Hercules Incorporated v. United States
United States Supreme Court
516 U.S. 417 (1996)
Hercules Incorporated (plaintiff) entered into a fixed-price contract with the federal government (defendant) to produce Agent Orange, a phenoxy herbicide, for use in military operations in Southeast Asia during the Vietnam War. Hercules produced and stored Agent Orange in accordance with detailed specifications provided by the government. It was undisputed that Hercules fully complied with all government specifications. Hercules’s contract ended in 1968. In the late 1970s, Hercules, along with the other contractors that produced Agent Orange, was sued in a class-action tort lawsuit brought by Vietnam War veterans and their families for damages related to health problems caused by Agent Orange. Hercules, along with the other contractors, settled the class action in 1984. Hercules’s share of the settlement was over $18.7 million. Hercules sued the government in the United States Court of Claims seeking reimbursement under the government’s warranty of specifications for both the $18.7 million Hercules paid to the settlement fund and the $9 million in legal fees Hercules incurred defending and settling the class action. The government moved for summary judgment, which the Court of Claims granted. Hercules appealed to the Federal Circuit, which affirmed. The United States Supreme Court granted certiorari.
Rule of Law
Holding and Reasoning (Rehnquist, C.J.)
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