A Florida federal district court recently enforced a relatively simple proposition: a private manufacturer is not entitled to immunity from product liability claims under the government contractor defense where the manufacturer did not actually have a design contract with the federal government. 3M Company tested that proposition and lost in multidistrict litigation involving design defect and failure to warn claims over earplugs issued to members of the United States military. In re 3M Combat Arms Earplug Products Liability Litigation, No. 3:19md2885, 2020 U.S. Dist. LEXIS 131951 (N.D. Fla. July 24, 2020).

Aearo Technologies, LLC (which 3M acquired in 2007) designed a multiple-flanged earplug known as the "E-A-R UltraFit" in 1989. Over the succeeding decade, Aearo revised the UltraFit by inserting a stem through its center and attaching a second earplug opposite the first. The resulting dual-ended earplug offered two different hearing protection options in a single unit; one side was a traditional, linear earplug that provided protection from steady-state noise, and the other was a non-linear filter that provided protection from loud impulse noises (such as weapons fire), while still allowing the wearer to hear low-level sounds, including human speech. Aearo prepared nearly thirty pages of design drawings and documents during that process.

Near the end of its design and development process, Aearo began to market the UltraFit to the U.S. military as the "Combat Arms Earplug" or "CAEv2." In March 1998, Aearo manufactured twenty five production samples and sent them to the Army on an unsolicited basis. In April 1999, Aearo learned that the CAEv2 was too large for the Army's current carrying case, had an increased potential for wind noise, and protruded too far to be worn with a Kevlar combat helmet. Aearo told the Army that it could shorten the CAEv2, proceeded independently to redesign the unit (including the creation of at least one new design drawing), and sent new production samples to the Army. In 2006, the government issued an indefinite procurement purchase order for the CAEv2 or its "equal" or a "double-ended swept-back triple-flange style earplug," which it continued to purchase for over a decade.

Plaintiffs claim that the CAEv2 earplugs had a propensity to loosen "imperceptibly" in some wearers' ears, which allowed harmful sound levels to pass and cause permanent damage. Among other things, they asserted design defect and failure to warn claims. In particular, they allege that the stem was too short to fit certain wearers properly and that Aearo should have warned users about proper fit. At the close of discovery plaintiffs and 3M cross-moved for summary judgement on 3M's government contractor defense.

The government contractor defense extends sovereign immunity to private manufacturers that provide products to the government under certain circumstances. The doctrine recognizes that the government is not in the business of manufacturing goods; consequently, where a private manufacturer acts at the direction of the government, sovereign immunity should be extended to the manufacturer. Otherwise, the manufacturer either will decline to provide the goods or substantially inflate their price. Application of the defense to design defect claims requires proof that: (i) the government approved reasonably precise specifications, (ii) the product conformed to those specifications, and (iii) the manufacturer warned the government about risks associated with use of the product that were known to the manufacturer but not the government. In the context of failure to warn claims, proof also is required that the government affirmatively prevented the manufacturer from issuing a warning to the end user, or otherwise imposed upon the manufacturer warning requirements that "significantly conflict[ed] with those required by state law."

The Florida district court rejected the government contractor defense on the record before it. With respect to the design defect claims, the Court found that the government had no participation in the design or development of the CAEv2 earplug. Indeed, Aearo never shared any of the design drawings and documents with the government, and no contract or purchase order was issued by the government until after completion of the earplugs' design. Furthermore, the government's rejection of the initial product samples because they did not fit inside existing carrying cases, had excessive wind noise and were incompatible with Kevlar helmets did not constitute participation in the design process because the government gave Aearo "complete freedom" and discretion as to whether and how to solve those design issues.

The Court also declined to extend government contractor immunity to 3M for plaintiffs' failure to warn claims, simply because 3M "identified no contract, formal specification, or incorporated government publication in which the Army forbade Aearo from fulfilling any state law duty to warn or instruct about the alleged risks or dangers inherent in the use of the CAEv2 or otherwise dictated the specific warnings to be given." 3M argued that the Army specifically instructed Aearo not to include instructions inside the package because military audiologists would provide in-person training to each service member. The Court rejected that argument because there was no evidence that the Army precluded Aearo from affixing warnings to the outside of the packaging, nor did the Army's "instruction" address the type or content of permissible warnings.

Manufacturers of aerospace products for the government and military have long relied on the government contractor defense for design defect and failure to warn claims. In re 3M Combat Arms Earplug Products Liability Litigation serves as both a reminder and a warning. The defense remains available and viable to manufacturers, but application is dependent upon clear satisfaction of its elements.

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