Lockheed Martin Corp. v. The Boeing Co.
| Decision Date | 16 February 2005 |
| Docket Number | No. 6:03CV796ORL28KRS.,6:03CV796ORL28KRS. |
| Citation | 357 F.Supp.2d 1350 |
| Parties | LOCKHEED MARTIN CORPORATION, Plaintiff, v. THE BOEING COMPANY, McDonnell Douglas Corporation, Boeing Launch Services, Inc., William Erskine, Kenneth Branch, and Larry Satchell, Defendants. |
| Court | U.S. District Court — Middle District of Florida |
Kevin K. Ross, Michael V. Elsberry, Terry C. Young, Richard S. Dellinger, Lowndes, Drosdick, Doster, Kantor & Reed, P.A., Orlando, FL, Michael F. Mason, Peter S. Spivack, Thomas L. McGovern, III, Hogan & Hartson L.L.P., Raymond A. Jacobsen, Jr., McDermott, Will & Emery, Washington, DC, Nathaniel H. Akerman, Dorsey & Whitney, New York, NY, Terrence P. McMahon, McDermott, Will & Emery, Palo Alto, CA, for Plaintiff.
Brad D. Brian, Dennis C. Brown, Gregory D. Phillips, Marc A. Becker, Richard E. Drooyan, Ronald K. Meyer, Munger, Tolles & Olson LLP, Michael W. Fitzgerald, Robert L. Corbin, Sara Pfrommer, Corbin & Fitzgerald, LLP, Los Angeles, CA, David B. King, Mayanne Downs, Thomas A. Zehnder, King, Blackwell & Downs, P.A., Darryl M. Bloodworth, Nichole M. Mooney, Dean, Mead, Egerton, Bloodworth, Capouano & Bozarth, P.A., Orlando, FL, Kara M. Sacilotto, Benjamin S. Sharp, Perkins Coie LLP, Scott M. McCaleb, William J. Colwell, Wiley, Rein & Fielding, LLP Washington, DC, Kristin Linsley Myles, Munger, Tolles & Olson, San Francisco, CA, Gerry S. Gibson, Traci H. Rollins, Steel, Hector & Davis, LLP, West Palm Beach, FL, for Defendants.
Thomas J. Pilacek, Thomas J. Pilacek & Associates, Winter Springs, FL, for Defendants and Claimants.
Jay M. Cohen, Jay M. Cohen, P.A., Winter Park, FL, pro se.
Bernard Barmann, Jr., Ralph Hirschmann, Hirschmann & Barmann LLP, Los Angeles, CA, Robert L. Case, Stovash, Case & Tingley, P.A., Orlando, FL, for Movant.
On April 23, 2004, the Court dismissed Counts I-IV of Plaintiff Lockheed Martin Corporation's ("Lockheed Martin") original Complaint alleging that Defendant The Boeing Company ("Boeing") violated the Racketeer Influenced and Corrupt Organizations Act ("RICO") and the Florida Civil Remedies for Criminal Activities Act ("Florida RICO"). Lockheed Martin has since filed an Amended and Supplemental Complaint ("Amended Complaint") (Doc. 233) alleging violations of RICO and Florida RICO (Counts I-VI) against Boeing and its wholly owned subsidiaries, the McDonnell Douglas Corporation ("McDonnell Douglas") and Boeing Launch Services, Inc. ("BLS"), as well as William Erskine ("Erskine"), Kenneth Branch ("Branch"), and Larry Satchell ("Satchell").
This cause is before the Court on the motions of Boeing and its subsidiaries ("the Boeing Defendants") (Doc. 289)1 and Satchell (Doc. 315)2 to dismiss all of the RICO and Florida RICO claims against them. For the reasons set forth below, the motions of the Boeing Defendants and Satchell (collectively "Defendants") must be granted as to Counts II and V of Lockheed Martin's Amended Complaint. However, while the Boeing Defendants' motion must also be granted as to the remaining counts, Satchell's motion as to those counts must be denied.
Lockheed Martin's RICO claims are premised on allegations that Boeing and certain persons acting for its benefit engaged in misconduct which enabled the company to gain an advantage over its competitors in the market to provide the United States Government ("Government") satellite launch services. In particular, Lockheed Martin alleges that certain individuals, including employees of McDonnell Douglas and Boeing, improperly obtained and used the proprietary and confidential information of Boeing's competitors to gain an advantage in securing satellite launch service contracts from government agencies, including the United States Air Force ("Air Force") and the National Aeronautics and Space Administration ("NASA"). The following facts are taken as true for the purpose of ruling on Defendants' motions.
