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Silverstein v. Grumman

March 10, 2004

MICHAEL S. SILVERSTEIN AND ROSEANNE SILVERSTEIN, HUSBAND AND WIFE, PLAINTIFFS-APPELLANTS,
v.
NORTHROP GRUMMAN CORPORATION, A DELAWARE CORPORATION FORMERLY KNOWN AS GRUMMAN CORPORATION, A NEW YORK CORPORATION, GRUMMAN ALLIED INDUSTRIES, INC., A NEW YORK CORPORATION, GENERAL MOTORS CORPORATION, A DELAWARE CORPORATION, DEFENDANTS-RESPONDENTS AND GARY W. STROMBERG, CHARLES J. KOWALSKI, DEFENDANTS.



On appeal from the Superior Court of New Jersey, Law Division, Middlesex County, MID-L-10630-96.

Before Judges Kestin, Cuff and Winkelstein

The opinion of the court was delivered by: Winkelstein, J.A.D.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Argued February 4, 2004

Michael Silverstein (plaintiff), while an employee of the United States Postal Service (USPS), was seriously injured when the postal vehicle he was driving, known as an LLV (Long Life Vehicle), rolled over after being struck by a car.*fn1 He and his wife, who has asserted a per quod claim, have raised a strict liability claim against the corporate defendants (General Motors (GM) and Grumman) for defective design of the LLV. They assert the vehicle's defective design caused it to roll over when struck by the car. Judge Ciccone granted summary judgment to the corporate defendants, and dismissed plaintiff's complaint against them based on the"government contractor defense," which, when successfully raised, preempts state law claims against federal government contractors. See Boyle v. United Techs. Corp., 487 U.S. 500, 512-14, 108 S. Ct. 2510, 2518-20, 101 L. Ed. 2d 442, 458-59 (1988).

In this appeal, we are called upon to decide two issues: first, whether the government contractor defense applies to nonmilitary contracts; and second, if it does, have the corporate defendants established each element of the Boyle test so as to qualify for the defense. We answer both questions in the affirmative. The government contractor defense may be raised by nonmilitary contractors; and here, the corporate defendants have successfully established all of the elements enunciated by the United States Supreme Court in Boyle to qualify for the defense. Accordingly, we affirm.

I. FACTUAL BACKGROUND

A. The Accident

Plaintiff was injured on October 28, 1994, while driving a 1993 LLV, a right-side operated vehicle, on Hamilton Street in Franklin Township. While attempting to make a left turn, plaintiff's vehicle was struck in the rear by another vehicle. The impact caused the LLV to roll onto its right side and slide along the pavement, pinning plaintiff's right arm beneath it. As a result of the injuries plaintiff sustained in the accident, his right arm was amputated.

B. Design and Development of the LLV

In the early 1980's, the USPS decided to seek bids for a new mail delivery truck to replace the Jeep-type vehicle, known as the DJ-5, which the USPS had used for many years. Each DJ-5 was being replaced approximately every eight years, and the USPS wanted a vehicle that could last twenty-four years, which would result in significant cost savings. The new vehicle would be known as the"Long Life Vehicle" or LLV.

Before it drafted the specifications for the LLV, the USPS had gained substantial knowledge about vehicle design and rollover stability through its experience with the DJ-5. That vehicle had been involved in numerous rollover accidents, generating over two dozen lawsuits alleging it was unstable. In fact, the rollover issue was featured on a television news magazine show. As a result, the USPS authorized a study of the vehicle's possible stability problem, from which the USPS concluded that the DJ-5 was not unstable.

The USPS does not design vehicles; rather, it prepares performance specifications and seeks a design from manufacturers based on those specifications. For this reason, when the USPS developed detailed specifications for the LLVs, which it put out to bid on March 20, 1984, it sought written technical proposals from the manufacturers. The specifications contained express dimension requirements for the vehicle, as well as requirements concerning design, safety, ease of maintenance, and fuel economy. The design of the vehicle was required to comply with all federal motor vehicle safety standards. According to Robert St. Francis, the Director of the USPS Office of Fleet Management, whose responsibilities included developing specifications for vehicles and vehicle acquisitions, the USPS was"careful to draft specifications [for the LLV] that would not require any of the [proposed vehicles] to exhibit unstable characteristics," because the USPS was"acutely aware" of stability issues based on its experience with the DJ-5.

