After their recent defeat in the first set of bellwether trials, 3M’s attorneys stated that they would consider an appeal. One potential ground for appeal is the court’s grant of summary judgment to plaintiffs against 3M’s attempted ‘federal contractor’ defense. That defense makes governing contractors immune from liability if the contractor made equipment conforming to approved, reasonably precise specifications and warned the U.S. government about the dangers in its equipment that the contractor knew about.
A brief history of the development of the CAEv2 earplug explains why the Court struck down 3M’s ‘federal contractor’ defense. Before Aereo (and later 3M) sold the CAEv2 earplug to the U.S. Army, they tested, redesigned, and marketed it to the French Army in 1997. In December 1997, Aereo met with the U.S. Army to discuss its earplug – but the U.S. Army didn’t buy it then, or the 25 sample earplugs Aereo sent three months later. In fact, in April 1999, the Army doctor examining Aereo’s earplugs asked the Army to expand the carrying case to fit Aereo’s earplugs and discussed how those earplugs would need to be shortened. But Aereo never asked the Army how to fix its earplugs – instead, Aereo sent the Army its own shorter earplugs without waiting for input. Only in November 1999 – after the Army had been buying the new, shortened earplugs for four months – did Aereo test its shorter earplugs. The results of that testing were finished in July 2000 – and Aereo (and later 3M) hid those tests for the next 14 years.
For the federal contractor defense to apply, there must be a “uniquely federal” interest in the lawsuit – an interest that is usually met by “a contractor’s performance of work for, or on behalf of, the government under a procurement contract.” 3M’s problem was that Aereo didn’t sign a contract to provide the U.S. Army with the CAEv2 earplug until 2006 – after that flawed earplug had been designed, sold, and sent to American soldiers around the globe. 3M tried to avoid this by claiming a “uniquely federal interest” in the U.S. government’s purchase of its products – which the court rejected “[a]fter considerable deliberation.” Because 3M had no contract, there were no “reasonably precise” specifications that 3M’s earplugs could have met.
If 3M were to appeal this defense, it would face great difficulty; as the court noted, “there were nearly thirty pages of ‘detailed, precise and quantitative’ design descriptions and drawings of the CAEv2 and its component parts that could have been provided to Army officials for review and approval, but were not.” Only “two short emails” from the U.S. Army to Aereo support 3M’s claim that the U.S. government had any input into the CAEv2’s design – and on that record, the court found “no reasonable jury could conclude that [the Army’s doctor] or the Army made Aereo do anything.” Neither the Eleventh Circuit nor the U.S. Supreme Court is likely to disagree – but 3M might be willing to take that chance, hoping to throw out jury verdicts leaving 3M liable for millions on this narrow issue of law.