What was the outcome in the lower court(s)?
Question
INSTRUCTION:
11/2 pages- 2 pages APA format
Review Harduvel v. General Dynamics Corp. case. (The link to the case is below; YOU CAN
FIND OTHER LINKS TO THIS CASE ON GOOGLE))
http://law.justia.com/cases/federal/districtcourts/FSupp/801/597/1944735/a QUESTION:
Mention : Procedure [Who brought the appeal? What was the outcome in the lower
court(s)?]
Issue [Note the central question or questions on which the case turns] .
please Include citations and reference. and answer procedure and issue in different
paragraphs EXAMPLE : (THE case below is just an example to help you format the paper) PARTIES
In the case the plaintiff was the U.S. Navy and the defendants were the two
contractor’s General Dynamics and McDonnell Douglas. FACTS
After the petitioners fell behind the schedule in developing stealth aircraft (A-12) for
the Navy, contracting officer terminated their $4.8 billion fixed-price contract for the default
and ordered the petitioners to repay approximately $1.35 billion in the progress payments for work that the Government never accepted. Petitioners filed the suit in Court of Federal
Claims, challenging termination decision under Contract Disputes Act of 1978, 41 U.S.C.
609(a)(1). The Court of Federal Claims held that, since the invocation of the state-secrets
privilege obscured the too many of facts relevant to the superior-knowledge defense, the issue
of the defense was no justifiable, even though the petitioners had brought forward enough
unprivileged evidence for the prima facie showing. Accordingly, at the issue was what
remedy was proper when, to protect the state secrets, court dismissed the Government
contractor’s prima facie valid affirmative defense to Government’s allegations of the
contractual breach. The Court concluded that it must exercise common-law authority in the
situation to fashion the contractual remedies in the Government-contracting disputes and held
that proper remedy was to leave parties where they were on the day that they filed suit. PROCEDURE
In June 1991, General Dynamics “sought relief in the Court of Federal Claims under
the Contract Disputes Act requesting that the court: (1) grant the contractors’ equitable
adjustment claims, (2) convert the government’s termination for default into a termination for
convenience, (3) deny the government’s demand for return of progress payments, (4) award
GD costs and a reasonable profit under the contract, (5) award GD settlement expenses, and
(6) award damages for breach of contract.”(Bloomberg Law) “After several years of
litigation, the Court of Federal Claims ruled that the government’s default termination was
invalid .It vacated the government’s termination for default and converted it into a
termination for convenience. The court denied the government’s claim for return of $1.35
billion in unliquidated progress payments, and entered judgment of approximately $1.2
billion in favor of” (Bloomberg Law) GD. On appeal, the United States Court of Appeals, Federal Circuit reversed that holding
and “remanded the case for the trial court to determine whether the default termination was
justified.” (Bloomberg Law).
Following a six-week trial on remand, the Court of Federal Claims ruled in favor of
the government. On appeal, the Federal Circuit Court affirmed the trial court’s determination,
but said “that the trial court misapplied the controlling standard in determining whether the
default termination was justified” (Bloomberg Law). Therefore, the case was again vacated
and remanded to the Court of Federal Claims The CFC, after analyzing the Federal Circuit
Court’s remand, ruled again in favor of the government. GD appealed again to the US Court
of Appeals, Federal Circuit, which held the lower court’s decision. Finally, GD appealed in
the US Supreme Court in the year 2010. ISSUE
The “state secrets” doctrine prevents disclosure of important state secrets in litigation.
can the government sue a federal contractor for breach of contract then use the secrets
doctrine to prevent the contractor from raising a defense that would require the contractor to
disclose secret information? APPLICABLE LAW
“State secrets privilege or national-security privilege is a privilege that the
government may invoke against the discovery of a material which if divulged, could
compromise national security. This is an evidentiary rule created by legal precedent in U.S.
