State Secrets Block Resolution of Contractors’ Suit, Justices Say

The Supreme Court on Monday unanimously ruled that national security considerations made it impossible for it to take sides in a multibillion-dollar dispute between military contractors and the government.

The decision came a week after the court refused to hear an appeal from men who said they had been kidnapped by the Central Intelligence Agency and sent abroad to be tortured as part of the Bush administration’s “extraordinary rendition” program. A federal appeals court had thrown out the lawsuit based on the “state secrets” privilege.

The combination of the two developments at the Supreme Court amounts to “an unmistakable and loud signal that all nine of the justices are not about to change the rules of the game in cases in which the government claims that military, intelligence or diplomatic secrets may be revealed,” said David Rudenstine, an authority on the state secrets privilege at the Benjamin N. Cardozo School of Law at Yeshiva University in New York.

The case decided Monday arose from a 1988 contract between the Navy and two companies, General Dynamics and McDonnell Douglas, to develop a stealth aircraft called the A-12 Avenger. Three years later, dissatisfied with the contractors’ progress, the Navy declared them in default and demanded the return of $1.35 billion.

The contractors sued, asking to keep the money and seeking $1.2 billion more. They said their work had been frustrated by the government’s failure to share classified information about how to design and build stealth aircraft.

The government disputed that, but it would not explain why, invoking the state secrets privilege. The case concerned “some of the government’s most closely guarded military secrets,” Justice Antonin Scalia wrote for the court on Monday.