A Texas federal judge on Thursday ruled that a lawsuit by rocket and satellite maker SpaceX claiming the structure of the National Labor Relations Board is unconstitutional must be transferred to a federal court in Los Angeles.
U.S. District Judge Rolando Olvera in Brownsville, Texas, said that while SpaceX has a launch facility nearby, he agreed with the labor board that the case should instead be heard in California where the events that triggered the lawsuit occurred.
SpaceX sued the NLRB last month after it accused the company of illegally firing eight engineers who criticized CEO Elon Musk in a letter to executives. Seven of the workers were based at SpaceX's Hawthorne, California headquarters, and the NLRB case is being heard in Los Angeles.
"This action concerns a California administrative proceeding regarding the actions of a California company and its California employees in California," Olvera wrote.
NLRB General Counsel Jennifer Abruzzo in a statement said she was pleased Olvera had rejected "SpaceX's blatant forum-shopping efforts in Texas."
SpaceX did not immediately respond to a request for comment.
The decision marks a rare instance of an agency securing the transfer of a case that was filed by an opponent of a government policy in one of Texas' smaller federal courthouses, a strategy the Biden administration says reflects "judge shopping."
Many of those courthouses outside Texas' largest cities have just one or two judges, allowing litigants to effectively pick their judges. The Biden administration and American Bar Association have called for changes to curtail the practice.
In Brownsville, cases are divided 50-50 between Olvera, appointee of Democratic former President Barack Obama, and U.S. District Judge Fernando Rodriguez, an appointee of Republican former President Donald Trump.
In its latest lawsuit, SpaceX claims that the NLRB's in-house enforcement proceedings violate its constitutional right to a jury trial. The company also says that limits on the removal of the NLRB's administrative judges and five presidentially-appointed members violate the U.S. Constitution.
The NLRB in court filings has denied the claims and said SpaceX has not alleged an injury giving it standing to sue.
Trader Joe's and two Starbucks baristas who are seeking to dissolve their unions have made similar claims in separate cases.
Thursday's ruling could be a significant blow to SpaceX's case, as Olvera last year had separately ruled for the company when it challenged enforcement proceedings by the U.S. Department of Justice accusing SpaceX of refusing to hire refugees and asylum recipients.
Olvera blocked the department's case from moving forward, ruling that administrative judges who hear cases alleging bias based on citizenship were not properly appointed.
The case is SpaceX v. NLRB, U.S. District Court for the Southern District of Texas, No. 24-cv-0001.
For SpaceX: Catherine Eschbach, Harry Johnson and Michael Kenneally of Morgan Lewis & Bockius
For the NLRB: David Boehm
For the workers: Laurie Burgess of Burgess Law Offices; Anne Shaver and Nimish Desai of Lieff Cabraser Heimann & Bernstein
Read more:
NLRB accuses SpaceX of forum shopping in Texas lawsuit over agency's structure
SpaceX sues US agency that accused it of firing workers critical of Elon Musk
SpaceX illegally fired workers critical of Elon Musk, US labor agency says
Eight SpaceX employees say they were fired for speaking up against Elon Musk
SpaceX wins reprieve from US lawsuit alleging anti-immigrant bias
