Understanding ORBITAL ATK V. WALKER (DARPA)

The plaintiffs, Orbital ATK and its subsidiary, Space Logistics LLC, have brought an action against the Defense Advanced Research Projects Agency and its acting director, Dr. Steven H. Walker (collectively defendants or DARPA), seeking to order DARPA’s program for Robotic Maintenance of Geosynchronous Satellites according to the theory that the program violates several provisions of the 2010 National Space Policy, a presidential policy directive, and therefore violates the so-called Administrative Procedure Act.

DARPA has filed a motion to dismiss for lack of jurisdiction in the matter and for failure to bring a claim on which relief can be granted. Defendants argue the court lacks jurisdiction because the complaint runs counter to the Supreme Court’s ban on programmatic challenges to overall improvement of an agency’s programs by court decree and because DARPA’s determination to conduct the RSGS program is firmly committed to the discretion of the agency by law. Furthermore, the defendants argue that even if the court had jurisdiction in the matter, the plaintiffs’ claims must be dismissed because they wrongly argue that the NSP has the force of law.

Background

Orbital ATK and its affiliate argue that DARPA intends to illegally waste hundreds of millions of U.S. taxpayer dollars on developing robotic satellite service technology for which DARPA has admitted there is no current need from the U.S. government. DARPA describes its RSGS program as aimed at implementing robotic servicing of the many government and commercial satellites in Earth geosynchronous orbit. GEO’s orbital period makes it a desirable location for satellites; however, the radiation levels in GEO prevent humans from walking in space and can damage electronics. There is currently no U.S. entity, private or public, capable of serving GEO-based satellites. Therefore, when GEO’s satellites experience breakdowns, malfunctions, schedule delays, gaps in coverage, unscheduled maneuvers, and other abnormal events, they cannot be inspected to determine the source of the problem, nor repaired, moved or upgraded with new capabilities and facilities, thus becoming prematurely obsolete.

In 2011, DARPA announced the Phoenix program to explore potential satellite service capabilities in space. The initial goal of the Phoenix program was to use DARPA’s existing robotic arm technology as well as new technologies to demonstrate that it is possible to salvage and reuse components from retired and unused GEO satellites.

In 2012, DARPA entered into a contract with ATK (the predecessor entity of plaintiff Orbital ATK), to modify an existing government-owned satellite bus for use in the demonstration of the Phoenix program.

By 2013, DARPA’s vision for RSGS technology had shifted from a demonstration phase to a long-term mission with additional capabilities, such as robotic maintenance, and DARPA indicated that it no longer required a reused bus, as this vehicle would not be able to support its new purpose.

In May 2015, DARPA circulated a proposal for a consortium of companies to partner with them to develop real-world service capabilities in GEO. In response to DARPA’s proposal, Orbital ATK argued that extending the life of satellites was the only existing business need sufficient to justify the investment required to support a business case.

When Orbital ATK asked DARPA what long-term commitments U.S. government entities had made to it to use DARPA’s robotic arm technology for the maintenance of GEO satellites, DARPA replied that there was no existing commitments. Orbital ATK expects DARPA to grow as the RSGS program is approved.

Meanwhile, ATK’s parent company had merged with Orbital Sciences Corporation, a maker of commercial GEO satellites and other spacecraft, to create the plaintiff Orbital ATK. ATK has been investing in satellite maintenance technology for commercial satellites since 2008 and, as part of the new ownership structure, Orbital ATK is developing a Mission Extension Vehicle, which is to provide satellite life extension for GEO satellites.

In the meantime, NASA, which had contracted with ATK since 2004 for the design and development of robotic tools for servicing satellites in space, continued to examine the possibility of servicing the satellites in orbit.

In 2015, NASA designed what became the Restore-L program, a project to deploy a robotic spacecraft capable of supplying and maintaining an operational satellite; however, NASA did not focus on GEO, the target of DARPA’s RSGS technology, but rather on Low Earth Orbit.

