Florida Moves to Limit Spaceflight Liability

On 25 May 2023, the Governor of Florida, Ron DeSantis, signed a new bill: An Act Relating to Spaceflight Entity Liability (the “Act”).[1] The Act received relatively limited media coverage. But, as I will explore in this post, its impact on private spaceflight could be game-changing.

The Act widens the eligibility for a liability immunity regime previously in effect for spaceflight entities towards their spaceflight participants. It will come into force on 1 July 2023. Briefly, crews, as defined in US Federal legislation, can now also be forced, like participants can be, to forfeit potential liability claims against spaceflight entities responsible for their space travel. Moreover, the exceptions defeating the liability regime were restricted, giving spaceflight entities even stronger protections against liability.

Spotlight on Florida

Florida is home to two world-famous and globally-important spaceports: Kennedy Space Center and Cape Canaveral Space Force Station. It is the second US State by importance for the number of aerospace establishments. As Space Florida, the State’s aerospace development authority, explains, more than 17,000 companies related to aerospace operate in the State. They employ more than 150,000 people and generate US$19 billion dollars in revenue for Florida’s economy.[2]

The Floridian legislature is actively working on many fronts to increase the presence of the aerospace industry in the State. The Act is only one of the tools deployed by the state to increase its attractiveness. Space Florida itself is being reformed on the same day that the Act enters into force. The relevant bill, known as the Space Florida bill, will give the Governor more influence on the direction of the organization. This aims at streamlining the future strategy for space development in Florida.

Industry views

There has long been demand for crewed spaceflight, but the commercial offering was rather limited. Rather, one had to be extremely skilled and lucky to be selected by national space agencies for spaceflight, or, more recently, be very wealthy. Less than seven hundred persons have ever been to outer space, even by accepting a broad definition of what is considered outer space.

The private space industry is working very hard to meet the growing demand for spaceflight. Current pricing is, quite literally, sky-high. While official pricing fluctuates or remains vague, estimates for cost per seat range US$ from 250,000 for a few minutes at the edge of space to US$55,000,000 for 8 days aboard the International Space Station.[3] Undoubtedly, prices will lower as the industry expands its offering. Recall that travel by car and plane was once reserved to the elite. Space travel could well follow a similar path.

However, selling seats to the general public can lead to serious headaches if one starts examining potential liability. Two main factors have to be highlighted.

• First, spaceflight is an incredibly dangerous and risky activity. Looking only at deaths for spaceflight participants, spaceflight directly led to the deaths of 15 astronauts and 4 cosmonauts. The current fatality rate is slightly under 3%. The last loss of crew was in the Space Shuttle Columbia disaster, where 7 lives were lost; a single piece of foam insulation detached during launch, leading to damages that ultimately doomed Columbia during its re-entry.[4]
• Second, seats available for sale today are mostly filled by very high net-worth individuals. Potential liability is therefore significantly increased in comparison to equivalent damages that could be claimed by a person of a humbler background – not to mention the fact that wealthy people (and their estates) are often more litigious.

One failed private crewed flight could lead to bankruptcies, if not halt the entire nascent industry by rendering it uninsurable, or, less dramatically, slow its growth by pushing up insurance premiums or precipitating lengthy court battles.

Before the Act

The Military and Veterans Affairs, Space, and Domestic Security Committee of the Florida Senate produced an analysis of the Act. It explains the situation prior to the Act, its purpose, and looks at potential issues and consequences.

The Act amended Section 501 “Spaceflight; informed consent”, Chapter 331 “Aviation and Aerospace Facilities and Commerce” of Title XXV “Aviation” of the 2022 Florida Statutes.

