PLAINTIFFS’ RESPONSE TO FOSTER WHEELER ENERGY CORPORATION’S SUPPLEMENTAL MOTION FOR SUMMARY JUDGMENT
Plaintiff Bennie Spencer Haley files this response to Defendant Foster Wheeler Energy Corporation’s Supplemental Motion for Summary Judgment and would respectfully show the Court as follows:
Table Of Contents
Defendant Foster Wheeler Energy Corp. (“FWEC”) initially filed a “no-evidence” motion under Tex. R. Civ. P. 166a(i), seeking summary judgment on its asserted “government contractor” defense. After Plaintiff objected to this improper use of Rule 166a(i), FWEC filed a “supplemental” motion under Rule 166a(c), again seeking summary judgment on its government contractor defense. Under Rule 166a(c), a defendant seeking summary judgment on an affirmative defense must “conclusively prove all essential elements of that defense.” Swilley v. Hughes, 488 S.W.2d 64, 67 (Tex. 1972). In this case, FWEC must conclusively prove all elements of its government contractor defense, and “failure to adduce legally sufficient summary judgment evidence on each element of the defense is fatal.” Trapnell v. Sysco Food Services, Inc., 850 S.W.2d 529, 550 (Tex. App. – Corpus Christi 1992), aff’d, 890 S.W.2d 796 (Tex.1994).
ARGUMENTS AND AUTHORITIES
FWEC Is Relying on Inadmissible Evidence.
Summary judgment proof must be admissible under the rules of evidence, just as if the evidence were being offered at trial. United Blood Services v. Longoria, 938 S.W.2d 29, 30 (Tex. 1997). Plaintiff objects to Exhibits 2 and 5 to the supplemental motion for summary judgment, because both exhibits are inadmissible.
Exhibit 2 purports to be testimony from a 1988 trial in Maryland. The testimony is hearsay, and FWEC has not demonstrated that any exception to the hearsay rule is applicable. A party seeking to introduce former testimony must (1) prove that the declarant is unavailable, and (2) establish that the party against whom the testimony is offered, or a person with a similar interest, had an opportunity and similar motive to develop the testimony by direct, cross, or redirect examination. Tex. R. Evid. 804; Hall v. White, 525 S.W.2d 860, 862 (Tex. 1975). FWEC has failed to make such a showing.
Exhibit 5 is a collection of judicial opinions in which “various courts found that the United States Government knew of any dangers posed by the use of asbestos during the World War II era.” Defendant Foster Wheeler Energy Corporation’s Supplemental Motion for Summary Judgment at 4. As a general matter, a judgment in a prior case is inadmissible “to establish the facts on which it was rendered.” Davis v. Zapata Petroleum Corp., 351 S.W.2d 916, 922 (Tex. App. – El Paso 1961, writ ref’d n.r.e.). Even when a prior judgment may be introduced to prove its existence, it is not admissible to prove the facts adjudicated “except where the parties and the subject matter in each suit are the same” or where the judgment is in rem and binding on the public at large. Id. Neither of those requirements are met in this case, and the prior judgments are inadmissible to prove the facts on which they were rendered.
Nor can FWEC circumvent the rules of evidence by requesting “judicial notice” of the decisions. Although a court may take judicial notice of the existence of prior judgments, the court may not take judicial notice of the facts adjudicated. See, e.g., Hardy v. Johns-Manville Sales Corp., 681 F.2d 334 (5th Cir. 1982) (court could not take “judicial notice” of other cases finding that asbestos was unreasonably dangerous); Fender v. St. Louis Southwestern Ry. Co., 513 S.W.2d 131, 134-35 (Tex. Civ. App. – Dallas 1974, writ ref’d n.r.e.) (“[W]e are not persuaded that judicial notice under that rule can be extended to foreign judicial records and proceedings which are alleged to have affected specifically the rights of the parties before the Texas court, as distinguished from the law of another state to be found in published statutes and precedents.”); Jones v. Bordman, 759 P.2d 953, 965 (Kan. 1988) (citations omitted) (“While a court may take judicial notice of the outcome of another proceeding, where that ultimate outcome possesses an independent legal significance, there is no authority for a trial court to take judicial notice of the factual conclusions reached in another court in another case.”); Lockley v. Law Office of Cantrell, Green, Pekich, Cruz & McCort, 110 Cal. Rptr.2d 877, 885 (Cal. App. 2001) (“[A]n appellate court’s ‘recitation of facts should not be considered as true on any theory of judicial notice.’”).
