487 U.S. 500 (1988)

BOYLE, PERSONAL REPRESENTATIVE OF THE HEIRS AND ESTATE OF BOYLE
v.
UNITED TECHNOLOGIES CORP.

No. 86-492.

Supreme Court of United States.

Argued October 13, 1987 Reargued April 27, 1988 Decided June 27, 1988 CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE FOURTH CIRCUIT

*501 Louis S. Franecke reargued the cause for petitioner. With him on the briefs was John O. Mack.

Philip A. Lacovara reargued the cause for respondent. With him on the briefs were Lewis T. Booker, W. Stanfield Johnson, and William R. Stein.

Deputy Solicitor General Ayer reargued the cause for the United States as amicus curiae urging affirmance. With him on the brief were Solicitor General Fried, Assistant *502 Attorney General Willard, Deputy Assistant Attorneys General Spears and Willmore, and Christopher J. Wright.^[*]

Briefs of amici curiae urging affirmance were filed for the Chamber of Commerce of the United States by Herbert L. Fenster, Raymond B. Biagini, and Robin S. Conrad; for the Defense Research Institute, Inc., by James W. Morris III, Ann Adams Webster, and Donald F. Pierce; for Grumman Aerospace Corp. by James M. FitzSimons, Frank J. Chiarchiaro, Charles M. Shaffer, Jr., L. Joseph Loveland, and Gary J. Toman; for the National Security Industrial Association et al. by Kenneth S. Geller and Andrew L. Frey; and for the Product Liability Advisory Council, Inc., et al. by Michael Hoenig, David B. Hamm, William H. Crabtree, and Edward P. Good.

Briefs of amici curiae were filed for the Association of Trial Lawyers of America by Robert L. Habush, Dale Haralson, and Denneen L. Peterson; for Bell Helicopter Textron Inc. by R. David Broiles, George Galerstein, and James W. Hunt; and for UNR Industries, Inc., by Joe G. Hollingsworth.

JUSTICE SCALIA delivered the opinion of the Court.

This case requires us to decide when a contractor providing military equipment to the Federal Government can be held liable under state tort law for injury caused by a design defect.

I

On April 27, 1983, David A. Boyle, a United States Marine helicopter copilot, was killed when the CH-53D helicopter in which he was flying crashed off the coast of Virginia Beach, Virginia, during a training exercise. Although Boyle survived the impact of the crash, he was unable to escape from the helicopter and drowned. Boyle's father, petitioner here, brought this diversity action in Federal District Court against the Sikorsky Division of United Technologies Corporation (Sikorsky), which built the helicopter for the United States.

*503 At trial, petitioner presented two theories of liability under Virginia tort law that were submitted to the jury. First, petitioner alleged that Sikorsky had defectively repaired a device called the servo in the helicopter's automatic flight control system, which allegedly malfunctioned and caused the crash. Second, petitioner alleged that Sikorsky had defectively designed the copilot's emergency escape system: the escape hatch opened out instead of in (and was therefore ineffective in a submerged craft because of water pressure), and access to the escape hatch handle was obstructed by other equipment. The jury returned a general verdict in favor of petitioner and awarded him $725,000. The District Court denied Sikorsky's motion for judgment notwithstanding the verdict.

The Court of Appeals reversed and remanded with directions that judgment be entered for Sikorsky. 792 F. 2d 413 (CA4 1986). It found, as a matter of Virginia law, that Boyle had failed to meet his burden of demonstrating that the repair work performed by Sikorsky, as opposed to work that had been done by the Navy, was responsible for the alleged malfunction of the flight control system. Id., at 415-416. It also found, as a matter of federal law, that Sikorsky could not be held liable for the allegedly defective design of the escape hatch because, on the evidence presented, it satisfied the requirements of the "military contractor defense," which the court had recognized the same day in Tozer v. LTV Corp., 792 F. 2d 403 (CA4 1986). 792 F. 2d, at 414-415.

