Status Report

Testimony of Pamela L. Meredith: The Commercial Space Act of 2003 (part 2)

By SpaceRef Editor
November 5, 2003
Filed under , ,

Part 1|2


Summary Answer: I would recommend: 1) Careful consideration of the possible
implications of extending the FAA/AST’s authority to human spaceflight through an
amendment of CSLA definition of “payload;” 2) Careful consideration of whether the
proposed safety regime for passengers is adequate to achieve H.R. 3245’s goal of opening
outer space to the American people; and 3) Clarification of the liability regime established
by H.R. 3245 and consideration of whether it is adequate to achieve the bill’s goal.

The Objectives of H.R. 3245

The articulated goal of H.R. 3245 is “the opening of outer space to the American people
and their economic, scientific, and cultural enterprises is a priority goal which should guide
Federal Space investments, policy development, and regulatory action.”45 To achieve this
goal, H.R. 3245 should, at a minimum, accomplish these objectives: 1) clarify the
FAA/AST’s authority to license human spaceflight; 2) provide reasonable safety protection
for passengers and crew; 3) impose a reasonable liability regime on passengers and crew;
and 4) regulate only to the extent necessary.

Licensing Authority for Commercial Human Spaceflight

H.R. 3245 attempts to clarify that the FAA/AST has the authority to license commercial
human spaceflight under the CSLA. The bill does so by amending the definition of
“payload” to include an “individual,” and not just an “object,” as is currently the case.
As noted above, the CSLA authorizes the FAA/AST to license the launch of a launch vehicle
or reenter a reentry vehicle and any payload.46 The new definition makes passengers and
crew a payload.47

The implication of including crew and passengers as payloads is that the FAA/AST has socalled
“payload determination” authority over crew and passengers under the CSLA. That
means that the FAA/AST has the authority to “prevent the launch or reentry [of these
individuals] if [the FAA/AST] decides the launch or reentry would jeopardize the public
health and safety, safety of property, or national security or foreign policy interests of the
United States.”48 It will be necessary to carefully consider other potential consequences of
including “individuals” in the definition of “payload.”

Safety Protection for Passengers and Crew

H.R. 3245 takes the position that Federal regulation of human spaceflight “should focus on
protecting the safety of the general, uninvolved public, while allowing involved persons to
assume risks which are inherent to human spaceflight activities.”49 In other words, H.R.
3245 provides that the FAA/AST’s public health and safety mandate be directed at the
general public, to the exclusion of passengers and crew. Accordingly, the FAA/AST’s
“payload determination” as to whether the launch would “jeopardize public health and
safety” presumably would focus on whether the passenger/crew poses a hazard to the
public at large, and not whether the spaceflight would be safe for the passenger or crew.

H.R. 3245 does temper this laissez faire safety treatment to some extent by imposing
qualification requirements on passengers, designed to protect their safety, such as medical
standards and a requirement for training. The question is whether this safety regime is
sustainable. In other words, is this minimalist approach to safety regulation adequate to
promote the bill’s goal of opening outer space to the American people?

Liability Regime for Passengers and Crew

Again, H.R. 3245 takes the position that Federal regulation of human spaceflight should
“allow[ ] involved persons [presumably passengers] to assume risks which are inherent to
human spaceflight activities.”50 The first question is whether the bill as now styled achieves
that objective. A separate question is whether such a liability regime is sustainable and
whether it promotes the goals H.R. 3245 is trying to accomplish.

The liability treatment of passengers and crew in the bill is incongruous. H.R. 3245 treats
passengers and crew as non-third parties, while at the same time depriving them of the
protections afforded to other non-third party participants in launch and reentry services.
H.R. 3245 amends the CSLA definition of “third party” to make clear that “crew and
passengers” are not third parties. These individuals are added to a list of non-third parties,
which includes the licensee, the customer and their respective contractors and
subcontractors. Yet, crew and passengers do not benefit from the protection as additional
insureds under the licensee’s third party liability insurance, as do, e.g., the licensee’s
contractors, subcontractors, and customer. Passengers and crew also do not benefit from
the CSLA indemnification.

