Supreme Court Watch High court wary of billion-dollar legal fight over Navy plane

By Mark Sherman

Associated Press

WASHINGTON (AP) -- Supreme Court justices seemed in general agreement Tuesday that the best way to resolve a long-running, billion-dollar dispute between the government and two big defense contractors is to say, in Justice Antonin Scalia's words, "Go away."

Or to put it another way, Scalia said, "'Get out of here,' is what we're saying."

That was the apparent sentiment of the court toward a contract dispute over the A-12 Avenger attack plane, canceled by the Pentagon in 1991 when Richard Cheney was defense secretary, based on claims that the companies, the Boeing Co. and General Dynamics Corp., failed to meet the terms of the contract.

For the past 20 years, the government has been demanding repayment of $1.35 billion, plus more than $2.5 billion in accumulated interest, and the companies have been resisting, filing a lawsuit in federal court to block the Pentagon from collecting.

The Supreme Court is 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. Invoking the privilege, which the Supreme Court ratified in the 1950s, the government tells a court that allowing a case to go forward would force the disclosure of information that could damage national security.

A federal appeals court sided with the government against the companies.

The main point to emerge from the argument is that the court appeared to have little desire to delve into the state secrets issue, and whether the Pentagon was right to declare the companies in default on the $4.8 billion contract.

That is what prompted Scalia's remarks, which he at one point laughingly described as the court's "go-away principle of our jurisprudence."

Scalia suggested that one outcome would be to leave things where they stand now -- the disputed money in the companies' pocket.

"We're not going to try to apply the contract because we can't tell who's in the right and who's in the wrong," because of the government's decision not to provide the classified information, he said.

Other justices and acting Solicitor General Neal Katyal, the Obama administration's top Supreme Court lawyer, agreed that avoiding the issue is the right approach. But they did not necessarily embrace the result Scalia proposed. "You should wind the clock back to.before the lawsuit was filed," Katyal said. At that point, he said, "there was an undoubted right of the government to have $1.35 billion."

Both Boeing and General Dynamics have disputed the Pentagon's claims that they did not live up to the contract.

The A-12, designed with stealth technology to hide it from radar, was more than 18 months behind schedule and at least $1 billion over budget when it was canceled. The government and the contractors dispute who was responsible for the delays and overages.

The Navy wanted the A-12 Avenger in operation by the mid-1990s to replace older carrier-based airplanes. At one point, the military was planning to buy 850 A-12s.

A decision is expected by summer. The consolidated cases are General Dynamics v. U.S., 09-1298, and Boeing v. U.S., 09-1302.

Published: Thu, Jan 20, 2011

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