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 (1087) (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 *516the 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 *517rules 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 *518more 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). “[AJbsent 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, *519at 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 “obligations to and rights of the United States under its contracts” is nearly as old as Erie itself. Federal law typically controls when the Federal Government is a party to a suit involving its rights or obligations under a contract, whether the contract entails procurement, see Priebe & Sons v. United States, 332 U. S. 407 (1947), a loan, see United States v. Kimbell Foods, Inc., 440 U. S. 715, 726 (1979), a conveyance of property, see Little Lake Misere, supra, at 591-594, or a commercial instrument issued by the Government, see Clearfield Trust Co. v. United States, 318 U. S. 363, 366 (1943), or assigned to it, see D’Oench, Duhme & Co. v. FDIC, 315 U. S. 447, 457 (1942). Any such transaction necessarily “radiate[s] interests in transactions between private parties.” Bank of America Nat. Trust & Sav. Assn. v. Parnell, 352 U. S. 29, 33 (1956). But it is by now established that our power to create federal common law controlling the Federal Government’s contractual rights and obligations does not translate into a power to prescribe rules that cover all transactions or contractual relationships collateral to Government contracts.
In Miree v. DeKalb County, supra, for example, the county was contractually obligated under a grant agreement with the Federal Aviation Administration (FAA) to “ ‘restrict *520the use of land adjacent to . . . the Airport to activities and purposes compatible with normal airport operations including landing and takeoff of aircraft.’” Id., at 27 (citation omitted). At issue was whether the county breached its contractual obligation by operating a garbage dump adjacent to the airport, which allegedly attracted the swarm of birds that caused a plane crash. Federal common law would undoubtedly have controlled in any suit by the Federal Government to enforce the provision against the county or to collect damages for its violation. The diversity suit, however, was brought not by the Government, but by assorted private parties injured in some way by the accident. We observed that “the operations of the United States in connection with FAA grants such as these are undoubtedly of considerable magnitude,” id., at 30, and that “the United States has a substantial interest in regulating aircraft travel and promoting air travel safety,” id., at 31. Nevertheless, we held that state law should govern the claim because “only the rights of private litigants are at issue here,” id., at 30, and the claim against the county “will have no direct effect upon the United States or its Treasury,1’ id., at 29 (emphasis added).
Miree relied heavily on Parnell, supra, and Wallis v. Pan American Petroleum Corp., supra, the former involving commercial paper issued by the United States and the latter involving property rights in federal land. In the former case, Parnell cashed certain bonds guaranteed by the Government that had been stolen from their owner, a bank. It is beyond dispute that federal law would have governed the United States’ duty to pay the value bonds upon presentation; we held as much in Clearfield Trust, supra. Cf. Parnell, supra, at 34. But the central issue in Parnell, a diversity suit, was whether the victim of the theft could recover the money paid to Parnell. That issue, we held, was governed by state law, because the “litigation [was] purely between private parties and [did] not touch the rights and duties of the United States.” 352 U. S., at 33 (emphasis added).
*521The same was true in Wallis, which also involved a Government contract — a lease issued by the United States to a private party under the Mineral Leasing Act of 1920, 30 U. S. C. § 181 et seq. (1982 ed. and Supp. IV) — governed entirely by federal law. See 384 U. S., at 69. Again, the relationship at issue in this diversity case was collateral to the Government contract: It involved the validity of contractual arrangements between the lessee and other private parties, not between the lessee and the Federal Government. Even though a federal statute authorized certain assignments of lease rights, see id., at 69, 70, and n. 8, and imposed certain conditions on their validity, see id., at 70, we held that state law, not federal common law, governed their validity because application of state law would present “no significant threat to any identifiable federal policy or interest,” id., at 68.
Here, as in Miree, Parnell, and Wallis, a Government contract governed by federal common law looms in the background. But here, too, the United States is not a party to the suit and the suit neither “touch[es] the rights and duties of the United States,” Parnell, supra, at 33, nor has a “direct effect upon the United States or its Treasury,” Miree, 433 U. S., at 29. The relationship at issue is at best collateral to the Government contract.3 We have no greater power to displace state law governing the collateral relationship in the Government procurement realm than we had to dictate federal rules governing equally collateral relationships in the areas of aviation, Government-issued commercial paper, or federal lands.
