BILL ANALYSIS Ó
SENATE JUDICIARY COMMITTEE
Senator Noreen Evans, Chair
2013-2014 Regular Session
SB 415 (Knight)
As Amended January 6, 2014
Hearing Date: January 14, 2014
Fiscal: No
Urgency: No
RD
SUBJECT
Space Flight Liability
DESCRIPTION
This bill would require a space flight entity to enter into a
reciprocal waiver of claims with its contractors,
subcontractors, customers, participants, and contractors and
subcontractors of the customers or participants, involved in
space flight activities, under which each party to the waiver
must agree to be responsible for property damage or loss it
sustains, or for personal injury to, death of, or property
damage or loss sustained by its employees resulting from space
flight activities.
This bill would include a limited exception for specified
actions under existing law.
BACKGROUND
In order to promote the emerging commercial space flight
industry, various states, including Colorado, Florida, Texas,
New Mexico, and Virginia, 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. Then, last year, the
Legislature passed AB 2243 (Knight, Ch. 416, Stats. 2012),
providing limited immunity from civil liability for space flight
entities in order to encourage the development of the space
flight industry in California. That bill, however, was largely
(more)
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predicated on the assumption of risk doctrine and incorporated
requirements to ensure that the participant knew of and
knowingly consented to the risks of space flight. Significantly,
AB 2243 expressly stated that it would not limit the liability
of a manufacturer of a part or component used in space flight
activities if a defective part or component proximately causes
injury to the participant.
As introduced, SB 415 would have extended the limited immunity
created by AB 2243 to manufacturers or suppliers of component
services, or vehicles that have been reviewed by the Federal
Aviation Administration as part of issuing a license, permit, or
other authorization pursuant to specified federal laws relating
to commercial space launch activities. As a result, SB 415 was
presented but held in Committee in order to allow additional
time for the author to address concerns raised by the Committee
about the proposed extended immunity.
As amended most recently, this bill would instead require a
space flight entity to enter into a "reciprocal waiver of
claims" with its contractors, subcontractors, customers,
participants, and contractors and subcontractors of the
customers or participants, involved in space flight activities.
Each party to the waiver must agree to be responsible for
property damage or loss it sustains, or for personal injury to,
death of, or property damage or loss sustained by its employees
resulting from space flight activities. The bill would also
include a limited exception for specified actions under existing
law.
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 (space flight entities) 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
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space flight. (51 U.S.C. 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).)
Existing law requires a space flight entity to provide a space
flight participant, at minimum and in addition to any language
required to be provided by federal law, warning of the inherent
risks associated with space flight for which there is limited
civil liability under California law, including, but not limited
to risk of bodily injury, including death, emotional injury and
property damage. The space flight entity must obtain the
participant's signature acknowledging the statutory warning.
(Civ. Code Sec. 2211(a).)
Existing law provides 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. (Civ. Code Sec. 2211(b).)
Existing law provides 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
and consent requirements, as specified; 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 specified. (Civ. Code Sec. 2212(a).)
Existing law states that if the participant provides informed
consent to the inherent risks, pursuant to the above
requirements, then the 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, are precluded from maintaining an action
against, or recover from, a space flight entity for a
participant injury that results from the risks associated with
space flight activities. (Civ. Code Sec. 2212(b).)
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Existing law provides that a space flight entity remains subject
to civil liability if it:
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;
intentionally causes a participant injury; or
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. (Civ. Code Sec. 2212(c)(1)-(3).)
Existing law specifies that the above provisions providing for
the limited immunity of space flight entities shall not 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.
(Civ. Code Sec. 2212(e).)
Existing law provides specified definitions for "participant,"
"participant injury," "space flight activities" and "space
flight entity." Specifically, existing law defines "space
flight entity" to mean 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 (FAA), as specified,
including, but not limited to, a safety approval and a payload
determination. (Civ. Code Sec. 2210.)
