifications The rationale underlying the government contract specification dsfsnse is that the manufacturer was compelled by the government to produce the item in question exactly as it was produced. Where the manufacturer has participated in the development of the specifica tion, however, the eisment of compulsion is missing and the manufac turer may not rely on the defense. In O'Keefe v. Boeing Company, 335 F. Supp. 1104 (S.D. N.Y. 1971), for example, Boeing wee sued for personal injury and wrongful death caused by the eraen of a Boeing- manufactured Air Forca B-52. Boeing argued that since the government had designed the aircraft, the company could not be held liable for any of plaintiffs' injuriaa. The court found that . . . ultimate responsibility for the design and use of the B-52 bomber rests and always has rested with the United States government. The court concludes, however, that this fact, in itself, neither exonerates the defendant, nor haa it in any way altarad the defendant's duty as a manufacturer in this case where there has bsen no showing thst ths defendant was totally oblivious of and/or aloof from the genesis of the design specifications in the first place. . . . (Footnotes and citations omittsd.) 335 F. Supp. at 1124. See also, Jenkins v. Wittaker Coro.. 551 P.Supp. 110 (0. Hawaii 1982) (summary Judgement for manufacturer not appropriate where there is evidence of involvement in the design of the produet USA'S MEMORANDUM REGARDING MOTIONS FOR SUMMARY JUDG MENT ON GOVERNMENT CONTRACT OEFENSE.................. 14 U.S. DEPARTMENT OF JUSTICE P.O. BOX 340, REN'FRANKLIN WASHINGTON, DC 20044 (202) 724-6715 STA. Copyright 1984 ANDREW S PU BLICA TIO N S. INC. P. 8,998 Reproduction strictly prohibited without permission. called for by the government contract). The government contract defense Is inapplicable here because the insulation manufacturers exercised considerable discretion and control over the terms of ehe military specifications applicable to eheir products. The government has traditionally relied on product manufac turers for technical and product information to enable it to prepare specifications to cover the range of its needs. Specifications writers know the parameters of the Navy's performance needs and seek to develop specifications for products to meet those needs. They do not however, have expertise in the range either of products available in the commercial market or of the performance character istics of those products. It is essential, then, in the preparation of procurement specifications that the Navy ask for advice and assistance from industry in order to develop specifications with realistic requirements. i This general process has been true in the development of specifications for thermal insulation products since at least the early part of ehis century. The Navy has regularly relied on product jmanufaeturera for technical and product information to enable it to |prepare specifications to cover the range of its needs. John jAlfers, who was employed by the Navy for 39 years in the field of jmilitary specifications, states in a declaration accompanying this memorandum. Exhibit 9, that , Although ay staff engineers attempted to keep current in the areas assigned USA's MEMORANDUM REGARDING MOTIONS TOR SUMMARY JUDG MENT ON GOVERNMENT CONTRACT DEFENSE.................. IS U.S. DEPARTMENT OP JUSTICE P.O. BOX 340, REN FRANKLIN WASHINGTON, DC 20044 (202) 724-6715 STA. to than, the industry snginssrs and rsprssentativss inevitably had much greater knowledge concerning the design, composition, manufacturing procsss, psrformancs charactaciatiea, existing eoaoMrcial usas, and possible new uses of their own products. My staff necessarily reliad hssvily upon industry to provide them with all the information needed to draft useful specifications. In many casas, the great technical knowledge of ehe industry rsprssentativss gave them substantial influsnee ovar ; the final lsnguags and requirsmsnts of i the specifications. i Exhibit 9, at 3-4. Slmllary, Joseph Chilcote, a project engineer in the Materials Standards Branch from 1942 to 1964, has statsd that because it was impractieablt for ths Navy to dsvslop ths data H a d sxpertlss necasaary indspendsntly to undertake ita own product development, he and others in his office invariably conferred with industry to determine product svstlability from preexisting commercial sources. Exhibit 7, at 1. These practices comport with the purpose of the Defense Cataloguing and Standardisation Act adopted in 1991, 10 U.S.C. S 2451, et sec., which was to davelop a supplies catalogue and standardization program consonant with *the best practices of industry in order to obtain to the greatest extent practicable the cooperation and participation of industry in ths program.* Ths Navy regularly solicited comments from thermal insulation manufacturara on new `specifications or proposed changes in existing specifications. Exhibit 11. Manufacturers regularly offered such comments. Exhibit 12. USA's MEMORANDUM REGARDING MOTIONS FOR SUMMARY JUDG MENT ON GOVERNMENT CONTRACT OEFENSE.................. 16 U.S. DEPARTMENT OF JUSTICE P.O. BOX 340, BEN FRANKLIN STA. WASHINGTON, DC 20044 * (202) 724-6715 Moreover, various trade associations to wnich the manufacturers belonged were consistently involved in reviewing, commenting on and redrafting new specifications or amendments to existing specifications. For example, Raybestos-tfanhattan advised Joseph Chilcote by letter of March 29, 1963 that it would furnish comments on an interim specification revision to 'the Asbestos Textile Institute, and that the ATI would provide i comments on behalf of the industry. Attachment C to Exhibit 7. in addition, Marion Washington Oliver, the vice-president of materials and environmental affairs for Raymark, has testified that the Asbestos Textile Institute and Raymark prepared specifications and modifications to specifications for asbestos cloth. Exhibit !l3. Mr. Oliver, who was a member of the technical committee of the Asbestos Textile Institute between 1950 and 1967, testified that the technical committee wrote specifications which were .later adopted by the government. According to Mr. Oliver, the jcommittee drafted proposals for military specifications that .'were circulated to all the members of the committee. The committee then put the draft in final form and made the recommendation to the board of governors. Exhibit 13. Upon receiving the recommendations from the ATI, the government may have made some changes in terminiology but essentially accepted the technical committee's changes and modifications. Similarly, the National Insulation Manufacturers Association (NIMA), of which Pittsburgh Corning and Pibreboard were members, USA's MEMORANDUM REGARDING MOTIONS FOR SUMMARY JUDG MENT ON GOVERNMENT CONTRACT OEPCNSE. .................17 U.S. DEPARTMENT OF JUSTICE P.O. BOX 340, BEN FRANKLIN STA. WASHINGTON, DC 20044 - (202) 724-6715 created a committee responsible solely for reviewing and preparing comments on proposed specifications. Exhibit 14, at 90. Before NIMA, the Megneeia Insulation Manufacturers Association (MIMA) .provided substantial comments on proposed specifications. In commenting on proposed revision B to MIL-1-2781, for example, I the MIMA comments indicated that the majority of manufacturers were in "major disagreement with certain provisions of the subject proposal,* and changes wars recommended by the menufacturers (including Fibreboard's predecessor, Pabco) to conform to existing materials or practices m the industry. Exhibit IS, at 1, and accompanying attachment. Manufacturers also influenced the specification development process through direct dealings with government engineers. .Harry P. Hoopes, who served in various capacities at Pibreboard Corporation, including insulation research director, has tsstifisd that he met with a writer of thermal insulation ispecifications to discuss a draft specification. It was his judgment that the specification writer knew about specifications, but was not knowledgeable about insulation. Hoopes provided needed technical advice. Exhibit 14, at 105-108. In addition, manufacturers have frequently brought new thermal insulation products to the Navy to seek a new market. Where existing specifications have not covered these products but the products have been tested and have had a demonstrated ability to perform in accordance with the Navy's needs, the USA'S MEMORANDUM REGARDING MOTIONS FOR SUMMARY JUDG MENT ON GOVERNMENT CONTRACT OSPEHSE.................. 