BILL ANALYSIS                                                                                                                                                                                                    Ó






                             SENATE JUDICIARY COMMITTEE
                             Senator Noreen Evans, Chair
                              2011-2012 Regular Session


          AB 2243 (Knight)
          As Amended May 7, 2012
          Hearing Date: July 3, 2012
          Fiscal: No
          Urgency: No
          ME/RD/TW
                    

                                        SUBJECT
                                           
                         Liability:  Commercial Space Flight

                                      DESCRIPTION  

          This bill would provide a limited civil immunity to space flight 
          entities for injuries sustained by a space flight participant if 
          the entities meet certain requirements, including warning the 
          voluntary participant of the inherent risks of space flight and 
          obtaining the participant's informed signed consent. 

          This bill would not provide immunity for injuries proximately 
          caused by a space flight entity that is grossly negligent, 
          willfully or wantonly disregards the safety of the participant, 
          intentionally causes injury, or has actual knowledge or 
          reasonably should have known of a dangerous condition, as 
          specified.

                                      BACKGROUND  

          Space travel has fascinated the public since the first human 
          space flight was launched in 1961.  Since that time, various 
          government space programs have been established and have 
          launched astronauts in space.  Now, space travel by private 
          citizens is an emerging commercial industry in the United 
          States.  Indeed, in 2004, the first private human space flight 
          occurred in Mojave, California.  That same year, Congress passed 
          the Commercial Space Launch Amendments Act of 2004 (CSLAA).  The 
          CSLAA created a licensing and regulatory scheme to promote the 
          development of the commercial space flight industry.  However, 
          the CSLAA does not address liability issues that arise when 
          voluntary participants in commercial space flight are injured or 
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          die during their participation as passengers of space flight 
          companies.

          In order to promote the emerging commercial space flight 
          industry, various states, including Colorado, Florida, Texas, 
          New Mexico, and Virginia, have enacted space flight limited 
          civil liability laws to protect space flight companies from 
          potential lawsuits brought by private citizens who participate 
          in space flights.  In California, space flight liability 
          legislation was first introduced in AB 2834 (Maze, 2007), but 
          that bill was never referred to a policy committee.  

          To similarly encourage the space flight industry in California, 
          this bill would enact a limited immunity from civil liability 
          for space flight entities.

                                CHANGES TO EXISTING LAW
           
           Existing federal law  encourages private sector efforts to 
          provide commercial space flight.  (51 U.S.C.S. Sec. 50901 et 
          seq.)

           Existing federal law  provides for the licensing of entities who 
          provide space launch and reentry services.  (51 U.S.C.S. Sec. 
          50905.)

           Existing federal law  requires a license holder who provides 
          space launch and reentry services to inform the space flight 
          participant in writing about the risks of the launch and reentry 
          and requires that the space flight participant be informed in 
          writing of relevant information related to the risk or probable 
          loss during each phase of the space flight.  (51 U.S.C.S. Sec. 
          50905(b)(5).)

           Existing law  provides that everyone is responsible, not only for 
          the result of his or her willful acts, but also for an injury to 
          another caused by his or her lack of ordinary care or skill in 
          the management of his or her property or person, except so far 
          as the latter has, willfully or from lack of ordinary care, 
          brought the injury upon himself or herself.  (Civ. Code Sec. 
          1714(a).)

           This bill  would require a space flight entity to provide, in 
          addition to any language required to be provided by federal law, 
          a space flight participant with the following warning of 
          inherent risks associated with space flight:
                                                                      



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            WARNING AND ACKNOWLEDGMENT:  I understand and acknowledge 
            that, under California law, there is no civil liability for 
            bodily injury, including death, emotional injury, or property 
            damage, sustained by a participant as a result of the inherent 
            risks associated with space flight activities provided by a 
            space flight entity.  I have given my informed consent to 
            participate in space flight activities after receiving a 
            description of the inherent risks associated with space flight 
            activities, as required by federal law pursuant to Section 
            50905 of Title 51 of the United States Code and Section 460.45 
            of Title 14 of the Code of Federal Regulations.  The consent 
            that I have given acknowledges that the inherent risks 
            associated with space flight activities include, but are not 
            limited to, risk of bodily injury, including death, emotional 
            injury, and property damage.  I understand and acknowledge 
            that I am participating in space flight activities at my own 
            risk.  I have been given the opportunity to consult with an 
            attorney before signing this statement.

