EFiled: Aug 28 2023 04:36PM EDT

Transaction ID 70731887
Case No. 2023-0868-NAC
IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE

CLEVELAND BAKERS AND )

TEAMSTERS PENSION FUND, )
)
Plaintiff, ) Public Version - Filed Aug. 28, 2023
v. )
)
JEFFREY P. BEZOS, ANDREW ) C.A. No. 2023- 0868-NAC
JASSY, KEITH B. ALEXANDER, )
EDITH W. COOPER, JAMIE S. )
GORELICK, DANIEL P. )
HUTTENLOCHER, JUDITH A. )
MCGRATH, INDRA K. NOOYI, )
JONATHAN J. RUBINSTEIN, )
PATRICIA Q. STONESIFER, and )
WENDELL P. WEEKS, )
)
Defendants, )
)
and )
)
AMAZON.COM, INC. )
)
Nominal Defendant. )
)

VERIFIED SHAREHOLDER DERIVATIVE COMPLAINT

Plaintiff Cleveland Bakers and Teamsters Pension Fund (“Cleveland B&T”

or “Plaintiff”), by and through its undersigned counsel, asserts this action on behalf

of Amazon.com, Inc. (“Amazon” or the “Company”) against defendants Jeffrey P.

Bezos (“Bezos”), Andrew Jassy (“Jassy”), Keith B. Alexander (“Alexander”), Edith

W. Cooper (“Cooper”), Jamie S. Gorelick (“Gorelick”), Daniel P. Huttenlocher

(“Huttenlocher”), Judith A. McGrath (“McGrath”), Indra K. Nooyi (“Nooyi”),

Jonathan J. Rubinstein (“Rubinstein”), Patricia Q. Stonesifer (“Stonesifer”), and

Wendell P. Weeks (“Weeks” and collectively, the “Board”). The allegations of this

Complaint are based upon Plaintiff’s knowledge as to itself, and upon information

and belief, including counsel’s investigation and review of publicly available

information and of internal books, records and documents produced by the Company

in response to Plaintiff’s demand (the “Demand”) made under 8 Del. C § 220 (the

“220 Production”),1 as to all other matters.

SUMMARY OF THE ACTION

1. This Court is not in the business of second-guessing corporate decisions

made by disinterested, independent, and adequately informed directors. However,

the Court will question business decisions where directors and officers “fail[] to

exercise any business judgment and fail[] to make any good faith attempt to fulfill

their fiduciary duties” to a corporation and its stockholders.2 Put differently,

directors and officers do not act in good faith when they know that they are making

material decisions without adequate information, without adequate deliberation, and

without regard to whether the decisions can inflict injury or loss on the corporation

and its stockholders.

1
The Company confirmed its production in response to the Demand was complete
on August 18, 2023.
2
In re Walt Disney Co. Deriv. Litig., 825 A.2d 275, 278 (Del. Ch. 2003) (emphasis
in original).
2
 2. This case presents just such a situation. Amazon’s directors and

officers consciously and intentionally breached their most basic fiduciary

responsibilities by approving a series of related-party contracts that are due to

collectively funnel more than $ to a company founded and owned by

Amazon’s founder and Executive Chair, Bezos, following no effort to properly

discharge their fiduciary duties. By approving the related-party contracts during two

cursory meetings without having conducted any meaningful analysis, without

having protected the negotiation process from Bezos’ glaring conflict of interest, and

without having conducted any real scrutiny of the contracts, the Amazon Board

knowingly abdicated its fiduciary duties and acted in bad faith.

* * *

3. In early 2019, Amazon announced “Project Kuiper,” a plan to build a

mega-constellation of satellites that would provide fast, space-based internet access

to users around the globe. Amazon applied for a license to deploy its vast Kuiper

constellation from the Federal Communications Commission (“FCC”) in 2019; the

FCC granted its approval in July 2020. In total, Amazon planned to deploy 3,236

satellites into space over the next decade, at a cost of several billion dollars. The

FCC gave Amazon only six years to launch half of its planned constellation (i.e., it

had to launch 1,618 satellites by July 30, 2026), and only nine years to deploy the

entire 3,236 satellite constellation into orbit (i.e., it had to launch all 3,236 satellites
3
by July 30, 2029). With the FCC’s timestamped approval, Project Kuiper took on a

new urgency.

4. For a company known for its delivery vans and other decidedly

terrestrial endeavors, Amazon admitted—and the Board knew—that Project Kuiper

presented . Because of the sheer size

of its planned constellation, Amazon would have to arrange for several dozen rocket

launches to deploy its satellites to orbit. Internally, Amazon acknowledged

. Negotiating the hugely expensive

contracts with third-party providers to launch the satellites to space on time and on

budget—and then actually achieving a reliable launch cadence—was a Herculean

task. Managing these risks is critical to Project Kuiper’s success.

5. Of no coincidence, Bezos—Amazon’s founder, largest stockholder,

and then-chief executive officer (“CEO”)—just so happened to own a rocket

company, Blue Origin. Bezos founded Blue Origin nearly two decades before his

Amazon announced Project Kuiper, fulfilling a childhood dream of owning and

operating a space company. Blue Origin remains wholly-owned by Bezos, who has

personally funded it for years by selling off swathes of his Amazon stock. Blue

Origin is currently developing a next-generation rocket named the “New Glenn,”

which Bezos would soon make a centerpiece of Amazon’s Kuiper program.

4
 6. At exactly the same time that the FCC granted Amazon’s license in July

2020, Amazon management—led by Bezos—informed Amazon’s Audit Committee

that Amazon was in discussions with Bezos-owned Blue Origin and three other

companies for contracts to launch hundreds of Project Kuiper’s satellites into orbit.

Management had to inform the Audit Committee about these negotiations because

these contracts were admittedly related-party transactions, with Bezos serving as

Amazon’s CEO, director, and largest stockholder on one side, and as Blue Origin’s

owner and primary funding source on the other. These contracts were also

transactions that could plainly be worth billions of dollars, in an industry where

single rocket launches routinely cost upwards of $100 million. Indeed, at this time,

Amazon management told the Audit Committee that the contracts would cost more

than $ .

7. Inexplicably, the most famous, reliable and obvious launch provider in

the world—SpaceX—was not among the four companies presented to the Audit

Committee. SpaceX—founded, owned, and managed by Bezos’ longtime rival,

Elon Musk—has by far the most proven rocket launch track record in history, having

now completed some 235 successful launches of its Falcon 9 rocket. SpaceX is also

known to be one of the most cost-effective launch providers, due to its ability to re-

use rocket boosters and carry large payloads on each launch.

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 8. Bezos was intimately familiar with SpaceX and Musk’s success, as

Blue Origin has repeatedly lost out to SpaceX in competing for lucrative government

launch contracts. Each time, Musk has publicly taunted Bezos’ loss on Twitter; and

each time, Bezos has filed legal protests and challenges seeking to overturn the

government’s decisions to choose SpaceX over Blue Origin. In one notable instance,

Blue Origin appealed the United States government’s choice to award a multi-

billion-dollar lunar contract to SpaceX, even though the government explained that

it chose SpaceX because Blue Origin’s bid was nearly double SpaceX’s offered cost.

In the face of SpaceX’s proven reliability and cost advantages, Bezos-led Amazon’s

decision to not even consider SpaceX as a launch provider illustrates the glaring

conflict of interest Bezos’ affiliation with both Amazon and Blue Origin presented,

and the substantial impact these conflicts had on the Board’s ability to protect the

best interests of the Company and its stockholders in negotiating the contracts.

9. At the time the Audit Committee was first notified of these launch

contracts in July 2020, a host of factors should have prompted the Audit Committee

to step up and actually exercise its oversight responsibility. Any of the critical risks

associated with Project Kuiper—the importance and sheer number of the launch

contracts; the multi-billion dollar cost; the palpable conflicts presented by

negotiating a significant related-party transaction where Bezos and Blue Origin

stood to gain from Bezos steering launch contracts to Blue Origin—standing alone
6
should have prompted a responsible board to immediately educate itself and take

ownership of the process to protect the interests of Amazon and its public

stockholders.

10. A responsible board would, for example, engage experts and advisors,

fully oversee and inform itself about the contract negotiations, implement safeguards

to insulate these negotiations from conflicts of interest, wall Bezos off from

negotiations, and ensure that Amazon was conducting a full and fair procurement

process that Bezos could not skew in favor of his personal rocket company.

11. The Audit Committee—none of whom have any experience with rocket

launches—took none of these steps. Instead, it left Bezos and his loyal management

team to commandeer the process of selecting and negotiating with the launch

providers—including with Bezos-owned Blue Origin and its New Glenn rocket and

with other entities that planned to use Blue Origin engines in their rockets. For a

full year and a half, the Board sat, ostrich-like, while the negotiation process

unfolded without their involvement or oversight. Indeed, the Board did not even

bother to ask for—and did not receive—any updates as to the status of the

negotiations.

12. In January 2022, nearly 18 months after the Audit Committee was first

informed that Bezos and his management team were negotiating related-party

transactions with Bezos’ rocket company, Bezos and his management team returned
7
to the Audit Committee with two fully-negotiated related-party contracts—one with

Blue Origin and one with an entity Blue Origin provided rocket engines to—for the

Committee to approve. First, Amazon planned to contract with Blue Origin directly

for up to 27 launches aboard the New Glenn rocket for total payments of up to $

. Second, Amazon planned to contract with another launch provider named

United Launch Services (“ULS”) for 38 launches aboard a rocket called the Vulcan

Centaur for total payments of up to $ . Because this ULS rocket relied on

Blue Origin engines to fly, up to $ of the $ to be paid to ULS

would flow to Blue Origin supplying engines to ULS. In total, Amazon would be

paying nearly $ to Blue Origin under these contracts. These contracts

needed separate Audit Committee approval because both were related-party

transactions.

13. Beyond the conflicted nature of these contracts, there was another

glaring problem: Blue Origin’s lack of reliability. Since its founding, Blue Origin’s

rocket development track record has featured more blemishes and setbacks than

successes. Blue Origin needed well over a decade to develop a small rocket meant

to take humans into space for only a few minutes at a time. In 2015, Blue Origin set

out to develop the New Glenn, which was a much larger rocket—featuring seven

vastly more powerful, to-be-developed engines—meant to carry massive loads of

cargo to orbit. Blue Origin’s New Glenn rocket has yet to take flight, and Blue
8
Origin has yet to complete development of the engine on which ULS’ rocket depends.

And its timeline to achieve these milestones keeps extending. Blue Origin originally

predicted that the New Glenn rocket would take off in 2020. Then in 2021. Then

in 2022. Today, it claims the rocket will fly in 2023. As of the filing of this

complaint, the New Glenn and the Blue Origin-reliant Vulcan Centaur remain firmly

rooted to the ground.

14. None of this troubled the Board. During a January 31, 2022 meeting,

the Audit Committee received a brief summary of the terms of the contracts. It had

no information about how Bezos and his management team conducted the

negotiations with Blue Origin. It had no information about the level of Bezos’

involvement. It had no information about how many other launch providers (if any)

Bezos and his management team explored contracting with. It had no information

about Blue Origin’s struggles to develop the New Glenn, about how these struggles

might jeopardize Amazon’s ability to meet its FCC-mandated 2026 deadline, or

about how Blue Origin planned to overcome these struggles. It did not receive a

presentation or any other materials about these contracts. It did not receive any

guidance from any outside expert as to whether these contracts were commercially

fair and reasonable to Amazon and its public stockholders.

