"Tails You Win, Heads, You Win" -- The State Secrets Privilege

It is rare for an aviation case to make its way to the Supreme Court of the United States.  But, this year, the Court is considering an issue that will have broad impact for any company working for the federal government on classified aviation technologies.  The cases are General Dynamics v. United States, 09-1298, and Boeing v. United States, 09-1302.

The case involves a dispute lasting almost two decades over the Pentagon’s 1991 termination of the A-12 Avenger stealth carrier-based aircraft.   Dating back to 1988, the aviation contractors for the A-12 ran into difficulties with the aircraft's weight, resulting in missed deadlines that ultimately led to the abandonment of the $4.8-billion project by order of then-Defense Secretary Dick Cheney. 

The Navy believes that the contractors owe the government "default" penalties totaling nearly $3 billion with interest.  The contractors' defense is that the government withheld critical information about stealth technologies that led to the delays and cost overruns in the first place.  To prove they did not default, the contractors attempted to show that the government itself had "superior knowledge" of the futility of the A-12 program all along.  Not so fast, the government argues—the government's decision to default the contractors was based on military secrets that, if admitted in open court, would jeopardize the national security.

The contractors do not challenge the so-called state secrets privilege, but object to the use of such privilege to prevent them from challenging the default.  “By invoking the state-secrets privilege, the government has not simply taken some evidence out of this case,” General Dynamics argued in its appeal. “Rather, it has entirely prevented the contractors from raising a critical defense.”

Whether the government should be permitted to declare a contractor in default and then invoke a secrecy privilege to withhold information the contractor says it needs to dispute that finding in court is now before the Supreme Court.

At the January 18, 2011 oral argument, Chief Justice John Roberts asked, "Why don't you we call the whole thing off and say nobody's at fault?"  Justice Antonin Scalia also remarked, "It's the 'go-away' principle of our jurisprudence."  New Justice Elena Kagan asked the government hypothetically, Suppose state secrets had kept you from proving default ...?"

The Court's ruling is expected before the 2010-'11 term ends in June.  Stay tuned.