The Need for Federal Preemption and International Negotiations Regarding Liability Caps and Waivers of Liability in the US Commercial Space Industry

Abstract

Federal preemption is often controversial and international negotiations are often difficult. Yet, both are necessary in the case of liability issues surrounding the nascent US commercial space industry. In the past year, with the retirement of the space Shuttle, two US commercial companies have begun ferrying cargo to the International Space Station for the US government. Commercial human spaceflight will begin in earnest soon. Indeed, later this year or next, companies will begin sub-orbital space flights from the United States for tourism and research purposes. The current US approach to third-party liability and space flight participant (or passenger) liability suffers from unnecessary uncertainty. This uncertainty is caused by the current federal approach to third-party liability but also as a result of a patchwork of divergent state statutes and common law rules regarding liability of commercial space operators to space flight participants. Recognizing the importance of the growing commercial space industry to US national security and national economy, enhanced liability protections should be afforded to the nascent industry to avoid “crushing liability” on US space companies and place the industry on a level playing field with foreign competitors in the case of a massive, catastrophic accident. Accordingly, the article recommends preemptive federal legislation that would create a liability cap on third-party liability and prevent suits by space flight participants or their heirs against space companies except in cases of gross negligence. However, the article also cautions that federal preemption should not occur with respect to workers’ compensation claims against employers that send their employees to space as protection of those myriad of employers is not critical to incentivizing and maintaining commercial space activity in the United States.