15. Worst of all, the Audit Committee did not even try to gather more

information or ask any questions. The minutes from the January 31, 2022 meeting
9
reflect the Audit Committee’s utter lack of concern in approving $ worth of

contracts with Amazon’s founder. The Audit Committee simply rubberstamped

sending $ to Blue Origin following after only a few minutes of discussion.

Upon information and belief, these related-party transactions were only one of many

agenda items for an Audit Committee meeting that lasted a little over three hours. 3

16. Two months later, in March 2022, the full Amazon Board continued

this ostrich-like approach to these material and risky related-party contracts.

17. On March 3, 2022, Amazon management presented a summary of the

Blue Origin and ULS contracts to the full Board for approval, together with a third

contract that did not involve Blue Origin. This third contract was with a European

company named Arianespace, with Amazon paying $ for 18 launches.

In total, Amazon was seeking the Board’s approval for up to $ worth of

launch contracts. These contracts represented the second-largest capital expenditure

in Amazon’s 25+ year history, second only to Amazon’s acquisition of Whole

Foods, and would send more than $ to Bezos’ Blue Origin. Unsurprisingly,

SpaceX was not even mentioned as a possible launch provider: an omission made all

3
Plaintiff makes this allegation on information and belief because, as explained at
¶49 n.55, infra, this document is heavily redacted, preventing Plaintiff from having
direct insight into the full details of the Audit Committee’s agenda at this meeting.
10
the more troubling by Blue Origin’s longstanding struggles to get its rocket to

actually work.

18. These contracts also made Amazon’s Project Kuiper program critically

dependent on Bezos’ rocket company. In total, Amazon intends to rely on Blue

Origin for up to 78% of its total planned launches, and to launch up to of the

total Kuiper satellites contemplated in these three contracts. At the time of the March

3, 2022 Board meeting, Blue Origin’s New Glenn rocket was more than two years

behind schedule, and Blue Origin had yet to complete developing the engine on

which ULS’ rocket relied.

19. The Board did nothing. In stark contrast to Amazon’s $13.7 billion

acquisition of Whole Foods, in connection with which Amazon engaged a financial

advisor, the Board here did not engage any experts or advisors at all. The Board

only received a brief summary of the terms of the contracts. The Board did not ask

for or receive any information about the negotiations of the contracts, how providers

were identified and selected, or the handling of Bezos’ conflicts of interest. The

Board received no information about the procurement process, received no

presentations concerning these contracts, received no expert analysis or approval,

and received no information about the New Glenn rocket’s years of delays.

Operating almost entirely in the dark, the Board took less than 40 minutes to

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rubberstamp an $ transaction that would send $ to Bezos’ own

rocket company.

20. In total, between the Audit Committee’s single meeting and the Board’s

single brief meeting, Amazon’s directors likely devoted barely an hour before

blindly signing off on funneling $ of Amazon’s money to Bezos’ unproven,

struggling rocket company.4

21. The Board completely abdicated its fiduciary duties in approving these

contracts. Any one of a number of factors—the risk, the historic size of the contracts,

the blatant conflicts of interest—should have prompted the Board to exercise

heightened diligence over these massive contracts. But the Board knowingly

adopted a posture of indifference and instead reduced its role to almost nothing,

leaving Bezos-led management entirely free to negotiate with Bezos-owned Blue

Origin for a year and a half, with no Board oversight. The net result of these

negotiations, unsurprisingly, is that Amazon has hung Project Kuiper’s fate on Blue

Origin’s success; has funneled $ of Amazon’s corporate funds to Bezos’

rocket company with no Board protections or oversight; and excluded the most

obvious and affordable launch provider, SpaceX, from its procurement process

4
Amazon’s heavy redactions of the documents produced in response to Plaintiff’s
Section 220 Demand make it impossible to determine precisely how much time the
Audit Committee devoted to discussing the contracts with Blue Origin and ULS.
See ¶49 n.55, infra.
12
because of Bezos’ personal rivalry with Musk. Plaintiff brings this action to remedy

the Board’s knowing and deliberate indifference to their fiduciary duties in entering

into these highly material, related-party corporate transactions.

JURISDICTION

22. This Court has jurisdiction over this action pursuant to 10 Del. C. § 341.

23. As directors and officers of a Delaware corporation, the Individual

Defendants have consented to this Court’s jurisdiction pursuant to 10 Del. C. § 3114.

24. This Court has jurisdiction over Amazon pursuant to 10 Del. C. §3111.

THE PARTIES

A. PLAINTIFF

25. Plaintiff Cleveland Bakers and Teamsters Pension Fund is an Amazon

stockholder and has been an Amazon stockholder at all times relevant to the claims

asserted herein.

B. NOMINAL DEFENDANT

26. Nominal Defendant Amazon.com, Inc. is a Delaware corporation.

C. DEFENDANTS

27. Defendant Jeffrey P. Bezos is Amazon’s Executive Chair. Bezos

founded Amazon from the garage of his Seattle home in 1994 and has been the

Company’s visionary leader ever since, controlling all aspects of the Amazon’s

operations and strategy. Indeed, throughout Amazon’s history and evolution, Bezos

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has remained its single most dominant influence. Market observers have noted that

under Bezos’ leadership, Amazon “was an intensely personal venture, run by one of

the wealthiest men in the world according to his own desires and reflecting his own

personality.” Amazon’s staff leapt to accommodate Bezos’ personal passion

projects, devoting virtually limitless resources to make his commands a reality. For

example, Amazon developed the Alexa virtual assistant after Bezos sent a casual

email to his subordinates:

[Bezos] came up with the idea of a smart speaker in January 2011, back
in the era of Google Plus and the iPod Shuffle. Bezos emailed his top
deputies that month and declared, “We should build a $20 device with
its brains in the cloud that’s completely controlled by our voice.”

28. For the next nearly four years, Bezos obsessively micromanaged the

project, pushing teams in Atlanta and Gdansk to make speech recognition seamless.

He put in place a surreal testing protocol that involved hiring temps to spend days in

empty apartments chattering away to silent speakers, and berated executives who

told him it would take decades to develop speech recognition.

29. Bezos was Chairman of the Board from 1994 until he became Executive

Chair in July 2021. Bezos served as Amazon’s Chief Executive Officer (“CEO”)

from May 1996 to July 2021 and as President from the Company’s founding until

July 1999 and again from October 2000 to July 2021. Further, Bezos is Amazon’s

14
largest stockholder, beneficially owning 1,258,288,970 Amazon shares, or 12.3% of

Amazon’s outstanding stock.

30. Defendant Andrew P. Jassy has been Amazon’s President, CEO, and a

director since July 2021. Bezos personally mentored Jassy and hand-picked Jassy

to succeed him as CEO. Jassy has been an Amazon employee since 1997. Bezos

recruited Jassy to join Amazon, and later installed Jassy to lead Amazon Web

Services (“AWS”) where Jassy served as CEO from April 2016 to July 2021 and as

Senior Vice President from April 2006 until April 2016.

31. Jassy has held various leadership roles across the Company, including

business-to-business and business-to-consumer businesses, and served as Bezos’

first lieutenant in running the Company.

32. Jassy has been rewarded handsomely for his loyalty to Bezos. Since

Bezos installed Jassy to head AWS, and through 2022, Jassy has received total

compensation of $305,733,907, consisting of $1,367,500 in salary, $302,470,166 in

stock awards, and $1,896,271 in other compensation. Jassy is the second largest

individual shareholder of Amazon.

33. Defendant General (Ret.) Keith B. Alexander has been an Amazon

director since September 2020. Alexander serves on Amazon’s Audit Committee.

Upon information and belief, Alexander has no experience or expertise in rocket

launches. Alexander has received $934,297 in compensation as an Amazon director.

15
 34. Alexander has benefited from his association with Bezos and Amazon.

Alexander founded IronNet, Inc. (“IronNet”) in 2014, using his background as

Commander of U.S. Cyber Command from May 2010 through March 2014, and

Director of the National Security Agency and Chief of the Central Security Service

from August 2005 through March 2014. IronNet is a software development and

service provider that provides cybersecurity services to both public- and private-

sector clients to help detect and combat cyberattacks on computer systems.

35. On June 25, 2019, IronNet announced its partnership with AWS to

provide cloud-native network traffic analysis. The partnership allowed IronNet to

expand its cybersecurity services to cloud-based and hybrid network environments

due to AWS’s established presence in cloud computing environments.

36. Amazon and IronNet further confirmed their relationship with

Alexander’s appointment to Amazon’s Board in September 2020. Subsequently, on

March 15, 2021, IronNet entered into a merger agreement with LGL Systems

Acquisition Corp., a special purpose acquisition company (the “IronNet Merger”).

On June 23, 2021, in the run-up to the IronNet Merger, Bezos’ AWS announced it

had named IronNet the Best Cybersecurity Solution for Public Sector Organizations

as part of its 2021 Global AWS Public Sector Partner Awards.

37. On August 26, 2021, IronNet completed its merger, capitalizing in part

on Bezos’ AWS award ahead of the stockholder vote on the IronNet Merger.
16
IronNet’s stock price climbed to over $40 per share by mid-September 2021. At the

same time, Alexander took advantage of IronNet’s good fortune and soaring stock

price and sold 85% of his holdings, netting $5 million in stock sale proceeds thanks

in part to Bezos and AWS.

38. Defendant Edith W. Cooper has been an Amazon director since

September 2021. Cooper serves on Amazon’s Leadership Development and

Compensation Committee. Upon information and belief, Cooper has no experience

or expertise in rocket launches. Cooper has received $958,171 in compensation as

an Amazon director.

39. Defendant Jamie S. Gorelick has been an Amazon director since

February 2012. Gorelick serves on Amazon’s Nominating and Corporate

Governance Committee. Upon information and belief, Gorelick has no experience

or expertise in rocket launches. Gorelick has received $2,552,684 in compensation

as an Amazon director.

40. Defendant Daniel P. Huttenlocher has been an Amazon director since

September 2016. Huttenlocher serves on Amazon’s Leadership Development and

Compensation Committee. Upon information and belief, Huttenlocher has no

experience or expertise in rocket launches. Huttenlocher has received $2,740,697 in

compensation as an Amazon director.

17
 41. Defendant Judith A. McGrath has been an Amazon director since July

2014. McGrath serves on Amazon’s Leadership Development and Compensation

Committee. Upon information and belief, McGrath has no experience or expertise

in rocket launches. McGrath has received $3,601,324 in compensation as an

Amazon director.

42. Defendant Indra K. Nooyi has been an Amazon director since February

2019. Nooyi serves as Chair of Amazon’s Audit Committee. Upon information and

belief, Nooyi has no experience or expertise in satellite rocket launches. Nooyi has

received $1,782,837 in compensation as an Amazon director.

43. Defendant Jonathan J. Rubinstein has been an Amazon director since

December 2010. Rubinstein serves on Amazon’s Nominating and Corporate

Governance Committee. Upon information and belief, Rubenstein has no experience

or expertise in rocket launches. Rubinstein has received $3,397,498 in compensation

as an Amazon director.

44. Defendant Patricia Q. Stonesifer has been an Amazon director since

February 1997. Stonesifer serves on Amazon’s Nominating and Corporate

Governance Committee. Upon information and belief, Stonesifer has no experience

or expertise in rocket launches. Stonesifer has been a director of Amazon since

1997, and has received $4,640,320 in compensation as an Amazon director since

2008.
18
 45. Defendant Wendell P. Weeks has been an Amazon director since

February 2016. Weeks serves on Amazon’s Audit Committee. Upon information

and belief, Weeks has no experience or expertise in rocket launches. Weeks has

received $1,606,117 in compensation as an Amazon director.

