U.S. Court Dismisses Space X Lawsuit Against Boeing, Lockheed Martin

A U.S. federal district court dismissed Space Exploration Technologies (SpaceX)’s anti-trust lawsuit seeking to halt the proposed launch partnership proposed by Boeing Co. and Lockheed Martin Corp., saying that SpaceX does not yet have legal standing to sue the two aerospace giants.

Instead, Judge Florence-Marie Cooper of the Central District of California wrote in her ruling of Feb. 15 that "SpaceX’s argument is utterly devoid of any concrete factual allegations regarding any type of actual injury suffered".

Space X is headed by multimillionaire entrepreneur Elon Musk, who seeks to revolutionize the space launch industry by offering access to orbit for a fraction of today’s costs. Musk brought the suit against Boeing and Lockheed Martin in October, claiming the two companies "engaged in an unlawful conspiracy to eliminate competition in, and ultimately to monopolize, the government space launch business" by the planned merger of their respective Delta 4 and Atlas 5 launch services under the United Launch Initiative (ULA).

However, Cooper stated, SpaceX, by its own pronouncements, "is not yet ready to compete" against Boeing and Lockheed Martin to win government launch contracts under the U.S. Air Force‘s Evolved Expendable Launch Vehicle (EELV) program. Musk’s EELV-class Falcon 9 rocket is not slated for its maiden launch until late 2007, so it does not yet have a launch vehicle capable of competing against the Atlas 5 and Delta 4, making any claims of injury speculative, said Cooper.

"Because it lacks such readiness, its speculative claims regarding future harm are not ripe," Cooper wrote. Accordingly, she granted Boeing’s and Lockheed Martin’s request to dismiss the claims.

SpaceX has 20 days from the entry of the ruling into the court record Feb. 17 to amend its suit. However, noted Cooper: "It does not appear to the court that SpaceX will, at this time, be able to overcome the constitutional deficiencies that plague its claims."

Lockheed Martin spokesman Thomas Greer said his company welcomed the decision. "The ruling affirms our view," he said. "As we see the EELV program today, the Air Force needs assured access to space. SpaceX is not yet in that category."

The U.S. government is still mulling the merits of the ULA merger, which Boeing and Lockheed Martin say would save the government about $150 million annually when fully implemented.

As of Feb. 21, the U.S. Department of Defense is still formulating its recommendation to the Federal Trade Commission (FTC), which will approve or reject the deal.

Intertwined with the ULA issue are the Air Force’s plans to award the next series of more than 20 EELV launches, known as Buy-3. While the Air Force originally intended to compete the Buy-3 launches solely between the Atlas 5 and Delta 4 programs, SpaceX hopes to make inroads into the market with the Falcon 9.

"What we are really after is that the Air Force Buy-3 be opened up for free competition," Musk, who serves as the company’s CEO and chief technology officer, told sister publication Defense Daily Feb. 17 prior to the court ruling. "We aren’t fundamentally opposed to the United Launch Alliance. What we are opposed to is anything that would create an artificial barrier to entry to compete with that monopoly. It is about free and fair competition — truly free and fair and not something which is, in fact, a very tilted playing field."

Congress has offered some help in that regard. Lawmakers added language to the conference report accompanying the fiscal year 2006 defense appropriations act that mandates that "launch service contracts provide an annual opportunity for companies to present their qualifications to meet objective criteria for reliability, mission assurance, oversight, and cost credibility, and compete based on their ability to meet these criteria."

Congress further directed "the elimination of multi-year ‘allocations,’ ‘pre-awards’ and ‘block buys’ from Buy-3 and future EELV launch services contracts."

Accordingly, the Air Force says it now will allow additional bidders. "Other companies can compete," Air Force spokeswoman Maj. Regina Winchester said Feb. 21. "But they still have to be a certified EELV provider — meaning they have to be able to meet the requirements set out by the EELV program."


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