CHICAGO – Skypan International, an aerial photography company based in Chicago, has agreed to pay a fine of $200,000 to end an enforcement action brought by the Federal Aviation Administration.

But while the deal saved the company nearly $1.7 million compared to the fine the FAA had initially sought, the case should send a message to drone operators of all kinds that the FAA is serious about enforcing its rules on private and commercial drone operation, said a Chicago attorney.

Skypan released a statement in response to the agreement on its website, saying, “SkyPan International is pleased to announce that it has reached agreement with the United States Federal Aviation Administration to settle the civil penalty action initiated by the FAA in 2015 related to its unmanned aircraft systems (UAS) operations in New York City and Chicago during 2012-2014.”

The company was accused of conducting 65 illegal flights during that period.

Additionally, the company said, “While neither admitting nor contesting the allegations that these commercial operations were contrary to FAA regulations, SkyPan wishes to resolve this matter without any further expense or delay of business."

Richard Balough, a lawyer with Balough Law in Chicago, said he believed the deal represented a recognition on the part of the FAA that its more stringent drone regulations weren't in place at the time Skypan was alleged to have improperly operated its drones.

“On the other hand, Skypan would consider the fact that contesting any proposed penalty would be costly, well exceeding the amount of the agreed penalty,” he added.

The FAA first contacted Skypan in the fall of 2015 and said it could seek a $1.9 million penalty. The regulations governing the operation of commercial drones were not announced until June 2016 and went into effect in August 2016.

For Skypan’s case, Balough noted: “The FAA alleges that they were near dense populations and congested airspace. These flights were conducted during a period in which there were no specific FAA rules governing drones. Drone operators at that time had two options—apply for a specific exemption to operate a drone or merely operate the drone without authority, hoping not to be caught.”

Balough said it appears Skypan did not obtain the needed exemption.

“The immediate take-away for commercial drone operators is that the FAA is serious that it will enforce the drone rules and impose civil penalties," Balough said. "Commercial drone operators need to follow the rules that require drones to remain within visual sight, not operate over any persons not participating in the operation, operate only during daylight, not exceed 400 feet in altitude, be operated by a person holding a remote pilot airman certificate, and not operate within five miles of an airport.”

The settlement represented a win for both sides.

 “For the FAA, the settlement ... lets drone users know that it will go after those who violate the FAA rules," Balough said.  "For Skypan, it allows them to continue operations with no finding of a past violation.”

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Balough Law Offices, LLC U.S. Federal Aviation Administration

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