46. Defendants Bezos and Jassy are referred to collectively herein as the

“Officer Defendants.” Defendants Bezos, Jassy, Alexander, Cooper, Gorelick,

Huttenlocher, McGrath, Nooyi, Rubinstein, Stonesifer, and Weeks are referred to

collectively herein as the “Director Defendants.”

SUBSTANTIVE ALLEGATIONS

I. BEZOS FOUNDS BLUE ORIGIN AND FULFILLS HIS CHILDHOOD

DREAM

47. Soon after he founded Amazon in 1994, Bezos used his newfound

wealth to fulfill one of his lifelong ambitions: to found a space company. In 2000,

Bezos founded Blue Origin, with the goal of taking both humans and cargo to space

and beyond. Today, Bezos remains Blue Origin’s only owner, and he self-funds the

company by selling some $1 billion of his Amazon stock each year. 5 Bezos

considers Blue Origin his “most important work.”6

5
Franklin Foer, Jeff Bezos’s Master Plan, THE ATLANTIC, November 2019.
6
Id.
19
 48. Bezos’ creation of Blue Origin grew from his lifelong obsession with

outer space. In high school, Bezos showed a great interest in space-related classes,

and claimed that the future of mankind lies beyond Earth. During his high school

valedictory speech, Bezos “dreamed aloud of the day when millions of his fellow

earthlings would relocate to colonies in space. A local newspaper reported that his

intention was ‘to get all people off the Earth and see it turned into a huge national

park.’”7

49. But even from these early days, Bezos’ passion for space travel was not

from the perspective of a budding astronaut, but from that of an entrepreneur. In an

interview soon after his high school graduation, Bezos talked about his dream of

building hotels, amusement parks, and colonies for humans who were in orbit around

the Earth. Part of his rationale, explained the 18-year old Bezos, was to preserve the

Earth from overuse through resource depletion.

50. In its early years, Blue Origin focused primarily on developing rockets

to take people into space. Blue Origin first developed a passenger rocket named

New Shepard, with the first test vehicle taking flight in 2006. This single-stage

booster rocket with a small crew capsule sitting atop was designed to carry a handful

passengers to sub-orbital space for short durations, with total trips lasting only

7
Id.
20
around 10 minutes. New Shepard followed a simple straight up-and-down flight

path, meant to give passengers a brief experience of space and weightlessness before

returning to Earth.

51. Blue Origin made slow progress developing New Shepard. It took Blue

Origin 9 years after the initial test flight in 2006 to complete testing of the rocket

engine that powered New Shepard, known as the BE-3. By February 2016, Blue

Origin had only built three New Shepards, one of which was lost to an explosion

during a test flight. It took Blue Origin another five years to complete its first crewed

mission on New Shepard, with Bezos himself flying on the rocket’s inaugural

manned flight in 2021.

II. BLUE ORIGIN STRUGGLES TO DEVELOP THE NEW GLENN

ROCKET AND RAPIDLY LOSES GROUND TO SPACEX

A. BLUE ORIGIN FACES REPEATED SETBACKS IN DEVELOPING THE

NEW GLENN ROCKET

52. In 2015, Blue Origin announced its intention to develop a rocket

designed to carry payloads into orbit around Earth. Blue Origin named this orbital

launch vehicle the “New Glenn,” and it would be powered by multiple BE-4 engines

(the more powerful successor to the BE-3 engine that propels the New Shepard). As

with the New Shepard, Blue Origin intended for New Glenn’s launcher to be fully

reusable, with the rocket landing vertically back on Earth after deploying its payload

to orbit.

21
 53. New Glenn was a vastly more powerful and complex rocket than its

New Shepard predecessor. New Shepard relied on a single BE-3 engine that

generated 110,000 pounds of thrust—a relatively simple proposition in the world of

rocket science.8 New Glenn, by contrast, was designed to launch with seven BE-4

engines that were each much larger than the New Shepard’s BE-3 engine, and which

would combine to generate four million pounds of thrust at liftoff. 9 This increased

the complexity and added to the difficulty of ensuring that the New Glenn would be

fully reusable: a goal that was not just a huge technological challenge, but that was

critical to the success and advertised affordability of the new rocket.

54. At the time Blue Origin announced the New Glenn, it also stated that

the new rocket would take its first test flight in 2020. Once this project was

announced, Bezos moved to rapidly expand Blue Origin’s workforce, adding

hundreds of engineers between 2016 and 2018.10 In 2018, Blue Origin made several

8
Eric Berger, Four Huge Rockets Are Due to Debut in 2020—Will Any Make It?,
ARS TECHNICA (July 24, 2018), https://arstechnica.com/science/2018/07/the-year-
2020-could-see-the-unheard-of-debut-of-four-big-rockets-or-not/.
9
Id.
10
Eric M. Johnson, Bezos Throws Cash, Engineers at Rocket Program as Space
Race Accelerates, REUTERS (Aug. 3, 2018), https://www.reuters.com/article/us-
space-blueorigin/bezos-throws-cash-engineers-at-rocket-program-as-space-race-
accelerates-idUSKBN1KO0HN.
22
fundamental design changes to the New Glenn and to the BE-4 engine that was due

to power it, which cast the company’s predicted 2020 launch date in serious doubt.

55. That same year, in discussions with its earliest customers, Blue Origin

officials privately described the company’s 2020 launch target as “very

aggressive.”11 Also in 2018, media outlets publicly questioned Blue Origin’s

projected 2020 launch date, and predicted delays of at least one year in bringing the

new rocket into orbit.12 Despite these private and public concerns, Blue Origin stuck

by its “very aggressive” 2020 launch prediction.

B. SPACEX BEATS BLUE ORIGIN FOR A CRITICAL CONTRACT,

FURTHER IMPERILING AND DELAYING DEVELOPMENT OF THE NEW
GLENN

56. By 2020, it quickly became clear that Blue Origin was not close to

launching New Glenn. This failure was driven in large part by Blue Origin’s

repeated loss of lucrative government contracts and funding, most notably to

SpaceX—led by Bezos’ longtime rival, Elon Musk.

57. Musk, as is widely known, is the CEO of SpaceX, which he founded in

2002 to achieve many of the same goals that fuel Bezos’ space ambitions. Like

Bezos, Musk sought to develop a fully-reusable rocket that could eventually be used

11
Id.
12
Eric Berger, Four Huge Rockets Are Due to Debut in 2020—Will Any Make It?,
ARS TECHNICA (July 24, 2018), https://arstechnica.com/science/2018/07/the-year-
2020-could-see-the-unheard-of-debut-of-four-big-rockets-or-not/.
23
to transport humans to Mars, and fulfill his goal of making humankind a “multi-

planetary species.” Unlike Bezos, however, Musk saw rapid and impressive success

with his own space company.

58. In September 2008, SpaceX successfully launched its Falcon 1 rocket

from Omelek Island in the Marshall Islands, marking the first successful orbital

launch by a privately funded company. The next year, in 2009, a SpaceX Falcon 1

rocket delivered a satellite (the Malaysian RazakSat satellite) into orbit.

59. Reflecting its rapid pace of development, SpaceX soon retired the

Falcon 1 rocket and replaced it with the larger and more powerful reusable Falcon

9. SpaceX launched the Falcon 9 rocket for the first time in June 2010. In 2012, a

Falcon 9 rocket carried a SpaceX Dragon 1 cargo capsule to orbit and docked with

the International Space Station (“ISS”). Since then, the Falcon 9 and Dragon 1

completed 23 cargo missions to the ISS, until Dragon 1 was retired in 2020.

60. By 2017, SpaceX commanded 45% of the market for awarded

commercial launch contracts, and expanded its development of the Dragon capsules

to carry human passengers to orbit, as well as cargo. In the summer of 2020, SpaceX

launched a Falcon 9 with two NASA astronauts to the ISS, becoming the first private

company to send a crewed aircraft into space. Illustrating SpaceX’s vast advantage

over Blue Origin, Blue Origin’s New Shepard did not carry passengers into space

until 2021—on a flight that only lasted a few minutes. For his part, Musk has taken
24
every opportunity to publicly mock Bezos and Blue Origin, as detailed further

below.

61. Musk’s SpaceX was therefore a formidable—and far more proven—

competitor to Blue Origin when the two went head-to-head for valuable

governmental and military launch contracts. In 2019, Blue Origin, SpaceX, and

other companies competed for the $3.4 billion National Security Space Launch

Phase 2 Launch Service Procurement (“NSSL”), awarded by the United States Air

Force. The NSSL is intended to assure reliable access to deliver payloads to space

for the United States Department of Defense and other governmental and military

bodies. Blue Origin had campaigned aggressively to be included in this multi-

billion-dollar contract, going so far as to file a “pre-award” protest with the

Government Accountability Office in 2019, challenging certain criteria that the Air

Force was using to evaluate and award the launch contracts under the NSSL.

62. In August 2020, the United States Air Force announced the winning

bidders for the NSSL; Blue Origin was not among them. The Air Force instead

selected SpaceX and United Launch Alliance (“ULA”) to provide launches for the

NSSL, awarding SpaceX $316 million and ULA $337 million. 13

13
Space Force Awards National Security Space Launch Phase 2 Launch Service
Contracts to ULA, SpaceX, AIR FORCE (Aug. 7, 2020),
https://www.af.mil/News/Article-Display/Article/2305576/space-force-awards-
national-security-space-launch-phase-2-launch-service-contra/.
25
 63. Losing out entirely on the NSSL was a crushing blow for Blue Origin.

Blue Origin’s senior vice president responsible for New Glenn, Jarrett Jones, bluntly

stated that not being included in the NSSL “was a big hit for us” and that Blue Origin

“had to consider the economics” after this loss.14 In Jones’ estimation, losing out on

the five-year NSSL procurement contract cost Blue Origin up to $3 billion in

revenue.15

64. Only four months later, the Air Force announced that it was terminating

an award it had previously granted Blue Origin for the development of the New

Glenn. In October 2018, the United States Air Force announced that it had awarded

Blue Origin $500 million for the development of the New Glenn as a potential

competitor for future military contracts. In December 2020, however, the Air Force

terminated this award; Blue Origin had received only $255.5 million of the $500

million that it had originally been awarded, leaving it with a $244.5 million hole to

its expected revenue.16

65. These setbacks delayed the development of the New Glenn. Blue

Origin executive Jones stated that Blue Origin had to “re-baseline” the New Glenn’s

14
Jeff Foust and Sandra Erwin, Blue Origin Delays First Launch of New Glenn to
Late 2022, SPACENEWS (Feb. 25, 2021), https://spacenews.com/blue-origin-
delays-first-launch-of-new-glenn-to-late-2022/.
15
Id.
16
Id.
26
timeline and development plan.17 In February 2021, driven by the loss of major

expected sources of funding and revenue, Blue Origin publicly delayed the projected

launch of New Glenn to the fourth quarter of 2021.18

66. The effect of the delays in the New Glenn’s development was not

limited only to Blue Origin, but was also felt by other rocket companies that were

depending on Blue Origin’s engines for use in their own rockets. Most notably,

ULA (which won part of the NSSL contract that Blue Origin lost out on) planned to

use Blue Origin’s BE-4 engines in its next-generation Vulcan Centaur rocket that

remained under development at this time. Because ULA’s Vulcan Centaur depended

on receiving fully-developed BE-4 engines from Blue Origin, Blue Origin’s

development delays directly impacted the development and testing of the Vulcan

Centaur. In February 2021, when Blue Origin was forced to delay the projected

launch of the New Glenn to late 2021, ULA was forced to similarly announce that

the Vulcan Centaur would also not launch until the fourth quarter of 2021.

