Court to hear dispute over Navy plane (Sept. 28, 2010)

The Supreme Court agreed to decide whether the government's claim of the state secrets privilege has prevented two leading defense contractors from defending their position in an ongoing battle over an ill-fated Navy fighter plane.

More than 20 years ago, General Dynamics Corp. and McDonnell Douglas signed a contract to build eight A- 12 Avenger stealth fighters for the Navy at a total estimated cost of more than $4 billion. Three years later, the Navy and then-Defense Secretary Dick Cheney declared the company in default and canceled the contract.

The government has argued that the companies weren't able to produce the aircraft as designed on schedule and is seeking repayment of $1.35 billion, plus more than $2.5 billion in accumulated interest, arguing that the companies failed to meet the terms of the contract.

Meanwhile, the companies contend that the delay was caused by the government's refusal to share essential stealth technology.

The government have argued that the companies couldn’t press that argument because litigating the issue would require the disclosure of military secrets and jeopardize national security. Two lower courts agreed.

On Sept. 28, the Supreme Court granted review in the consolidated cases of General Dynamics v. U.S., 09-1298, and Boeing v. U.S., 09-1302.

Question presented: Whether the Due Process Clause of the Fifth Amendment permits the government to maintain a claim while simultaneously asserting the state-secrets privilege to bar presentation of a prima facie valid defense to that claim.