A Space Law Primer for Colorado Lawyers Part 2: U.S. Space Law, 0518 COBJ, Vol. 47, No. 5 Pg. 43

• Author: MILTON “SKIP” SMITH, J.
• Position: Vol. 47, 5 [Page 43]

47 Colo.Law. 43

A Space Law Primer for Colorado Lawyers Part 2: U.S. Space Law

Vol. 47, No. 5 [Page 43]

The Colorado Lawyer

May, 2018

SPACE LAW

MILTON “SKIP” SMITH, J.

FEATURE SPACE LAW

The United States has a robust regulatory scheme addressing activities in space. Tis article reviews selected aspects of national space law applicable to commercial space activities.

As discussed in Part 1, space activities occur within a framework of international law including, most importantly, the Outer Space Treaty.¹ Pursuant to Article 6 of the Outer Space Treaty, nations bear “international responsibility for national activities in space” whether such activities are carried on by governmental or non-governmental entities.² Moreover, the activities of non-governmental entities in outer space require “authorization and continuing supervision.”³ To fulfill these obligations, the United States and many other nations have established detailed statutory and regulatory regimes addressing safety, financial responsibility, licensing, and other matters. Te United States has the most robust national space law regime, which is addressed below. Many other nations have also established space laws. A 2010 book details the space laws of 15 countries.⁴ Since then, seven additional countries have adopted space laws,⁵ and other countries, such as the United Arab Emirates, are in the process of developing their own space laws. Many nations have modeled their laws after those of the United States.

This article provides a high-level review of selected aspects of the U.S. legal regime applicable to commercial space activities⁶ with a focus on (1) commercial space launch, (2) satellite remote sensing of the Earth, (3) satellite communications, (4) National Aeronautics and Space Administration (NASA) activities, and (5) space mining. Most of these areas involve U.S. space policy, statutory provisions, and extensive administrative regulations. The regulatory regimes have generally worked well and fostered the development of commercial space activities in the United States. Given the tremendous growth in commercial space activities, however, there are initiatives to streamline some of the extensive regulations and expedite the processing o f license applications by agencies. U.S. space law is likely to mature as the commercialization of space activities progresses.

One recent significant development in space law was the re-codification of U.S. space laws in 2010. Public Law 111-314 enacted a restatement of existing law relating to national and commercial space programs as a new title of the United States Code. Te enactment of Title 51 transferred statutes dealing with space programs from various United States Code titles and put them in one place,^[7] so most of the laws relevant to commercial use of space are located there.

Commercial Space Launch Activities

Commercial space launch capabilities are important to the United States for many reasons. The 2010 National Space Policy reflects this importance; one of its six goals is to “[e]nergize competitive domestic industries to participate in global markets and advance the development of: . . . space launch[.]”⁸ Te 2013 National Space Transportation Policy established five goals, including to “[p]romote and maintain a dynamic, healthy, and efficient domestic space transportation industrial base; [and] [e]ncourage and facilitate the U.S. commercial space transportation industry to increase industry robustness and cost effectiveness[.]”⁹ Te 2013 Policy also directs agencies to “[p]urchase and use U.S. commercial space transportation capabilities and services and facilitate multiple U.S. commercial providers of space transportation services across a range of launch vehicle classes, to the maximum extent practicable.”¹⁰ Te United States has done so in many ways, including NASA’s use of Space Act Agreements, discussed below. Because commercial space launch capabilities are so important, there is a very detailed statutory and regulatory regime applicable to such activities. Te Commercial Space Launch Act^[11] (CSLA) was enacted in 1984 to incentivize the commercial space launch industry. Te CSLA and its implementing regulations govern commercial space launch activity. Te CSLA empowers the Secretary of Transportation, delegated to the Federal Aviation Administration (FAA) Office of Commercial Space Transportation, to (1) authorize and regulate launch and reentry activities of licensees consistent with public health and safety, the environment, national security, and U.S. foreign policy; (2) impose and enforce insurance and financial responsibility requirements on licensees; (3) encourage, facilitate, and promote commercial space launches and reentries by the private sector; and (4) investigate and penalize violations of the CSLA.¹²

