Term: 2010
Docket: 09-1298
General Dynamics Corporation, Petitioner, v. United States
- Pro
09-1298 GENERAL DYNAMICS CORP. V. UNITED STATES DECISION BELOW: 567 F.3d 1340 CONSOLIDATED WITH 09-1302 FOR ONE HOUR ORAL ARGUMENT 09-1298 LIMITED TO QUESTION 1 09-1302 LIMITED TO QUESTION 2 CERT. GRANTED 9/28/2010 QUESTION PRESENTED: 1. Whether the government can maintain its claim against a party when it invokes the state-secrets privilege to completely deny that party a defense to the claim. 2. Whether, contrary to nearly a century of government contracts law, a court can uphold a default termination on factual grounds never relied on by the contracting officer, and can dispense with the requirement that the contracting officer exercise discretion when terminating for default. 3. Whether one panel of a court of appeals can use the law-of-the-case doctrine to overrule another panel's prior decision in the same case as clearly erroneous or manifestly unjust and thereby circumvent the law-of-the-circuit doctrine, which permits only the en banc court to overrule a precedential panel decision. LOWER COURT CASE NUMBER: 2007-5111, 2007-5131
In the case of General Dynamics Corporation v. United States, 2010, the U.S. Supreme Court ruled in favor of defense contractors General Dynamics and Boeing who were involved in a contract dispute with the federal government over a terminated aircraft project known as A-12 Avenger II. The companies had been ordered to repay $1.35 billion for failing to deliver on their contractual obligations but argued that they could not complete the project due to classified technology which was withheld by the government itself - invoking what is known as "superior knowledge" doctrine or “state secrets” privilege. The court held that when state secrets prevent a contractor from presenting its defense, then it would be unfair for them to bear heavy financial penalties imposed by lower courts without being able to present an adequate defense.
In the dissenting opinion for General Dynamics Corporation v. United States, Justice Scalia disagreed with the majority's decision to apply a "state secrets" privilege in this case. He argued that such a privilege should only be used when national security is at risk, not simply because classified information might be revealed during litigation. In his view, if the government chooses to enter into contracts and then breaches them, it must bear the consequences of its actions - including potentially having sensitive information disclosed in court proceedings. Furthermore, he contended that there are other legal mechanisms available to protect classified information without completely barring plaintiffs from seeking redress for alleged contract violations.
