Case 1:17-cv-00562-TSE-JFA Document 190 Filed 03/13/18 Page 1 of 36 PageID# 4826 IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF VIRGINIA (Alexandria Division) HARALD MCPIKE, Plaintiff, v. Case No. 1:17cv562-TSE/JFA ZERO-GRAVITY HOLDINGS, INC. f/k/a SPACE ADVENTURES, LTD., THOMAS SHELLEY and ERIC ANDERSON, Defendants. MEMORANDUM IN SUPPORT OF DEFENDANT’S MOTION FOR SUMMARY JUDGMENT Pursuant to Local Rule 5, and this Court’s December 19, 2017 Joint Stipulated Protective Order, Defendant Zero-Gravity Holdings, Inc. provides notice that this filing refers to documents marked “CONFIDENTIAL” and therefore this public version has been provisionally filed with redactions to the Memorandum and Exhibits 7, 14, 16, 17, 18, 19, 21, 24, 25, 29, 30, and 31 with the designated “CONFIDENTIAL MATERIALS.” Unredacted versions have been filed contemporaneously UNDER SEAL. Case 1:17-cv-00562-TSE-JFA Document 190 Filed 03/13/18 Page 2 of 36 PageID# 4827 TABLE OF CONTENTS TABLE OF CONTENTS ................................................................................................................. i TABLE OF AUTHORITIES .......................................................................................................... ii INTRODUCTION .......................................................................................................................... 1 STATEMENT OF UNDISPUTED FACTS ................................................................................... 3 A. The Parties .............................................................................................................. 3 B. SA’s History of Arranging Orbital Flights and Agreements with Russian Space Partners for a Circumlunar Mission ........................................................................ 3 C. SA’s Agreement with Plaintiff................................................................................ 7 D. Plaintiff Stops Making Payments, and Space Adventures Terminates ................. 12 LEGAL STANDARD ................................................................................................................... 17 ARGUMENT ................................................................................................................................ 17 I. There Is No Evidence That an Injury Was Caused by SA’s Lack of a Formal Contract Directly with Roscosmos Approving Plaintiff’s Space Flight .......................................... 19 II. SA Did Not Breach the Agreement .................................................................................. 23 A. It Is Clear From the Face of the Agreement That SA Represented It Had Rights To Provide Plaintiff’s Space Flight Experience .................................................... 24 B. The Undisputed Evidence Is That SA Had Rights to Provide Plaintiff’s Space Flight Experience – and Was Providing It Until Plaintiff Quit ............................ 29 CONCLUSION ............................................................................................................................. 30 i Case 1:17-cv-00562-TSE-JFA Document 190 Filed 03/13/18 Page 3 of 36 PageID# 4828 TABLE OF AUTHORITIES CASES Anderson v. Liberty Lobby, Inc., 477 U.S. 242 (1986) ..................................................................17 Autonomy, Inc. v. TASC, Inc., No. 1:15-cv-505 (AJT/TCB), 2015 WL 7313380 (E.D. Va. Nov. 19, 2015) .......................................................................................20, 21, 22, 28 Babcock & Wilcox Co. v. Areva NP, Inc., 788 S.E.2d 237 (Va. 2016) .........................................24 Bernsen v. Innovative Legal Mktg., LLC, No. 2:11cv546, 2012 WL 3912759 (E.D. Va. Sept. 6, 2012) ....................................................................................................................23 Collier v. Rice, 356 S.E.2d 845 (Va. 1987) .............................................................................19, 22 Design & Prod., Inc. v. Am. Exhibitions, Inc., 820 F. Supp. 2d 727 (E.D. Va. 2011) ........................................................................................................................................17 Drewitt v. Pratt, 999 F.2d 774 (4th Cir. 1993) ..............................................................................17 Enomoto v. Space Adventures, Ltd., 624 F. Supp. 2d 443 (E.D. Va. 1999) ..................................20 Filak v. George, 594 S.E.2d 610 (Va. 2004) .................................................................................22 Hitachi Credit Am. Corp. v. Signet Bank, 166 F.3d 614 (4th Cir. 1999) .................................21, 22 Lloyd v. Travelers Prop. Cas. Ins. Co., 727 F. Supp. 2d 452 (E.D. Va. 2010) .............................24 Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574 (1986).....................................17 MCR Fed., LLC v. JB&A, Inc., 808 S.E.2d 186 (Va. 2017) ..........................................................22 Pocahontas Mining Ltd. Liab. Co. v. CNX Gas Co., 666 S.E.2d 527 (Va. 2008) .........................29 Projects Mgmt. Co. v. Dyncorp Int’l, LLC, No. 1:13-cv-331, 2014 WL 1248075 (E.D. Va. Mar. 26, 2014) .........................................................................................................23 Quadros & Assocs., P.C. v. City of Hampton, 597 S.E.2d 90 (Va. 2004) .....................................24 Reed v. Beverly Hills Porsche, No. 6:17-CV-00059, 2018 WL 797444 (W.D. Va. Feb. 8, 2018) ............................................................................................................................20 Shee Atika Languages LLC v. Glob. Linguist Sols., LLC, No. 1:13cv850 (LMB/TRJ), 2014 WL 11430922 (E.D. Va. Oct. 9, 2014) ......................................................29 Shepherd v. Davis, 574 S.E.2d 514 (Va. 2003) .............................................................................23 ii Case 1:17-cv-00562-TSE-JFA Document 190 Filed 03/13/18 Page 4 of 36 PageID# 4829 Sunrise Continuing Care, LLC v. Wright, 671 S.E.2d 132 (Va. 2009) ...................................22, 23 Waterfront Marine Constr., Inc. v. N. End 49ers Sandbridge Bulkhead Grps. A, B & C, 468 S.E.2d 894 (Va. 1996) ..............................................................................................20 Wright v. Eli Lilly & Co., No. 03-2891, 2004 WL 2656839 (Va. Cir. Ct. Nov. 15, 2004) ..................................................................................................................................19, 22 OTHER AUTHORITIES Fed. R. Civ. P. 56(a) ......................................................................................................................17 Oxford Living Dictionaries (“Opportunity”) .................................................................................25 iii Case 1:17-cv-00562-TSE-JFA Document 190 Filed 03/13/18 Page 5 of 36 PageID# 4830 INTRODUCTION Plaintiff entered into an agreement with Space Adventures, Ltd. (“SA”) in March 2013 for an opportunity to be a passenger on the first circumlunar mission arranged by SA using a specially-modified Russian “Soyuz” spacecraft. Since 2005 SA had been working on a circumlunar mission under agreements with its principal Russian suppliers, Energia and Roscosmos, and early technical studies had shown the mission was theoretically possible. As of 2013, however, additional scientific and engineering analyses were required to iron out the details of a mission, and the Plaintiff, SA, and the Russians recognized that it still entailed significant risks of failure and was dependent upon numerous contingencies. Moreover, the mission would require the parties to make large, up-front capital expenditures to manufacture a specially-modified Soyuz spacecraft (with an enhanced heat shield for safer re-entry into the Earth’s atmosphere, among other changes) and “Blok-DM” propulsion module to be joined to the Soyuz spacecraft for the lunar journey. No person had circled the Moon since Apollo 17 in the early 1970s, and the Russians had never performed a manned circumlunar mission. Reflecting the costs and risks of this unique venture, Plaintiff agreed to pay $150 million to SA prior to the launch date, broken down into six payments that coincided with important project milestones. SA would use most of these funds to maintain its rights to offer this opportunity, commission studies to determine if the mission were technically feasible and to delineate the mission profile, arrange for a trajectory analysis, advance all of the other aspects of Plaintiff’s mission, and pay its Russian suppliers. Plaintiff’s payment obligations included a $7 million non-refundable deposit, just under five percent of the total price, which Plaintiff paid when he entered the agreement in March 2013, which secured for him something he valued greatly: the opportunity to become the first private citizen to circle the Moon and enter the Case 1:17-cv-00562-TSE-JFA Document 190 Filed 03/13/18 Page 6 of 36 PageID# 4831 pantheon of memorable space firsts. The balance of the $150 million would be paid in five tranches at critical junctures leading to the launch. In early 2014, Plaintiff changed his mind and decided, notwithstanding the terms of the agreement, that he would not release any further cash payments to SA or its Russian partners prior to a successful launch. Instead, he asked SA to agree to an amendment under which he would place the balance of the funds into escrow, and would make their release contingent on attaining certain milestone