SANTA FE, N.M. (AP) — Spacecraft operators and manufacturers, along with their parts and services suppliers, will be shielded in New Mexico from most damage lawsuits by passengers on space tourism flights under a proposal touted as a compromise between trial lawyers and the fledgling space travel industry.
Supporters of the measure say it should help New Mexico remain competitive in a race with Florida, Texas and other states to become a hub for commercial space travel.
New Mexico has spent more than $200 million to develop a spaceport in southern New Mexico that British billionaire Richard Branson’s Virgin Galactic plans to use to take tourists into outer space for $200,000-a-ticket.
Virgin Galactic and representatives of the New Mexico Trial Lawyers Association negotiated the compromise proposal, which was unveiled this week.
“When we sat down with Virgin Galactic and they laid out what they needed and we laid out what our concerns were, it turns out we weren’t all far apart,” Ray Vargas, president of the state’s trial lawyers Wednesday.
He said Democratic legislative leaders had nudged both sides to the bargaining table.
Virgin Galactic CEO George Whitesides said in a statement that the company supported a liability law change “that helps maintain Spaceport America’s leadership in the commercial space sector.”
He previously had hinted that the company might leave New Mexico and its Spaceport America if the Legislature didn’t revise the legal liability limitations offered to the commercial space industry.
A 2010 state law shielded Virgin Galactic from being sued, except under certain circumstances, for damages by passengers or their families if there was an accident and the passengers had signed a form warning them of the risks of space travel.
However, the lawsuit protections didn’t cover the suppliers and manufacturers of spacecraft parts and components. The compromise proposal changes that, putting them on the same footing as a space flight operator like Virgin Galactic.
“The operator can only be sued if they knew or should have known that there was a defect or dangerous condition or if they acted in a willful or reckless manner. Those are very difficult limited circumstances, but they don’t foreclose a suit,” said Vargas.
But to qualify for the liability limitations under the new proposal, companies including Virgin Galactic must carry $1 million in liability insurance.
“If one of these folks can’t get a $1 million in coverage or can’t prove it, then they are really not a commercially viable entity and they are not someone that you should be doing business with or buying spacecraft components from,” said Vargas.
The insurance also helps guarantee that people will be compensated in the few instances that damage lawsuits are allowed, he said.
Virgin Galactic, state economic development officials and Spaceport America Executive Director Christine Anderson have blamed New Mexico’s refusal during the last two legislative sessions to expand the liability protections as the reason some commercial space companies have gone to states such as Texas and Florida. However, companies have pointed to lucrative economic development incentives from other states as a factor in their decisions.
Republican Gov. Susana Martinez said Wednesday she hadn’t seen the proposed compromise but hoped it will keep Virgin Galactic as the anchor tenant for New Mexico’s spaceport. Before pledging support for the measure, Martinez said, she wants to analyze the legislation and make certain it won’t discourage other space companies from coming to the state.
“It’s encouraging that there is discussion,” Martinez said during a public appearance in Albuquerque. “I want to read it first.”
Associated Press Writers Russell Contreras and Jeri Clausing in Albuquerque contributed to this report.