drone on! emerging legal issues for commercial use of
TRANSCRIPT
DRONE ON! Emerging Legal Issues for Commercial Use of Unmanned Aerial Vehicles (UAVs): Will You and Your Clients Be
Ready for the Invasion of American Airspace?
ABA Section of Litigation--Environmental, Mass Torts & Products Liability Litigation Committees' Joint CLE
January, 2016
By: Scott Carr, Ph.D. -- Navigant Economics Samuel L. Felker, Esq. -- Baker Donelson Matthew Grosack, Esq. -- DLA Piper Connie A. Lahn, Esq. -- Barnes & Thomburg LLP ______________________________________________________________________________ A. Drone (UAV) Usage Now and In the Future.
1. Introduction • A recent Teal Group study estimates that worldwide spending in the Unmanned
Aerial Vehicle (UAV) industry will increase drastically in the next decade—with expenditures of up to $11.5 billion annually.1
• The Association for Unmanned Vehicle Systems International (AUVSI) examined the first 500 commercial drone permits issued by the FAA and found exemptions spanned 20 major industries across 48 U.S. states. An oft-cited economic impact report published by AUVSI in 2013 indicated that in the first decade following the integration of commercial drones the U.S. would see roughly $82 billion in economic impacts, stemming from both the manufacture and operation of drones as well as from the efficiencies they create.
• The United States has banned UAV commercial use without express authorization by the Federal Aviation Administration (FAA) through its exemption process; however, the FAA has dramatically accelerated the pace of issuing exemptions. A year ago, only two companies in the U.S. were cleared by the FAA. Now, more than 1,000 exemptions have been issued and FAA approves application at a rate of roughly 50 per week. http://fortune.com/2015/08/09/faa-commercial-drone-permits/.
• Numerous crashes, "near misses" and other incidents have raised concerns over the proliferation of drone use: at least two drones have landed on the White House lawn; a drone landed on the rooftop of the Japanese Prime Minister's house carrying radioactive material; the FAA has reported numerous "near misses" with airliners;
1 http://www.tealgroup.com/index.php/about-teal-group-corporation/press-releases/118-2014-uav-press-release
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and in Tennessee a drone operator/photographer flew his drone into a fireworks display on July 4th, endangering a large crowd of spectators.
2. Agricultural Use of Drones
• Unmanned aerial vehicle (UAV) technology is set to take off, and the agricultural
industry is once again perfectly positioned to lead a revolution. And, although the United States has banned the commercial use of UAVs without express authorization, integration is on the horizon.
• Estimates are that agriculture will account for 80% to 90% of UAV use. • Common agricultural uses already in the U.S.2:
o Crop monitoring – Drones can capture highly accurate crop images and cover
hundreds of acres in a single flight. Farmers can then manually inspect problem areas using information gathered from the images.
o Irrigation monitoring – Drones can inspect the nozzles and sprinklers on irrigation systems saving farmers the time of manually inspecting the systems—especially when crops reach a height that makes it difficult to gain access.
o Variable rate fertilizing – Some precision agriculture companies have used normalized difference vegetation index (NDVI) maps to direct in-season fertilizer applications on corn and other crops. Farmers can apply fertilizer in different quantity to different areas of a field by using drone-generated, variable-rate application (VRA) maps to determine the strength of nutrient uptake within a single field.
o Cattle herd monitoring – Drones can track where quantity and activity levels of a rancher’s herds. They are especially helpful at night when visibility is low.
o Weed identification – Drones are able to create “weed maps” using NDVI sensor data. This allows farmers to identify weed problems early, where traditionally farmers would not be able to determine the extent of weed problems until harvest.
o Drones in Greenhouse – (Spain) Equipment sensors for temperature, humidity, luminosity, and carbon
dioxide concentration Low cost Small More accurate than static sensors and can more quickly detect
problems in the environment In 20 minutes, can map an entire greenhouse
o Crop spraying:
2 http://dronelife.com/2014/12/30/5-actual-uses-drones-precision-agriculture-today/
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The FAA has come a long way towards integration of UAV's into the national airspace, though there is still a ban on commercial UAV operation without express FAA approval. On May 1, 2015, regulators took another large step by granting Yamaha an exemption in order to operate a UAV large enough for crop-spraying operations. It is called the RMAX, and it is larger and heavier than any UAVV previously approved to operate in U.S. airspace. The RMAX is 9 feet long and 3 feet 6 inches tall, has an empty weight of 141 pounds, and a load capacity of about 61 pounds for both liquid and granular applications.
The RMAX will immediately prove its use in precision agriculture to U.S. farmers by allowing increased productivity, lower costs, and reducing the amount of chemicals needed to treat fields. It does all of this while also being safer than other air and ground based chemical treatment methods—it reduces human exposure to chemicals and is less likely than manned aircraft to cause damage in the event of an accident.
Yamaha cited the RMAX’s proven track record in support of its petition. It has been in use for more than 20 years in Japan, and was more recently approved for operations in both Australia and South Korea. The UAV has logged 2 million flight hours over 2.4 million acres of farmland in Japan alone, and has never been the cause of an accident that caused human injury.
The FAA did issue restrictions on the use of the RMAX in order to ensure safety. It can only be operated in uninhabited areas within the visual-line-of-sight of both a certified pilot and a visual observer. At no time is the UAV to exceed 400 feet above the ground or 45 miles per hour.