Factual findings in prior decisions are not binding on subsequent cases unless the requirements of collateral estoppel are met. Under Texas law, the doctrine of collateral estoppel is not applicable unless “the party against whom the doctrine is asserted was a party or in privity with a party in the first action.” Sysco Food Services, Inc. v. Trapnell, 890 S.W.2d 796, 802 (Tex. 1994). Mr. Haley was not a party to any of the cases cited in Exhibit 5, nor was he in privity with any of the parties. The factual findings in those cases therefore have no bearing on Mr. Haley’s case.
FWEC’s Evidence Is Insufficient.
Even if FWEC’s evidence were admissible, it is insufficient to meet FWEC’s burden of proof. In Boyle v. United Technologies Corp., 487 U.S. 500 (1988), the United States Supreme Court held that “[l]iability for design defects in military equipment cannot be imposed, pursuant to state law, when (1) the United States approved reasonably precise specifications; (2) the equipment conformed to those specifications; and (3) the supplier warned the United States about the dangers in the use of the equipment that were known to the supplier but not to the United States.” Id. at 512.
State law claims are displaced only when “a ‘significant conflict’ exists between an identifiable ‘federal policy or interest and the [operation] of state law,’ or the application of state law would ‘frustrate specific objectives’ of federal legislation.” Id. at 507 (citations omitted). State law will not be preempted if the contractor “could comply with both its contractual obligations and the state-prescribed duty of care.” Id. at 509.
Boyle may be applied by analogy to claims based on failure to warn, but courts have consistently recognized that there will rarely be a conflict between government specifications and a duty to warn under state law. See, e.g., Feldman v. Kohler Co., 918 S.W.2d 615, 625 (Tex. App. – El Paso 1996, writ denied) (holding that asserting a defense under Boyle “may be more difficult in failure to warn cases because it is more difficult to show that state law failure to warn claims present significant conflicts with federal policy”); see also Garner v. Santoro, 865 F.2d 629, 635-36 (5th Cir. 1989) (recognizing that it is difficult to “establish an identifiable federal interest or policy in the existence or methods of warning and a significant conflict between that federal interest or policy and the operation of state law”).
In Feldman, the court explained that to satisfy Boyle in a failure to warn case, the defendant must present summary judgment evidence “supporting a significant conflict between Texas’ failure to warn tort law, and the requirements imposed by the government.” Id. at 627. Specifically, the defendant must show that “warnings of a particular sort were either required or prohibited.” Id. Because the defendants “failed to conclusively prove all prongs of the Boyle test, and summary judgment cannot be sustained as to Feldman’s failure to warn claims.” Id.
In Jorden v. Ensign-Bickford Co., 20 S.W.3d 847 (Tex. App. – Dallas 2000, pet. denied), the court applied the same analysis: “Ensign-Bickford has not pointed us to any summary judgment evidence indicating that the United States approved reasonably specific standards for the warning label or labels, what those standards were, or even what the labels said. Therefore, we conclude that Ensign-Bickford’s summary judgment evidence does not conclusively establish either the first or second elements of the government contractor defense as to Jorden’s failure to warn claim.” Id. at 855; see also Timberline Air Service, Inc. v. Bell Helicopter-Textron, Inc., 884 P.2d 920, 931 (Wash. 1994) (reviewing cases holding that the government contractor defense “applies in the case of a failure-to-warn claim only if there are precise government specifications pertaining to warnings”).
This application of Boyle to failure to warn claims has also been adopted by the Fifth Circuit. Specifically, the Fifth Circuit has held that in a failure to warn case, state law is displaced under Boyle only if the defendant shows, among other things, that “the United States exercised discretion and approved the warnings.” Kerstetter v. Pacific Scientific Co., 210 F.3d 431, 438 (5th Cir. 2000) (citing In re Air Disaster at Ramstein Air Base, Germany, 81 F.3d 570, 575 (5th Cir.1996)). In Kerstetter, this requirement was satisfied because “the Navy approved, changed and edited warnings.” Id.
Ignoring these explicit holdings, FWEC cites several Fifth Circuit cases for the proposition that “where the manufacturer has established a Boyle defense as to the design defect, Boyle bars the failure to warn claims as well.” Supplemental Motion at 19. None of the cases cited by FWEC even addresses the question, much less offers support for FWEC’s position. In Smith v. Xerox Corp., 866 F.2d 135 (5th Cir. 1989), the court does not analyze the failure to warn claims at all. In Stout v. Borg-Warner Corp., 933 F.2d 331 (5th Cir. 1991), the court noted that the plaintiff “does not contend that his failure to warn claim can survive the government contractor defense” and declined to address the issue further. Id. at 337 n.2. Likewise, in Bailey v. McDonnell Douglas Corp., 989 F.2d 794 (5th Cir. 1993), the plaintiff did not “challenge the disposition of her failure to warn claim.” Id. at 797 n.6.