C. BLUE ORIGIN LOSES ANOTHER CONTRACT TO SPACEX, WHILE

MUSK CONTINUES TO MOCK BEZOS

67. In 2020, Blue Origin again competed against SpaceX and other

companies for contracts under NASA’s Human Landing System (“HLS”) program.

17
Id.
18
New Glenn’s Progress Towards Maiden Flight, BLUE ORIGIN (Feb. 25, 2021),
https://www.blueorigin.com/news/new-glenns-progress-towards-maiden-flight/.
27
The HLS program is a key part of NASA’s Artemis mission, which aims to return

American astronauts to the surface of the moon by 2024. Initially, Blue Origin fared

well with NASA. In 2020, NASA awarded $1 billion as part of “study contracts” to

several companies for design and concept development for NASA’s next crewed

lunar lander. Of this $1 billion, NASA awarded $579 million to a team led by Blue

Origin, $135 million to SpaceX, and $253 million to a team headed by Dynetics, a

subsidiary of Leidos Holdings, Inc. Earning by far the largest share of NASA’s

study contracts should have put Blue Origin in prime position to win the actual HLS

contracts.

68. But it didn’t. In April 2021 (only two months after Blue Origin publicly

announced the delay of the New Glenn), NASA announced that it had awarded the

entire HLS contract—worth a staggering $2.9 billion—to SpaceX. As was his wont,

Musk wasted no time in publicly taunting Bezos:

69. Bezos was furious. The next month, in May 2021, Blue Origin filed a

protest with the Government Accountability Office (“GAO”), challenging the

manner in which NASA had selected SpaceX. Blue Origin criticized NASA’s award
28
as “flawed” and claimed that NASA had “moved the goalposts at the last minute.” 19

In reality, however, Blue Origin lost the HLS contract for a simple reason: its $5.99

billion bid was more than double SpaceX’s $2.9 billion bid.20

70. On July 26, 2021, Bezos issued an open letter complaint to NASA

administrator Bill Nelson, in which Bezos tried to use his own vast personal wealth

to compensate for Blue Origin’s inability to compete with SpaceX on the merits.

Bezos lamented: “Instead of investing in two competing lunar landers as originally

intended, the Agency chose to confer a multi-year, multi-billion-dollar head start to

SpaceX. That decision broke the mold of NASA’s successful commercial space

programs by putting an end to meaningful competition for years to come.” 21

71. In the name of seeking to foster “competition” that would benefit

NASA and the industry in the long run, Bezos offered to “waiv[e] all payments in

the current and next two government fiscal years up to $2B to get the program back

on track right now.”22 Bezos made clear that this $2 billion offer was “not a deferral,

19
Christian Davenport, Jeff Bezos Challenges NASA Moon-contract Award to Elon
Musk’s SpaceX, WASHINGTON POST (Apr. 26, 2021),
https://www.washingtonpost.com/technology/2021/04/26/jeff-bezos-challenges-
nasa-moon-contract-award-elon-musks-spacex/.
20
See Matter of: Blue Origin Fed'n, LLC; Dynetics, Inc.-A Leidos Co., B-419783,
2021 WL 3545283, at *25 (July 30, 2021).
21
Blue Origin, Open Letter to Administrator Nelson (July 26, 2021),
https://www.blueorigin.com/news/open-letter-to-administrator-nelson.
22
Id.
29
but is an outright and permanent waiver of those payments.”23 In other words, Bezos

directly and transparently offered to personally swallow $2 billion of Blue Origin’s

bid if NASA would only reconsider its decision to award SpaceX the entirety of the

HLS contract. In a further reflection of his desperation, Bezos also offered to “accept

a firm, fixed-priced contract for this work, cover any system development cost

overruns, and shield NASA from partner cost escalation concerns.” 24 In an industry

that is infamous for technical complexity, lengthy delays, and cost overruns, this

offer was nothing short of extraordinary.

72. Bezos’ transparent and last-ditch attempt to win the HLS contract was

not well received. In response, NASA’s Deputy Administrator Lori Garver stated:

“NASA can’t just ‘take offers’ because funding is offered. There’s absolutely

nothing to stop Blue from moving forward with their own money to get in a better

position to win something in the next round.”25

73. Just days later, on July 30, 2021, the GAO formally rejected Bezos and

Blue Origin’s protest against the decision to award the entire $2.9 billion contract to

23
Id.
24
Id.
25
Joey Roulette, Jeff Bezos Offers NASA $2 Billion to Pick Blue Origin’s Lunar
Lander in Last-Minute Plea, THE VERGE (July 26, 2021),
https://www.theverge.com/2021/7/26/22594038/jeff-bezos-blue-origin-nasa-lunar-
lander-2-billion.
30
SpaceX. In announcing its decision, the GAO explained that “SpaceX submitted the

lowest-priced proposal with the highest rating” and that “the offers submitted by

Blue Origin and Dynetics were significantly higher in price.” 26

74. Predictably as clockwork, Musk made sure to get his say in:

75. Refusing to accept that SpaceX’s bid was judged to be both

quantitatively and qualitatively superior to Blue Origin’s bid, Bezos quickly

proceeded to appeal the GAO’s decision in the United States Court of Federal

26
Statement on Blue Origin – Dynetics Decision, GOVERNMENT ACCOUNTABILITY
OFFICE (July 30, 2021), https://www.gao.gov/press-release/statement-blue-origin-
dynetics-decision.
31
Claims. This lawsuit followed “months of potshots, ridicule, and criticism.” 27 In

his appeal, Bezos took pointed jabs at both NASA and SpaceX, accusing NASA of

“inexplicably disregard[ing] key flight safety requirements for only SpaceX, in order

to select and make award to a SpaceX proposal that NASA’s evaluation team

assessed as tremendously high risk and immensely complex[.]”28

76. Not content to stop there, Bezos simultaneously launched a public

relations campaign against SpaceX’s Lunar Starship Lander, which won NASA’s

HLS contract. In August 2021, Blue Origin published an infographic on its website,

which attacked SpaceX’s Lunar Starship lander as “immensely complex and high

risk,” but described Blue Origin’s Blue Moon lander as “safe, low-risk,” and “fast”:

27
Victor Tangermann, Bitter Jeff Bezos Sues NASA Over SpaceX Contract,
FUTURISM (Aug. 26, 2021), https://futurism.com/jeff-bezos-sues-nasa.
28
Michael Sheetz, Judge Releases Redacted Lunar Lander Lawsuit From Bezos’
Blue Origin Against NASA-SpaceX Contract, CNBC (Sep. 22, 2021),
https://www.cnbc.com/2021/09/22/jeff-bezos-blue-origin-redacted-lunar-lander-
lawsuit-nasa-spacex.html.
32
 77. Later in August, Bezos updated this graphic to make even more attacks

on SpaceX. Witnessing Bezos’ desperate attempts to wrest the HLS contract from

SpaceX, Musk couldn’t pass up the opportunity to taunt Bezos yet again:

33
 78. On November 4, 2021, the Court of Federal Claims rejected Blue

Origin’s appeal of the GAO’s decision. In explaining its decision, the Court noted

that Blue Origin’s “proposal was priced well above NASA’s available funding and

34
was itself noncompliant.”29 Keeping up with past practice, Musk again taunted

Bezos over his latest loss:

29
Blue Origin Fed'n, LLC v. United States, 157 Fed. Cl. 74, 81 (2021).
35
 79. At the same time that Bezos, through Blue Origin, was fighting

NASA’s decision to award SpaceX the HLS contract, Bezos, through Amazon, was

also fighting SpaceX’s plan to launch the second generation of satellites as part of

its Starlink network (described further below). In August 2021, Amazon filed

“notice of an ex parte meeting” with the FCC, asking the FCC to reject proposed

revisions that SpaceX had submitted for its Starlink satellite network. In the FCC

proceeding, Amazon took a number of pointed shots at SpaceX that laid bare Bezos’

dislike of Musk. Amazon told the FCC: “Whether it is launching satellites with

unlicensed antennas, launching rockets without approval, building an unapproved

launch tower, or re-opening a factory in violation of a shelter-in-place order, the

conduct of SpaceX and other Musk-led companies makes their view plain: rules are

for other people, and those who insist upon or even simply request compliance are

deserving of derision and ad hominem attacks.” 30 Amazon continued: “If the FCC

regulated hypocrisy, SpaceX would be keeping the commission very busy.” 31

30
David Shepardson, Amazon.Com Goes For Jugular in FCC Spat With Spacex's
Musk, REUTERS (Sept. 8, 2021), https://www.reuters.com/technology/amazoncom-
goes-jugular-fcc-spat-with-spacexs-musk-2021-09-08/.
31
Id.
36
 80. Again, Musk taunted Bezos’ latest legal complaints against him:

III. AS BLUE ORIGIN STRUGGLES, BEZOS’ AMAZON ANNOUNCES

PROJECT KUIPER

81. In 2018, Bezos and Amazon began to develop a new initiative called

“Project Kuiper” (formally housed in Kuiper Systems LLC, a subsidiary of

Amazon). Project Kuiper is a “long-term initiative to design, develop and launch a

37
constellation of Low Earth Orbit satellites to provide low-latency, high-speed

broadband connectivity to unserved and underserved communities around the

world.”32

82. In April 2019, Amazon publicly announced Project Kuiper. Project

Kuiper was virtually identical in concept to SpaceX’s Starlink network, which

similarly aimed to provide fast internet access around the world via a vast

constellation of orbiting satellites. SpaceX publicly announced its development of

Starlink in 2015; by 2017, it had obtained a license from the FCC to launch a

constellation of 7,518 satellites. SpaceX launched the first Starlink satellites into

orbit in 2018 on its own rockets, and opened a beta testing program to the public in

November 2020.

32
AMZN000134 at -142. Citations to “AMZN000___” are to documents produced
by Amazon in response to Plaintiff’s Section 220 Demand.
38
 83. When Bezos and Amazon publicly announced Project Kuiper in 2019,

its similarity to Starlink prompted yet another jab from Musk, with Musk calling

Bezos a “copycat”:

84. In April 2019, Amazon applied to the FCC for permission to launch

3,236 Project Kuiper satellites into Lower Earth Orbit. From that point on, Project

Kuiper grew quickly. By May 2020, Amazon projected that Project Kuiper would

end 2020 with dedicated employees, $ in non-headcount operating

expenses, and $ in capital expenses.33 As of 2020, Project Kuiper

33
AMZN000134 at -142.
39
remained in the research and development stage; production satellite launches were

not expected until and revenue not expected until . 34

85. On July 30, 2020, the FCC approved Amazon’s request to launch its

Project Kuiper constellation. Pursuant to the FCC’s order and 47 CFR § 25.164(b),

Amazon was required to “launch and operate 50 percent of its satellites no later than

July 30, 2026, and Kuiper must launch the remaining space stations necessary to

complete its authorized service constellation, place them in their assigned orbits, and

operate each of them in accordance with the authorization no later than July 30,

2029.”35 In other words, pursuant to its license from the FCC, Amazon had to launch

and operate 1,618 Project Kuiper satellites by July 30, 2026, and launch and operate

the remaining 1,618 by July 30, 2029. This put considerable time pressure on

Amazon. It not only had to quickly complete development of its Kuiper satellites

in-house, but it also had to figure out a way to deliver several hundred of these

satellites into orbit within six years of the FCC’s approval.

