Morrison Foerster’s Class Dismissed blog provides insights, recommendations, and timely reports on the latest defense news, developments, and trends in the most current class actions lawsuits and product liability issues that affect consumer-facing companies. Through Class Dismissed, attorneys from our nationally recognized Consumer Class Action and Products Liability practices offer a real-time assessment of the developments in matters that are shaping the industry. This blog examines the full spectrum of consumer-related class action and product liability lawsuits ranging from false advertising, privacy, consumer product safety, ADA, food misbranding, TCPA, environment, retail, and government actions as well as nationwide and multidistrict litigation class actions.<h2>ABOUT MORRISON FOERSTER</h2>Morrison Foerster is a leading global law firm that transforms complexity into advantage for its clients. Our clients include some of the largest financial institutions, banks, consulting and accounting firms, and Fortune 100, technology, and life sciences companies. Highlighting the firm’s commitment to client service, leadership in market-changing deals and impact litigation, and values-based culture, Morrison Foerster has been repeatedly recognized as one of the top 10 firms on The American Lawyer’s A-List. Year after year, the firm receives significant recognition from Chambers and The Legal 500 across their various guides, including Global, USA, Asia‑Pacific, Europe, UK, Latin America, and FinTech Legal. Our lawyers passionately care about delivering legal excellence while living our values. Morrison Foerster has a long-standing commitment to creating a culture that respects and celebrates differences, while providing an inclusive environment. The firm has achieved Mansfield Certification Plus since 2018 as a result of successfully reaching at least 30 percent women, communities of color, and LGBTQ+ lawyer representation in a notable number of current leadership roles and committees. The firm also has a long history of commitment to the community and society through providing pro bono legal services, including litigating for civil rights and civil liberties, improving public education and fostering the wellbeing of children, advocating for veterans, promoting international human rights, enforcing the right to asylum, and safeguarding the environment.

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Partner

Adam Hunt is a partner in the Litigation Department of Morrison Foerster’s New York office. His practice focuses on complex litigation, with an emphasis on class action and commercial litigation.

Adam Hunt

Alexandra Barlow is a partner in the Litigation Department of Morrison Foerster’s San Diego office.Alexandra litigates product liability matters involving medical devices, pharmaceuticals, consumer products, automobiles, and AI. Alexandra's litigation expertise spans the entire case life cycle in both state and federal courts. She handles all phases of discovery, including fact investigation and expert discovery. Alexandra has taken over twenty-five depositions, including experts, plaintiffs, treating physicians, and third-party witnesses. She drafts and argues motions of all types, including motions for summary judgment, motions to quash, and motions for preliminary injunction.Alexandra has significant trial experience. She has first-chaired a one-week jury trial and second-chaired a five‑week jury trial, both involving multiple claims and witnesses. She also has extensive experience in alternative dispute resolution, representing clients at mediations, mandatory settlement conferences, and early neutral evaluations.Alexandra enjoys tracking developments and keeping her clients updated on product liability and personal injury claims, frequently writing or presenting on emerging areas such as autonomous vehicles and smart devices. Alexandra’s experience also extends to professional liability, warranty claims, eminent domain, and construction law.Alexandra earned her J.D. from the University of San Diego School of Law. While in law school, the San Diego Law Review published her comment on the recovery of damages by plaintiffs in a persistent vegetative state, and she also served as a comment editor. She received her B.A. from the University of California, Los Angeles, where she majored in Political Science and minored in Spanish. A San Diego native, she attended a Spanish immersion school through the eighth grade. Alexandra is active in the San Diego community, advising students at a local college. She is also a member of several legal organizations in San Diego, including Lawyer’s Club, the Association of Business Trial Lawyers, and Wallace Inn of Court.

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Alexandra Barlow is a partner in the Litigation Department of Morrison Foerster’s San Diego office. Alexandra litigates product liability matters involving medical devices, pharmaceuticals, consumer products, automobiles, and AI. Alexandra’s litigation expertise spans the entire case life cycle in both state and federal courts. She handles all phases of discovery, including fact investigation and expert discovery. Alexandra has taken over twenty-five depositions, including experts, plaintiffs, treating physicians, and third-party witnesses. She drafts and argues motions of all types, including motions for summary judgment, motions to quash, and motions for preliminary injunction.

Alexandra Barlow is a partner in the Litigation Department of Morrison Foerster’s San Diego office. Alexandra litigates product liability matters involving medical devices, pharmaceuticals, automobiles, AI, and robotics. Alexandra's litigation expertise spans the entire case life cycle in both state and federal courts. She handles all phases of discovery, including fact investigation and expert discovery. Alexandra has taken over twenty-five depositions, including experts, plaintiffs, treating physicians, and third-party witnesses. She drafts and argues motions of all types, including motions for summary judgment, motions to quash, and motions for preliminary injunction.

Alexandra Barlow

<div class="videoWrapper"><iframe frameborder="0" class="sticky-video" allowfullscreen="1" title="Meet Penny Preovolos, Litigation Partner" src="https://www.youtube-nocookie.com/embed/hv7hYn-Bl7c?rel=0&showinfo=0;vq=hd1080" title="iframe"></iframe></div>Penelope has served as lead counsel in major consumer class actions and antitrust cases for more than 35 years, successfully representing high-profile defendants in antitrust, consumer fraud, and product defect matters. Her clients span a range of industries, including consumer electronics, technology, retail, publishing, food and beverage, cosmetics, and household products. According to Chambers USA, Penelope has a “great reputation for antitrust and product liability work” and is a “superb all-around antitrust lawyer.”Penelope was named the 2019 Antitrust Lawyer of the Year by the Antitrust, UCL, and Privacy Section of the California Lawyers Association. She was co-chair of MoFo’s antitrust practice for 14 years. She has served as chair of the Antitrust and Trade Regulation Section of the State Bar of California and as a member of the Ninth Circuit Advisory Committee on Local Rules and Operations. She is an editor of and frequent contributor to Morrison & Foerster’s <a href="https://classdismissed.mofo.com/">Class Dismissed blog</a>, as well as a frequent speaker about class action and antitrust issues.More About PenelopePenelope clerked for the Honorable Charles M. Merrill, United States Court of Appeals for the Ninth Circuit. She graduated cum laude from Harvard Law School, where she was executive editor of the Harvard Civil Rights – Civil Liberties Law Review. Penelope was a member of Phi Beta Kappa at the University of California, Berkeley. She was awarded the University Medal, the highest undergraduate honor at the university, as well as the English Departmental Citation (awarded to the outstanding graduate in that department).

