GENERAL DYNAMICS CORP. v. UNITED STATES

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Case Basics
Docket No. 
09-1298
Petitioner 
General Dynamics Corporation
Respondent 
United States
Consolidation 
09-1302, The Boeing Company, Successor to McDonnell Douglas Corporation v. United States
Decided By 
Advocates
(for the petitioners)
(Acting Solicitor General, Department of Justice, for the respondent)
Term:
Facts of the Case 

More than 20 years ago, General Dynamics Corp. and McDonnell Douglas Corp. signed a contract to build eight A- 12 Avenger stealth fighters for the U.S. Navy at a total estimated cost of more than $4 billion. Three years later, the Navy and then-Defense Secretary Dick Cheney declared the company in default and canceled the contract. The government has argued that the companies weren't able to produce the aircraft as designed on schedule and is seeking repayment of $1.35 billion, plus more than $2.5 billion in accumulated interest, arguing that the companies failed to meet the terms of the contract. Meanwhile, General Dynamics Corp. and Boeing Co., which inherited the litigation through its purchase of McDonnell Douglas, contend that the delay was caused by the government's refusal to share essential stealth technology.

The government has argued that the companies couldn't press that argument because litigating the issue would require the disclosure of military secrets and jeopardize national security. Two lower courts agreed.

Question 

The "state secrets" doctrine prevents disclosure of important state secrets in litigation. Can the government sue a federal contractor for breach of contract then use the state secrets doctrine to prevent the contractor from raising a defense that would require the contractor to disclose secret information?

Conclusion 
Decision: 9 votes for General Dynamics, 0 vote(s) against
Legal provision: state secrets

No. The Supreme Court reversed and remanded the lower court order in a unanimous decision by Justice Antonin Scalia. The court held that neither the government nor the defense contractors could pursue the long-running dispute because of the possibility that state secrets might be revealed. "Suit on the contract, or for performance rendered or funds paid under the contract, will not lie, and the parties will be left where they are,” Scalia wrote. "Both parties—the government no less than petitioners—must have assumed the risk that state secrets would prevent the adjudication of claims of inadequate performance."

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GENERAL DYNAMICS CORP. v. UNITED STATES. The Oyez Project at IIT Chicago-Kent College of Law. 12 December 2014. <http://www.oyez.org/cases/2010-2019/2010/2010_09_1298>.
GENERAL DYNAMICS CORP. v. UNITED STATES, The Oyez Project at IIT Chicago-Kent College of Law, http://www.oyez.org/cases/2010-2019/2010/2010_09_1298 (last visited December 12, 2014).
"GENERAL DYNAMICS CORP. v. UNITED STATES," The Oyez Project at IIT Chicago-Kent College of Law, accessed December 12, 2014, http://www.oyez.org/cases/2010-2019/2010/2010_09_1298.