Hercules, Inc. v. United States, 516 U.S. 417 (1996)

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OCTOBER TERM, 1995

Syllabus

HERCULES, INC. et al. v. UNITED STATES

certiorari to the united states court of appeals for the federal circuit

No. 94-818. Argued October 30, 1995—Decided March 4, 1996

Petitioner chemical manufacturers produced the defoliant Agent Orange under contracts with the Federal Government during the Vietnam era. After they incurred substantial costs defending, and then settling, tort claims by veterans alleging physical injury from the use of Agent Orange, petitioners filed suits under the Tucker Act to recover such costs from the Government on alternative theories of contractual indemnification and warranty of specifications provided by the Government. The Claims Court granted summary judgment against them and dismissed the complaints. The Court of Appeals consolidated the cases and affirmed.

Held: Petitioners may not recover on their warranty-of-specifications and contractual-indemnification claims. Pp. 422-430. (a) The Tucker Act's grant of jurisdiction to the Claims Court to hear and determine claims against the Government that are founded upon any "express or implied" contract with the United States, 28 U. S. C. § 1491(a), extends only to contracts either express or implied in fact, not to claims on contracts implied in law, see, e. g., Sutton v. United States, 256 U. S. 575, 581. Because the contracts at issue do not contain express warranty or indemnification provisions, petitioners must establish that, based on the circumstances at the time of contracting, there was an implied agreement between the parties to provide the undertakings that petitioners allege. Pp. 422-424. (b) Neither an implied contractual warranty of specifications nor United States v. Spearin, 248 U. S. 132, the seminal case recognizing a cause of action for breach of such a warranty, extends so far as to render the United States responsible for costs incurred in defending and settling the veterans' tort claims. Where, as here, the Government provides specifications directing how a contract is to be performed, it is logical to infer that the Government warrants that the contractor will be able to perform the contract satisfactorily if it follows the specifications. However, this inference does not support a further inference that would extend the warranty beyond performance to third-party claims against the contractor. Thus, the Spearin claims made by petitioners do not extend to postperformance third-party costs as a matter of law. Pp. 424-425.

417

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