Nos. 09-1298, 09-1302

IN THE

upreme ( urt tl e tate

GENERAL DYNAMICS CORPORATION,Petitioner,

V.

UNITED STATES,Respondent.

THE BOEING COMPANY, SUCCESSOR TOMCDONNELL DOUGLAS CORPORATION,

Petitioner,V.

UNITED STATES,Respondent.

On Petition for a Writ of Certiorarito the United States Court of Appeals

for the Federal Circuit

BRIEF OF THE CHAMBER OF COMMERCEOF THE UNITED STATES OF AMERICA

AS AMICUS CURIAE IN SUPPORTOF PETITIONERS

ROBIN S. CONtLADAMAR D. SARWALNATIONAL CHAMBER

LITIGATION CENTER, INC.1615 H. Street, N.W.Washington, DC 20062(202) 463-5337

CARTER G. PHILLIPS*RICHARD KLINGLERKATHLEEN M. MUELLERSIDLEY AUSTIN LLP1501 K Street, N.W.Washington, D.C. 20005(202) 736-8000cphillips@sidley.com

Counsel for Amicus CuriaeMay 27, 2010 * Counsel of RecordWILSON-EPES PRINTING CO., INC. - (202) 789-0096 - WASHINGTON, D. C. 20002

B~ank Page

TABLE OF CONTENTS

TABLE OF AUTHORITIES .................................INTEREST OF THE AMICUS CURIAE .............INTRODUCTION AND SUMMARY OF ARGU-

MENT .................................................................REASONS FOR GRANTING THE PETIT-

IONS ..................................................................THE FEDERAL CIRCUIT’S UNPRECEDENT-

ED APPLICATION OF THE STATESECRETS PRIVILEGE UNDERMINESCERTAINTY THAT CONTRACTORS CANENFORCE CONTRACTUAL RIGHTS ANDASSERT DEFENSES AGAINST THE GOV-ERNMENT ........................................................

A. The Defense Sector’s Ability To ProvideServices And Defense Goods To The U.S.Government Depends On ContractualCertainty ...................................................

B.The State Secrets Privilege, As AppliedBy The Federal Circuit, HarmfullyUndermines Contractual Certainty .........

C.The Government’s Ability To Use TheState Secrets Privilege To Further ItsClaims Against Defense ContractorsEspecially Undermines ContractualCertainty ...................................................

CONCLUSION .....................................................

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iiTABLE OF AUTHORITIES

CASES Page

AI-Hara.nain Isla.nic Found., Inc. v. Bush,507 F.3d 1190 (9th Cir. 2007) .................... 11

Bittaker v. Woodford, 331 F.3d 715 (9thCir. 2003) .................................................... 14

Cabiri v. Gov’t of Ghana, 165 F.3d 193 (2dCir. 1999) .................................................... 13

Ducre v. F_meagi~ Officers of Halter Marine,Inc., 752 F.2d 976 (5th Cir. 1985) .............. 7

EI-Masri v. United States, 479 F.3d 296(4th Cir. 2007) ............................................ 11

Gardner v. New Jersey, 329 U.S. 565 (1947) ..... 13Hepting v. AT&T Corp., 439 F. Supp. 2d

974 (N.D. Cal. 2006) ................................... 11Lapides v. Bd. of Regents, 535 U.S. 613

(2002) .......................................................... 13Lindsey v. Nor,net, 405 U.S. 56 (1972) ......... 14Moha.ned v. Jeppesen Dataplan, Inc., 579

F.3d 943 (9th Cir.), reh’g en bancgranted, 586 F.3d 1108 (9th Cir. 2009) ..... 11

Rov~aro v. United States, 353 U.S. 53(1957) ................................................... : ...... 14

Tenet v. Doe, 544 U.S. 1 (2005) ................ 9Torten v. United States, 92 U.S. 105 (1876) ..... 9United States v. Reynolds, 345 U.S. 1

(1953) ..................................................... 9, 12, 15United States v. Rylander, 460 U.S. 752

(1983) .......................................................... 14United States v. S.nith, 780 F.2d 1102 (4th

Cir. 1985) .................................................... 14United States v. Winstar Corp., 518 U.S.

839 (1996) ................................................... 8Wehling v. CBS, 608 F.2d 1084 (5th Cir.