18 U.S. DEPARTMENT OF JUSTICE P.O. BOX 340, BEN FRANKLIN WASHINGTON, DC 20044 (202) 724-6715 STA. Copyright 1984 ANDREW S PU BLICA TIO N S. INC. P. 8,999 Reproduction strictly prohibited without permission. Manufacturers supplying the United States with products that are also sold widely to,commercial and industrial users will almost certainly carry substantial liability insurance regardless of whather a faderal employee or another individual exposed to a shipment sold to the government, eould successfully assert a product liability claim. The cost of this insurance will be built into the price of the product# even if injured federal employees eannot benefit from the coverage. Further# certain government contracts in fact require that the contractor carry liability insurance. Thus recognition of the defense is unlikely to rsduce Che government's procurement costs or to induce additional sellers to offsr their products to the United States# The only cleer consequence of applying the government contract dsfsnss in most situations would be to provide a windfall to the contractor's insuror. USA's MEMORANDUM REGARDING MOTIONS POR SUMMARY JUDG MENT ON GOVERNMENT CONTRACT DEFENSE........... *...... 23 U.S. DEPARTMENT OF JUSTICE P.0. BOX 340 REN FRANKLIN STA WASHINGTON# DC 20044 (202) 724-6715 specifieation dealing with material or composition were se follows: ' i 3.2 Materials# The pipe covering shall be com posed of heat-resisting compounds suitable for temperature conditions and the purpose intended. 3.3 Composition# The composition of the pipe covering shall conform to that of ths sample given qualification approval... The remainder of the nine-page specification dealt with the shape and dimension of the pipe covering, the performance criteria to be met for each class and grade, and the testing procedures to bs used to measure performance. There was no msneion of asbestos# Between July, 1962 and February, 1972, MIL-- 1-2791 was rsvised or amended on five occasions: ; MIL-I-2781D (June 13 1963) , Interim Amendment 1 (Ships) to MIL-1-2781D (December 10, 1964) # ; Interim Amendment 1 (DCSC) to MIL-I-2781D (January 11, 1965) j Interim Amendment 2 (Ships) to MIL-I-2781D (July 16, 1965) I Interim Amendment - 3 (Ships) to MIL-I-2781D (March 1 1971 ) V However# the paragraph daaling with "Materials" (Section 3.2) remained unchanged.**/ Throughout this 10 year period m i l -I-2781 Lever mentioned asbestos. ;>*/ Copiss of these documents accompanied PCC's Motion for Summary Judgment. See Affidavit of John R. Allison# st 3 discussing PCC 'exhibit ii. '**/ Section 3.3 dealing witn Composition," was deleted, apparenTTy because other portions of the speciflcseion adequately insured that the product supplied had to be the same as the product itested# USA'S MEMORANDUM REGARDING MOTIONS FOR SUMMARY JUDG MENT ON GOVERNMENT CONTRACT DEFENSE.................. 25 U.S. DEPARTMENT OF JUSTICE P.O. BOX 340 BEN FRANKLIN WASHINGTON, 0C 20044 (202) 724-6715 STA. III. NONE OF THE DEFENDANTS HAS SATISFIED THE REQUISITE ELEMENTS OF THE GOVERNMENT CONTRACT DEFENSE.______ If despits the foregoing the Court concludes that the government contract defanae is available in this context, each defendant can succeed on its motion for summery judgment , only by demonstrating that (1) the specificatione applicable to its insulation products at issue here were 'design* rather than 'performance* specifications; (ii) ths product was supplied to ths government pursuant to a contract: (iii) ths Government established ths specifications for ths product: (iv) ths product meet eh# government's specifications in all material rsapsctst and (v) ths defendant did not have# and fail to disclose, infor mation unknown to ths Government about the hesards aaeoeiated with the use of the product thee might reesonaoly have affected ehe Government's decision to specify its use# Order Granting Pittsburgh C o m i n g ' s Motions To Amend# supra# at 12# As diseussed in detail below# none of the defendant* has established each of these elements# A# Pittsburgh Corning Corporation l. MIL-I-2781 Was A Performance Standard When Pittsburgh C o m i n g purchased the right to manufacture and sell Unibeatos in July, 1962# the applicable pipe covering speeifiestion was MIL-I-2781C (see Exhibit 15), as supplemented by A*ndnine 1 ( Exhibit IS). only soctions of that JSA's MEMORANDUM REGARDING MOTIONS FOR SUMMARY JUDG MENT ON GOVERNMENT CONTRACT DEFENSE............... ...24 * U.S. DEPARTMENT OF JUSTICE P.O. SOX 340, REN FRANKLIN STA WASHINGTON 0C 20044 (202) 724-6715 MIL-X-2781 was a classic performance specification. The expected performance charactistics ware set out with great precision by grads (i.s.# upper temperature limit) by class (whether ths product was composed of a calcium silicate compound or of fiber) and# in some cases# by type (i.e., light or heavy density). Exhibit 15 at 5# Table III. Conversely, the specifi cation made only broad and rudimentary references to the materials to be used ("fibrous" material? heat-resisting compounds suitable for temperature conditions and the purpoee intended") and to the design. Only a cursory review of m IL-I-2781 is required to determine that this specification set out no detailed design or concent requirements. > Whether Pittsburgh C o m i n g ' s pipe covering released asbestos fibers into the environment during use# and if so# ths degree of ths health hasard thus created# was largely a function of the following design factors: (i) whether asbestos was ussd m the product? (il) the type of asbestos ussd-- "asbestos" is a generic name referring to a general class of minerals, some of 'whieh are more dangerous ehan others; (iii) tne length of the asbestos fibers (also an important health consideration); (iv) jthe percentage of asbestos in the product; (v) the othr materials mixed with or surrounding ths asbestos fibers; and (vi) the process jby which the various macsrials wars bound together. m x l -I-2781 did not address an of these design factors. Under this specification, Pittsburgh Corning had complete discretion to resolve these ques tions. USA's MEMORANDUM REGAROXNG MOTIONS FOR SUMMARY JUDGMENT ON GOVERNMENT CONTRACT DEFENSE.................. 26 U.S. DEPARTMENT OF JUSTICe P.O. BOX 340, SEN FRANKLIN WASHINGTON, DC 20044 (202) 724-6715 STA. Copyright 1984 ANDREW S PU BLICA TIO N S, INC. P. 9,001 Reproduction strictly prohibited without permission. Navy has developed a specification (or a naw class or grade of an existing specification) to cover the new product. See Exhibit 14 at 121 where Hr. ftoopes states that the Navy wrote a specifi cation during World War XI to cover fibraboard's product a light density 85% magnesia Insulation. , In sum it is clear that in developing and revising thermal insulation specifications the United States neither desired nor attempted to override design decisions by the industry. Indeed, the United States strove to build on or incorporate ii\ toto existing industry specifications wherever possible. Certainly the defendant manufacturers cannot establish that they were totally oblivious of and/or aloof from the genesis of the design specification." 0*Keefe v. Boeing Company, supra, at 1124. E. THE GOVERNMENT CONTRACT DEFENSE DOES NOT SHEXLO A MANUFACTURER FROM LIABILITY FOR ITS OWN NEGLIGENCE. ; Regardless of whether the government contract defense is grounded conceptually on considerations unique to sales to the i government or on general tort principles, the defense will not protect a manufacturer from his own negligence. If the contractor |tas particular Knowledge or expertise concerning the design of the product, then he is no longer merely the servant of the purchasing party. Johnston v. United States. 