IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

No. 91-2432

LAWRENCE M. BAREFORD, Individually, ET AL., Plaintiffs-Appellants,

versus

GENERAL DYNAMICS CORPORATION, ET AL., Defendants-Appellees,

and

UNITED STATES OF AMERICA, Intervenor-Appellee.

Appeal from the United States District Court for the Southern District of Texas

( September 16, 1992 )

Before HIGGINBOTHAM and DUHÉ, Circuit Judges and HUNTER,* District Judge.

HIGGINBOTHAM, Circuit Judge:

We must grapple with the federal government's invocation of

the state secret doctrine to a manufacturing and design defect suit

against the manufacturer of a military weapons system. We are

persuaded that plaintiffs would be unable to prove their case

without classified information and that the very subject matter of

* Senior District Judge of the Western District of Louisiana, sitting by designation. the trial is a state secret. We affirm the district court's

dismissal.

I.

In 1987, during the Iraqi-Iranian War, an Iraqi F-1 Mirage

fighter fired two Exocet missiles at the U.S.S. Stark, an Oliver

Hazard Perry class frigate stationed in the Persian Gulf. The

attack killed 37 crewmen on the Stark, including 23 of the

plaintiffs' decedents in this case.

The Navy's official investigation concluded that there were

four principle causes of the missiles' successful penetration of

the Stark's defenses: (1) the failure of the Stark's commander to

recognize the threat posed by the F-1 Mirage fighter; (2) improper

watch manning and standing; (3) lack of proper weapon readiness;

and (4) failure of the Stark's commander to use radar to warn the

fighter to desist its attack. The United States has espoused the

sailors' and their families' claims for death and has received over

$27 million from Iraq to compensate families for deaths of sailors

which has been distributed to the families of the deceased crewmen.

Bareford and other plaintiffs filed this action against

several defense contractors including General Dynamics asserting

that the Phalanx weapons system was defectively manufactured and

designed, that General Dynamics and other contractors fraudulently

and deceptively concealed these defects, and that the sailors'

deaths or injuries were proximately caused by these defects.

The government intervened and filed a 12(b)(6) motion to

dismiss the complaint, on the grounds that (1) the plaintiffs'

2 claims had been espoused by the U.S. government; (2) the case

presented a non-justiciable political question; and (3) the subject

of the lawsuit was a "state secret" that was privileged under the

state secret doctrine. The contractors filed a similar motion.

In response to these motions, the plaintiffs filed voluminous

pleadings and exhibits, including 2,500 pages of affidavits and

other documents. A hearing was scheduled on February 14, 1991.

One day before the hearing, the government informed the plaintiffs'

counsel that it intended to make an in camera production of

additional documents. On the same day, government attorneys

conducted in camera production before the district court judge.

The documents included an affidavit by an admiral and the

unabridged version of the Navy Department's official investigation

of the Stark incident.

The district court granted the government's motion to dismiss.

The district court found that the plaintiffs' action was barred

under the state secret privilege, because the trial of the case

would require disclosure of classified information sensitive to

national security.

II.

The privilege for state secrets allows the government to

withhold information from discovery when disclosure would be

inimical to national security. Zuckerbraun v. General Dynamics

Corp.,

(2d Cir. 1991); United States v. Reynolds,

(1953). The privilege may be invoked by the head of a

governmental department with responsibility over the matter in

3 question, and the head of the department must give personal

consideration to the matter in question. United States v.

Reynolds,

(1953). A government department may

intervene in litigation to which it is not a party and assert the

privilege, thereby preventing either party in the litigation from

obtaining sensitive government information in discovery.

The effect of the privilege is generally to exclude the

privileged evidence from the case. Ellsberg v. Mitchell,

(D.C. Cir. 1983), cert. denied,

(1984). The

plaintiff's case then goes forward without the privileged

information and would be dismissed only if the remaining

information were insufficient to make out a prima facie case.

Halkin v. Helms,

(D.C. Cir. 1982). Some

courts, however, have held that the privilege can lead to the

dismissal of the plaintiffs' case in two other circumstances.

First, if the privilege deprives the defendant of information that

would otherwise give the defendant a valid defense to the claim,

then the court may grant summary judgment to the defendant. In Re

United States,

(D.C. Cir.), cert. denied sub nom.

United States v. Albertson,

(1989); Molerio v. Federal

Bureau of Investigation,

(D.C. Cir. 1984).