• Benefits
o Saves Time: Can capture highly accurate images of your fields, covering up to
hundreds of acres in a single flight Farmers do not have to physically scout their fields
o Saves Money:
Reduces resource use by optimizing application of water, seed,
fertilizer, and chemicals because the images allow farmers to target the areas in need
o Boosts Crop Yield Farmers can identify and target problem areas early which boosts
overall yield
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• UAVs have been used in many countries for agricultural purposes
o Japan3 Some farmers have been using unmanned helicopters for seeding and
spraying rice for almost 20 years The Japan Agricultural Aviation Association under the Ministry of
Agriculture, Forestry and Fisheries of Japan regulates drones by setting safety standards Must maintain low speed (20km/h) and low altitude (3-5m) Government sets safety standards on performance, inspection,
maintenance, operator licenses, and operator registration
o Australia UAV used for profit-seeking “air work” must meet safety
requirements and pilot certification Model Aircraft
• Must be flown during the day in line of sight • Cannot fly closer than 30m to vehicles, boats or people • Cannot fly over populous areas • Cannot fly higher than 400 feet • Cannot fly within 5.5 km of airfield • Must have an operators certificate issued by the Civil
Aviation Safety Authority
Remotely Piloted Aircraft (RPA)4 - Australia was the first country in the world to regulate RPAs, with the first operational regulation for unmanned aircraft in 2002 • Splits UAVs into three categories:
o Micro RPA – under 22 lbs. These are largely
exempt from regulation o Small RPA – 22 lbs. to 330 lbs. These may be
flown by an unqualified person in certain conditions without any form of certification. There are operational requirements but no airworthiness requirements to operate this class.
3http://uvs-international.org/phocadownload/03_5ac_Relevant_Information/Applications_Civil-UAV-Applications-in-Japan.pdf 4http://uvs-international.org/phocadownload/04_1cdb_White-Papers_PvB________________/Coyne-James_CASA_Australia_UAS%20Regulatory%20Developments.pdf
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o Large RPA – 330 lbs. and above. These must have a certificate of registration, a certificate of airworthiness and its remote pilots must be qualified and licensed.
Uses: Aerial Photography Noxious weed identification and eradication Vegetation Monitoring Fire Fighting Support Crop spraying Feral animal tracking Location and eradication of harmful introduced species of
insects
• The Association for Unmanned Aerial Vehicle Systems International predicts that, along with public safety, precision agriculture will comprise 90% of the potential market for UAV technology.
3. Drone Applications in the Energy Industry
• The physical infrastructure for producing and transporting crude oil, refined
petroleum products, and electricity contains many physical assets that require inspection and/or monitoring for safety and environmental protection. In many cases, these infrastructure assets are difficult to access by workers. Examples include:
o Crude oil drilling platforms o Pipeline rights of way o Power lines o Wind turbines o Solar farms o Offshore oil fields
• Currently, inspection/monitoring of energy infrastructure assets is largely manual –
e.g., wind turbine inspections are performed by workers using helicopters and/or ropes. The current manual inspection processes are often dangerous, expensive, and (potentially) ineffective.
• Drones can be used for this inspection/monitoring, especially for inspections of equipment that is difficult for workers to access (e.g., wind turbine blades, power lines, drilling platforms). Drone usage in these applications can be highly cost-effective and much safer.5
5 http://news.nationalgeographic.com/energy/2015/09/150923-drone-use-could-soar-at-pipelines-wind-turbines-solar-farms/ http://www.nytimes.com/2014/04/22/business/energy-environment/drones-are-becoming-energys-new-roustabouts.html?_r=0
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o According to Navigant Research, cumulative global revenue for wind turbine UAV sales and inspection services is expected to reach nearly $6 billion by 2024.6
• In some instances, drones can be used for monitoring that is impossible to perform manually. For example, inspection of oil field equipment by workers often requires the equipment to be shut down. Drones can inspect the equipment while it is in operation which enables drones to identify problems (e.g., flares or intermittent problems) that a worker would miss.7
• Given drones’ low cost and, in some applications, autonomous operation, inspection/monitoring by drones can potentially be performed continuously (“24/7”) rather than intermittently. For example, autonomous drones could continuously inspect pipeline rights of way for leaks (e.g., dead vegetation indicating a leak in a natural gas pipeline). “The day may not be far off when more than 1,000 miles of pipeline that were previously inspected by manned aerial flyovers can instead be monitored virtually around the clock with a previously unattainable level of watchfulness and precision.” 8
4. Drone Applications in Construction • Most uses of drones in construction involve 2- and 3-Dimensional imaging of
construction sites and buildings for numerous purposes .