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Senior Counsel

Penelope has served as lead counsel in major consumer class actions and antitrust cases for more than 35 years, successfully representing high-profile defendants in antitrust, consumer fraud, and product defect matters. Her clients span a range of industries, including consumer electronics, technology, retail, publishing, food and beverage, cosmetics, and household products.

Penelope A. Preovolos

Zak is an associate in the Litigation Department in Morrison Foerster’s New York office.Zak’s practice focuses on class actions, commercial litigation, white collar defense, government investigations, and antitrust litigation and counseling. He has represented clients before federal and state courts in complex commercial matters, as well as in arbitration tribunals.Zak received his J.D. from New York University School of Law in 2018, where he was inducted into the Order of the Barristers. During law school, Zak also served as the Marden executive editor for the NYU Law Moot Court Board. In 2013, Zak received his B.A. and M.A. in political science from Yale University, receiving honors in his major and the Ellsworth Prize for Best Senior Essay in the Social Sciences.

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Associate

Zak Newman

Mitchell A. Hokanson is an associate in the Litigation Department of Morrison Foerster’s San Diego office.Mitchell’s practice focuses on commercial litigation and consumer class actions. He has extensive experience with civil litigation, including managing day-to-day strategy, propounding and responding to discovery, taking and defending depositions, and engaging in motion practice. He also has experience providing regulatory advice to clients, including pro bono partners and multinational corporations. Mitchell maintains an active pro bono practice.After law school, Mitchell worked as a judicial clerk for Justice Susan M. Carney of the Alaska Supreme Court, where he drafted bench memoranda and opinions on a wide range of state and federal law topics. Prior to joining MoFo, Mitchell worked for another international law firm, where he was a member of the Complex Civil Litigation practice group, in Los Angeles, California.Mitchell received his J.D. from Columbia Law School, where he was honored as a James Kent Scholar and Harlan Fiske Stone Scholar. While in law school he was the senior executive editor of the Columbia Journal of Environmental Law and worked as a judicial intern for Judge Sandra S. Ikuta of the United States Court of Appeals for the Ninth Circuit and Judge George B. Daniels of the United States District Court, Southern District of New York. Prior to that, Mitchell earned his B.A. from Stanford University.

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Mitchell Hokanson

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Software Gains New Status as a Product Under Strict Liability Law

MAHA Commission Publishes Report to Highlight Childhood Chronic Disease Drivers

Tenth Circuit Denies Challenge to CPSC Rule Regulating High-Powered Magnets

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Setting Consumer Standards for Lithium-Ion Batteries Act

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In a recent decision regarding the scope of personal jurisdiction, the Tenth Circuit Court of Appeals extended the recent trend of limiting the reach of personal jurisdiction over out-of-state defendants. Old Republic Insurance Co. v. Continental Motors, Case No. 16-1408, (10th Cir. Dec. 15, 2017).In Old Republic, plaintiff insurance company sued after one of its insured aircraft crashed in Colorado.  Plaintiff alleged that the crash was the result of a negligent or otherwise faulty repair of the aircraft’s engine.  Plaintiff further alleged that the maintenance company that repaired the engine followed the guidance provided by the engine manufacturer, Alabama-based Continental Motors.

Old Republic – Personal Jurisdiction Trending Defendant Friendly

In a recent decision regarding the scope of personal jurisdiction, the Tenth Circuit Court of Appeals extended the recent trend of limiting the reach of persona

Old Republic – Personal Jurisdiction Trending Defendant Friendly

Product Liability

Aviation & Drones

On September 21, 2017, the District of Massachusetts ruled that Federal Aviation Regulations (FARs) preempt many of the restrictions that the City of Newton, Massachusetts, imposed on drones within its airspace. Although the decision is not binding on other jurisdictions, the ruling is a good indication of how other federal courts may see the same issue, and highlights—again—the tension between local and federal interests in regulating drones. The Singer v. City of Newton decision states that the FAA has exclusive responsibility for establishing safety requirements for all navigable airspace in the U.S., including low-level drone flying. Singer could be read as shutting the door on the possibility of cities establishing broad localized drone regulations for themselves. However, even Singer left open the possibility that cities or states could regulate some aspect of drone operations, especially if the locality worked in conjunction with its federal counterparts.The Lawsuit. Dr. Michael S. Singer, a medical doctor and professor at Harvard, filed suit against the City of Newton challenging four provisions of a city ordinance that restricted the use of small unmanned aircraft (or drones) within city limits. Although the FAA already regulates drone flights in airspace below 400 feet above ground level or within the 400-foot radius of a structure, Newton sought to further regulate its own airspace by:(1) requiring registration with the City for all drones;(2) requiring the express permission of property owners to fly drones above any private property;(3) requiring the prior permission of the City to fly drones above public land; and(4) banning drone flight beyond the operator’s visual line of sight.Notably, each of these aspects is expressly contemplated by Part 107—the rules set forth by the FAA to govern drone operations. Accordingly, the Singer court struck down each of these provisions as impermissible encroachments into areas of FAA responsibility. The court found that the FAA is intended to be the exclusive regulatory authority for drone registration; that cities may not wholesale eliminate drone use over their airspace absent prior permission; and that the FAA has already adopted safety regulations that anticipate flying drones beyond line of sight with the help of a visual observer. Any future regulation by Newton would therefore have to be more narrowly constructed and avoid these areas of conflict with FAA regulation.  The Singer decision, at bottom, was a clear application of conflict preemption, and leaves open the larger question of to what extent a city could regulate drone operations that aren’t expressly covered by the FARs.The Reasoning. In regulatory arenas that are traditionally occupied by the federal government, state or local governments may only regulate where the rules do not conflict with federal rules. Additionally, if Congress intended the regulating agency to “occupy the field,” state and local governments may not impose any additional regulation in that area. This is known as “conflict preemption” and “field preemption,” respectively.In this case, the court found that Congress intended the FAA to develop a comprehensive plan for airspace safety. Based on this finding, the court stated that the FAA has exclusive control of much of the field. Because the FAA declared its intent to be the exclusive registration authority for drones, states and localities are unlikely to be permitted to require additional registration. The court also found that aviation safety — both in terms of aircraft navigation and protection of individuals or property on the ground — is an exclusively federal area of regulation. Therefore, the court held, local governments may not impose their own registration requirements, nor develop their own comprehensive airspace management system.Importantly, the court stopped short of declaring that the FAA occupies the entire field of airspace regulation. Both the FAA and the Court acknowledged that regulation of airspace in furtherance of specific functions of local governments may be permissible; indeed, the FAA expressly recommends that local governments consult with it when enacting drone restrictions of “flight altitude, flight paths; operational bans; or any regulation of the navigable airspace.” The FAA also acknowledges that some of the traditional powers of local governments implicate drone regulation, such as “land use, zoning, privacy, trespass, and law enforcement operations.”  The FAA and the court thus acknowledged that some drone laws, and in particular those in the areas and government functions listed, might not be preempted by FAA regulation. This latter finding is consistent with decades of precedent that permits localities to decide where aircraft take off and land, despite such a local regulation having an effect on aircraft operations.The Implications. The most immediate impact of this ruling for the drone industry is that it may make patchwork regulatory requirements around the country less likely. This decision does not affect the FAA’s process for commercial drone registration, drone operation requirements, or the FAA’s waiver-application process for drone use. It also does not affect the FAA’s long-established systems for managing controlled and restricted airspace. It does restrict to some degree what cities that want to impose additional drone requirements may be allowed to do. At least to the degree of Newton’s drone ordinance, the court found that cities cannot impose extensive local regulations that could be seen as interfering or conflicting with the FAA’s drone regulation scheme.The concern for the FAA is that it may continue in many ways to lag behind in the regulation needed for this quickly evolving field. Proper regulation will help encourage new contributions to society by the drone industry, and ideally also help to assuage growing public concerns regarding safety and privacy related to drone use. As it stands, Congress and the FAA cannot necessarily rely on local or state lawmakers to do that regulatory job for them.

