I have no doubt that they are great at their job, but when it comes to lawsuits the judge(s) are equally as important. You could get everything right but a judge has extreme power to interpret the law or even ignore it in select cases.
And then other times you run into bloody-mindedness, or worse.
I don't think NIST has many excuses here. It looks like they botched this straightforwardly.
It's a straightforward case. My bet is that they'll lose it. The documents will get delivered. That'll be the end of it.