
[Federal Register Volume 78, Number 180 (Tuesday, September 17, 2013)]
[Notices]
[Pages 57215-57216]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-22566]


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DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration


Waiver of Requirement To Enter Into a Reciprocal Waiver of Claims 
Agreement With All Customers for Orbital Sciences Corporation

AGENCY: Federal Aviation Administration (FAA), DOT.

ACTION: Notice of waiver.

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SUMMARY: This notice concerns a petition for waiver submitted to the 
Federal Aviation Administration (FAA) by Orbital Sciences Corporation 
(Orbital) to waive in part the requirement that a launch operator enter 
into a reciprocal waiver of claims with each customer. The FAA grants 
the petition.

FOR FURTHER INFORMATION CONTACT: For technical questions concerning 
this waiver, contact Charles P. Brinkman, Licensing Program Lead, 
Commercial Space Transportation--Licensing and Evaluation Division, 800 
Independence Avenue SW., Washington, DC 20591; telephone: (202) 267-
7715; email: Phil.Brinkman@faa.gov. For legal questions concerning this 
waiver, contact Sabrina Jawed, Attorney-Adviser, Space Law Branch, AGC-
250, Office of the Chief Counsel, Regulations Division, Federal 
Aviation Administration, 800 Independence Avenue SW., Washington, DC 
20591; telephone (202) 267-8839; email: Sabrina.Jawed@faa.gov.

SUPPLEMENTARY INFORMATION:

Background

    On August 8, 2013, Orbital submitted a petition to the FAA's Office 
of Commercial Space Transportation (AST) requesting a waiver under its 
launch license for flight of an Antares launch vehicle carrying 
Orbital's Cygnus module.\1\ Orbital requested a partial waiver of 14 
CFR 440.17, which requires a licensee to enter into a reciprocal waiver 
of claims (a ``cross-waiver'') with each of its customers.
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    \1\ This mission is also referred to as OrbD-1. See Letter from 
Mark A. Wright, Manager, Safety Inspection Division AST, to Natalie 
Imfeld, Contracts Manager, Advanced Programs Group Orbital Sciences 
Corporation (August 16, 2013) (on file with FAA) (referring to 
Antares launch of the Cygnus payload as ORB-D1 Mission).
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    The FAA licenses the launch of a launch vehicle and reentry of a 
reentry vehicle under authority granted to the Secretary of 
Transportation by the Commercial Space Launch Act of 1984, as amended 
and re-codified by 51 U.S.C. Subtitle V, chapter 509 (Chapter 509), and 
delegated to the FAA Administrator and the Associate Administrator for 
Commercial Space Transportation, who exercises licensing authority 
under Chapter 509.
    The petition for waiver applies to Orbital's September 2013 launch 
of an Antares launch vehicle and Orbital's Cygnus pressurized cargo 
module to be used in the delivery of cargo to the International Space 
Station (ISS). The Cygnus cargo module will carry cargo for NASA to 
resupply the ISS. In addition to the ISS supplies, the Antares may also 
carry other payloads whose transport NASA has arranged as part of the 
Johnson Space Center cargo. These consist of a NanoRacks, LLC, and 
NanoRacks locker insert and student experiments created under NASA's 
Student Spaceflight Experiments Program (SSEP). NASA describes SSEP as 
a national science, technology, engineering, and mathematics education 
initiative.\2\ According to its Space Act Agreement with NASA,\3\ 
NanoRacks arranges to carry the student experiments on a locker insert 
to put into an experimental locker on board the ISS. The Space Act 
Agreement states that NASA will provide on-orbit resources and limited 
launch opportunities to NanoRacks for the launch of its insert and the 
experiments the insert carries. Orbital provided the FAA, along with 
its petition for waiver, a letter signed by Christopher Cummins, Chief 
Operating Officer of NanoRacks, stating that NanoRacks will not have 
any personnel at the launch site for the OrbD-1 \4\ launch, which is 
the launch that is the subject of this waiver.
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    \2\ Space Station--Here we Come! NASA Press Release: http://www.nasa.gov/audience/foreducators/station-here-we-come.html (last 
visited August 16, 2013).
    \3\ Nonreimbursable Space Act Agreement Between NanoRacks, LLC 
and NASA for Operation of the NanoRacks System Aboard the 
International Space Station National Laboratory, (Sept. 4 and 9 
2009) (NanoRacks Agreement), 387938main--SAA--SOMD--6355--
NanoRacks--ISS--National--Lab.pdf.
    \4\ OrbD-1 refers to the COTS Demo mission currently scheduled 
to launch in September on the Antares launch vehicle from Wallops. 
See Letter from Mark A. Wright, Manager, Safety Inspection Division 
AST, to Natalie Imfeld, Contracts Manager, Advanced Programs Group 
Orbital Sciences Corporation (August 16, 2013) (on file with author) 
(referring to Antares launch of the Cygnus payload as ORB-D1 
Mission).
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    NanoRacks and each student who places a payload on board the 
NanoRacks insert qualify as customers under the FAA's definitions. 
Section 440.3 defines a customer, in relevant part, as any person with 
rights in the payload or any part of the payload, or any person who has 
placed property on board the payload for launch, reentry, or payload 
services. A person is an individual or an entity organized or existing 
under the laws of a State or country. 51 U.S.C. 50901(12), 14 CFR 
401.5. The subjects of this waiver are persons because the students are 
individuals and NanoRacks is an entity, a limited liability 
corporation. Accordingly, because NanoRacks and the students are 
persons who have rights in their respective payloads, the locker insert 
and the experiments, due to their ownership of those objects, and 
because they have placed property on board, they are customers. Section 
440.17 requires their signatures as customers.
    In this instance, however, NanoRacks and the students are also 
subject to a NASA reciprocal waivers of claims, a cross-waiver, which 
is governed by NASA's regulations at 14 CFR part 1266. Article 8 of the 
Space Act Agreement between NASA and NanoRacks governs liability and 
risk of loss and establishes a cross-waiver of liability.
    Other than the NanoRacks and SSEP customers, all other customers as 
defined by 14 CFR 440.3 will execute the cross-waivers required by 14 
CFR 440.17. The cross-waivers among Orbital and all customers, other 
than NanoRacks and SSEP customers, are amended to provide that signing 
customers waive claims against any other customer as defined by 14 CFR 
440.3. The petition for partial waiver of the requirement that the 
licensee implement a cross-waiver with each customer applies to 
NanoRacks and the SSEP customers as customers of the September 2013 
launch of the Antares launch vehicle carrying the Cygnus module.

