Other, Pentagon

Court presses SpaceX and Air Force to resolve case in mediation

In a pair of orders issued Thursday, a federal court judge pushed SpaceX and the US Air Force to resolve the ongoing lawsuit over the EELV block buy contract through mediation rather than in the courtroom.

In the first order, Judge Susan Braden directed the Air Force and SpaceX to take the first steps towards mediation. By August 8, The Air Force must provide to SpaceX a list of missions it plans to perform using the vehicles acquired in the block buy contract “together with sufficient technical information to allow Plaintiff to determine whether and when it can perform those missions.”

SpaceX, by September 10, will submit a list of issues that it will seek to resolve through mediation as well as other issues involved with mediation, including a proposed mediator and schedule for the mediation process. The Air Force must respond by October 14. “To facilitate the good faith efforts of the Government and Plaintiff to undertake these initial steps in a mediation process, all parties are ordered to decline to comment in the press about the substance or assignments set forth herein,” the order states.

In a second order, largely dealing with the “administrative record” of the case, Judge Braden threw out a motion by United Launch Alliance (ULA), the “defendent-intervenor” in the case, to dismiss the SpaceX suit. That decision, though, was not based on the merits of ULA’s arguments in its motion, but because the court concluded ULA had no standing to request a dismissal. “The Defendant-Intervenor has no basis to challenge Plaintiff’s standing in this case, as all relevant evidence is within the custody and control of the Plaintiff and/or Government.”

The decision was considered a victory for SpaceX in many media reports, although it may be more accurate to consider it not a defeat. The court has not thrown out the SpaceX suit, although it hasn’t ruled on the Air Force’s motion to dismiss. (The fact that Judge Braden is setting up a mediation process suggests she will not rule on that motion while mediation is ongoing.) SpaceX has hinted in the past that it would be open to some kind of settlement in its suit, but has been vague on what it would accept.

55 comments to Court presses SpaceX and Air Force to resolve case in mediation

  • Egad

    The Air Force must provide to SpaceX a list of missions it plans to perform using the vehicles acquired in the block buy contract “together with sufficient technical information to allow Plaintiff to determine whether and when it can perform those missions.”

    Won’t the NRO have a problem with that? Payload mass, dimensions, intended orbits aren’t the kind of thing it likes to see revealed.

    • Ben Russell-Gough

      It should be possible to hit the relevant SpaceX employees with NDAs. They get the basics they need to bid Falcon-9 against Atlas-V and Delta-IV for those missions and don’t tell anyone else on pain of 12-25 in Club Fed. NRO has to let these specs out a bit for ULA anyway, so I’m sure that there are information control procedures in place.

      • E.P. Grondine

        It seems to me that SpaceX employees will have to submit to the same background security checks as other defense contractors. It seems to me that SpaceX employees will also have to sign the usual security contracts.

  • Jim Nobles

    The decision was considered a victory for SpaceX in many media reports, although it may be more accurate to consider it not a defeat.

    Yeah, good call. The ruling just said ULA had to standing to ask for a dismissal. On the other hand some people had predicted that the same thing would happen to SpaceX for basically the same reason. That hasn’t happened.

    • Michael J. Listner

      The Court said that ULA has no basis to challenge the Plaintiff’s standing. In other words, ULA didn’t articulate a legal basis for challenging Space X since the defendant in this matter is USAF and not ULA. USAF Motion to Dismiss is still in play and will probably be decided on before a decision on mediation happens. No sense giving away chips when you have a strong hand to play.

      • Jim Nobles

        Well, since this is your field let me ask you this: Does it make sense for the judge to set up the mediation scenario if SpaceX obviously has no standing and they are definitely going to get quashed?

        • Michael J. Listner

          It makes perfect sense. She hasn’t ruled on the the Motion to Dismiss yet. That is not an easy thing to do because the judge has to weigh each side’s arguments and then justify her decision in a legal opinion. This is important because regardless of who wins the Motion, the losing side will most certainly file an interlocutory appeal. The appellate court will then either affirm or reverse the judge’s decision (no judge wants to be reversed by a higher court, so the judge must articulate her rationale for making her decision.)

          In the meantime, the judge has to go on the presumption that the case will continue on and therefore she has to offer mediation and set the schedule for the trial with counsel for both sides as well as prepare a meeting to schedule the rest of the trial. This is the way the courts work.

          If Space X has submitted their reply, and presuming this court is on a rocket docket (no pun, that’s what it’s called), the judge will be making her decision on the Motion to Dismiss soon. From there any appellate challenges will stop further proceedings until the appellate court makes its decision.