Prior to the Act, Section 501 established a limited-liability regime for “spaceflight entities” towards “participants” in the course of “spaceflight activities.” These three concepts are defined as follows:

• Spaceflight entity: means any “public or private entity holding a United States Federal Aviation Administration launch, reentry, operator, or launch site license for spaceflight activities.” In addition, the term covers “any manufacturer or supplier of components, services, or vehicles that have been reviewed by the United States Federal Aviation Administration as part of issuing such a license, permit, or authorization;”
• Participant: also referred to as a spaceflight participant, as defined in 51 U.S.C. s. 50902(20), “means an individual, who is not crew or a government astronaut, carried within a launch vehicle or reentry vehicle;”
• Spaceflight activities: encompasses the definitions of launch services and reentry services as defined in 51 U.S.C. s. 50902(10, 17). Services include all activities involved in the preparation of the vehicle, its payload, crew, government astronaut, and spaceflight participant for both launch and reentry plus the conduct of launch and reentry.

The regime protected a spaceflight entity from the liability for injury or death of a spaceflight participant resulting for the inherent risks of spaceflight activities. To qualify for limited liability towards a participant, the entity had to distribute to and require signature of the participant an exact warning. The warning had to be taken word-for-word from the legislation. If the spaceflight entity failed to distribute to and receive signature of the warning from a spaceflight participant, it would not be eligible to invoke the immunity granted by this limited liability regime.

However, this protection did not apply if the spaceflight entity:

• “Commit[ted] an act or omission that constitutes gross negligence or willful or wanton disregard for the safety of the participant and that act or omission proximately cause[d] injury, damage, or death to the participant;”
• “Ha[d] actual knowledge or reasonably should have known of a dangerous condition on the land or in the facilities or equipment used in the spaceflight activities and the danger proximately causes injury, damage, or death to the participant;” or
• “Intentionally injur[ed] the participant.”

Additionally, Section 501 did not limit or modify any other legal liability restriction established in Law.

What’s Changed?

The Act reinforces the protections from Section 501. Floridian spaceflight entities now benefit from a wider immunity from liability.

A new definition has been introduced to Section 501 – "crew” – which is defined in Federal legislation (specifically, 51 U.S.C. s. 50902(2)). Crew means “any employee of a licensee or transferee or of a contractor or subcontractor of a licensee or transferee who performs activities in the course of that employment directly relating to the launch, reentry, or other operation of or in a launch vehicle or reentry vehicle that carries human beings.”

The relevant Federal legislation also identifies three types of individuals that fly into space:

• crew;
• space flight participants; and
• government astronauts.

Accordingly, government astronauts continue to fall outside of the Act. The other important definitions were amended as follows:

• Spaceflight entity: “means a public or private entity holding a United States Federal Aviation Administration launch, reentry, operator, or launch site license for spaceflight activities or which is otherwise authorized by the United States Government to conduct spaceflight activities. The term also includes a manufacturer or supplier of spaceflight components, services, or vehicles;”
• Spaceflight activities: addition of “as well as activities occurring between launch and landing.” The prior definition was limited to launch or reentry services as defined in 51 U.S.C. s. 50902(10, 17).

Consequences

Let’s now examine the consequences of these definition changes. First, addressing the newcomer: crew. By introducing the concept of crew, the Act expands the scope of a spaceflight entity’s liability limitation. In the amended version of clause (2)(a) of Section 1, liability for death or injury is excluded for both spaceflight participants and crew (and their representatives).

Second, regarding spaceflight entities, a subtle but noticeable enlargement of the definition can be highlighted. The revised definition allows an entity to qualify for the immunity even if its activities are not authorized by a FAA launch, reentry, operator or launch site license, provided that it holds some form of authorization from the United States government. This would theoretically allow entities to bypass FAA obligations while still enjoying the privileges of immunity. Similarly, any manufacturer or supplier of spaceflight components, services or vehicles is now eligible to benefit from the limited liability regime; the mandatory FAA review requirement having been removed.

Third, regarding spaceflight activities, this definition was expanded to include all activities happening between the launch and reentry. Once again, this amounts to a significant expansion of the immunity privilege.