Second, some courts have held that the court should dismiss if the

"very subject matter of the plaintiff's action is a state secret,"

even if the plaintiff has produced non-privileged evidence

sufficient to make out a prima facie case. Farnsworth Cannon, Inc.

v. Grimes,

(4th Cir. 1980) (en banc). The reason

4 for dismissal in these circumstances is that witnesses with

knowledge of secret information may divulge that information during

trial because the plaintiffs "would have every incentive to probe

as close to the core secrets as the trial judge would permit. Such

probing in open court would inevitably be revealing." Farnsworth

Cannon,

; cf. Bowles v. United States,

(4th Cir. 1991) ("If the case cannot be tried without

compromising sensitive foreign policy secrets, the case must be

dismissed.").

A.

We turn first to the plaintiffs' ability to prove their case

without revealing state secrets. Although originally styled as a

motion to dismiss for failure to state a claim, we will treat the

defendants' motion as a motion for summary judgment because both

parties have produced and rely upon evidence outside the pleadings.

Plaintiffs contend that they can survive summary judgment pointing

to 2,500 pages of affidavits and documents, all assertedly in the

public domain. These documents include an affidavit of the former

captain of the U.S.S. Stark, two affidavits from former employees

of General Dynamics, and information contained in Congressional

reports and other published sources. The Secretary of the Navy

asserts no privilege for this evidence.1

There is a preliminary question of whether the government has

validly invoked the state secret doctrine. Bareford asserts that

1 The government maintains that security considerations prevent the Navy Department from either confirming or denying whether the offered evidence is classified information.

5 Secretary of the Navy H. Lawrence Garrett did not personally review

the plaintiffs' documents as required by Reynolds,

.

We disagree. The government does not target documents produced by

the plaintiffs, but objects to the claim which by necessity would

rely upon highly sensitive information. Secretary Garrett states

in his affidavit that he personally considered the type of evidence

necessary to this claim.2 The Secretary's review was sufficient.

Plaintiffs have succeeded in producing considerable evidence,

and present a closer issue than Zuckerbraun v. General Dynamics

Corp.,

(2d Cir. 1991). In Zuckerbraun, the claims

were almost identical to the claims in this case to recover for the

death of a sailor in the Stark incident. The defendants responded

with an affidavit from the Navy Secretary identical to the

affidavit in this case, stating that the design and operation of

the Phalanx weapons system were highly classified and sensitive

matters and that disclosure of such information in litigation would

be "inimical to national security."

The Second Circuit affirmed the dismissal of Zuckerbraun's

claim. Judge Winter, writing for the panel, noted that the

plaintiffs' claims of manufacturing and design defects at a minimum

required proof of what the Phalanx weapons system is supposed to

do, whether it was used when the Stark was hit, and, if it was,

whether the failure of the system to work was the result of the

manufacturers' negligence. The panel noted that "[t]hese questions

2 A copy of Secretary Garrett's affidavit was published as an appendix to the opinion in Zuckerbraun v. General Dynamics Corp.,

(2d Cir. 1991).

6 cannot be resolved or even put into dispute without access to data

regarding the design, manufacture, performance, functional

characteristics, and testing of these systems and the rules of

engagement under which the Stark was operating." Zuckerbraun,

. Because this data was subject to the privilege, the

panel concluded that "there is no evidence available to the

appellant to establish a prima facie case." Zuckerbraun,

.

Plaintiffs distinguish Zuckerbraun on the basis that

Zuckerbraun apparently did not offer any non-privileged information

on which to build a case. As noted in Zuckerbraun, "appellant has

not designated any sources of reliable evidence on the factual

issues going to liability". Zuckerbraun,

. By

contrast, the plaintiffs point to their 2,500 pages of evidence--

eleven Congressional reports, letters, media articles, and eight

declarations--that they contend establishes a prima facie case of

liability.

Bareford has come forward with substantial evidence from which

a judge or jury might find problems, or even wrongdoing, by General

Dynamics in its production and testing of the Phalanx system. That

alone will not establish a prima facie case. Its claim of

manufacturing and design defects requires proof of what the Phalanx

system was intended to do and the ways in which it fails to

accomplish these goals. This question cannot be resolved without

access to detailed data regarding "the design, manufacture,

performance, functional characteristics, and testing of these

7 systems." Zuckerbraun,

. Such an analysis of the

capabilities of an advanced Navy frigate's defensive systems is the

type of judicial disclosure of state secrets the doctrine blocks.

