Miller v. Diamond Shamrock Co , 275 F.3d 414 ( 2002 )

Revised January 28, 2002
UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
_________________________
No. 00-41341
SUMMARY CALENDAR
_________________________
RODNEY A. MILLER,
Plaintiff-Appellant,
V.
DIAMOND SHAMROCK CO.; DIAMOND SHAMROCK CHEMICAL COMPANY,
also known as Occidental Chemical Corporation; DOW CHEMICAL COMPANY; MONSANTO
COMPANY; UNIROYAL, INC.; HERCULES, INC.;
THOMPSON-HAYWARD CHEMICAL COMPANY, also known as Thompson Chemicals;
T. H. AGRICULTURAL & NUTRITION, INC.,
Defendants-Appellees.
______________________________________________________________________________
Appeal from the United States District Court
for the Southern District of Texas
______________________________________________________________________________
October 30, 2001
Before REYNALDO G. GARZA, BARKSDALE, and STEWART, Circuit Judges.
REYNALDO G. GARZA, Circuit Judge:1
This case is yet another episode in the great Agent Orange saga. In this appeal, we review
1
Pursuant to 5TH CIR. R. 47.5, the Court has determined that this opinion should not be
published and is not precedent except under the limited circumstances set forth in 5TH CIR. R.
47.5.4.
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the district court's decision to grant the defendants-appellees' motion for summary judgment
where the decision was based exclusively on the military contractor defense. We also review the
district court's decision to deny the plaintiffs-appellants' motion to remand the case to state court.
Because we can find no error in the court's decisions, we affirm both rulings.
I
The defendants are seven chemical companies, each of which entered into contracts with
the United States during the 1960s to provide the government with "Agent Orange," a herbicide
used as a defoliant by the military in Vietnam. Agent Orange is an equal mix of 2,4-
Dichlorophenoxyacetic Acid ("2,4-D") and 2,4,5-Trichlorophenoxyacetic Acid ("2,4,5-T").
Agent Orange contains varying amounts of a toxic substance known as 2,3,7,8
Tetrachlorodibenzo-p-dioxin ("dioxin").2 Dioxin has been linked to various maladies such as liver
cancer and chloracne.
The plaintiffs are civilians, some of whom worked at the Corpus Christi Army Depot in
Corpus Christi, Texas, at various times over the past 40 years. These workers claim they were
exposed to Agent Orange while working on aircraft that used the defoliant in Vietnam. The other
plaintiffs are the workers' spouses and children. They claim that they were exposed to Agent
Orange through physical contact with the workers or with the workers' clothing. The plaintiffs
allege that their exposure to Agent Orange has caused various maladies and cancers.
The plaintiffs originally brought suit in state court. The defendants, however, removed the
2
Apparently, there has been some confusion as to the relationship between Agent Orange
and dioxin. We have previously stated that the mixture of 2,4-D and 2,4,5-T contained dioxin.
See Winters v. Shamrock Chemical Co., 149 F.3d 387, 390 (5th Cir. 1997). This statement is
misleading. Actually, 2,4,5-T contains dioxin, and 2,4-D does not. Thus, Agent Orange contains
dioxin only because it contains 2,4,5-T.
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case to district court based on the Federal Officer Removal Statute. 28 U.S.C. § 1442(a)(1). The
plaintiffs unsuccessfully moved to remand. The defendants then filed a motion for summary
judgment based on the military contractor defense. The district court granted the motion and
entered final judgment in favor of the defendants. The plaintiffs appeal both decisions.
II
We review the denial of a motion to remand de novo. See Medina v. Ramsey Steel Co.,
238 F.3d 674, 680 (5th Cir. 2001). "This standard of review applies even where the district court
makes certain findings of fact in denying the motion to remand." Winters v. Shamrock Chemical
Co., 149 F.3d 387, 397 (5th Cir. 1997). Because the defendants invoked the removal jurisdiction
of the district court, they bore the burden of establishing jurisdiction. See Frank v. Bear Stearns &
Co., 128 F.3d 919, 921–22 (5th Cir. 1997). Because the defendants met their burden, the district
court properly denied the plaintiffs' motion to remand.
This Court has already given full treatment to the questions posed by the plaintiffs' motion
to remand. Winters v. Shamrock Chemical Co. is identical to the present action in all relevant
respects. 149 F.3d 387 (5th Cir. 1997), aff'g 901 F. Supp. 1195 (E.D. Tex. 1995), cert. denied,
526 U.S. 1034 (1999). In Winters, the plaintiff brought suit in state court against the same
defendants in the present action. She alleged that her exposure to Agent Orange while in Vietnam
had caused her to develop cancer. Id. at 390. As they did the present action, the defendants in
Winters removed the case to federal court pursuant to the Federal Officer Removal Statute. Id.
