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A Drone Company Sued the FAA and Now the FAA Is Fining it $1.9 Million

It's by far the largest drone fine ever doled out.

by Jason Koebler
Oct 6 2015, 3:44pm

Image: Flickr/Gabriel Garcia Morengo

The Federal Aviation Administration has fined a Chicago-based drone operator $1.9 million for flying without permission from the agency, an enforcement penalty that exceeds the previous record by $1,890,000.

The FAA says in at least 65 instances, SkyPan International flew "unauthorized operations in some of our most congested airspace and heavily populated cities, violating airspace regulations and various operating rules. These operations were illegal and not without risk."

The FAA says a majority of the flights were in New York City's airspace. The company's website advertises flights it has done in Manhattan.

Screengrab: SkyPan

There are many peculiar things about the FAA's case against SkyPan, a company that has been conducting photography from both manned and unmanned aircraft for 27 years. Earlier this year, the FAA expressly granted the company permission to fly drones commercially.

Also of note: SkyPan is currently suing the FAA, alleging that the agency doesn't have the authority to make drone operations illegal without enacting formal drone regulations. Earlier this week, the FAA officially missed a Congressionally mandated deadline to enact those regulations.

According to the charging document, the FAA wants to fine SkyPan $11,000 per infraction, and says it violated 11 separate airspace regulations. SkyPan told me it is currently parsing the document and has no comment at the moment.

"I don't know what it's based on," an FAA spokesperson told me. "I don't know if it's based on videos [posted online], and I don't think it's spelled out in the document."

The document does not have specific evidence of each drone flight, but does appear to have a detailed list of flights that it wants to fine the company for.

The largest fine the FAA has ever levied against a drone operator was $10,000. After years of legal headaches—including a court decision that temporarily made all drone flights legal—the agency settled that case for a fraction of the original amount.

The specifics of the SkyPan case are obviously important, and we will update this story once we're able to get some more of them. The company advertises some images from high over Manhattan, but it's unclear whether the shots were taken with a drone or with a manned helicopter.

Screengrab: SkyPan

In any case, it's worth noting SkyPan's history with the FAA.

In August of 2014, SkyPan and several other drone companies filed a lawsuit against the FAA that formally challenged a move the agency made to reinterpret the FAA Modernization Act of 2012. That move took a law Congress passed that required the FAA to enact drone regulations and reinterpreted it to—in the FAA's view—make all unauthorized commercial drone operations illegal.

"The Order poses a grave threat to SkyPan's entire business model, and the jobs of its eight employees, by purporting to regulate, restrict, or even completely prohibit, use of model aircraft technology in all commercial photography applications," the lawsuit alleges. "The Order is arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law, in excess of statutory jurisdiction, authority, or limitations, and without observance of procedure required by law."

The case is ongoing.

Despite SkyPan's legal action, in April of this year, the FAA formally granted SkyPan permission to fly drones commercially, noting that their business is "in the public interest." In its petition for permission, SkyPan noted that it regularly flies in cities.

Image: FAA

"Under contract to leading real estate developers, SkyPan flies over unbuilt properties, normally large dirt, grass, or paved lots," the company wrote. "SkyPan's flights are considered straight up/straight down; the vehicle ascends straight up over private property, has the capability of hovering in place, and then descends straight down."

The agency notes that the unauthorized, unsafe flights took place between March 21, 2012 and December of 2014. It granted SkyPan authority to fly in April, which raises the question: Why give the company permission to operate if, in the FAA's opinion, it was flying unsafely?

SkyPan 10 6 15 Civil Penalty Letter