o Site surveying o Identification of quality problems or jobsite safety hazards o Progress monitoring and identification of off-schedule tasks/projects – e.g.,
construction of the Sacramento Kings’ new stadium is being monitored by comparing 3-D models built from drone video against computerized architectural plans.9
o Workforce monitoring o Identification of building maintenance problems – e.g., corrosion in steel and
concrete structures o Thermal imaging to detect energy losses in building o Volumetric analysis (e.g., of materials to be moved or soil to be excavated) o Inspection of structures o Architectural imaging/rendering, business development/marketing materials o Monitoring of potential environmental impact of construction projects (e.g.,
impact on nearby wetlands or water resources)
• The benefits of using drones for aerial imaging of construction sites and buildings relate to cost, safety, and feasibility
6 https://www.navigantresearch.com/research/drones-for-wind-turbine-inspection 7 http://www.nationaljournal.com/sponsor-content/bp/how-drones-are-transforming-energy-business?mref=skybox 8 Id. 9 http://www.technologyreview.com/news/540836/new-boss-on-construction-sites-is-a-drone/
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o Purchase and operation costs of drones are very low. Manned vehicles can cost thousands of dollars per hour. Drones can thus be used daily or even more frequently.
o Drones can easily access areas of a construction site that are dangerous/difficult to access by humans.
o Drones can access areas that are not accessible by other means. E.g., drones can safely perform aerial imaging within an area that manned helicopters cannot access due to cranes and other construction equipment.
• Drones could potentially also perform construction tasks such as installing overhead cabling.
5. Drones in Disaster Management
• Pre-Disaster Planning and Prevention
o 2- and 3-Dimensional mapping to facilitate disaster planning. For example:
Mapping of flood planes Identification of potential mud slides
o Structural assessment of buildings, dams, and other structures o Detection of wild fires
• During and immediately after a disaster
o Rapid deployment – drones can be airborne in minutes – and deployment
during severe weather o Reconnaissance and mapping of the disaster o Search and rescue support
Aerial search for victims Identification of dangers to first responders – e.g., locations of fires,
downed power lines, dangerous structures Drones, which can be very quiet – can carry listening devices to locate
victims Thermal and infrared imaging (i.e., drones can see at night and through
smoke)
o Damage assessment – e.g., identification of flooded areas, downed power lines, blocked roads, fallen trees, damaged structures
o Logistics support – e.g., identification of blocked roads, damaged rail, and destroyed ports and airports.
o Coordination of disaster management efforts – e.g., aerial imaging to identify location of first responders and support personnel
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o Temporary telecommunications platforms enabling cell phone and Wi-Fi coverage in affected or remote
• Post-Disaster
o Delivery of medicine, food, water, and survival gear cut off areas o Assessment of whether humans (such as insurance adjusters, inspectors,
residents) can safely enter affected areas o Damage assessment o Insurance claim support
6. Other Aerial Imaging Applications Using Drones
• Media and Entertainment (e.g., television news coverage, sporting events,
moviemaking) • Real Estate and surveying • Mapping and cartography • Traffic monitoring • Weather monitoring • The aerial imaging industry has been forecasted to grow to $2.2 billion worldwide by
2020.10 • Security services to monitor premises and assets.
7. Delivery and Logistics
• Healthcare applications
o Delivery of medicine, vaccines, and supplies and retrieval of medical samples
to/from remote locations. A delivery of medicine to a rural Virginia clinic in in July 2015 was
the first FAA-approved drone delivery.11
• Disaster management (delivery of medicine, food, and survival supplies, see above). • Retail/Parcel deliveries.
o In December 2013, Amazon.com announced that it was developing Amazon
Prime Air to deliver packages to customer in 30 minutes using drones.12 o Google is developing a package delivery service that it aims to have in service
in 2017.13
10 http://www.businesswire.com/news/home/20151014006001/en/Aerial-Imaging-Market-reach-US2.2-billion-2020 11 http://www.latimes.com/business/la-fi-drone-delivery-20150720-story.html and http://qz.com/458703/the-first-successful-drone-delivery-in-the-us-has-taken-place/ 12http://money.cnn.com/2013/12/01/technology/amazon-drone-delivery/ and http://money.cnn.com/2013/12/01/technology/amazon-drone-delivery/
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o Alibaba (China, biggest retailers) has been testing a drone delivery service in China.14
o “Tacocoptera hoax.15 o Parcel delivery services have been reported to be in development or testing
by: US Postal Service16 DHL17 Domino’s18 United Arab Emirates (for delivery of official government documents
and packages)19
• Illegal deliveries
o Drug smuggling20 o Smuggling of contraband into prisons21
B. U.S. Regulation of UAV's
1. FAA Modernization and Reform Act (FMRA)
• In 2012, Congress enacted the FAA Modernization and Reform Act (FMRA) in order
to give the FAA control over the regulation of unmanned aircraft. • The law regarding UAV use in the United States is unsettled and it is the opinion of
the FAA that the use of UAVs for commercial purposes is prohibited without express authorization.
• However, UAV technology has been used for commercial purposes without specific authorization from the FAA by individuals that liberally construe the definitions of both “model aircraft” and “recreational purpose” in order to rationalize their UAV use.