568 F. Supp. 351 I (D. Kansas, 1983). Because the defendant asbestos manufacturers here are charged with the knowledge of experts concerning the design and JSA* S MEMORANDUM REGARDING 40TI0NS FOR SUMMARY JUDG MENT ON GOVERNMENT CONTRACT 3EFENSE.................. 19 U.S. DEPARTMENT OF JUSTICE P.0. BOX 340, BEN FRANKLIN WASHINGTON, DC 20044 (202) 724-6715 STA. One of the fundamental purposes of tort law, and specifically its product liability principles, is to encourage manufacterers to take every possible precaution to see that their products are reasonably safe. The United States has a direct interest in ensuring that materials and equipment sold to the government are safe, in part because these products are likely to have their greatest health impact on employees of the United States. The United States sees no justification for denying these workers the deterrent effect of ordinary tort law simply because they are employed by the federal government. Moreover, the operations of the government are adversely affected by any accident or illness which results in lost working time, hinders efficiency or lowers . morale. The United States also has a clear financial Interest in avoiding Injury to its employees, for under the Federal Employees Compensation Act the government must reimburse its employees for certain medical costs and lost wages resulting from occupational illness or Injury without any showing of fault* K the government ieontraet defense is widely recognised, and safety consciousness :among manufacturers selling to the government decreases, the United States not only could expect to incur a greater direct FECA burden, but would be less likely to recoup its FECA payments !from sums recovered by the Injured employee from the manufacturer. ! 2. Maintaining Potential Tort Liability - For Manufacturers Pools The Risk Associated With Hazardous Products And Provides More Complete Relief Por Tort victims USA's MEMORANDUM REGARDING MOTIONS FOR SUMMARY JUDG MENT ON GOVERNMENT CONTRACT DEFENSE.................. 21 U.S. DEPARTMENT OF JUSTICE P.O. BOX 340, HEN FRANKLIN WASHINGTON, 0C 20044 (202) 724-6715 STA. manufacture of their own products, including the health implica tions thereof. Borei v. Ftbreboard Paper Products. 493 F.2d 1076, 1089 (5th Clr. 1973), and because these manufacturers had actual knowledge unavailable to the United States concerning the manner in which their products were designed and produced (e.g. PCC's `special . . production technique called fiberizing". Exhibit 2, at 2), the government contact defense is unavailable against plaintiffs claims based on negligence. F. PUBLIC POLICY CONSIDERATIONS WEIGH HEAVILY AGAINST APPLICATION OF THE GOVERNMENT CONTRACT 0EFENSE IN THESE CASES At the time of its September, 1982, decision this Court believed that the government contract defense could be justified in part on the ground that recognition of the defense would facil itato government procurement. Having considered the significance of the government contract defense for the overall government procurement program, military and non-military, as well as the likely Impact of the defense In litigation involving products purchased by the government, the United States respecefully asserts that public policy conaideraeiona argue serongly against application of the defense in theee cases.1 1. Potential Tort Liability Encourages Manufacturers To Provide Safe Products And Thus Protects The Health And Safety Of federal Employee USA's MEMORANDUM REGARDING MOTIONS FOR SUMMARY JUOG. MENT ON GOVERNMENT CONTRACT DEFENSE.................. 20 U.S. DEPARTMENT OF JUSTICE P.O. BOX 340, BEN FRANKLIN STA. WASHINGTON. DC 20044 (202) 724-6715 Another obvious goal of the tort system is to provide relief to the victims of accident or injury. The government contract defense frustrates this goal, for the Injured worker is left with no action against either his employer or the manufacturer, regard less of any culpability by either or both. This means that the burden Is shared by the United States, through its FECA payments to the Injured employee, and by the injured employee himself, who cannot recover for his pern and suffering. Only the manufacturer benefits from the defense. If the defense is not applied, the individual ean be compen sated and ehe risk spread to other users of the product and throughout the insurance system. The manufacturer of the product Is in by far the best position to learn of the risks associated with his product, to Insure against these risks, and, if necessary, to adjust prices to reflect these insurance costs. The government contract defense creates an unpredictable and unjustifed exception tc ^this mechanism for spreading the risks of injury and death, denying relief solely on the ground that the worker was Injured by a product sold to the federal government. Certainly there ijfcan be no basis for denying tort compensation to Puget Sound Naval Shipyard workers while insulators exposed to ehe same products at private shipyards (e.g. Todd Shipyard), and suffering the same disabilities, are not confronted with this defense. 3. Recognition Of The Govern ment Contract Defense la Unlikely To Facilitate G o v r n w n e Procurement USA's MEMORANDUM REGARDING MOTIONS FOR SUMMARY JUDG MENT ON GOVERNMENT CONTRACT DEFENSE.................. 22 U.S. DEPARTMENT OF JUSTICE P.O. BOX 340. BEN FRANKLIN STA. WASHINGTON, 0C 20044 (202) 724-6715 Copyright 1984 ANDREW S PU BLICA TIO N S, INC. P. 9,000 Reproduction strictly prohibited without permission. ' Pittsburgh Corning used this discretion to product very distinctive product composed almost entirely (951) of asbestos* Moreover, Pittsburgh Corning selected an unusual type of asbestos (amosite) found almost exclusively in South Africa. Exhibit 2, at 3. Throughout its promotional material Pittsburgh Corning repeatedly emphasised that "Unlbestos...is the only industrial insulation made in the United States composed of unique long-fibered Amosite asbestos." Exhibit 2, at 2. Unlbestos had an "exclusive composition* offering "unique natural advantages" over other available thermal insulation pipe covering. Exhibit 2, at 2. further, Pittsburgh Corning stated in its promotional material that its manufacturing process was "special" to Pittsburgh Corning* The Amosite asbestos is processed by a special Pittsburgh C o m i n g production tech nique call fPeriling, designed to exploit the full natural advantages of the long- fibered material. Xn this process, the Amosite is carefully screened, air blown, and brushed to "open up" the long, fine asbestoe fibers into an interlaced fibrous mass which entraps millions of insulating air spaces. UNIBESTOS is produced by care , fully farming this exclusive base material into sections of precise thicknesses, then applying a sxeoth, ehemieally-inert refrac tory coating. Baaed on these factors Pittsburgh Cornning promoted Unlbestos as "unique among insulations in its make-up and manufacture." Exhibit 2, at 2. Clearly Pittsburgh Corning cannot now claim that MIL-I-2781 imposed a single, uniform set of design or manufacturing require ments. neither can Pittsburgh Corning argue that m i l -I-2781 USA'S MEMORANDUM REGARDING MOTIONS FOR SUMMARY JUDG MENT OM GOVERNMENT CONTRACT OS TENSE.................. 