Petitioner sought review here, challenging the Court of Appeals' decision on three levels: First, petitioner contends that there is no justification in federal law for shielding Government contractors from liability for design defects in military equipment. Second, he argues in the alternative that even if such a defense should exist, the Court of Appeals' formulation of the conditions for its application is inappropriate. Finally, petitioner contends that the Court of Appeals erred in not remanding for a jury determination of whether the elements *504 of the defense were met in this case. We granted certiorari, 479 U. S. 1029 (1986).

II

Petitioner's broadest contention is that, in the absence of legislation specifically immunizing Government contractors from liability for design defects, there is no basis for judicial recognition of such a defense. We disagree. In most fields of activity, to be sure, this Court has refused to find federal pre-emption of state law in the absence of either a clear statutory prescription, see, e. g., Jones v. Rath Packing Co., 430 U. S. 519, 525 (1977); Rice v. Santa Fe Elevator Corp., 331 U. S. 218, 230 (1947), or a direct conflict between federal and state law, see, e. g., Florida Lime & Avocado Growers, Inc. v. Paul, 373 U. S. 132, 142-143 (1963); Hines v. Davidowitz, 312 U. S. 52, 67 (1941). But we have held that a few areas, involving "uniquely federal interests," Texas Industries, Inc. v. Radcliff Materials, Inc., 451 U. S. 630, 640 (1981), are so committed by the Constitution and laws of the United States to federal control that state law is pre-empted and replaced, where necessary, by federal law of a content prescribed (absent explicit statutory directive) by the courts — so-called "federal common law." See, e. g., United States v. Kimbell Foods, Inc., 440 U. S. 715, 726-729 (1979); Banco Nacional v. Sabbatino, 376 U. S. 398, 426-427 (1964); Howard v. Lyons, 360 U. S. 593, 597 (1959); Clearfield Trust Co. v. United States, 318 U. S. 363, 366-367 (1943); D'Oench, Duhme & Co. v. FDIC, 315 U. S. 447, 457-458 (1942).

The dispute in the present case borders upon two areas that we have found to involve such "uniquely federal interests." We have held that obligations to and rights of the United States under its contracts are governed exclusively by federal law. See, e. g., United States v. Little Lake Misere Land Co., 412 U. S. 580, 592-594 (1973); Priebe & Sons, Inc. v. United States, 332 U. S. 407, 411 (1947); National Metropolitan Bank v. United States, 323 U. S. 454, *505 456 (1945); Clearfield Trust, supra. The present case does not involve an obligation to the United States under its contract, but rather liability to third persons. That liability may be styled one in tort, but it arises out of performance of the contract — and traditionally has been regarded as sufficiently related to the contract that until 1962 Virginia would generally allow design defect suits only by the purchaser and those in privity with the seller. See General Bronze Corp. v. Kostopulos, 203 Va. 66, 69-70, 122 S. E. 2d 548, 551 (1961); see also Va. Code § 8.2-318 (1965) (eliminating privity requirement).

Another area that we have found to be of peculiarly federal concern, warranting the displacement of state law, is the civil liability of federal officials for actions taken in the course of their duty. We have held in many contexts that the scope of that liability is controlled by federal law. See, e. g., Westfall v. Erwin, 484 U. S. 292, 295 (1988); Howard v. Lyons, supra, at 597; Barr v. Matteo, 360 U. S. 564, 569-574 (1959) (plurality opinion); id., at 577 (Black, J., concurring); see also Yaselli v. Goff, 12 F. 2d 396 (CA2 1926), aff'd, 275 U. S. 503 (1927) (per curiam); Spalding v. Vilas, 161 U. S. 483 (1896); Bradley v. Fisher, 13 Wall. 335 (1872). The present case involves an independent contractor performing its obligation under a procurement contract, rather than an official performing his duty as a federal employee, but there is obviously implicated the same interest in getting the Government's work done.^[1]

