Supreme Court Agrees To Hear $3Billion Boeing Case Against Federal Government

Yesterday the Supreme Court agreed to hear a case among Boeing Co. and General Dynamics, on the one hand, and the U.S. government, on the other.   The case involves a 19 year old dispute over the Pentagon’s 1991 termination of the A- 12 Avenger stealth fighter aircraft program. A federal appeals court had previously ruled that the government was justified in canceling the contract because the companies weren’t living up to their obligations in terms of price and delivery.

 

The case will involve the isssue of  government secrecy claims.  The state secrets issue stems from the companies’ contention that the delay was caused by the government’s refusal to share essential stealth technology. The companies don’t directly challenge the assertion of the state secrets privilege. They instead say the government’s invocation of the privilege should have precluded it from claiming default.

The high court’s ruling on the state-secrets matter could influence other cases where the government is invoking national security to block litigation by terrorism suspects and others.

 

Boeing could take $1.7 billion in pre-tax charges if it loses the case.