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Argument recap: “State secrets” claim on trial


To critics of the “state secrets” doctrine, the problem always has been that the government would use it to gain an unfair advantage in court, perhaps shielding itself from legal woe or at least from being called to account for its conduct.   That risk was back on display Tuesday in the Supreme Court, but the Justices hinted strongly that they will insist on having a role in shaping the consequences for the government — despite a “hands-off” plea by a top government lawyer.

Acting U.S. Solicitor General Neal K. Katyal bluntly told the Court that it was none of the courts’ business to impose consequences on an official claim of “state secrets” to halt an ongoing court case, if the government had been haled into court by a party who was sophisticated enough to have protected itself in advance against unwanted outcomes.

Any right to hold federal officials to account, Katyal asserted, can be bargained away by a private entity in its dealings with the government, and if it does so, the courts are not in a position to second-guess whether the bargain was a fair deal.

After an hour of argument in a Pentagon contracting case, however, two reactions from the Court had emerged quite clearly: while the Justices were uncertain as to just how they would do it, they were strongly inclined to find some legal mechanism for imposing at least a modest mandate of fairness when the government invokes its privilege to keep its national security secrets to itself, with a significant negative effect upon someone in the private sector — even a high-powered business company with legions of lawyers on call.

While the Court’s well-documented reluctance to probe deeply into the contours of the “state secrets” privilege could have led an observer to predict that the Justices were not about to tinker with it in any way, most of them — with perhaps the exception of Justice Stephen G. Breyer — gave the impression in this case that they would not let the government dictate always what happens when the claim is invoked in a way that means the government always wins.

Katyal, in fact, seemed unable to dissuade most of the bench from the perception that he was, in fact, advocating what Justice Elena Kagan called a “tails you win, heads you win” approach.

And, it seemed, Katyal’s insistence that what the government is able to get written into its contracts with private companies is the end of the matter may not, in fact, be the end.

It is important, though, to keep in context what was going on in the oral argument in the combined cases of General Dynamics v. U.S. (09-1298) and Boeing v. U.S. (09-1302).    The “state secrets” privilege itself is in no jeopardy, whatever, in the case; General Dynamics and Boeing make no claim that it was misused illegally to shut down their court case claiming that the government was to blame for their inability to deliver, on time, a new warplane that could operate off of an aircraft carrier and fly under the enemy’s radar.

And no one questions that the Pentagon had every right to act to protect highly sensitive secrets about the technology necessary to create such a modern weapon of war.

Moreover, the General Dynamics-Boeing case is not like the usual “state secrets” case: that is, a lawsuit in which someone has a grievance about alleged wrongdoing by some government official or agency, and demands to know what is in some secret government file in order to build his case.  In such a case, the government invokes its privilege of protecting national security or other highly protected information, and the courts customarily refuse to order it to do so against its will.

Those are the kinds of cases, for example, that have arisen over the way the Central Intelligence Agency and the National Security Agency have waged the “war on terrorism” — cases that the Supreme Court has steadily refused even to consider.

But, potentially, the General Dynamics-Boeing case may wind up borrowing from the most important precedent the Supreme Court has ever issued on the “state secrets” concept — its 1953 decision in U.S. v. Reynolds.

In that case, the Supreme Court told the government, so to speak,  that it may not always have its cake and eat it, too — it may not be allowed to prosecute someone for a legal violation, if its invocation of “state secrets” prevents that person from defending himself.  That, the Court said then, would be “unconscionable.”

Much of Tuesday’s argument was about just what Reynolds meant, and about whether Reynolds should be brought into the legal equation of government contracting.  Justice Breyer, who alone seemed worried about importing that precedent into the contracting system, made that point very colorfully.  “Sophisticated contractors,” he said, “are perfectly capable of negotiating their own contract,” so if the Reynolds principle were brought in, “we are not just throwing a monkey wrench into the gears of government contracting; we’re throwing the whole monkey.”

Other Justices — notably Anthony M. Kennedy — did not seem totally averse to borrowing from Reynolds the concept of “fundamental fairness” when the government finds a contractor at fault in failing to fulfill a Pentagon project but then keeps the contractor from defending against that outcome.   Kennedy said the notion could be imported through “the law of contracts”; others thought it might be a matter of constitutional due process.

It was against those inclinations that Acting SG Katyal fought so energetically, relying on his most heroic approach to contracting: essentially, every man for himself.   General Dynamics and Boeing made the deal, knew what they were getting into, and have to live with what they bargained for, he contended.

What Katyal had going for him, mostly, were four things: the Court’s known hesitancy to get into the depths of “state secrets” doctrine, the puzzlement of the Justices about which mode of enforcing “fundamental fairness” would be the most workable in the contracting context, the difficulty of the contractors’ lawyer, Carter G. Phillips, in making the two big companies seem like victims, and, finally, Phillips’ ill-chosen suggestion that, perhaps, his clients were being a bit “greedy.”

What Phillips had going for him, on the other hand, were four things: the likelihood that the Court almost certainly was not going to simply throw out his clients’ appeal without issuing some, perhaps quite consequential, ruling on it (whatever its actual content), the view of several of the Justices — most conspicuously, Justice Antonin Scalia — that since the Court could not know who was right or wrong, each side should simply be allowed to walk away from the deal and keep the money each now had in its pocket from the deal with no untoward consequences, the fact that several Justices were seriously interested in Scalia’s idea, and, finally, the appearance that Katyal had over-played his argument about self-protection in contract bargaining.

The “state secrets” doctrine, it appeared, would certainly survive this particular test, with no limitation directly on its invocation, but with a perhaps stern reminder by the Court that its invocation may well come at a price.   While Katyal insisted that it is rarely invoked, it has become such a powerful litigation weapon for the government in recent years that any legal counter-balance might well diminish that potency.

Recommended Citation: Lyle Denniston, Argument recap: “State secrets” claim on trial, SCOTUSblog (Jan. 20, 2011, 8:06 PM),