The Navy was justified in 1991 when it opted to terminate the $4 billion contract with McDonnell Douglas and General Dynamics to build a stealth aircraft, the court said.

Chicago-based Boeing, which acquired McDonnell Douglas in 1997, said it will appeal the ruling.

The aircraft project was ended for being substantially over budget and behind schedule, according to the Justice Department. Both contractors were under a fixed-price contract to develop the A-12, a carrier-based attack aircraft.

But because of serious technical difficulties, the Pentagon refused to approve additional funding, leading the Navy to cancel the program.

In a 29-page opinion, the court explained the contractor's performance history showed that "the government was justifiably insecure about the contract's timely completion."

Both contractors are now required to repay the government more than $1.35 billion, plus interest of $1.45 billion.

Boeing had questioned whether the government owed money to both companies for work in progress when the contract was terminated.

In a statement, Boeing called for an immediate appeal of the court's ruling. Falls Church, Va.-based General Dynamics issued a statement saying it disagrees with the ruling and continues to believe that the government's default termination was not justified. The company intends to seek a re-hearing in the Federal Circuit.

"We have the whole package here," said Sen. Harry Reid, seated beside Sotomayor before the two met in his Capitol office. He called her life story "compelling."

"America identifies with the underdog, and you've been an underdog many times in your life, but always the top dog," Reid, D-Nev., said of Sotomayor, the New York-born daughter of Puerto Rican parents who would be the first Hispanic and the third woman on the high court.

Citing her Princeton and Yale education and long experience as a lawyer and judge, Reid said: "We could not have anyone better qualified."

The visit was the start of a daylong schedule of meet-and-greets with Republicans and Democrats designed to let senators get to know President Barack Obama's nominee before they debate confirming her.

Sotomayor was also meeting with the top Republican, Sen. Mitch McConnell of Kentucky, and leaders of the Judiciary Committee, Chairman Patrick J. Leahy, D-Vt., and senior GOP Sen. Jeff Sessions of Alabama.

Republican senators have already begun to question remarks Sotomayor has made in the past about how her life experiences influence her judicial decisions. In turn, Democrats have defended her as a fair and unbiased judge, and all sides say they are eager to talk to her privately and question her in public hearings to come.

Barely a minute into oral arguments, justices challenged Coleman's attorneys on the adequacy of evidence they presented in an election trial and the legality of their suggested remedy: that more ballots be counted even if some absentee voters didn't fully comply with the law.

"It's possible there are statutory violations which do not rise to the level of constitutional violation," Justice Alan Page said, alluding to a threshold appeals courts often turn to before reversing a lower-court decision.

The state Supreme Court justices can confirm Franken as the victor or reopen the count as Coleman wants.

Franken hopes the court orders that he immediately receive the election certificate required to take office. Franken is the potential 60th vote for Democrats in the Senate, though two of those are independents.

The court's involvement is the latest but maybe not the final stop. If Coleman loses, he could file a new case in federal court or petition for review by the U.S. Supreme Court, which isn't certain to take the case. If Franken doesn't like the result, he could ask the Senate itself to weigh in.

The state Supreme Court's decision to uphold California's constitutional ban on gay marriage — and the prospect that an impassioned initiative to overturn it could share the ballot with next year's governor's race — holds consequences for candidates from both parties, but especially for the one most deeply associated with the issue.

The intensity of a statewide vote on same-sex marriage could make it difficult for Newsom to connect with centrist voters, millions of whom voted no on the issue last year.

"It certainly underlines Gavin Newsom's previous advocacy for same-sex marriage. I think that might be a two-edged sword for him," said Mark DiCamillo, director of the San Francisco-based Field Poll.

Other possible Democratic contenders including Attorney General Jerry Brown, Los Angeles Mayor Antonio Villaraigosa and Lt. Gov. John Garamendi also support same-sex marriage. So does one of the three leading Republican hopefuls, former U.S. Rep. Tom Campbell, but former eBay chief executive Meg Whitman and state Insurance Commissioner Steve Poizner oppose it.

The Supreme Court said on Monday it would hear the Bilski patent case, which would tell high tech and software companies how far they could go in patenting software, financial strategies and other abstract processes.

An appeals court which specializes in patent cases had ruled in October that the Patent Office was correct in refusing to allow Bernard Bilski and Rand Warsaw's company Weatherwise to patent a method for hedging against energy cost changes.

That court said the hedging method could not be patented because it was not tied to a machine and did not result in a transformation.

But this seemingly narrow case has implications for any company that hopes to patent a business method. One of the best known examples of a business method patent is Amazon.com Inc's one-click process to buy goods on the Internet.

Coleman attorney Joe Friedberg argued before the high court Monday that counties were inconsistent in the way they decided whether absentee ballots were filled out correctly.

Franken's attorney gets a chance to present his side after Friedberg finishes.

Coleman wants justices to instruct a trial court to open 4,400 rejected absentee ballots.

Franken, potentially a critical 60th Senate vote for Democrats, hopes the court sweeps aside the appeal and is demanding that he get the election certificate required to take office.

There's no telling when Minnesota's highest court will act.