           This bill  would require the space flight entity to obtain the 
          participant's written acknowledgment of this warning.

           This bill  would provide that a space flight entity's failure to 
          comply with the written warning and consent requirements above 
          shall prevent the space flight entity from invoking the limited 
          immunity provided in this bill.

           This bill  would provide the following definitions:
          (a) "participant" means a space flight participant as defined in 
            Section 50902 of Title 51 of the United States Code;
          (b) "participant injury" means a bodily injury, including death, 
            emotional injury, or property damage, sustained by the 
            participant;
          (c) "space flight activities" means launch services or reentry 
            services; and
          (d) "space flight entity" means any public or private entity 
            that holds, either directly or through a corporate subsidiary 
            or parent, a license, permit, or other authorization issued by 
            the United States Federal Aviation Administration.
           
          This bill  would provide that a space flight entity shall not be 
          liable for participant injury arising out of space flight 
          activities if both of the following apply:  (1) the participant 
          has been informed of the risks associated with space flight 
          activities as required by federal law and the written warning 
                                                                      



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          and consent requirements contained in this bill; and (2) the 
          participant has given his or her informed consent that he or she 
          is voluntarily participating in space flight activities after 
          having been informed of the risks associated with those 
          activities, as required by federal law and the provisions of the 
          bill.  
           
          This bill  would provide that if the participant provides 
          informed consent to the inherent risks specified in the warning, 
          then a participant, his or her representative, including the 
          heirs, administrators, executors, assignees, next of kin, and 
          estate of the participant, or any person who attempts to bring a 
          claim on behalf of the participant for a participant injury, 
          shall not be authorized to maintain an action against, or 
          recover from, a space flight entity for a participant injury 
          that results from the risks associated with space flight 
          activities.
           
          This bill  would provide that a space flight entity is still 
          subject to civil liability if the space flight entity does any 
          of the following:  
          (1)commits 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 causes a 
            participant injury; 
          (2)intentionally causes a participant injury; or 
          (3)has actual knowledge or reasonably should have known of a 
            dangerous condition on the land or in the facilities or 
            equipment used in space flight activities and the dangerous 
            condition proximately causes injury, damage, or death to the 
            participant.

           This bill  would specify that any limitation on legal liability 
          afforded by this bill to a space flight entity is in addition to 
          any other limitations of legal liability otherwise provided by 
          law.
           
          This bill  would specify that it shall be construed to limit the 
          liability of a manufacturer of a part or component used in space 
          flight activities if a defective part or component proximately 
          causes an injury to the participant.  

           This bill  would make various legislative findings and 
          declarations regarding space flight.

                                        COMMENT
                                                                      



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           1.Stated need for the bill  
                
           The author writes:

            The first human entered space over 50 years ago, a pursuit 
            that was decades in the making.  Every astronaut since has 
            assumed the immense risk involved in being hurled into orbit 
            to further human development through the exploration of 
            countless scientific experiments producing everything from new 
            consumer products and the expansion of communications to cures 
            for diseases.  Human space flight has been carried-out 
            exclusively by government spaces agencies of the United States 
            and Russia, with expertise provided by the private sector.  
            With the retirement of the U.S. space shuttle program, 
            innovators in private industry have developed new forms of 
            space transportation vehicles and are being looked upon to 
            fill the void of manned space flight.  Undoubtedly, however, 
            they face the risk of civil suits if anyone is harmed 
            undertaking this inherently dangerous activity.

            In order to promote the emerging industry of private human 
            space travel, California must provide innovators with 
            regulatory latitude and limited indemnification from civil 
            liability to ensure the state's competitive marketplace.

          2.  Immunity based on assumption of risk involved in inherently 
            dangerous activities  

          This bill would provide limited immunity from liability for a 
          space flight entity if the entity provides a warning, as 
          specified, of risks associated with space flight and the 
          participant acknowledges these risks.  This immunity is 
          predicated on the participant assuming the risk of the 
          inherently dangerous activities of space flight.

              a.   Assumption of risk
             
            Under existing law, everyone is responsible, not only for the 
            result of his or her willful acts, but also for an injury to 
            another caused by his or her lack of ordinary care or skill in 
            the management of his or her property or person, except so far 
            as the latter has, willfully or from lack of ordinary care, 
            brought the injury upon himself or herself.  (Civ. Code Sec. 
            1714(a).)  Under this provision, if a person injures another, 
            the person may be held liable for the other's injuries.  
                                                                      



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            However, the person who injures another may have a defense 
            from liability based upon the doctrine of assumption of risk.

