Originally published at The Heritage Foundation by Jason Snead and John-Michael Seibler | 3/8/16
Two months: That is all the time an executive branch agency needs to create a crime.
With passage of the 2012 FAA Modernization and Reform Act, Congress explicitly told the Federal Aviation Administration to leave recreational drones alone, but the FAA has charged ahead anyway. In just two months, with no input from Congress or the public, unelected and unaccountable bureaucrats have devised a way to apply the pre-existing aircraft registration penalties to create a federal felony offense that can result in up to three years in prison and up to $277,500 in fines for failing to register as the owner of a qualifying drone—essentially a toy.
As bad as this is for unwary drone owners, the real legacy of the FAA’s drone registry may be much broader. To justify its rushed regulatory action, the FAA, relying on trumped-up claims about the risk and harms associated with drone use, has asserted its regulatory muscle to protect society from these as yet unrealized dangers. Such thinking has important ramifications for the regulation of innovation and may be only a foretaste of future regulatory actions that deter or dissuade adoption of some new and innovative technologies.
FAA Violation of Rulemaking Requirements
The FAA’s drone registry went into effect remarkably quickly.[1] On October 22, 2015, the FAA published a rule determining that drones are subject to existing aircraft registry requirements.[2] One month later, the agency’s special drone registry task force, composed of government and industry representatives, released a report outlining specific recommendations for a “streamlined” registration process.[3] Three weeks later, the FAA published its “interim final rule” establishing the recreational drone-owners’ registry.[4] Seven days after its release, the rule went into effect, and it officially became a federal felony to operate a drone weighing more than 0.55 pounds without first registering as a drone owner.
From start to finish, the regulatory process took two months to complete.
Agency rulemaking is governed by two primary sources of law: the Administrative Procedure Act (APA) and the Chevron doctrine, which enables agencies to promulgate regulations when Congress has delegated that power with adequate “guidelines.” The FAA registry pushes the boundaries of what an agency can do under both.
The swiftness of the FAA’s drone action was possible only because it bypassed many of the requirements set forth in the APA, which governs most agency rulemaking. Under the APA,[5] administrative agencies must generally publicize their intent to promulgate new regulatory rules by filing a notice of proposed rulemaking (NPRM) in the Federal Register. Interested parties then have from 30 to 60 days to file comments with the agency, which then must consider the public’s input before publishing a final rule. Under the APA, a new regulation generally cannot take effect for at least 30 days after its final publication.[6] This process can take months or years to complete. The requirements of the APA clearly place a premium on public involvement, transparency, and fair notice over swiftness in the regulatory process.
There are exceptions, though, since circumstances can arise that require unusually rapid action on the part of regulatory bodies. To that end, the APA creates a “good cause” exemption to the notice-and-comment process if an agency can show that adhering to the APA’s requirements is “impracticable, unnecessary, or contrary to the public interest.”[7] This is meant to be a narrow exemption, not a way to circumvent the APA’s broader requirements merely for reasons of bureaucratic expediency.
In creating its new drone-owners’ registry, the FAA claimed this exemption,[8] owing to the immediate dangers that the agency has alleged stem from the proliferation of drones in the national airspace.[9] According to the FAA, “it is critical that the Department be able to link the expected number of new unmanned aircraft to their owners and educate these new owners prior to commencing operations.”[10] But there are reasons to doubt the FAA’s claims that drones have suddenly become a problem and that it could therefore not countenance any delay.
- The rapid growth of small, recreational drones is not new; in fact, Congress legislated on the subject of drone policy in 2012, fully three years before the FAA claimed a sudden exigency to justify rushing its registry into effect.
- Claims of immediate danger are greatly exaggerated. There is no documented instance of a drone colliding with another aircraft, and it is unclear how dangerous such a collision would be.
- The number of incidents—interference with emergency services, near-collisions, and other criminal misdeeds—is insignificant compared to the number of drones in circulation. For example, the FAA reported 764 unconfirmed drone sightings near airports or aircraft over an 11-month period at a time when there were possibly as many as a million registry-eligible drones in the hands of consumers.[11]
A full analysis of the FAA’s claimed APA exemption is beyond the scope of this paper, but it is clear that there is reason to doubt the validity of the agency’s claims. In the process of rushing its registry, the FAA exposed hundreds of thousands of drone owners to steep civil and criminal penalties for conduct that is not inherently wrongful and that was not unlawful before the rule went into effect.
