Space Law: A New Frontier For Commercial Law

Wednesday, November 7, 2012 - 19:49

The Editor interviews Maria-Vittoria “Giugi” Carminati, Associate, Weil, Gotshal & Manges LLP. Ms. Carminati co-authored The Laws of Spaceflight: A Guidebook for New Space Lawyers with Matthew Kleiman and Jenifer Lamie (American Bar Association, 2012).

Editor: Would you share with us your professional background? How did you become interested in space law?

Carminati: I am a fifth-year associate in the international arbitration group at Weil, Gotshal & Manges, where I do a mixture of complex commercial litigation and international arbitration. I graduated from the University of Houston Law School in 2008 and came straight to Weil Gotshal’s Houston office. I do not practice space law in my everyday practice; it is, however, a huge passion of mine and a subject I’ve pursued since I graduated from law school. In my third year of law school, I was looking for off-the-beaten-path classes, and I saw that space law was being offered in the spring semester. One week in, I knew this was a topic I was going to fall in love with. Unless you are in an IP practice, as attorneys, we don’t often get to be part of something so technologically substantive. And for me personally, technology, engineering and all kinds of scientific endeavors and exploration – especially those that break boundaries – are a real passion. Space law allows me to pursue that passion in my role as an attorney and has given me a look into a world I knew nothing about. Once I looked into that world, there was no way I could go back.

Editor: Please talk about the history of spaceflight, especially its transition from public to private sector. Did this partially inspire your recently published book?

Carminati: There has been massive growth in the private sector. Today there are companies that everybody recognizes – Virgin Galactic, SpaceX, XCOR, Bigelow, Armadillo Aerospace – as well as many other smaller ones.

The retiring of the space shuttle was a turning point (notwithstanding the fact that the efforts of Virgin Galactic predated this). We had to ask ourselves, how are we going to fill the gap? Are we really only going to rely on the Soyuz capsule? Today the space sector is a very interesting field, with constant changes and rapidly expanding private sector involvement – which means a lot of capital and a lot of novelty.

With all of this happening, Matt Kleiman contacted Jenifer Lamie and myself and said he thought we should write a book about the topic. We were all very much on the same page about the fact that we wanted to do something that was practical, a real “guidebook.” The term “new space lawyers” has a double meaning: for one, the book is written for new lawyers who are doing space law, but it also refers to the divide – not in any antagonistic sense, but merely descriptive – between “old space law” and “new space law.” The former refers to public international law, and the latter refers to private international law in the regulation of commercial space and space endeavors. Basically it is this “new space” that was the impetus behind Spaceflight.

Editor: As space has no national boundaries, one would think writing space law would be an international affair. Is there an international legal framework for outer space?

Carminati: Absolutely, and it’s been in place since the ’60s. There are five United Nations treaties. The first, the Outer Space Treaty, governs state-to-state relations. There’s the Registration Convention; the Liability Convention; the Rescue and Return of Astronauts; and, lastly, the Moon Treaty – which is often dubbed the “failed treaty” because no space powers have ratified it. In addition, the Intergovernmental Agreement, or IGA, governs the ISS. There are many international agreements that govern space law and space relations, but in 2004 there was an amendment to the United States laws that codified commercial human spaceflight, which was a huge step forward in creating a legislative framework for the implementation of regulations by the FAA for licensing space activities of private actors. This has put the United States very much at the forefront because the laws that have been passed are so specific and comprehensive. They are currently being used by commercial entities.

Editor: What agencies have jurisdiction over commercial domestic spaceflight? Is ADR/arbitration often used?

Carminati: In the United States, it is the FAA. There always will be jurisdiction issues in law, but it’s pretty clear that each country retains jurisdiction over its own launched object – I mentioned the Liability Convention and the Registration Convention earlier, which govern this. There’s such a thing as the “launching state,” which is responsible for any damages caused by the object. There are four different ways you can define a launching state: the launching state itself; the state that procures the launch; the state from which the launch takes place; or the state that owns the facility from which the launch takes place. That’s how you untangle jurisdiction.

In addition, every nation is supposed to register a space object when it is launched, and so you should be able to find on the UN registry or national registry which state has jurisdiction over an object. As far as the use of ADR/arbitration, there’ve been a lot of state-to-state negotiations until now. However, I think there’s a sense that ADR/arbitration will be on the rise because the ICC recently released the Optional Rules, which are international arbitration rules governing the resolution of disputes involving outer space activities. I just published an article on that topic in the L.A. County Bar Association’s International Law Journal in which I compared the Optional Rules to the UNCITRAL Arbitration Rules, because the former were explicitly based on the latter, and noted how the former have been designed specifically to address issues that may arise – and issues that space operators have already raised – concerning dispute resolution in an international arbitration context.