27 U .s . DEPARTMENT Of JUSTICE P.0. BOX 340, BEN FRANKLIN WASHINGTON, DC 20044 (202) 724-6715 StA. John Alfers, who was responsible for portions of the Asbeetoe Elimination and Substitution Program, describes these trade-offs and their significance in the asbestos context as follows* Xn drafting materials specifications, the project engineer invariably balances various interests and strikes compromises abetween achieving the ideal performance and durability on the one hand, and, for example, cost, feasibility, commercial availability and known safety constraints on the other hand. X am certain that had the manufacturers and suppliers of asbeseos-coeanlning products alerted my office earlier to the health hazards associated with asbestos, my staff would have sacrificed a certain degree of performance, if necessary and compatible with the Navy's minimal performance needs, in order to reduce or eliminate the asbestos content of the products and thus facilitate procurement of safer products. Exhibit 9. In fact, this is exactly what was eventually done aa part of the asbestos elimination program. On March 1, 1971, prior to the availability of asbestos-free substitutes, the United States eliminated Grade XX, Class e and Grade XXX, Class f of m x l -X-2781, jthe only provisions under which unlbestos was purchased. The Navy then made use of produets which could be obtained under Lther portions of MIL-I-2781 having less demanding performance 'criteria. Thus the Navy choose to switch to existing low-asbestos products rather than insist on the particular performance characteristics of Unlbestos. Clearly Untbestos was not aesential to the survival of ehe fleet and would have been deleted from the specification earlier had the united States been warned of the health hazards. USA's MEMORANDUM REGARDING MOTIONS FOR SUMMARY JUDG MENT ON GOVERNMENT CONTRACT DEFENSE.................. 29 U.S. DEPARTMENT OP JUSTICE P.O. BOX 340, REN FRANKLIN WASHINGTON, DC 20044 (202) 724-6715 STA. expressly required asbestos, for this is obviously not the case. .Xn the final analysis Pittsburgh Corning is left with, and makes, only one argument* that the performance requirements set out in 'those portions of MXL-I-27R1 under which Unlbestos was purchased I could be met only if asbestos wea ineludsd in the produet. Pitts burgh Corning apparently would have the Court concluded from this that MXL-I-2781 Is a design specification. 1 This argument falls far short, for several rsaeons. first, an asbsstos-free produet could almost certainly have been developed to meet the performance characteristics set out in the two relevant sub sections of MIL-1-2781, had the industry been willing to do so. Attached as Exhibit 28 is a detailed historical study by Stephen L. Berger of the patents issued for asbestos-containing thermal insula tion products. Mr. Berger concludes thet the technology necessary to manufacture substitutes for existing products existed throughout the period at issue here, indeed, Mr, Berger finds that such pro d u c e s had already been patented by several manufacturers of asbsstos- containing insulation products by 1962.^/ Second, Pittsburgh C o m i n g creates the impression ehet the Navy's demand tor the performance characteristics contained In MXL-X-27B1 wa inflexible. Xn fact, however, all materials specifi cations necessarily reflect trade-offs among a variety of factors, none of which can be considered an absolute. On September 11, 1984, Mr. Berger described these findings under oath in a deposition noticed in this litigation. The transcript of this d e p o s i t i o n 1 no t y-c v i l b U to eh* Unie a d States* USA'S MEMORANDUM REGARDING MOTIONS FOR SUMMARY JUDG MENT ON GOVERNMENT CONTRACT DEPENSE.................. 28 U.S. DEPARTMENT OF JUSTICE P.O. BOX 340, BEN PRANKLXN STA. WASHINGTON, DC 20044 (202) 724-6715 Even if those sections of MXL-X-2781 under whieh Unlbestos was purchased eould have been satisfied only through the use of asbestos, this remains a performance specification for two reasons. First, the manifold design decisions discussed above, other than whether to use asbestos, would have remained within Pittsburgh C o m i n g ' s unfettered discretion. Second, even if the performance .criteria within portions of MXL-X-2781 eould not then have boen satisfied by any product unless it was designed as Unlbestos was designed, the only criterion within the specifiestion was one of performance. As noted, ons of the goals of the specification system is to increase competition among suppliers and thus decrease costs. By insisting on a classic performance specification, the [United States created an incentive, and lefe open the possibility, for another manufacturer to meet the performance requirements in a different way, l.e., to produce a competing product. Thus MXL-X-2781 remained a true performance specification at all times j relevant here even if only one product was purchased thereunder. Thet no ocher manufacturer in fact developed a competing product, perhaps asbestos-free, until compelled to do so by the Navy is s dramatic testament to the to ehe collusiveness of the asbestos industry. ' 2. Host of ehe Unlbestos Ussd At PSNS 1 was Obtained From sources other Than PCC and Was Not Governed By A Con tract Beceeen The Uniced States and PCC . This Court has provided chat in order to benefit from the government contract Gsfsnae a manufacturer must show that USA's MEMORANDUM REGARDING MOTIONS FOR SUMMARY JUDG MENT ON GOVERNMENT CONTRACT .......................... 30 I U.S. DEPARTMENT OF JUSTICE P.O. BOX 340, REN PRANKLXN STA. WASHINGTON, OC 2U044 (202) 724-4715 Copyright 1984 ANDREW S PU BLICA TIO N S, INC. P. 9,002 Reproduction strictly prohibited without permission. the produet wee supplied to the Government puruant to a contract.* Order Granting PCC's Motions To Amend, suora. at 12. This require ment was articulate by Judge Pratt in the Agent Orange litigation as follows! Since the defense applies to a product only when it was supplied by a defendant pur suant to a government contract. In order to succeed the defendant must establish that it ' did have one or more contracts with the govern , ment to supply *Agent Orange*. Moreover, the > defense will extend to, and protect the defen dant against liability for, only those par ticular shipments that were made under the contract with the government. In Re Agent Orange Product Liability Litigation, 934 P. Supp. 1046, 1056 (E.O.N.Y., 1982) (emphasis added). In order to completely defeat plaintiffs' claims, Pittsburgh corning must establish that each of the shipments of its Unibestos to which Hugh Tefft, William Baines and Albert Marry were exposed was sold to the United States pursuant to a contract directly "with the United States*, d. This is not a mere technical requirement, for it is only by contract that the United States could exercise the type of control over a manufacturer's product design which lies at the heart of the government contract defense. Pittsburgh Corning clearly has not satisfied this requirement. Although its exhibits are voluminous on other subjects, Pittsburgh Corning has submitted only one document showing a sale of Unibestos directly to the United States for delivery to or use at Puget Sound Naval Shipyard. Exhibit C to the affidavit of Robert E. Bucxley is a PCC invoice dated May 18, 1970 showing the sale and shipment USA'S MEMORANDUM REGARDING NOTIONS FOR SUMMARY JUDG MENT ON GOVERNMENT CONTRACT 0EPENSE.................. 31 U.S. DEPARTMENT OF JUSTICE P.O. BOX 340, REN FRANKLIN WASHINGTON, DC 20044 (202) 724-6715 STA. Alfred E. Lade, who was a Purchasing Agent at the shipyard from 1942 to 1944 and 1946 to 1951, states by affidavit that when thermal insulation products were purchased at least 50% of the products were purchased from local source m the Seattle area, such as Brown Company or E.J. Bartells. In these cases our pur chases were made directly from these local commercial outlets rather than from the manufacturers. Many of these purchases were made orally over the telephone. Exhibit 19, at 1-2. In sum, it seems indisputable that much, and possibly most, Unibestos used at PSNS was not obtained pursuant to a contract directly from Pittsburgh Corning, but from independent distributors. Because such sales did not involve contracts between the United States and Pittsburgh Corning, the government contract defense does not apply to these sales. On this basis Pittsburgh C o m i n g ' s motion for summary should be denied, and plaintiffs' motion granted, as to all claims except those arising out of the May, i1970 shipment. I 3. Pittsburgh Corning Exercised Significant Influence and Control Over the Form and Import of MIL-I-- 2781 iI Because MIL-I-2781 existed prior to the time Pittsburgh !I Corning purchased the Unibestos line, the appropriate inquiry Imust be whether during 1962 to 19*'2, Pittsburgh Corning exercised a significant degree of control over the implementation of these portions of the specification applying to Unibestos. Because Unibestos was the only product being purchased under USA'S MEMORANDUM REGARDING MOTIONS FOR SUMMARY JUDG MENT ON GOVERNMENT CONTRACT DEFENSE.................. 