1980) ........................................................... 14

ooo

TABLE OF AUTHORITIES - continuedSTATUTES Page

18 U.S.C. app. 3 §§ 1-16 ................................ 1328 U.S.C. § 1491 ............................................ 3

§ 1607 ............................................ 1341 U.S.C. §§ 601-613 ..................................... 3

SCHOLARLY AUTHORITIESHarold J. Krent, Reconceptualizing Sovereign

Immunity, 45 Vand. L. Rev. 1529 (1992) .....7, 15

OTHER AUTHORITIESGen. Accounting Office, DOD Assessments

of Supplier-Base Availability for FutureDefense Needs; Briefing to the SenateCommittee on Banking and Housing,Urban Affairs, Subcommittee on Secur-ity and International Trade and Finance(Oct. 27, 2009), available at http://www.gao.gov/new.items/dl0317r.pdf. ................ 6

Gov’t Executive, Top 100 Defense Contract-ors (Aug. 15, 2009), available at http:/!www. govexec.com/story_p age_pf.cfm?articleid=43388&printerfriendlyvers= 1 .... 6

Info. Security Oversight Office, ClassifiedInformation Nondisclosure AgreementBriefing Booklet, available at http://www.archives.gov/isoo/training/standard-form-312.html ..................................................... 6

Moshe Schwartz, Congressional ResearchService, Defense Acquisitions: How DODAcquires Weapon Systems and RecentEfforts to Reform the Process (July 10,2009), available at http://www.fas.org!sgp/crs/natsec/RL34026.pdf ....................... 5, 6

iv

TABLE OF AUTHORITIES - continued

U.S. Dep’t of Commerce, Statistical Ab-stract of the United States: 2010,available at http://www.census.gov/prod/2009pubs/10statab/defense.pdf .................

Page

6

INTEREST OF THE AMICUS CURIAEThe Chamber of Commerce of the United States of

America (the Chamber) submits this brief as amicuscuriae in support of the petitions for a writ ofcertiorari filed by General Dynamics Corporation andThe Boeing Company.1

The Chamber is the world’s largest businessfederation. The Chamber represents more than300,000 direct members and indirectly represents anunderlying membership of more than three millioncompanies and professional organizations of everysize, in every industry sector, and from every regionof the country. An important function of theChamber is to represent the interests of its membersin matters before Congress, the Executive Branch,and the courts. To that end, the Chamber regularlyfiles amicus briefs in cases that raise issues of vitalconcern to the nation’s business community.

Many members of the Chamber do business withthe federal government. The Chamber also repre-sents businesses in industries, such as defense andaerospace, transportation, information technologyand telecommunications, which long have served thenation by entering contracts to provide the federalgovernment with goods and services that are vital tonational security. Such contracts often relate to

1 Pursuant to Supreme Court Rule 37.6, amicus curiae statesthat no counsel for any party authored this brief in whole or inpart and that no entity or person, aside from amicus curiae, itsmembers, and its counsel, made any monetary contributiontowards the preparation and submission of this brief. Pursuantto Rule 37.2(a), counsel of record for all parties have receivedtimely notice of amicus curiae’s intent to file this brief and haveconsented to the filing of this brief in letters on file with theClerk’s office.

2defense or national security programs that are highlyclassified, and the contracts themselves may containclassified information. For this reason, one of thequestions presented by the petitions for certiorari-whether the Government may maintain a contractclaim against a contractor after it asserts the statesecrets privilege to deny the contractor a defense tothat claim - is of particular concern to the Chamberand its members.

INTRODUCTION AND SUMMARY OFARGUMENT

This case involves an unprecedented implemen-tation of the state secrets privilege that has far-reaching, adverse effects on the thousands ofbusinesses that contract with the federal governmentto provide goods and services that are critical to thenation’s security. The decision below, by permittingthe Government’s invocation of the privilege toadvance the Government’s claim and eliminate acontracting party’s defense in a contract dispute,creates considerable uncertainty surrounding theenforceability of government contracts addressingclassified matters. That certainty is essential to theeffective and efficient delivery of defense systems andservices by private companies to the Government,and a decision so severely undermining that certaintypresents an important question warranting thisCourt’s review.