          My question is whether Space X has filed its objection to the motion if at all.

          One other notable point in the Mediation Scheduling Order is that the judge effectively put a gag order on the parties. This will effectively shut down the rhetoric machine on all sides.

          • Dick Eagleson

            From there any appellate challenges will stop further proceedings until the appellate court makes its decision.

            Is “further proceedings” just those related to possible trial prep and scheduling on SpaceX’s complaint or does that also cover the mandated discovery and mediation tracks the judge also put in motion? If just the first of these is halted by a dismissal of SpaceX’s complaint and an immediate higher court appeal, but not the mandated discovery and mediation, then the judge may rule on the dismissal motion fairly soon, but this is hardly assured. In any case, it seems to me there may be little practical effect even of an initial and prompt adverse decision and even if SpaceX ultimately lost its appeal of said adverse dismissal decision.

            Based on whatever you may know about the higher-level court that would receive any such appeal, what is your estimate of the time required for said court to schedule, consider and render a decision on it? It seems to me that if the appeals process goes much beyond the earliest start date for actual mediation – which would seem to be no earlier than mid-October and probably later than that – that it might have no practical effect, especially if the mediation process concludes quickly.

            On the other hand, if the initial decision is against SpaceX and comes soon, and the subsequent appeal is also processed quickly, there would probably be moves by USAF and ULA to cancel the mediation and discovery processes the judge’s current orders put in place. SpaceX would resist this, of course, and I have no idea how long that potential litigation string might take to play out. If it takes significantly longer than the mandated schedule for mediation and discovery it, again, wouldn’t have much practical effect even if it ultimately goes against SpaceX.

            But it seems likely to me that the judge ordered the mediation, and particularly the discovery, because she smells a rat and wants more relevant facts in hand before she rules on the USAF dismissal motion. She certainly doesn’t have to rule immediately. I’m thinking she won’t. If so, that means the mandated mediation and discovery processes will go forward as ordered.

            Given that mediation won’t start before mid-October, and may start even later, it is likely that the RD-180 situation should have clarified a lot by then. I believe at least one small shipment of RD-180′s is currently anticipated to be in-hand well before mid-October. If they haven’t arrived on schedule, that will likely change the whole tenor of any mediation discussions. That will be even more the case if mediation doesn’t start until November or December and a second small shipment of RD-180′s, which I believe ULA is expecting before year’s end, is also in the wind.

            Under such circumstances, USAF will no longer have any rational basis to continue stooging for ULA. No rational basis will any longer exist to think that ULA will be able to fulfill the block buy requirements, as currently written. At that point, the only question remaining anent the block buy will be what should replace it. That realization on USAF’s part should produce a mediation process that goes considerable more favorably for SpaceX.

            I’ve previously outlined what I regard as the most likely outcome of such a process in a previous comment on an earlier thread on this forum. That post also goes into a little speculative detail about the future state of competition for USAF/NRO launches. I also asked the question that Jim Nobles raises above, though not as politely as Jim did.

            Oh yeah, the gag order on the participants isn’t likely to have much effect. SpaceX has already done all the public talking it really needs to do about this case. Their viewpoint is known and has become fairly high-profile as such things go.

            The really interesting stuff is going to emerge from the discovery process mandated by the judge. I will further predict here that at least the highlights of that process will likely figure in the text of the judge’s eventual ruling on the USAF dismissal motion which, once again, I don’t see coming down quickly. It is certainly true that judges don’t like being overturned on appeal, but they also don’t like being played for fools by litigants eager to get them to rush things. I think the judge in this case likely feels she can avoid both types of bad outcome by taking her time and seeing what gets unearthed in discovery.

            • Michael J. Listner

              There’s a lot I could say to try to explain this, but I’m not going to waste my time. You’re in your own world right now and you’re not going to listen. If you want to discuss further I would be happy to entertain you…billed at my hourly rate.

              • Reality Bits

                You had complained a month ago about people posting impolite towards you, I don’t see where Dick was being impolite to you…

                Counselor, ab alio expectes alteri quod feceris.

              • Dick Eagleson

                Thanks for sticking up for me RB. In fairness, though, I have been a wee bit snarky toward Mr. Listner elsewhere. I don’t really blame him for clamming up now. I mean, what can he say?

              • E.P. Grondine

                “There’s a lot I could say to try to explain this, but I’m not going to waste my time. ”

                A very good plan. People generally believe what they want to believe, and do not let facts intrude.

            • Luke.