In any event, this court is not required to follow Fifth Circuit precedent. Penrod Drilling Corp. v. Williams, 868 S.W.2d 294, 296 (Tex. 1993) (“While Texas courts may certainly draw upon the precedents of the Fifth Circuit, or any other federal or state court, in determining the appropriate federal rule of decision, they are obligated to follow only higher Texas courts and the United States Supreme Court.”). Courts in numerous other jurisdictions, addressing virtually identical facts, have rejected FWEC’s argument.
In In re Joint Eastern and Southern Dist. New York Asbestos Litigation, 897 F.2d 626 (2d Cir. 1990), the court held that Navy design specifications did not displace state law duties to warn about the dangers of asbestos:
[A] plaintiff’s ability to pursue a failure-to-warn claim when Boyle may foreclose a design defect claim is not indicative of some loophole inadvertently left open by Boyle, but rather demonstrates a crucial lack of the necessary conflict between state and federal warning requirements. Indeed, it is not unreasonable to imagine that, as in this case, government contracts often may focus upon product content and design while leaving other safety-related decisions, such as the method of product manufacture or the nature of product warnings, to the contractor’s sole discretion. In these instances, state law design requirements are displaced, although state law warning requirements are not. See Garner v. Santoro, 865 F.2d 629, 635-36 (5th Cir.1989) (observing “the difficulty that a defendant will have under Boyle in establishing an identifiable federal interest or policy in the existence or methods of warning and a significant conflict between that federal interest or policy and the operation of state law”). In a failure-to-warn action, where no conflict exists between requirements imposed under a federal contract and a state law duty to warn, regardless of any conflict which may exist between the contract and state law design requirements, Boyle commands that we defer to the operation of state law.
Id. at 631 (emphasis added).
In In re Hawaii Federal Asbestos Cases, 960 F.2d 806 (9th Cir. 1992), contractors who supplied asbestos-containing products to the U.S. Navy during World War II asserted the government contractor defense. The court held that the contractors could not assert the defense because “[t]hey could have provided detailed and prominent statements regarding the dangers of asbestos insulation without violating the terms of their procurement contracts or their product specifications. There thus existed no conflict between their state law duty to provide adequate warnings to the users of their insulation and the conditions imposed on them pursuant to the agreements they had entered into with the Government.” Id. at 812. Because the government’s specifications did not conflict with the duty to warn under state law, “a crucial element of the military contractor defense as defined in Boyle is missing. Owens-Illinois and Fibreboard have simply failed to allege, let alone establish, that in making their decisions regarding warnings they were acting in compliance with ‘reasonably precise specifications’ imposed on them by the United States. . . . [T]he Government did not require Fibreboard or Owens-Illinois to do anything with respect to the placement of warnings on their products. Nothing in Boyle suggests preemption of a state law duty to warn under such circumstances.” Id. at 813.
In Dorse v. Armstrong World Industries, Inc., 716 F.Supp. 589 (S.D. Fla. 1989), the court held that the U.S. Navy’s specifications regarding asbestos-containing products did not conflict with the duty to warn under state law and that the defendant “could have complied with both its state tort law duty and its Navy contract.” Id. at 591; see also In re Brooklyn Navy Yard Asbestos Litig., 971 F.2d 831, 839-40 (2d Cir. 1992) (“[T]he military contractor’s defense can protect a manufacturer from design defect liability while leaving it exposed to liability for failure to warn.”); Overly v. Raybestos-Manhattan, 1996 WL 532150, *4 (N.D.Cal. 1996) (“Defendant’s only showing on this motion relates to the government’s manufacturing and engineering specifications. Defendant has not demonstrated that the government provided ‘reasonably precise specifications’ affecting Avondale’s provision of warnings. Absent a showing by defendant that the federal government gave specific instructions to Avondale not to warn employees of the existence of asbestos, Avondale is offered no protection by government contractor immunity.”) (citations omitted).
The same analysis applies to manufacturers of products, such as FWEC boilers, that require asbestos insulation. See Megill v. Worthington Pump, Inc., 1999 WL 191565, *4 (D. Del. 1999) (pump manufacturer could not assert a “colorable” government contractor defense in the absence of evidence that “the U.S. Navy prohibited defendant from, or otherwise directed defendant in, issuing warnings.”). FWEC has failed to present any evidence, much less conclusive proof, that the United States government imposed any requirements that prevented FWEC from warning users about the dangers involved in using its products.