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Air Supremacy: Court Finds that Federal Aviation Regulations Preempt City Drone Regulation

Air Supremacy: Court Finds that Federal Aviation Regulations Preempt City Drone Regulation

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On September 21, 2017, the District of Massachusetts ruled that Federal Aviation Regulations (FARs) preempt many of the restrictions that the City of Newton, Ma

One year ago, the federal government test drove its first set of self-driving policies with a four-part <a href="https://www.transportation.gov/AV-factsheet" target="_blank" rel="noopener">announcement </a>from the U.S. Department of Transportation. In twelve months, much has changed, but the wheels are still turning.The U.S. House of Representatives earlier this month passed the bipartisan Safely Ensuring Lives Future Development and Research in Vehicle Evolution (SELF DRIVE) Act. The SELF DRIVE Act continues the work of clarifying state and federal government roles as well as the federal government’s responsibilities with regard to safety, cybersecurity, privacy, and consumer education.Although SELF DRIVE has now launched, the engine is still heating up: The U.S. Senate is still developing its approach to federal policy in this space. Last week, the U.S. Senate held a hearing to this end, inviting experts on self-driving trucks to <a href="https://www.commerce.senate.gov/public/index.cfm/pressreleases?ID=BAC7FBCE-424B-4C61-8082-71B3E3D9333B" target="_blank" rel="noopener">testify </a>before its Commerce Committee. This latest action built on a set of bipartisan “principles” for <a href="https://www.commerce.senate.gov/public/index.cfm/pressreleases?ID=3319E728-1F3A-4316-8F7E-8CAF66000F8C" target="_blank" rel="noopener">legislation </a>that the U.S. Senate had released in June.The Executive Branch has also announced a change to its approach. Specifically, U.S. Department of Transportation Secretary Chao unveiled <a href="https://www.nhtsa.gov/sites/nhtsa.dot.gov/files/documents/13069a-ads2.0_090617_v9a_tag.pdf" target="_blank" rel="noopener">“A Vision for Safety: 2.0” i</a>n Michigan <a href="https://www.transportation.gov/briefing-room/av-summit" target="_blank" rel="noopener">last week. </a>As Secretary Chao noted, this “replaces the Federal Automated Vehicle Policy Version 1.0” released last year, but it is not the Department’s final word: “DOT and NHTSA are already planning for Version 3.0 in 2018!”In short, for federal self-driving policy, the wheels are still turning – and the regulatory landscape will most certainly continue to evolve over the coming weeks and months.

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Wheels Are Turning on Federal Self-Driving Policy

Wheels Are Turning on Federal Self-Driving Policy

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One year ago, the federal government test drove its first set of self-driving policies with a four-part announcement from the U.S. Department of Transportation.

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The Federal Aviation Administration’s Small Unmanned Aircraft Rule, called Part 107, broadly authorized simple, visual line-of-sight operations with drones that weigh less than 55 pounds. Part 107 was considered by most to be a strong first step toward integrating drones into the national airspace. But that is all it was — the first in a series of what were supposed be incremental regulations to foster this growing industry and enable safe operations. Now, however, President Trump’s Jan. 30, 2017, executive order requiring government agencies to identify two existing regulations to repeal before publicly proposing a new regulation is hampering the unmanned aircraft systems (UAS) industry’s ability to move beyond Part 107.Please see our full article as published on <a href="https://media2.mofo.com/v3/assets/blt5775cc69c999c255/bltc2289eb80fbbe19a/6273157bdeee7329767e7624/170525-international-drone-rules.pdf">Law360</a>.

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Collaboration, Harmony Key For International Drone Rules

Collaboration, Harmony Key For International Drone Rules

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The Federal Aviation Administration’s Small Unmanned Aircraft Rule, called Part 107, broadly authorized simple, visual line-of-sight operations with drones that

