Supreme Court Takes Cases on Corporate Rights

New York Times

WASHINGTON — Continuing to explore the limits of corporations’ constitutional rights, the Supreme Court on Tuesday added cases to its docket that will test the scope of companies’ rights to due process and privacy.

The new cases follow the court’s decision in January in Citizens United v. Federal Election Commission, which ruled that corporations and unions have a First Amendment right to spend money in candidate elections.

In two of the cases, the justices will consider how the state secrets privilege, which can allow the government to shut down litigation by invoking national security, applies in a contract dispute between the Navy and military contractors hired to create a stealth aircraft.

In the third case, the justices agreed to decide whether corporations have privacy rights for the purposes of the Freedom of Information Act.

The cases were among 14 the court added to its docket.

The court’s newest member, Justice Elena Kagan, disqualified herself from four of the new cases, including the one concerning corporate privacy, because she participated in them as United States solicitor general before joining the court in August. She has also recused herself from about half of the roughly 40 cases that had already been on the court’s docket for the new term, which starts Monday, and so will be absent from the bench much of the time in the coming months.

The state secrets case arises in a surprising context. The court has turned back appeals from people who say they were sent abroad to be tortured but whose lawsuits were dismissed after the government invoked the privilege.

This month, a sharply divided 11-member panel of the United States Court of Appeals for the Ninth Circuit, in San Francisco, dismissed a lawsuit against Jeppesen Dataplan, a Boeing subsidiary accused of arranging flights for the Central Intelligence Agency to transfer prisoners to other countries for imprisonment and interrogation, on state secrets grounds.

Boeing, as successor to the McDonnell Douglas Corporation, is one of the parties to the state secrets cases the court agreed to hear on Tuesday, Boeing Company v. United States, No. 09-1302, but now it objects to the government’s invocation of the privilege. Its case has been consolidated with the second one, General Dynamics Corp. v. United States, No. 09-1298.

Both arose from a 1988 contract to develop the A-12 Avenger aircraft. Dissatisfied with the contractors’ progress, the Navy terminated the contract three years later and demanded the return of $1.35 billion.

The contractors refused to return the money and sued, saying among other things that their work had been frustrated by the government’s failure to share classified technology. The government disputed that assertion but would not explain why, invoking the state secrets privilege. An appeals court repeatedly ruled against the contractors, saying at one point that the Constitution’s due-process clause does not require that they be able to present “a defense that would threaten national security.”

The leading Supreme Court case on state secrets, from 1953, also concerned an aircraft. In that case, United States v. Reynolds, the widows of men who died when a B-29 bomber crashed in Waycross, Ga., during a secret mission, sued the government for negligence.

The Supreme Court ruled against the widows on state secrets grounds. But the court said things might be different if the government were pressing a claim rather than defending against one.

It would be unconscionable to allow the government to pursue a criminal prosecution, Chief Justice Fred M. Vinson wrote for the majority, “and then invoke its governmental privileges to deprive the accused of anything which might be material to his defense.”

“Such rationale,” Chief Justice Vinson went on, “has no application in a civil forum where the government is not the moving party.”

The new cases are civil rather than criminal, and the parties disagree about which of them is the plaintiff and which the defendant. With interest, the government now seeks about $3 billion.

The privacy case, Federal Communications Commission v. AT&T Inc., No. 09-1279, will consider whether a provision of the Freedom of Information Act concerning “personal privacy” applies to corporations.

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