Loss in Space? 

A bill heading to the Legislature exempts a commercial spaceflight firm from negligence claims by passengers

Within the next three years, local space development company Paragon intends to take six passengers at a time into near space from a launch site in Page, Ariz., via a high-altitude balloon and enclosed capsule combination called the World View Project. Paragon CEO Taber MacCallum says that this will be the luxurious version of space travel compared with the 20-minute rocket rides offered by rival companies like Virgin Galactic and SpaceX. MacCallum highlights the fact that Paragon's flights will last hours instead of minutes and cost a fraction of what competing firms are charging per ride—about $75,000 compared to the $250,000 price tag for a Virgin flight. Local hero Mark Kelly has signed on with Paragon as head of crew for flight operations. And according to MacCallum, passengers have already begun reserving seats.

Things, it seems, are in order for Paragon to begin the testing phase, but according to MacCallum, until legislation is in place that would protect the company from liability in the event of an accident, all real-world tests will have to be put on hold. A draft of that legislation is already in circulation, and it is set to hit the Arizona House of Representatives as soon as this year's session is called to order.

The bipartisan bill, as drafted by Tucson Republican Rep. Ethan Orr with support from Paragon, limits a space company's liability for damage or death to "spaceflight participants" as a result of "spaceflight activities" except in cases involving the space flight company's "gross negligence evidencing willful or wanton disregard for the safety of the space flight, or intentionally caused by the space flight entity." Summation: if you're involved in an accident on a Paragon flight and you signed the waiver (which is the only way to get on the flight), you can't sue the company unless the accident was intentionally caused or its cause was intentionally overlooked. So gross incompetence on the part of any Arizona space company, then, could still potentially go unpunished should this bill become law. The bill also provides liability protection for the state of Arizona and its municipalities. Though the bill makes no direct mention of a space company's liability in the event of negligence alone, Orr says he believes "that would probably be the standard that the courts would apply." The negligence issue could make the bill "suspect on public policy grounds," University of Arizona commercial law professor Lawrence Ponoroff said in an interview earlier this month.

Similar legislation has already been enacted in Texas, New Mexico, Colorado and California. The legislation in Texas extends liability protection to parts manufacturers and suppliers. The New Mexico, Colorado, and California laws, however, do not protect a spaceflight company in the event of gross negligence—willful, wanton or otherwise. Orr told the Weekly that Arizona's law was "almost verbatim what's already passed in Texas and New Mexico."

But, Orr added, though everyone in the Arizona House appears to either support the bill or take a neutral stance on it, the fact that the Arizona Constitution protects the rights of victims to sue may present a problem for the bill's ratification. And how does this liability protection sit with respect to federal Department of Transportation policy, you may ask? Potentially not well, as it turns out.

Since both the Federal Aviation Administration and Department of Transportation operate under mission statements that list safety as their primary concern, it seems that a law that protects the financial interests of a transportation company over the safety of its passengers may not meet basic DOT standards. A draft of Orr's bill was sent to the DOT in Washington, D.C., and a rep there told the Weekly by email last week that bills such as Orr's could potentially "cause legal problems."

There does not appear to be any equivalent legislature that protects balloon companies, their operators, or airline companies from actions by passengers who have been affected by accidents. In fact, the Montreal Convention—which was signed by the United States in 1999—protects the rights of passengers involved in airline accidents to collect up to 113,100 "special drawing rights" (roughly $170,000) in damages before an airline is even legally allowed to defend itself against a claim. In cases involving larger dollar amounts, an airline, to avoid liability, must prove the accident in question was not a result of its own negligence or was in fact the fault of a third party.

MacCallum says that Paragon's presence in Arizona is "quite a binary thing" with respect to the passage of Orr's legislation. That is to say, should Arizona fail to pass the liability immunity bill in the next couple of years, there is serious threat of Paragon leaving its Page launch site in favor of a state with more lenient liability legislation. "If insurance is a fraction of the cost in (another state)," says MacCallum, "that's where we have to go." Paragon has sister offices in Houston and Denver.

Economic benefits of the World View project to Pima County have more or less been met through the research and development stage, and the operation of the spaceport in Page would likely have little or no direct impact on the economy in Pima County.

As it stands, it looks like the bill will become law sometime early this year, though questions still remain as to how the law will hold up when a spaceflight company encounters its first injury-related lawsuit. And inevitably that day will come. Until then, if you are planning on signing up as a first-generation commercial astronaut, be advised: You do so at your own risk.

More by Craig S. Baker

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