Wednesday, September 29, 2010
The Supreme Court yesterday agreed to hear a government contractor's case against the Defense Department involving the Department's invocation of the state secrets privilege. But the case doesn't involve anything nearly so dramatic as what we've seen recently come out of the Ninth Circuit in Mohamed v. Jeppesen (ordering the dismissal of a private lawsuit by an alleged victim of extraordinary rendition and torture based upon the government's intervention and assertion of the state secrets privilege). Instead, this case is a more ordinary application of the privilege--an application more consistent with its common law, evidentiary roots.
But that doesn't make the case any less important. And the Court's treatment of the privilege in this more ordinary context may give us important clues as to how the Court might treat the more dramatic cases.
This case, General Dynamics Corp. v. U.S. (and a consolidated companion, The Boeing Co. v. U.S.) is a nearly 20-year-old dispute over the plaintiffs' ill-fated contract with the Navy to develop the A-12 Avenger, a carrier-based stealth aircraft. The plaintiffs-appellants claim that the Navy declined to share its stealth technology with the contractors in the design process, instead requiring the contractors to reinvent this wheel. This, among many other problems, led to substantial delays in the development of the aircraft. Finally the Navy terminated the contract for default.
Under federal contracting regulations, a termination for default means that the contractor gets no more payments under the contract and may have to reimburse the government for some payments already issued. A termination for default can also mean that the contractor is debarred from public contracting, or is prejudiced in the award of new contracts. (The government could have alternatively terminated for convenience. When it does this, the contractor still gets reimbursement for costs reasonably incurred.)
The contractors sued, arguing that the government failed to meet its burden in terminating for default because the government had "superior knowledge" (i.e., the stealth technology), but refused to share it with the contractors. The government asserted the state secrets privilege, arguing that it couldn't litigate the "superior knowledge" claim because the stealth technology is a state secret. The lower courts ruled in favor of the government.
The case now goes before the Court on the state secrets issue and a couple other issues related to the standard that applies to termination for default.
The contractors argue that the government cannot at once press its default claim (on which it bears the burden) but also deny the contractors information on their "superior knowledge" defense. The contractors point to language in United States v. Reynolds that supports this common-sensical argument--you can't fairly prosecute when you also deny the accused evidence necessary for the defense. And given the amount of money at stake and the possibly punitive nature of termination for default, this is like a prosecution.
The government argues that this principle doesn't apply here: after all, the government is the defendant; it isn't prosecuting anything. Moreover, it's the plaintiffs who bear the burden on the "superior knowledge" defense.
The case thus involves an evidentiary state secrets privilege in the old-fashioned sense--a privilege that applies (or not) to individual pieces of evidence, and not to entire cases, even purely private cases, as we've seen in the lower courts more recently. But the Court could nevertheless use the case to signal its direction with the cases, like Mohamed, that involve the government's far more sweeping assertions of the privilege, and therefore it's one to watch.