SpaceX vs Boeing and Lockheed: Case Closed

by Braddock Gaskill

“IT IS HEREBY ORDERED, ADJUDGED and DECREED that the Second Amended Complaint is dismissed with prejudice, that judgement is entered in favor of defendants, that the matter is closed.”

With those words on Thursday, Judge Florence-Marie Cooper of the US District Court of Central California closed the SpaceX vs. Boeing and Lockheed anti-trust lawsuit, dismissing SpaceX’s last attempt to demonstrate injury and standing in the EELV marketplace.
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**Click here for PDFs of the final rulings**

The anti-trust lawsuit, filed by SpaceX last October, claims a history of anti-competitive behavior in the EELV programs by Boeing and Lockheed Martin violating the RICO, Sherman and Clayton acts.  This behavior, the claims argued, culminated in harm to SpaceX by its exclusion form the USAF 2006 ‘Buy 3’ EELV Launch Services contracts, receipt of past and future Air Force subsidies, and the USAF’s ‘pre-allocation’of EELV launches through 2011.

Judge Cooper stated ‘the Defendants’ conduct, whether anti-competitive or not, has not caused SpaceX any articulable injury’, and dismissed the case with prejudice, without the hearing for oral arguments which had been scheduled for next month.  She concluded ‘SpaceX’s alleged injuries arise either from past awards for which it was not eligible to bid or future claims that are speculative and unripe.’

This is, in fact, the second time the case has been closed.  In February, after a brief hearing, Justice Cooper dismissed SpaceX’s claims on the grounds SpaceX ‘is not yet ready to compete with the Defendants in the EELV market.’  However, she did grant SpaceX the option to re-open the case by filing a second amended sets of claims.

SpaceX reopened the case in March, insisting upon their viability as competitors to Boeing and Lockheed in the EELV launch market even though they have not yet launched their EELV-class Falcon 9 vehicle.

SpaceX reminded the court that they had already secured a contract with an unnamed US Government customer for their first Falcon 9 flight slated for the summer of next year worth over $30 million.

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The new complaint argued that in the launch industry, contracts and payments are executed years in advance of launch, citing that the USAF awarded the first EELV contracts to Boeing and Lockheed in 1995, many years before their vehicles’ first flights.  Therefore, argued SpaceX, they should be considered a ‘full-fledged’ competitor, and at least a ‘serious potential competitor, distinguishable from the great horde of opportunists who ‘would’ve, could’ve, or might’ve”.

Regardless of these arguments, the Court found that SpaceX could not compete in the Air Force ‘Buy 3’ launch contract awards last year not due to the actions of Boeing and Lockheed Martin, but instead because ‘it lacked the capability to perform EELV launch services at the time.’ 

The Court also used this argument for lack of capability to debunk SpaceX’s subsidy claim, stating that ‘the fact that the USAF has chosen to provide subsidies to the only two competitors it deems capable of providing EELV launch services at this time does not link any behavior by Defendants to any perceived competitive disadvantage of SpaceX.’

Judge Cooper did take note that she had seen a Wall Street Journal article about the failed Falcon 1 attempt in March, which she incorrectly identified as an ‘EELV-class vehicle’.  She noted as a footnote ‘SpaceX’s failure to launch an EELV-class vehicle does not preclude it from being considered a competitor but it is a relevant factor in the evaluation.’

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