That the Government might have to pay higher prices for what it orders if delivery in accordance with the contract ex*522poses the seller to potential liability, see ante, at 507, does not distinguish this case. Each of the cases just discussed declined to extend the reach of federal common law despite the assertion of comparable interests that would have affected the terms of the Government contract — whether its price or its substance — just as “directly” (or indirectly). Ibid. Third-party beneficiaries can sue under a county’s contract with the FAA, for example, even though — as the Court’s focus on the absence of “direct effect on the United States or its Treasury,” 433 U. S., at 29 (emphasis added), suggests — counties will likely pass on the costs to the Government in future contract negotiations. Similarly, we held that state law may govern the circumstances under which stolen federal bonds can be recovered, notwithstanding Parnell’s argument that “the value of bonds to the first purchaser and hence their salability by the Government would be materially affected.” Brief for Respondent Parnell in Bank of America Nat’l Trust & Sav. Assn. v. Parnell, O. T. 1956, No. 21, pp. 10-11. As in each of the cases declining to extend the traditional reach of federal law of contracts beyond the rights and duties of the Federal Government, “any federal interest in the outcome of the question before us ‘is far too speculative, far too remote a possibility to justify the application of federal law to transactions essentially of local concern.’” Miree, supra, at 32-33, quoting Parnell, 352 U. S., at 33-34.
B
Our “uniquely federal interest” in the tort liability of affiliates of the Federal Government is equally narrow. The immunity we have recognized has extended no further than a subset of “officials of the Federal Government” and has covered only “discretionary” functions within the scope of their legal authority. See, e. g., Westfall v. Erwin, 484 U. S. 292 (1988); Howard v. Lyons, 360 U. S. 593 (1959); Barr v. Matteo, 360 U. S. 564, 571 (1959) (plurality); 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). Never be*523fore have we so much as intimated that the immunity (or the “uniquely federal interest” that justifies it) might extend beyond that narrow class to cover also nongovernment employees whose authority to act is independent of any source of federal law and that are as far removed from the “functioning of the Federal Government” as is a Government contractor, Howard, supra, at 597.
The historical narrowness of the federal interest and the immunity is hardly accidental. A federal officer exercises statutory authority, which not only provides the necessary basis for the immunity in positive law, but also permits us confidently to presume that interference with the exercise of discretion undermines congressional will. In contrast, a Government contractor acts independently of any congressional enactment. Thus, immunity for a contractor lacks both the positive law basis and the presumption that it furthers congressional will.
Moreover, even within the category of congressionally authorized tasks, we have deliberately restricted the scope of immunity to circumstances in which “the contributions of immunity to effective government in particular contexts outweigh the perhaps recurring harm to individual citizens,” Doe v. McMillan, 412 U. S. 306, 320 (1973); see Barr, supra, at 572-573, because immunity “contravenes the basic tenet that individuals be held accountable for their wrongful conduct,” Westfall, supra, at 295. The extension of immunity to Government contractors skews the balance we have historically struck. On the one hand, whatever marginal effect contractor immunity might have on the “effective administration of policies of government,” its “harm to individual citizens” is more severe than in the Government-employee context. Our observation that “there are . . . other sanctions than civil tort suits available to deter the executive official who may be prone to exercise his functions in an unworthy and irresponsible manner,” Scot, 360 U. S., at 576; see also id., at 571, offers little deterrence to the Government contractor. On the other hand, a grant of immunity to Gov*524ernment contractors could not advance “the fearless, vigorous, and effective administration of policies of government” nearly as much as does the current immunity for Government employees. Ibid. In the first place, the threat of a tort suit is less likely to influence the conduct of an industrial giant than that of a lone civil servant, particularly since the work of a civil servant is significantly less profitable, and significantly more likely to be the subject of a vindictive lawsuit. In fact, were we to take seriously the Court’s assertion that contractors pass their costs — including presumably litigation costs — through, “substantially if not totally, to the United States,” ante, at 511, the threat of a tort suit should have only marginal impact on the conduct of Government contractors. More importantly, inhibition of the Government official who actually sets Government policy presents a greater threat to the “administration of policies of government,” than does inhibition of a private contractor, whose role is devoted largely to assessing the technological feasibility and cost of satisfying the Government’s predetermined needs. Similarly, unlike tort suits against Government officials, tort suits against Government contractors would rarely “consume time and energies” that “would otherwise be devoted to governmental service.” 360 U. S., at 571.
