Boeing, General Dynamics prevail in Supreme Court
Unanimous decision goes against federal government
- By Washington Technology staff
- May 24, 2011
Boeing Co. and General Dynamics Corp. have won a Supreme Court decision that will keep some $3 billion in their coffers rather than requiring them to pay it to the federal government, the Wall Street Journal reports today.
The court, in a unanimous ruling, said a key issue in the two-decade-old contract battle couldn't be litigated because it involved state secrets that can't be aired in court. The companies and the Defense Department have been fighting since 1991, when the government canceled a $4.8 billion contract to build a Navy stealth fighter jet and demanded that the companies repay roughly $1.35 billion they already had received plus interest, a total of about $3 billion.
The defense contractors countered that the government had superior technical knowledge needed to build the aircraft but refused to share it with them. The case now returns to lower courts, according to the Journal.