Te CSLA requires a license for:

■ a person to launch a launch vehicle, operate a launch or reentry site, or reenter a reentry vehicle (launch–reentry activities) inside the United States;

■ a U.S. citizen to conduct launch–reentry activities outside the United States; and

■ a U.S. citizen to conduct launch–reentry activities outside the United States in certain situations involving a foreign government.¹³

Te CSLA implementing regulations in Title 14 of the Code of Federal Regulations¹⁴ (CFR) establish procedures to obtain a

■ launch license (Part 415);

■ license to operate a launch site (Part 420);

■ license for launch and reentry of a reusable launch vehicle (Part 431);

■ license to operate a reentry site (Part 433); and

■ license for reentry of a vehicle other than a reusable launch vehicle (Part 435).

Part 413 of the regulations establishes license application procedures.¹⁵ These procedures include guidance on who must obtain a license or permit, pre-application consultation with the FAA, confidentiality, and license or permit renewal.

Part 440 of the CSLA regulations addresses financial responsibility.¹⁶ Te FAA determines “the maximum probable loss (MPL) from covered claims by a third party for bodily injury or property damage, and the United States, its agencies, and its contractors and subcontractors for covered property damage or loss, resulting from a permitted or licensed activity.”¹⁷ Te MPL is an important concept because the MPL determination “forms the basis for financial responsibility requirements issued in a license or permit order.”¹⁸ Te licensee or permittee must obtain third party liability insurance or demonstrate financial responsibility in amounts sufficient to compensate for the MPL.¹⁹ Te third party MPL amounts are established for each license by the FAA up to a maximum of $500 million or “[t]he maximum liability insurance available on the world market at a reasonable cost.”²⁰ Similar provisions apply to claims by the United States, its agencies, and its contractors and subcontractors, with their MPL capped at $100 million or “[t]he maximum liability insurance available on the world market at a reasonable cost.”^[21]

Each licensee must also comply with detailed and complex reciprocal waiver of claims requirements.^[22] Tis includes signing a cross-waiver of liability with their customer(s) and the U.S. government.²³ Through these reciprocal waivers each party (1) agrees to be responsible for property damage or loss it sustains, and for personal injury to, death of, or property damage or loss sustained by its own employees, resulting from an activity carried out under the license; and (2) waives claims it may have against the other parties to the agreement.²⁴ Furthermore, the licensee and its contractors, subcontractors, and customers, as well as the contractors and subcontractors of the customers, are also to extend the requirements of the waiver and release of claims, and the assumption of responsibility, to their contractors and subcontractors.²⁵ Proper implementation and flow-down of these waivers is critical. Failure to do so can lead to indemnity obligations²⁶ and other significant consequences, such as exposing parties to potential liability.

With limited exceptions, the government is authorized, subject to congressional appropriations, to pay successful third party claims against the licensee, a contractor, subcontractor, or customer of the licensee, or a contractor or subcontractor of the licensee’s customer, in excess of the amount of the licensee’s third party liability insurance up to $1.5 billion.²⁷ In such an event, the President, on the recommendation of the Secretary of Transportation, must submit a compensation plan to Congress recommending the amount of claims to be paid.²⁸

In addition to determinations of financial responsibility, the FAA, with assistance from other government agencies, will conduct policy, safety, payload, and environmental “reviews” for a proposed activity.^[29]

In a policy review, the FAA “reviews a license application to determine whether it presents any issues affecting U.S. national security or foreign policy interests, or international obligations of the United States.”³⁰ Tis may involve inter agency coordination with the Department of Defense, the Department of State, and other federal agencies. Te processing of these reviews at FAA, and at the National Oceanic and Atmospheric Administration (NOAA), have come under attack from industry due to long delays, sometimes exceeding one year.³¹

Safety reviews vary depending on the specific type of activity. The FAA conducts them to determine whether an applicant is capable of launching a launch vehicle and its payload without endangering public health and safety and the safety of property.³² These reviews generally include analysis of compliance with acceptable fight risk criteria, fight readiness and communication...