• The FAA recently reacted to these liberal interpretations and attempted to clarify what constitutes a commercial purpose. Among the list of commercial purposes was “[d]etermining whether crops need to be watered that are grown as part of commercial farming operation.” This strongly indicates that the FAA considers any use of an UAV in a commercial farming operation to be illegal. Therefore, one must
13http://www.theatlantic.com/technology/archive/2014/08/inside-googles-secret-drone-delivery-program/379306/?single_page=true and http://www.bbc.com/news/technology-34704868 14 http://www.bbc.com/news/technology-31129804 15 http://articles.latimes.com/2012/mar/28/business/la-fi-tn-tacocopter-internet-hoax-20120328 16 http://www.federaltimes.com/story/government/management/facilities-fleet/2015/04/20/postal-service/26077869/ 17 http://www.cbsnews.com/news/dhl-testing-delivery-drones/ 18 http://www.dailymail.co.uk/news/article-2336324/Dominos-builds-DRONE-deliver-pizzas-air-beat-traffic.html 19 http://www.reuters.com/article/us-emirates-drones-idUSBREA1906E20140210#rQLcIPRfATbsZXMA.97 20 http://www.cnn.com/2015/01/22/world/drug-drone-crashes-us-mexico-border 21 http://www.nbcnews.com/news/other/drone-tries-sneak-contraband-georgia-prison-f2D11665517 and http://www.irishtimes.com/news/crime-and-law/remote-control-helicopter-used-to-smuggle-drugs-into-prison-1.1844830
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be cautious in implementing commercial UAV use without FAA express authorization.
2. FAA Enforcement
• FAA may take enforcement action against anyone who:
o Conducts unauthorized UAV operation or o Operates a UAV in a way that endangers the safety of the NAS
• Enforcement Tools
o Warning notices o Letters of correction o Civil penalties
• FAA has authorized local law enforcement to help
o State and local Law Enforcement Agencies (LEA) are often in the best
position to deter, detect, immediately investigate, and, as appropriate, pursue enforcement actions to stop unauthorized UAV operations. Although the FAA retains the responsibility for enforcing FAAs regulations, FAA aviation safety inspectors, who are the agency’s principal field elements responsible for following up on these unauthorized and/or unsafe activities, will often be unable to immediately travel to the location of an incident.
• Factors to Consider in Determining a Course of Action
o Whether the violation was a first-time and inadvertent violation; o Whether the violation involves repeated or intentional violations; and o Whether the safety risk resulting from the operation in terms of actual or
potential endangerment to the NAS was low/medium/high
• Guidance for Legal Enforcement Sanction Determination
o A first-time, inadvertent violation that poses a low actual or potential risk to safety but one in which the aviation safety inspector determines compliance cannot be gained through education warrants administrative action (warning notices or letters of correction, with associated documentation (See FAA Order 2150.3B, Chapter 5, Paragraph 3)).
o When sufficient evidence exists to support a violation that poses a medium or high actual or potential risk to safety, legal enforcement action is appropriate. For example, legal enforcement action is appropriate when a UAV operation has a medium or high risk of endangering the operation of another aircraft or endangering persons or property on the ground. In addition, repeated or intentional violations generally warrant legal enforcement action.
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3. Exemptions Under §333
• Section 333 of the FMRA allows the Secretary of Transportation to grant exemptions
for certain unmanned aerial systems if he determines that they can operate safely within the national airspace.
o In order to receive approval under Section 333, a commercial entity must demonstrate that its operation of a UAV will not adversely affect safety, or that it will provide at least an equal level of safety to that of the current rules.
o The Secretary is to consider the “size, weight, speed, operational capability, proximity to airports and populated areas, and operation within visual line of sight” when determining if their operation will “create a hazard to users of the national airspace system or the public or pose a threat to national security.”
o If an exemption is granted, the Secretary is then required to establish specific safety requirements for the operation of the UAV under Section 333.
o The FAA recommends that petitioners allow for 120 days for a response
• Exemptions are being granted with increasing frequency, especially in the following industries:
o Oil field and pipeline inspections o Filmmaking o Aerial surveying o Construction site monitoring o Precision agriculture o Real estate photography
• Precision Agriculture: almost 100 requested exemptions. These exemptions are often
accompanied by survey/mapping GPS request as well • The exemption petitions that have the highest chance of success are those that can
assure the FAA that UAVs will only be operated in highly controlled environments • Speed Exemptions
o FAA is using a flexible regulatory approach to accommodate the rapid influx
of § 333 requests o FAA still reviews each Section 333 petition individually, but the agency can
issue a summary grant when it finds it has already granted a previous exemption similar to the new request
o These requests generally fall into two categories: filmmaking or aerial data collection
o Allows potential UAV users to enter the industry more quickly
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4. Small UAVs and Notice of Proposed Rulemaking (NPRM)
• Outlines a protocol for authorizing and regulating operations for commercial (non-recreational) flights of small UAVs weighing up to 55 pounds
• Promulgated under FMRA §333 and outlines a series of restrictions the FAA believes will allow UAVs to operate safely in the national airspace
• Significant provisions:
o Must be 55 pounds and under o Must be operated in daylight and within visual-line-of-sight of operator o May not operate over persons not directly involved in the operation o Maximum speed of 100 miles/hour o Maximum altitude of 500 feet above the ground o Must conduct preflight inspections o Aircraft must be registered and marked
• The 60 day comment period for the public to provide input on the NFPRM ended on
April 24, 2015. The comments came from a wide range of interested stakeholders, including:
o Federal and state agencies (e.g. National Transportation Safety Board (NTSB), National Oceanic and Atmospheric Administration, New York City Department of Transportation)
o Small UAV manufacturers and operators, traditional aviation stakeholders (e.g., Boeing and Airports Council International), labor unions, educational institutions, various industries and companies (e.g., Amazon, Common Wealth Edison Company, Motion Pictures Association of America, Nuclear Energy Institute, and Traveler’s Insurance)
o Press and media groups, privacy groups, hobbyists, and individuals.
