Judge Rejects SpaceX Attempt to Keep Labor Board Suit in Texas

SpaceX failed to convince a federal judge in Texas to cancel his order sending one of the company’s constitutional challenges against the National Labor Relations Board to California.

Judge Rolando Olvera, an Obama appointee in the US District Court for the Southern District of Texas, on Tuesday rejected the company’s argument that he lacked jurisdiction to order the transfer because a federal appellate court has control of the dispute.

But while SpaceX’s motion was pending in Olvera’s court, the Elon Musk-owned aerospace firm filed an emergency motion with the US Court of Appeals for the Fifth Circuit seeking to nix the order and pause proceedings. The company requested that the appeals court rule before Aug. 14, when its lawsuit is scheduled to be sent to US District Court for the Central District of California.

The Fifth Circuit has instructed the NLRB to respond to the company’s order by Thursday.

The appeals court already halted the unfair labor practice case against SpaceX that gave rise to its constitutional challenge to elements of the NLRB, one of several moves that court has taken that have benefited the company.

The Fifth Circuit kept the case in Texas while it considered whether to hear SpaceX’s appeal of Olvera’s February transfer, even though it ultimately decided—twice—not to take up the appeal.

The appeals court later agreed to hear SpaceX’s challenge to Olvera’s “effective denial” of its motion for a preliminary injunction, which was triggered by the judge not ruling on the company’s request by the deadline it set.

The Fifth Circuit’s consideration of the effective denial, as well as its decision in a similar case, formed the basis of SpaceX’s argument for Olvera to vacate his own transfer order.

The circuit stopped the transfer of that separate, similar case in April, holding that the district court lacked the jurisdiction to send the dispute out of Texas after the plaintiffs appealed the court’s effective denial of a preliminary injunction motion.

In Tuesday’s order, Olvera said the chronology of the SpaceX case makes that earlier Fifth Circuit decision distinguishable.

Olvera first ordered the case to California months before SpaceX filed its April appeal on a separate issue. The judge set the Aug. 14 transfer date last month when he denied the company’s request that he reconsider his February transfer order.

“Denial of a motion for reconsideration, despite being a distinct order, does not derive from a separate action transferring the case, only a denial to revoke the original transfer,” Olvera said. “Further, motions for reconsideration should not serve as a tool to stall litigation in one venue when a court has already ruled that the case should be transferred to another.”

Attorneys from Morgan Lewis & Bockius LLP are representing SpaceX. The NLRB is represented by agency lawyers.

The case is Space Exploration Technologies Corp. v. NLRB, S.D. Tex., No. 24-00001, 8/6/24.