Supreme Court Watch: Court won't help in fight over plane; Pentagon canceled attack plane 20 years ago

By Jesse J. Holland

Associated Press

WASHINGTON (AP) -- The Supreme Court refused on Monday to take sides in a long-running billion-dollar dispute between two defense contractors and the government over a cancelled contract for a Navy plane.

The high court unanimously threw out court decisions that would have helped both the federal government and Boeing Co. and General Dynamics, the companies that were supposed to build 850 A-12 Avenger attack planes for the military.

The A-12 Avenger attack plane was canceled by the Pentagon in 1991 based on claims that the companies failed to meet the terms of the contract. The A-12, designed with stealth technology to help it evade radar, was more than 18 months behind schedule and at least $1 billion over budget when it was canceled. The government and the contractors disagreed over who was responsible for the delays and cost overruns.

For the past 20 years, the government has been demanding repayment of money spent on the plane's development and the companies have been resisting, filing a lawsuit in federal court to block the Pentagon from collecting.

But the government asked for the lawsuit to be thrown out because classified secrets were being leaked during the discovery process.

The Supreme Court was being asked to settle the issue of whether the government's refusal to turn over classified information, thus preventing the companies from defending themselves, should bar the government from recovering the money.

The state-secrets privilege, on which the government relied to shut down the companies' lawsuit, typically arises in national security and terrorism cases.

The consolidated cases are General Dynamics v. U.S., 09-1298, and Boeing v. U.S., 09-1302.

Published: Tue, May 24, 2011