Commercial Space Flight Liability: Are Waivers Enough?

1. Commercial Space Flight Liability: Are Waivers Enough? Reuben Canada 10/2006

2. Acknowledgements Patti Smith Herb Bachner Ken Gidlow Laura Montgomery Michael Aherne AST Staff Tracy Knutson International Space Brokers

3. Overview • Why waivers are needed for space flight? • How can a written waiver be made effectively? • How does location factor into waiver effectiveness? • Recommendations

4. § 70112 (b) reciprocal wavier coverage • Government <->Licensee <->Customers • Cross waiver required • Government <-> Space flight Participant • Cross waiver required • Licensee X Space flight Participant • Cross waiver not required

5. Human Space Flight Requirements for Crew and Space Flight Participants • “The CLSAA requires crew and each space flight participant to execute a reciprocal waiver of claims with the FAA…The CLSAA does not require crew and space flight participants to waive claims against each other or against a licensee or permittee.” • Waiver of liability between permittees/Licensees and Space flight participants is not required by federal law

6. § 70117. Relationship to other executive agencies, laws, and international obligations • (c)States and Political Subdivisions.— A State or political subdivision of a State— (1) may not adopt or have in effect a law, regulation, standard, or order inconsistent with this chapter; but • (2) may adopt or have in effect a law, regulation, standard, or order consistent with this chapter that is in addition to or more stringent than a requirement of, or regulation prescribed under, this chapter.

7. Assumption of Risk • Def: Voluntary exposure of person or personal property to a known and appreciated danger due to the negligence of another. • 65 C.J.S. Negligence § 360 (2006). • Protects permittee/Licensee from most acts of negligence. • Allan v Snow Summit, Inc. (1996, 4th Dist) 51 Cal App 4th 1358, 59 Cal Rptr 2d 813, 97 CDOS 13, 97 Daily Journal DAR 9.

8. Waiver Construction • Must clearly state the intent to release • Moore v. Hartley Motors, Inc., 36 P.3d 628 (Alaska 2001). • Clearly set out for which liability is to be avoided • Seigneur v. National Fitness Institute, Inc., 132 Md. App. 271, 752 A.2d 631 (2000) • Speak clearly and directly to the particular conduct of the defendant which caused the harm at issue • Empire Lumber Co. v. Thermal-Dynamic Towers, Inc., 132 Idaho 295, 971 P.2d 1119 (1998) • Express the protection from liability in clear and unequivocal terms • Bishop v. GenTec Inc., 2002 UT 36, 48 P.3d 218 (Utah 2002).

9. Minors • Parents generally cannot waive the rights of children • Dixon v. U.S., 197 F. Supp. 798 (W.D. S.C. 1961).

10. Waiver Enforcement Factors • Tunkl Factors • Significance • Used by a number of states currently involved in space travel • Factors • Whether activity: • Is generally subject to extensive public regulation • Is it an important public service • Is it an “essential activity” • Was the injured party under the control of the service provider • Was the activity open to the general public • Is the release regarded as an ‘Adhesion Contract’ (not bargained for)

11. State-by-State Examination • States where action is most likely to take place

12. State-by-State Examination • Florida • Public policy not to interfere lightly in freedom to contract • Waiver releases all sponsors or parties, even if not named • Must include the word negligence • Waivers will protect against gross negligence, but not intentional acts • Minor status: yet to be determined

13. State-by-State Examination • Virginia • Not enforceable? • 1992 Virginia Supreme Court stated, “to hold it was competent for one party to put the other parties to the contract at the mercy if its own misconduct… can never be lawfully done where an enlightened system of jurisprudence prevails. Public policy forbids it, and contracts against public policy are void.” • Universal

14. State-by-State Examination • New Mexico • Factors • Strict construction • Exculpatory language should be conspicuous to the signer • Tunkl factors

15. Recommendations • Lobby state legislatures to enact bills recognizing waivers for negligence liability • Follow waiver construction rules

16. Questions ?

17. State-by-State Examination • California • Use Tunkl Factors • Cannot exempt fraud or willful injury • Must distinguish between injuries due to negligence and inherent risks • Should include the word ‘negligence’ • Parents may execute a release on behalf of children

18. State-by-State Examination • Washington • Public policy • Public interest is involved • Care greatly below standard (gross negligence, reckless conduct) • Clause is inconspicuous • Rely on Tunkl factors • Parents cannot sign away child’s rights

19. State-by-State Examination • Texas • Must meet requirements of fair notice • Express negligence doctrine • Conspicuousness requirement • Negligence clause must be spelled out

20. State-by-State Examination • Wisconsin • Strict scrutiny • Public policy element • Must be clear, unambiguous • When looked at in its entirety • Gives great weight to ‘bargaining process’

21. State-by-State Examination • Alaska • Tunkl factors are used • Must be clear, explicit, and comprehensible in each detail • Must use the word negligence

22. State-by-State Examination • Oklahoma • Waivers are not against public policy • Prohibits waivers seeking to avoid willful injury, fraud, or gross negligence

23. U.S. Spaceport States