In the decisions below, the courts allowed theGovernment to proceed with its breach of contractclaim against Petitioners even though it had assertedthe state secrets privilege to deprive Petitioners ofthe right to litigate a defense to that claim. Pet. App.

3202a-203a.2 The Federal Circuit therefore affirmed ajudgment for the Government on the Government’sdefault termination claim - a claim on which theGovernment is seeking approximately $2.9 billion incontract payments and interest from Petitioners. SeeGeneral Dynamics Pet. at 11.

That decision - which will effectively govern thelitigation of all government contract disputes byvirtue of the Federal Circuit’s appellate jurisdictionover claims brought in the Court of Federal Claimsunder the Tucker Act, 28 U.S.C. § 1491, or ContractDisputes Act, 41 U.S.C. §§ 601-613- warrants thisCourt’s review because it causes great uncertaintyand even a deterrent for businesses that entercontracts with the Government in areas such asnational security, homeland security, nationaldefense, and intelligence. Such contracts often con-tain classified information or relate to a governmentprogram the operations of which are classified inwhole or in part. Under the Federal Circuit’s rule,these businesses can no longer be assured that theirlegal defenses to government contract claims will bejudicially enforced if the Government asserts that theevidence relevant to the litigation of the defenses isprotected by the state secrets privilege.

Review of the decision below to restore certainty tothe contracting process would not call into questionthe propriety of the Government’s invocation of theprivilege or the Government’s ability to shield fromdisclosure such privileged information - in this orany other case. Instead, this case concerns whatlitigation consequences follow from the Government’s

2 Throughout this brief, citations to the Petition Appendix areto the Appendix to the Petition for Writ of Certiorari filed byGeneral Dynamics in No 09-1298.

4invocation of the privilege, and it does so only for theimportant but narrow context of contractual disputesarising between private parties and the Government.For claims brought against the Government orcontractors by third parties - who have no contract-ual relationship with the Government, no defense toa contractual claim that could be eliminated upon theGovernment’s invocation of the privilege, no grant ofauthority to handle classified information, and oftenno interest in safeguarding the nation’s secrets -different litigation consequences are appropriatewhen the Government invokes the state secretsprivilege.

In contrast, the Federal Circuit’s decision woulddisrupt and make less efficient the process thatenables the Government to contract to secure goodsand services that provide for the nation’s security.The Federal Circuit’s decision to allow the Govern-ment to assert the state secrets privilege and then todeprive a contractor of a legal defense to a govern-ment contract claim is an unprecedented andunwarranted extension of the privilege that deprivesgovernment contractors of the assurance that theircontractual rights and defenses will be judiciallyenforced. The resulting uncertainty threatens toharm businesses that enter contracts with theGovernment that relate to classified governmentprograms and to undermine their capacity to provideservices to the Government. The question presentedin the petitions is thus a matter of public importancethat warrants this Court’s review.3

s For similar reasons related to the need for certainty in thegovernment contracting process, and because the issuespresented by the petitions are intertwined, review of the otherissues presented by the petitions is also warranted.

5REASONS FOR GRANTING THE PETITIONS

THE FEDERAL CIRCUIT’S UNPRECEDENTEDAPPLICATION OF THE STATE SECRETSPRIVILEGE UNDERMINES CERTAINTY THATCONTRACTORS CAN ENFORCE CONTRACT-UAL RIGHTS AND ASSERT DEFENSESAGAINST THE GOVERNMENT.

A. The Defense Sector’s Ability To ProvideServices And Defense Goods To The U.S.Government Depends On ContractualCertainty.

The United States, unlike most other mihtarypowers, has chosen to rely upon the innovation andefficiency of the private sector to secure the mostsensitive and sophisticated components of its nationaldefense requirements. Other nations have historic-ally relied instead upon agencies and instrumen-talities of the government itself (as in the case offormer and current Communist governments) or morerecently upon companies substantially owned by thegovernment (as in the case of Continental Europeangovernments). The United States is able to enlist theresources of private companies only by grounding thedefense contracting process in rule of law principles,most importantly by providing certainty that con-tracts entered with the Government can be enforced.

