ContractsProf Blog

Editor: D. A. Jeremy Telman
Valparaiso Univ. Law School

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Tuesday, January 11, 2005

Supreme Court looks at spy contract

Secret_agent Contracts are not always contracts, especially when they’re made with secret agents. That’s what the U.S. Supreme Court held in the 1876 case of Totten v. United States, holding that a spy can’t sue the government on a secret contract to perform espionage, because then the contract wouldn’t be secret any more.

The Supreme Court is hearing argument today on that doctrine.  In Doe v. Tenet, two communist defectors who were brought into the U.S. by the CIA during the Cold War are claiming that the agency violated its promise to cover their expenses for life.  The agency said it no longer had funds in its budget for such things.  The Ninth Circuit held, 2-1, that they could proceed with their claim.

In Totten, the plaintiff had a special commission direct from President Lincoln to go and spy in the "Insurrectionary States," gathering information on troops and fortifications in exchange for $200 a month.   After the war, his estate sued the government.  The Court held:

Both employer and agent must have understood that the lips of the other were to be for ever sealed respecting the relation of either to the matter.  This condition of the engagement was implied from the nature of the employment, and is implied in all secret employments of the government in time of war, or upon matters affecting our foreign relations, where a disclosure of the service might compromise or embarrass our government in its public duties, or endanger the person or injure the character of the agent.  If upon contracts of such a nature an action against the government could be maintained in the Court of Claims, whenever an agent should deem himself entitled to greater or different compensation than that awarded to him, the whole service in any case, and the manner of its discharge, with the details of dealings with individuals and officers, might be exposed, to the serious detriment of the public.  A secret service, with liability to publicity in this way, would be impossible; and, as such services are sometimes indispensable to the government, its agents in those services must look for their compensation to the contingent fund of the department employing them, and to such allowance from it as those who dispense that fund may award. The secrecy which such contracts impose precludes any action for their enforcement. The publicity produced by an action would itself be a breach of a contract of that kind, and thus defeat a recovery.  (Emphasis added.)

The plaintiffs in Doe hope to get around the contract rule by claiming due process violations.  The Ninth Circuit's opinion is here.  Also available are the CIA's petition for certiorari, the CIA's appendix, the Does' response, and the CIA's reply.

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