The U.S. Supreme Court’s 1984 opinion in Chevron U.S.A. Inc. v. Natural Resources Defense Council, Inc.[12] clarified when and how a federal agency can make binding rules.[13] Congress can and often does delegate its legislative power to agencies with guidelines to administer a certain regulatory mission. This enables Congress to write broad legislation and leave the job of filling in the details to agencies. As recently stated by Judge Carlos T. Bea of the U.S. Court of Appeals for the Ninth Circuit, “The basic rule of Chevron deference is that if a statute is ambiguous, the federal agency charged with implementing the statute can issue regulations interpreting it to mean whatever the agency wants within the bounds of that ambiguity.”[14]
A lawsuit has now been filed challenging the FAA drone-owners’ registry, alleging that the rule violates the text and congressional intent of Section 336 of the FAA Modernization and Reform Act of 2012. The plaintiff, John Taylor, claims the registry “creates a burden on hobbyists that Congress did not want to create,” as evidenced by the language of Section 336, which states that “the agency may not create new rules if such model aircraft are ‘flown strictly for hobby or recreational use.’”[15] The nonprofit group TechFreedom has also filed a lawsuit challenging the registry on similar grounds.[16] If either of these lawsuits succeeds, the courts could overturn the drone registration process; if they do not, that task will most likely be left to Congress.
Power to Create the Drone Registry Not Delegated by Congress
Only Congress can enact a federal criminal law.[17] In 1911, however, the Supreme Court held in United States v. Grimaud that Congress could delegate legislative authority to federal agencies to issue regulations and could also enact legislation making it a crime to violate those regulations.[18] More recently, in United States v. O’Hagan,[19] the Court did not object to Congress “authorizing the Securities and Exchange Commission to make rules combating securities fraud and to make violations of these rules crimes.”[20]
But here it seems clear that the FAA was not empowered either to criminalize the failure to register a recreational drone or to require its registration in the first place. While agencies get deference under Chevron to interpret vague and ambiguous statutes, the statute in this instance is not ambiguous, so Chevron should not apply.
In 2014, the Supreme Court declined to hear a criminal appeal in Whitman v. United States. While they agreed with the Court’s decision not to hear the case, the late Justice Antonin Scalia, joined by Justice Clarence Thomas, clarified that “[u]ndoubtedly Congress may make it a crime to violate a regulation, but it is quite a different matter for Congress to give agencies—let alone for us to presume that Congress gave agencies—power to resolve ambiguities in criminal legislation.”[21] While Grimaud and later cases like O’Hagan affirm agencies’ ability to write regulations that implement statutory objectives even where Congress attaches a criminal penalty by statute, “agencies cannot overlook[] the reality that, if Congress wants to assign the executive branch discretion to define criminal conduct, it must speak ‘distinctly.’”[22] In the context of the FAA drone registry, Congress did not so speak.
In the case of the FAA registry, Congress did provide a penalty and defined when it should apply: 49 U.S.C. § 46306(b)(5) provides that the owner of an aircraft “not used to provide air transportation” and “eligible for registration” who “knowingly and willfully operates, attempts to operate, or allows another person to operate the aircraft” is subject to imprisonment for three years and fines up to $250,000.[23] Congress also provided, however, in Section 336 that “the agency may not create new rules if such model aircraft are ‘flown strictly for hobby or recreational use.’” Moreover, Congress has given the FAA the authority to register only aircraft, not aircraft owners, which is how the FAA has set up its drone-owners’ registry to function.[24]
In addition to the fact that the FAA acted unlawfully here, the FAA drone registry merits reconsideration because it needlessly and hastily resorted to criminal penalties when civil fines would have sufficed to satisfy the government’s interests.[25]
A Misuse of Criminal Law
By contrast to the over 300,000 regulatory crimes that exist today, there were only nine felonies at common law, including treason, murder, robbery, and arson.[26] If the FAA’s registration requirement seems out of place when compared with those crimes, it is because criminal laws and regulations are meant to serve different purposes. Criminal laws “enforce the minimum substantive content of the social compact”—“the moral code that every person knows by heart”—“by bringing the full moral authority of government to bear on violators.”[27] Regulations “efficiently manage components of the national economy using civil rules, rewards, and penalties to incentivize desirable behavior without casting aspersions on violations attributable to ignorance or explanations other than defiance.”[28]
Treating such relatively trivial conduct as failing to register a child’s toy the same way we treat “murder, robbery, or theft ‘ignores the profound difference between the two classes of offenses and puts parties engaged in entirely legitimate activities without any intent to break the law at risk of criminal punishment.’”[29] This problem is only compounded by the fact that by the FAA’s own estimates, there may be as many as a million registry-eligible drone owners, and this population grows daily.