Since the Revolutionary War, when the ContinentalArmy relied on contractors to provide transportationand engineering services as well as clothing, weaponsand labor, the U.S. Government has relied oncontractors to provide goods and services to themilitary. See Moshe Schwartz, CongressionalResearch Service, Defer~se Acquisitior~s: How DODAcquires Weapor~ Systems arid Recer~t Efforts toReform the Process 1-2 (July 10, 2009), available at

6http://www.fas.org/sgp/crs/natsec]RL34026.pdf. Thus,as early as 1775, the Continental Congress establish-ed a procurement system and appointed a quarter-master general and a commissary general to buygoods and services for the Continental Army. Id. at2.

Although the threats facing the nation and theneeds of the military have changed significantly overthe past 235 years, the federal government continuesto depend upon the private sector to provide thegoods and services necessary to protect the nation.The Department of Defense now relies on thousandsof suppliers to provide the weapons, equipment andraw materials to achieve national security objectives,and the defense sector is an important part of thenational economy. See Gen. Accounting Office, DODAssessments of Supplier-Base Availability for FutureDefense Needs; Briefing to the Senate Committee onBanking and Housing, Urban Affairs, Subcommitteeon Security and International Trade and Finance 2(Oct. 27, 2009), available at http://www.gao.gov/new.items/dl0317r.pdf. In 2008, for example, the Depart-ment of Defense purchased over $377.5 billion ingoods and services from the nation’s top 100 defensecontractors. Gov’t Executive, Top 100 Defense Con-tractors (Aug. 15, 2009), available at http://www.govexec.com/story_page.cfm?articleid=43388&printerfriendlyvers=l. And this year, outlays on nationaldefense are estimated to represent almost 20 percentof total federal outlays and almost 5 percent of grossdomestic product. U.S. Dep’t of Commerce, Statis-tical Abstract of the United States: 2010, tbl.491, at326, available at http://www.census.gov.prod/2009pubs/0statab/defense.pdf.

The U.S. defense contracting process is the princi-pal mechanism that enables the U.S. Government to

7secure supplies, including those needed for classifiedprograms, from private corporations in an efficientmanner over often lengthy periods. Since theGovernment first waived sovereign immunity forcontract claims in 1855, the assurance that privatecompanies can enforce their contracts against theU.S. Government has been viewed as "indispensableto the efficient operation of government, for withoutit, qualified private contractors might not undertakegovernment projects .... " Harold J. Krent, Recon-ceptualizing Sovereign Immunity, 45 Vand. L. Rev.1529, 1565 (1992). This applies equally to contractsinvolving the most highly classified weapons systemsand services and to standard supply contracts.Indeed, defense contracts routinely address classifiedmatters because only the private sector has thecapability to develop and produce the most advanced,and thus most classified, technologies in support ofthe national defense.

Measures that erode the enforceability of defensecontracts, as the Federal Circuit’s rule does byproviding the Government with a discretionarymeans of avoiding its contractual commitments,undermine the defense sector’s ability and willing-ness to supply the nation’s security requirements.For this important sector of our economy to functionefficiently, the rules governing the award, adminis-tration, and termination of government contractsneed to be clearly stated and consistently applied. Cf.Ducre v. Executive Officers of Halter Marine, Inc., 752F.2d 976, 994 n.37 (5th Cir. 1985) (noting the"supremely important interests in predictability andcertainty which lie at the heart of contract law").This adherence to basic "rule of law" principlescreates a predictable legal framework that givesbusinesses the confidence to enter into government

8contracts that may extend over several years orcontain many contingencies. If, however, the rulesbecome uncertain or tilt toward the Government, thecost of contracting with the Government increases,and some companies may even be unable to enter intocontracts with the Government. Increased contract-ual uncertainty thus threatens not only to underminethe vitality of the economically significant defensesector, but also to increase the cost and lower therange of goods available to the Government. SeeUnited States v. Winstar Corp., 518 U.S. 839, 913(1996) (plurality opinion) (Breyer, J., concurring) (ifparties are "unwilling to undertake the risk ofgovernment contracting," the Government may beunable "to obtain needed goods and services").