• The general ban on commercial UAV use remains effective until a final rule is published, but once the NPRM goes into effect, commercial entities will no longer have to individually petition under FMRA §333 for an exemption as long as they can operate within its confines.
• Companies may still want to file a section 333 exemption.
o May take a while for the NPRM to actually take effect; the public comment period will take several months, Congress may step in to modify or replace the rule, or there could even be challenges in court that could take years to resolve.
o Some will want to use UAVs in a way that is outside the scope of the NPRM; for example a farmer may want to use UAVs to carry chemicals for crop dusting. It is likely the chemicals would cause the UAV to be above the 55 pound limit established in the NPRM. Another example can be found in the visual-line-of-sight requirement. A farmer that would like to use a UAV to
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inspect remote fields will likely want authorization to operate the UAV out of the direct, unaided line-of-sight of its operator.
C. Liability and Insurance Issues
1. Operator Error Causing Personal Injury and Property Damage to Others
• Drone operators can potentially be held liable for personal injuries and property damage as a result of flying their drone.
• Under the tort theory of negligence, a drone operator could be held liable for losing control of their drone and allowing it to crash into a person or damage property.
• Generally, in order to prevail in a drone accident lawsuit, the plaintiff must establish that the drone operator failed to exercise “reasonable care” while operating the drone.
• Case law will be developed over the next few years to set the boundaries of “reasonable care” but expect plaintiffs to focus on any operator violations of FAA regulations and state laws in order to establish negligence per se.
• In addition, the plaintiff will need to establish causation between the drone operator’s negligent acts and the claimed injuries.
• Consider hypothetical where drone is launched with low battery power which results in crash into passerby who sustains bodily harm.
• Successful recovery in drone personal injury litigation could include recovery for economic and non-economic losses.
• Intentional misconduct or gross negligence may also lead Court to award punitive damages.
• See discussion on trespass below regarding property damage caused by drones.
2. Damage to Drones • State and federal law is undeveloped regarding damage or self-defense against
civilian drones. It appears that this question is at a crossroad between tort law and FAA federal regulations because it involves issues such as privacy, trespass, right to self-help or self-defense against intruding drones, and national airspace. Benjamin D. Mathews, Potential Tort Liability for Use of Drone Aircraft, 46 ST. MARY’S L.J. 573, 598–599 (2015).
• Drone operator sued his neighbor in small claims court in 2014 in California for shooting down his drone while it was flying over the operator’s family residence. The Court found that the defendant acted unreasonably in having his son shoot down the drone regardless of whether it was his property or not. The Court awarded drone operator $850 for the damaged equipment. This case raises the issue that the FAA has classified drones as “aircraft”, which would mean that they would be under the same restrictions as other types of aircraft. Therefore, shooting at a drone would be a federal felony. The FAA has yet to charge anyone who has shot at a drone. JEFF STONE, Shooting Down Drone Costs California Man $850 Penalty, One Angry Neighbor, INTERNATIONAL BUSINESS TIMES (Jun. 29, 2015),
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http://www.ibtimes.com/shooting-down-drone-costs-california-man-850-penalty-one-angry-neighbor-1987699.
• A Kentucky homeowner in 2015 was arrested for shooting down a civilian drone that was flying over his property that he believed was invading his family’s privacy (homeowner’s daughters were sunbathing in the backyard). The homeowner was charged with felony charges of wanton endangerment and criminal mischief. The judge dismissed the charges, stating that “the drone was hovering over people’s property and that it was an invasion of privacy and that the homeowner had the right to shoot the drone.” JAMES VINCENT, Judge Rules Kentucky Man Had the Right to Shoot Down His Neighbor’s Drone, THE VERGE (Oct 28, 2015), http://www.theverge.com/2015/10/28/9625468/drone-slayer-kentucky-cleared-charges.
• In 2014, the small town of Deer Trail, Colorado considered an ordinance that would have allowed for the issuance of hunting licenses to shoot down drones. In response the FAA issued a statement, that “shooting an unmanned aircraft could result in criminal or civil liability, just as firing at a manned airplane.” However, in its response, the FAA did not cite any specific law backing this assertion. A. Michael Froomkin & P. Zak Colangelo, Self-Defense Against Robots and Drones, 48 CONN. L. REV. 1
3. Products Liability of Drone Manufacturer
• Drone manufacturers will be sued under traditional product liability theories
including negligence, strict liability (including failure to warn) and breach of warranty for alleged manufacturing or design defects. The suit may arise in the context of an operator seeking indemnity or contribution when the operator's drone causes an accident and subjects the operator to liability. Manufacturers may also face suits directly from injured parties on the theory that such injuries were foreseeable when the manufacturer sold the device and placed it in the stream of commerce.
• Component Parts Manufacturers: Manufacturers of individual component parts of a larger product may be found liable if the component part caused the injury complained of. Therefore, the manufacturer of a camera on a drone is not liable if a drone accident was caused by a malfunctioning engine, so the engine manufacturer is liable. Pasquale v. Speed Products Engineering, 654 N.E.2d 1365 (Ill. 1995).