34
AMZN000134 at -142.
35
In the Matter of Kuiper Sys., LLC Application for Auth. to Deploy & Operate A
Ka-Band Non-Geostationary Satellite Orbit Sys., 35 F.C.C. Rcd. 8324 (2020).
40
IV. THE BOARD ALLOWS BEZOS AND HIS MANAGEMENT TEAM
TO NEGOTIATE MULTI-BILLION DOLLAR CONTRACTS WITH
BLUE ORIGIN WITHOUT ANY OVERSIGHT OR PROTECTIONS

86. The FCC’s deadline heightened both the time pressure and the risks of

Project Kuiper. At exactly the same time that the FCC approved the Project Kuiper

constellation, and despite its unreliable track record, Bezos positioned Blue Origin

to be one of Amazon’s launch providers.

87. In a memorandum dated July 28, 2020, Amazon management informed

the Audit Committee that Amazon was engaged in discussions with Blue Origin,

ULA,36 Arianespace, and to serve as potential launch providers

for Project Kuiper.37 Amazon management also informed the Audit Committee that

the launch vehicle that ULA would use for Project Kuiper would “incorporate[] an

engine designed and manufactured by Blue Origin.”38

88. This management memorandum also informed the Audit Committee

that the “total cost to launch all satellites is estimated to be at least $

”39 Management clarified that Amazon was not requesting formal Audit

36
ULA is a joint venture between Boeing and Lockheed Martin. Amazon’s Section
220 documents interchangeably refer to negotiations and contracts with ULS (United
Launch Services) and ULA (United Launch Alliance), but there appears to be no
meaningful distinction between the two.
37
AMZN000155 at -159.
38
Id.
39
Id.
41
Committee approval at the time, but was simply giving the Committee a “heads up”

that it would seek formal approval if Amazon decided to pursue launch agreements

with either Blue Origin or ULA (because ULA would use Blue Origin engines) as

these would be conflicted or related-party transactions as a result of Bezos standing

on both sides of the agreements.40

89. The July 28, 2020 memo identifying the unsupervised negotiations with

related parties concerning highly valuable contracts should have prompted the Audit

Committee to exercise heightened, stringent, and continuing oversight of Amazon

management’s negotiations with Blue Origin and ULA. Instead, the Audit

Committee did not bat an eye. Indeed, although the Audit Committee met on July

28, 2020, the meeting’s minutes do not even mention Amazon’s negotiations with

Blue Origin.41 Reflecting its utter lack of concern about this huge capital expense in

a transaction with Amazon’s CEO and largest stockholder, the Audit Committee also

did not take any steps to oversee the negotiation process or to insulate the process

from conflicts of interest. For the next several months, Bezos and his management

team were given free rein to negotiate both sides of the launch contracts, and were

40
AMZN000159.
41
The minutes for this meeting reflect only that the Audit Committee received an
update regarding “litigation and Code of Conduct” matters, with all other material
redacted as “non-responsive” to Plaintiff’s Section 220 demand. AMZN000160 at
-161.
42
free to exploit information he learned through Amazon about competitors’ services

to aid Blue Origin’s negotiations.

90. On November 4, 2020, Amazon management made a four-hour

presentation on Project Kuiper to Amazon’s Board. 42 Through this presentation, the

management warned the Board that Project Kuiper

.43 Management also made clear that the

were key risks and of high importance to the success

of the program.44

91. This presentation again noted that Audit Committee approval would be

needed if Blue Origin or ULA were selected as launch providers as related-party

transactions.45 This disclosure (this time made to the full Board, rather than just to

the Audit Committee) again prompted no protective action from the Board: no

guidelines, no oversight, and no expressions of concern. Bezos attended this

42
AMZN000162.
43
AMZN000162 at -171.
44
AMZN000162 at -172.
45
AMZN000162 at -168 n.6.
43
meeting and presentation and was not recused from any part of the Board’s

discussion.46

92. The two management memoranda to the Audit Committee and the

Board were remarkable for a number of reasons. The Board was fully aware that

were key risks. The Board was also aware that Bezos and Amazon

management were actively negotiating these critical and expensive contracts with

Blue Origin (owned by Bezos) and ULA (which relied on Blue Origin’s engines).

The Board also learned that the most glaringly obvious launch provider and Blue

Origin rival, SpaceX, was not even under consideration. The Board was aware that

these contracts would be worth at least $ , making the launch contracts the

second-largest capital expenditure in Amazon’s history at the time, behind only

Amazon’s $13.7 billion acquisition of the Whole Foods grocery chain—an

acquisition for which the Board engaged financial and legal advisors to provide

expert advice and negotiate.47

46
AMZN000262.
47
See Whole Foods Market, Inc., Schedule 14A (July 21, 2017), at 27, 30
(referencing Goldman Sachs and Sullivan & Cromwell serving as Amazon’s
respective financial and legal advisors in connection with the Whole Foods
acquisition).
44
 93. While Bezos remained free to negotiate both sides of Amazon’s

contract with Blue Origin, the Amazon Board met on May 25, 2021 to consider a

smaller, interim launch services agreement (“LSA”) between Amazon and ULS.

This LSA was for nine launches of Project Kuiper’s satellites using ULS’s Atlas V

launch vehicles (the “ULS LSA”).48 The ULS LSA involved a committed spend of

$ .

94. The Board was not provided any materials concerning the ULS LSA.

No outside experts advised the Board on whether the terms of the ULS LSA were

commercially reasonable or fair to Amazon. But the Board was told—in front of

Jeff Bezos—that they effectively had no choice but to approve the ULS LSA.

Amazon management told the Board that the

49

48
AMZN000457; AMZN000466.
49
AMZN000457 at -462.
45
 95. Tellingly, even though Amazon was seeking to

SpaceX was again

nowhere to be found. SpaceX’s exclusion is all the more inexplicable because the

launches Amazon acquired on the ULS Atlas V cost more than SpaceX’s

advertised cost on its Falcon 9 rocket. Amazon agreed to pay $ for 9

launches aboard the Atlas V, amounting to $ per launch. By contrast,

launches on SpaceX’s Falcon 9 cost a relatively paltry $62 million at the time.

Compounding this cost advantage, the Falcon 9 also boasts a higher payload capacity

than the Atlas V. Given these factors, Amazon’s persistent refusal to even consider

SpaceX—and the Board’s failure to question its exclusion—lays bare the extent to

which Bezos’ personal rivalry influenced Amazon’s procurement process.

96. Furthering its practice of approving hugely expensive contracts with

minimal guidance or discussion, the Audit Committee and the Board would soon

approve even larger contracts that would funnel billions of dollars to cash-starved

Blue Origin: contracts that the Board left Bezos free to negotiate himself.

V. THE BOARD KNOWINGLY ABDICATES ITS DUTIES AND

BLINDLY APPROVES $ OF LAUNCH CONTRACTS
THAT MAKE AMAZON RELIANT ON BLUE ORIGIN

97. On January 31, 2022, after allowing Bezos to freely run the process of

identifying launch providers (including the decision to not even consider SpaceX)

and to fully negotiate on behalf of both Amazon and Blue Origin for a year and a

46
half, Amazon management presented a summary of two fully-negotiated, related-

party contracts involving Blue Origin to the Audit Committee for approval. 50 These

LSAs included:

a. A contract with Blue Origin for 12 firm launches and an option

for up to 15 additional launches, pursuant to which Amazon
would pay Blue Origin either (for the 15 firm
launches only) or (for the combined total 27 firm
and optional launches) (the “Blue Origin LSA”).

b. A contract with ULS (separate and apart from Amazon’s

previous contract with ULS) for 38 launches, pursuant to which
Amazon would pay ULS . Because ULS’ Vulcan
Centaur rocket utilizes Blue Origin’s BE-4 engine, Blue Origin
would receive up to
(the “ULS LSA” and, together with
the Blue Origin LSA, the “Bezos Related-Party LSAs”).51

98. Together, under the terms of the Bezos Related-Party LSAs, Blue

Origin could receive a total of $ from Amazon (up to $

directly and $ indirectly via ULS). Despite the fact that these were related-party

transactions, despite the fact that they represented nearly $ of corporate

funds flowing to another company owned by Amazon’s Executive Chair and

founder, and despite the fact that it had no insight whatsoever into how these

50
The agenda to and materials for this meeting are attached hereto as Exhibit A.
51
Ex. A at 635-636.
47
contracts were negotiated or whether any alternatives were considered, the Audit

Committee rubberstamped the Bezos Related-Party LSAs.

99. The Bezos Related-Party LSAs were only one of several items on Audit

Committee’s agenda for its meeting on January 31, 2022, and were listed as agenda

item F (i.e., the Audit Committee discussed five items before the multi-billion-dollar

Bezos Related-Party LSAs).52 Because Amazon redacted the rest of the agenda for

this meeting as “non-responsive,” it is impossible to determine how many total items

were on the Committee’s agenda for this meeting. But of a 2 1/3 rd page agenda,

nearly one full page’s worth of redacted agenda items appear after the “Potential

Related Person Transactions” listed as agenda item F, suggesting that the Audit

Committee was due to discuss several topics after the Bezos Related-Party LSAs. 53

100. Further, the Audit Committee’s January 31 meeting began at 10:30

a.m., and concluded at 1:50 p.m. (a total duration of 3 hours and 20 minutes). 54 The

Committee’s discussion of the Bezos Related-Party LSAs was scheduled to begin at

11:20 a.m. Given its seemingly extensive agenda, the Audit Committee in all

52
See Ex. A at 628-630.
53
Id.
54
The minutes of this meeting are attached hereto as Exhibit B.
48
likelihood spent no more than a few minutes discussing the Bezos Related-Party

LSAs,55 pursuant to which Bezos’ Blue Origin would receive nearly $ .

101. That the Audit Committee spent such little time discussing the Bezos

Related-Party LSAs is not surprising, in light of the fact that the Audit Committee

was given very little information to actually discuss. The Audit Committee did not

receive a presentation about the Bezos Related-Party LSAs. The Audit Committee

did not hear from, nor did it receive any materials or analysis from, an independent

expert in the launch and satellite industry. The Audit Committee did not receive any

information about how Amazon negotiated the Bezos Related-Party LSAs; did not

know how many other counterparties Amazon negotiated with (if any); did not know

why (which Amazon had previously been in discussions with)

was not chosen; and, most importantly, did not know the extent to which Bezos

himself was involved in negotiating the contracts with his very own rocket company.

55
This entire meeting only lasted three hours and twenty minutes. Assuming that
the Audit Committee took no breaks at all, that the Committee spent equal time on
each agenda item, and even assuming that the Bezos Related-Party LSAs were the
last item on the Audit Committee’s agenda (which they clearly were not), the
Committee would have spent a mere 33 minutes discussing the Bezos Related-Party
LSAs. Given that a full page’s worth of agenda items and two and a half hours of
scheduled time that followed this agenda item, the Audit Committee is likely to have
devoted no more than a few minutes to discussing the Bezos Related-Party LSAs.
Because this uncertainty is caused entirely by Amazon’s decision to redact simple
agenda items, all reasonable inferences regarding the Audit Committee’s discussion
of the Bezos Related-Party LSAs should be drawn in Plaintiff’s favor.
49
 102. The only information that the Audit Committee received about the

Bezos Related-Party LSAs at this meeting was four brief pages that provided a vague

summary of the key terms of the contracts. And this minimal amount of material

raises even more troubling questions—questions that the Audit Committee did not

bother to ask. For example, the Audit Committee was told that

56

The Audit Committee had no idea, and did not bother to ask.

103. Those four brief pages contained other details that should have caused

a responsible, functioning Audit Committee’s ears to perk up. For example, for both

of the Bezos Related-Party LSAs, the Audit Committee was told that

56
Ex. A at 633.
50
 57

104.

Again, the Audit Committee had no idea, and

did not bother to ask.