B. The State Secrets Privilege, As AppliedBy The Federal Circuit, HarmfullyUndermines Contractual Certainty.

By adding uncertainty to the adjudication of privatecontractors’ defenses to government contract claims,the decision below threatens to harm the manybusinesses that enter government contracts thatcontain classified information or relate to classifiedprograms, and harm their ability to provide servicesefficiently to the Government. Under the FederalCircuit’s decision, such businesses can no longer beassured that the judiciary will enforce their defensesto government contract claims. Instead, they face thepossibility that, if a contract dispute arises, theGovernment may assert the state secrets privilegewith the effect of preventing the litigation of theircontractual defenses.

By reviewing the Federal Circuit’s application ofthe state secrets privilege in this case, the Courtcould establish a more stable and predictable legalenvironment and one that ultimately is fair. In the

9absence of that review, the importance of the FederalCircuit to shaping the federal contracting processensures that an unusually high degree of uncertaintyis injected into the defense contracting process. Thecontracting process would shift from one grounded inrule of law principles toward a less workable onemore like that governing espionage arrangements,where "contracts" reflect the parties’ aspiration andostensible intent rather than judicially enforceableagreements. See Tenet v. Doe, 544 U.S. 1 (2005),Torten v. United States, 92 U.S. 105 (1876). Ofcourse, the party harmed in this situation is thecontractor that acted in good faith and, as in thesecases, is potentially liable for billions of dollars ofliability without an appropriate opportunity to defendagainst the claim that they breached their contracts.

The source of legal uncertainty is not theGovernment’s ability to invoke the state secretsprivilege, but rather the litigation consequences ofdoing so. Legal certainty can be reestablishedwithout calling into question either the Government’sundisputed right to invoke the state secrets privilegeif there is a "formal claim of privilege, lodged by thehead of the department which has control over thematter," United States v. Reynolds, 345 U.S. 1, 7-8(1953), or the Government’s absolute right towithhold the information subject to the privilege "ifthe court is ultimately satisfied that military secretsare at stake." Id. at 11. Instead, the issue is whetherand in what circumstances the Government can, byinvoking the privilege, secure a profoundly unfairadvantage in a contractual dispute that it would nototherwise have. The Federal Circuit erred in thislimited but crucial respect, and legal certainty wouldbe restored by a determination that the Government’sability to secure that advantage in a contractual

10dispute is considerably narrower than what theFederal Circuit’s new rule provides. Cf. Pet. App.202a-210a.

Narrowing the consequences of the Government’sinvocation of the state secrets privilege in the settingof contract disputes, and particularly in this context,is justified for several reasons. First, theGovernment is using the state secrets privilege tosecure an advantage in the context of a contract ithas already entered. The Federal Circuit’s rulepermits the Government to assert a claim under thecontract while retaining the discretion to invoke theprivilege to avoid a defense to the claim. This resultis horribly one-sided and has the detrimental effectsoutlined above. See supra pp. 7-8. Second, theGovernment is invoking the privilege in a contextwhere the private parties to the contract have theability and incentive to safeguard classified iafor-mation. Defense contractors on a daily basis handlemany of the nation’s most sensitive secrets and mustagree not to disclose such information. See Info.Security Oversight Office, Classified InformationNondisclosure Agreement Briefing Booklet (discussingthe nondisclosure agreement that must be signed byemployees of government contractors and conse-quences related to breach), available at http://www.archive s. gov/isoo/training/standard- form- 312. html("Briefing Booklet"). Indeed, the contract at issue inthis case directly addressed classified informationthat was presumably very closely related to theclassified information subject to the state secretsdoctrine. See Pet. App. 245 (state secrets doctrineapplying to information the Court of Federal Claimsfound to be necessary to litigate Petitioners’ "superior

11knowledge" defense).4 Sanctions associated withcontractors’ disclosure of classified information aresevere. See Briefing Booklet, supra, at Question 20(the Government "may move to terminate thecontract or to seek monetary damages from thecontractor, based on the terms of the contract" andmay also criminally prosecute individuals or organ-izations). Finally, as discussed below, permitting theGovernment to invoke the privilege to assist it purelyin litigating a contractual claim it asserts against aprivate party is contrary to established equitableprinciples and judicial processes. See infra pp. 13-16.