Although the applicants identify substantial redundancy between the NASA and DARPA programs, they allege that in the case of DARPA, Orbital ATK’s concerns are more acute because of DARPA’s stated plan to transfer the ownership and commercial use of the technology to a single competitor.

In May 2016, DARPA launched a Request for Proposals in conjunction with the RSGS program. The RFP announced DARPA’s intention to partner with a private sector partner to develop and launch a Robotic Service Vehicle: an unmanned spacecraft, consisting of both a robotic payload and a satellite bus, capable of autonomously servicing, repairing and repositioning of satellites in GEO.

According to DARPA, the RSGS program is designed to:

  1. inspect satellites with anomalies;
  2. assist with orbital adjustments of satellites;
  3. correct mechanical problems with satellites;
  4. install upgrade payloads on satellites providing them with new capabilities.

The RSGS program will have five phases: in the first phase, which is ongoing, DARPA and the U.S. Naval Research Laboratory are working together to develop the robotic maintenance payload; that is, the device with a robotic arm capable of repairing satellites. Meanwhile, a private partner is building a satellite bus capable of carrying the payload.

Phase 1: the NRL has contracts with commercial suppliers for the components of the robotic service payload, including with the plaintiff Orbital ATK, which was engaged to design the printed circuits.

Phase 2: the private partner will integrate the payload on the bus belonging to the partner with the support of DARPA.

Phase 3: DARPA launches RSV in GEO.

Phase 4: allows DARPA to work with its industrial partner to demonstrate the capabilities of RSV in a series of exercises specified by DARPA.

Phase 5: DARPA will transfer ownership of the robotic maintenance payload to the private partner, who will continue to own and operate the RSV while providing fee-for-service operations to the U.S. government and commercial GEO satellite operators.

On June 22, 2016, the CEO of Orbital ATK wrote a letter to DARPA, expressing concern that the RSGS program violated several provisions of the NSP and claiming that it would unfairly benefit DARPA’s private partner and harm DARPA’s private partner investment in ATK’s Orbital MEV System. DARPA claimed that a response to the letter would be inappropriate and declined to meet with Orbital ATK.

Orbital ATK eventually attended a briefing regarding the RSGS solicitation. In response to written questions about the RSGS program, DARPA explained that the RSV was not intended to be used to extend life, but rather for robotic maintenance. DARPA retorted that if the private partner wanted to develop life extension capabilities, this would be complementary to the advanced robotic capabilities that DARPA is proposing to activate.

On July 5, 2016, As DARPA closed all other lines of communication, Orbital ATK reiterates its objections in a counter-proposal to the RSGS satellite bus RFP. Orbital ATK then came up with three alternative approaches that it said would save the government money and meet DARPA’s stated goals:

  1. the first approach was to test DARPA’s robotic arm on the ground, followed by the transfer of the technology to all U.S. companies interested in fair and equal business development;
  2. the second approach was for DARPA to fund the development, production and testing of RSGS technology as a hosted payload on a commercial satellite bus, but not to transfer ownership, nor to subsidize the costs of the start-up from a single private operator.

On July 14, 2016, DARPA asked Orbital ATK to submit a more detailed proposal.

On September 9, 2016, Orbital submitted an updated counter-proposal, providing more details on Orbital ATK’s second approach by proposing that DARPA modify the program to one involving a hosted payload without compensation for launch or the transfer of ownership of the payload.

On December 14, 2016, DARPA sent Orbital ATK a letter stating that its comments were no longer being considered. Following its final assessments, DARPA selected Space Systems / Loral LLC, a wholly owned subsidiary of MacDonald Dettwiler and Associates, a Canadian company, as its industrial partner.

This relationship is based on an Other Transaction agreement, a special instrument authorized by Congress to allow DARPA to flexibly enter into purchase agreements, for specified purposes, outside the constraints of the Federal Acquisition Regulation and other sources of normally applicable federal government procurement law.