It is not clear whether passengers or crew will have to sign the CSLA liability waiver. The
waiver applies to the licensee and its “customers” and their contractors and subcontractors
that are “involved in launch services.” Are passengers and/or crew “customers?” The
FAA defines customer as “the person who procures launch services . . . ,”51 which is true
of a passenger, but not crew. It would be a stretch to apply the remaining portion of the
“customer” definition – providing that “any person who has placed property on board the
payload” is a customer – to crew.

Even assuming passengers meet the definition of “customer,” are passengers “involved in
launch services?” The waiver applies only to parties “involved in launch services.”
Furthermore, H.R. 3245’s addition of “passengers” to a list of non-third parties that
already contains “customers” suggests that passengers are not considered customers for
purposes of the liability waiver under the bill. If the bill’s intention was to extend the waiver
to customers, that purpose may not have been achieved.

1 Title 49, Transportation, Subtitle IX, Commercial Space Transportation, Chapter 701, Commercial
Space Launch Activities, 49 U.S.C. §§ 70101-70121.

2 See 49 C.F.R. § 1.47(v) (providing that the Federal Aviation Administrator “is delegated authority to .
. . [c]arry out the functions vested in the Secretary by 49 U.S.C. Subtitle IX”); see also 50 Fed. Reg.
9036 (Mar. 6, 1985) (delegating authority under the CSLA to the Director of the Office of Commercial
Space Transportation) and 60 Fed. Reg. 62762 (Dec. 7, 1995) (transferring the Director of Commercial
Space Transportation’s CSLA authority to the FAA Administrator).

3 A license is required to “launch a launch vehicle” or “reenter a reentry vehicle.” 49 U.S.C. §
70104(a)(1). A launch vehicle is “(A) a vehicle built to operate in, or place a payload in, outer space;
and (B) a suborbital rocket.” Id. § 70102(7). A reentry vehicle is “a vehicle designed to return from
Earth orbit or outer space to Earth, or a reusable launch vehicle designed to return from Earth orbit or
outer space to Earth, substantially intact.” Id. § 70102(14).

4 The FAA/AST’s licensing and regulatory authority extends to: 1) launches/reentries in the U.S.; 2)
launches/reentries by U.S. persons or entities anywhere in the world; 3) launches/reentries by U.S.
controlled foreign entities on the high seas or from international air space, unless there is an agreement
that a foreign government will license the launch/reentry; and 4) launches/reentries of U.S. controlled
foreign entities in foreign countries if there is an agreement that the U.S. will license the launch or
reentry. 49 U.S.C. § 70104(a). The FAA/AST also licenses and regulates launch sites and reentry
sites. Id.

5 Id. § 70105(a)(1).

6 Commercial Space Act of 1998, Pub. Law 105-303, § 102, 112 Stat. 2843, 2846-2851 (1998).

7 Commercial Space Act of 1997, H.R. Rep. No. 105-347, at 20.

8 Civilian Space Authorization Act, Fiscal Years 1998 and 1999, H.R. Rep. No. 105-65, at 23. The
Committee pointed out that the FAA/AST had previously taken the position that “a reentry [was]
subject to a launch license requirement on the grounds that reentry entailed the placing of a launch
vehicle in a suborbital trajectory ‘from Earth orbit [and that the FAA/AST had] since abandoned that
position . . . .” Id., at 60; see also Commercial Space Act of 1997, H.R. Rep. No. 105-347, at 21
(providing the same).

9 See, e.g., Financial Responsibility Requirements for Licensed Reentry Activities, Notice of Proposed
Rulemaking (“NPRM”), 64 Fed. Reg. 54448, 54457 (Oct. 6, 1999) (providing that “[w]ith the
development of RLV technology comes the possibility of crewed or piloted launch vehicles whose
operations would be subject to FAA licensing”). In the same NPRM, the FAA solicited comments on
the subject of a “regulatory program that would . . . address passenger safety.” Id.

10 49 U.S.C. § 70104(a).

11 Id. § 70102(3).

12 Id. § 70102(9).

13 Outer Space Treaty, done Jan. 27, 1967, 18 U.S.T. 2410.

14 Id., art. VI.

15 Id.

16 Commercial Space Launch Act, H.R. Rep. No. 98-816, at 8.

17 49 U.S.C.