Review in this case would thus not call intoquestion the broader effects on litigation appropri-ately produced when the Government invokes thestate secrets privilege in cases brought by thirdparties against the Government or its contractors.See, e.g., Mohamed v. Jeppesen Dataplan, Inc., 579F.3d 943 (9th Cir.), reh’g en banc granted, 586 F.3d1108 (9th Cir. 2009); El-Masri v. United States, 479F.3d 296 (4th Cir. 2007); Al-Haramain IslamicFound., Inc. v. Bush, 507 F.3d 1190 (9th Cir. 2007);Hepting v. AT&T Corp., 439 F. Supp. 2d 974 (N.D.Cal. 2006).5 There, the plaintiffs have no contract

4 The Chamber does not dispute the Government’s assertionthat the stealth aircraft technology at issue in this case isprotected by the privilege, and its knowledge of the facts of thiscase is limited to those set forth in the lower court opinionsreprinted in the Petition Appendices, which of course are publicmaterials.

5 The Chamber filed an arnicus brief in support of theGovernment’s assertion that the state secrets privilege requireddismissal of a third party’s claim against a company alleged tohave contracted with the Government regarding mattersrelating to national security. See Brief of Arnicus CuriaeChamber of Commerce of the United States of America inSupport of Appellants and Urging Reversal in Hepting v. AT&T

12with the Government, have not been selected by theGovernment for their ability to handle classifiedinformation, and by definition bring claims againstthe Government - often in the form of advocacylitigation designed to increase the disclosure andscrutiny of sensitive national security information.

C. The Government’s Ability To Use TheState Secrets Privilege To Further ItsClaims Against Defense ContractorsEspecially Undermines ContractualCertainty.

Certainty surrounding defense suppliers’ contractsand particularly the remedies available when adispute arises between the parties is especiallyundermined if the Government can use the statesecrets privilege not only to withhold information, butalso to deprive a private contracting party of adefense against the Government’s own contractualclaim. The Federal Circuit’s rule operates in just thismanner. In this case, the Government is acting asthe "moving party" on the default termination claim.United States v. Reynolds, 345 U.S. at 12 (state secretinvocation providing litigation benefit to the Govern-ment upheld because the Government is not the"moving party"). The Government bore the burden ofproving that Petitioners were in default of theircontractual obligations (Pet. App. 196a-197a), and itsought the repayment of billions of dollars fromPetitioners after it prevailed on this claim in thecourts below. General Dynamics Pet. at 11. As aresult of the Government’s assertion of the statesecrets privilege, as applied by the Federal Circuit,

Corp., 539 F.3d 1157 (9th Cir. 2008). The Chamber’s submissionin this case is completely consistent with its position in Hepting.

13Petitioners were stripped of their defense to thisclaim.

In criminal and civil contexts, a governmentgenerally cannot both assert a privilege and, as aresult, secure a litigation advantage for its own claim.For example, a government cannot pursue a claimand assert foreign sovereign immunity as a defense tocounterclaims. See 28 U.S.C. § 1607; Cabiri v. Gov’tof Ghana, 165 F.3d 193 (2d Cir. 1999). Nor can astate government pursue a claim and advance thatclaim, or deflect counterclaims, by invoking statesovereign immunity recognized by the EleventhAmendment. See, e.g., Lapides v. Bd. of Regents, 535U.S. 613, 619 (2002) (State waives EleventhAmendment immunity by removing case to federalcourt; allowing States "to follow their litigationinterests by freely asserting both [a claim andimmunity] in the same case could generate seriouslyunfair results"); Gardner v. New Jersey, 329 U.S. 565,574 (1947) (when State files a bankruptcy claim, "itwaives any immunity which it otherwise might havehad respecting the adjudication of the claim").

This principle should extend equally to the Govern-ment’s privileges related to classified information andthe nation’s security. For example, the ClassifiedInformation Procedures Act ("CIPA") is designed toprovide a measure of protection to the Government’suse of classified information in the course ofprosecutions. See 18 U.S.C. app. 3 §§ 1-16. TheGovernment may not, however, use CIPA’s provisionsto secure a material litigation advantage; theGovernment is required instead to abandon the claimrelevant to the information the Government choosesnot to disclose. See id. § 6(e)(2) (dismissal of claim orcount, or finding against Government); see also id.§ 12(b). In addition, outside the context of CIPA, the

14Government must choose between pursuing aprosecution and invoking executive privilege toprotect classified information or other governmentsecrets material to a defense against the Govern-ment’s case. See United States v. Smith, 780 F.2d1102, 1107-08 (4th Cir. 1985) (en banc); see alsoRoviaro v. United States, 353 U.S. 53, 60 (1957).