This bill would require a space flight entity to enter into a
reciprocal waiver of claims, as defined, with its contractors,
subcontractors, customers, participants, and contractors and
subcontractors of the customers or participants, involved in
space flight activities.
This bill would define "reciprocal waiver of claims" to mean an
agreement between parties under which each party to the waiver
must agree to be responsible for property damage or loss it
sustains, or for personal injury to, death of, or property
damage or loss sustained by its employees resulting from space
flight activities.
This bill would preclude the reciprocal waiver of claim from
preventing or limiting the liability of a space flight entity
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for specified actions under existing law.
This bill would also correct a cross-reference in existing law
to a specified federal statute.
COMMENT
1. Stated need for the bill
According to the author:
The amendments to SB 415 (Knight, 2013) seek to strengthen the
legal protection afforded under Federal law by requiring a
stronger waiver for spaceflight participants in the chain of
reciprocal waivers of claim. The Federal Commercial Space
Launch Act requires that space launch licensees obtain
informed consent from their spaceflight participant customers,
but it is silent on the issue of potential claims from
participants in the event of a flight incident or accident,
and many of those claims may arise in state court.
Federal law requires launch companies to sign a reciprocal
waiver of claims with their suppliers and customers that
covers damage to life and property of the parties (51 USC
[Sec.] 50914(b)(1)). Irrespective of the law, a reciprocal
waiver of claims would be signed regardless of the
requirement, as it is standard practice in the space industry.
However, because they are required under Federal law, the
waivers are demonstrably not contrary to public policy and
therefore more likely to be held enforceable in court.
This Federal waiver requirement does not include the
spaceflight participants in the chain of reciprocal waivers of
claim. [As amended, SB 415 seeks] to change California law
with regards to the breach and require reciprocal waivers of
claims between the spaceflight participant and the supply
chain, thus offering such waivers (which will certainly be a
part of any flight contract) the legal protection afforded
under Federal law to waivers between elements of the supply
chain.
2. January 6, 2014 amendments would limit the liability of
manufacturers and suppliers
This bill would effectively limit the liability of manufacturers
and suppliers by requiring space flight participants to waive
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potential claims against various entities involved in the space
flight. Specifically, to limit that liability, the bill would
require a space flight entity to enter into a waiver with its
contractors, subcontractors, participants, and contractors and
subcontractors of the customers or participants, involved in
spaceflight activities. Under that waiver, each party must
agree to be responsible for any property damage or loss it
sustains, or for personal injury to, death of, or property
damage or loss sustained by its employees resulting from space
flight activities. Consistent with existing law, however, the
bill would specify that this waiver would not prevent or limit
the liability of a space flight entity where it: (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. (See Civ.
Code Sec. 2212(c); note also that California courts generally
hold liability waivers invalid where they protect against
anything other than ordinary negligence.)
In support of the most recent amendments to this bill, the
author writes that "[i]n order to promote the emerging industry
of private human space travel, California needs to change
current law to allow companies to remain competitive with
commercial spaceflight entities nationwide. Strengthening the
waivers in California is one step closer to providing suppliers
and manufacturers protection in the event something goes wrong
and additionally, to ensure the state's competitive
marketplace." As also noted by the author, however, the federal
law upon which this bill is modeled does not include
participants in the waiver that is required of licensees. (See
Comment 1.)
Specifically, federal law requires that a licensee make a
reciprocal waiver of claims with its contractors,
subcontractors, and customers, and contractors and
subcontractors of the customers, involved in launch services or
reentry services, under which each party to the waiver agrees to
be responsible for property damage or loss it sustains, or for
personal injury to, death of, or property damage or loss
sustained by its own employees resulting from an activity
carried out under the applicable license. (51 U.S.C. Sec.
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50914(a).)