105. None of this—the dearth of real information, the complete lack of

insight into how the LSAs were negotiated and into the extent of Bezos’ role, the red

flags identified above—prompted the Audit Committee to do its job. Instead, the

Audit Committee summarily approved the Bezos Related-Party LSAs. 58 Worse, the

57
Ex. A at 635. Specifically, regarding the fee for the ULS LSA, the Audit
Committee was told:
Id. Regarding
the costs for the Blue Origin LSA, the Audit Committee was told:

Id. at 636.
58
Ex. B at 854.
51
Audit Committee rapidly approved these contracts in a single meeting despite not

having any knowledge or expertise in rocket launch contracts, without any guidance

or analysis from qualified advisors, without any insight into how the contracts were

negotiated, and without knowing the extent to which Bezos was involved in the

negotiations.

106. Two months later, the full Board somehow contrived to out-abdicate

their fiduciary responsibilities. On March 3, 2022, the Board met via

videoconference for Amazon management to present three LSAs to the Board for

approval: the two Bezos Related-Party LSAs and one LSA with Arianespace.59 The

details and costs of the two Bezos Related-Party LSAs remained the same as

approved by the Audit Committee, described in ¶97, supra. With Arianespace,

Amazon purchased 18 launches on Arianespace’s Ariane 6 rocket, for a total cost of

$ (the “Arianespace LSA” and, together with the Bezos Related-Party

LSAs, the “Final LSAs”).

107. The Final LSAs made clear that Amazon had decided to pin the success

of its entire Kuiper program on Blue Origin. Amazon chose Blue Origin to launch

of its satellites (on 12 launches), with an option to launch another (on 15

launches). Amazon also chose ULS—whose rocket’s ability to fly depends entirely

59
The agenda to and materials for this meeting are attached hereto as Exhibit C.
52
on Blue Origin engines—to launch another of its satellites (on 38 launches).

Even assuming that Amazon did not

, Amazon was relying on Blue Origin and its engines to launch more than

of its licensed Kuiper constellation of 3,236 satellites, and 73% of its contracted

68 launches. If Amazon

depending on

Blue Origin. In other words, if Bezos’ Blue Origin failed, so would Amazon’s

Project Kuiper.

108. At its March 3, 2022 meeting, the Board’s only topic of discussion was

the three Final LSAs.60 Unlike the Audit Committee, the full Board had never

previously discussed the Final LSAs, and had not previously received any materials

concerning the Final LSAs. This March 3 meeting was, therefore, the first and only

time61 the Amazon Board as a whole learned anything about the Final LSAs that

60
The minutes for this meeting are attached hereto as Exhibit D.
61
The March 3, 2022 Board meeting is the only time that the Board as a whole
discussed the Final LSAs, or anything concerning the selection of launch providers
for Project Kuiper. As part of its Section 220 production, Amazon produced a
document titled “Board Meeting Agenda Items and Consent Topics – 2019-2022.”
This document is attached hereto as Exhibit E. Every single line of this list is
redacted as “non-responsive,” except for two: the March 3, 2022 meeting when the
Board approved the Final LSAs, and the Board’s May 25, 2021 meeting when it
approved the unrelated contract with ULS to use ULS’s legacy Atlas V rocket. This
document indisputably demonstrates that the Board discussed Amazon’s selection
of launch providers at only one meeting. See Exhibit E at 849-851.
53
would commit Amazon to spending up to $ —the second-largest capital

expenditure in Amazon’s 25+ year history.62 Of this more than $

commitment, nearly 45% would go to the struggling rocket company founded and

owned by Amazon’s founder, Executive Chair, and largest stockholder, Bezos. 63

109. Mirroring the Audit Committee’s abdication, the Board was given

virtually no information upon which to base its decision of whether to spend $

or whether this price was fair to Amazon. The Board received no

presentation. The Board received no expert opinion or analysis. The Board received

no information regarding the negotiation of the Final LSAs, Bezos’ involvement in

the process, which (if any) other launch providers were considered, or, indeed, why

Amazon was choosing to pin the fate of Project Kuiper on a rocket company (Blue

Origin) that had proven itself to be woefully inept at actually producing rockets.

110. Instead, as with the Audit Committee, the full Board received scant

information—a 2.5-page summary of the basic terms of the Final LSAs. These

pages summarized the number of launches each company would provide, the total

62
$ to Arianespace + up to $ to Blue Origin + up to $
to ULS = $ .
63
Up to $ to Blue Origin directly + $ to Blue Origin indirectly
via ULS, because ULS relied on Blue Origin’s engines.
54
number of satellites each would launch, and the cost parameters of the three

contracts.64

111. Armed with this bare minimum of information, and without any insight

into Bezos-led management’s negotiation and bidding process, the Board needed

only 40 minutes on a videoconference to rubberstamp the $ Final LSAs. 65

This was a historic capital expenditure that would send $ of Amazon’s

corporate funds to a company controlled by its founder and Executive Chair. But

the Amazon Board still somehow only needed 40 minutes to review, discuss, and

approve these contracts that they were learning about for the very first time.

112. Together with the likely few minutes that the Audit Committee had

devoted to discussing the Bezos Related-Party LSAs, the Amazon Board as a whole

needed barely one hour across only two meetings to approve $ worth of

launch contracts, which would send $ to Bezos’ Blue Origin. And this

astonishing efficiency cannot be explained by the Board’s deep expertise of the

space and satellite industry—because it had none. Amazon is not, of course, a space

64
See Ex. C at 646-648.
65
Ex. D. Reinforcing their lackadaisical attitude towards exercising their fiduciary
obligation to rigorously scrutinize transactions between Amazon and Bezos, two of
Amazon’s nominally independent directors—Defendants Huttenlocher and Nooyi—
did not even attend this meeting. Bezos himself was recused from the meeting, after
having been allowed to freely involve himself in negotiating the Bezos Related-Party
LSAs for nearly two years.
55
company. It is primarily an online marketplace that has only recently expanded into

physical locations, web services, video streaming, and other—very decidedly

terrestrial—offerings. For all its weightless ambition, Project Kuiper lies very much

outside the scope of Amazon’s core competency, and none of its directors appear to

have any expertise with satellite development or rocket launches.

113. This would ordinarily prompt a responsible Board to seek outside

guidance, to become educated, and to generally exercise heightened diligence before

approving $ worth of contracts for services in a complex industry with

which they had no familiarity. The Amazon Board did the opposite and, as detailed

further below, ultimately approved LSAs that are unfair to the Company.

VI. THE FINAL LSAS ARE UNFAIR TO AMAZON

114. The process by which the Audit Committee and the Board

rubberstamped the Final LSAs was irredeemably flawed. As described above, the

Board completely abdicated its fiduciary duty with respect to these $

contracts, exercising no oversight over Bezos’ role in negotiations or the

procurement process, and blindly approving the LSAs with the bare minimum of

time and attention. This non-existent process unsurprisingly had the effect of

saddling Amazon with contracts that are unfair to the Company.

115. To summarize the Board’s non-existent, unfair process:

56
  Amazon management, led by Bezos, negotiated the Final LSAs
with Blue Origin and ULS, with no Board oversight or
protections whatsoever;

 Amazon’s Bezos-led management team completely excluded

SpaceX—controlled by Bezos’ longtime rival Elon Musk—from
the procurement process, despite SpaceX being by far the most
proven launch provider in the industry;

 The Board did not receive any presentations about the Final
LSAs, but instead only received a vague summary of the
contracts’ terms;

 The Board did not retain any experts or outside advisors to

consult on the Final LSAs or opine as to their fairness; and

 The Board approved the Final LSAs at a single 40-minute

meeting, which was the first and only time the full Board learned
anything about these multibillion-dollar contracts.66

116. In the most glaring example of this unfairness, Amazon appears to not

have even considered SpaceX as a launch provider. Amazon seemingly considered

only four launch providers, ultimately choosing three—only one of which was

unaffiliated with Blue Origin. Despite being the launch provider with the most

proven track record and the lowest prices in the industry, SpaceX was seemingly not

considered by Amazon.

66
Although the minutes of this meeting claim that the board “asked questions of
management on aspects of the proposed LSAs, and discussion ensued,” the minutes
provide absolutely no detail about these questions. See Ex. D. Further, given that
this meeting lasted only 40 minutes in total, the amount of time left for the Board to
ask meaningful questions between management’s presentation and the Board’s
formal rubberstamping likely was minimal.
57
 117. As described in Sections II.B and II.C, supra, SpaceX has had

remarkable success launching its various Falcon rockets, and became the first private

spaceflight company to deliver cargo and humans to the ISS. SpaceX has also set

records for the most launches of a single type of rocket in a year, and has deployed

dozens of satellites for third-party customers to orbit. It has also, of course, launched

hundreds of its own Starlink satellites into orbit. This track record stands in stark

contrast to Blue Origin and its New Glenn, which has suffered repeated delays and

setbacks. Worse, as of the filing of this complaint, more than two years after New

Glenn was first supposed to take to the skies, Bezos’ much-vaunted rocket on which

Amazon has pinned Project Kuiper’s fortunes has yet to take off.

118. On top of its proven reliability, SpaceX was also likely to represent a

considerably more affordable launch provider than at least two of the unproven

companies that Amazon chose. At the time that Amazon was negotiating the LSAs,

SpaceX publicly advertised that launches aboard its Falcon 9 rocket cost

approximately $62 million.67 SpaceX also states that the Falcon 9 is capable of

lifting payloads of 22,800 kilograms to lower Earth orbit (which is the orbit where

Amazon’s Kuiper satellites will be deployed). Based on public reports and industry

expectations that each Kuiper satellite will weigh approximately 600 kilograms, this

67
In March 2022, after Amazon had already entered into the Final LSAs, SpaceX
increased the advertised cost of Falcon 9 launches from $62 million to $67 million.
58
suggests that each launch of the Falcon 9 could deploy some 36 Kuiper satellites into

orbit—at an implied per satellite cost of $1.72 million. By comparison, Amazon’s

contracted per-satellite costs in the Final LSAs are $ ,$ , and

$ .

119. Even the use of more conservative assumptions generates a per-satellite

cost for SpaceX that equals or easily beats the per-satellite costs that Amazon

committed to in the Final LSAs. SpaceX’s recent launches of the Falcon 9 to deploy

its own Starlink satellites into orbit have carried approximately 21-22 satellites,

which are each estimated to weigh around 800 kilograms. 68 This suggests an actual

launched payload of approximately 17,000 kilograms, which would equate to some

28 Kuiper satellites per launch. Even on the basis of these conservative assumptions,

the Falcon 9 would cost Amazon some $2.2 million per satellite. This

Blue Origin’s purported cost aboard its wholly-unproven rocket of $ per

satellite; and is than Arianespace’s stated cost of $ per

satellite and ULS’s stated cost of $ per satellite.

68
See Mike Wall, SpaceX Launches 22 Starlink Satellites, Lands Rocket at Sea,
SPACE.COM (Aug. 16, 2023), https://www.space.com/spacex-starlink-launch-group-
6-10; Stephen Clark, Spacex Unveils First Batch of Larger Upgraded Starlink
Satellites, SPACEFLIGHT NOW (Feb. 26, 2023),
https://spaceflightnow.com/2023/02/26/spacex-unveils-first-batch-of-larger-
upgraded-starlink-satellites/.
59
 120. By excluding SpaceX, Bezos and his management team minimized bid

competition for the launch agreements and likely committed Amazon to spending

hundreds of millions of dollars more than it would have otherwise had to. For

example, if SpaceX were to launch the satellites that Amazon instead allocated

to Arianespace, this contract likely would have cost Amazon some $ ,

instead of the $ Amazon is committed to paying Arianespace.69

Similarly, if SpaceX were to launch the satellites that Amazon instead

allocated to ULS, this contract would likely have cost Amazon some $ ,

instead of the $ Amazon is committed to paying ULS. 70 This

represents an illustrative savings of more than $ .