We think the reasons for considering these closely related areas to be of "uniquely federal" interest apply as well to *506 the civil liabilities arising out of the performance of federal procurement contracts. We have come close to holding as much. In Yearsley v. W. A. Ross Construction Co., 309 U. S. 18 (1940), we rejected an attempt by a landowner to hold a construction contractor liable under state law for the erosion of 95 acres caused by the contractor's work in constructing dikes for the Government. We said that "if [the] authority to carry out the project was validly conferred, that is, if what was done was within the constitutional power of Congress, there is no liability on the part of the contractor for executing its will." Id., at 20-21. The federal interest justifying this holding surely exists as much in procurement contracts as in performance contracts; we see no basis for a distinction.

Moreover, it is plain that the Federal Government's interest in the procurement of equipment is implicated by suits such as the present one — even though the dispute is one between private parties. It is true that where "litigation is purely between private parties and does not touch the rights and duties of the United States," Bank of America Nat. Trust & Sav. Assn. v. Parnell, 352 U. S. 29, 33 (1956), federal law does not govern. Thus, for example, in Miree v. DeKalb County, 433 U. S. 25, 30 (1977), which involved the question whether certain private parties could sue as third-party beneficiaries to an agreement between a municipality and the Federal Aviation Administration, we found that state law was not displaced because "the operations of the United States in connection with FAA grants such as these . . . would [not] be burdened" by allowing state law to determine whether third-party beneficiaries could sue, id., at 30, and because "any federal interest in the outcome of the [dispute] before us `[was] far too speculative, far too remote a possibility to justify the application of federal law to transactions essentially of local concern.' " Id., at 32-33, quoting Parnell, supra, at 33-34; see also Wallis v. Pan American Petroleum *507 Corp., 384 U. S. 63, 69 (1966).^[2] But the same is not true here. The imposition of liability on Government contractors will directly affect the terms of Government contracts: either the contractor will decline to manufacture the design specified by the Government, or it will raise its price. Either way, the interests of the United States will be directly affected.

That the procurement of equipment by the United States is an area of uniquely federal interest does not, however, end the inquiry. That merely establishes a necessary, not a sufficient, condition for the displacement of state law.^[3] Displacement will occur only where, as we have variously described, a "significant conflict" exists between an identifiable "federal policy or interest and the [operation] of state law," Wallis, supra, at 68, or the application of state law would "frustrate specific objectives" of federal legislation, Kimbell Foods, 440 U. S., at 728. The conflict with federal policy need not be as sharp as that which must exist for ordinary pre-emption when Congress legislates "in a field which the States have traditionally occupied." Rice v. Santa Fe Elevator Corp., 331 U. S., at 230. Or to put the point differently, the *508 fact that the area in question is one of unique federal concern changes what would otherwise be a conflict that cannot produce pre-emption into one that can.^[4] But conflict there must be. In some cases, for example where the federal interest requires a uniform rule, the entire body of state law applicable to the area conflicts and is replaced by federal rules. See, e. g., Clearfield Trust, 318 U. S., at 366-367 (rights and obligations of United States with respect to commercial paper must be governed by uniform federal rule). In others, the conflict is more narrow, and only particular elements of state law are superseded. See, e. g., Little Lake Misere Land Co., 412 U. S., at 595 (even assuming state law should generally govern federal land acquisitions, particular state law at issue may not); Howard v. Lyons, 360 U. S., at 597 (state defamation law generally applicable to federal official, but federal privilege governs for statements made in the course of federal official's duties).

In Miree, supra, the suit was not seeking to impose upon the person contracting with the Government a duty contrary to the duty imposed by the Government contract. Rather, it was the contractual duty itself that the private plaintiff (as third-party beneficiary) sought to enforce. Between Miree *509 and the present case, it is easy to conceive of an intermediate situation, in which the duty sought to be imposed on the contractor is not identical to one assumed under the contract, but is also not contrary to any assumed. If, for example, the United States contracts for the purchase and installation of an air-conditioning unit, specifying the cooling capacity but not the precise manner of construction, a state law imposing upon the manufacturer of such units a duty of care to include a certain safety feature would not be a duty identical to anything promised the Government, but neither would it be contrary. The contractor could comply with both its contractual obligations and the state-prescribed duty of care. No one suggests that state law would generally be pre-empted in this context.