18 Id. § 70112(b); 14 C.F.R. § 440.17 and Part 440, Appx. B, Agreement for Waiver of Claims and
Assumption of Responsibility (“Waiver Agreement”). The purpose of the cross waivers is: “(1) to
limit the total universe of claims that might arise as a result of a launch; and (2) to eliminate the
necessity for all these parties to obtain property and casualty insurance to protect against these claims.”
Commercial Space Launch Act Amendments of 1988, S. Rep. No. 100-593 (1988), at 14.

19 14 C.F.R. § 440.17(b); Waiver Agreement, supra note 18, § 4.

20 49 U.S.C. § 70112(a).

21 Id. § 70112(b).

22 See infra notes 37-39 and accompanying text (describing indemnification under the CSLA).

23 See Martin Marietta Corp. v. International Telecomm. Satellite Org., 991 F.2d 94, 100 (4th Cir.
1992) (providing that “neither the language of the [CSLA] Amendments nor their legislative history
reflects a Congressional intent to protect parties from liability for their own gross negligence”).

24 For example, the customer agrees to hold such employees harmless from any liability arising out of
claims from customer’s contractors and subcontractors. Waiver Agreement, supra note 18, § 5(b).

25 Compare the FAA’s definition of “third party” in 14 C.F.R. § 440.3(a)(15)(ii) (providing specifically
that U.S. government personnel are third parties).

26 49 U.S.C. § 70101(a)(7). (Emphasis added).

27 Under the Outer Space Treaty, “[e]ach State Party to the Treaty that launches or procures the launching
of an object into outer space [or] from whose territory or facility an object is launched, is
internationally liable for damage to another State Party by such object or its component parts . . . .”
Outer Space Treaty, art. VII.

28 Liability Convention, done Mar. 29, 1972, 24 U.S.T. 2389.

29 Id., art. II.

30 Id., art. III

31 Id., art. I(c).

32 See supra note 14 (setting forth the international responsibility of the United States for its national
activities in space pursuant to the Outer Space Treaty, art. VI).

33 See Liability Convention, art. XI.2 (providing that “[n]othing in this Convention shall prevent a
State, or natural or juridical persons it might represent, from pursuing a claim in the courts or
administrative tribunals or agencies of a launching State”).

34 49 U.S.C. § 70112(a)(1)(A).

35 Id. § 70112(a)(2).

36 Id. § 70112(a)(3)(A)(i).

37 Id. § 70113(a)(1).
Id. § 70113(a)(1)(B).

39 Id. § 70113(a)(1).

40 Commercial Space Launch Act Amendments of 1988, S. Rep. No. 100-593 (1988), at 17.

41 Id., at 11.

42 Id., at 22.

43 49 U.S.C. § 70113(f).

44 H.R. 3245, § 5. A Senate bill provides for an extension of the indemnification provision to December
31, 2009. S. 1260, § 3.

45 H.R. 3245, § 2(3).

46 See supra note 3 (providing that the FAA has the authority to license the launch of a launch vehicle
and the reentry of a reentry vehicle).

47 H.R. 3245 does not define “individual,” but makes it implicitly clear that the term encompasses both
crew and passengers, which the bill calls “spaceflight participants.” The bill defines crew as “an
individual or individuals carried within a launch or reentry vehicle who performs a function necessary
for the protection of public safety.” H.R. 3245, § 3(c)(2). A spaceflight participant means “an
individual who is not crew carried within a launch or reentry vehicle during a launch or reentry.” Id., §

48 49 U.S.C. § 70104(c). The FAA has this authority for payloads that are not otherwise subject to U.S.
government licensing or authorization. 14 C.F.R. §§ 415.51.

49 H.R. 3245, § 2(6); see also id., § 4 (providing that the focus of commercial human spaceflight
regulation should be on “protecting the safety of the general public, while allowing spaceflight
participants who have been trained and meet license-specific standards to assume an informed level of

50 H.R. 3245, § 2(6).

51 14 C.F.R. § 440(a)(3).

SpaceRef staff editor.