The Federal Circuit’s decision to allow theGovernment to proceed on this default terminationclaim while simultaneously invoking the state secretsprivilege to deprive Petitioners of a defense to theclaim is, moreover, more broadly inconsistent withthe courts’ general refusal to allow any litigants touse a privilege as both a sword and a shield. See,e.g., United States v. Rylander, 460 U.S. 752, 761(1983) (Fifth Amendment privilege against self-incrimination); Bittaker v. Woodford, 331 F.3d 715(9th Cir. 2003) (attorney-client privilege); Wehling v.CBS, 608 F.2d 1084, 1087 (5th Cir. 1980) (FifthAmendment privilege against self-incrimination).These decisions are based on the recognition that it isfundamentally unfair to permit a litigant to proceedwith a claim while declining to provide the otherparty with the information needed to prepare adefense to the claim. See, e.g., Wehling, 608 F.2d at1087; cf. Lindsey v. Normet, 405 U.S. 56, 66 (1972)("Due process requires that there be an opportunityto present every available defense") (internalquotation marks omitted).

This Court’s leading state secret doctrine decisionsimilarly indicates that there are limits on theGovernment’s ability to assert the state secretsprivilege and secure a litigation benefit for its ownclaim, although the Court had no occasion to addressthe issue directly or to define the full implications ofthe invocation of the doctrine for the Government’s

15own claim. United States v. Reynolds, 345 U.S. 1,involved a tort suit brought against the United Statesby three widows whose husbands were killed whenan Air Force plane crashed during a flight to testsecret electronic equipment. Id. at 3. This Courtupheld the invocation of the privilege even though itdeprived plaintiffs of evidence they sought in pursuitof their claims. The Court distinguished criminalcases where the Government "can invoke itsevidentiary privileges only at the price of letting thedefendant go free," id. at 12, on the basis that thecase arose "in a civil forum where the Government isnot the moving party, but is a defendant only onterms to which it has consented." Id.

This case thus also provides the opportunity for thisCourt to elaborate the point it raised in Reynolds, andto resolve the important question whether, when theGovernment seeks to pursue a claim in a civil actionafter asserting the state secrets privilege, the courtmust also apply the privilege to deprive the otherparty of a defense to that claim. What makes theGovernment’s claim particularly unfair is that theGovernment does not lose the ability to terminate acontract if state secrets are implicated in the parties’dispute and the standard means of protectingclassified information short of invocation of the statesecrets privilege are insufficient. Instead, theGovernment is limited to the remedies of atermination for convenience, which are substantial,but not one-sided. See, e.g., Krent, supra, at 1565-66(when the Government terminates a contract forconvenience, it may "escape the full consequences of abreach" because the contractor may not obtainspecific performance and its recovery is generallylimited to costs incurred, profit on work done, and thecost of preparing the termination settlement pro-

16posal). Thus, the interests of the Government can befully protected without having to impose undueburdens on contractors and thereby create disin-centives for future potential contractors to undertaketo promote the Government’s most sensitive andimportant national security and defense assignments.

In light of the far-reaching and unfair effects of theFederal Circuit’s decision below, the questionwhether the Government may use the state secretsdoctrine not only as a shield to prevent the disclosureof privileged information, but also as a sword tostrike a contractor’s defense to the Government’s owncontract claim, presents an important question thatmerits this Court’s review.

CONCLUSIONFor the foregoing reasons, the petitions for a writ of

certiorari should be granted.

Respectfully Submitted,

ROBIN S. CONRADAMAR D. SARWALNATIONAL CHAMBERLITIGATION CENTER, INC.

1615 H Street, N.W.Washington, DC 20062(202) 463-5337

May 27,2010

CARTER G. PHILLIPS*RICHARD KLINGLERKATHLEEN M. MUELLERSIDLEY AUSTIN LLP1501 K Street, N.W.Washington, D.C. 20005(202) 736-8000cphillips@sidley.com

Counsel for Amicus Curiae* Counsel of Record