121. SpaceX’s vast cost advantage means that Amazon likely could have

saved hundreds of millions of dollars by allocating even a small portion of its Kuiper

constellation to SpaceX. Further, SpaceX’s unmatched reliability means that it also

could have guaranteed that at least a portion of the Kuiper constellation reached orbit

69
This conservatively assumes SpaceX costs of $2.2 million per satellite, as
described above, multiplied by satellites. An even more conservative
assumption of $2.5 million per satellite with SpaceX still yields savings of some
$ ($ with SpaceX; $ contracted with
Arianespace).
70
This conservatively assumes SpaceX costs of $2.2 million per satellite, as
described above, multiplied by satellites. An even more conservative
assumption of $2.5 million per satellite with SpaceX still yields savings of some
$ ($ with SpaceX; $ million contracted with ULS).
60
on schedule—just the type of insurance Amazon tried to obtain through its contract

for ULS’s legacy Atlas V rocket, discussed in ¶¶93-96, supra.

122. For his part, Musk has publicly stated that SpaceX is willing to provide

launch services to its competitors. Indeed, SpaceX has deployed hundreds of

satellites into orbit for other companies under its SmallSat Rideshare Program,

established in 2019. For example, in early March 2023, SpaceX agreed to launch

hundreds of satellites into space for Rivada Space Networks GmbH (“Rivada”).

Rivada is a company headquartered in Munich, Germany that aims to build a

business-to-business broadband satellite constellation—a constellation that Rivada

describes as a “European alternative to Starlink.” SpaceX has agreed to launch of

300 satellites for Rivada on twelve Falcon 9 missions that are scheduled for liftoff

between April 2025 and June 2026.

123. Similarly, as recently as June 2023, Musk reiterated that SpaceX’s

proven launch services remain available to Starlink competitors—on the same terms

available to anyone else. While discussing SpaceX’s launches for OneWeb, Musk

stated that “[w]e charged them the same as anyone else.”71 During this discussion,

71
Micah Maidenberg, Elon Musk’s SpaceX Now Has a ‘De Facto’ Monopoly on
Rocket Launches, WALL STREET JOURNAL (July 7, 2023),
https://www.wsj.com/articles/elon-musks-spacex-now-has-a-de-facto-monopoly-
on-rocket-launches-3c34f02e.
61
Musk also acknowledged the obvious: “[I]f SpaceX had a goal of blocking rivals, it

wouldn’t have done the launches for OneWeb.” 72

124. Other Starlink rivals that chose SpaceX to launch their satellites have

acknowledged a different obvious reality. Discussing his decision to choose

SpaceX, satellite internet provider EchoStar’s head of operations stated, “You have

to be practical about what’s demonstrated and going.” 73 In other words, SpaceX

remains virtually the only proven, affordable launch provider with the “capacity and

flexibility” to deploy large numbers of satellites into orbit.74

125. While SpaceX’s Starlink network is indeed a competitor against

Amazon’s Project Kuiper, a fair and robust bidding process overseen by a diligent

board would have at the very least considered SpaceX. As described above, SpaceX

not only has a proven track record, but would have been far cheaper than at least

two, if not all three, of Amazon’s chosen launch providers. This proven reliability

could have been invaluable to Amazon, which faces a July 30, 2026 deadline to

launch 1,618 Kuiper satellites into orbit. Choosing a reliable launch provider with

a proven rocket could have helped Amazon meet this FCC deadline and hedged

72
Id.
73
Id.
74
Id.
62
against the risk of delays in the development of the other next-generation rockets

that Amazon has chosen to rely on.

126. Instead, Amazon chose three providers that have each yet to prove their

rockets can actually fly, and two of which depend on Blue Origin’s BE-4 engines

that are now years behind schedule. Blue Origin’s struggles—which were apparent

years before its LSA with Amazon—imperil the very viability of the entire Kuiper

program, which Amazon’s current CEO Jassy has described as a potential “fourth

pillar” of Amazon’s business. In choosing to rely so heavily on Blue Origin and

ignoring potential candidates like SpaceX, Amazon’s supine Board placed this

“fourth pillar” at great risk of never becoming upright.

127. Given SpaceX’s demonstrated advantages, Amazon’s complete

exclusion of SpaceX has one obvious explanation: Bezos’ personal rivalry with

Musk. As detailed in Sections II.B and II.C, supra, SpaceX and Blue Origin have

competed for several lucrative government contracts, with Blue Origin losing out to

SpaceX at virtually every turn. In response, Bezos has resorted to public letters of

complaint, legal appeals, and lawsuits, each effort growing in desperation to wrest

government contracts away from Musk and SpaceX. And each time, Musk has

responded by publicly taunting Bezos, making crude and sexual jokes at Bezos’

expense and mocking Bezos for treating suing SpaceX as a full-time job.

63
 128. After being told that Amazon was in discussions with Blue Origin

(while Bezos was still Amazon’s CEO), the Audit Committee implemented no

safeguards whatsoever to insulate the negotiation process from conflicts of interest.

For a year and a half, Bezos was free to identify and negotiate with launch providers

for Amazon, while also free to negotiate against Amazon on behalf of Blue Origin.

Given their bitter track record, Bezos had every reason to exclude Musk’s SpaceX

from the process entirely. And Bezos, it must be assumed, could not swallow his

pride to seek his bitter rival’s help to launch Amazon’s satellites. Bezos’ unchecked

involvement in the negotiation process therefore directly contributed to the exclusion

of the most reliable and most affordable launch provider from Amazon’s already-

curtailed procurement process.

129. Further, once Amazon announced that it had entered into the multi-

billion-dollar Final LSAs on April 5, 2022, Amazon’s stockholders were less than

impressed. Amazon’s stock closed at $168.35 on April 4, 2022; closed at $164.05

on April 5, when the Final LSAs were announced; and continued to slide during the

rest of the month, closing at $124.28 on April 29, 2022.

VII. SINCE THE BOARD RUBBERSTAMPED THE FINAL LSAS,

AMAZON HAS PAID OUT NEARLY $1.7 BILLION, BUT BLUE
ORIGIN’S ROCKET HAS YET TO TAKE FLIGHT

130. Since approving the Final LSAs more than a year ago, Amazon has yet

to launch even a prototype of its Kuiper satellite into orbit. Yet, Amazon has already

64
paid approximately $1.7 billion to the three launch providers, including $585 million

to Blue Origin directly, and an unknown additional amount to Blue Origin indirectly

via ULS.

131. Meanwhile, to no one’s surprise, Blue Origin’s years-long struggles to

develop its New Glenn rocket have continued. After delaying its original test launch

window in 2018 from 2020 to late 2021, the New Glenn has yet to take flight. In

early 2021—while Bezos-led Amazon was actively negotiating with Bezos-led Blue

Origin—Blue Origin delayed the New Glenn’s launch again to the fourth quarter of

2022.

132. Then, in March 2022—the very same month the Board rubberstamped

the Final LSAs—Blue Origin announced that the New Glenn would not fly in 2022

at all as it had promised. When pressed for an updated timeline, a Blue Origin

spokesman bluntly said, “We will fly when we’re ready.” 75

133. Blue Origin’s struggles have continued into 2023. In March 2023, one

of Blue Origin’s BE-4 engines (which will power both the New Glenn and Vulcan

Centaur rockets, and therefore underpin the entire Kuiper program) exploded ten

75
Emre Kelly, Blue Origin Again Delays Upcoming New Glenn Rocket's First
Launch From Florida, FLORIDA TODAY (Mar. 23, 2022),
https://www.floridatoday.com/story/tech/science/space/2022/03/23/blue-origin-
again-delays-new-glenn-rockets-first-florida-launch/7130846001/.
65
seconds into a static fire test.76 This particular engine was meant to complete its

testing process in July 2023, and then be used on ULA’s second launch of Vulcan

Centaur rocket.

134. Separately, and also in March 2023, one of ULA’s Vulcan Centaur

rockets experienced an unrelated explosion due to a hydrogen leak. ULA had

originally planned to launch this particular rocket in May 2023. Instead, in June

2023, ULA announced that it had identified the cause of the explosion, and was

shipping the rocket from the launch pad back to ULA’s factory for further

modifications. This means that ULA’s maiden flight of the Vulcan Centaur is

delayed until the fourth quarter of 2023—years behind schedule.

135. In turn, this also means that Amazon’s launch of its prototype Kuiper

satellites is significantly delayed. In a tacit admission that its chosen next-generation

rockets are jeopardizing Project Kuiper, Amazon announced in August 2023 that it

planned to launch its prototype satellites not on the Vulcan Centaur at all, but on the

Atlas V: a legacy rocket that first launched in 2002.

136. With this forced switch to the Atlas V, Amazon now expects its

prototype satellites to launch only in the fourth quarter of 2023—some six months

76
Michael Sheetz, Jeff Bezos’ Blue Origin Rocket Engine Explodes During Testing,
CNBC (July 11, 2023), https://www.cnbc.com/2023/07/11/jeff-bezos-blue-origin-
be-4-rocket-engine-explodes-during-testing.html.
66
behind schedule. Amazon management originally told the Board that it planned to

launch its prototype satellites in the second quarter of 2023. If Amazon actually

launches its prototype satellites in the fourth quarter of 2023 (which remains highly

uncertain), it will have well under three years to complete validation testing, finalize

the design of its satellites, produce its constellation of 1,618 satellites with the final

design, and launch all 1,618 satellites into orbit. This is an impossibly tight timeline,

and one that requires all of Amazon’s launches to go perfectly smoothly—even

though not one of its chosen rockets have yet had a single successful flight.

137. Tellingly, when asked by the press for an update on Project Kuiper in

July 2023 following news of ULA’s delay, Amazon refused to give one. Instead,

Amazon simply regurgitated what it learned from ULA—that ULA plans to launch

the Vulcan Centaur by the end of 2023.77 Even more alarmingly, during recent

public appearances, Blue Origin’s leadership has declined to comment on a new

maiden launch target date for the New Glenn.78

77
Michael Kan, Amazon's Project Kuiper Satellite Internet System Faces Yet
Another Delay, PCMAG (July 18, 2023), https://www.pcmag.com/news/amazons-
project-kuiper-satellite-internet-system-faces-yet-another-delay.
78
See Michael Sheetz, Jeff Bezos’ Blue Origin Rocket Engine Explodes During
Testing, CNBC (July 11, 2023), https://www.cnbc.com/2023/07/11/jeff-bezos-blue-
origin-be-4-rocket-engine-explodes-during-testing.html.
67
 138. The near-constant drumbeat of delays and bad news from Blue Origin

and its business partner and customer, ULA, now threatens to jeopardize the entire

Kuiper program, underscoring the harm the Board’s utter failure to comply with its

fiduciary duties has caused to Amazon. The brief summary terms sheets provided

to the Audit Committee and the Board in assessing the Bezos Related-Party LSAs—

the only materials they received in voting to approve Amazon’s historic $

expenditure—make no mention of Blue Origin’s repeated delays in developing the

New Glenn and the BE-4 engine. Further, the minutes from the only two meetings

at which Amazon’s directors discussed the Final LSAs reflect absolutely no

discussion about the rocket’s development, about previous delays, or about why

Amazon should entrust the vast majority of its Kuiper network to Blue Origin’s long-

troubled rocket.