With respect to the design defect claim, FWEC has likewise failed to present conclusive evidence. The third prong of Boyle requires that the supplier “warned the United States about the dangers in the use of the equipment that were known to the supplier but not to the United States.” Boyle, 487 U.S. at 512. This requires evidence of two things: (1) what the United States knew, and (2) what the supplier knew. Although FWEC has presented evidence that the United States was aware of some asbestos-related dangers, FWEC has presented no evidence about its own knowledge. FWEC asserts that it “did not possess any knowledge of risks superior to that of the U.S. Navy” but present no evidence to support that assertion. Supplemental Motion at 12. It is not enough to show that the United States had knowledge; FWEC must also establish its own knowledge of asbestos dangers in order to satisfy the third prong of Boyle. See In re New York City Asbestos Litig., 542 N.Y.S.2d 118, 121 (N.Y. Sup. Ct. 1989) (“Eagle-Picher also does not satisfy the last element of the [Boyle] test which relates to the state of knowledge possessed alternatively by Eagle-Picher and the United States. While Eagle-Picher contends that the government knew at least as much as it did about the danger of asbestos exposure, the question of the relative state of knowledge between the government and Eagle-Picher is, at best, a question of fact and therefore, beyond the scope of a motion for summary judgment.”).
FWEC Has Not Negated Its Duty to Warn Under State Law.
FWEC cites Hagans v. Oliver Machinery Co., 576 F.2d 97 (5th Cir. 1978), and Stout v. Borg-Warner Corp., 933 F.2d 331 (5th Cir. 1991), for the proposition that “under Texas law there is no duty to warn when danger is known.” Supplemental Motion at 19. What these cases actually hold is that “there is no duty to warn when the danger or potentiality of danger is obvious or is actually known to the injured person.” Hagans, 576 F.2d at 102; see also Stout, 933 F.2d at 337 n.2 (“Under Texas law, there is no duty to warn when the danger is obvious or actually known to the injured person.”) (emphasis added). There is no evidence that the dangers of asbestos were obvious or actually known to the injured person in this case, i.e. Mr. Haley. FWEC had a duty under Texas law to warn Mr. Haley of the dangers posed by its products. See, e.g., General Motors Corp. v. Saenz, 873 S.W.2d 353, 356 (Tex. 1993) (“Generally, a product manufacturer has a duty to warn if it ‘knows or should know of potential harm to a user because of the nature of its product.’”).
To the extent that the United States Navy possessed any information about asbestos hazards, that will only be relevant if FWEC asserts some version of the “sophisticated intermediary” doctrine. In In re Brooklyn Navy Yard Asbestos Litigation, 971 F.2d 831 (2d Cir. 1992) – which FWEC attaches to its motion – the court held that the Navy’s knowledge of asbestos hazards did not relieve manufacturers of their duty to warn:
Defendants . . . contend that the sophistication of the Navy as an intermediary relieved manufacturers of their duty to warn the naval employees. . . . We find no merit in defendants’ contention that they justifiably relied on the Navy to communicate potential hazards to those who would ultimately work with defendants’ asbestos-containing products. . . . Given that the record supports neither a finding that defendants actually relied on the Navy to warn its workers, nor a finding that any such reliance would have been justifiable, the presence of the Navy as an alleged ‘sophisticated intermediary’ or ‘knowledgeable user’ does not call into question the jury’s finding of defendants’ duty to warn. See Restatement (Second) of Torts § 388, cmt. n (1965).
Id. at 837-38; see also Humble Sand & Gravel, Inc. v. Gomez, 48 S.W.3d 487, 494-95 (Tex. App. – Texarkana 2001, pet. granted) (“[T]he mere presence of an intermediary does not excuse the manufacturer from warning those users whom it should reasonably expect to be endangered by the use of its product. . . . Proof that the intermediary knew that the product was dangerous does not, in and of itself, absolve the supplier of a duty to warn ultimate users.”) (citing Alm v. Aluminum Co. of America, 717 S.W.2d 588, 591 (Tex. 1986)). “In the situation of asbestos exposure, which is known to be dangerous on a significant societal scale, a supplier may still not escape liability to an ultimate user.” Humble Sand, 48 S.W.3d at 497 (citing Willis v. Raymark Indus., Inc., 905 F.2d 793 (4th Cir. 1990)).
Moreover, the Navy’s alleged knowledge does not disrupt the causal connection between FWEC’s failure to warn and Mr. Haley’s injuries. As the court held in the Brooklyn Navy Yard case, “[t]he Navy’s intervening failure to warn was entirely foreseeable; there is nothing unjust in holding defendants liable for their own negligence, notwithstanding the Navy’s additional lapse. See Woodling [v. Garrett Corp., 813 F.2d 543, 556 (2d Cir. 1987)] (‘[T]he fact that the intervening actor, such as an employer who controls defective machinery, knows of the dangers and merely fails to warn or otherwise protect the plaintiff does not of itself relieve the original actor from liability.’).” Id. at 839.
FWEC has not conclusively established its government contractor defense, nor has FWEC demonstrated any other proper basis for summary judgment. Plaintiff respectfully requests that the Court deny FWEC’s motion for summary judgment in its entirety.