On Friday, May 19, 2017, a federal appellate court struck down an integral part of the FAA’s attempt to safely monitor and integrate small unmanned aerial systems (“sUAS”) into the national airspace. The D.C. Circuit found that the FAA’s Registration Rule—which was promulgated in December 2015 and subject to an expedited rulemaking process—directly conflicted with the FAA’s enabling statute, the FAA Modernization and Reform Act of 2012 (the “2012 Act”).

For context, in December 2015, the FAA announced the much-anticipated registration requirements for sUAS. However, given that industry believed nearly one million sUAS would enter the national airspace after the 2015 holiday season, coupled with the FAA’s serious delay in complying with the timelines set forth in the 2012 Act, the FAA declared that the Registration Rule was subject to “emergency” rulemaking and bypassed the generally applicable notice-and-comment period. Despite whatever procedural irregularities may have plagued the Rule, the substance itself has posed a greater hurdle to the FAA.

As we originally noted when discussing the Registration Rule, beyond failing to observe the standard notice-and-comment period associated with agency rulemaking, the Registration Rule applied to commercial and hobbyist users alike. Commercial operators include the overwhelming majority of use cases involving sUAS, especially given that the FAA has interpreted “commercial” operations very expansively. Even sUAS operations that are simply captured by video and uploaded to YouTube or other content-sharing sites are considered “commercial” by the FAA. Hobbyist and recreational users are, for all intents and purposes, model aircraft pilots or other individuals flying sUAS purely for enjoyment.

Prior to the Registration Rule, model aircraft flown for hobby or recreational purposes were not subject to any registration requirements. Congress acknowledged as much in Section 336 of the 2012 Act, which provides that “notwithstanding any other provision of law relating to the incorporation of unmanned aircraft systems into Federal Aviation Administration plans and policies . . . the Administrator of the Federal Aviation Administration may not promulgate any rule or regulation regarding a model aircraft,” so long as the aircraft meet certain criteria. Congress defined “model aircraft” under Section 336 as “an unmanned aircraft that is capable of sustained flight in the atmosphere, flown within visual line of sight of the person operating the aircraft, and flown for hobby or recreational purposes.” Despite this seemingly clear language, the FAA’s Registration Rule applied with equal force to both commercial and hobbyist operators.

The FAA’s Registration Rule was challenged by model aircraft pilots almost immediately. At the time it was passed, the FAA justified requiring model aircraft users to register because, in its view, the 2012 Act’s clear language to the contrary did not affect its authority under 49 U.S.C. 44101(a) to require registration.

The D.C. Circuit disagreed. It found that the Registration Rule was “does not merely announce an intent to enforce a pre-existing statutory requirement[; rather] The Registration Rule …creates a new regulatory regime for model aircraft.” (Slip Op. at 7.) The D.C. Circuit thought it important that the “new regulatory regime includes a ‘new registration process’ for online registration of model aircraft” and “imposes new requirements—to register, to pay fees, to provide information, and to display identification—on people who previously had no obligation to engage with the FAA.” (Id. at 7–8 (citations omitted).) Perhaps most notable to the Court was that “the new regulatory regime imposes new penalties—civil and criminal, including prison time—on model aircraft owners who do not comply. (Id. at 8.)

In its decision, the D.C. Circuit noted that the FAA’s mandate is “to ‘promote safe flight of civil aircraft’ and to set standards governing the operation of aircraft in the United States.” (Slip. Op. at 3 (citing 49 U.S.C. § 44701(a).) It also acknowledged that “aircraft” must be registered before they can legally operate in the national airspace. (Id. (citing 49 U.S.C. §§ 44101, 44103).) On top of these two uncontroversial points, the D.C. Circuit also noted that “the FAA has not previously interpreted the general registration statute to apply to model aircraft.” (Id.) And the D.C. Circuit acknowledged that the 2012 Act expressly carved out model aircraft from the FAA’s rulemaking authority:

In short, the 2012 FAA Modernization and Reform Act provides that the FAA “may not promulgate any rule or regulation regarding a model aircraft,” yet the FAA’s 2015 Registration Rule is a “rule or regulation regarding a model aircraft.” Statutory interpretation does not get much simpler. The Registration Rule is unlawful as applied to model aircraft.

(Id. at 7.) As we noted in our original analysis of the 2012 Act, “it is unclear how to reconcile the plain text of Section 336 of the 2012 Act with the FAA’s registration scheme.”

The D.C. Circuit was unequivocal: “Section 336 of the FAA Modernization and Reform Act prohibits the FAA from promulgating ‘any rule or regulation regarding a model aircraft.’ The Registration Rule is a rule regarding model aircraft. Therefore, the Registration Rule is unlawful to the extent that it applies to model aircraft.” (Id. at 8.)

As a result of this ruling, especially given how tied the ruling is to a plain reading of the statutory text of the 2012 Act, it seems unlikely that the FAA will be able to resuscitate the Registration Rule as it applies to model aircraft. In a press release issued on the same day as the ruling, the FAA said that it is “carefully reviewing the U.S. Court of Appeals decision as it relates to drone registrations [and that the] FAA put registration and operational regulations in place to ensure that drones are operated in a way that is safe and does not pose security and privacy threats.” The FAA is considering its options; we believe it may be more fruitful for the FAA to seek assistance from Congress than to seek certiorari from the Supreme Court.

In the meantime, model aircraft operators need not comply with the Registration Rule. That said, the Registration Rule is easy to comply with and required for Part 107 operations, so it is not clear how much of an impact the Court’s ruling will have on sUAS (as opposed to traditional model aircraft).