              Two due August as at April 2014; of course much blood under the bridge since then..

              “United Launch Alliance said Thursday it is speeding up its schedule for receiving Russian-made engines, from once a year to twice per year.

              ULA received one shipment of four engines last November [2013], but this year will receive shipments of two engines in August and three engines in October.

              “This year we are having the engines shipped once they are completed versus waiting to get one shipment,” ULA spokeswoman Jessica Rye told The Hill.”

              http://thehill.com/policy/defense/204316-contractor-speeds-up-deliveries-of-russian-engines

              • Dick Eagleson

                Thank you for the citation and link Luke. I knew I’d read something somewhere about two shipments, but I had forgotten the anticipated scheduling. My recollection was that each shipment was to be later than this. An expected date in August for shipment one makes the initial day of reckoning less than five weeks hence. The confirmatory day of reckoning, being in October, places it right around the earliest date the mandated mediation is likely to begin. That just reinforces the near certitude that the mediation is going to be about what replaces the block buy, the impossibility of its fulfillment and the necessity of its replacement having been amply demonstrated by then.

                It also means both SpaceX’s suit and USAF’s motion to dismiss will have been rendered moot. The best ULA can hope for in that case, is that they salvage at least something in the mediation and maybe get the judge to forget about the discovery track she mandated at the same time as the mediation. In this way, ULA can keep huge amounts of its staffers’ future work hours from being taken up with depositions, writs, subpoenas and a general scramble to avoid doing time. Certain precincts in USAF might find similar motivations to settle quickly.

                SpaceX might go along with such a request as long as clear rules of the road for all future launch services procurements are spelled out to its satisfaction and it gets the maximum possible number of launch contracts out of the current block buy mission manifest.

                No RD-180′s for ULA by 8/31/2014 and I think Elon and company can break out the champagne in Hawthorne and revel like drunken trolls. The rest will just be a mopping up exercise.

          • Michael J. Listner: One other notable point in the Mediation Scheduling Order is that the judge effectively put a gag order on the parties. This will effectively shut down the rhetoric machine on all sides.

            That would probably be a good thing. Thank you very much for providing your analysis on this. It’s a subject about which I know very little.

            – Donald

  • amightywind

    What’s to mediate? SpaceX wasn’t qualified to bid at the time.

  • common sense

    Surprise surprise hmmm?

    Mediation is the only no-losing-face way for the government out of this mess.

    What about ULA again? “ULA had no standing to request a dismissal”

    Oh well…

  • common sense

    I am sure there is a technical difference. So fine. But then let’s write the whole quote. “The Defendant-Intervenor has no basis to challenge Plaintiff’s standing in this case, as all relevant evidence is within the custody and control of the Plaintiff and/or Government.”

    As I suggested in an earlier thread it seemed odd to say the least that ULA made this move. And it seems now that the court and I think somehow in the same way since “all relevant evidence is within the custody and control of the Plaintiff and/or Government.”

    Oh well bis repetita.

    • Michael J. Listner

      I’m not going to repeat myself either. If you want me to you can pay me my hourly rate.

      • common sense

        Arrogance – to remain polite – is what’s destroying OldSpace please carry on.

        We shall see in a little while.

        • Michael J. Listner

          {Insert eye roll here}

          • Luke.

            I’m curious Michael – is your prodigious commenting made on your own time or do you bill it against ULA’s retainer?

            p.s. what is the hourly? One hopes Exceedingly Expensive Launch Vehicle chasing beats that of ambulances..

            • Michael J. Listner

              Good grief. I won’t grace that question with an answer, but suffice it to say if I had any relationship with ULA I wouldn’t be posting on this forum; I take the privacy of my clients very seriously.

              Beyond that, I won’t say anything else out of respect for the moderator.

          • Alan Nestos

            Yes Michael, what is your hourly rate and can I pay with Paypal? (don’t be afraid, it is not owned by Elon Musk anymore)

            • Michael J. Listner

              You couldn’t afford my hourly.

              • Joe

                I said this in another posting in a different article to Marcel Williams. He is a Heroic glutton for punishment, but I will try again:

                These guys are never going to think about anything beyond their own next glass of SpaceX cool-aid.

                For your own sanity, leave them alone to endlessly rant about their delusions. Nobody (outside of their very narrow circle) is paying attention.

              • Coastal Ron

                Joe said:

                For your own sanity, leave them alone to endlessly rant about their delusions. Nobody (outside of their very narrow circle) is paying attention.

