In Huerta v. Pirker, Docket CP-215 (NTSB Mar 6, 2014), an administrative law judge of the NTSB dismissed a civil penalty complaint and held that the FAA has no jurisdiction over model aircraft flown for commercial purposes.  The full text of the decision is available here.

The respondent, Raphael Pirker, had been cited by the FAA for flying a Ritewing Zephyr powered glider aircraft over the University of Virginia on 17 October 2011 and getting paid for aerial imagery of the U VA campus and medical center. The FAA proposed a civil penalty of $10,000.

The ALJ held that the FAA had never classified model aircraft as “aircraft,” subject to 14 C.F.R. § 91.13(a), which prohibits any person from operating "anaircraft in a careless or reckless manner so as to endanger the life or property of another." The FAA had charged Pirker, not only with operating the drone commercially, but also with flying it close to persons and buildings.

The FAA repeatedly has emphasized that it does not subject model aircraft to mandatory regulation. In its Advisory Circular AC91-57, it encouraged voluntarycompliance with the circular's safety standards for model aircraft. The “has distinguished, model aircraft as a class excluded from the regulatory and statutory definitions." Perkir decision at 3. The Administrative Law Judge also noted that the 2012 FAA Revitalization and Reform Act prohibits the FAA from regulating model aircraft.

Nor was the FAA able to salvage its penalty by referring to the vehicle flown by Perkir as a “UAS.” The ALJ held that none of the FAA’s pronouncements on its plans for meeting the Congressional mandate to integrate UAS into the National Airspace System constituted rules. The FAA has subjected none of them to the rulemaking process required by the Administrative Procedure Act. They are, at most, policy guidance, or statements for internal FAA reference, the ALJ held.

If the FAA wants to enforce rules restricting drone operations, it must follow the rulemaking procedures under the Administrative Procedure Act, as the ALJ said. That statute requires that administrative agencies like the FAA justify 

their rules as logical and reasonably related to statutory authority.

The matter was before the NTSB because 49 U.S.C § 46301(d) (5)(B) and 14 C.F.R. § 13.18(g) grant a person acting as a pilot a right of appeal to the NTSB from an FAA assessment of civil penalties. The NTSB thus acts as the administrative appeals body from civil penalties assessed against airmen.

It may be some time before the effect of the Perkir decision is clear. Under 49 C.F.R. § 821.47, the FAA may appeal the ALJ decision to the full NTSB, within 10 days of the ALJ decision. On 7 March 2014, the FAA filed notice of appeal to the full NTSB.

Final orders of the NTSB are subject to judicial review (a form of appeal) in the United States Court of Appeals. 49 U.S.C § 46301(d)(6). 

If the full NTSB upholds the ALJ decision in the Perkir decision, the FAA may appeal to the United States Court of appeals. To obtain judicial review, the FAA must file a petition for review in the court of appeals with 60 days after the final Board decision.

Appeals in the courts of appeals often take six- to nine-months between the time an appeal is filed to the time a decision is issued. So it may be mid-2015 before this matter is finally resolved—unless the FAA elects to accept the ALJ decision and proceed with a rulemaking proceeding for small drones.

Or,the FAA could promulgate an emergency regulation, which does not require prior notice, prohibiting commercial model aircraft operations until its regulatory framework has evolved. This would restore the status quo as it existed before thePerkir decision. The Administrative Procedure Act permits such emergency rulemaking. 5 U.S.C. § 553(b)(B). 

The central question in the Perkir case was whether the FAA could allow model aircraft flight for amateur purposes while prohibiting flight of the same air vehicles for commercial purposes. The legal problem was that the FAA had consistently excluded model aircraft from the definition of "aircraft." Only aircraft and their operations are subject to detailed FAA regulation. To be sure, the distinction between amateur and commercial flight of model aircraft has been recognized by the Congress in the 2012 statute, which preserves a safe 

harbor for model aircraft only when they are not flown for commercial purposes. (See § 336(c)(3) of the 2012 Act)

The distinction between commercial and non-commercial aviation operations makes sense when the operations being regulated involve the carriage of passengers. Then, the more stringent requirements for commercial operations under Parts 119, 135, and 121 are necessary to protect paying passengers.

Drones, of course, do not carry passengers. So this justification is absent for more stringent regulation of commercial drone operations. 

The scope of the existing regulations for commercial operations, however, suggests that the protection of passengers is not the only justification. Not only commercial passenger carriage, but also commercial cargo carriage, involves more stringent regulation. Other justifications exist for applying higher standards to commercial operations. For one thing, economic incentives are likely to induce more operations. More aircraft will be flown and they will fly in more places. 

For another, research into aviation safety makes it clear that a pilot or other decision-maker is more likely to fly into a risky situation when he does not want to lose 

the revenue for the flight, or face the prospect of losing his job or losing a contract if he makes to too many no-fly decisions. That is one of the justifications for introducing more stringent regulation of EMS operations in 2014.

HHP