Case Referred Back Lower Court For Further Review

The U.S. Supreme Court has set aside a ruling by a Federal Appeals Court what would have forced Boeing and General Dynamics to repay over a billion dollars to the Pentagon over a stealth aircraft that was cancelled in 1991.

GD and McDonnell Douglas (now Boeing) were working on the A-12 Avenger, which was to have been a stealth aircraft designed for carrier operations. After years of delays and cost overruns on the $4.8 billion contract, the Pentagon terminated the program in January of 1991, saying the two companies were in default. Defense News reports that the two companies claimed they had not defaulted, and a federal claims court ordered the Pentagon to pay them $1.2 billion in expenses. They said that the government had not shared stealth knowledge it had used to develop the F-117 and B-2. That decision was overturned by the federal appeals court, which said the previous technology argument could not be litigated for reasons of national security.

And the Pentagon wanted its money back, with interest.

That decision was vacated Monday in a unanimous decision by SCOTUS, which sent the case back to federal circuit court. In the court's opinion, Justice Antonin Scalia wrote: "Whether the Government had an obligation to share its superior knowledge about stealth technology is left for the Federal Circuit to address on remand."

In a statement following the ruling, J. Michael Luttig, Boeing Executive Vice President and General Counsel, issued the following statement:

“We are pleased with today’s win in the Supreme Court and the Court’s unanimous decision to overturn the government’s default termination of the A-12 program. It has always been our view that the default termination was improper.”

FMI: www.dod.gov, www.boeing.com