In contrast, SB 415 would require that a space flight entity
enter into a "reciprocal waiver of claims" with its contractors,
subcontractors, customers, participants, and contractors and
subcontractors of the customers or participants, involved in
space flight activities. The bill would then require that each
party to the waiver agree to be responsible for property damage
or loss it sustains, or for personal injury to, death of, or
property damage or loss sustained by its employees resulting
from space flight activities. In other words, not only would
participants be waiving their claims against contractors and
subcontractors (which could feasibly include claims against
manufacturers or suppliers as "contractors" or "subcontractors"
of the space flight entity), but contractors and subcontractors
would also be waiving claims against one another, which was not
necessarily envisioned by the federal law that this bill is
modeled upon. Essentially, under SB 415, each party would
necessarily be waiving their rights against all other parties.
Thus, this bill would not only remove strict liability for
manufacturers and suppliers of defective products that cause
injury to a participant, but it would arguably have even broader
liability implications than it would have in the introduced
version that this Committee held.
As stated in this Committee's earlier analysis of SB 415, as a
matter of public policy, any encouragement of innovation to
promote commercial space flight activity should be done in a
reasonable manner that does not unnecessarily expose
participants to avoidable risks or preclude them from any
recovery for injuries suffered as a result of un-assumed risks.
3. Author's amendment to address concerns
Given the above issues, the author offers the following
amendment which would instead strengthen waiver approved by this
Committee last year. As background, under existing law, in
order to receive limited civil liability for injuries suffered
by participants engaging in inherently dangerous space flight
activities, the space flight entity must provide participants
with a statutory warning, in addition to any language required
by federal law. (See AB 2243 (Knight, Ch. 416, Stats. 2012).)
Despite the codification of this waiver and limited liability
provisions, there are concerns that the courts may refuse to
uphold such waivers as being contrary to the public policy of
the state. Accordingly, the author offers an amendment to
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strike the contents of the bill and instead clarify that the
waiver approved by AB 2243 shall not be construed to be contrary
to the public policy of this state.
Staff notes that the amendment would not substantively change
the waiver requirement under existing law, but would send an
indication to the courts that the legislature intended the
language passed last year to be upheld as valid public policy.
Moreover, the amendment would enhance the existing waiver in a
way that does not undermine the ability of participants to seek
redress in the case of a product defect.
Amendment:
Strike out entire contents of the bill and insert: "Section
2211 of the Civil Code is amended to read:
2211. (a) A space flight entity providing space flight
activities to a participant shall have each participant sign a
warning statement that shall contain, at a minimum, and in
addition to any language required by federal law, the
following notice:
"WARNING AND ACKNOWLEDGMENT: I understand and acknowledge
that, under California law, there is limited 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."
(b) Failure to comply with the requirements provided in this
section shall prevent a space flight entity from invoking the
privileges of immunity provided by Section 2212.
(c) Nothing in this section shall be construed to be contrary
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to the public policy of this state."
Support : City of Lancaster; City of Palmdale Commercial
Spaceflight Federation; Firestar Technologies, LLC; Greater
Antelope Valley Association of Realtors; Mojave Air & Space
Port; SpaceX; The Spaceship Company, LLC; Virgin Galactic
Opposition : Consumer Attorneys of California
HISTORY
Source : Author
Related Pending Legislation : AB 737 (Fox, 2013), which is
substantially similar to the introduced version of this bill but
also included an exception to the proposed limited liability of
space flight entities where a defective product has been
manufactured or supplied. This bill would have also contained a
requirement that a space flight entity present to and file with
the Secretary of State a certificate of insurance coverage, as
specified, in order to qualify for the proposed limited
liability, and would have included a sunset date. That bill is
currently in this Committee.
Prior Legislation :
AB 2243 (Knight, Ch. 416, Stats. 2012), See Background.
AB 2834 (Maze, 2007), would have made various legislative
findings and declarations relating to commercial human space
flight in this state, including its inherent risks, and provided
related definitions. This bill was never heard in any policy
committees and died at the Assembly Desk.
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