In short, because the essential justifications for official immunity do not support an extension to the Government contractor, it is no surprise that we have never extended it that far.
C
Yearsley v. W. A. Ross Construction Co., 309 U. S. 18 (1940), the sole case cited by the Court immunizing a Government contractor, is a slender reed on which to base so drastic a departure from precedent. In Yearsley we barred the suit of landowners against a private Government contractor alleging that its construction of a dam eroded their land without just compensation in violation of the Takings Clause of the Fifth Amendment. We relied in part on' the observation that the plaintiffs failed to state a Fifth Amendment claim *525(since just compensation had never been requested, much less denied) and at any rate the cause of action lay against the Government, not the contractor. See id., at 21 (“[T]he Government has impliedly promised to pay [the plaintiffs] compensation and has afforded a remedy for its recovery by a suit in the Court of Claims”) (citations omitted). It is therefore unlikely that the Court intended Yearsley to extend anywhere beyond the takings context, and we have never applied it elsewhere.
Even if Yearsley were applicable beyond the unique context in which it arose, it would have little relevance here. The contractor’s work “was done pursuant to a contract with the United States Government, and under the direction of the Secretary of War and the supervision of the Chief of Engineers of the United States, ... as authorized by an Act of Congress.” Id., at 19. See also W. A. Ross Construction Co. v. Yearsley, 103 F. 2d 589, 591 (CA8 1939) (undisputed allegation that contractor implemented “stabilized bank lines as set and defined by the Government Engineers in charge of this work for the Government”). In other words, unlike respondent here, the contractor in Yearsley was following, not formulating, the Government’s specifications, and (so far as is relevant here) followed them correctly. Had respondent merely manufactured the CH-53D helicopter, following minutely the Government’s own in-house specifications, it would be analogous to the contractor in Yearsley, although still not analytically identical since Yearsley depended upon an actual agency relationship with the Government, see 309 U. S., at 22 (“The action of the agent is ‘the act of the government’”) (citation omitted), which plainly was never established here. See, e. g., Bynum v. FMC Corp., 770 F. 2d 556, 564 (CA5 1985). Cf. United States v. New Mexico, 455 U. S. 720, 735 (1982). But respondent’s participation in the helicopter’s design distinguishes this case from Yearsley, which has never been read to immunize the discretionary acts of those who perform service contracts for the Government.
*526III
In a valiant attempt to bridge the analytical canyon between what Yearsley said and what the Court wishes it had said, the Court invokes the discretionary function exception of the Federal Tort Claims Act (FTCA), 28 U. S. C. § 2680(a). The Court does not suggest that the exception has any direct bearing here, for petitioner has sued a private manufacturer (not the Federal Government) under Virginia law (not the FTCA). Perhaps that is why respondent has three times disavowed any reliance on the discretionary function exception, even after coaching by the Court,4 as has the Government.5
*527Notwithstanding these disclaimers, the Court invokes the exception, reasoning that federal common law must immunize Government contractors from state tort law to prevent erosion of the discretionary function exception’s policy of foreclosing judicial “ ‘second-guessing’ ” of discretionary governmental decisions. Ante, at 511, quoting United States v. Varig Airlines, 467 U. S. 797, 814 (1984). The erosion the Court fears apparently is rooted not in a concern that suits against Government contractors will prevent them from designing, or the Government from commissioning the design of, precisely the product the Government wants, but in the concern that such suits might preclude the Government from purchasing the desired product at the price it wants: “The financial burden of judgments against the contractors,” the Court fears, “would ultimately be passed through, substantially if not totally, to the United States itself.” Ante, at 511.
Even granting the Court’s factual premise, which is by no means self-evident, the Court cites no authority for the proposition that burdens imposed on Government contractors, but passed on to the Government, burden the Government in a way that justifies extension of its immunity. However substantial such indirect burdens may be, we have held in other contexts that they are legally irrelevant. See, e. g., South Carolina v. Baker, 485 U. S. 505, 521 (1988) (our cases have “completely foreclosed any claim that the nondiscriminatory imposition of costs on private entities that pass them on to . . . the Federal Government unconstitutionally burdens . . . federal functions”).