The complainants allege that the RSGS program violates five separate provisions of the NSP issued in 2010 by then-President Barack Obama. The NSP is a presidential directive that sets out the political objectives of the United States in the field of outer space. The document, which comes in the form of a memorandum from the president to cabinet secretaries and other senior executive officials, begins by setting out the principles of cooperation with the international community that the United States will adhere to, continues outlining goals for US, state space programs, and concludes by offering cross-sectoral and sectoral guidelines to departments and agencies. The complainants focus on five specific provisions of the Commercial Space Guidelines section of the NSP according to which agencies should:

  1. purchase and make maximum use of commercial space capabilities and services when such capabilities and services are available in the marketplace and meet United States government requirements;
  2. modify commercial space capabilities and services to meet government requirements when existing commercial capabilities and services do not fully meet those requirements and the potential modification represents a more cost effective and timely procurement approach for the government;
  3. develop government space systems only when it is in the national interest and there is no suitable and cost-effective U.S. commercial or, where applicable, foreign commercial service system that is or will be available;
  4. refrain from conducting United States government space activities that prevent, discourage, or compete with United States commercial space activities, unless required by national or public security;
  5. to ensure that United States government space technology and infrastructure is made available for commercial use on a reimbursable, interference-free and fair basis to the greatest extent possible.

As a remedy, Orbital ATK and its subsidiary request:

  1. a declaratory judgment that the DARPA RSGS project violates the national space policy and the law on administrative procedure;
  2. a permanent injunction prohibiting any further action in favor of the acquisition of RSGS;
  3. discussion of the standard of review;
  4. dismissal for lack of jurisdiction in the matter.

Rule 12 (b) (1) of the Fed. R. Civ. P. allows a defendant to challenge the jurisdiction of a federal court over the subject matter of a complaint. The question of material jurisdiction may be raised by the parties or by the court, sua sponte, at any stage of the dispute. It is up to the applicant to establish material competence. When the Court approaches the matter solely on the basis of the petition documents, supporting legal notes and relevant allegations of a complaint, the burden on the complainant is simply to make a prima facie case in order to survive the jurisdictional challenge.

Rejection for failure to report

By considering a motion to reject under the Fed. R. Civ. P. 12 (b) (6), the Court must presume that the facts alleged in the complaint are true and must draw all reasonable conclusions in favor of the plaintiff. Judgment must be rendered when the pleadings present no known claim for relief, and the issue can, therefore, be decided as a question of law. The factual allegations must be sufficient to raise a right to redress above the speculative level, assuming that all the allegations in the complaint are true (even if they are in fact questionable).

Question of law

The question before the Court is whether, under the terms of the complaint, the Court has jurisdiction in the matter under the APA and whether the NSP has the force of law.

On the competence in the matter

DARPA contend that the Court has no such jurisdiction over the litigation because the complaint constitutes a challenge to the RSGS program, which is not a questionable agency action under the APA, and, even if it did, DARPA’s determination to continue the RSGS program is committed at the discretion of the agency by law.

Orbital ATK and its affiliate allege that it is because this action arises out of Federal Administrative Procedure Act, this Court has federal jurisdiction under 28 U.S.C. §1331.

Indeed, §1331 grants district courts the original jurisdiction of all civil actions arising out of the Constitution, statutes or treaties of the United States, and although §1331 does not waive the Sovereign government immunity, the APA contains a limited waiver of immunity.

§702 states: A person who suffers legal damage as a result of an agency action has the right to judicial review. An action seeking relief other than damages will not be dismissed on the grounds that it is against the United States. If the complaint does not challenge the agency’s action, a court does not have jurisdiction over the matter for the complaint. The APA also expressly excludes from its scope agency actions [which] are brought at the discretion of the agency by law.

Congress has defined the term agency action to mean all or part of an agency rule, order, license, sanction, remedy, or its equivalent or his refusal, or his failure to act. The term action as used in the APA is a term which does not include all behaviors such as, for example, the construction of a building, the operation of a program or the execution of a contract. Specifically, the Supreme Court expressly excluded claims for overall program improvement from judicial review because a program is not an action that can be conducted separately from an agency.