Waiver Criteria

    Chapter 509 allows the FAA to waive a license requirement if the 
waiver (1) will not jeopardize public health and safety, safety of 
property; (2) will not jeopardize national security and foreign policy 
interests of the United States; and (3) will be in the public interest. 
51 U.S.C. 50905(b)(3) (2013); 14 CFR 404.5(b) (2013).

[[Page 57216]]

Waiver of FAA Requirement for Each Customer To Sign a Reciprocal Waiver 
of Claims

    The FAA waives 14 CFR 440.17, which requires a licensee to enter 
into a reciprocal waiver of claims with each of its customers with 
respect to NanoRacks and the SSEP participants for the September 2013 
Antares launch.
    In 1988, as part of a comprehensive financial responsibility and 
risk sharing regime that protects launch participants and the U.S. 
Government from the risks of catastrophic loss and litigation, Congress 
required that all launch participants agree to waive claims against 
each other for their own property damage or loss, and to cover losses 
experienced by their own employees. 51 U.S.C. 50915(b). This part of 
the regime was intended to relieve launch participants of the burden of 
obtaining property insurance by having each party be responsible for 
the loss of its own property and to limit the universe of claims that 
might arise as a result of a launch. H. Rep. 100-639, at 11-12 (1988); 
S. Rep. 100-593, at 14, (1988); Financial Responsibility Requirements 
for Licensed Launch Activities, Notice of Proposed Rulemaking, 61 FR 
38992, 39011 (Jul. 25, 1996). The FAA's implementing regulations may be 
found at 14 CFR part 440.
    In its request for a waiver, Orbital submits that the NASA Space 
Act Agreement reciprocal waivers of claims imposed on NanoRacks and the 
SSEP participants are equivalent to the requirements imposed on each 
customer under the FAA's requirements of 14 CFR part 440. A comparison 
of the two regimes shows that in this particular situation the two sets 
of cross-waivers are sufficiently similar that the statutory goals of 
51 U.S.C. 50914(b) will be met by the FAA agreeing to accept the NASA 
cross-waivers in this instance.
    The FAA cross-waivers require the launch participants, including 
the U.S. Government and each customer, and their respective contractors 
and subcontractors, to waive and release claims against all the other 
parties to the waiver and agree to assume financial responsibility for 
property damage sustained by that party and for bodily injury or 
property damage sustained by the party's own employees, and to hold 
harmless and indemnify each other from bodily injury or property damage 
sustained by their respective employees resulting from the licensed 
activity, regardless of fault. 14 CFR 440.17(b) and (c). Each party \5\ 
to the cross-waiver must indemnify the other parties from claims by the 
indemnifying party's contractors and subcontractors if the indemnifying 
party fails to properly extend the requirements of the cross-waivers to 
its contractors and subcontractors. 14 CFR 440.17(d). A comparison of 
each element shows that, although there are some differences, because 
the NASA cross-waiver signed by NanoRacks is consistent with 
Congressional intent and the FAA's regulations, because relevant 
employees will not be present at the launch site, and because the 
Orbital cross-waiver submitted to the FAA has been amended to protect 
non-signing customers, NanoRacks and the SSEP participants need not 
sign a cross-waiver under 14 CFR part 440.
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    \5\ Indemnification by the U.S. Government is conditioned upon 
the passage of legislation. 51 U.S.C. 50915; 14 CFR 440.17(d).
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    For the reasons stated in the waiver the FAA published for SpaceX 
on October 16, 2012,\6\ and for the reasons stated above, the FAA finds 
that this waiver implicates no safety, national security or foreign 
policy issues. The waiver is consistent with the public interest goals 
of Chapter 509. Under 51 U.S.C. 50914, Congress determined that it was 
necessary to reduce the costs associated with insurance and litigation 
by requiring launch participants, including customers, to waive claims 
against each other. Because the NanoRacks Agreement under 14 CFR part 
1266 accomplishes these goals by the same or similar means, the FAA 
finds this request in the public interest, and grants the waiver with 
respect to NanoRacks and the SSEP participants in reliance on the 
representations Orbital made in its petition.
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    \6\ Waiver of Requirement to Enter Into a Reciprocal Waiver of 
Claims Agreement With All Customers, Notice of Waiver, 77 FR 63221 
(Oct. 16, 2012).

    Issued in Washington, DC, on September 10, 2013.
Kenneth Wong,
Commercial Space Transportation, Licensing and Evaluation Division 
Manager.
[FR Doc. 2013-22566 Filed 9-16-13; 8:45 am]
BILLING CODE 4910-13-P