139. Nor is it clear whether the Board ensured that Amazon will have any

protections, monetary or otherwise, in the event that Blue Origin fails to develop the

New Glenn in time to launch the many hundreds of Kuiper satellites that it is

supposed to. Indeed, with Amazon having already paid more than half a billion

dollars to Blue Origin, the damage to Amazon may already be done.

140. In stark contrast to the constant setbacks that Amazon’s three chosen

suppliers have suffered, SpaceX has continued to thrive since the Board approved

the Final LSAs. SpaceX accounted for 66% of customer flights from American
68
launch sites in 2022, and a dominant 88% of such flights in the first six months of

2023.79 Musk himself recently estimated that SpaceX would carry a full 80% of the

mass launched from Earth into space in 2023, underscoring the sheer dominance that

SpaceX has over the launch industry because of its reliability and its low cost. 80

141. In a sign of its technical advantage, in July 2023, SpaceX announced

that it launched one of its Falcon 9 rockets for a record 16th time—a hugely

impressive reusability milestone, particularly when set against the fact that Blue

Origin may prove unable to reuse any of its rockets at all. 81 By July, SpaceX had

already conducted more than 40 successful launches in 2023: in other words, more

launches in six months than Blue Origin will supposedly provide to Amazon over

several years.

142. By completely abdicating its fiduciary duties, the Board has already

exposed Amazon to substantial harm and placed the Company’s entire Kuiper

program at needless risk. And with each passing day, as Amazon’s chosen launch

79
Micah Maidenberg, Elon Musk’s SpaceX Now Has a ‘De Facto’ Monopoly on
Rocket Launches, WALL STREET JOURNAL (July 7, 2023),
https://www.wsj.com/articles/elon-musks-spacex-now-has-a-de-facto-monopoly-
on-rocket-launches-3c34f02e.
80
Id.
81
Amy Thompson, SpaceX Sets a New Reusability Record, THE HILL (July 11,
2023), https://thehill.com/homenews/space/4090715-spacex-sets-a-new-
reusability-record/.
69
partners (Blue Origin in particular) continue to struggle and SpaceX continues to

prove itself, this Board-inflicted harm continues to grow. Plaintiff brings this action

to remedy the Board’s utter failure to discharge its fiduciary duties.

DERIVATIVE ALLEGATIONS

143. Plaintiff brings this action derivatively to redress injuries suffered by

the Company as a direct result of the breaches of fiduciary duties by the Defendants.

144. Plaintiff has owned Amazon stock continuously during the time of the

wrongful course of conduct by the Individual Defendants alleged herein and

continues to hold Amazon stock.

145. Plaintiff will adequately and fairly represent the interests of Amazon

and its shareholders in enforcing and prosecuting its rights and has retained counsel

competent and experienced in shareholder derivative litigation.

DEMAND ON THE BOARD IS EXCUSED AS FUTILE

146. Plaintiff did not make a demand on the Board to bring suit asserting the

claims set forth herein because pre-suit demand was excused as a matter of law.

Amazon’s current Board consists of eleven directors: Defendants Bezos, Jassy,

Alexander, Cooper, Gorelick, Huttenlocher, McGrath, Nooyi, Rubinstein,

Stonesifer, and Weeks.

147. First, demand is excused because a majority of Amazon’s directors face

a substantial likelihood of liability for acting in bad faith by completely failing to

70
oversee and protect Amazon in connection with its negotiation of multi-billion dollar

launch contracts with Blue Origin and ULS. Bezos is Amazon’s founder and largest

stockholder, and served as Amazon’s CEO until July 2021. At that time, Bezos

transitioned to Executive Chair, and appointed his protégé Jassy to replace him as

CEO. Throughout the entire period that Amazon negotiated the Final LSAs, Bezos

led Amazon’s management team. Bezos also founded and owns Blue Origin.

148. The Audit Committee was notified of these hugely expensive related-

party negotiations in July 2020, while the Board as a whole was notified just four

months later, in November 2020. Despite being told that Bezos-led Amazon was

negotiating contracts worth over $ with Bezos-owned Blue Origin,

Defendants Jassy, Alexander, Cooper, Gorelick, Huttenlocher, McGrath, Nooyi,

Rubinstein, Stonesifer, and Weeks did nothing to oversee these negotiations, did

nothing to ensure that Bezos’ obvious conflict of interest would not jeopardize

Amazon’s interests, and did nothing to ensure that these negotiations would be

conducted at arm’s-length.

149. These Director Defendants also never questioned why the space

industry’s most successful and most proven launch provider, SpaceX, was not even

under consideration. As detailed in Section II, supra, Bezos and Musk are bitter

rivals. Blue Origin has repeatedly lost out to SpaceX in competing for lucrative

government launch contracts, and Musk has publicly and repeatedly antagonized
71
Bezos with Blue Origin’s failures. Bezos was plainly motivated to not permit a

single Amazon dollar to go to Blue Origin’s biggest—and far more successful—

rival. But even though this rivalry has nothing to do with Amazon, Amazon suffered

substantial financial harm as a result of Bezos’ personal war with Elon Musk. Bezos’

and Blue Origin’s rivalry with SpaceX means that Amazon was unable to consider

a launch provider that is not only far cheaper, but that has a proven, reliable heavy-

lift rocket: something to which none of Amazon’s three chosen counterparties can

lay claim.

150. These Director Defendants compounded their governance failure by

engaging in virtually no scrutiny once the Bezos-led Final LSAs were fully

negotiated. For the Audit Committee (consisting of Defendants Alexander, Nooyi,

and Weeks), the Bezos Related-Party LSAs were only one of many different items

on the Committee’s agenda for its January 2022 meeting, and most likely received

no more than a few minutes’ worth of discussion before they were breezily approved.

Likewise, for the full Board, which had never previously learned anything about the

contracts, the $ Final LSAs merited only a single 40-minute meeting to

receive the full Board’s rubberstamp. Defendants Jassy, Alexander, Cooper,

72
Gorelick, McGrath, Rubinstein, Stonesifer, and Weeks signed off on the Final LSAs

at this meeting.82

151. Second, as detailed in ¶¶30-32, supra, demand is excused as futile as to

Defendant Jassy because he is Bezos’ hand-picked protégé and successor, has reaped

$305 million in compensation for serving Bezos at Amazon, and currently serves as

Amazon’s CEO. After many years of being mentored for the CEO role by Bezos

and serving as one of his chief lieutenants, Jassy is plainly not independent of Bezos.

In addition, Jassy is not independent for the additional reason that he currently serves

as an executive officer of Amazon as Amazon’s CEO. Jassy is therefore incapable

of impartially considering a litigation demand against Bezos.

152. Third, demand is excused as futile as to Defendant Bezos, because

Bezos freely negotiated on behalf of both Amazon and Blue Origin, because Bezos

has an indisputable material financial and personal interest in the Final LSAs, and

because Bezos currently serves as Amazon’s Executive Chair. As soon as Amazon

received the FCC’s license in 2020, Bezos put Blue Origin at the front of Amazon’s

queue of potential launch providers—despite knowing that its New Glenn rocket

was years behind schedule. Bezos-led Amazon also completely excluded Bezos’

longtime personal rival Musk’s launch company from the process, despite SpaceX

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Defendants Bezos, Nooyi, and Huttenlocher did not attend this meeting.
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being the most obvious choice to, at the very least, hedge some of the risk associated

with choosing three unproven rockets. Amazon’s selection of the aging Atlas V

rocket for nine launches rather than SpaceX underscores the extent to which Bezos’

personal interests interfered with—and therefore harmed—Amazon’s.

153. Under these circumstances, the Board cannot be expected to bring the

claims asserted herein, and the actions of the Board challenged herein cannot be

protected from judicial scrutiny. Demand is therefore excused.

CAUSES OF ACTION

COUNT I
Breach of Fiduciary Duty
(Derivatively Against The Director Defendants)

154. Plaintiff realleges the preceding paragraphs as set forth above and

incorporate them herein by reference.

155. The Director Defendants, as directors of Amazon, are fiduciaries of the

Company and its shareholders. As such, they owe the Company the highest duties

of good faith, fair dealing, due care, candor and loyalty.

156. The Director Defendants had a duty to evaluate and consider the Final

LSAs and ensure that they were fair to Amazon and its stockholders including, but

not limited to, by evaluating and considering alternative agreements with other

companies, including SpaceX.

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 157. The Director Defendants breached their fiduciary duties and did not act

in good faith because they knew they were making material decisions about the

LSAs without adequate information, without adequate deliberation, and without

regard to whether the decision to enter into the LSAs with Blue Origin and ULA

would cause the Company and its stockholders injury and loss. As discussed above,

the Director Defendants failed to oversee the negotiation of the LSAs, failed to

implement procedural safeguards for the related-party transactions, failed to become

adequately informed, failed to adequately deliberate, and adopted a “we don’t care

about the risks” attitude concerning multi-billion-dollar contracts with entities

owned by Bezos.

158. In contemplating, planning and/or effecting the foregoing conduct, the

Director Defendants were not acting in good faith toward the Company and breached

their fiduciary duties.

159. As a result of these actions of the Director Defendants, the Company

has been and will be damaged.

COUNT II
Breach of Fiduciary Duty
(Derivatively Against the Officer Defendants)

160. Plaintiff realleges the preceding paragraphs as set forth above and

incorporate them herein by reference.

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 161. Bezos, as Executive Chair of Amazon, and Jassy, as Amazon’s CEO,

are fiduciaries of the Company and its stockholders. As such, they owe the Company

the highest duties of good faith, fair dealing, due care, candor and loyalty when

acting as officers of Amazon.

162. Bezos and Jassy breached their fiduciary duties as officers of Amazon.

Amazon management dominated and directed the process through which the

Company selected, negotiated and entered in the LSAs, including by selecting which

entities (including Blue Origin) to enter into agreements with and failing to apprise

the Board fully of the negotiation, process, risks, and terms of the LSAs.

163. In contemplating, planning, and/or effecting the foregoing conduct and

in pursing and structuring the related-party LSAs, the Officer Defendants did not act

in good faith, failed to exercise due care, and acted disloyally towards the Company

in breach of their fiduciary duties.

164. As a result of the Officer Defendants’ actions and conduct, the

Company has been and will be damaged.

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 PRAYER FOR RELIEF

WHEREFORE, Plaintiff demands judgment as follows:

(a) Entry of an order deeming this action to be a proper derivative

action and Plaintiff to be a proper and adequate derivative
plaintiff;

(b) Entry of an order declaring that Defendants breached their

fiduciary duties to the Company;

(c) Entry of an order awarding damages, together with pre- and

post-judgment interest to the Company;

(d) Entry of an order of immediate disgorgement of all profits,

benefits and other compensation obtained by Defendants as a
result of their breaches of fiduciary duties;

(e) An award of Plaintiff’s costs and expenses incurred in this

action, including, but not limited to, experts’ and attorneys’
fees; and

(f) Such other and further relief as this Court may deem just and
proper.

Dated: August 23, 2023. GRANT & EISENHOFER, P.A.

Of Counsel: /s/ Christine M. Mackintosh

Michael J. Barry (#4368)
Christopher J. Orrico Christine M. Mackintosh (#5085)
GRANT & EISENHOFER, P.A. John C. Kairis (#2752)
485 Lexington Avenue Vivek Upadhya (#6241)
29th Floor Edward M. Lilly (#3967)
New York, New York 10017 123 Justison Street
(646) 722-8500 Wilmington, DE 19801
corrico@gelaw.com (302) 622-7000
mbarry@gelaw.com
cmackintosh@gelaw.com
jkairis@gelaw.com
vupadhya@gelaw.com
elilly@gelaw.com
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