As the Supreme Court went on to explain, the barrier against this type of large-scale programmatic attack is rooted in the definition of agency action, which, in its words, requires the action be discreet This limitation serves to protect agencies against interference with their legitimate discretion. This prevents judges from becoming entangled in abstract political disagreements that cannot be resolved by the courts due to a lack of expertise and information.

The defendants explain that the RSGS program is not a separate agency action, but a multi-phased program, comprising, for example, several contracts entered into by both DARPA and NRL with various aerospace companies to purchase components and services, a program in which DARPA provides funding for research and development activities in the areas of robotics maintenance in orbit.

Orbital ATK et al respond to this argument by ignoring the wording of their complaint, which clearly challenges the entire RSGS program. The plaintiffs are entitled to a declaratory judgment and an injunction to prevent the defendants from taking action to advance this illegal program. Instead, the plaintiffs oppose the defendants’ motion to dismiss by focusing on DARPA’s award of the OT deal, which they describe as a final agency action under review of the APA.

Despite having devoted four pages to this argument, the plaintiffs do not cite a single passage from the complaint to support the contention that their challenge is limited to the specific decision to enter the TO. The only reference to a consummated contract is the statement that: on February 6, 2017, DARPA announced that it has made a final decision, and Space Systems / Loral LLC has been selected as a business partner.

Instead, the complaint systematically relates to the RSGS program. The first paragraph of the complaint alleges that the DARPA program is in direct violation of several provisions of the 2010 National Space Policy and therefore constitutes a violation of the Law on Administrative Procedure. Throughout the remainder of the seven paragraph introduction, the complainants repeatedly refer to DARPA’s program. Applicants never refer to the OT agreement.

Likewise, the five sections describing the various charges conclude that DARPA’s decision to continue the RSGS program as constituted in direct violation of national space policy is arbitrary, capricious and unlawful.

The relief sought is a declaratory judgment that the DARPA RSGS project violates national space policy and a permanent injunction prohibiting all further action in the pursuit of the RSGS market, and not actions in favor of the OT deal.

The mere fact that the OT agreement is part, perhaps even an integral part, of the RSGS program, is not enough to convert the plaintiffs’ programmatic challenge into a justiciable request for judicial review of the agency’s action. On the contrary, as the RSGS program consists of multiple interdependent actions, of which the achievement of a private partner relationship through the OT agreement is only one, the challenge is not justiciable simply because one of the actions ripe for review prejudices the plaintiffs.

Moreover, contrary to the complainants’ argument, their complaint does not simply challenge one element of DARPA’s action. Rather, the five-count complaint explicitly challenges the development of DARPA’s technology that the plaintiff claim it should buy from the commercial sector (Counts I, II and III). Since the complaint is an attack on the RSGS program, this Court has no jurisdiction in the matter and, for that reason alone, DARPA’s motion must be allowed.

Force of Law

Even if the complainants’ complaint was not interpreted as a challenge to the RSGS program, to prevail over a challenge to the OT agreement, the complainants would still need to establish that the NSP provides the law against which to measure agency action.

On this point, the defendants argue that the terms of the NSP make it clear that this document is merely a political directive from the president to his subordinates.

The defendants do not dispute that a presidential ordinance can have the force and effect of law; rather, they point out that such orders are only enforceable under the APA when issued under:

  1. a statutory mandate;
  2. a congressional delegation of legislative power.

In the context of the APA, the word law refers to the legislative authority under Article I of the Constitution, and not to the executive authority of the President under Article II, which may certainly have legal effect. In accordance with this distinction, some presidential ordinances are only internal directives intended for the internal management of the presidential cabinet and should not be applied by the courts.

The complainants deny that the NSP is simply a management tool; instead, they insist that the NSP 2010 is the latest in a long series of executive decrees concerning space policy which:

  1. are based on express authorizations from Congress;
  2. have been ratified by action of Congress.

