Tax Payers First on the Hook for Space Crash

Another Challenger Catastrophe should never happen again. Yet, on Sunday, June 28th 2015, a SpaceX Falcon-9 rocket exploded after launching from Cape Canaveral Air Force Station, Florida during a resupply mission to the International Space Station. Debris from the explosion fell harmlessly into the Atlantic Ocean. But what if it didn’t? What if the debris fell in a populated area killing or seriously injuring people and damaging private property? Further, what if passengers were onboard? If this were an air crash, injured parties would have legal recourse. However, the recently signed Spurring Private Aerospace Competitiveness and Entrepreneurship Act of 2015 (“SPACE Act of 2015”) recently became law. Pub.L. 114–90.

SPACE Act of 2015

Our government is not learning from history. More—not less—regulation and law is required as we dawn on an era of commercial space travel. Private market forces will not make commercial space travel safe. Only government oversight and law, regulation, can mitigate the major risks associated with commercial space travel. Unfortunately, the SPACE Act of 2015 extends U.S. government-backed (taxpayer) indemnification to 2025. And the SPACE Act establishes exclusive FEDERAL jurisdiction and law, which the Framers of the Constitution sought fit to create only for treaties; Ambassadors and other federal officers; admiralty & maritime (which was subsequently granted concurrently to State courts); and generally actions between two or more States. U.S. Const. art. III, § 2, cl. 1.

Limitation of Liability (Launch Liability Indemnification)

Launch liability indemnification, originally enacted in 1984, caps a commercial spaceflight corporation’s, and consequentially its insurer’s, legal exposure to third parties and the government at a “maximum probable loss” for all claims which do not involve willful conduct/gross negligence. Any claim over the maximum probable loss would be paid by the U.S. government (i.e. taxpayers) up to a maximum amount of up to around $3 billion. This Act lowers the maximum probable loss figure, and extends this limitation of liability to 2025. The effect—taxpayer’s exposure to more risk of paying damages in the event of a disaster.

As a point of reference, the maximum probable loss for the recent SpaceX rocket launch is approximately $170 million dollars ($57 million for third party claims and $113 million for U.S. government property). What does this mean? According to Linda Lipsen, “[i]f private space travel corporations were to cause any kind of crash or disaster, this [law] immunize[s] those at fault and leave[s] victims and taxpayers stuck footing the bill for the tragedy.”  At a minimum, taxpayers would be on the hook for any amount over the $57 million “maximum probable loss” figure. Why would a government with a current national debt approaching $20 trillion chose to extend its risk exposure, or allow its taxpayers to bear corporate and insurer risk?

Exclusive Federal Jurisdiction and Law

“Any claim by a third party or space flight participant for death, bodily injury, or property damage or loss resulting from an activity carried out under the license shall be the exclusive jurisdiction of the Federal courts.” The SPACE Act of 2015.

This jurisdictional approach runs afoul of American jurisprudence. Space may be the final frontier, but it is not the first frontier the US has encountered. Sea travel for the Framers of the Constitution, and commercial air travel in the twentieth century offer a guide to the development of what space jurisdiction and law ought to be. On sea, the Framers determined that federal maritime law would apply; yet, in application State and Federal courts maintain concurrent jurisdiction through a “saving to suitor’s clause” for most maritime claims. In Air, neither the Federal Aviation Act, nor the Airline Deregulation Act, expressly create “federal aviation law” or exclusive federal jurisdiction. Why should a California resident injured by a California (spaceflight or space launch) corporation not be permitted to seek justice in a California court?

Commercial space travel is near. The first commercial space flights will very likely occur before 2025. The US government still has time to make a course correction regarding law, regulation, and oversight. The People deserve such action.