The present case, however, is at the opposite extreme from Miree. Here the state-imposed duty of care that is the asserted basis of the contractor's liability (specifically, the duty to equip helicopters with the sort of escape-hatch mechanism petitioner claims was necessary) is precisely contrary to the duty imposed by the Government contract (the duty to manufacture and deliver helicopters with the sort of escape-hatch mechanism shown by the specifications). Even in this sort of situation, it would be unreasonable to say that there is always a "significant conflict" between the state law and a federal policy or interest. If, for example, a federal procurement officer orders, by model number, a quantity of stock helicopters that happen to be equipped with escape hatches opening outward, it is impossible to say that the Government has a significant interest in that particular feature. That would be scarcely more reasonable than saying that a private individual who orders such a craft by model number cannot sue for the manufacturer's negligence because he got precisely what he ordered.

In its search for the limiting principle to identify those situations in which a "significant conflict" with federal policy or interests does arise, the Court of Appeals, in the lead case *510 upon which its opinion here relied, identified as the source of the conflict the Feres doctrine, under which the Federal Tort Claims Act (FTCA) does not cover injuries to Armed Services personnel in the course of military service. See Feres v. United States, 340 U. S. 135 (1950). Military contractor liability would conflict with this doctrine, the Fourth Circuit reasoned, since the increased cost of the contractor's tort liability would be added to the price of the contract, and "[s]uch pass-through costs would . . . defeat the purpose of the immunity for military accidents conferred upon the government itself." Tozer, 792 F. 2d, at 408. Other courts upholding the defense have embraced similar reasoning. See, e. g., Bynum v. FMC Corp., 770 F. 2d 556, 565-566 (CA5 1985); Tillett v. J. I. Case Co., 756 F. 2d 591, 596-597 (CA7 1985); McKay v. Rockwell Int'l Corp., 704 F. 2d 444, 449 (CA9 1983), cert. denied, 464 U. S. 1043 (1984). We do not adopt this analysis because it seems to us that the Feres doctrine, in its application to the present problem, logically produces results that are in some respects too broad and in some respects too narrow. Too broad, because if the Government contractor defense is to prohibit suit against the manufacturer whenever Feres would prevent suit against the Government, then even injuries caused to military personnel by a helicopter purchased from stock (in our example above), or by any standard equipment purchased by the Government, would be covered. Since Feres prohibits all service-related tort claims against the Government, a contractor defense that rests upon it should prohibit all service-related tort claims against the manufacturer — making inexplicable the three limiting criteria for contractor immunity (which we will discuss presently) that the Court of Appeals adopted. On the other hand, reliance on Feres produces (or logically should produce) results that are in another respect too narrow. Since that doctrine covers only service-related injuries, and not injuries caused by the military to civilians, it could not be invoked to prevent, for example, a civilian's suit against the manufacturer of fighter planes, based on a state *511 tort theory, claiming harm from what is alleged to be needlessly high levels of noise produced by the jet engines. Yet we think that the character of the jet engines the Government orders for its fighter planes cannot be regulated by state tort law, no more in suits by civilians than in suits by members of the Armed Services.

There is, however, a statutory provision that demonstrates the potential for, and suggests the outlines of, "significant conflict" between federal interests and state law in the context of Government procurement. In the FTCA, Congress authorized damages to be recovered against the United States for harm caused by the negligent or wrongful conduct of Government employees, to the extent that a private person would be liable under the law of the place where the conduct occurred. 28 U. S. C. § 1346(b). It excepted from this consent to suit, however,

"[a]ny claim . . . based upon the exercise or performance or the failure to exercise or perform a discretionary function or duty on the part of a federal agency or an employee of the Government, whether or not the discretion involved be abused." 28 U. S. C. § 2680(a).