The district court denied the plaintiff's motion to remand, and this Court affirmed. Id. at 404.
The Federal Officer Removal Statute provides in relevant part:
(a) A civil action or criminal prosecution commenced in a State court against any
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of the following may be removed by them to the district court of the United States
for the district and division embracing the place wherein it is pending
(1) The United States or any agency thereof or any officer (or any person
acting under that officer) of the United States or of any agency thereof, sued in an
official or individual capacity for any act under color of such office or on account
of any right, title or authority claimed under any Act of Congress for the
apprehension or punishment of criminals or the collection of the revenue.
28 U.S.C. § 1442(a)(1); see Winters, 149 F.3d at 390. In denying Winters's motion to remand,
the district court found that the defendants: (1) were "persons," (2) "acting under color of federal
authority" when committing the acts that allegedly caused her injuries, and (3) had asserted a
colorable federal defense. Id. at 397. As in the present action, the colorable federal defense
asserted by the defendants in Winters was the military contractor defense. Id. at 400.
The plaintiffs do not dispute the legal reasoning of the Winters decision. Rather, they
attempt to distinguish it. The plaintiffs argue that Winters was based on the erroneous assumption
that the mixing of 2, 4-D and 2, 4, 5-T created a product more toxic than either of the
components individually. The plaintiffs then offer proof that only 2, 4, 5-T contains dioxin, so the
addition of 2, 4-D actually creates a less toxic product. According to the plaintiffs, the defendants
were not acting under the color of federal authority when they made 2, 4, 5-T, which contains
dioxin. Thus, as the plaintiff's argument follows, there was no causal connection between the
defendants' actions that gave rise to this suit—making 2, 4, 5-T—and the defendants' actions that
were under the direction of the federal government—mixing 2, 4, 5-T and 2, 4-D to make Agent
Orange.
The argument fails on both its premise and its conclusion. The determination that the
defendants in Winters were acting under color of federal authority was never based on any
perceived increase in toxicity of the combination of 2, 4-D and 2, 4, 5-T. Rather, it was based on
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evidence that indicated the government's "strict control over the development and subsequent
production of Agent Orange." Id. at 399. The government specifically asked the defendants to
produce Agent Orange using 2, 4, 5-T. Thus, the defendants were acting under color of federal
authority when they used 2, 4, 5-T to make Agent Orange.
Further, the plaintiffs are not suing the defendants because they were exposed to dioxin
generally. Rather, they are suing because they were exposed to the dioxin contained in Agent
Orange specifically. Therefore, it was the production of Agent Orange that gave rise to this suit,
and we find that the defendants produced Agent Orange at the behest of the federal government.
The plaintiffs have failed to distinguish the instant action from Winters. Because the defendants
have demonstrated their right to a federal forum under the Federal Officer Removal Statute, we
affirm the district court's decision to deny the plaintiffs' motion to remand.
III
We review the grant of summary judgment de novo. See Veeck v. S. Bldg. Code Congress,
Int'l, Inc., 241 F.3d 398, 402 (5th Cir. 2001). Summary judgment is proper only if the record
shows that there are no genuine issues of material fact and that the moving party is entitled to
judgment as a matter of law. FED. R. CIV. P. 56(c). There is no genuine issue of fact if, after
viewing the evidence in a light most favorable to the nonmoving party, a reasonable fact finder
could not find in favor of the nonmoving party. See Merritt-Campbell, Inc. v. RxP Prods., Inc.,
164 F.3d 957, 961 (5th Cir. 1999).
The district court granted summary judgment under the military contractor defense.
Under the proper circumstances, the military contractor defense shields a contractor from liability
for a defect in an item it built or manufactured at the government's direction. "Subjecting military
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contractors to full tort liability would inject the judicial branch into political and military decisions
that are beyond its constitutional authority and institutional competence." In re Agent Orange
Prod. Liab. Litig. MDL No. 381, 818 F.2d 187, 191 (2d Cir. 1987); see also Boyle v. United
Techs. Corp., 487 U.S. 500, 511–12 (1988).
To invoke the military contractor defense, the defendants must prove that: (1) the
government approved reasonably precise specifications for the item; (2) the item conformed to
those specifications; and (3) the contractor warned the government about the dangers from the
use of the item that were known to the contractor but not to the government. See Boyle, 487 U.S.
at 512. Because we find no genuine issues of material fact with respect to any one of these issues,
we affirm the district court's decision.