Definitions were not the only changes brought by the Act. The liability immunity clause at s. 1(2)(a) was widened by the removal of the “inherent risks” of spaceflight concept. Immunity can now be claimed by an entity for any loss, damage, injury, or death suffered by a participant or crew or their representative as a result of any space activity from launch to reentry.

The conditions for a spaceflight entity to lawfully invoke liability immunity did also change. Exceptions are narrower. For the gross negligence and intentional injury exceptions, the clauses were updated to reflect the addition of “crew” in the law.

For reasonable knowledge of a dangerous condition, the reasonability criterion has been eliminated and replaced by an “actual” knowledge necessity. Likewise, a “dangerous” condition is not enough anymore, as an “extraordinarily dangerous” condition is now required. The “inherent” principle makes a return by mandating that the extraordinarily dangerous condition actually known is not inherent to spaceflight activities. As a result, the amended clause reads as follows: “Has actual knowledge of an extraordinarily dangerous condition that is not inherent in spaceflight activities and the danger proximately causes injury, damage, or death to the participant or crew.” These modifications strongly narrow the exception window. As such, post-Act, it will become significantly harder to defeat a claimed immunity through this exception.

Following all these changes, the obligatory warning to be given and signed by spaceflight participant and crew is as follows:

“WARNING: Under Florida law, there is no liability for an injury to or death of a participant or crew in a spaceflight activity provided by a spaceflight entity if such injury or death results from of the spaceflight activity. Injuries caused by spaceflight activities may include, among others, injury to land, equipment, persons, and animals, as well as the potential for you to act in a negligent manner that may contribute to your injury or death. You are assuming the risk of participating in this spaceflight activity.”

 

Critics

While the industry lobbied intensively for this new regulation, critics have cast a shadow of doubt over its potential consequences. Media coverage put a strong emphasis on the Act mostly benefitting companies owned by some of the wealthiest persons and private interests on Earth, such as Elon Musk’s SpaceX and Jeff Bezos’ Blue Origin (who both run significant operations in the State). Growing wealth inequality is under the scrutiny across much of the Western world, and the Act gives the impression to many that it protects people and companies that do not need to be shielded from financial consequences.

Also, limiting legal recourses against space companies could have the effect of a cold shower on potential customers for space travel. Forfeiting one’s right in case of an accident is not to be taken lightly – and the required warning itself may put some people off.

Additionally, excessive shielding from consequences could lead to an increasing disregard for safety, as immunity makes legal actions harder to win for victims and their representatives. We have recently seen the tragic results of a lack of consideration for safety in the Oceangate submersible catastrophe, where a waiver was required from passengers as the vehicle was not certified by any authority for its operations.

It must be noted that a lot of the media coverage shone a light upon Elon Musk’s apparent role in the Act. Musk is constantly under scrutiny for his ventures such as Tesla, SpaceX and Starlink, and, more recently, its recent acquisition of the social media network Twitter. His name is synonymous with media controversy, but a closer look reveals two elements. First, The New Republic reported that SpaceX has been strongly lobbying in favor of the Act. Of note, donations to party members on both sides of the Floridian political spectrum were made. Second, the timing has raised some eyebrows, so to speak. Governor DeSantis launched his campaign for the 2024 US presidential election on Twitter’s audio forum, Twitter Spaces, on 24 May 2023. Musk promoted this event on his own Twitter page, directly oversaw its deployment, and hosted the event. Less than 24 hours later, the Act was signed by Governor DeSantis. A coincidence? Perhaps. But the chain of events has understandably warranted scrutiny amongst the Florida press.

Ultimately, the Act illustrates the various areas of private law that will draw lobbyists, legislators, and politicians’ attention as the commercial space age progress. Time will tell whether the broader legislative trend will be toward more or less liability – and indeed, whether the Act can spur the further aerospace investment that it seems designed to attract.

 

Philippe Beaulieu holds a LLB and MBA from the Université de Sherbrooke, and is a current LLM (Air and Space Law) candidate at the Institute of Air and Space Law.