On March 21, 2017, a federal judge in the Western District of Kentucky dismissed a lawsuit brought by a drone pilot, David Boggs, against the “Drone Slayer” William Merideth, a Kentucky man who shot down a drone that he believed was flying over his own property in 2015.  Dismissed on jurisdictional grounds, the ruling leaves open many questions concerning aerial trespass and federal authority.The Lawsuit.  Boggs sued Merideth in federal court in Kentucky seeking a declaratory judgment and money damages after Merideth shot down Boggs’ unmanned aircraft, or “drone,” with a firearm, earning Merideth the nickname “Drone Slayer.”  For his part, Merideth contended that Boggs’ drone was trespassing on Merideth’s property and Boggs was invading Merideth’s privacy by allegedly using the drone to watch Merideth’s teenage daughter.In his lawsuit, Boggs asked the court to find that “an unmanned aircraft is an ‘aircraft’ under federal law” and that when flying in Class G airspace, an unmanned aircraft is “operating in the ‘navigable airspace’ within the exclusive jurisdiction of the United States.”  According to Boggs, because he was operating in the navigable airspace, his operation did not violate Merideth’s reasonable expectation of privacy, and Merideth was not permitted to shoot Boggs’ drone out of the sky.  Boggs asked the court for $1,500.00 in damages, the amount that Boggs contended his drone was damaged by Merideth.Merideth moved to dismiss Boggs’ complaint, arguing that Boggs’ claim for a declaratory judgment did not provide the court with subject matter jurisdiction because Boggs’ complaint merely anticipated defenses Merideth could raise under federal law as opposed to asserting any rights arising under federal law.  In response, Boggs argued that he was flying his drone in the “sovereign navigable airspace” and therefore “resolution of his claims in federal court” was proper.  But the court disagreed with Boggs, finding that it lacked subject matter jurisdiction over Boggs’ claims against Merideth.The Reasoning.  Federal courts have only “limited jurisdiction.”  Under 28 U.S.C. § 1331, the federal courts have “original jurisdiction of all civil actions arising under the Constitution, laws, or treaties of the United States.” To satisfy this requirement, “a federal question must appear on the face of the complaint rather than as part of a defense, even if a federal-law defense is anticipated.”  Chase Bank USA, N.A. v. City of Cleveland, 695 F.3d 548, 554 (6th Cir. 2012).  “[A] case arises under federal law when federal law creates the cause of action asserted.”  Gunn v. Minton, 133 S. Ct. 1059, 1064 (2013) (citing Am. Well Works Co. v. Layne & Bowler Co., 241 U.S. 257, 260 (1916)).  The Supreme Court has also “identified a ‘special and small category’ of cases in which arising under jurisdiction still lies,” even though only state law claims are being pursued.  These are “state-law claims that implicate significant federal issues.” Grable & Sons Metal Prod., Inc. v. Darue Eng’g & Mfg., 545 U.S. 308, 312 (2005).  This type of federal question jurisdiction is often referred to as “Grable” jurisdiction.  Boggs argued that the court had Grable jurisdiction over his complaint because it raised airspace concerns that implicated significant federal issues.  Specifically, Boggs argued that his Kentucky state law trespass-to-chattels claim satisfies the requirements for federal question jurisdiction because it “necessarily raises a disputed federal issue” under the Grable standard; that is, “whether Boggs was flying his unmanned aircraft in federal airspace.”Boggs relied on the Federal Aviation Administration’s (FAA) definition of “aircraft” (“a[ny] device that is used or intended to be used for flight in the air” 14 C.F.R. § 1) and 49 U.S.C. § 40103, which provides that “[t]he United States Government has exclusive sovereignty of airspace of the United States.”But the court nonetheless found that Boggs’ complaint did not meet the Grable standards.  Under Grable, jurisdiction exists when “a federal issue is: (1) necessarily raised, (2) actually disputed, (3) substantial, and (4) capable of resolution in federal court without disrupting the federal-state balance approved by Congress.”  Gunn, 133 S. Ct. at 1065 (citing Grable, 545 U.S. at 314).  Unfortunately for Boggs, the court held that his complaint did not meet any—much less all—of Grable’s requirements.With regard to whether Boggs’ complaint “necessarily raised” a federal issue, the court found that it did not.  Instead, the court found that the complaint merely “anticipates a defense of privilege that Merideth may raise in response to Boggs’ trespass of chattels claim – e.g. ‘if the unmanned aircraft was flying on Merideth’s property, his actions may have been privileged, but if it was flying in federal airspace, they would not.’”  But the court found that “where ‘the right to be vindicated is State-created’ and the action was ‘brought into the federal courts merely because an anticipated defense derived from federal law,” there is no Grable jurisdiction.The court similarly dismissed Boggs’ arguments concerning the remaining Grable factors:<ul><li>Actually Disputed. “Nor is the Court persuaded that a federal issue is actually disputed. Although Boggs asserts that he operated his unmanned aircraft on federal, rather than private property, Merideth has not responded to the substance of that argument.”</li></ul><ul><li>Significance. “Boggs has not persuaded the Court that resolution of the simple issue of whether Boggs’ unmanned aircraft was flying on Merideth’s property, as opposed to federal property, for the ultimate purpose of determining Merideth’s liability for a state law trespass to chattels claim, is significant to the federal system as a whole.”</li></ul><ul><li>Federal-State Balance. “Using a federal forum to resolve Boggs’ garden variety state tort claim is inappropriate, and the appropriate balance of federal and state judicial responsibilities favors dismissal of Boggs’ trespass to chattels claim[.]”</li></ul>The Implications.  To those in the drone industry, the question whether a drone flying over private property is permissibly in the navigable airspace or may be trespassing is a significant one.  But, as the Drone Slayer case indicates, that alone is apparently insufficient to confer federal question jurisdiction because it is not clear the issue will significantly impact federal aviation law or the FAA’s ability to regulate air safety and navigation.This ruling will undoubtedly become more important as states and municipalities consider bills that would hold harmless property owners who may damage a drone flying over their private property.  In Oklahoma, for example, State Senator Ralph Shortey (R) authored a bill that authorizes anyone who owns property to damage or destroy a drone without being held civilly liable for the damage as long as the drone was within 400 feet of the property.  The bill, SB600, is currently making its way through the Oklahoma Senate.Perhaps the federal courts will find that they have jurisdiction in the context of a preemption challenge to state law bills like that being considered in Oklahoma.  Then, maybe, we will begin to get some clarity concerning aerial property rights.   Of course, this doesn’t mean that amateur (or professional, for that matter) drone slayers can shoot or otherwise disarm unmanned aircraft without the possibility of facing serious consequences.  As it stands today, it is a federal crime to attempt to destroy or disable an aircraft, including an unmanned aircraft, even if federal prosecutors have yet to enforce that provision against the Drone Slayer.  See 18 U.S.C. § 32.

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In a Victory for the “Drone Slayer,” Federal Judge Rejects Pilot’s Attempt to Create Federal Question Jurisdiction

In a Victory for the “Drone Slayer,” Federal Judge Rejects Pilot’s Attempt to Create Federal Question Jurisdiction

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On March 21, 2017, a federal judge in the Western District of Kentucky dismissed a lawsuit brought by a drone pilot, David Boggs, against the “Drone Slayer” Wil

The Federal Trade Commission’s recent workshop on drones raised familiar issues related to the privacy implications of a new and evolving technology. While the many potential innovations and consumer benefits of drone technology were highlighted, the workshop’s focus was on whether drones raise unique privacy considerations and, if so, how such considerations should be addressed.

