Space Racers Hearing Transcript from March 8, 2019

As previously posted, the Judge in the New York case to affirm the $1.3 million Space Racers arbitration award, affirmed the decision. Judge Andrea Masley states in the transcript that she prefers a written decision but chose to render a decision from the bench for the sake of time.

“So I really prefer writing decisions, but I think that it’s important to get this done. “

Judge Andrea Masley, March 8, 2019 Space Race v ASSEC hearing

The judge goes on to provide reasoning for her decision to uphold the arbitration award against Alabama Space Science Exhibit Commission (ASSEC) dba U.S. Space & Rocket Center.

First, ASSEC failed to file a motion to vacate in New York Court.

“The petitioner filed this petition to confirm the award and the respondent moved for dismissal. They did not move to vacate the award. And one of the bases for this decision is that a failure to seek vacatur when I have a petition to confirm is actually fatal under Cullen v. Paine, Webber, 863 F.2d 851. ”

“Let me just note that the Court is aware that the respondent did file an action in Alabama on February 13, 2019 to vacate the arbitration award. The Court notes that this action was first filed, and it rejects the respondents’ argument that the action filed in Alabama was first filed.”

Judge Andrea Masley, March 8, 2019 Space Race v ASSEC hearing

The judge then goes into the specifics of the arbitration agreement not having a clause specifying where arbitration proceedings will be held.

” The Arbitration Agreement specifies Alabama Law will apply. However, this is not dispositive to the forum selection. In fact, there is no forum selected, it’s simply AAA. That is not dispositive. The Court relies on Merrill Lynch v. McLeod, 208 A.D.2d 81 (First Dep’t. 1995). So, as I said, it didn’t actually specify where. There was no forum selection provision, only that Alabama Law would apply. And, in fact, the arbitration panel did apply Alabama Law. “

Judge Andrea Masley, March 8, 2019 Space Race v ASSEC hearing

Judge Masley continued by stating that the main reason for her decision is that ASSEC is not a state agency and not subject to the soverign immunity defese.

“The primary reason for this decision is that the respondent is not an agency of the State of Alabama. That’s not my finding, that is the finding of three other courts in the Odysseia, Parker and — two Odysseia decisions and the Parker decision.”

“And let me just go through the factors for that. So the respondent hires its own personnel, it raises and spends money, it owns property, including the space center, it can sue and be sued, it can have its own counsel, it’s not limited to representation by the State Attorney General’s Office, although I understand you are standing in the shoes of the attorney general today. So I would say it operates more like a private public corporation.”

“With regard to respondent’s waiver at the arbitration, it’s in the transcript, pages 574 to 575, that respondent said it was not and would not be asserting sovereign immunity and so all of the parties went ahead and had the arbitration. Now, this was really a significant waiver because the petitioners and the arbitrators relied on it. They spent an awful lot of time at the hearing, which was, I think, four days. But more importantly, as a result of having the arbitration, even if you look at this petition to confirm as expedited, the statute of limitations has run and now the petitioners have been negatively affected and prejudiced by this decision to say that the sovereign immunity defense was waived.”

“Under Rogers v. Hopper, which is 768 So.2d 963, an Alabama case, the Supreme Court of Alabama held that the qualities to determine whether it’s a state agency or not are whether the entity had the power to be sued or be sued, the power to enter into contracts. Clearly, the respondent has sued and been sued. They have entered into contracts; precisely the contract here. They have the power to sell and dispose of property. They own the property — their property in Alabama. The fourth thing is the power to raise and issue bonds, and it has responsibility for its financial obligations. “

Judge Andrea Masley, March 8, 2019 Space Race v ASSEC hearing

There was also one interesting note concerning ASSEC entering into an arbitration agreement with the ability to declare sovereign immunity.

“And I have to say, I have real concerns, and think I said this at the argument, about the officer at the respondent who signed the agreement petitioner puts in, says it could be fraud. What would happen to the commercial world if such issues were lurking? You wouldn’t be able to have such agreements and so many commercial agreements state that they are to be arbitrated if there’s a disagreement. “

Judge Andrea Masley, March 8, 2019 Space Race v ASSEC hearing

With the filing of this transcript, the order to pay the $1,365,582 award is officially ordered and ends temporary restraining order preventing ASSEC from participating in the court proceedings in Alabama to attempt to vacate the award.

Based on my calculations the award amount will reach $1.4 million in less than 10 days and will continue to compile interest until the award is either paid or vacated.

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The full transcript can be downloaded here.


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