In the class-action suit over 3M’s Combat Arms Version 2 earplug (“CAEv2”), the last bellwether trial recently concluded. James Beal won some $5 million in compensatory damages and $72.5 million in punitive damages – bringing Plaintiffs’ wins up to 9 of 15 trials total. Mr. Beal’s case is no fluke: in every case where a plaintiff has won, the jury has imposed millions in punitive damages against 3M. Given that the initial set of 15 included 5 plaintiff-friendly, 5 defendant-friendly, and 5 “neutral” (judge-selected) cases, 3M’s odds of success seem to shrink with every new trial. Many plaintiffs (and lawyers, for that matter) wonder: why doesn’t 3M stop plugging its ears to its losses and just settle? The answer is that 3M has staked everything on its appeal based on the “federal contractor” defense.
In layman’s terms, this defense claims “we gave the government the equipment it asked for, so we can’t be held liable.” 3M must prove three things for this defense: the government approved “reasonably precise” specs for the CAEv2, the CAEv2 met those specs, and 3M warned the government about the dangers of the CAEv2 that 3M knew about and the government did not. If 3M proved this defense – which is based on the same facts for every plaintiff – then none of the hundreds of thousands of veterans in this lawsuit could recover from 3M, and every verdict would be thrown out. Even showing a fact issue – that 3M could assert the defense – would be enough to start the entire trial process over.
The Court’s Ruling
The district court silenced this line of argument by holding that, as a matter of law, 3M could not assert the defense. The “federal contractor” defense only pushes aside (“preempts”) state law when a “uniquely federal interest” would conflict with or be frustrated by state law. Government contracts to design military equipment are one such “unique” interest – the government wants its equipment to work in a certain way that may leave soldiers’ lives at risk. For example: if soldiers could sue a tank designer because it built a tank whose armor was too thin when the Army ordered the tank to have that thin armor, tank designers would face a Catch-22. If they made the tank to order, its users could sue for putting them at risk; if they added thicker armor to protect the user, the government could sue for breaching the contract.
District Court judge Casey Rodgers agreed with that rule in general. However, Judge Rodgers disagreed that selling equipment to the government without a design contract – like 3M did – raised the same “interest” as designing equipment. What’s more, Judge Rodgers held that the Army did not give “reasonably precise” specs for the CAEv2: the Army said “this earplug is 1/4 inch too long” and left 3M to fix it. Judge Rodgers also held that the Army did not give 3M orders as to how it should warn CAEv2 users – and so 3M’s failure to warn users was not the Army’s fault. Based on that, the Court gave summary judgment for plaintiffs – in other words, “the defense cannot possibly win” – and barred 3M from discussing the defense.
3M’s Response
Unsurprisingly, 3M’s appeal to the 11th Circuit attacks every point of Judge Rodgers’ ruling. In its brief, 3M claims that government purchase contracts and design contracts are both “procurement contracts” and both raise the same issues. 3M’s position seems to misread the key Boyle case, which based the “federal contractor defense” on the fact that “It makes little sense to insulate the Government … when [it] produces the equipment itself, but not when it contracts for the production.” 3M also claims that the Army did provide “reasonably precise” specs – both for the CAEv2 and its warnings – based on the same evidence that Judge Rodgers found was essentially not a “spec” at all.
As the 8th Circuit has already found that 3M’s “voluntary request for military review and input … does not demonstrate that 3M was carrying out or assisting in the government’s duties,” this argument seems unlikely to succeed. Still, given the stakes, 3M’s appeal makes tactical sense. Rather than having to fight or settle nearly a quarter-million cases, 3M has the chance to stop the entire lawsuit with a single act. Plaintiffs are due to respond to 3M’s appeal shortly – after which, the Eleventh Circuit will decide whether to give either side a hearing.