We think that the selection of the appropriate design for military equipment to be used by our Armed Forces is assuredly a discretionary function within the meaning of this provision. It 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. And we are further of the view that permitting "second-guessing" of these judgments, see United States v. Varig Airlines, 467 U. S. 797, 814 (1984), through state tort suits against contractors would produce the same effect sought to be avoided by the FTCA exemption. The financial burden of judgments against the contractors would ultimately be passed through, substantially if not totally, to the *512 United States itself, since defense contractors will predictably raise their prices to cover, or to insure against, contingent liability for the Government-ordered designs. To put the point differently: It makes little sense to insulate the Government against financial liability for the judgment that a particular feature of military equipment is necessary when the Government produces the equipment itself, but not when it contracts for the production. In sum, we are of the view that state law which holds Government contractors liable for design defects in military equipment does in some circumstances present a "significant conflict" with federal policy and must be displaced.^[5]

We agree with the scope of displacement adopted by the Fourth Circuit here, which is also that adopted by the Ninth Circuit, see McKay v. Rockwell Int'l Corp., supra, at 451. Liability 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. The first two of these conditions assure that the suit is within the area where the policy of the "discretionary function" would be frustrated — i. e., they assure that the design feature in question was considered by a Government officer, and not merely by the contractor itself. The third condition is necessary because, in its absence, the displacement of state tort law would create some incentive for the manufacturer to withhold knowledge of risks, since conveying that knowledge might disrupt the contract but withholding it would produce no liability. We adopt this provision lest our effort to protect *513 discretionary functions perversely impede them by cutting off information highly relevant to the discretionary decision.

We have considered the alternative formulation of the Government contractor defense, urged upon us by petitioner, which was adopted by the Eleventh Circuit in Shaw v. Grumman Aerospace Corp., 778 F. 2d 736, 746 (1985), cert. pending, No. 85-1529. That would preclude suit only if (1) the contractor did not participate, or participated only minimally, in the design of the defective equipment; or (2) the contractor timely warned the Government of the risks of the design and notified it of alternative designs reasonably known by it, and the Government, although forewarned, clearly authorized the contractor to proceed with the dangerous design. While this formulation may represent a perfectly reasonable tort rule, it is not a rule designed to protect the federal interest embodied in the "discretionary function" exemption. The design ultimately selected may well reflect a significant policy judgment by Government officials whether or not the contractor rather than those officials developed the design. In addition, it does not seem to us sound policy to penalize, and thus deter, active contractor participation in the design process, placing the contractor at risk unless it identifies all design defects.

III

Petitioner raises two arguments regarding the Court of Appeals' application of the Government contractor defense to the facts of this case. First, he argues that since the formulation of the defense adopted by the Court of Appeals differed from the instructions given by the District Court to the jury, the Seventh Amendment guarantee of jury trial required a remand for trial on the new theory. We disagree. If the evidence presented in the first trial would not suffice, as a matter of law, to support a jury verdict under the properly formulated defense, judgment could properly be entered for the respondent at once, without a new trial. And that is so even though (as petitioner claims) respondent failed to *514 object to jury instructions that expressed the defense differently, and in a fashion that would support a verdict. See St. Louis v. Praprotnik, 485 U. S. 112, 118-120 (1988) (plurality opinion of O'CONNOR, J., joined by REHNQUIST, C. J., WHITE, and SCALIA, JJ.); Ebker v. Tan Jay Int'l, Ltd., 739 F. 2d 812, 825-826, n. 17 (CA2 1984) (Friendly, J.); 9 C. Wright & A. Miller, Federal Practice and Procedure § 2537, pp. 599-600 (1971).