Clients seek out Julie because of her practical advice on cutting-edge issues at the intersection of privacy and consumer protection laws. She provides clients with practical solutions to compliance c

Julie O'Neill

Clients seek out Julie because of her practical advice on cutting-edge issues at the intersection of privacy and consumer protection laws. She provides clients with practical solutions to compliance challenges around a wide variety of both online and offline privacy issues, including tracking, interest-based advertising, geo-targeting and other mobile tracking, personalization, and cross-device tracking. Recognized in The Legal 500 US 2014, 2016, 2019, and 2020 and Chambers USA 2021 for her exceptional legal work, her clients praise her saying, “She is really good at giving practical, targeted advice and taking stock of what the risk profile of the client is, so that the advice is holistic.” (Chambers USA 2021).

FTC Workshop on New Drone Technologies Raises Familiar Privacy Issues

The Federal Trade Commission’s recent workshop on drones raised familiar issues related to the privacy implications of a new and evolving technology. While the 

FTC Workshop on New Drone Technologies Raises Familiar Privacy Issues

Retail

On Tuesday, June 21, the Federal Aviation Administration issued Part 107, the Final Rule for Operation and Certification of Small Unmanned Aircraft Systems (UAS). The Rule comes sixteen months after the FAA issued its Notice of Proposed Rulemaking (NPRM) for small UAS, and is the first step in the FAA’s plan to incrementally incorporate UAS into the national airspace. The FAA stated that the UAS industry estimates that “the rule could generate more than $82 billion for the U.S. economy and create more than 100,000 new jobs over the next 10 years.” The rule will take effect in late August 2016.

FAA Issues Long-Awaited Final Rule for Small Unmanned Aircraft Systems

On Tuesday, June 21, the Federal Aviation Administration issued Part 107, the Final Rule for Operation and Certification of Small Unmanned Aircraft Systems (UAS

FAA Issues Long-Awaited Final Rule for Small Unmanned Aircraft Systems

In a recent ruling, California’s Court of Appeal unanimously affirmed the dismissal of California’s complaint against Delta Air Lines, Inc. (“Delta”), which alleged that the company’s Fly Delta mobile application violated California’s privacy laws.<a href="#_ftn1" name="_ftnref1">[1]</a> The Court of Appeal held that the lawsuit was expressly preempted by the Airline Deregulation Act of 1978 (ADA). The holding is in line with other cases broadly applying the ADA’s preemption provision and limits the extent to which airlines may be required to comply with state privacy laws.California’s LawsuitThe California Attorney General (AG) brought the lawsuit against Delta to enforce California’s Online Privacy Protection Act of 2003 (CalOPPA), Cal. Bus. & Prof. Code §§ 22575-22579. In pertinent part, CalOPPA requires an operator of a commercial website or online service to draft and post online a privacy policy informing consumers in California “of the Web site’s or online service’s information practices with regard to the consumers’ personally identifiable information[.]” CalOPPA also places certain other requirements on operators of websites or online services.The AG argued that Delta violated CalOPPA in connection with the Fly Delta mobile app, which can be downloaded from the Internet and used on smart phones and other mobile devices (and therefore arguably makes Delta “an operator of online services” subject to CalOPPA). Users can do a variety of things on the app, including checking in for flights, viewing reservations for air travel, pricing and buying tickets, paying for and tracking checked baggage, and accessing their frequent flyer accounts. The app also purportedly allows users to send and receive information over the Internet, and collects certain personally identifiable information (PII) about individuals residing in California.The AG alleged that Delta did not conspicuously post a privacy policy as required by CalOPPA.  According to the complaint, app users allegedly were not informed that their PII was collected, how Delta used such information, or with whom that information was shared, disclosed, or sold. The AG first notified Delta that the app did not comply with CalOPPA in an October 2012 letter.  Less than two months later, the AG filed its complaint alleging that the app “does not have a privacy policy conspicuously posted, i.e., reasonably accessible to consumers within the [mobile application.]” The AG’s complaint contained a single cause of action under California’s Business and Professions Code section 17200 (the “unfair competition law” or UCL), claiming that Delta’s CalOPPA violations were “unlawful, unfair, or fraudulent business acts and practices” under the UCL.Delta responded with a demurrer in which it argued that the ADA expressly preempted the AG’s lawsuit. The ADA is a 1978 federal law intended to remove government control over fares, routes, and new carriers entering the market in the commercial aviation field. The ADA contains an express preemption provision that prohibits the states from enacting or enforcing any law, regulation, or provision “related to a price, route, or service of an air carrier[.]” 49 U.S.C. § 41713(b)(1). The trial court agreed with Delta, sustaining the demurrer without leave to amend and dismissing the complaint with prejudice. The AG appealed.The Court of Appeal’s OpinionThe Court of Appeal affirmed, holding that the ADA preempted California’s UCL claim against Delta. The court began by reiterating the “‘two cornerstones’ of federal preemption analysis”: First, that congressional intent is the focus of the analysis, and second, that there is a presumption against preemption.            