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Saturday, May 28, 2011

'Supreme Court declines to settle 20-year battle over canceled A-12'

dont these companies get enough taxpayer money?...........from star-telegram.....

"The Supreme Court refused Monday to take sides in a long-running billion-dollar dispute between two defense contractors and the government over the canceled contract for the A-12, which triggered mass layoffs in Fort Worth 20 years ago.

The high court unanimously threw out court decisions that would have helped both the federal government and Boeing Co. and General Dynamics, the companies that were supposed to build 850 A-12 Avenger attack planes for the military.

"Neither side will be entirely happy with the resolution," said Justice Antonin Scalia, who wrote the opinion for the court.

The A-12 was canceled by then-Defense Secretary Dick Cheney in 1991 based on claims that the companies failed to meet the terms of the contract. General Dynamics and McDonnell Douglas had signed a contract to build eight planes for the Navy in 1988 at a target price of $4.4 billion. By 1991, the A-12 was more than 18 months behind schedule and at least $1 billion over budget.

About 3,400 workers at the General Dynamics plant in west Fort Worth, now operated by Lockheed Martin, lost their jobs, as well as 4,000 McDonnell Douglas workers in St. Louis. Chicago-based Boeing acquired McDonnell Douglas in 1997 and inherited the litigation.

For 20 years, the government has demanded repayment and the companies have resisted, suing in federal court to block the Pentagon from collecting. But the government asked for the lawsuit to be thrown out because classified data were being leaked during the discovery process.

The Supreme Court was asked to settle the issue of whether the government's refusal to turn over classified information, thus preventing the companies from defending themselves, should bar the government from recovering the money.

The court agreed that the litigation could not go forward if state secrets were going to be spilled, but also that the government could not use a defense that included classified information. The high court sent the case back to the lower courts.

This article includes material from Star-Telegram archives"...........LINK

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