Moreover, the statutory basis on which the Court’s rule of federal common law totters is more unstable than any we have ever adopted. In the first place, we rejected an analytically similar attempt to construct federal common law out of the FTCA when we held that the Government’s waiver *528of sovereign immunity for the torts of its employees does not give the Government an implied right of indemnity from them, even though the “[t]he financial burden placed on the United States by the Tort Claims Act [could conceivably be] so great that government employees should be required to carry part of the burden.” United States v. Gilman, 347 U. S. 507, 510 (1954). So too here, the FTCA’s retention of sovereign immunity for the Government’s discretionary acts does not imply a defense for the benefit of contractors who participate in those acts, even though they might pass on the financial burden to the United States. In either case, the most that can be said is that the position “asserted, though the product of a law Congress passed, is a matter on which Congress has not taken a position.” Id., at 511 (footnote omitted).
Here, even that much is an overstatement, for the Government’s immunity for discretionary functions is not even “a product of” the FTC A. Before Congress enacted the FTC A (when sovereign immunity barred any tort suit against the Federal Government) we perceived no need for a rule of federal common law to reinforce the Government’s immunity by shielding also parties who might contractually pass costs on to it. Nor did we (or any other court of which I am aware) identify a special category of “discretionary” functions for which sovereign immunity was so crucial that a Government contractor who exercised discretion should share the Government’s immunity from state tort law.6
Now, as before the FTCA’s enactment, the Federal Government is immune from “[a]ny claim . . . based upon the exercise or performance [of] a discretionary function,” including presumably any claim that petitioner might have brought against the Federal Government based upon respondent’s negligent design of the helicopter in which Lt. Boyle died. *529There is no more reason for federal common law to shield contractors now that the Government is liable for some torts than there was when the Government was liable for none. The discretionary function exception does not support an immunity for the discretionary acts of Government contractors any more than the exception for “[a]ny claim [against the Government] arising out of assault,” § 2680(h), supports a personal immunity for Government employees who commit assaults. Cf. Sheridan v. United States, ante, at 400. In short, while the Court purports to divine whether Congress would object to this suit, it inexplicably begins and ends its sortilege with an exception to a statute that is itself inapplicable and whose repeal would leave unchanged every relationship remotely relevant to the accident underlying this suit.
Far more indicative of Congress’ views on the subject is the wrongful-death cause of action that Congress itself has provided under the Death on the High Seas Act (DOHSA), Act of Mar. 30, 1920, ch. Ill, § 1 et seq., 41 Stat. 537, codified at 46 U. S. C. App. §761 et seq. (1982 ed., Supp. IV) — a cause of action that could have been asserted against United Technologies had Lt. Boyle’s helicopter crashed a mere three miles further off the coast of Virginia Beach. It is beyond me how a state-law tort suit against the designer of a military helicopter could be said to present any conflict, much less a “‘significant conflict,”’ with “federal interests ... in the context of Government procurement,” ante, at 511, when federal law itself would provide a tort suit, but no (at least no explicit) Government-contractor defense,7 against the same *530designer for an accident involving the same equipment: See Pet. for Cert, in Sikorsky Aircraft Division, United Technologies Corp. v. Kloss, O. T. 1987, No. 87-1633, pp. 3-6 (trial court holds that family of marine can bring a wrongful-death cause of action under the DOHSA against United Technologies for the negligent design of a United States Marine Corps CH-53D helicopter in which he was killed when it crashed 21 miles offshore), cert. denied, 486 U. S. 1008 (1988).
IV
At bottom, the Court’s analysis is premised on the proposition that any tort liability indirectly absorbed by the Government so burdens governmental functions as to compel us to act when Congress has not. That proposition is by no means uncontroversial. The tort system is premised on the assumption that the imposition of liability encourages actors to prevent any injury whose expected cost exceeds the cost of prevention. If the system is working as it should, Government contractors will design equipment to avoid certain injuries (like the deaths of soldiers or Government employees), which would be certain to burden the Government. The Court therefore has no basis for its assumption that tort liability will result in a net burden on the Government (let alone a clearly excessive net burden) rather than a net gain.
Perhaps tort liability is an inefficient means of ensuring the quality of design efforts, but “[w]hatever the merits of the policy” the Court wishes to implement, “its conversion into law is a proper subject for congressional action, not for any creative power of ours.” Standard Oil, 332 U. S., at 314-315. It is, after all, “Congress, not this Court or the other federal courts, [that] is the custodian of the national purse. By the same token [Congress] is the primary and most often the exclusive arbiter of federal fiscal affairs. And these comprehend, as we have said, securing, the treasury or the Government against financial losses however inflicted . . . .” Ibid, (emphasis added). See. also Gilman, supra, *531at 510-512. If Congress shared the Court’s assumptions and conclusion it could readily enact “A BILL [t]o place limitations on the civil liability of government contractors to ensure that such liability does not impede the ability of the United States to procure necessary goods and services,” H. R. 4765, 99th Cong., 2d Sess. (1986); see also S. 2441, 99th Cong., 2d Sess. (1986). It has not.