Supreme Court PrecedentApplying those cornerstone principles here, the court was guided by three cases in which the U.S. Supreme Court addressed the reach of the ADA’s preemption provision: Morales v. Trans World Airlines, Inc., 504 U.S. 374 (1992), American Airlines, Inc. v. Wolens, 513 U.S. 219 (1995), and Northwest, Inc. v. Ginsberg, 134 S.Ct. 1422 (2014).In Morales, the Supreme Court held that the ADA preempted Travel Industry Enforcement Guidelines composed by the National Association of Attorneys General (NAAG). The NAAG guidelines purported to govern the content and format of airline fare advertising and were designed to stop allegedly deceptive airline advertisements. The Supreme Court interpreted the “relating to” language in the ADA preemption clause broadly, and held that the ADA preempted the NAAG guidelines because they were “related to” a price, route, or service of an air carrier.  Morales, 504 U.S. at 383-384.The Court similarly found that the ADA preempted the plaintiffs’ claims in Wolens. In Wolens, the plaintiffs alleged American Airlines’ retroactive modification of its frequent flyer program violated Illinois’ Consumer Fraud and Deceptive Business Practices Act. The Supreme Court held that the claims related to American Airlines’ “‘[prices],’ i.e. American’s charges in the form of mileage credits for free tickets and upgrades, and . . . ‘services,’ i.e. access to flights and class‑of-service upgrades unlimited by retrospectively applied capacity controls and blackout dates.” Wolens, 513 U.S. at 226.  Because they related to prices and services, the claims were preempted by the ADA.In Ginsberg, the Supreme Court reaffirmed its broad interpretation of the ADA’s preemption provision. The Court concluded that the ADA preempted the plaintiffs’ claims for breach of the implied covenant of good faith and fair dealing stemming from allegations that the airline terminated their memberships to its frequent flyer program. The Court found that airline’s frequent flyer program was “related to” the airline’s prices and services, and thus that the claims were preempted by the ADA.            ADA Preemption, CalOPPA, and the Fly Delta AppTurning to California’s claim here, the court began by addressing a few issues that had been resolved by Morales and Wolens.First, the court noted that, in assessing whether the ADA preempts the AG’s UCL action, the court would examine the underlying state law predicate—i.e., CalOPPA.Second, the court explained that, in analyzing the preemption issue, it was not required to apply the presumption against preemption because the field governed by the ADA—air transportation—has long been regulated at the federal level.Third, the court rejected the AG’s argument that the complaint did not “relate to” Delta’s service. The app was designed to facilitate access to the airline’s services, and the AG was trying to compel Delta to maintain the app in compliance with CalOPPA.  Thus, the lawsuit “related to” Delta’s services. Notably, the court did not decide whether the app itself was a “service” within the meaning of the ADA.The court then concluded that the ADA preempts California’s UCL/CalOPPA claim as applied to Fly Delta. The court explained that CalOPPA is not a mere “disclosure regimen” within which operators of online services may act with broad discretion. Rather, CalOPPA is similar to the consumer protection legislation at issue in Morales and Wolens, and has the potential to intrusively regulate airlines.  Moreover, as in Morales, the obligations imposed by CalOPPA would significantly affect the airline’s ability to market its product through the app, and would therefore have a meaningful impact on the fares Delta charges. As the court explained, quoting Morales: “If each AG were to require Delta to comply with its own version of CalOPPA, it would force Delta to design different mobile applications to meet the requirements of each state. And, indeed, enforcement of the CalOPPA’s privacy policy requirements might well make it impossible for an airline to use a mobile application as a marketing mechanism at all.”Finally, the court rejected the AG’s argument that CalOPPA would have only “a peripheral effect on ticket prices, routes, or airline services.” CalOPPA would instead “require Delta to meet state standards regarding privacy policy requirements in place of the market forces currently dictating Delta’s selection and design of” Fly Delta.Because the ADA preempted California’s UCL claim for violation of CalOPPA, the court upheld the dismissal of the complaint. And it did so without leave to amend, finding that there was no reasonable possibility that the AG could amend to avoid ADA preemption.What This MeansDelta reinforces the broad scope of the ADA’s preemption provision. As the case makes clear, airlines have a strong argument that state laws like CalOPPA, which apply across industries and seem to have only a remote effect on the airline’s prices, routes, or services, simply cannot be applied to them. But this does not mean that the airlines may operate unchecked in areas governed by CalOPPA and other preempted laws. As the Delta court noted, quoting Wolens, Morales, and Ginsberg: “[T]he DOT retains authority to investigate unfair and deceptive practices and unfair methods of competition by airlines, and may order an airline to cease and desist from such practices or methods of competition.” The court further stated that DOT appears to have “taken action” related to the collection of PII by air carriers, and privacy policies for the sharing and storage of that PII. To date, however, the DOT has issued no regulations governing the form and placement of privacy policies related to an airline’s mobile app. And until the DOT does, state privacy laws cannot fill the gap. <a href="#_ftnref1" name="_ftn1">[1]</a> People ex rel. Harris v. Delta Air Lines, Inc., Case No. A139238, 2016 LEXIS 419 (Cal. Ct. App. May 25, 2016).

