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Moon Express, Inc. v. Intuitive Machines, LLC

United States District Court, D. Delaware

October 15, 2018

MOON EXPRESS, INC., Plaintiff,

          R. Craig Martin, Ethan H. Townsend, DLA PIPER LLP (US), Wilmington, DE Ilana H. Eisenstein, DLA PIPER LLP (US), Philadelphia, PA Michael P. O'Day, DLA PIPER LLP (US), Baltimore, MD Marc A. Silverman, DLA PIPER LLP (US), New York, NY Attorneys for Plaintiff Moon Express, Inc.

          Oderah C. Nwaeze, DUANE MORRIS LLP, Wilmington, DE David J. Wolfsohn, Kelly Huff, DUANE MORRIS LLP, Philadelphia, PA Attorneys for Defendant Intuitive Machines, LLC.



         Pending before the Court are seven post-trial motions, three filed by Plaintiff Moon Express Inc. ("Plaintiff or "ME") and the remaining filed by Defendant Intuitive Machines, LLC ("Defendant" or "IM").


         This case involves a contractual dispute between ME and IM concerning two contracts: the Flight Software ("FS") contract and the Terrestrial Return Vehicle ("TRV") contract. Both ME and IM filed breach of contract and other claims against each other relating to those contracts. (See generally D.I. 113) After a five-day trial, [1] a jury returned a verdict finding ME liable for breach of both contracts and awarding IM damages of $1.25 million and $2.25 million in equity of ME common stock with respect to the FS contract, plus $732, 000 ($520, 000 plus $212, 000 for "TRV wind down costs") with respect to the TRV contract. (See D.I. 151 at 3, 5) The jury also found that ME prevented IM from performing its obligations under Phase A of the FS contract, so the jury did not reach the question of whether IM breached the FS contract. (See Id. at 1-2) The jury further found that IM breached the TRV contract, but that IM's breach was not material. (See Id. at 4) The jury additionally found in favor of IM on ME's claim for breach of the covenant of good faith and fair dealing with respect to the TRV contract. (See Id. at 6) The Court entered judgment on the jury verdict. (See D.I. 182) The judgment provided in relevant part that the $2.25 million in equity awarded corresponded to 590, 710 shares of ME common stock, as ME proposed. (See D.I. 155)

         Thereafter, both parties filed multiple post-trial motions. IM filed four motions: (i) a motion for attorneys' fees and costs under Fed.R.Civ.P. 54(d)(2) and section 11.15 of the TRV contract (see D.I. 191, 200, 220, 226); (ii) a motion for pre-judgment and post-judgment interest (see D.I. 193, 194, 207, 213); (iii) a motion to order ME to deliver 590, 710 shares of ME common stock to IM pursuant to Fed.R.Civ.P. 70 (see D.I. 198, 199, 211, 217); and (iv) a motion to permit registration of judgment under 28 U.S.C. § 1963 (see D.I. 209, 210, 218, 222). ME filed three motions: (i) a motion for a new trial under Fed.R.Civ.P. 59 (see D.I. 195, 196, 216, 223); (ii) a motion to stay judgment on issuance of 590, 710 shares of ME common stock to IM under Fed. R Civ. P. 62(b) (see D.I. 211, 217, 219); and (iii) a motion to stay judgment of the monetary award to IM under Fed.R.Civ.P. 62(b) (see D.I. 218, 222). The Court heard oral argument on all pending motions on July 30, 2018. (See D.I. 234 ("Tr."))


         ME seeks a new trial with respect to each of the two contracts in dispute. ME presents multiple arguments to support its motion. The Court is not persuaded that the requested relief is warranted on any ground.

         Legal Standards

         ME moves for a new trial pursuant to Federal Rule of Civil Procedure 59(a), which provides in pertinent part:

A new trial may be granted to all or any of the parties and on all or part of the issues in an action in which there has been a trial by jury, for any of the reasons for which new trials have heretofore been granted in actions at law in the courts of the United States.

         Among the most common reasons for granting a new trial are: (1) the jury's verdict is against the clear weight of the evidence, and a new trial must be granted to prevent a miscarriage of justice; (2) newly discovered evidence exists that would likely alter the outcome of the trial; (3) improper conduct by an attorney or the court unfairly influenced the verdict; or (4) the jury's verdict was facially inconsistent. See, e.g., Forrest v. Beloit Corp., 424 F.3d 344, 351 (3d Cir. 2005); Olefins Trading, Inc. v. Han Yang Chem. Corp., 9 F.3d 289-90 (1993); Williamson v. Consol Rail Corp., 926 F.2d 1344, 1352 (3d Cir. 1991); Bohus v. Beloff, 950 F.2d 919, 930 (3d Cir. 1991); see also Zarow-Smith v. N.J. Transit Rail Operations, 953 F.Supp. 581, 584 (D.N.J. 1997).