A
The first element of the defense is that the government must have approved reasonably
precise specifications for the item to be manufactured. Id. at 512. This assures that "the
government, and not the contractor, is exercising discretion in selecting the design." Stout v.
Borg-Warner Corp., 933 F.2d F.2d 331, 334 (5th Cir. 1991). It is clear from the record that the
United States government provided the defendants with exacting specifications for Agent Orange.
In 1963, the Army Munitions Command prepared and promulgated Military
Specifications, MIL-H-51147(MU), 19 July 1963, "Herbicide 2,4-dichlorophenoxy-acetate" and
MIL-H-51148(MU), 19 July 1963, "Herbicide 2,4,5-trichlorophenoxyacetate." These
specifications defined all facets of their respective chemical's composition, including its
appearance, free acid content, moisture content, packing, and marking. Further, the military
ordered Agent Orange pursuant to purchase descriptions such as AFPID 6840-1, 23 Feb. 1968,
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"Herbicide-Orange." These purchase descriptions defined the end-product, Agent Orange, with
equal specificity. Such specifications were more than reasonably precise.
The plaintiffs do not dispute the precision of the military specifications. Instead, they
argue that Agent Orange was an "off-the-shelf product," and as such, it was not covered by the
military contractor defense. The plaintiffs contend that, because the defendants sold 2,4,5-T and
2,4-D of varying strengths commercially before the war in Vietnam, the mixture called Agent
Orange, which was sold to the military, was an off-the-shelf product.
This argument confuses the law and misapplies it to the facts. The plaintiffs argue that this
"off-the-shelf limitation" is a new, fourth element of the military contractor defense. Yet, no
court has held that the supplier of an off-the-shelf item is ineligible for protection under the
military contractor defense,3 and we need not decide the issue here. The plaintiffs have failed to
demonstrate a genuine factual dispute that Agent Orange was an off-the-shelf product.
The plaintiffs do not claim that Agent Orange was sold commercially before the war in
Vietnam. Instead, they contend that its component parts were. According to the plaintiffs, if the
parts are off-the-shelf, the whole must be as well. Nonetheless, such an argument would lead us
to an absurd result. As the district court noted, all products can eventually be broken down into
various off-the-shelf components. See Record on Appeal at Vol. III, 37–38. The combination of
off-the-shelf component parts does not necessarily create a new off-the-shelf product. The
plaintiffs offer no evidence that the mixture known as Agent Orange was an off-the-shelf product.
B
3
In any event, the fact that the military contractor has provided the government with an
off-the-shelf product would be relevant to the first element of the military contractor defense.
Creating a separate, fourth element would be unnecessary.
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To invoke the military contractor defense the defendants must establish that the item
procured conformed to the government specifications. Boyle, 487 U.S. at 512. This also assures
that "the government, and not the contractor, is exercising discretion in selecting the design."
Stout, 933 F.2d at 334. Given the evidence before the court, a reasonable fact finder could not
conclude that the Agent Orange produced by the defendants failed to conform to the government
specifications.
Acceptance and use of an item following its production can establish that the item
conformed to its specifications. See Kerstetter v. Pacific Sci. Co., 210 F.3d 431, 435 (5th Cir.
2000); In re Air Disaster at Ramstein Air Base, Germany, 81 F.3d 570, 575 (5th Cir. 1996).
Moreover, the government's issuance of a DD Form 250, Material Inspection and Receiving
Report, further establishes the item's conformity. See, e.g., Tate v. Boeing Helicopters, 921
F. Supp. 1562, 1567 (W.D. Ky. 1996), affirmed 140 F.3d 654 (6th Cir. 1998) (Defendants were
entitled to summary judgment on the second prong of the government contractor defense because
the Army executed a "DD250" documenting an operating manual's conformance to its
specifications.); United States v. Cannon, 41 F.3d 1462, 1468 (11th Cir. 1995) (The signing of a
DD Form 250 signifies the government's acceptance and the "conformance of the goods."); Quiles
v. Sikorsky Aircraft, 84 F. Supp. 2d 154, 167 (D. Mass. 1999) (Although it is not dispositive,
"initial acceptance by the United States government, in the form of a signed DD-250, is some
evidence that the aircraft complied with specifications."); Hendrix v. Bell Helicopter Textron,
Inc., 634 F. Supp. 1551, 1557 (N.D. Tex. 1986) (Absent proof that the government's acceptance
of a helicopter was not correct, the "DD250 acceptance conclusively established that [the]
helicopter . . . conformed to the contract specifications."). Each shipment of Agent Orange was
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inspected by the government, and the inspectors issued a DD Form 250 for each shipment that
had been inspected and accepted. Agent Orange was then used extensively throughout Vietnam.