California Court of Appeal Finds AG’s Privacy Suit Over Fly Delta Mobile App Is Preempted

In a recent ruling, California’s Court of Appeal unanimously affirmed the dismissal of California’s complaint against Delta Air Lines, Inc. (“Delta”), which all

California Court of Appeal Finds AG’s Privacy Suit Over Fly Delta Mobile App Is Preempted

In a departure from a string of cases supporting field preemption of state-law aviation product liability claims under certain circumstances by the Federal Aviation Act (FAAct), the Third Circuit recently held that the FAAct does not categorically preempt such claims. Sikkelee v. Precision Airmotive Corp., et al. Case No. 14-4193. In doing so, the court significantly limited its own groundbreaking ruling in Abdullah v. American Airlines, Inc., 181 F.3d 363 (3d Cir. 1999), in which it held that “the entire field of aviation safety is federally preempted.” As it backpedaled, the court explained that Abdullah applied only to operating an aircraft—not to the aircraft’s design or manufacture.

Third Circuit Limits Federal Aviation Act Preemption for Product Liability Claims

In a departure from a string of cases supporting field preemption of state-law aviation product liability claims under certain circumstances by the Federal Avia

Third Circuit Limits Federal Aviation Act Preemption for Product Liability Claims

Note: In light of the FAA’s announcement of the drone registry, we’ve revisited our recent analysis of its authority to require registration.]On December 14, 2015, the FAA issued the much-anticipated “Registration and Marking Requirements for Small Unmanned Aircraft Interim Final Rule” (the “Interim Final Rule”).  The incongruously named rule requires all operators of small unmanned aerial systems (sUAS)—drones weighing between .55 and 55 pounds—to register their drones through the FAA’s new web-based process.<a href="#_ftn1" name="_ftnref1">[1]</a>  The registration process will be available starting December 21, 2015, and will apply to new and existing drones.While the FAA adopted many of the recommendations made by the Unmanned Aircraft Systems Registration Task Force Aviation Rulemaking Committee,<a href="#_ftn2" name="_ftnref2">[2]</a> the Interim Final Rule is sure to generate controversy.  From the FAA’s use of “emergency” rulemaking, to the applicability to the model aircraft community, to the efficacy of registration in addressing safety concerns, it remains highly likely that the FAA’s “interim final rule” will face legal challenges before it loses its “interim” label. In fact, the Academy of Model Aeronautics (AMA) is recommending members hold off on registering their drones for now to give the organization time to “fully consider all possible options.”The FAA’s Registration RulesBorrowing heavily from the Task Force’s final report, which reflected a “general consensus” of major industry voices from Google X to DJI, the FAA’s new Interim Final Rule includes the following:<ol><li>Only individual or recreational users who are U.S. citizens and at least 13 years old may register their sUAS using the web-based registration process. All other operators, including business entities, must continue registering through the paper-based registration process set forth in part 47.</li><li>Owners who purchased the sUAS prior to December 21, 2015 will have 60 days to register.</li><li>Owners who purchase a sUAS on or after December 21, 2015 must register the sUAS prior to operating in the National Airspace System (NAS).</li></ol> <ol start="4"><li>Online registration requires submission of the owners name, physical address, mailing address, and email address. The make, model, and serial number does not necessarily have to be provided.</li><li>Registration will cost $5 per owner, but is free until January 21, 2015. This grace period is calculated to encourage speedy registration of sUAS.<a href="#_ftn3" name="_ftnref3">[3]</a></li><li>Registrations must be renewed at least as often as every three years.</li><li>The registration number, which is unique to the owner, must be marked on each sUAS in a readily accessible manner.</li><li>Failure to register a sUAS may result in civil and/or criminal penalties. On the civil side, an operator could face up to $27,500 in penalties.  Not to be outdone, the criminal penalties range from fines of up to $250,000 to imprisonment for up to three years.</li><li>Drones that weigh 250 grams or less, including the aircraft, payload, and any other associated weight, are exempt from registration.</li></ol>While few of the requirements come as a surprise, the Interim Final Rule leaves many questions unanswered.  For example, how useful will a registration number be in the event a drone actually collides with, and is completely destroyed by, a manned aircraft?  What good is the 250 gram exemption when nearly every drone, even toys, weighs more than that?  What is the rationale that a “failure to register,” by itself, should carry the risk of three years in prison, particularly for recreational operators who have been flying their sUAS for years?  And how will the registration requirement help inform and educate new users when it will be implemented after most of the holiday season’s drones have been purchased?The FAA implicitly acknowledged some of these questions, and many more, in a FAQ it released along with the rule, but until the agency begins enforcement, it remains to be seen how effective and how onerous the requirements will truly be.  More problematic, however, are the possible legal challenges associated with the process the FAA used to promulgate the Interim Final Rule.The FAA’s “Emergency” RulemakingAccording to the FAA, registration will serve the dual goals of promoting accountability in the event of an incident and educating operators on federal regulations pertaining to sUAS.  While laudable aims, they are distinct from the justifications the agency has offered for its accelerated rulemaking process.Under the APA, the FAA cannot make rules without giving the public a 30-day period to comment.<a href="#_ftn4" name="_ftnref4">[4]</a>  In limited circumstances, however, an agency can forgo the standard notice‑and‑comment requirements and directly issuea final rule.<a href="#_ftn5" name="_ftnref5">[5]</a>  When an “agency for good cause finds … that notice and public procedure thereon are impracticable, unnecessary, or contrary to the public interest,” the notice-and-comment period can be bypassed.<a href="#_ftn6" name="_ftnref6">[6]</a>Such “emergency rulemaking” usually follows situations that require immediate action (such as a natural disaster), minor technical amendments that do not affect the substantive law, or instances where Congress has directed the action in legislation.  Here, the FAA has considered the absence of rules regarding public registration of drones to be an “emergency,” and has determined that “[g]ood cause exists for making this regulation effective less than 30 days from the date of publication because it relieves a significant number of owners from the burden of complying with the paper-based, time-consuming part 47 registration process.”In other words, the FAA promulgated the Interim Final Rule without allowing for the traditional notice-and-comment period. Under the “good cause” exemption, the FAA itself has determined that it was justified in invoking emergency rulemaking, and as a result, any challenge to its decision may only be filed after the rules are promulgated.  Despite courts’ cautioning they will “narrowly construe” agency actions utilizing the emergency rulemaking exception, in reality the agency’s action is often left untouched.As evidence supporting its “good cause” finding, the FAA has noted the significant increase in sUAS expected to enter the NAS in the coming weeks and months.  Citing reports of dangerous and/or unauthorized operation of sUAS during 2015, including expressly referencing the $1.9 million enforcement action against Skypan, the FAA determined “that it is impracticable and contrary to the public interest in ensuring the safety of the NAS and people and property on the ground to proceed with further notice and comment on aircraft registration requirements for small unmanned aircraft before implementing the streamlined registry system established by this rule.”<a href="#_ftn7" name="_ftnref7">[7]</a>In this context, “impracticable” generally refers to a situation in which the required execution of agency functions would be unavoidably prevented by public rulemaking proceedings.  However, “time constraints” and the “imminence of a deadline” are considered “inadequate justifications to invoke the good-cause exemption, especially when it would have been possible to comply with [a] statutory deadline.”<a href="#_ftn8" name="_ftnref8">[8]</a>  The FAA cannot create its own “emergency” (intentionally or otherwise) by delaying announcement of proposed rules or setting an arbitrarily imminent deadline.After the FAA announced its intention to create a registration requirement, numerous organizations expressed concerns over the FAA’s fast-track approach, prior to the release of the Interim Final Rule.  To its credit, the FAA documented these concerns, but the agency failed to advance any new justification for dispensing with the required rulemaking proceedings.  Rather, the FAA supported promulgation of the Interim Final Rule with evidence regarding increasing sUAS incidents.Curiously, however, the FAA’s own evidence is far from unambiguous.  The rule states “[s]ince February 2015, reports of potentially unsafe UAS operations have more than doubled[.]”  