Recently, the FAA sent a massive shot across the bow of the burgeoning UAS community’s ship of aspirations: a $1.9 million dollar penalty against a single operator.

The target of the Notice of Proposed Civil Penalty (NPCP) is a modest photographer who offices on Milwaukee droneAvenue in Chicago. According to the FAA Press Release [the FAA declined to release the actual NPCP], there were 65 offending flights occurring between March 21, 2012 and December 15, 2014. [Sidebar – all of these flights occurred at least 6 months prior to any FAA action, and therefore would be barred by the stale complaint rule if the FAA had sought to take action against SkyPan’s certificate.] Interestingly, as of this writing, Sky Pan’s website still proudly displays the Section 333 Exemption issued by the FAA on April 17, 2015.

Why is this NPCP significant?
First, the money. That sanction is huge, and it is unprecedented, in every respect. There is no doubt the FAA intended to use this case as a cause celeb to get the attention of the UAS community. Message received.

Given the 65 alleged flights, the penalty amount exceeds $29,000 for each offending flight. No doubt the NPCP will include a multiple stacking of numerous violations for each offending flight to reach hundreds of claimed violations, including 65 derivations of old faithful – careless and reckless 91.13.

By comparison, according to the FAA’s own Table of Sanctions [FAA Order 2150.3], a large business (exceeding $100 million in revue), has a maximum civil penalty of $18,750 – $25,000. Conversely, a small business concern that does not hold a certificate should expect a civil penalty of between $2,200 – $4,399, not $1.9 million.

Second, there is no actual harm. The records do not reveal that there was a single flight diverted as a result of SkyPan’s operations, a single injury caused by the operation, any damage to property, or any complaints by the public. These factors are among the most severe aggravating factors used by Regional Counsel to increase the amount of the sanction or civil penalty. In many respects, SkyPan’s flights are not different than a flight thousands of enthusiasts took this weekend to get an aerial view of the fall colors. No harm no foul?

According to the FAA’s press release, the company conducted 65 unauthorized commercial UAS flights; 43 of which took place inside New York Class B airspace. It is unclear whether the claimed lack of authorization is merely a function of the 333 Exemption not becoming effective until after these flights took place or whether the manner in which the flights were conducted violated the FAR’s [regardless of the applicability of the exemption]. However, it is worth noting that the primary concern of Class B operation restrictions is the potential interference with flights landing or taking off from at JFK and Kennedy – no such allegation has been made public.

So, what’s really going on here?
The FAA is behind the curve on corralling the avalanche of UAS that are coming on line and into the air space. The September 30, 2015 deadline to fully integrate USA into the Airspace System came and went without any action. This is no slight on the FAA. The undertaking is massive. At the time of this writing, there were 1,937 Section 333 exemptions issued so far; 85% of which were issued in FY 2015. The amount of craft requiring regulation is expected to double within a year; and double again several years later. The FAA resources – not so much. So, follow the money. If the agency is not properly funded to engage in an entirely new spectrum of enforcement, one might ask the question – is the FAA looking at the Civil Penalty process as supplemental funding? I don’t think there is any question about it.

There is swirling uncertainty in the UAS world. What regulations will be approved; and when. How will this massive new fleet be integrated into the Air Space System. The FAA sent a clear signal – slow down. If you do not have a waiver – do not operate commercially. If you do – follow the limitations to the letter. If you don’t, you will pay the price.

By Brandt Madsen of SmithAmundsen