No reasonable trier of fact could find that Agent Orange did not conform to the specifications
provided by the military.
The plaintiffs do not dispute that the defendants' Agent Orange conformed to the military's
specifications as those specifications were expressly formulated. The plaintiffs claim that the
Agent Orange produced by the defendants failed to conform because it included dioxin, a toxic
chemical that the specifications did not expressly request. According to the plaintiffs, the absence
of an express request for something as significant as dioxin is a direct indication that the military
did not wish dioxin to be included.
This argument is problematic in two respects. First, it is unclear why the government
would remain silent with respect to dioxin if the government wished to forbid its inclusion. An
express prohibition would have been much more effective.
Second, Agent Orange could not have been made according to the government's
specifications without including dioxin, because the government specifically requested that Agent
Orange be made with 2, 4, 5-T. For there to be nonconformity, "[t]he alleged defect must exist
independently of the design itself, and must result from a deviation from the required military
specifications." Kerstetter v. Pacific Sci. Co., 210 F.3d 431, 435 (5th Cir. 2000). The alleged
defect was the inclusion of dioxin in Agent Orange. Dioxin was included because 2, 4, 5-T was
included. Thus, the alleged defect resulted not from a deviation from the required military
specifications, but from the defendants' strict adherence to them.
C
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Finally, to be protected by the military contractor defense, the contractor must have
warned the government about dangers of the item that were known to the contractor but not to
the government. Boyle, 487 U.S. at 512. This "eliminate[s] any incentive that this defense may
create for contractors to withhold knowledge of risks." Stout, 933 F.2d at 334. No one can
reasonably dispute the fact that the government possessed information about the potential dangers
of Agent Orange that was as great as, if not greater than, that possessed by the defendants.
The Second Circuit has addressed this element in the context of a summary judgment
motion. In re Agent Orange Product Liability Litigation, MDL No. 381, 818 F.2d 187, 191 (2d
Cir. 1987), aff'g 611 F. Supp. 1223, 1263 (E.D.N.Y. 1985), cert. denied sub nom. Lombardi v.
Dow, 487 U.S. 1234 (1988). In that case, the district court granted summary judgment for the
defendants, based in part on the military contractor defense. See 611 F. Supp. at 1263–64. The
Second Circuit affirmed, noting that no genuine issue of material fact existed as to whether the
chemical companies had a duty to inform the government of the potential hazards of Agent
Orange because of "the paucity of scientific evidence that Agent Orange was in fact hazardous."
818 F.2d at 193. Judge Weinstein, whose experience with this multidistrict litigation makes him
an authority on the subject, noted at the trial level that "[i]t is clear from the record, in light of all
the information received to date, that the government knew as much as, or more than, the
defendant chemical companies about the possible adverse health effects of Agent Orange as it was
used in Vietnam," 611 F. Supp. at 1263, and the Second Circuit unequivocally echoed this finding:
"We agree with the district court that the information possessed by the government at pertinent
times was a great as, or greater than, that possessed by the chemical companies." 818 F.2d at
189–90.
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The factual record before this Court presents the same relevant facts that were before the
Second Circuit. Although the decision is not binding on this Court, we find its treatment of the
law and application of the facts to be sound and persuasive. The plaintiffs do not argue that the
Second Circuit erred in affirming Judge Weinstein's grant of summary judgment. Rather, they
argue that the law has changed since that decision and that additional evidence demonstrates the
existence of a factual dispute.4 We find the first of these arguments to be incorrect and the second
to be unpersuasive.5
The plaintiffs argue that, under the Supreme Court's decision in Boyle, even constructive
knowledge of the potential hazards of Agent Orange on the part of the defendants would defeat
the military contractor defense. This is contrary to the clearly established case law. "The
government contractor defense does not require a contractor to warn the government of defects
about which it only should have known." Kerstetter v. Pacific Sci. Co., 210 F.3d 431, 436 (5th
Cir. 2000) (emphasis added). "After Boyle, a government contractor is only responsible for
warning the government of dangers about which it has actual knowledge." Trevino v. General
4
The plaintiffs have introduced the affidavit of Elmo Russell Zumwalt, Jr., the
Commander of the U.S. Naval Forces in Vietnam, in which Admiral Zumwalt indicates that he
had no knowledge of the potential hazards of using Agent Orange and that he had received no
warnings of any such hazards from the defendants. It is upon this affidavit alone that the plaintiff's
distinguish the present action. See Record on Appeal at Vol. III, 316 n.1.