         The decision to grant or deny a new trial is committed to the sound discretion of the district court. See Allied Chem. Corp. v. Darflon, Inc., 449 U.S. 33, 36 (1980); Olefins Trading, 9 F.3d 282 (reviewing district court's grant or denial of new trial motion under deferential "abuse of discretion" standard). However, where the ground for a new trial is that the jury's verdict was against the great weight of the evidence, the Court should proceed cautiously, because such a ruling would necessarily substitute the court's judgment for that of the jury. See Klein v. Hollings, 992 F.2d 1285, 1290 (3d Cir. 1993).

         Although the standard for grant of a new trial is less rigorous than the standard for grant of judgment as a matter of law - in that the Court need not view the evidence in the light most favorable to the verdict winner - a new trial should only be granted where "a miscarriage of justice would result if the verdict were to stand," the verdict "cries out to be overturned," or where the verdict "shocks [the] conscience." Williamson, 926 F.2d at 1352-53; see also Price v. Del. Dep't o/Corr., 40 F.Supp.2d 544, 550 (D. Del. 1999).

         The FS Contract

         ME first seeks a new trial on IM's breach of contract claim with respect to the FS contract. ME asserts three bases for a new trial: (i) the jury's finding that ME prevented IM from performing its obligations under Phase A of the FS contract was against the great weight of the evidence, (ii) the verdict form was "misleading and confusing" and suffered from plain errors, and (iii) evidence of settlement communications was improperly admitted and prejudiced the verdict. (See D.I. 196 at 2-3)

         First, ME contends that "[o]ne of the most egregious errors at trial was the application of the prevention doctrine to disguise [IM]'s deliberate breach" of the FS contract by failing to deliver the software it had already developed. (D.I. 196 at 9) In ME's view, the "prevention doctrine is patently inapplicable" where the "alleged preventing-party had 'no duty whatsoever' to perform the condition that allegedly prevented performance," as was purportedly the case here. (Id. at 9) ME insists it had no contractual duty to provide a lander vehicle with which IM could perform a test, referred to as a "tethered test," using the relevant software, contrary to IM's claim at trial that ME prevented IM from performing the contract by not producing to IM a test vehicle. (Id. at 9-10)

         IM responds that the jury's conclusion on this issue was "well supported by the trial record." (D.I. 216 at 5) The Court agrees with IM. The record contains sufficient evidence from which a reasonable jury could have found that ME prevented IM from performing its obligations under the FS contract.

         ME now argues that it had no obligation to provide a test vehicle to IM to perform the tethered test, yet before the jury it argued that IM was obligated to perform the tethered test on a test vehicle provided by ME before IM could expect to get paid for developing the software under the contract. (See Trial Tr. at 158-60) (plaintiffs counsel explaining during opening statement that IM demanded payment from ME even though Phase A of FS contract required IM to perform tethered test, which "never occurred") ME's post-trial about-face is striking.

         More importantly, the jury heard testimony from Bob Richards, ME's Chief Executive Officer ("C.E.O."), that Phase A of the FS contract would be incomplete without a successful tethered test, which ME considered "a great milestone;" the tethered test would use a test vehicle provided by ME, and IM would not be entitled to payment unless a successful tethered test had been performed. (See Id. at 238) (Bob Richards noting that "successful tether test as proposed would trigger the final $1, 125 million payment... [and] it was great surprise to me that [IM's C.E.O.] Steve [Altemus] expected that payment had been triggered through a different milestone which I had not approved") The jury heard additional testimony from Bob Richards that ME never provided a test vehicle with which IM could perform the tethered test and it would have been impossible for IM to have delivered the software in the absence of a test vehicle. (See Id. at 882; see also Id. 879 (Bob Richards explaining that "[ME] didn't have the test vehicle completed, so there was no way this software could have been delivered")) The jury could have reasonably credited all of this evidence to conclude that ME prevented IM from fulfilling its obligations under the contract by not providing a test vehicle for IM to conduct the tethered test, a test which ME insisted was required under the contract before ME was obligated to pay IM for the requisite software.

         It is noteworthy that the jury also heard Bob Richards testify that ME had no intention of providing a test vehicle because it was contemplating a new vehicle design and had decided that a tethered test was no longer suitable for testing IM's software. (See Id. at 878-81) (Bob Richards explaining that after several months of internal preliminary design review, "it was becoming very evident" that new micro-concept design for lunar lander "was likely a better way to go," so ME "did not have an intention of actually building another terrestrial test vehicle")

         Furthermore, the jury could have reasonably given more weight to IM's evidence than to ME's evidence. IM presented testimony from Steven Altemus, IM's C.E.O., who negotiated the FS contract with Naveen Jain, ME's Chairman of the Board. However, ME chose not to provide testimony from Naveen Jain, or even to have him present in the courtroom, as IM pointed out during the closing argument (without objection). (See Id. at 1010) (IM's counsel noting during closing argument: "Mr. Jain? Mr. Jain? Not in the courtroom, didn't show up. Think about that. Why didn't Mr. Jain show up? He was the guy that Mr. Altemus was negotiating both ...

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