It is somewhat unclear from the Court of Appeals' opinion, however, whether it was in fact deciding that no reasonable jury could, under the properly formulated defense, have found for the petitioner on the facts presented, or rather was assessing on its own whether the defense had been established. The latter, which is what petitioner asserts occurred, would be error, since whether the facts establish the conditions for the defense is a question for the jury. The critical language in the Court of Appeals' opinion was that "[b]ecause Sikorsky has satisfied the requirements of the military contractor defense, it can incur no liability for . . . the allegedly defective design of the escape hatch." 792 F. 2d, at 415. Although it seems to us doubtful that the Court of Appeals was conducting the factual evaluation that petitioner suggests, we cannot be certain from this language, and so we remand for clarification of this point. If the Court of Appeals was saying that no reasonable jury could find, under the principles it had announced and on the basis of the evidence presented, that the Government contractor defense was inapplicable, its judgment shall stand, since petitioner did not seek from us, nor did we grant, review of the sufficiency-of-the-evidence determination. If the Court of Appeals was not saying that, it should now undertake the proper sufficiency inquiry.

Accordingly, the judgment is vacated and the case is remanded.

So ordered.

*515 JUSTICE BRENNAN, with whom JUSTICE MARSHALL and JUSTICE BLACKMUN join, dissenting.

Lieutenant David A. Boyle died when the CH-53D helicopter he was copiloting spun out of control and plunged into the ocean. We may assume, for purposes of this case, that Lt. Boyle was trapped under water and drowned because respondent United Technologies negligently designed the helicopter's escape hatch. We may further assume that any competent engineer would have discovered and cured the defects, but that they inexplicably escaped respondent's notice. Had respondent designed such a death trap for a commercial firm, Lt. Boyle's family could sue under Virginia tort law and be compensated for his tragic and unnecessary death. But respondent designed the helicopter for the Federal Government, and that, the Court tells us today, makes all the difference: Respondent is immune from liability so long as it obtained approval of "reasonably precise specifications" — perhaps no more than a rubber stamp from a federal procurement officer who might or might not have noticed or cared about the defects, or even had the expertise to discover them.

If respondent's immunity "bore the legitimacy of having been prescribed by the people's elected representatives," we would be duty bound to implement their will, whether or not we approved. United States v. Johnson, 481 U. S. 681, 703 (1987) (dissenting opinion of SCALIA, J.). Congress, however, has remained silent — and conspicuously so, having resisted a sustained campaign by Government contractors to legislate for them some defense.^[1] The Court — unelected and unaccountable to the people — has unabashedly stepped into *516 the breach to legislate a rule denying Lt. Boyle's family the compensation that state law assures them. This time the injustice is of this Court's own making.

Worse yet, the injustice will extend far beyond the facts of this case, for the Court's newly discovered Government contractor defense is breathtakingly sweeping. It applies not only to military equipment like the CH-53D helicopter, but (so far as I can tell) to any made-to-order gadget that the Federal Government might purchase after previewing plans — from NASA's Challenger space shuttle to the Postal Service's old mail cars. The contractor may invoke the defense in suits brought not only by military personnel like Lt. Boyle, or Government employees, but by anyone injured by a Government contractor's negligent design, including, for example, the children who might have died had respondent's helicopter crashed on the beach. It applies even if the Government has not intentionally sacrificed safety for other interests like speed or efficiency, and, indeed, even if the equipment is not of a type that is typically considered dangerous; thus, the contractor who designs a Government building can invoke the defense when the elevator cable snaps or the walls collapse. And the defense is invocable regardless of how blatant or easily remedied the defect, so long as the contractor missed it and the specifications approved by the Government, however unreasonably dangerous, were "reasonably precise." Ante, at 512.

In my view, this Court lacks both authority and expertise to fashion such a rule, whether to protect the Treasury of the United States or the coffers of industry. Because I would leave that exercise of legislative power to Congress, where our Constitution places it, I would reverse the Court of Appeals and reinstate petitioner's jury award.