Complainants call the NSP a decree, but it is in fact a presidential directive. The defendants will use it by not contesting the fact that presidential policy directives such as the NSP are a form of decree, such that, like any other decree, and depending on the source from which they derive their authority, these directives may have the force of law.

While the Court accepts that, in certain circumstances, a presidential directive might have the force of law, treating it as a form of decree overrides a number of potentially relevant distinctions.

Since the ratification of the Constitution, presidents have issued directives establishing a new policy, decreeing the commencement or cessation of certain actions, or ordering that notification be given to a declaration. These instruments, which can be described as most widely presidential directives, have taken many forms ranging from oral directives to executive orders published in the Federal Register.

In 1935, Congress passed the Federal Register Act, which requires all Presidential Proclamations and Executive Orders, except those which do not have general application and legal effect or which are effective only against Federal agencies, or persons in their capacity as officers, agents or employees, must be published in the Federal Register.

Under the Obama administration, the guidelines that were used to promulgate presidential decisions on security matters were referred to as Presidential Policy Guidelines (PPD) and Presidential Study Guidelines (PSD).

After examining the NSP, which is designated PPD-4, the inescapable conclusion is that it represents a set of internal management guidelines and does not have the force of law. The NSP is a memorandum addressed to twenty-three officials in the executive branch, including the vice president, various cabinet secretaries, the chairman of the Joint Chiefs of Staff, and the administrator of NASA. Although the memorandum identifies a number of presidential directives that it supersedes, it does not cite the authority under which it is issued. In addition, the NSP has not been published in the Federal Register, either in whole or in part.

On the basis of these elements, the Court concludes that the NSP is a directive aimed at the internal management of the executive and it was not promulgated on the basis of the legislative power delegated by Congress. As such, it does not have the force of law and does not constitute a basis for bringing an APA action in this court.

The NSP was intended primarily as a management tool to implement the President’s personal policies and not as a legal framework enforceable by private civil action. Because the NSP is an internal management tool, it is not for the court to determine whether an agency is following the president’s directives.

The plaintiffs still insist that it has the force of law because there are many statutory foundations for the NSP. This argument invites the Court to ignore the opening question of whether the President intended the NSP have the force of law and to simply wonder whether he could have done so. Even if the President had intended the NSP to have the force of law, the general provisions of Congress to which the complainants cite, which make general statements on policy and space programs, fall far short of the specific statutory basis that a presidential directive must receive. Moreover, since DARPA is part of the DoD, neither the president’s power to oversee NASA nor the various other statutes directed against it. NASA to which the complainants cite have no bearing on its authority vis-à-vis DARPA.

Likewise, the statement that it is the policy of the United States for the President to take appropriate steps to ensure, to the greatest extent possible, that the United States has the necessary capabilities to launch and insert payloads. National Security Policy in space when necessary, does not contain any delegation of authority but simply describes United-States policy. It also does not mention the wide range of space-related activities covered in the NSP.

Moreover, although the complainants make great emphasis that in October 2010, four months after the publication of the NSP, Congress ordered the president to develop a national policy to guide the space technology development programs of the U.S. until 2020, and has since tasked NASA with developing an infrastructure plan that is consistent with the national strategic direction set out in the National Space Policy, National Aeronautics and Space Administration Transition Authorization Act of 2017. None of these provisions do not constitute a delegation of legislative power. They simply reaffirm the President’s decision-making role in directing the operations of U.S. space agencies.

The insufficiency of these statutes as a basis for concluding that the NSP has the force of law is reinforced by the important difference between the generality of the statutes cited by the complainants and the specific statutory foundations recognized as giving the force of law to the presidential directives.

In short, the structure and content of the NSP and the statutes and precedents cited by the complainants do not demonstrate that the NSP has the force of law and, as such, Orbital ATK et al cannot support a claim for redress under of the APA.

Conclusion

For the reasons set out above, the defendants’ motion to dismiss for lack of jurisdiction in the matter and for failure to bring a claim on which relief is granted by an appropriate order and the plaintiffs’ complaint is dismissed without prejudice.