Were I a legislator, I would probably vote against any law absolving multibillion dollar private enterprises from answering for their tragic mistakes, at least if that law were justified by no more than the unsupported speculation that their liability might ultimately burden the United States Treasury. Some of my colleagues here would evidently vote otherwise (as they have here), but that should not matter here. We are judges not legislators, and the vote is not ours to cast.
I respectfully dissent.
See, e. g., H. R. 4765, 99th Cong., 24 Sess. (1986) (limitations on civil liability of Government contractors); S. 2441, 99th Cong., 2d Sess. (1986) (same), See also H. R. 2378, 100th Cong., 1st Sess. (1987) (indemnification of civil liability for Government contractors); H. R. 5883, 98th Cong., 2d Sess. (1984) (same); H. R. 1504, 97th Cong., 1st Sess. (1981) (same); H. R. 5351, 96th Cong., 1st Sess. (1979) (same).
Not all exercises of our power to fashion federal common law displace state law in the same way. For example, our recognition of federal causes of action based upon either the Constitution, see, e. g., Bivens v. Six Unknown Fed. Narcotics Agents, 403 U. S. 388 (1971), or a federal statute, see Cort v. Ash, 422 U. S. 66 (1975), supplements whatever rights state law might provide, and therefore does not implicate federalism concerns in the same way as does pre-emption of a state-law rule of decision or cause of action. Throughout this opinion I use the word “displace” in the latter sense.
True, in this ease the collateral relationship is the relationship between victim and tortfeasor, rather than between contractors, but that distinction makes no difference. We long ago established that the principles governing application of federal common law in “contractual relations of the Government . . . are equally applicable . . . where the relations affected are noncontractual or tortious in character.” United States v. Standard Oil Co., 332 U. S. 301, 305 (1947).
“QUESTION: [Would it be] a proper judicial function to craft the contours of the military contractor defense . . . even if there were no discretionary function exemption in the Federal Tort Claims Act?
“MR. LACOVARA: I think, yes. . . . [I]t ought not to make a difference to the contractor, or to the courts, I would- submit, whether or not the Government has a discretionary function exception under the Federal Tort Claims Act. ...
“QUESTION: I think your position would be the same if Congress had never waived its sovereign immunity in the Federal Tort Claims Act. . . .
“MR. LACOVARA: That’s correct_
“QUESTION: Now wait. I really don’t understand that. It seems to me you can make the argument that there should be preemption if Congress wanted it, but how are we to perceive that’s what Congress wanted if in the Tort Claims Act, Congress had said the Government itself should be liable for an ill designed helicopter? Why would we have any reason to think that Congress wanted to preempt liability of a private contractor for an ill designed helicopter?
“QUESTION: . . . [Y]our preemption argument, I want to be sure I understand it — does not depend at all on the Federal Tort Claims Act, as I understand it. . . .
“MR. LACOVARA: That’s correct.” Tr. of Oral Arg. 33-35 (reargument Apr. 27, 1988).
“QUESTION: Does the Government’s position depend at all on the discretionary function exemption in the Federal Tort Claims Act?
“MR. AYER: Well, that’s a hard question to answer. ... I think my answer to you is, no, ultimately it should not.” Id., at 40-41.
Some States, of course, would not have permitted a stranger to the contract to bring such a tort suit at all, but no one suggested that this rule of state tort law was compelled by federal law.
But cf. Tozer v. LTV Corp., 792 F. 2d 403 (CA4 1986) (applying defense in DOHSA ease), cert. pending, No. 86-674; Shaw v. Grumman Aerospace Corp., 778 F. 2d 736 (CA11 1985) (same), cert. pending, No. 85-1529; Koutsoubos v. Boeing Vertol, Division of Boeing Co., 755 F. 2d 352 (CA3) (same), cert. denied, 474 U. S. 821 (1985); McKay v. Rockwell Int’l Corp., 704 F. 2d 444 (CA9 1983) (same), cert. denied, 464 U. S. 1043 (1984).