5
It should also be noted that the plaintiffs' argument that the government had insufficient
knowledge concerning Agent Orange and dioxin contradicts their earlier argument that the
government, knowing the significance of dioxin, would have explicitly included it in the
specifications for Agent Orange. See supra Part III.B. The plaintiffs cannot have it both ways.
Either the government had sufficient knowledge concerning dioxin for the plaintiffs' challenge to
the second element, or the government had insufficient knowledge for the plaintiffs' challenge to
the third.
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Dynamics Corp., 865 F.2d 1474, 1487 (5th Cir. 1989) (emphasis added).6
The plaintiffs also argue that any knowledge possessed by certain low-level government
officials about the potential toxicity of Agent Orange cannot be imputed to the government as a
whole for purposes of the military contractor defense. The plaintiffs do not dispute the factual
record establishing the government's knowledge. Instead, they point to this Court's opinion in
United States v. Currency Totaling $48,318.08, which held that the actual knowledge of a U.S.
customs agent may not be imputed to the government as a whole without proof that the agent had
a duty to reveal his knowledge. 609 F.2d 210, 215 (5th Cir. 1980). According to the plaintiffs,
because there is no evidence that the information possessed by the low-level government
employees was specifically presented the President, the Secretary of Defense, or any of the field
commanders in Vietnam, a factual dispute exists with respect to the third element of the military
contractor defense.
The plaintiffs' argument stretches the rule in Currency beyond its breaking point. Whereas
that case involved the knowledge of an individual agent, the present action involves pervasive
6
Further, imposing liability on military contractors for latent defects would defeat the
purpose of the military contractor defense. The defense shields military contractors from liability
in order to protect the discretionary function of military procurement. See Boyle, 487 U.S. at 511.
"[T]he selection of an appropriate design for military equipment . . . often involves not merely
engineering analysis but judgment as to the balancing of many technical, military, and even social
considerations, including specifically the trade-off between greater safety and greater combat
effectiveness." Id. The military must often make decisions that civilians would not, and "[c]ivilian
judges and juries are not competent to weigh the cost of injuries caused by a product against the
cost of avoidance in lost military efficiency." In re Agent Orange, 818 F.2d at 191. "Whereas
judges and juries may demand extensive safety testing for goods marketed in the civilian sector,
such testing could impose costs and delays inconsistent with military imperatives." Id. Imposing
liability on military contractors for latent defects would make them very reluctant to provide
equipment that has not been fully tested even where the military has determined that delay would
compromise military imperatives. This result defeats the purpose of the military contractor
defense.
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institutional knowledge, even if only among the lower echelons of the government. There can be
no reasonable dispute that knowledge possessed by the United States Public Health Service, the
Army Chemical Corps Chemical Warfare Laboratories, the President's Science Advisory
Committee, the National Academy of Sciences, the Office of the Army Surgeon General, the
Navy's Bureau of Medicine and Surgery, and the Advanced Research Project Agency of the
Department of Defense is the knowledge of the military. See In re "Agent Orange" Prod. Liab.
Litig., 565 F. Supp. 1263, 1266–68 (E.D.N.Y. 1983); In re Agent Orange, 579 F. Supp. at
797–99. Knowledge of the military is knowledge of the government for purposes of the military
contractor defense. Judge Weinstein, who has addressed this precise argument in an earlier
episode of the Agent Orange litigation, came to the same conclusion:
Plaintiffs argue that because of the complex nature of the United States
Government, knowledge on the part of employees within various agencies,
particularly at the lower echelons, cannot be imputed to the White House or the
Secretary of Defense. Their position appears to be an overstatement of the
knowledge requirement. Neither the Secretary of Defense nor the President are
"the government." Widespread knowledge among lower echelons can be
attributed to the Executive.
In re "Agent Orange" Prod. Liab. Litig., 579 F. Supp. 740, 796 (E.D.N.Y. 1984).
The plaintiffs have failed to demonstrate any genuine issue of material fact with respect to
any one of the three elements of the military contractor defense. Thus, the district court properly
granted the defendants' motion for summary judgment. Accordingly, we affirm.
IV
We AFFIRM the district court's judgment denying the plaintiffs' motion to remand the
instant action to state court. We also AFFIRM the district court's judgment granting summary
judgment to the defendants based on the military contractor defense.
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