Appalachian Insurance v. McDonnell Douglas Corp.

This case involves the failure of a telecommunications satellite owned by Western Union Telegraph Company (Western Union) to reach the desired orbit. Western Union sought to launch its satellite, Westar VI, into orbit from the space shuttle. To reach the desired orbit from the space shuttle, Western Union used an upper stage rocket it purchased from McDonnell Douglas Corporation (McDonnell Douglas). McDonnell Douglas subcontracted with Morton Thiokol and Hitco to manufacture elements of the upper stage rocket. Due to a failure of this rocket, the Westar VI satellite was left in an orbit unsuitable for telecommunication purposes.

Western Union’s insurers paid Western Union $105 million for the satellite, treating it as a total loss. Five of the insurers—Appalachian Insurance Company, Commonwealth Insurance Company, Industrial Indemnity, Mutual Marine Office, Inc. and Northbrook Excess & Surplus Insurance Company (hereafter collectively referred to as Appalachian)—sued McDonnell Douglas, Morton Thiokol and Hitco for negligence and strict products liability. The trial court initially granted summary adjudication against Appalachian on its strict liability cause of action…