Space: The Final Frontier for Products Liability Law

By James G. Lare

The Legal Intelligencer February 11, 2014

Space exploration and the commercialization of primarily by the need to protect the lives of space activities are creating the next frontier for astronauts and to ensure that launch and legal regulation. Travel beyond the Earth's recovery activities were sufficiently distant from atmosphere was once the province of only the the public to avoid any risk to safety. (Even the most powerful sovereign entities, but now rocket boys of Coalwood, W.Va., in the late private enterprise is involved in launching 1950s knew that the launch site for their satellites into space and stands at the forefront homemade rockets should be far enough from of commercial human space flight. Moreover, town to avoid a mishap.) the number of nations engaged in space activities has increased substantially, and the Because space exploration was initially and evolution in space travel that will occur within almost exclusively a government activity, the private sector during the 21st century will be undertaken by the and the former extraordinary. Soviet Union, the legal structure that resulted was based on United Nations treaties, including Consider what is occurring today. Private entities the Outer Space Treaty and its companion manufacture rockets, satellites and spacecraft; treaties. Negotiated five decades ago, these they are poised to acquire launch platforms, treaties embody compromises between the such as the space shuttle launch pad at Kennedy United States and the Soviet Union, and even Space Center; and they are already providing though their general principles still remain in opportunities for space travel on government‐ force, they are insufficient to address the vastly operated space flights. The current legal expanding area of space activities and the legal structure of space law does not regulate these disputes that will result. activities in a manner similar to other industries and commercial enterprises, raising the question Space for the Private Sector of whether principles of products liability law Fast forward to 2001, the year in which Space can and should serve as a basis to regulate risk, Adventures, a company founded in 1998 and provide consistency and predictability in whose mission is to open the space frontier to resolving legal disputes, establish safety private citizens, placed the first private space standards, and serve as the means for explorer into orbit for seven days. Space compensation in the unfortunate event of Adventures is presently planning to launch a damage or injury. circumlunar mission in 2017 using a Russian spacecraft on which two private citizens and one A Brief History cosmonaut would travel. Even though the Space travel represents one of the pinnacles of mission would not land on the moon, this will be human ingenuity and achievement. From the the closest humans will come to it since 1972. earliest days of space exploration, the establishment of safety standards was driven

1 Garnering more attention are the activities of placed in space; and outer space is not subject to Virgin Galactic, which is planning to launch the any claim of sovereignty. first commercial human spaceflight in December. The eight‐seat suborbital vehicle will Even though these treaties assign liability to a depart from Spaceport America in New Mexico sovereign nation for certain conduct, they are for a two‐and‐a‐half‐hour flight, during which limited in their ability to serve as the basis for four minutes will involve weightlessness. developing a cohesive legal regime for Although the fare for the inaugural flight is commercial space activities, a subject that significant, Virgin Galactic predicts that, like remains largely unaddressed in the treaties. The most commercial endeavors, the future cost will technological developments in space exploration eventually decrease. and the commercialization of space activities will present challenges not governed by the treaties' What has been happening more quietly since the broad principles—namely, regulating conduct for mid‐1990s, though, is the ascent of private which a commercial actor can be held legally industry in placing satellites into orbit. Even liable. though private industry was involved with a small number of satellite placements as early as The regulatory landscape in the United States the 1960s, the realization of commercial gain has, to a limited extent, foreseen the need to from this activity did not occur until the very end ensure that there is adequate financial of the 20th century. Space activities, those responsibility for those entities engaged in initiated by sovereign nations and by commercial commercial space activities. Since the 1980s, the operators, have caused a unique problem: the federal government has vested authority to proliferation of orbital debris, which creates a regulate these activities with the Office of risk for future space missions and sets the stage Commercial Space Transportation, a "line of for significant legal disputes. business within the Federal Aviation Administration" generally referred to as the AST. Products Liability as Regulation The mission of the AST "is to ensure protection Generally, regulation of a field occurs when of the public, property and national security and there is a need (perceived or actual) to ensure foreign policy interests of the United States that an actor's conduct—whether the provision during commercial launch or reentry activities, of a service or the manufacture and distribution and to encourage, facilitate and promote U.S. of a product—does not present a risk of harm to commercial space transportation." others. The authority and means to regulate conduct are just as important as the actual Notwithstanding concerns about agency norms that are eventually established. capture, a situation that occurs when an agency becomes dependent upon the industry it is In the area of space law, the Outer Space Treaty charged with regulating, the AST has and its companion treaties establish the basic promulgated regulations "applicable to the rules and legal framework in this field, but they authorization and supervision ... of commercial only go so far. In general, these treaties embody space transportation activities conducted in the the following principles: the exploration and use United States or by a U.S. citizen." To that end, of outer space shall be carried out for the an entire subpart of the regulatory framework benefit of all countries; space shall be the "establishes financial responsibility and province of all mankind; the moon and other allocation of risk requirements for any launch or celestial bodies shall be used exclusively for reentry authorized by a license or permit issued" peaceful purposes; nuclear weapons shall not be by the AST. The requirement for financial responsibility recognizes the significant risk that space activities pose; however, the legal void

2 that exists between the treaties and domestic These statutes generally have exceptions for AST regulations will, by default or even separate conduct that is grossly negligent or intentionally initiative, require resort to established legal causes injury and also for situations where the theories, including products liability. spaceflight entity has knowledge of a dangerous condition that results in harm. By enacting these In the United States, law serves as a statutes, each of the foregoing jurisdictions powerful regulating force. Even among recognizes the right of injured parties to claim jurisdictions, though, there are differences in the recovery through tort remedies. degree of accountability that exists with regard to products and the potential harm they may In light of this recognition, these statutes, with cause. Courts in various U.S. jurisdictions refer to the exception of California, also extend principles of products liability law, particularly immunity to manufacturers of spacecraft and , as focusing on the product itself their components. Even though these statutes and not on the actions of those engaged in place significant restrictions on the ability to designing, manufacturing or distributing it. Even pursue tort recovery for commercial human though there are difficulties associated with this spaceflight activities, they do not reach other doctrine, it has generally not presented an products liability issues arising from space impediment to holding legally accountable those activities, such as the problems associated with responsible for placing products into the stream orbital debris and launch failures for nonhuman of commerce. commercial space transport.

Products liability theories, and even general Space exploration will continue to evolve, and so principles of , though, may cede the should the legal regime called upon to regulate desire of individual states to attract commercial it. With the first commercial spaceflight planned spaceflight activities within their borders. For to occur later this year, the limitations example, Virginia, Texas, Florida, California, associated with the treaty regime, the Colorado, New Mexico and Oklahoma have all enactment of spaceflight immunity statutes, and enacted spaceflight immunity and liability laws, the continuous launch of satellites by the private which relieve "spaceflight entities," a defined sector, products liability law will soon encounter statutory term, from liability for injuries its final frontier. sustained by one engaged in spaceflight activities. One consequence of these laws is that a purchaser of a seat on a commercial James G. Lare is a shareholder in the casualty spaceflight could be required to to a department at Marshall Dennehey Warner choice‐of‐law provision (and likely a forum Coleman & Goggin. A former commercial airline selection clause), which would result in pilot, he focuses his practice on aviation and immunity from liability for the spaceflight entity. aerospace law, commercial litigation and products liability matters. He can be reached at [email protected].

Reprinted with permission from the February 11, 2014 edition of The Legal Intelligencer© 2014 ALM Media Properties, LLC. All rights reserved. Further duplication without permission is prohibited. For information, contact 877‐257‐3382, [email protected] or visit www.almreprints.com.

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