Yet the FAA’s own information paints a murkier picture.  Far from the hockey stick line one might expect, a graph of the sUAS reports cited by the FAA shows an overall increase, but not the volume or growth one would expect from a crisis. As a result, it will be difficult for the FAA to stop critics from raising the question:  Is the Interim Final Rule valid?On February 14, 2012, in the FAA Modernization and Reform Act of 2012 (the “2012 Act”), Congress instructed the FAA to issue rules for the “safe integration” of UAS by September 30, 2015.  Although the FAA issued a Notice of Proposed Rulemaking, and the comment period has closed, the FAA has yet to finalize these rules, despite nearly four years lapsing between Congress’s mandate and today.  Because the holiday shopping “deadline” is the impetus for the FAA’s “emergency” rulemaking, it seems that the FAA is the cause of its own crisis, and its action may be vulnerable if challenged.In an analogous situation, the FAA claimed that “good cause” was present, and it bypassed the notice-and-comment requirements, when promulgating Penalty Rules for violations of FAA regulations.<a href="#_ftn9" name="_ftnref9">[9]</a>  There, a private petitioner challenged the FAA’s action and a federal appellate court held that the FAA was required to follow the APA’s notice-and-comment requirements because the rule substantially affected the petitioner’s (and others’ similarly situated) substantive rights.  The Court further pointed out that the “good cause” exception should be used for “housekeeping” matters, which are traditionally thought of as purely procedural rules.  Notably, in that case, the FAA waited only nine months to begin promulgating the rules.  Here, it has waited years.If an agency can create its own emergency to bypass the APA’s notice-and-comment requirements, public comment will effectively be optional for agencies.  This not only creates perverse incentives for agencies directed to make rules for hotly debated topics (like drones) to do so through emergency rulemaking in the hopes of avoiding extensive and controversial public comment, but it also, ironically, threatens to slow down the entire rulemaking process, as lawsuits will inevitably follow such actions.<a href="#_ftn10" name="_ftnref10">[10]</a>Hobbling the Hobbyists?In addition to the FAA’s procedural shortcuts, the issues of both who and what the registry would encompass present legal challenges.  Under the Interim Final Rule, registration applies to commercial and hobbyist users alike.Traditionally, model aircraft flown for hobby or recreational purposes have not been subject to any registration requirements.  This understanding was codified under 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 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.”According to the FAA, the 2012 Act does not affect its ability to require registration of drones flown for hobby or recreational purposes.  The agency’s stance is that registration has been exempted for model aircraft only through the use of its own discretion, and that prior law unrelated to the incorporation of UAS into FAA plans and policies, specifically 49 U.S.C. 44101(a), gives it the authority to require registration of model aircraft.In fact, the FAA uses this assumption to offer another justification for ignoring the rulemaking procedures.  The Interim Final Rule notes that the burden on model aircraft and drone flyers would be enormous if they were required to register their craft using the current paper-based registration system.  To avoid that “emergency,” the FAA is justified in proceeding without the required notice-and-comment rules to relieve the burden that would otherwise fall on sUAS operators.As noted above, the FAA is facing another crisis of its own manufacture.  Model aircraft operators have never had to register their aircraft.  Absent the FAA’s decision to require registration, there would be no burden on operators.  Thus, the decision to require registration creates a burden so great that the FAA is justified in shortcutting the rulemaking process, a circular argument for the “streamlined” registration requirement.The FAA’s position is the latest move away from its hands-off attitude towards model aircraft, dating back at least to mid-2014.  In June of last year, the FAA issued its “Interpretation of the Special Rule for Model Aircraft.”  There, the FAA claimed that model aircraft are “subject to all existing FAA regulations.”  More recently, the rules proposed in the Notice of Proposed Rulemaking for sUAS exempt various types of aircraft or flying vehicles from their ambit, such as moored balloons, kits, and amateur rockets, among others, but not model aircraft.Taken together, the FAA’s actions suggest that model aircraft are likely to be subject to increasing regulation.  However, it is unclear how to reconcile the plain text of Section 336 of the 2012 Act with the FAA’s registration scheme or with the FAA’s own interpretation of Section 336, for that matter.  In the Interpretation of the Special Rule for Model Aircraft, the FAA noted that “a model aircraft operated pursuant to the terms of section 336 would potentially be excepted from a UAS aircraft certification rule[.]”  It is difficult to see how a registration requirement is different.The AMA RespondsOn Thursday, December 17, the AMA emailed its members in response to the Interim Final Rule and asked them to refrain from registering their aircraft with the FAA.  The AMA has previously taken issue with the FAA’s interpretation of the “Special Rule for Model Aircraft.”  Last August, the group filed a petition with the United States Court of Appeals for the D.C. Circuit challenging the FAA’s interpretation, a challenge that is still pending.In its email on Thursday, the AMA noted that the central issue is “whether the FAA has the authority to expand the definition of aircraft to include model aircraft; thus, allowing the agency to establish new standards and operating criteria to which model aircraft operators have never been subject to in the past.”  How the court rules on that question will determine whether model aircraft are aircraft, as the FAA views them.The AMA already instructs its members to use a variety of precautions to address the same safety and accountability objectives of the FAA’s drone registry, which puts it in a unique position of arguing against registration while explicitly recognizing some of registration’s benefits.  As the organization argued, however, “we also strongly believe our members are not the problem and should not have to bear the burden of additional regulations.”The AMA’s recommendation to refrain from registration, its pending legal challenge, and the ongoing negotiations with the FAA all highlight the uncertainty that remains (the FAA’s pronouncements notwithstanding).ConclusionThe drone registry appears simple enough, and the FAA’s desire to ensure the safety of the skies is a praiseworthy and reasonable goal.  But lurking beneath the surface are complicated issues of agency process and the FAA’s authority that threaten the registry’s launch.    <a href="#_ftnref1" name="_ftn1">[1]</a> www.faa.gov/uas/registration.<a href="#_ftnref2" name="_ftn2">[2]</a> <a href="https://www.faa.gov/regulations_policies/rulemaking/committees/documents/media/UASRTFARC-102015.pdf">http://www.faa.gov/uas/publications/media/RTFARCFinalReport_11-21-15.pdf</a>.<a href="#_ftnref3" name="_ftn3">[3]</a> Technically, all registrants will be charged $5, but this fee will be refunded if it occurs in the first 30 days of the Interim Final Rule being effective.<a href="#_ftnref4" name="_ftn4">[4]</a> See 5 U.S.C. § 553(b).<a href="#_ftnref5" name="_ftn5">[5]</a> Ibid.<a href="#_ftnref6" name="_ftn6">[6]</a> 5 U.S.C. § 553(b)(3)(B).<a href="#_ftnref7" name="_ftn7">[7]</a> Interim Final Rule, § III.  The FAA states that it “will consider additional comments received following publication of this IFR and make any necessary adjustments in the final rule,” but in all likelihood the Interim Final Rule will not be changed in any material way.<a href="#_ftnref8" name="_ftn8">[8]</a> 2 Am. Jur. 2d Administrative Law § 185 (2012) (emphasis added).<a href="#_ftnref9" name="_ftn9">[9]</a>Air Transport Assoc. of Am. v. Dep’t of Trans., 900 F.2d 369 (D.C. Cir. 1990) (“[T]he FAA is foreclosed from relying on the good cause exception [from the APA,] by its own delay in promulgating the Penalty Rules. The agency waited almost nine months before taking action to implement its authority under section 1475. At oral argument, counsel for the FAA conceded that the delay was largely a product of the agency’s decision to attend to other obligations. We are hardly in a position to second guess the FAA’s choices in determining institutional priorities. But insofar as the FAA’s own failure to act materially contributed to its perceived deadline pressure, the agency cannot now invoke the need for expeditious action as ‘good cause’ to avoid the obligations of section 553(b).”).<a href="#_ftnref10" name="_ftn10">[10]</a>  Another potential problem for the FAA is Executive Order 12866, which requires agencies to complete a cost-benefit analysis for rules that, among other things, raise novel legal or policy issues.  Given that drone registration will likely raise both novel legal and policy issues, such an analysis may be required.

FAA Announces Drone Registration, but Legal Challenges Loom

On December 14, 2015, the FAA issued the much-anticipated “Registration and Marking Requirements for Small Unmanned Aircraft Interim Final Rule” (the “Interim F