• Assemblers: Assemblers of a product can be found liable for injuries if the products assembly results in a dangerous condition. In Williams Machine & Tool Co., the lift assembling and manufacturing company was found liable under a strict products liability theory when the employees were injured by a defective pump on a lift. Liberty Mutual Ins. Co. v. Williams Machine & Tool Co., 338 N.E.2d 857 (Ill. 1975).
• Installers: Installers of a defective product that was supplied by another are typically liable if the defect was the result of defective or improper installation. Winters v. Fru-con, Inc., 498 F.3d 734 (7th Cir. 2007). The United State Court of Appeals for the Seventh Circuit, interpreted the Illinois products liability law and reasoned that 1) [installers] are not involved in the sale of the product, (2) [installers] did not receive any profit from the placing of the defective product in the stream of commerce, and
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(3) [installers lack] the purchasing power of a retailer or distributor and therefore cannot exert pressure on the manufacturer to enhance product safety.” Id. at 745. If the installer creates the defect, however, then the installer is liable. Court v. Grzelinski.
• Apparent Manufacturers: An entity that holds itself out as an apparent manufacturer is liable under products liability doctrine if the entity derives economic benefit from the marketing of the products. Hebel v. Sherman Equip., 92 Ill. 2d 368 (Ill. 1982). Whether an entity is an apparent manufacturer is whether the entity’s “advertising was such as to lead a reasonable purchaser to believe that the defendant, and not some other party, was the actual manufacturer. Hebel v. Sherman Equip., 92 Ill.2d 368, 377 (Ill. 1982) (finding apparent manufacturers strictly liable under a theory of estoppel).
4. Invasion of Privacy, Trespass, and Property Rights • Invasion of Privacy
o Tort claims related to the invasion of privacy are generally examined under
the framework provided by the Restatement (Second) of Torts. Invasions of privacy are categorized into the following four tort actions; (i) unauthorized use of name or likeness; (ii) intrusion upon seclusion; (iii) publicity placing one in highly offensive ‘false light”; and (iv) public disclosure of private matters.
o From these four tort actions, “misuse of a drone by a private operator is most likely to give rise to a claim of intrusions upon seclusion.” Benjamin D. Mathews, Potential Tort Liability for Use of Drone Aircraft, 46 ST. MARY’S L.J. 573, 586–587 (2015).
o Under the claim of intrusion upon seclusion, “one who intentionally intrudes, physically or otherwise, upon the solitude or seclusion of another or his private affairs or concerns, is subject to liability to the other for invasion of his privacy, if the intrusion would be highly offensive to a reasonable person.” Restatement (Second) of Torts §652B (1977).
o Courts and lawmakers will likely need to wrestle with the question of “whether the intentional act of flying a drone is sufficient to give rise to a claim of intrusion upon seclusion.” Benjamin D. Mathews, Potential Tort Liability for Use of Drone Aircraft, 46 ST. MARY’S L.J. 573, 586–587 (2015).
o As a general rule, the plaintiff will need to successfully demonstrate that the “drone operator’s intrusive actions would have highly offended a reasonable person.” Benjamin D. Mathews, Potential Tort Liability for Use of Drone Aircraft, 46 ST. MARY’S L.J. 573, 586–587 (2015) citing to Shorter v. Retail Credit Co., 251 F. Supp. 329, 332 (D.S.C. 1966).
o Invasion of privacy claims involving drones may also be premised upon “public disclosure of private matters.” This claim is likely to be included when a drone is used to capture photographs or video of private subjects,
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information, or situations that is later made public by way of publication on the Internet or traditional media such as newspapers and magazines.
o Central to the analysis is whether the plaintiff was a “in a place where one should reasonably expect to have privacy.” Benjamin D. Mathews, Potential Tort Liability for Use of Drone Aircraft, 46 ST. MARY’S L.J. 573, 587–588 (2015).
o Multiple states throughout the United States have enacted statutes which address privacy issues and drones. For example, the Texas Privacy Act sets forth examples of illegal drone usage. Under Texas law, liability arises when a drone operator uses a drone “with the intent to conduct surveillance on the individual or property captured in the image.” Tex. Gov’t Code Ann. §423.003(a) (West 2013). The statute contains a two-part test: (a) capture an image in violation of the statutory definition, and (b) possess, disclose, display, distribute, or otherwise use the image. Tex. Gov’t Code Ann. §423.003(a) (West 2013). Violation of the statute can result in civil liability ranging from $5,000 to $10,000 depending upon the nature of the capture and public disclosure. See Gov’t Code Ann. §423.006(a) (West 2013). In response to drone use by paparazzi, the State of California has also recently enacted legislation design to curb use of drones over private property. See California Civil Code, §1708. Tennessee recently passed a statute to prohibit "surveillance" or photography of an individual or property by an unmanned aircraft. Tenn. Code Ann.§39-13-903.