I

Before our decision in Erie R. Co. v. Tompkins, 304 U. S. 64 (1938), federal courts sitting in diversity were generally free, in the absence of a controlling state statute, to fashion *517 rules of "general" federal common law. See, e. g., Swift v. Tyson, 16 Pet. 1 (1842). Erie renounced the prevailing scheme: "Except in matters governed by the Federal Constitution or by Acts of Congress, the law to be applied in any case is the law of the State." 304 U. S., at 78. The Court explained that the expansive power that federal courts had theretofore exercised was an unconstitutional " `invasion of the authority of the State and, to that extent, a denial of its independence.' " Id., at 79 (citation omitted). Thus, Erie was deeply rooted in notions of federalism, and is most seriously implicated when, as here, federal judges displace the state law that would ordinarily govern with their own rules of federal common law. See, e. g., United States v. Standard Oil Co., 332 U. S. 301, 307 (1947).^[2]

In pronouncing that "[t]here is no federal general common law," 304 U. S., at 78, Erie put to rest the notion that the grant of diversity jurisdiction to federal courts is itself authority to fashion rules of substantive law. See United States v. Little Lake Misere Land Co., 412 U. S. 580, 591 (1973). As the author of today's opinion for the Court pronounced for a unanimous Court just two months ago, " ` " `we start with the assumption that the historic police powers of the States were not to be superseded . . . unless that was the clear and manifest purpose of Congress.' " ' " Puerto Rico Dept. of Consumer Affairs v. Isla Petroleum Corp., 485 U. S. 495, 500 (1988) (citations omitted). Just as "[t]here is no federal pre-emption in vacuo, without a constitutional text or a federal statute to assert it," id., at 503, federal common law cannot supersede state law in vacuo out of no *518 more than an idiosyncratic determination by five Justices that a particular area is "uniquely federal."

Accordingly, we have emphasized that federal common law can displace state law in "few and restricted" instances. Wheeldin v. Wheeler, 373 U. S. 647, 651 (1963). "[A]bsent some congressional authorization to formulate substantive rules of decision, federal common law exists only in such narrow areas as those concerned with the rights and obligations of the United States, interstate and international disputes implicating conflicting rights of States or our relations with foreign nations, and admiralty cases." Texas Industries, Inc. v. Radcliff Materials, Inc., 451 U. S. 630, 641 (1981) (footnotes omitted). "The enactment of a federal rule in an area of national concern, and the decision whether to displace state law in doing so, is generally made not by the federal judiciary, purposefully insulated from democratic pressures, but by the people through their elected representatives in Congress." Milwaukee v. Illinois, 451 U. S. 304, 312-313 (1981). See also Wallis v. Pan American Petroleum Corp., 384 U. S. 63, 68 (1966); Miree v. DeKalb County, 433 U. S. 25, 32 (1977). State laws "should be overridden by the federal courts only where clear and substantial interests of the National Government, which cannot be served consistently with respect for such state interests, will suffer major damage if the state law is applied." United States v. Yazell, 382 U. S. 341, 352 (1966).

II

Congress has not decided to supersede state law here (if anything, it has decided not to, see n. 1, supra) and the Court does not pretend that its newly manufactured "Government contractor defense" fits within any of the handful of "narrow areas," Texas Industries, supra, at 641, of "uniquely federal interests" in which we have heretofore done so, 451 U. S., at 640. Rather, the Court creates a new category of "uniquely federal interests" out of a synthesis of two whose origins predate Erie itself: the interest in administering the "obligations to and rights of the United States under its contracts," ante, *519 at 504, and the interest in regulating the "civil liability of federal officials for actions taken in the course of their duty," ante, at 505. This case is, however, simply a suit between two private parties. We have steadfastly declined to impose federal contract law on relationships that are collateral to a federal contract, or to extend the federal employee's immunity beyond federal employees. And the Court's ability to list 2, or 10, inapplicable areas of "uniquely federal interest" does not support its conclusion that the liability of Government contractors is so "clear and substantial" an interest that this Court must step in lest state law does "major damage." Yazell, supra, at 352.

A

The proposition that federal common law continues to govern the "obligation