                Per your definition I guess you’re part of the “very narrow circle”, since you certainly ARE paying attention, right Joe? ;-)

              • Joe

                No, just a HazMat guy that occasionally stops by to warn sane people about the local environment in this comments section.

              • Joe, if you are as sane as you think you are, you realize that this isn’t just about SpaceX. I and most of the others here would like to see the long established companies technically innovating to the degree SpaceX is. But I don’t see ULA seriously attacking reusability, and when that is a reality what is going to happen? I can’t help but wonder whether or not you think that far ahead. It’s adapt or die and I for one truly wish that SpaceX’s competition would adapt, because I don’t think it is healthy for our nation for any one company to have a virtual monopoly.

                Blaming it all on SpaceX fanboism definitely is NOT sane.

              • Joe

                Sorry Rick, but I have been through this too many times; including with you.

                I did not use the term “SpaceX fanboism”, you did. But using your terminology, it is not about SpaceX fanboysim when that becomes the subject, then it is all about SpaceX again the minute the subject has been deflected.

                I read this website for general information (the articles are often quite good), but have avoided the comments section for months until a couple of articles made me think the comments section would be interesting. Interesting in the sense that people look at car accidents on the road side while driving by.

                While skimming the posts I noticed a few sincere types (Marcel Williams, Michael Listner) were being sucked into the bottomless pit of the “he who posts last wins” philosophy that rules around here and chose to try to warn them.

                It is obvious that was a mistake. So I will now take my own advice and leave you alone to endlessly rant about your delusions.

              • “While skimming the posts I noticed a few sincere types (Marcel Williams, Michael Listner) were being sucked into the bottomless pit of the “he who posts last wins” philosophy that rules around here and chose to try to warn them.”

                Keep lying to yourself. If you are honest it’s really, “He who can back his words with externally provable evidence wins.” Since your side doesn’t have that, you continually lose and come up with excuses when you can’t come up with logical reasons. But you will do anything other than admit that, especially to yourself. I noticed you purposely ignored my observation about lack of innovation. That’s the kind of thing I’m talking about.

              • Paul Scutts

                Joe, I have only recently discovered this community (The Space Review, Space Politics, NewSpace Journal) and have found that IMO the commentators are both passionate and a quite well informed. Sure, at times they can be “single minded” on certain topics but that is a foible that can be laid at all our feet. By trying to keep an open mind I have learnt a lot “listening” to these guys and I respectfully suggest you try to do the same … so state your views/opinions and, when necessary, cop the flack, otherwise, piss-off.

              • Neil

                Michael. Thanks for your view of proceedings. It seems reasonable given what information is available and without further interpretation.

                Without wishing to incur any legal fees :) , could you put any timeframe on how long this court action may proceed including any appeals?

                Cheers

              • Dick Eagleson

                You couldn’t afford my hourly.

                Deponent so stipulates.

              • Michael J. Listner

                For your own sanity, leave them alone to endlessly rant about their delusions. Nobody (outside of their very narrow circle) is paying attention.

                Lesson learned. I receive enough media inquiries and there are others in the community to share my insight with. I’ll focus my attention there. As for those who think I am secretly on ULA’s payroll let me say that I wish they were a client; I’m sure their attorneys on retainer are paid well.

              • Michael Listner: I want you to know that (though Joe mentioned your name in his diatribe) none of my comments were directed at you. I don’t know enough about the law to critique any legal evaluations that you put forward. My objections were to Joe insinuating all of us here base our decisions on a fanatical following of SpaceX. My main problem with Joe for years is that his arguments (usually in defense of the impractical SLS) which fall within my knowledge base purposely ignore pertinent facts in cases where those facts contradict what he wants to believe. As a person truly dedicated to evidential proof, I live by the principle that one should accept where the evidence leads regardless of whether one likes the end result or not. That is a difficult philosophical principle to live by and I sometimes fail in that regard, but when I realize the evidence doesn’t fit what I previously thought, I own up.

                Again, I don’t know enough about your field to make a judgement either for or against your position. For all I know you could be right.

              • Coastal Ron

                Michael J. Listner said:

                Lesson learned. I receive enough media inquiries and there are others in the community to share my insight with.

                I thought you provided a nice analysis. I read it and decided I had nothing to add… so I didn’t.

                And in general I assume that the majority of people that read this blog do not comment, so many times my comments are aimed at persuading the broader audience, and not just the person I’m responding to.

                So if your goal is to persuade, and not just retort, then I wouldn’t stop posting here.