Bareford has come forward with evidence of the intended

operation of the Phalanx system, but it is fairly described as

evidence of the system's general performance limits, not the

necessary detailed analysis of the system's intended performance in

the situation in which the Stark incident occurred. This is

certainly more than "dockside rumor," Zuckerbraun,

,

but would nonetheless not prove that the Phalanx system was

intended to destroy the Iraqi missile in these circumstances, much

less to prove why it failed to do so. Plaintiffs have failed to

demonstrate that this evidence is available to them as unclassified

information. Accordingly, we conclude that dismissal was

appropriate.

B.

Defendants also urge that dismissal was appropriate because

the state secret privilege would deprive them of a valid defense.

The contractors contend that "privileged state secrets are

essential to the defense to plaintiffs' claim," because "resort to

classified information would be necessary even to cross-examine

plaintiffs' witnesses on the most basic points of their testimony."

Most courts that have discussed the state secret privilege

have adopted the position that, if privileged information would

establish a valid defense, then the court ought to dismiss the

plaintiffs' case. Zuckerbraun,

; In re United

8 States,

; Molerio v. F.B.I.,

(D.C.

Cir. 1984); Ellsberg v. Mitchell,

(D.C. Cir. 1983).

This circuit has not yet ruled on the effect of the state secret

privilege on the availability of defenses and we decline to do so

here where it is unnecessary to resolve the case before us.

C.

Even if we found that Bareford had made out a prima facie case

with unprivileged information, we conclude that the state secret

doctrine would nonetheless bar the plaintiffs' action because any

further attempt by the plaintiffs to establish a prima facie case

would threaten disclosure of important state secrets. Farnsworth

Cannon,

; see also Bowles v. United States,

(4th Cir. 1991) (holding case must be dismissed "where no

amount of effort or care will safeguard the privileged

information"). The state secret doctrine justifies dismissal when

privileged material is central "to the very question upon which a

decision must be rendered." Fitzgerald v. Penthouse International,

Ltd.,

(4th Cir. 1985).

In Fitzgerald, for instance, the court affirmed the district

court's dismissal, even though the plaintiff intended to produce

only non-privileged information to support his case. Fitzgerald

was a former Navy contractor who had conducted experiments with

dolphins in order to design torpedoes. Penthouse magazine

published a story that, in part, alleged that Fitzgerald had

distributed brochures describing the experiments to countries

outside the United States and that these brochures contained

9 classified information. The plaintiff brought a libel action

against Penthouse, contending that the information in the brochures

was not classified.

To prove falsity, the plaintiff intended to call an official

from the Pentagon's Branch of Security Policy to testify that the

information was not classified. The Navy, however, intervened to

invoke the state secret privilege, stating that, although the

official's testimony would ostensibly be about non-classified

information, there was a considerable danger that classified

information would leak during cross-examination. The district

court dismissed the plaintiff's action, finding that "the very

subject of this litigation is a state secret."

.

The Fitzgerald court referred at length to the Secretary of

the Navy's affidavit in which the Secretary stated that, while some

uses of the marine mammal program were not classified, others were

highly classified. By calling experts to testify about non-

classified uses, the court saw a danger that "state secrets could

be compromised even without direct disclosure by a witness."

Fitzgerald,

. For instance,

if a witness is questions about facts A and B, the witness testifies that fact A is not a military secret, and the government objects to any answer regarding fact B, by implication one might assume that fact B is a military secret.

at 1243 n.10.

In Farnsworth Cannon, the plaintiffs alleged that a Navy

Department employee, Grimes, had tortiously interfered with the

plaintiffs' contractual relations with the Navy Department by

10 cancelling the plaintiffs' contracts with the Department. The

plaintiffs did not request discovery from the government and the

subject of the litigation--the defendant's motivations in

cancelling some Navy contracts--seemed remote from the content of

the state secrets contained in the contracts themselves.

Nevertheless, the en banc court vacated the original panel opinion

and held that the case presented too great a risk of disclosure of

state secrets to go to trial.