33 U.S. DEPARTMENT OF JUSTICE P.O. BOX 340, BEN FRANKLIN STA. WASHINGTON, DC 20044 (202) 724-6715 of $624.10 worth of Unibestos to PSNS. This document is entirely irrelevent to Dorothy Marry v. A.C. and S., Inc., No. C84-168N, since Albert Marry left PSNS in 1965 and died in 1968. Nor does this single S620 invoice carry much persuasive weigh in Tefft and Rainee. for the plaintiffs' claims arise primarily from exposure prior to 1970, and the invoice involves only a very small shipment of pipe covering (300 pieces). Pittsburgh Corning submits no evidence of a direct sale to the United States for use at PSNS at any other point during the 10 years Unibestos was manufactured by Pittsburgh Corning. Moreover, neither the papers submitted by Pittsburgh C o m i n g ' s counsel nor the supporting affidavits actually claim that Pittsburgh Corning made other direct sales to the United States for use at Puget Sound Naval Shipyard during the relevant periods. Pittsburgh C o m i n g ' s motion for summary judgment must be denied on these grounds alone. Further, the record now before the Court establishes, and Pittsburgh C o m i n g admits, that much of the Unibestos used by the United States was purchased from independent local insulation distributors, such as E.J. Bartells in the Seattle area. (See the Affidavit of Robert E. Buckley submitted by PCC, at 4 and 6.) This is confirmed by John Norris, a E.J. Bartells employee, who states that PSNS purchased Unibestos from Bartells during the period 1962-72 Exhibit It at 2. That PSNS would purchase Unlbeetos locally, rathar then from Pittsburgh C o m i n g , is conaistant with the shipyard's overall purchasing for insulation materials. USA's MEMORANDUM REGARDING MOTIONS FOR SUMMARY JUDG MENT ON GOVERNMENT CONTRACT 0EPENSE.................. 32 U.S. DEPARTMENT OF JUSTICE P.O. BOX 340, BEN FRANKLIN WASHINGTON, DC 20044 (202) 724-6715 STA. Grade ZZ, class e, and Grade ZZZ, class f, Pittsburgh Corning wee a dominant actor in all decisions affecting this part of the specification. This is dramatically illustrated by Pittsburgh C o m i n g ' s successful effort to delay the amendment of MIL-I-2781 to delete high-asbestos content insulation, principally Unibestos. When Navy engineers advised PCC of an intention to hale the purchase of Unibestos because of suspected health hasards, Pitts burgh C o m i n g argued that Che government engineers were incorrect, that Unibestos was not more dangerous than low-asbeetos contene produces, and that the specifications should not be amended until more was known aboue the health hazards. As a result, the Navy decided to forego any decision until extensive experiments could be conducted. It was noe uneil the results of ehis test proved the special hasards associated with Unibestos that PCC halted its battle against thw Amendment and the authority to purchase Unibestos was deleted. . I 4. The United States Dees Not Contest That Any Unibestos Used at PSNS Complied With MIL-I-2781 The Navy's specification requirements may be waived under certain conditions. Further, because the Navy can inspect only a email sample of any shipment before acceptance, and in many jeituationa relies totelly on the menufecturer's "certificate Of compliance*, material purchased pursuant to a specification may i inadvertently be accepted and used even chough not complying with USA'S MEMORANDUM REGARDING MOTIONS FOR SUMMARY JUDG MENT ON GOVERNMENT CONTRACT DEFENSE.................. 34 U.S. DEPARTMENT OF JUSTICE P.O. BOX 340, SEN FRANKLIN STA. WASHINGTON, DC 20044 (202) 724-6715 Copyright 1984 ANDREW S PU BLICA TIO N S, INC. P. 9,003 Reproduction strictly prohibited without permission. eh specification. In general, however, thermal insulation and nose other material may oa purchased and accepted only if it ecm- plies with the applicable specification. Consequently the United States does not contest this element of the government contract defense. 5. Pittsburgh Corning Had Greater Knowledge of The Health Hazards Assoclatsd With Ths Use of Unibestos Than Old The United States Pittsburgh C o m ing' s argument on the final element of the government contract defense greatly overstates the government's knowledge while understating Pittsburgh C o m i n g ' s own knowledge. This is accomplished by failing to focus on the only time period of significance here* distorting the meaning of several crucial develoDments in the medical knowledoe. misinterpreting the Shuman decision, and ignoring evidence that Pittsburgh C o m i n g was informed of the hazards of asbestos exposure even before it began producing Jnibeatos. a. Ths Relevane Penodt Because Pittsburah Corning manufac- tured Unibestos only between July 1* 1962 and February 1. 1972, this is the only period within which relative knowledge need be evelueted. During the I960'* the "seat--of-the-- art" in medical knowledge concerning asbestos was evolving, sometimes from month to month, and consequently the government contract defense can be meanfully litigated only by focusing on the exact dates at Issue. The particular focal points hsre must be the dates on which Pittsburgh C o m i n g and the United States entered into contracts USA'S MEMORANDUM REGARDING MOTIDNS FOR SUMMARY JUDGKENT OH GOVERNMENT CONTRACT OEPENSE.................. 35 U.S. DEPARTMENT DP JUSTICE P.O. BOX 340, REN FRANKLIN WASHINGTON, X 20044 (202) 724-6715 STA. factory uorK.r, in th. manufacturing setting (1 .a., whsrs aiDcacos products ars made) and the exposure experienced by insulators and ocher shipyard workers dealing with the finished asbescos-coneatning products. Th. United States b.lisvas that this is a valid and crucial distinction. However, Che remainder of Pittsburgh C o m i n g ' s relative knowledge argument is simplistic, self-serving and inaccurate* without recognizing or discussing the medical and scientific complexities, Pittsburgh Corning aiaply asserts that because the United States operated shipyards in whieh asbestos was used and knew thet asbestos eould be dangerous under certain conditions, the United States knew that the use of Unibestos was dangerous under the conditions prevailing at PSNS during the relevant period. Conversely, Pittsburgh C o m i n g denies that it had "any knowledge of asbestos hasards in any environment prior to 1961" PCC's Memorandum in Support, August 24, 1984, at 14 (emphasis added). Pittsburgh Corning has submitted no expert testimony in support of this position. The evolution of medical knowledge concerning the various asbestos-related diseases (asbestosis, mesothelioma, and lung c a n c e l and of th. hazard, aasociacad with aach typ. of axpoaura (e.g., factory worker*) insulators) bystander exposure) exposure to relatives) Is far too difficult and complex to present at length in a memorandum on summary judgment. In briefest aumary. it is the position of the United States that although it was generally known within the medical and scientific community before U S * 1a MEMORANDUM REGARDING MOTIONS FDR SUMNARV JUDORENT ON GOVERNMENT CONTRACT DEFENSE.................. 