• Trespass and Property Rights
o In general, physical intrusion upon a plaintiff’s personal property triggers a cause of action for trespass.
o The plaintiff need not physically enter the defendant’s property – sending an object, such as a drone, into the plaintiff’s property is enough to premise liability. See Restatement (Second) of Torts §158 (1977)(“One is subject to liability to another for trespass, irrespective of whether he thereby causes harm to any legally protected interest of the other, if he intentionally (a) enters land in the possession of the other, or causes a thing or a third person to do so ….”
o Courts have premised trespass liability for items flying or extending over property at heights of twenty to thirty-feet. See Butler v. Frontier Tel. Co., 79 N.E. 716, 718 (N.Y. 1906)(liability found for running wires over plaintiff’s land). Therefore, “it is reasonable to infer that flights at a very low level, such as a height of eight feet, will potentially incur liability for trespass, provided the additional elements of the tort are met.” Benjamin D. Mathews, Potential Tort Liability for Use of Drone Aircraft, 46 ST. MARY’S L.J. 573, 592–593 (2015).
o Be sure to check applicable state law on trespass as regulations vary from state to state. See e.g., Tenn. Code Ann.§39-14-405 making it a criminal trespass to cause an unmanned aircraft "to enter that portion of the airspace
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above the owner's land" not regulated as "navigable airspace" by the FAA. Some states also prohibit drone usage in crowded spaces. Tenn. Code Ann.§
• The Federal Aviation Administration (FAA) regulates activities regarding
drones.
o In February of 2015, the FAA produced its most recent rules on drone operators. Operation and Certification of Small Unmanned Aircraft Systems, 80 FR 9544-01. The FAA navigable-airspace regulation is not a privacy regulation, but it declares how close a drone can come to the home and thus bears on a home’s solitude. These new rules impose severe limitations on commercial drone operators but do not affect hobbyist drones. Hobbyist drones are drones used for personal recreational purposes. A. Michael Froomkin & P. Zak Colangelo, Connecticut Law Review: Self-Defense against Robots and Drone
o As mentioned, Congress passed the FAA Modernization and Reform Act of 2012 ( FMRA) so that the FAA would create rules on how to integrate drones into domestic airspace. There were two main objectives. Id. at 15. The first required that the FAA issues a final rule on integrating “small unmanned aircraft system” into the national airspace by September 2015. Id. The second requires the FAA to develop a “comprehensive plan to safely accelerate the integration of civil unnamed aircraft systems into the national airspace. Id.
• Does the FAA have authority to regulate drone-related privacy issues?
o The FAA has created a test site program. This test site program is to develop a
body of data and operational experiences to inform integration and the safe operation of aircrafts in the National Airspace System. In a recent final rule, the FAA required all test site operators to have written and publicly available privacy policies which are “informed” by Fair Information Practice principles, to accept public comment on their privacy policies, and to review and update the policies as needed. A. Michael Froomkin & P. Zak Colangelo, Connecticut Law Review: Self-Defense against Robots and Drone
o The FAA does not see enforcing policies pertaining to privacy or civil liberties as a part of their mission. Whether or not the FMRA gives the FAA authority to regulate drone-related privacy the FAA has chosen to allow the states to establish their own course of action for protection of privacy in the drone context and most likely won’t try to preempt the states from doing so.
o This very issues is being challenged before the U.S. Court of Appeals for the D.C. Circuit, where Petitioners argue that the FMRA requires the FAA to develop a “Comprehensive Plan” to integrate drones into the NAS and that the FAA wrongly concluded that the privacy issues are beyond the scope of its authorized rulemaking. See Brief for Petitioner at 2, Elec. Privacy Info. Ctr. v. FAA, No. 15-1075 (D.C. Cir. filed Sept. 28, 2015), https://epic.org/privacy/litigation/apa/faa/drones/1575326-EPIC-Opening-Brief.pdf [[https://perma.cc/8BY9-PXTW].
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o On February 15, 2015, President Obama issued an order directing all federal agencies that use drones to ensure that their collection of personally identifiable information complies with the Privacy Act of 1974. The order permits data collection via drones only where it is “consistent with and relevant to an authorized purpose.” The order also calls for a “multi-stakeholder engagement process to develop and communicate best practices for privacy, accountability, and transparency issues regarding commercial and private UAV use in the NAS.”
5. Insurance Issues
• Flying a drone for recreational reasons or as a hobby does not usually require insurance, but given the risks, it is advisable. Those interested in insuring their drone should consult their agent for coverage under their homeowner’s policy or separate drone policy.
• Insurance is also not a pre-requisite for commercial drone use. The FAA has not mandated insurance policies for flying drones commercially or for recreation. However, there are multiple companies in the United States that are offering UAV insurance. It is likely, however, that as the industry develops, insurance will likely be required by customers and partners. This differs from the landscape in Europe and Asia where drone insurance is required.
• As of February 2015, “it is has been estimated that underwriters now insurance only 3 percent of UAV applicants.” See Unmanned Aerial Systems/Drones – Regulation, Liability, and Insurance Requirements, available at http://www.namic.org/pdf/15memberadvisory/150226_drones.pdf .
• Insurance can cover numerous issues including, “loss or damage to the UAV and associated equipment, coverage for aircraft operators, including other non-pilot, on-ground crew, manufacturer product liability, third party legal liability, premises liability, aviation and premises medical payments, fire legal liability, independent contractors liability, personal injury, advertising liability, contractual liability, fellow employee coverage, war, hi-jacking and terrorism, damage to premises, property & office studio contents”. See: http://uavcoach.com/drone-insurance-guide/.
• In general, drone insurance consists of two separate types of coverage, (a) liability (a) liability and physical damage (or “hull”) provided for the owner/operator of the drone, and (b) products liability coverage for drone manufacturers and related UAV service providers.