Fitzgerald and Farnsworth Cannon recognize the practical

reality that in the course of litigation, classified and

unclassified information cannot always be separated. In some

cases, it is appropriate that the courts restrict the parties'

access not only to evidence which itself risks the disclosure of a

state secret, but also those pieces of evidence or areas of

questioning which press so closely upon highly sensitive material

that they create a high risk of inadvertent or indirect

disclosures. There is little question that the design and

limitations of the Phalanx weapons system are matters "which

reasonably could be seen as a threat to the military interests . .

. of the nation." Halkin v. Helms,

(D.C. Cir.

1982). As Judge Winters noted in Zuckerbraun, "the disclosure of

secret data and tactics concerning the weapons systems of the most

technically advanced and heavily relied upon of our nation's

warships may reasonably be viewed as inimical to national

security."

.

11 Plaintiffs would present the testimony of former Navy Captain

Brindel, commanding officer on the Stark, and of former General

Dynamics employees. These witnesses have each had access to highly

sensitive data. They would be questioned about their knowledge of

the Phalanx's operation and defects. Perhaps some of this evidence

is unclassified, as plaintiffs contend, or is contained in

Congressional reports and other public sources. But the danger

that witnesses might divulge some privileged material during cross-

examination is great because the privileged and non-privileged

material are inextricably linked. We are compelled to conclude

that the trial of this case would inevitably lead to a significant

risk that highly sensitive information concerning this defense

system would be disclosed.

The government maintains that, even if the data is available

from non-secret sources, acknowledgement of this information by

government officers would still be damaging to the government,

because the acknowledgement would lend credibility to the

unofficial data. Fitzgibbon v. Central Intelligence Agency,

(D.C. Cir. 1990); Alfred A. Knopf, Inc. v. Colby,

, 1370 (4th Cir.), cert. denied,

(1975);

and Afshar v. Department of State,

(D.C. Cir.

1983). These cases stand for the proposition that disclosure of

information by government officials can be prejudicial to

government interests, even if the information has already been

divulged from non-government sources. Afshar,

("Official acknowledgement by an authoritative source might well be

12 new information that could cause damage to national security").

This contention has a troubling sweep, but we do not rest upon it,

because we need not.

Plaintiffs argue that dismissal of their case was an overly

harsh remedy for the potential security risk posed by the trial of

this case. Dismissal is a harsh sanction. But the results are

harsh in either direction and the state secret doctrine finds the

greater public good--ultimately the less harsh remedy--to be

dismissal. Where "assertion of the privilege precludes access to

evidence necessary for the plaintiff to state a prima facie claim,

dismissal is appropriate." Zuckerbraun,

. No

intermediate solution such as those proposed by plaintiffs, as ably

and creatively as their counsel has put it, can fully protect the

United States' interest in keeping its state secrets undisclosed.

III.

The district court dismissed the claims on the alternative

ground that they presented a non-justiciable political question

outside the competence of the federal courts. We affirm on other

grounds. We do not address this argument and express no opinion

about its applicability.

IV.

Bareford raises two due process objections to the procedures

of the district court. First, they argue that the district court

should have provided a transcript of the proceedings that occurred

during the ex parte, in camera proceeding. Second, the plaintiffs

13 argue that the district court should have given the plaintiffs more

notice of the ex parte, in camera hearing.

Bareford's counsel was notified of the government's intent to

produce more documents to the district court in camera on the same

day that the court began its in camera review of these documents.

Bareford contends that this does not constitute adequate notice for

the plaintiffs to make a timely objection to the in camera

proceeding. The government contends that this notice was

sufficient to allow the plaintiffs' counsel to raise objections to

the in camera proceeding on the following day, when the district

court conducted the hearing on the defendants' motion to dismiss.

The government should have provided notice to allow the plaintiffs

to object to the in camera proceeding before it occurred. United

States v. Hall,

(7th Cir. 1988) (party should

have notice of request for in camera review adequate to allow party

to respond to request). This error does not require reversal,

however, because Bareford's claim is dismissed without relying upon

the materials produced by the government in camera. Any error was

therefore harmless.

The district court did not provide a transcript of the in

camera proceeding. This court cannot review a proceeding of which

no record was made. United States v. Southard,

(1st Cir.), cert. denied sub nom. Ferris v. United States,

(1983) (district court should make transcript of in camera

proceeding). For the reasons indicated above, however, any error

in the in camera hearing was harmless.

14 V.

Plaintiffs challenge on First Amendment grounds the district

court order to the parties not to communicate any information about

the litigation to anyone except essential legal staff. This

question is moot.

AFFIRMED.

15