By exercising this privilege, the court is asked to exclude evidence from a case based on an
affidavit submitted by the government stating that the court proceedings might disclose sensitive information which might endanger national security. The state secrets privilege was
formally recognized in the leading case United States v. Reynolds, 345 U.S. 1 (1953).” (US
Legal Inc.) In layman’s terms, “the state secrets privilege, when properly invoked, permits the
government to block the release of any information in a lawsuit that, if disclosed, would
cause harm to national security.” (ACLU.org) HOLDING
The court dismissed the government contractor’s prima facie valid affirmative defense
to the Government’s allegations of contractual breach. (JUSTIA, 2017). The court held,
neither the government nor the contractors could purse the long running dispute. It was a
unanimous decision and in the majority opinion by the Antonin Scalia, he said, “suit on the
contract, or for performance rendered or funds paid under the contract, will not lie, and the
parties will be left where they are.” “Both parties, the government no less than petitionersmust have assumed the risk that state secrets would prevent the adjudication of claims of
inadequate performance.” (Oyez, 2017)
The court held this way because the state secrets privilege obscured many of the facts
related to the superior knowledge defense, and was not justiciable. Therefore, the court
exercised its common law authority to solve the government contracting disputes. Neither
party was satisfied with the resolution, because General Dynamics wanted to turn the
termination in to convenience and reinstate a 12 billion award from the court. Unfortunately,
that was not an option under the A-12 agreement. The other reason was the government
wanted a return of 1.35 billion it paid petitioners for work never accepted because the
government claimed petitioners were in default, but this was not justiciable. REASONING
The Supreme Court decided to reverse and remand the lower court’s order with a
unanimous decision made by the court. In particular, Justice Antonin Scalia led and made the
decision while unanimously he was supported by his peers. It was decided that neither the
government nor the defendant was able to pursue a long-term dispute. The reason was
because the possibility that state secrets might be revealed. “Suit on the contract, or for
performance rendered or funds paid under the contract, will not lie, and the parties will be left
where they are,” Scalia wrote. “Both parties—the government no less than petitioners—must
have assumed the risk that state secrets would prevent the adjudication of claims of
inadequate performance.”(Oyez.org)
The overall reasoning was that in general, neither party could expect things to go fast
nor smooth since the secrets of government was not going to be revealed and that was
obviously going to prevent the contractors from doing their job. The defense contractors
were not able to honor the contract not because they were lacking the push to get things done,
but they were lacking the information needed in order to complete the job. CONCLUSION In conclusion, General Dynamics is the world’s fifth-largest defense contractor based
on its 2012 revenues. Their product includes Gulfstream business jets, submarines, wheeled
combat vehicles and communications systems. They entered in contract with the US
government in 1988. The U.S. Navy ordered a new stealth aircraft, the A-12 Avenger, to be
built by contractors General Dynamics and McDonnell Douglas. In 1991 the Navy gave up and cancelled the contract, saying too little progress had
been made, and asked the contractors to return payments already made. The contractors
refused, saying the government had kept too much information secret under the “state secrets
privilege” for there to be adequate progress.
On 1 June 2009, the U.S. Court of Appeals for the Federal Circuit ruled that the U.S.
Navy was justified in canceling the contract. The ruling also required the two contractors to
repay the U.S. government more than US$1.35 billion, plus interest charges of US$1.45
billion. Boeing, which had merged with McDonnell Douglas, and General Dynamics vowed
to appeal the ruling.
On appeal, the Federal Circuit Court affirmed the trial court’s determination, but said
“that the trial court misapplied the controlling standard in determining whether the default
termination was justified” (Bloomberg Law). Therefore, the case was again vacated and
remanded to the Court of Federal Claims The CFC, after analyzing the Federal Circuit
Court’s remand, ruled again in favor of the government. GD appealed again to the US Court
of Appeals, Federal Circuit, which held the lower court’s decision. Finally, GD appealed in
the US Supreme Court in the year 2010. REFERENCES
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