37 U.S. DEPARTMENT OP JUSTICE P.O. BOX 340, REN FRANKLIN STA. WASHINGTON. DC 20044 (202) 724-4715 concerning the purchase of that Unibestos to which th# plaintiffs wore exposed. Pittsburgh Corning has established only one contract (in May, 1970) between the United States and Plttsbrugh Corning regarding the purchase of Unibestos for PSn I. It hes been argued above that the government contract defense een be applied only to this contract. If the Court edopts this position, then the only significant date for tho "relevant knowledge* inquiry regarding PCC is May, 1970. Becauss Albert Marry clearly was net exposed to ths May, 1970 shipment of Unibestos, no "relative knowledge" insuirv need be made in the Oorothv Marrv Rose ease. Even if successful as to Tafft and Raines, PCC would be sheltered only from liability arising from this 1970 shipment* If this Court wore to permit Pittsburgh C o m i n g to assert the defense as to each sale of Unibestos for use at PSNS, the crucial date for relative knowledge purpose would presumably be the date of sale* But here too the defense must fall, because Pittsburgh C o m i n g has not to providad any specific information on sales to or for PSNS. Consequently Pittsburgh C o m i n g ' s factual pradlcate is so inadequate that the relative knowledge element cannot be meanfully evaluated and PCC's motion for summary judgment must b# denied* b. Studies. Surveys, and Safety Practices at Naval Shiovitrdst Pittsburgh Corning emphasizes that there ia "a clear and obvious diffvranea* in eh* typ* at **b*ato* xpetur* Kpeeiwnced by USA's MEMORANDUM REGARDING MOTIONS FOR SUMMARY JUDGMENT ON GOVERNMENT CONTRACT DEFENSE.................. 34 U.S. DEPARTMENT OF JUSTICE P.O. BOX 340, BEN FRANKLIN STA. WASHINGTON, OC 20044 (202) 724-4715 1930 that ssbeseos could be hazardous under certain conditions involving intsnss and prolonged exposure, it wes not until the mid-1960's that eh# United States lsarned that, dsspite the safety precautions then mandatory at the shipyards, exposure to asbestoscontaining products could cause significant adverse health constgueneee among insulators* Accompanying this memorandum as Exhibit 20 are portions of the September 6, 1984, deposition testimony of Or. Joseph Aisner. who is a Professor of Medicine end Oncology at the University of Maryland, with special expertisa m tabascosrslated diseases of the lung. Dr. Aisner has testified, and would testify at trial, that thera was no basis m ths medical literature until at lsast 1965 on whieh the United States had reason to know that asbestos-containing products constituted a health hazard under shipyard conditions. Exhibit 20, at 73, 193. Pittsburgh C o m i n g ' s elaim chat the United States "withheld its knowledge about shipyard asbestos hazards from the general public. Including PCC*, PCC Memorandum In Support, August 24, ae 14, is belied by Pittsburgh C o m i n g ' s own exhibits. Ths collection of Navy and Public H.alth Sarvtc. studiaa, arclcl.a. aurvaya and c a p o n s sufialetad Dy Pittsburgh Corning daaonstrat. that tha g o v a r i m n t was struggling throughout this p.rlod to gathar Informstlon and find solutions to a multitude of haalth problems at government shipyards-- and this struggle continues. Indeed, ths Nevy virtually ecaatad tha field of Industrial hyglana in th. 1940'. to protect shipyard workers. Had mambeca of the aebeetos industry pursued the health and safety Issues surrounding asetoa with USA'S MEMORANDUM REGARDING MOTIONS FOR SUMMARY J U X MENT ON GOVERNMENT CONTRACT OEPENSE.................. 38 U.S. DEPARTMENT OF JUSTICE P.O. BOX 340, SEN FRANKLIN WASHINGTON, DC 20044 (202) 724-6715 STA. Copyright 1984 ANDREW S PU BLICA TIO N S. INC. P. 9,004 Reproduction strictly prohibited without permission. anything n u c equal vigor, plaintiffs have might vail navar hava contracts^ asbestosis. c. Tha Shuman Dacision: Tha Shuman dacision cited by Pitts burgh Corning daalt with a maaothsliona victim working in a by stander trade in a private shipyard in tha 1940's and 1950's. Liability required a showing of negligence based on the govern ment's vessel-owner under the Longshoreman's Act. The instant cases deal with asbestosis in a naval shipyard and the only period of concern to Pittsburgh C o m i n g is 1962-1972. The issue is not negligence, but relative knowledge. Consequently Shuman is wholly inapposite to this litigation. Shuman v. United states, HO. 78-1407 <0. Hass. July 27, 1984). Moreover, that portion of the Shuman decision relied on by Pittsburgh Corning here is consistent with the government's position here. On page six of the findings. Rulings, and Order for Judgement, Judge Skinner concludes that: 'Upper echelon Mavy officials knew at least as early as the 1940's, probably earlier, that asbestos dust posed a significant health hasard.* As discussed above, it is the government's position that it was indeed widely |known by at least the 1940'* that asbestos could be hazerdous Iunder certain conditions. However, it was not known at that time, and the Navy did not know until the mid-1960's, that the use of asbestos-containing insulation products was dangerous to shipyard workers. d. Plttsurqh C o m i n g ' s Knowledge: a manufacturer of asbestos-containing products is held to the knowledge and skill of USA'S MEMORANDUM REGARDING MOTIONS FOR SUMMARY JUDG MENT ON GOVERNMENT CONTRACT ,DEFENSE.............. . U.S. DEPARTMENT OF JUSTICE P.O. BOX 340, BEN FRANKLIN WASHINGTON, OC 20044 (2021 724-6715 STA. Its services and advice are at your call. Exhibit 21. m PCC was a member of the National Insulation Manufacturers Association ("NIMA") as early as 1963 and Robert E. Buckley of PCC served as Director of NIMA. in June 1963, the Air Hygiene and Manufacturing Committee of the ATI was advised that Dr. Irving J. Sslikoff, at the next nesting at the American Medical Association in about 30 days, would read a paper on a study he had made of about 1500 workers showing a very large incidence of lung cancer over normal expectancy. It was thought that the Sellkoft study would 'be damaging to the industry.* Exhibit 22. At the April 14, 1964, meeting of the Board of Directors of NIMA, it wee reported that Johns-Manville Sales Corporation was printing on containers of asbestos products tns following warning: Caution: This product contains asbestos fibers, inhalation of asbestos in exces sive quantities over long periods of time may be harmful. If dust is created when this product is handled, avoid breaching ! the dust. It adequate ventilation con I trol is not possible wear respirators I approved by the U.S. Bureau of Mines for j pneumocoriosis (siel producing dust. IExhibit 23* It 4. j In October, 1964, Pittsburgh Corning Corporation became aware of an article in a New York paper entitled "A Rare Carcinoma Believed On The Rise-- A Study of Asbestos workers Shows A High Incidence.* The article began, "occupational exposure to asbestos may be making an extremely rare form of cancer much more common . . . The cancer is called mesothelioma. Exhibit 24. USA's MEMORANDUM REGARDING MOTIONS FOR SUMMARY JUDG MENT ON GOVERNMENT CONTRACT DEFENSE.................. 41 U.S. DEPARTMENT OF JUSTICE P.O. BOX 340, BEN FRANKLIN WASHINGTON, 0C 20044 (202) 724-6715 STA. an expert, meaning that *at a minimum, he must keep abreast of scientific knowledge, discoveries and advances and is presumed to know whet is imparted thereby." Borel v. Flbrsboard Paper Produces Corporation. 493 F.2d 1076, 1089-90 (Sth Clr. 1973), cert, denied. 419 U.S. 869 (1974). In addition, such a manufacturer has a duty to esse and inspect its product, i.s.. to research and experiment commensurate with the dangers involved. Id. in light of the fact that even the general scientific and medical community had recog nized a link between aabestosis and workers in asbestos-product manufacturing industries for several decades before PCC began manufacturing Unibeseos, these results impose a heavy burden on PCC to have been abreast of, and even lend, the frontiers of knowledge of health risks of exposure to asbestos. A complete discussion of the facts concerning PCC' actual knowledge between 1962 and 1972 concerning the hazards of exposure to asbestos, and in son cases failure to ace upon or disclose such knowledge, could fill hundreds of pages. For Illustrative purposes, the United Statss points to tha following: In May, 1962, Clyde Ruddick, the manager of safety and plane protection for PPG Company# wrote to Carl Baumler, vice President, Pittsburgh-Coming Corporation furnishing him with eopiss of a number of articles abeut the toxic properties of asbeatos and the disease asbestosis. Ruddick pointed out that one of the authorities quoted in the articles. Or. Carey P. McCord, was "an authority and is retained by our company.