[Federal Register Volume 78, Number 227 (Monday, November 25, 2013)]
[Notices]
[Pages 70392-70394]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-28138]


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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 on the condition that no employees of NASA-
sponsored CubeSat operators will be inside a hazard area associated 
with the Minotaur I launch.

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: [email protected]. 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: [email protected].

SUPPLEMENTARY INFORMATION: 

Background

    On November 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 the Minotaur I launch vehicle 
carrying the Air Force Operationally Responsive Space Office-3 (ORS-3) 
payload. Orbital requested a partial waiver of 14 CFR 440.17, which 
requires a licensee to enter into a

[[Page 70393]]

reciprocal waiver of claims (a ``cross-waiver'') with each of its 
customers.
    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 November 2013 launch 
of a Minotaur I launch vehicle and its ORS-3 payload. The ORS-3 mission 
will demonstrate and validate launch and range improvements for NASA 
and the military. The ORS-3 payloads consist of a Space Test Program 
Satellite-3 (STPSat-3), twenty-eight other CubeSats, and two government 
experiments that will not separate from the upper stage of the launch 
vehicle. STPSat-3 is an Air Force technology demonstration mission. 
Nineteen of the CubeSats are U.S. Government owned, one of which is 
NASA's Small Satellite Program PhoneSat 2 second generation smartphone 
mission. NASA is sponsoring the remaining ten CubeSats through its 
CubeSat Launch Initiative. NASA's CubeSat Launch Initiative provides 
opportunities for small satellite payloads to fly on rockets as part of 
research addressing science, exploration, technology development, 
education or operations.\1\ The operators of the ten NASA-sponsored 
CubeSats are University of Hawaii, Vermont Technical College, 
University of New Mexico, University of Louisiana at Lafayette, 
University of Florida, University of Alabama in Huntsville, Thomas 
Jefferson High School for Science and Technology, St. Louis University, 
University of Kentucky, and Drexel University. Among the NASA-sponsored 
CubeSats is the first CubeSat built by high school students.\2\
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    \1\ NASA's CubeSat Launch Initiative (CSLI), http://www.nasa.gov/directorates/heo/home/CubeSats_initiative.html (last 
visited Nov. 13, 2013).
    \2\ Chris Chester, Fairfax County School To Put First Student-
Built Satellite in Orbit, WAMU 88.5 News, Nov. 4, 2013, http://wamu.org/news/13/11/01/fairfax_county_school_helps_put_first_student_built_satellite_in_orbit.
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    NASA obtained cross-waivers of liability with each of the above 
educational institutions through Cooperative Research and Development 
Agreements (CRADAs). These ten educational institutions are part of 
NASA's Educational Launch of Nanosatellites (ELaNa) program. ELaNa is 
an initiative created by NASA to attract and retain students in the 
science, technology, engineering and mathematics disciplines. Students 
participating in ELaNa are involved in developing, assembling, and 
testing payloads as well as working with NASA and the launch vehicle 
integration teams.\3\
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    \3\ NASA's Educational Launch of Nanosatellites, http://www.nasa.gov/mission_pages/smallsats/elana/ (last visited Nov. 13, 
2013).
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    Cross-waivers are not required for the nineteen U.S. Government 
owned CubeSats, or the two U.S. Government owned experiments that will 
remain attached to the upper stage. The operators of the remaining ten 
NASA-sponsored CubeSats 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) (2013), 14 CFR 401.5 (2013). The subjects of this waiver are 
persons because University of Hawaii, Vermont Technical College, 
University of New Mexico, University of Louisiana at Lafayette, 
University of Florida, University of Alabama in Huntsville, Thomas 
Jefferson High School for Science and Technology, St. Louis University, 
University of Kentucky, and Drexel University are entities organized or 
existing under the laws of Hawaii, Vermont, New Mexico, Louisiana, 
Florida, Alabama, Virginia, Missouri, Kentucky, and Pennsylvania, 
respectively. Accordingly, because these persons have rights in their 
respective payloads 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, each of the CubeSat operators is also 
subject to a NASA reciprocal waiver of claims, a cross-waiver, which is 
governed by NASA's regulations at 14 CFR 1266.104. Article 7 of the 
CRADAs between NASA and the various NASA-sponsored CubeSat operators 
governs liability and risk of loss and establishes a cross-waiver of 
liability.
    Orbital's petition for partial waiver of the FAA requirement that 
Orbital implement a cross-waiver with each customer applies to each of 
the NASA-sponsored CubeSat operators, all of whom have signed a CRADA 
with NASA, and who are customers of the November 2013 launch of the 
Minotaur I launch vehicle carrying the ORS-3 payload.

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); 14 CFR 404.5(b).

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 the NASA-sponsored CubeSat operators, each of which has 
signed a CRADA with NASA, and who are customers of the November 2013 
launch of the Minotaur I launch vehicle carrying the ORS-3 payload.
    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 CRADA 
reciprocal waivers of claims imposed on the NASA-sponsored CubeSat 
operators 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, provided that no employees of NASA-
sponsored CubeSat operators will be inside a

[[Page 70394]]

hazard area associated with the Minotaur I launch.
    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 \4\ 
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).
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    \4\ 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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    A comparison of each element shows that, although there are some 
differences, because Article 7 of the NASA CRADAs addressing liability 
and risk of loss and signed by each of the NASA-sponsored CubeSat 
operators is consistent with Congressional intent and the FAA's 
regulations, and relevant employees will not be present at the launch 
site, the FAA waives the requirement of 14 CFR 440.17 that NASA-
sponsored CubeSat operators must sign a cross-waiver. Additionally, the 
FAA notes that because the only customers for the Minotaur I November 
2013 launch are the U.S. Government, for which cross-waivers are not 
required, and the various NASA-sponsored CubeSat operators, for which 
the CRADAs provide waivers of liability, the only signatories to the 
FAA cross-waivers as required by 14 CFR 440.17 are the FAA, on behalf 
of the U.S. Government, and Orbital. Therefore, Orbital does not need 
to amend its cross-waivers to provide that signing customers waive 
claims against any other customer as defined by 14 CFR 440.3, as the 
FAA has previously required before granting a similar waiver.\5\
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    \5\ See Waiver of Requirement to Enter Into a Reciprocal Waiver 
of Claims Agreement With All Customers for Orbital Sciences 
Corporation, Notice of Waiver, 78 FR 57215, 57216 (Sept. 17, 2013).
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    The FAA bases this determination of sufficient similarity between 
the FAA and NASA cross-waiver schemes on the reasons stated in the 
waiver the FAA published for Space Exploration Technologies Corporation 
on October 16, 2012,\6\ and for the reasons stated above.\7\ The FAA 
finds that 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 CRADAs under 
14 CFR part 1266 accomplish these goals by the same or similar means, 
the FAA finds this request in the public interest. The FAA grants the 
waiver with respect to the NASA-sponsored CubeSat operators in reliance 
on the representations Orbital made in its petition, and on the 
condition that no employees of NASA-sponsored CubeSat operators will be 
inside a hazard area associated with the Minotaur I launch.
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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).
    \7\ The FAA also notes that although its previous waiver cited 
above discussed NASA's Space Act Agreements rather than CRADAs, the 
waiver of liability language in both types of NASA contract has the 
same effect and therefore the FAA applies the same reasoning.

    Issued in Washington, DC, on November 15, 2013.
Kenneth Wong,
Commercial Space Transportation, Licensing and Evaluation Division 
Manager.
[FR Doc. 2013-28138 Filed 11-22-13; 8:45 am]
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