Lieutenant Junior Grade Daniel "Danny" Kaffee (Tom Cruise), is an inexperienced U.S. Navy Judge Advocate General's Corps lawyer who leads the defense in the court-martial of two Marines, Private First Class Louden Downey (James Marshall) and Lance Corporal Harold Dawson (Wolfgang Bodison), who are accused of murdering a fellow Marine of their unit, PFC William Santiago (Michael DeLorenzo), at the Guantanamo Bay Naval Base in Cuba, which is under the command of Col. Nathan R. Jessup (Jack Nicholson).
Santiago compared unfavorably to his fellow Marines, had poor relations with them and failed to respect the chain of command. He went above his superiors to bargain for a transfer in exchange for blowing the whistle on Dawson for firing a possibly illegal shot towards the Cuban side of the island. When the transfer request is seen by the base's senior commanders, there is a heated argument between Santiago's commanding officer, Lt Jonathan Kendrick (Kiefer Sutherland) who asserts that he can handle the situation, and Jessup's executive officer, Lt. Col. Matthew Andrew Markinson (J.T. Walsh) who casts doubt on Kendrick's ability based on a past incident. Markinson advocates that Santiago be transferred immediately for safety reasons before the request gets out, but Jessup says that this would set a bad precedent which could cost lives. Jessup also states that officers have a responsibility to ensure that all personnel are trained, so he orders Kendrick to ensure that Santiago shows significant improvement on the next evaluation report, or he would be held personally responsible. When Dawson and Downey are later arrested for Santiago's murder, Naval investigator and lawyer Lieutenant Commander Joanne Galloway (Demi Moore) suspects that they were carrying out a "code red": a euphemism for a violent extrajudicial punishment.
Galloway requests to defend them but the case is given to Kaffee, who has a reputation for arranging plea bargains. There is initial friction between them, as she believes he negotiates plea bargains to avoid having to argue in court, and he claims that she is interfering with his handling of the case.
Kaffee meets with the defendants and finds that they are of the strictest type of Marines; those that serve in a "forward area" (on the line between their country and an enemy country) and are required to take their duties very seriously. Friction immediately develops between Kaffee and Dawson and Downey, the former believing that Kaffee isn't up to the challenge of defending them and the latter guided only by his devotion to being a Marine and his dedication to his superior, namely Dawson.
Despite goading by Galloway and Dawson to allow the trial go to court, Kaffee initially tries to step down as lead counsel for the defense - his argument being that since he cannot prove that any order was given for the assault, making a legal stand simply because he believes the Marines did as they were told was a futile gesture. However his relationship with Galloway strengthens as the trial progresses, as does Kaffee's effectiveness as a litigator.
However, Galloway successfully argues her point of view to Kaffee after Dawson and Downey state they were ordered by Lieutenant Kendrick (under the orders of Jessup) to shave Santiago's head, minutes after Kendrick ordered the platoon not to touch the would-be victim. Santiago's death was actually caused when a rag was shoved into his mouth as a gag. Questioning of the base doctor reveals that Santiago had respiratory stress due to heat exhaustion and that lack of oxygen had caused a condition called lactic acidosis. The condition was accelerated in Santiago's case because of the respiratory problems he'd been experiencing. The doctor, however, maintains that Santiago's death must have been caused by a toxic substance present on the rag stuffed into his mouth, despite Kaffee's presentation of a medical report of the doctor's stating that Santiago was to be given...
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