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Amazon Shareholder Files Lawsuit Over Blue Origin Launch Contract

West Palm Beach Business Litigation Attorney 2023-01-26 16-49-13

According to a report from Reuters, an Amazon shareholder has filed a lawsuit against the Board of Directors and its founder Jeff Bezos. The complaint—filed by the Cleveland Bakers and Teamsters Pension Fund—alleged that the company awarded a launch contract to Blue Origin (also owned by Mr. Bezos) without properly considering competing bids. Within this article, our West Palm Beach shareholder litigation lawyer discusses the case and highlights a key lesson for shareholder law.

Background: Amazon Awarded Project Kuiper Satellite Launch Project to Blue Origin 

Blue Origin is an American private aerospace manufacturer and spaceflight services company founded by Jeff Bezos, the founder of Amazon. Notably, Ms. Bezos left his position as the CEO of Amazon in 2021, though he is still the executive chairman of the company.

Amazon’s “Project Kuiper” is an initiative to deploy a large constellation of low Earth orbit satellites with the aim of providing broadband internet access. The company entered into a large contract with Blue Origin to help complete its Project Kuiper satellite project.

 Shareholder Lawsuit: Pension Fund Argues Amazon Should Have Evaluated Competitors 

An Amazon shareholder—a pension fund based in Ohio—has sued Jeff Bezos and Amazon’s Board of Directors alleging a lack of due diligence in awarding launch contracts for Project Kuiper to Bezos’s own space company, Blue Origin. The lawsuit contends that contracts worth billions were given to Blue Origin without considering SpaceX. Of course, SpaceX is the Blue Origin rival company owned by Elon Musk. In response to the allegations, an Amazon representative stated the lawsuit’s claims are baseless and expressed the company’s intent to defend the lawsuit in court.

What Shareholders Need to Prove to Hold Board of Directors Liable for Damages 

At a fundamental level, shareholders are the owner of a corporation. Of course, minority shareholders have little (if any) control over how the company is actually managed and operated. The Board of Directors is often responsible for the day-to-day management of a corporation. Through shareholder litigation, a company’s Board of Directors may bear liability for shareholder damages—but these are complex cases. Shareholders typically need to establish the following:

  • Breach of Fiduciary Duty: The Board of Directors owes a duty of care to the shareholders of the corporation. They must act in good faith, with the care of a prudent person, and in the best interests of the shareholders.
  • Causation: Shareholders must prove that the actions (or inactions) of the board directly resulted in the damages claimed.
  • Quantifiable Damages: There must be a clear determination of the loss incurred, which can be directly attributed to the board’s conduct.

Get Help From a Shareholder Litigation Attorney in West Palm Beach, FL

At Pike & Lustig, LLP, our Florida shareholder disputes lawyer has the professional expertise to help clients navigate complex legal matters. If you have any questions about a shareholder lawsuit, our legal team is here as a resource. Contact us today for your strictly confidential consultation. We handle shareholder disputes in West Palm Beach, Palm Beach County, and beyond.



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