            The doctrine of assumption of risk is incorporated in Civil 
            Code Section 1714(a) and provides that a person who injures 
            another may not be liable if the injured individual brought 
            the injury upon himself or herself.  An assumption of risk 
            defense is asserted on the basis of the plaintiff's consent to 
            relieve the defendant of an obligation of conduct towards him, 
            and to take his chances of harm from the particular risk.  
            (Alcorn v. Davies (1959) 173 Cal.App.2d 569, 574-575.)  

            Similarly, this bill, by requiring the space flight 
            participant to acknowledge in writing the risks associated 
            with space flight, and thus consent to exposing himself or 
            herself to the risks of space flight activity, would relieve 
            the space flight entity from liability for any injuries 
            sustained by the participant during the space flight.  The 
            Commercial Spaceflight Federation, in support, argues that 
            this bill "provides the necessary liability protections that 
            will allow businesses in this sector to operate in an 
            efficient and effective manner, and acknowledges that 
            spaceflight is not a risk-free endeavor and passengers 
            understand and acknowledge that risk."  Further, they argue 
            that this "Act must be in place for California to continue to 
            be a leader in the industry."   

              b.   Inherently hazardous activity
             
            This bill would require a space flight entity to warn the 
            space flight participant of inherent risks of bodily injury or 
            death that may result from space flight activities.  This 
            warning effectively would deem space flight an inherently 
            hazardous activity.  An inherently hazardous activity is one 
            in which the nature of the activity or substance is so 
            inherently dangerous or complex that the hazard persists 
            despite the exercise of ordinary care.  (Benwell v. Dean 
            (1964) 227 Cal.App.2d 226, 233.)

            Existing federal law requires space flight entities to provide 
            to a space flight participant a written warning of the 
            inherent risks, as provided by the Federal Aviation 
            Administration (FAA), associated with space flight.  (51 
            U.S.C.S. Sec. 50905(b)(5).)  The FAA requires, among other 
            warnings, space flight entities to warn a space flight 
            participant of the risks of launch and reentry, including:
                                                                      



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            (1) for each mission, each known hazard and risk that could 
            result in a serious injury, death, disability, or total or 
            partial loss of physical and mental function;
            (2) that there are hazards that are not known; and
            (3) that participation in space flight may result in death, 
            serious injury, or total or partial loss of physical or mental 
            function.  (14 C.F.R. 460.45(a).)

            Further, the FAA requires the space flight operator to inform 
            each space flight participant of:  (1) the total number of 
            people who have been on a suborbital or orbital space flight 
            and the total number of people who have died or been seriously 
            injured on these flights; and (2) the total number of launches 
            and reentries conducted with people on board and the number of 
            catastrophic failures of those launches and reentries.  (14 
            C.F.R. 460.45(c).)  

            These warnings serve to educate the space flight participant 
            on the potential harm that may result in voluntarily 
            participating in space flight activities.  The FFA regulations 
            also require that, before flight, a space flight operator must 
            provide each space flight participant an opportunity to ask 
            questions orally to acquire a better understanding of the 
            hazards and risks of the mission, and each space flight 
            participant must then provide consent in writing to 
            participate in a launch or reentry. The consent must:  (1) 
            identify the specific launch vehicle the consent covers; (2) 
            state that the space flight participant understands the risk, 
            and his or her presence on board the launch vehicle is 
            voluntary; and (3) Be signed and dated by the space flight 
            participant.  (14 C.F.R. 460.45(f).)

