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Lopez v. A.C. & S. Inc.

Decided: September 28, 1988.

ALBERT LOPEZ AND SHIRLEY LOPEZ, PLAINTIFFS, AND RAYMARK INDUSTRIES, INC. AND EAGLE-PICHER INDUSTRIES, INC., DEFENDANTS/THIRD-PARTY-PLAINTIFFS/APPELLANTS,
v.
A.C.&S., INC.; AMERICAN ASBESTOS TEXTILE CORP., A/K/A AMATEX CORP.; ARMSTRONG CORK, INC.; ASARCO, INC.; CAREY CANADA, INC.; THE CELOTEX CORP., SUCCESSOR IN INTEREST TO PHILIP CAREY MANUFACTURING CO., PHILIP CAREY CORP., BRIGGS MANUFACTURING CO., AND PANACON CORP.; COMBUSTION ENGINEERING INC.; CROWN CORK & SEAL CO.; FIBREBOARD CORP.; THE FLINTKOTE CO.; FORTY-EIGHTY INSULATION, INC.; GAF CORP., SUCCESSOR BY MERGER WITH RUBEROID CO.; GARLOCK INC., JOHNS-MANVILLE SALES CORP.; J.P. STEVENS, INC.; KEENE CORP., SUCCESSOR BY MERGER WITH BALDWIN-EHERT-HILL A/K/A ASTEN HILL; NICOLET INDUSTRIES; OWENS-CORNING FIBERGLAS CORP.; OWENS-ILLINOIS CORP.; OWENS ILLINOIS GLASS; PITTSBURGH CORNING CORP.; RAYBESTOS-MANHATTAN; SOUTHERN TEXTILE; STANDARD ASBESTOS; UNION ASBESTOS; RUBBER CO. A/K/A UNARCO INDUSTRIES, INC., DEFENDANTS, V. UNITED STATES OF AMERICA, THIRD-PARTY-DEFENDANT/APPELLEE



Appealed from: U.S. District Court for the Western District of Washington at Seattle, Judge McGovern.

Markey, Chief Judge, Rich, Circuit Judge, Nichols and Bennett, Senior Circuit Judges, and Archer, Circuit Judge.

Nichols

NICHOLS, Senior Circuit Judge.

This is a test case,*fn* appealed from the United States District Court for the Western District of Washington (McGovern, C.J.), Civil Action No. C84-155M, representative of numerous claims by present or former workers at the Puget Sound Naval Shipyard (PSNS), or their widows, against companies which supplied to the United States Navy products for insulation on shipboard that contained asbestos. Lopez was a civilian pipe fitter, pipe coverer, and insulator at PSNS from 1947 to 1984. Of numerous defendants, Raymark and Eagle-Picher settled with Lopez for $7,200 and $10,000, respectively, for disabilities supposed to result from breathing air-borne asbestos dust, presumably, for purposes of this case, from products supplied to PSNS by Raymark and Eagle-Picher. Lopez also received an award from his employer, the United States, under the Federal Employees Compensation Act (FECA), 5 U.S.C. §§ 8101-93, but pursuant to section 8132, was required to refund it. See United States v. Lorenzetti, 467 U.S. 167, 81 L. Ed. 2d 134, 104 S. Ct. 2284 (1984). Raymark and Eagle-Picher joined the United States as a third-party defendant and seek to be indemnified or reimbursed, in whole or in part, for their settlement payments and litigation expenses.

Lopez originally filed his suit in state court, but defendants removed it to federal court (W.D. of Washington), on diversity. The asserted grounds of federal liability to Raymark and Eagle-Picher were the Tucker Act, 28 U.S.C. § 1346(a)(2), as to claims founded on contracts implied in fact, and the Federal Tort Claims Act (FTCA), 28 U.S.C. §§ 1346(b) and 2671-80, as to claims sounding in tort. The government, having successfully invoked 5 U.S.C. § 8132 to shift its loss to Raymark and Eagle-Picher, naturally does not welcome their effort to shift it back under the above two statutes. Its motion to dismiss or for summary judgment elicited a judgment of dismissal by the district court, which is the decision the appeal requires us to review. It is reported as Lopez v. Johns-Manville, 649 F. Supp. 149 (W.D. Wash. 1986).

