General Dynamics Corp. v. United States Page 2

General Dynamics Corp. v. United States general information

Media for General Dynamics Corp. v. United States

Audio Transcription for Oral Argument - January 18, 2011 in General Dynamics Corp. v. United States

Audio Transcription for Opinion Announcement - May 23, 2011 in General Dynamics Corp. v. United States

Antonin Scalia:

And when full litigation of that defense "would inevitably lead to the disclosure" of state-secrets, I have to quote from Totten, neither party can obtain judicial relief.

As the Court of Federal Claims concluded, that is the situation here for reasons explained in our opinion.

However, it seems to us unrealistic to separate, as the Court of Federal Claims did, the claim from the defense and to allow the former to proceed while the latter is barred.

It is claims and defenses together that established the justification or lack of justification for judicial relief.

And when public policy precludes judicial intervention for the one, it should preclude judicial intervention for the other as well.

We therefore leave the parties with the funds and property in their possession when they knocked on the courthouse door.

This disposition will please neither side.

General Dynamics but not Boeing wants us to convert the termination into one for the Government's convenience awarding petitioners $1.2 billion, the language of the A-12 agreement does not give us this option.

Moreover, state-secrets would make it impossible to calculate petitioners' damages.

The Government, for its part, wants a return of the $1.35 billion it paid petitioners in progress payments for work which it says it never approved.

But the validity of that claim depends upon whether petitioners are in default on their contract which cannot be judicially determined because of the valid assertion -- assertion of the state-secrets privilege.

As in Totten, our refusal to enforce this contract captures what the ex ante expectations of the parties were or reasonably ought to have been.

Both parties must have understood that state-secrets would prevent courts from resolving many possible disputes under the A-12 agreement.

We believe, moreover, that the impact of our ruling on these particular cases, which we think produces rough, very rough equity, is probably much more significant than its impact in future cases, except to the extent that it renders a law more predictable and hence, more subject to accommodation by contracting parties and contracting parties who have continuing relationships to companies that entered contracts involving state-secrets that are repeat offenders.

The foregoing analysis assumes that the Government generally has an obligation to share its superior knowledge.

The Court of Appeals did not address two of the Government's arguments for why that assumption may not apply here.

It had no need to, given its holding.

We did not grant certiorari to decide those questions, so they remained open for the Court of Appeals to address some remand.

The judgment of the Court of Appeals is vacated and the cases are remanded for further proceedings.