                My $0.02

  • Jim Nobles

    My instinct is telling me that SpaceX is going to come out of this with one or more of the launches that ULA is fighting to keep. I don’t know enough about the processes and politics to predict the details in advance though.

    This whole block buy deal stinks to high heaven and people are beginning to notice it.

    • Paul Scutts

      It more than stinks, Jim, it’s criminal. This block buy is a direct attempt to defraud the US Taxpayer by locking in so called discount priced launches but not allowing true competitive market forces to drive down the price further. IMO By trying to justify their behaviour by playing the “they (SpaceX) are not certified yet” is just adding to their crimes.

      • Neil

        Welcome aboard Paul.
        You could also try http://www.nasaspaceflight.com if you haven’t already found this site. There’s a fantastic pay section called L2 that offers life memberships for about USD100. Industry employees post there regularly and it has the most astonishing array of space-related material you could hope to find anywhere.

        Cheers

    • E.P. Grondine

      Hi Jim –

      “My instinct is telling me that SpaceX is going to come out of this with one or more of the launches that ULA is fighting to keep. I don’t know enough about the processes and politics to predict the details in advance though.”

      While manned Mars flight enthusiasts focus on SpaceX, they forget there is another launch service provider: Orbital/ATK.

      My instinct tells me that Orbital/ATK will simply sit back and let SpaceX and their supporters raise a stink, and then when it comes down to business will quietly point out that they are the only suppliers of on demand launch.

      • Dick Eagleson

        Orbital-ATK doesn’t have anything EELV certified yet with which to go after USAF/NRO business, but they plainly want to get there. I think going to the trouble of qualifying their current incarnation of Antares is probably pointless. Their 1st-stage engines are out of production. Russia has turned hostile so a resumption of production seems quite unlikely. The Eastern Ukraine plant that makes the structure and tankage for the Antares first stage is fairly likely to either wind up behind newly advanced Russian borders or even be destroyed in the increasingly grim fighting along the Russo-Ukrainian border.

        With a redesigned 1st stage, however, Orbital-ATK could have an Antares Mk2 with all-domestic sourcing for major booster components and this could be submitted for EELV certification. The only question is how long their redesign process will take. I have no inside knowledge with which to formulate an opinion on this, but it seems unlikely to be doable before maybe late 2016. At that point, they could – especially if they work some reusability elements into a fresh design and improve the lift capacity of the vehicle – have something that could not only get them business after it is EELV certified, but something that might even be competitive for future CRS and CC business for either or both NASA and Bigelow. I outlined one possible such design in a previous post on another thread in this forum.

  • vulture4

    The Falcon is still an evolving design and has had some close calls. To their credit, SpaceX generally resolves each problem as it is discovered, but (as Musk himself has said) they could still easily lose one. The DOD could simply launch more GPS satellites, as it originally planned, and make the launches available for SpaceX to bid on, as well as more communications satellites, which it needs anyway. This would increase the reliability and precision of the service, and would accelerate the process of building up an adequate record of reliability for the Falcon before committing the much more expensive reconnaissance and intelligence satellites, many of which will require the FH.

    • Coastal Ron

      vulture4 said:

      The DOD could simply launch more GPS satellites, as it originally planned, and make the launches available for SpaceX to bid on…

      The GPS satellites are already part of the original 14 payloads that the Air Force set aside for competition, but because they are lasting in orbit longer than planned the need for them in the near term has decreased, hence the reduction in payloads available for competition outside of the Block Buy.

      • Dick Eagleson

        Correct. Another major contributing factor to those GPS birds having been removed from that list of launches to be competed is that there are serious sourcing problems for major components of the Block 3 GPS birds. Some of the subsystem acquisition contracts are being cancelled and recompeted. USAF seems to be quite unhappy with at least one incumbent supplier.

    • The DOD could simply launch more GPS satellites, as it originally planned, and make the launches available for SpaceX to bid on, as well as more communications satellites, which it needs anyway.

      Makes you wonder who the customer is. You are just another cheerleader for crony capitalism.

      • Dick Eagleson

        The customers for milsat services should be the warfighters in the field. Unfortunately, the USAF REMF’s who run the procurement bureaucracy seem to think they are the customers.

        As for “crony capitalism” that would be ULA, their purchased stooges in USAF and their purchased stooges in the U.S. Congress.

  • BuzzFan

    Michael J. Listner,
    Complete side note here… but thought I should let you know that I’ve read a few of your articles/papers and even quoted you in a space property rights papers I wrote during law school. I appreciate your contribution to space law theory and discussion.

Leave a Reply

  

  

  

You can use these HTML tags

<a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>