* Ruddick also reminded Baumler that PPG was a member of the industrial Hygiene Foundation and said USA's MEMORANDUM REGARDING MOTIONS FOR SUMMARY JUDG MENT ON GOVERNMENT CONTRACT DEFENSE.................. 40 U.S. DEPARTMENT OF JUSTICE P.O. BOX 340, BEN FRANKLIN WASHINGTON, DC 20044 (202) 724-6715 STA. The Board of Governors of the ATI (Asbestos Textile Industry) met in Feburay 1965. The group discussed "the unfavorable publi city* whieh had resulted fro a conference on "biological effect of asbestos* held in October under the auspices of the New York Academy of Sciences. Exhibit 24. B. PI8REBOARD CORPORATION 1. The Specifications Applicable to Fibetboard's Products Were All Performance Specifications Flbreboard manufactured asbeatos-containing insulation products from the 1920's until 1971. The earliest specifications applicable to Flbreboard's products were Navy Department Specification 32P3, promulgated in 1929, and Federal Specification h h -m -61, promulgated in 1934. Specification 32P3, entitled "Pipe-Covering, Diatomeceous Earth, Moldad," required qualifying products to eontain a minimum of 41 asbestos. Through later incorporation by rsfsesnc* of HH-m -61, covering 85% magnesia products, products qualifying under 32P3 were required to have an asbestos content of at least 10%. These requirements of minimum asbestos content were deleted from the Navy specifications during world war II - 32P8, for pipe covering, in 1942 and 3213, for block, in 1943. The new provisions regarding product content referred to "heat resisting compounds suitable for the temperature conditions and for the purpose intended." In the early 1950's, the Navy'* specifications were superseded by military specifications applicable to the Army, the Nvy and the M r Force. Thus, MIL-l-2781 covered thermal insulation in pipe covering form, and MIL-I-2819 was promulgated to cover USA'S MEMORANDUM REGARDING MOTIONS FOR SUMMARY JUDG MENT ON GOVERNMENT CONTRACT DEFENSE.................. 42 U. S. DEPARTMENT OF JUSTICE P.O. BOX 34(1, BEN FRANKLIN STA. WASHINGTON, O.C. 20044 (202) 724-6715 Copyright 1984 ANDREW S PU BLICA TIO N S. INC. P. 9,005 Reproduction strictly prohibited without permission. irvl sine* it is elaar that much of Fibreboard's products were in fact sold by local distributors Fibraboard has failed to establish this element of the government contract specification defense* 3. Fibraboard Participated in the Development of the Specifications Applicable to its Products The United States has shown in Part ZZ above that the members of the asbestos industry Including Fibraboard had significant influence, and in some cases control over the development of the specifications governing their products. See Exhibits 11 12 and 14. 4. Fibraboard Had Greater Knowledge Then The United States Concerning the Health Hazards Associated with the Use of Its Products The United States adhers to and adopts the plaintiffs' statement concerning the Fibraboard's knowledge of the health hazards associated with asbestos exposure. C. RAYMARK INDUSTRIES, INC. Both plaintiffs and Raymark seek summary judgment on only the first three elements of the defense as it relates Co Raymark. The government addresses the `performance v. design* and 'contract* isauas below but does not contract compliance with specifications. 1. The Specifications Applicable To Raymark's Asbeetos-Concaimr.c Cletn Were Perfogwance_S_eecif_icatlgni_^ Raymark's only argumant on this element is that the applicable speeifications mandated that insulating cloth contain a stated amount of asbestos. Yet this alone cannot make these specifiestton USA's MEMORANDUM REGARDING NOTIONS FOR SUMMARY JUDG MENT ON GOVERNMENT CONTRACT OEFENSE.................. 4? U. S. DEPARTMENT OP JUSTICE P.O. SOX 340, SEN FRANKLIN STA. WASHINGTON, D.C. 20044 (202) 724-6715 `design* specifications for all other aspects of the product remained within the discretion of the manufacturer. As discussed in detail above, the government contract defense does not properly apply where the manufacturer retains this type of design discretion. 2. Aebentos-Containing Cloth Manufactured By Raymark Wes Not Supplied To Puget Sound N a w Shipyard Pursuant to A Contrsct Raymark submits the affidavit of John Hawkins, a Raymark employe, who states that Raybeetos made sales to the United States in response to specific, numbered contracts. The United States does not dispute that Raymark, on occasion, may have sold an asbestos-containing product to the United States pursuant to a contract. The United States assert, however, Cher* is no evidence that any of the asbestos cloth manufactured by Raymark to which plaintiffs were exposed at Puget Sound Navel Shipyard wee purchased pursuant to a contract with Raymark. Raymark relisa on the deposition of John Hass, an employee of the United States who had responsibility for the development of specifications. Mr. Hass' deposition is irrelevant eo the issue of whether the product wee supplied pursuant to a contract. His testimony clearly relates only to the development end use of specifiestions. Similarly, the photocopies submitted by Raymark are inadequate to prove that asbestos Cloth was supplied to Puget Sound Naval Shipyard pursuant to a contract. Raymark's Exhibit A consists of five documents dealing with asbestos tape (not asbestos cloth. USA's MEMORANDUM REGARDING MOTIONS FOR SUMMARY JUDG MENT ON GOVERNMENT CONTRACT OEFENSE.................. 48 U. S. DEPARTMENT OF JUSTICE P.O. BOX 340, BEN FRANKLIN STA. WASHINGTON, O.C. 20044 (202) 724-6715 which is in issue here) for shipment to GSA facilities in Fort * Worth. Texas. Three orders indicate asbestos cloth was to be shipped either to the GSA Supply Distribution Facility in Auburn. Washington or Forth Worth Texas. There is no evidence chat these orders were delivered to GSA nor is there any evidence that these products were ultimately delivered to Puget Sound Naval Shipyard. Raymark also submits orders for sewing thread and packing and gasket material under MIL-A-24058, allegedly sold to the Naval Supply Cancer. Even assuming these contracts were entered into, they are insufficient as a matter of law to prove sale of asbestos cloth. In short there is no evidence that asbestos cloth was supplied to Puget Sound Naval Shipyard pursuant to a contract between the United States and Raymark. As discussed m detail above. PSNS routinely purchased insulation products frcm local wholesalers and suppliers. Exhibits 13 and 19. Conversely Raymark routinely sold its products to distributors for resssle locally. Exhibit 28, at 109. Against this background, Raymark cannot succeed on the government contract defense without speeifi- cally proving that the Raymark cloth to which plaintiffs were exposed was sold pursuant to a contract between the United States and Raymark. IV. CONCLUSION None of the defendants has established all of the elements of the government contract defense and consequently their motions USA's MEMORANDUM REGARDING MOTIONS FOR SUMMARY JUDG MENT ON GOVERNMENT CONTRACT DEFENSE.................. 49 U. S. DEPARTMENT OF JUSTICE P.O. BOX 340, BEN FRANKLIN STA. WASHINGTON, O.C. 20044 (202) 724-6715 *or summery judgment must he denied. Because the specifications at issue are performance rather than design specifications because the products at issue w- not supplied pursuant to a contract between the United Seaees and the manufacturer, and because the manufacturers were equal, and sometimes controlling, partners in the development of the specifications, this Court should entar summary judgment in favor of eha plaintiffs on the government contract defense. DATED ;r Respectfully submitted. ' RXCHAR0 K. WILLARD Acting Assistant Attorney General ROGER K. DAIVS GENE S. ANOERSON Trial Attorney United States Attorns/ Torts Brancn, Civil Oivision U.S. Department of Justice CHRISTOPHER L. PICKRELL P.O. Box 340, Ben Franklin Station Assistant United States Attorney Washington, D.C. 20044 Telephone! (202) 724-6715 PETER A. NOWtNSKt Special Litigation Counsel Torts Branch, Civil Division H. MfHAEL SE.LEP Supervisor T n a l Aetorn.y Torts Branch, Civil Oivision LINDA C. JAMIESON T n a l Attorney Torts Branch, Civil Oivision USA'S MEMORANDUM REGARDING MOTIONS FOR SUMMARY JUDG MENT ON GOVERNMENT CONTRACT DEFENSE.................. 