Yet the FAA cannot guarantee that all—or even most—of this group is aware of the registration requirement or that they face draconian criminal penalties for failing to comply. Since most people do not think to check with a federal agency before using their latest toy or gadget, this leaves a significant and growing segment of the population needlessly exposed to criminal liability. The explosive growth of federal criminal law and the dramatic expansion of the administrative state have gone hand-in-hand.[30] Regulations like the FAA drone registration requirement generally make it all but impossible for individuals to know which of their toys—or any other things considered potentially “dangerous”—are permissible today but will make them felons tomorrow.
Criminalizing Innovation
The significance of the FAA’s registry extends beyond its immediate impact on drone owners: It sets a precedent for criminalizing other innovations utilizing “emergency” rulemaking procedures premised on overblown claims of harm. While this is a particularly egregious abuse of the criminal law, government has a history of criminalizing or threatening to criminalize innovation under the “precautionary principle,” the belief that “because a new idea or technology could pose some theoretical danger or risk in the future, public policies should control or limit the development of such innovations until their creators can prove that they won’t cause any harms.”[31]
Innovations affected by precautionary government action include commercial use of the Internet (until 1989);[32] an “at-home 99 genetic analysis kit”;[33] 3-D printing;[34] Caller ID;[35] Uber and Lyft, transportation services offered as an alternative to traditional taxi cabs;[36] Airbnb and other short-term home rental companies offering alternative vacation rentals;[37] driverless cars;[38] and FWD (“Skype before Skype was Skype”),[39] which eventually shut down in part because U.S. attorneys “put the reigns on FWD to seek FCC approvals” while “foreign founders of Skype proceeded apace with no regard for U.S. regulatory approvals.”[40]
Criminalizing or otherwise restraining technologies like e-mail sounds laughable today, but e-mails were new and strange once, and like the driverless and Internet-connected cars just beginning to emerge in the market today, people felt that “the more we learn about [them]…the more we’re learning to fear them.”[41] Telephones, too, were new and strange once, but “people quickly adjusted to the new device. ‘Ultimately, the telephone proved too useful to abandon for the sake of social discomfort.’”[42] When the telephone morphed into the cellular phone, the public once again became alarmed over the possibility of cell phone radiation causing cancer. That fear eventually proved to be unfounded, but imagine the consequences and the cost, both social and economic, if the government had banned cell phones until that risk was definitively disproven.
This thinking is antithetical to the core premise of a bottom-up, market-based economy and threatens technological progress, entrepreneurship, and prosperity. Precautionary rulemaking also (ironically for a theory premised on protecting society from unknown harms) leaves society exposed to “existing hazards” that new technologies might otherwise remedy. Drones, for example, might be useful tools in fighting wildfires and providing environmental disaster relief, or detecting threats to community safety, or performing tasks that would otherwise place a human being in danger. Public policies that, based on unproven potential risks, prevent or slow the development of those capabilities force society to forego the opportunity to benefit from social adaptation and repeated trial and error.[43]
Legislators and policymakers are standing by to capitalize on irrational fears or discomforts by introducing new legislation and regulations and claiming that such measures are necessary to protect the public from dangerous unknown technologies when, in fact, those fears are overblown.[44] Often, these claims are hyped to distract from other motives, whether it be protecting an entrenched and politically connected interest, enhancing one’s notoriety, or establishing regulatory purview over an expansive new sector. The public would be better served by policies that allow innovative technologies to be brought to market and that let the market and society sort out the winners and losers.
Conclusion
Drones are one of many emerging technologies that can legitimately be both celebrated and feared. The question becomes: How will government respond to new technologies, and can prosecutors and judges continue to do their jobs without new criminal penalties? Permitting a dynamic, bottom-up approach—where markets and social norms govern individuals’ interactions with new technologies—would be a more efficient regulatory response than a rigid, top-down, criminal law approach that threatens to deprive society of the benefits of innovation.
—Jason Snead is a Policy Analyst and John-Michael Seibler is a Visiting Legal Fellow in the Edwin Meese III Center for Legal and Judicial Studies at The Heritage Foundation. This is the second of five Issue Briefs on how the FAA’s drone registry represents the stifling criminalization of innovation.