            Given the extensive warning of risks associated with space 
            flight required to be provided under federal regulations, in 
            addition to the warning required under this bill, the 
            opportunity to ask questions about the inherent risks 
            associated with space flight, and the opportunity to consult 
            with an attorney prior to consenting to voluntarily 
            participate in a space flight, the space flight participant is 
            arguably well-informed of the risks associated with the 
            potential for serious injury or death.  If the participant 
            then consents to participate in the space flight, then the 
            doctrine of assumption of risk would arguably relieve the 
            space flight entity of liability.  This bill would codify the 
            doctrine of assumption of inherent risk associated with space 
            flight and make the space flight entity immune from liability.
                                                                      



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            c.    Arguments in support of immunity for assumption of 
            inherent risks  
             
             Supporters of this bill assert that the commercial space 
            flight industry feels vulnerable to law suits that may arise 
            if passengers are injured or die during commercial space 
            flight.  Indeed, the commercial space flight industry is 
            working to get state laws passed that limit their liability 
            for participants injured as a result of the inherent risks 
            associated with commercial space flight.  Since California is 
            an industry leader in commercial spaceflight and home to the 
            nation's first licensed commercial spaceport, housed in 
            Mojave, proponents of the bill argue that California must 
            enact similar legislation to remain competitive and not lose 
            industry jobs to the other states that have enacted limited 
            civil liability laws for commercial space flight.  

            Virgin Galactic and The Spaceship Company, in support, assert 
            that "the human spaceflight industry and the jobs it creates 
            require sensible regulation governing liability."  Further, 
            they argue that "the net effect of AB 2243 will be to provide 
            Ýtheir companies] with important assurances that are already 
            offered by a growing number of competing states . . . and 
            ensure that California remains a center of American aerospace 
            leadership."  They also assert that their "companies have 
            invested Ýsince 2005] approximately $200 million in 
            California, and created or supported roughly 500 high quality 
            jobs in the state."

            Mojave Air & Space Port, also in support, argues that time "is 
            of the essence" and California "must take all means to insure 
            barriers such as civil liability litigation does not hinder 
            the efforts of those that strive to innovate."  

          3.  Providing civil liability for space flight entities in some 
          circumstances

           This bill makes it clear that nothing in this Act limits the 
          liability of a space flight entity whose gross negligence or 
          willful or wanton disregard of the safety of a participant was 
          the proximate cause of the participant's injury.  

          This bill also makes it clear that nothing in the Act limits the 
          liability of a space flight entity that intentionally causes a 
          participant injury, or had actual knowledge or reasonably should 
                                                                      



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          have known of a dangerous condition that proximately caused the 
          injury or damage to the participant.

           4.Civil liability of manufacturers of defective parts or 
            components
           
          This bill does not extend limited civil liability to product 
          defects shown to be the proximate cause of injuries.  The bill 
          makes it clear that there is no limited liability for a 
          manufacturer of a part or component used in space flight 
          activities if a defective part or component proximately causes 
          injury to the participant.

           5.Suggested amendments  
             
           This bill contains two technical errors and one substantive 
          issue that should be resolved.
           
              a.   S tatements in findings and declarations  
                
             Section 2 of the bill includes findings and declarations that 
            are opinions and not substantiated by evidence.  As a matter 
            of policy, these unsupported findings and declarations should 
            be stricken.  Accordingly, this bill should be amended as 
            follows:

                Suggested amendment:

                Page 2, strike lines 3 through 23  

                Page 2, line 24, strike "3" and replace with "2"  
             b.   Technical error in Warning and Acknowledgment  
                
             The statement in the "Warning and Acknowledgment" that "under 
            California law, there is no civil liability for bodily injury 
            . . ." does not conform to the limited liability provisions 
            contained in this bill.  To accurately inform participants 
            about the limited liability provided by this bill, the 
            following amendment is suggested:

                Suggested amendment:

                Page 3, line 24, strike "no" and replace with "limited"  
           
              c.   Technical amendment to correct cross-reference  

                                                                      



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            The following amendment is also suggested to correct and 
            internal cross-reference:

                Suggested amendment  :

               Page 4, at line 13, strike "this section" and insert 
               "Section 2211"


           Support  :  Commercial Spaceflight Federation; Mojave Air & Space 
          Port; The Spaceship Company; Virgin Galactic

           Opposition  :  None Known

                                        HISTORY
           
           Source  : Author 

           Related Pending Legislation  :  None Known

           Prior Legislation  :  AB 2834 (Maze, 2007) See Background.

          Prior Vote  :

          Assembly Floor (Ayes 73, Noes 0)
          Assembly Judiciary Committee (Ayes 10, Noes 0)

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