Editor: Please tell us about the commercial entities needing legal counsel in this area. Are there many new entrants?

Carminati: There are definitely many new entrants to the sector, but they have their own in-house legal directors and counsel. For example, Marc Holzapfel, who wrote the foreword for our book, is the legal director for Virgin Galactic. There is a lot of movement and novelty in this field, and I believe it will only continue to grow.

Editor: How does space law relate to aviation law? Has the former drawn heavily from the latter? Where do they diverge?

Carminati: I could write a book about that. Basically it has been a huge debate, an academic issue which lawyers, professors and extremely intelligent people have tackled: they seem to be slowly reaching a consensus that they can no longer draw from each other because there is clear jurisdiction over the airspace that is above your own country, but there is no jurisdiction over the space – as in “outer space” space – that is over your country. Furthermore, the technology involved and the actual legal frameworks in place are so different that you just cannot use aviation to create space law. True, there will be people who will argue to you the opposite, but there has been an increasing consensus that this is a totally different animal.

Editor: Please outline the major liability issues involved in spaceflight. What are the greatest sources of risk?

Carminati: I am very interested in the liability issues, and, frankly, risk exists at every level throughout the endeavor. First of all, you are using huge amounts of power to escape the earth’s gravity, and so by that sheer fact alone there is always the risk for catastrophic loss. Also, as my law professor said, “If I can fly it over you, I can drop it on you,” and that’s another issue.

Liability arises from several different levels, the first being the standard launch product liability of something failing and somebody getting hurt. There’s liability with respect to the fact that you are launching something into outer space, and it has to come back: you hope that it comes back such that it doesn’t hurt anyone or damage anything. There’s liability involved in the fact that eventually we’ll have private people going up in space for tourism. Right now, it’s just sub-orbital space, but whether it’s sub-orbital or orbital space, the individuals going for the foreseeable future are high-net-worth individuals, and that’s going to raise some liability issues. Aside from that, under the United States rules, there is a liability-sharing regime with the U.S. government, whereby the government covers a certain amount in case of catastrophic losses.

Editor: Have there ever been cases of launched objects interfering with each other?

Carminati: Yes. Satellites have crashed into each other, and the governments involved have resolved those issues.

Editor: Is ITAR often an issue with space endeavors?

Carminati: ITAR is a huge issue when it comes to space endeavors. I believe that involvement by commercial and private entities is going to increase demands for a different approach to export control laws. Right now, the munitions list for the United States covers most, if not all, space-related items, but there’s a sense that this is too broad – that there is much we could be sharing with our allies that really poses no risk or threat, and that we should be able to sell and buy more. If we can export components, then why not?

In addition, discussing technical information about space-related items with a foreigner can also be considered an ITAR violation because you’re “exporting” information. If that’s the case, then how are we ever going to fly foreigners on a sub-orbital flight if we can’t brief them sufficiently? Overall, there’s been a push to revisit ITAR control laws with some common sense and make them less cumbersome. 

Editor: Who governs the environmental impact of spaceflight?

Carminati: There are really two issues embedded in that question. The first one comprises the environmental impact on Earth. Because the FAA licenses outer space activities, as part of the licensing process, you have to go through NEPA compliance, and you must also comply with a few other environmental laws and submit an environmental impact statement. This aspect is governed the way any other federal activity would be.

The second issue is the protection of the environment in space with regard to debris. That is a major concern on which there’s no consensus. Currently there are no mandatory rules about the orbiting, re-orbiting or destroying of objects. When China destroyed its own satellite, it created a huge amount of debris, and that is a massive problem. We are definitely littering space, and we have not come to an adequate approach at all.

Editor: Do you have anything you would like to add?

Carminati: Space law is a tremendously exciting area, and on a broader level I hope that if we can interest people in space, we can interest them in science and research – something other than the many things our culture looks to for entertainment value.

I think Neil deGrasse Tyson says it best when he notes that it’s important that people become interested in space not so much because they should be interested in space itself, but rather that being interested in space fosters an interest in science, in research, in mathematics, in engineering and in all of the things that ultimately bring society forward. I hope that this resurgence in a commercial context will inspire people – especially young people – to put their energy into science and discovery, to find research, technology and engineering fascinating. My own passion is larger than the issue of commercial space or the industry: it’s my dream that we can shift our priorities and become inspired not only by the intellectual endeavor, but also by someone who decides to jump from 120,000 feet and break the sound barrier, or by a company like SpaceX, which is able to resupply the ISS. To me, these events are nothing short of amazing.

Please email the interviewee at giugi.carminati@weil.com with questions about this interview.