Beginning in 1992, Lockheed Martin, Boeing, McDonnell Douglas, Alliant, General Dynamics Corporation ("General Dynamics"),3 and Martin Marietta Corporation ("Martin Marietta") competed for contracts to perform launch services for the Government. From 1992 to April 1993, certain McDonnell Douglas employees including Matthew Jew, an estimating and cost specialist, acquired and used the confidential and proprietary information of General Dynamics and Martin Marietta in preparation for McDonnell Douglas's bid on the Air Force's Medium Launch Vehicle III ("MLV-III") procurement. In April 1993, McDonnell Douglas won the MLV-III bid. After acquiring McDonnell Douglas on August 1, 1997, Boeing began providing MLV-III launch services for the Government.
In August 1995, Lockheed Martin, Boeing, McDonnell Douglas, and Alliant Techsystems, Inc. ("Alliant") began designing, proposing, and building Evolved Expendable Launch Vehicle ("EELV") systems for the Government. All four corporations initially competed in a multi-phased EELV competition held by the Air Force, the object of which was to provide the Government with the best and most innovative launch services at the best value. On December 20, 1996, after receiving proposals for the "Pre-Engineering and Manufacturing Development phase" of the EELV competition, the Air Force made a "down-select" decision, reducing the number of EELV competitors from four to two, resulting in the elimination of Boeing and Alliant from the competition. Boeing reentered the EELV competition when it acquired McDonnell Douglas in August 1997.
On November 3, 1997, the Air Force adopted a new competition strategy which, among other things, required Lockheed Martin and Boeing to bid for contracts to provide launch services for an initial set of thirty Government launch missions. In crafting its bid proposal for this competition, Boeing's EELV team, comprised of Branch, Erskine, Satchell, and Tom Alexiou ("Alexiou"), relied on the confidential and proprietary information of Lockheed Martin. Jew also participated in preparing Boeing's proposal by performing parametric analyses on the information unlawfully obtained from Lockheed Martin. On October 16, 1998, the Air Force awarded its first set of EELV contracts. Of the twenty-eight EELV contracts awarded, Boeing received nineteen and Lockheed Martin received nine.
The confidential and proprietary information used by Boeing's EELV team and Jew to prepare Boeing's bid for the October 1998 competition was supplied by Branch and Allen Cantu, Inc. ("Allen Cantu"). Branch initially provided Boeing with information in August 1996 while he was employed by Lockheed Martin, and he continued to do so until the conclusion of his employment with Lockheed Martin on January 29, 1997. Upon the termination of his employment with Lockheed Martin, Branch commenced employment with Boeing. In the months leading up to the October 1998 competition, Branch provided Boeing with additional confidential and proprietary information relating to Lockheed Martin's EELV proposal. Allen Cantu, an engineering firm, came to possess Lockheed Martin proprietary and confidential information while serving as "oversight officials" for one of the company's launch pads. Boeing hired Allen Cantu for the purpose of acquiring such information, which Allen Cantu provided to Boeing from August 1996 to June 1998.
In July 2001, Boeing hired Richard Hora ("Hora") to prepare competitive assessments for Boeing's Space & Communications Group. In preparing cost assessments for Boeing in connection with three NASA procurements, Hora relied on Lockheed Martin confidential and proprietary information, which Hora had obtained while he was an employee of General Dynamics.
In addition to improperly obtaining and using the confidential and proprietary information of Boeing's competitors, Defendants and others who committed abuses for Boeing's benefit hid and otherwise misrepresented the scope and gravity of their wrongdoing. In June 1999, Boeing informed Lockheed Martin that certain of its employees had possessed Lockheed Martin confidential and proprietary information. However, from the time of Boeing's initial disclosure until at least October 2003, Boeing intentionally and severely understated the quantity and value of such information.
Boeing and its employees, particularly Satchell, also engaged in more affirmative efforts to cover up Boeing's wrongdoing. Sometime in the summer of 1999, Satchell asked Jew to retrieve and destroy documents containing stolen Lockheed Martin confidential and proprietary information and the results of any analysis that Jew based on such information. Jew complied by destroying original physical documents containing Lockheed Martin information as well as two electronic copies of competitive analysis based on the stolen information. Additionally, on December 18, 2001, in a wrongful termination suit brought by Branch and Erskine against Boeing (the "Erskine litigation"), Satchell falsely testified that he never shared any Lockheed Martin confidential or proprietary information with anyone. In the same case, Boeing submitted a false affidavit which, among other things, disclaimed any knowledge of "improprieties in the ... EELV bid process." Finally, on June 10, 2003, Boeing provided the Air Force with a report which contained a false and misleading sworn declaration by Jew that he did not perform competitive assessments of Lockheed Martin's likely proposal for the 1998 EELV competition.4
To warrant dismissal under Rule 12(b)(6) of the Federal Rules of Civil Procedure, it must be "clear that no relief could be granted under any set of facts that could be proved consistent with the allegations." Blackston v. Alabama, 30 F.3d 117, 120 (11th Cir.1994) (quoting Hishon v. King & Spalding, 467 U.S. 69, 73, 104 S.Ct. 2229, 81 L.Ed.2d 59 (1984)). In determining whether to grant...
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