The appeal was originally filed with the Ninth Circuit, but is here because of the presence of Tucker Act claims and the rule of construction of 28 U.S.C. § 1295(a)(2) laid down in United States v. Hohri, 482 U.S. 64, 107 S. Ct. 2246, 96 L. Ed. 2d 51 (1987). See In re All Asbestos Cases, 849 F.2d 452 (9th Cir. 1988). The briefs were originally prepared for the Ninth Circuit and came here with the rest of the case. They were supplemented here. There are amicus briefs. We have carefully considered all briefs and heard oral argument on behalf of Raymark and Eagle-Picher separately. Our conclusion is that we affirm the judgment of the district court, though not in all respects on the same reasoning. As to the Tucker Act claims, we affirm primarily on the basis of our own case law as we are meant to be the primary or sole source of case law construing that act since our establishment. United States v. One (1) 1979 Cadillac Coupe de Ville, 833 F.2d 994, 997 (Fed. Cir. 1987). As to the Tort Claims Act claims, we look primarily to the law of the Ninth Circuit, since such claims are here only as pendants to other claims. Molins PLC v. Quigg, 837 F.2d 1064, 1066, 5 U.S.P.Q.2d 1526, 1527 (Fed. Cir.), cert. denied, 486 U.S. 1055, 108 S. Ct. 2822, 100 L. Ed. 2d 923 (1988).

Discussion

Tucker Act Jurisdiction

Since the statutory basis of our jurisdiction is the presence of Tucker Act claims under 28 U.S.C. § 1346(a)(2), we consider them first. The government, of course, purchased products containing asbestos under written contracts and purchase orders, but the case has proceeded in a partial vacuum so far as concerns the specific texts, and in view of the lapse of time, it may be impossible now to produce them all. Some are known. It is reasonable to suppose, and the district court did suppose, they specified what asbestos the purchased products should contain, as asbestos was the most effective insulating element, and its perils, that made its use so undesirable, were only beginning to be known at the time of Lopez's first employment. On the other hand, from the arguments on behalf of Raymark and Eagle-Picher, we assume it is not now contended that the contracts or purchase orders contained any written warranties to sellers; it would be surprising indeed to see express warranties running from the buyer to the seller, especially when their legality would have been in doubt, as the able district court supposed. We are considering implied warranties.

The theory is that in specifying asbestos, the government made an implied warranty to sellers that its own use of the products would not expose the sellers to unforeseen defective product liabilities to persons who might be injured by breathing clouds of asbestos dust, lethal as we now know such clouds to be.

The decision of the district court implies that a contract action on such a theory is simply not available to sellers to the government under the Tucker Act. If the decision does not rest on a broad range of possible factual assumptions, under the pleadings, it cannot be sustained.

The court quotes Santisteven v. Dow Chemical Co., 506 F.2d 1216 (9th Cir. 1974), which rejects the supposed liability of a buyer to a seller, not to use a dangerous substance in a manner to expose the seller to liability to the buyer's employees. The analysis, however, deals with tort law and that of contracts implied at law, while for Tucker Act jurisdiction the claimant must allege a contract obligation implied in fact. The Tucker Act, as the court correctly states, does not confer jurisdiction of claims against the United States on contracts, implied at law, they must be implied in fact. Hatzlachh Supply Co. v. United States, 444 U.S. 460, 62 L. Ed. 2d 614, 100 S. Ct. 647 (1980); Merritt v. United States, 267 U.S. 338, 69 L. Ed. 643, 45 S. Ct. 278 (1925).

The asbestos suppliers, in the numerous cases now pending which seek indemnity from the United States against their liability to United States employees, frequently mention two cases that were brought under the Tucker Act, and do enforce warranty contracts implied in fact, running from buyer to seller. We will add a third, and there are others.

The first and most famous is United States v. Spearin, 248 U.S. 132, 63 L. Ed. 166, 39 S. Ct. 59 (1918). Spearin had contracted to build a drydock at a navy yard (as Naval shipyards used to be called). The government, according to its custom, required construction contractors to build according to very detailed plans and specifications. Spearin was required to relocate a sewer according to plan, but the plan was defective in that it required Spearin to make the sewer, as relocated, discharge into another sewer which, as the plan failed to show, was itself blocked. The result was disaster. The Court (Brandeis, J.), said at 136:

But if the contractor is bound to build according to plans and specifications prepared by the owner, the contractor will not be responsible for the consequences ...


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