The USPS received three proposals in response to the 1984 request. Among them, was a September 1984 joint submission by Grumman and GM. The LLV they proposed had its origins in the GMC S-10 Blazer (Blazer). Their LLV was"expected to have similar stability and handling characteristics as the [Blazer]," but because the"[s]tability of a vehicle is a very compleX parameter[, it]... can only be fully defined when the vehicle is driven." USPS engineers also recognized that the LLV was not expected to handle like a passenger vehicle because, as a sport utility vehicle, it had a higher center of gravity than a typical automobile.

During the proposal phase of the procurement process, the contractors would submit written questions to the USPS contracting officer, and the USPS would supply the technical answers in writing. The technical proposals would then be reviewed by a USPS technical team to determine if they were acceptable.

The bidders were also required to furnish a technical proposal vehicle (TPV) for examination and testing before a contract could be awarded. The TPV was to be a"facsimile of the final version that embodies as many features of the final design as possible."

In 1985, after receiving the proposals but before awarding the contract, a team of USPS personnel, along with independent contractor Booz-Allen & Hamilton, Inc., performed and monitored physical and dynamic (driving) tests on the TPVs based upon"postal test criteria." They tested for total compliance with the specifications. The manufacturers' representatives were also present during testing. Rating the LLV superior to the DJ-5, the primary driver for the USPS team, who had experience both as a professional mechanic and race car driver, concluded that the Grumman LLV was"a magnificent vehicle" and"handled beautifully." Based on Grumman's technical proposal, the USPS Engineering department believed the LLV would be"inherently more stable" than the Blazer because of its lower center of gravity, lighter aluminum body, and wider rear track.

While the USPS tested the LLV prior to awarding the contract, so did Grumman/GM. During this preproduction testing in April 1985, Robert Taylor, a GM development engineer, co-authored a memo listing several incidents of the front wheel of the vehicle lifting off the ground. He considered the condition unacceptable because it meant a lack of proper control of the"front to rear suspension." Taylor suggested the problem could be resolved with changes to the front and rear spring and front and rear stabilizer bar. He recommended obtaining additional data so the LLV design group could"determine the feasibility of incorporating the recommended changes to the existing LLV design." He explained that although the vehicle was not"unstable," the condition nonetheless was one he"would not approve for production as a design." The information concerning the front wheel lift was not shared with the USPS.

Booz-Allen issued its report of the USPS test results in April 1985, concluding that the Grumman TPV"completed the testing... with no failure of major vehicle components or subsystems." In May, the USPS notified Grumman that its TPV had successfully completed the first step of the solicitation process. According to St. Francis, the other two bidders' vehicles"physically fell apart or were destroyed during the test phase," while Grumman's TPV"passed the test without an incident."

Both the technical proposal and the specifications, which were revised as of March 26, 1986, were incorporated into the contract that the USPS awarded to Grumman/GM in April 1986. The contract called for Grumman/GM to build 99,150 LLv. The contract price was more than $1.1 billion and the term of the contract was to continue through January 1993, with options to extend. All LLVs were to be constructed in accordance with the 1986 specifications and the contractor's technical proposal. Grumman/GM would present the USPS with a"first article" (the first vehicle off the production line) by September 15, 1986, which the USPS would examine and test, and would either approve or reject. The LLV to be delivered under the terms of the contract was to be"of the same overall design and materials as the Contractor's successful Technical Proposal Vehicle." The specifications called for the LLV to be"ruggedly constructed and highly maneuverable," while the safety characteristics"shall obviate hazards to personnel and property.... [t]otal design shall incorporate the best principles of ruggedness, roadability, safety of operation, ease of handling, cargo loading, and minimum scheduled preventative maintenance servicing."

The contract called for the USPS to be involved with testing the LLV. Particular test conditions were specified, including testing for vehicle stability and handling characteristics. The specifications set forth various"quality assurance provisions," one of which required that a road test of the vehicle be performed by USPS personnel. This test was specifically included in the specifications to allow the USPS to assess the rollover stability of the LLV. The USPS retained the right to reject the vehicle if it was not satisfied with the test results. The specifications stated:

Road Test - The vehicle shall be driven by a USPS representative a sufficient distance to determine its operating and handling characteristics.... The vehicle shall be closely observed for ease of handling and general roadworthiness, i.e., stability, undesirable sway tendency, off-tracking, acceleration, deceleration (including braking).... Evidence of poor handling qualities of roadworthiness characteristics or failure of the vehicle to maintain safety [at various speeds and grades]... shall be cause for rejection of the vehicle.

The contract also permitted the USPS to perform quality conformance examinations on randomly selected models, to ensure that the quality performance requirements were maintained throughout production.

In April 1987, the USPS notified Grumman/GM that it had approved the test vehicle. Production began, and the first LLVs were put in service that year. The design of the LLV conformed to USPS ...


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