• Numerous companies have entered the drone insurance business. These include, in no particular order: Unmanned Risk Management, Aerial Park, AIG, Sutton James Incorporated, Avalon Risk Management, Global Aerospace, Aviation Insurance, Driessen Assuadeuren (Drone-Insurance.com), UAV Protect, SkySmith, Harpenau Insurance Agency, Coverdrone
6. Trends in State Law
• General Trends
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o At last count, twenty-six (26) states have enacted laws addressing UAV
issues. Common issues addressed in the legislation include establishing definitions for UAV, UAV and drones, how they can be used by law enforcement or other state agencies, how they can be used by the general public, regulations for their use in hunting game and the Federal Aviation Administration (FAA) UAV test sites. See, National Conference of State Legislatures, Current Unmanned Aircraft State Law Landscape, (Nov. 25, 2015) http://www.ncsl.org/research/transportation/current-unmanned-aircraft-state-law-landscape.aspx.
o Six states provide private, civil causes of action in cases of certain drone-operator actions: Florida, Idaho, North Carolina, Oregon, Tennessee, and Texas. Florida provides a cause of action to individuals who have been surveilled by law-enforcement drones in violation of its statute's prohibitions. Freedom from Unwarranted Surveillance Act, § 1(3), 2013 Fla. Laws 364, 365.; A. Michael Froomkin & P. Zak Colangelo, Connecticut Law Review: Self-Defense against Robots and Drone
o Alaska legislation requires law enforcement to maintain a record of each flight “including the time, date, and purpose of the flight,” to establish an “auditable flight record system,” and to “establish a method for notifying the public of the operation of an unmanned aircraft system, unless notifying the public would endanger the safety of a person.” Alaska Stat. Ann. § 18.65.901(a) (West, Westlaw through 2015 1st Reg. Sess.).
o Virginia, along with Oregon, banned the installation of weapons on government drones. An Act to Place a Moratorium on the Use of Unmanned Aircraft Systems, § 1, 2013 Va. Acts 1408, 1408; Act of July 29, 2013, § 10, 2013-2014 Or. Laws 1869, 1871.
o North Carolina and Wisconsin similarly banned weaponized drones, although these bans are broader, applying also to privately owned and operated drones. Current Operations and Capital Improvements Appropriations Act of 2014, § 14-401.24(a), 2014 N.C. Sess. Laws 328, 582; Act of Apr. 8, 2014, § 3, 2013 Wis. Laws 1120, 1121
o In 2015, Florida amended its 2013 bill. One of the amendments created a definition for the term “surveillance” and more importantly, also prohibited any person and state agency from using a drone to conduct surveillance. The amendment also stated that a person is presumed to have a reasonable expectation of privacy on his or her privately owned real property if he or she is not observable by persons located at ground level in a place where they have a legal right to be, regardless of whether he or she is observable from the air with the use of a drone. This is in conflict with the principle that there is no reasonable expectant of privacy if you can be seen from the air by the naked eye or use of cameras. This amendment created an expectation of privacy from the air even if the person is visible from the air with drone technology. The 2015 amendment also allows private citizens to bring suits against defendants that violate the surveillance statute and also allows the prevailing party to recover attorneys’ fees against the losing party. Steven M. Hogan,
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Time to Lawyer Up: What Florida’s New Drone Law Means For You, Property Casualty 360.com (Jun. 10, 2015) See: http://www.propertycasualty360.com/2015/06/10/time-to-lawyer-up-what-floridas-new-drone-law-mean?t=commercial&page=8&page_all=1.
• Law Enforcement
o Across the nation, lawmakers are debating and enacting legislation that
addresses how police can use these innovative tools to maximize public safety while complying with the Fourth Amendment’s prohibition against unlawful search and seizure. National Conference of State Legislatures, Robocops: From Phones to Drones
o Warrant Requirements for UAV Use: Fourteen states have enacted laws that address police use of UAV, commonly called drones. Thirteen of those states enable police to use UAV pursuant to a warrant, while a Virginia prohibition on their use by law enforcement agencies ended on July 1, 2015. In Iowa, law prohibits UAVV from being used to enforce traffic violations. Id.
o Operational Standards for Police use of UAVs: Laws in at least five states require that agencies adopt standardized protocols for police use of UAV. Alaska’s law requires that law enforcement agencies adopt procedures that ensure: the appropriate Federal Aviation Administration authorization is obtained; UAV operators are trained and certified; a record of all flights is kept and there is an opportunity for community involvement in the development of the policy. Similar laws in Iowa, Texas and Virginia require state agencies to develop protocols for law enforcement’s use of UAV. In North Carolina, the law requires all state personnel that operate a UAV to complete a knowledge and skills test developed by the state Division of Aviation. Id.
Contributing authors:
Scott Carr, Ph.D. Director, Navigant Economics Washington, D.C. [email protected] (202) 481-7546 Samuel L. Felker, Esq. Baker Donelson Nashville, Tennessee [email protected] (615) 726-5558 Matthew Grosack DLA Piper
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Miami, FL [email protected] (305) 423-8554 Connie Lahn Barnes & Thornburg LLP Minneapolis, MN [email protected] (612) 367-8706
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