50 U. S. DEPARTMENT OF JUSTICE P.O. BOX 340, BEN FRANKLIN STA. WASHINGTON, D.C. 20044 (202) 724-6715 Copyright 1984 ANDREW S PU BLICA TIO N S. INC. P. 9,007 Reproduction strictly prohibited without permission. the ."sal Insulation manufactured in blocks. Thsss spsciflcations contained no requirement for minimum asbestos content. Fibreboard manufactured Praseo block and pipe covering products from the mid 1920's to 1957. The first specification applicable to these products was 32P3. Pibreboard's Praseo products were ready for manufacture and commercial distribution prior to the existence of the specification, exhibit 29. Indeed, Pibreboard's Praseo pipe covering and block products were included by the Navy in a series of tests of the products of various manufacturers for the purpose of aevolv(ing] satisfactory specifications for high temperature pipe covering. exhibit 30. Plbreboard manufactured 85 magnesia block and pipe covering products from 1928 to 1966. fibreboard identifies federal Specifi cation HH-M-61 as the first specification pursuant to which these products were produced for sale to the government. HH-M-61 was pormulgated in 1934 and required a minimum asbestos content of 10. HH-M-61 was superseded in 956 by h H-I-554 which deleted the requirement of asbestos content and substituted therefor reinforcement with `mineral fiber.* Piberboard's 85 magnesia products were also qualified for sale to the government pursuant to MIL-X-2781 and MIL-X-2819* promulgated m 1951. fibreboard manufactured its Caltemp and Super Caltemp block and pipe covering products* a combination of calcium sllicats and tbestos# from 1951 to 1971. Thase products were first submitted to the Navy for testing in 1949 and approvsd in 1951. fibreboard identifies 3213 as the specification pursuant to which the company USA'S MEMORANDUM REGARDING NOTIONS FOR SUMMARY JUDG MENT ON GOVERNMENT CONTRACT DEFENSE.................. 43 U. S. DEPARTMENT OT JUSTICE P.O. BOX 340* SEN FRANKLIN STA. WASHINGTON* O.C. 20044 (202) 724-6715 ation, have so testified. Exhibits 14 and 25* respectively. In addition, A.P. Mueller, Research Manager of the Phillip Carey Corporation* in correspondence with the head of the Navy's Qualified Products List Section* Naval Ship engineering Center* in 1968 called MIL-I-2781 and MILI-2819 "essentially performance standards." Exhibit 26. Although fibreboard may argue that only by containing asbestos could its products meet the performance standards* the specifica tions are nonetheless performancs and not design specifications. As the court recognised in Southland Mower v. Consumer Produce Safety Commission, 619 P.2d 499 (5th Cir. 1980), (M)anufacturers remain free to develop new forms of technology that will meet the. . . criterion. (Yet pending such developments] a performancs requirement may bs quits design restrictive in its practical import." Id. at 515. That fibreboard felt free to develop a new technology under the two specifications is apparent. In 1971 fibreboard submitted its asbestos-free products for qualification under MIL-I-2781 and MIL-I-2819. In its letter notifying the Navy of the proposed change in its Caltemp produces* Fibreboard stated that the only change ws the elimination of asbestos fiber and the substitution of an unidentified fiber "of a proprietary nature." exhibit 27. Thus it is clear that neither the Navy nor fibreboard believed the specification required the use of asbestos. 2. FIBREBOARD HAS FAILED TO ESTABLISH THAT ANY FIBREBOARD PRODUCTS USED AT PSNS WERE SUPPLIED PURSUANT TO CONTRACT BETWEEN flBREBOARD ANO THE UNITEO STATES USA's MEMORANDUM REGARDING MOTIONS FOR SUMMARY JUDG MENT ON GOVERNMENT CONTRACT DEFENSE.................. 4 5 U. S. DEPARTMENT OP JUSTICE P.O. BOX 340, BEN FRANKLIN STA. WASHINGTON, O.C. 20044 (202) 724-6715 initially sought product approval. The Caltemp and Super Caltemp products qualified for sale under MIL-I-2781 and MIL-1-2819 In 1953. Each of the specifications pursuant to which these Fibreboard products were purchased was a performance specification. The most Important of these waa MIL-I-2781* which hae been discussed at length above in connection with Pittsburgh C o m i n g . MIL-I2819 la similarly a straight-forward performance specification, for it "sets forth an objective or a standard to be achieved* . . . . the successful bidder . . selecting the means* of achieving the objective. J.L. Simmons Company v. United States. 412 P.2d 1360, 1362 (Ct. Cl. 1969). This apeclfication^describes temperature ranges and conditions under which the asbestos-containing blocks must perfoem* and saes physical characteristics relating to strength* durability and watar absorption to whleh the product must conform. Choices relating to produce composition and methods of manufacture are left to the discretion of the manufacturer.^/ It is abundantly clear that the manufacturers have tradition ally viewed both MIL-I-2781 and MXL-I-2819 aa performance specifi cations. Both Harry Hooper* a former fibreboard employee* and Robert Buckley* former vice president of Pittsburgh C o m i n g Corpor- */ Some versions of .specifications preceding MIL-I-2781 and MIL-I-2819 did contain minimum asbestos content requlrtments. See, e.g., 32P3, indirectly Incorporating HH-M-61 "technical requirements." Such references were deleted from the military specifications in world War II* and materials thereafter were generally required to be "suitable tor the temperature conditions and the purpose intended." USA's MEMORANDUM REGARDING MOTIONS FOR SUMMARY JUDG MENT ON GOVERNMENT CONTRACT DEFENSE.................. 44 U. S. DEPARTMENT OF JUSTICE P.O. BOX 340, BEN FRANKLIN STA. WASHINGTON, O.C. 20044 (202) 724-6715 fibreboard must establish that it had a contract with the United States relating to the products which caused plaintiffs' injuries. In re "Agent Orange" Product Liaaility Litigation, 534 F. Supp. i06, 1056 (E.D. N.Y. 1982). Pibreboard's evidence on this subject consists of certain corraapondence with the Navy referring to specific contract numbers. Fibreboard fails to point out* however* that the contracts are for shipments of products to locations other than Puget Sound Naval Shipyard. Fibreboard has produced noe one documene which refers to a contract to supply products to p s n s . Similarly* the Fibreboard internal sales records or reports which accompany the Budlong affidavit do not reflaet direct contracts with the Navy for use at PSNS. All of the sales reports rsflect periodic sales to "U.S. Government - Bremerton" or to "U.s. Governmene/Othlerl * Bremerton." Despite the conclusory assertions contained in the affidavit of Edmond Torbonn* there is nothing on ths face of the reports to show that these sales were made to or for Puget Sound Neval Shipyard. Nor may such a conclusion automatically bs drawn* for the Naval Supply Center in Bremerton purchases matsrlal and supplies for a number of government facilities In the Northwest in addition to ths shipyard. Moreover* these sales reports do not indicate whether the sale was to the government, or to some "other* entity. Because Fibreboard cannot establish thae it had contract with the United States to supply the insulation products to which plaintiffs' were exposed at Puget Sound Naval Shipyard USA'S MEMORANDUM REGARDING MOTIONS FOR SUMMARY JUDG MENT ON GOVERNMENT CONTRACT 0EFENSE.................. 46 U. S. DEPARTMENT OF JUSTICE P.O. BOX 340, BEN FRANKLIN* STA. WASHINGTON, D.C. 20044 (202) 724-6715 Copyright 1984 ANDREW S PU BLICA TIO N S. INC. P. 9,006 Reproduction strictly prohibited without permission.