Executive - OMB Review,  Judicial Review & Remedies,  Regulatory Process

Monday Morning Regulatory Review – 2/22/16: Drone Litigation; COOL Removal & Passenger Screening

A holiday-shortened week in regulatory practice found new challenges to drone regulations highlighting some of the peculiarities of regulations attempting to catch up with reality. The demise of authority for country of origin labeling regulations caused its originating agency to submit a new rule for interagency and executive review. Completing review of passenger screening rules may, on the other hand, end litigation.

Drone Litigation: Several parties commenced litigation challenging the Department of Transportation (DOT) Federal Aviation Administration (FAA) Registration and Marking Requirements for Small Unmanned Aircraft (sAUS or drone) rule over the past few weeks. TechFreedom v. FAA, D.C. Cir. No. 16-1062, for example, suggests in its petition for review (PFR) that the rule violates statutory limitations, requires the registration of persons rather than aircraft in violation of statute, and was improperly promulgated as an interim final rule (IFR) without good cause for bypassing advance notice and an opportunity for public comment under the Administrative Procedure Act (APA). Some petitioners have sought preliminary relief (summarily denied without response) and summary disposition.

► The issues presented are entirely too complex for summary disposition and the Clerk of Court has consolidated the relevant cases. Full briefing will be worth watching at least in part because of the complexity of the relationship between FAA’s good cause argument in the IFR and its previously published proposed rule. A fuller explication of at least the parties’ perceptions of the issues must await filing of the briefs. The reality of the FAA’s February 19, 2016, registration deadline for the current drone population may be less than expected on multiple fronts. The FAA stated on February 16 that over 342,000 registrations had been filed, but that seems far short of industry expectations for sales over the past holiday season alone. At the same time, do not expect the FAA to sweep the skies with civil penalties of up to $27,500 or seek many indictments leading to criminal fines of up to $250,000 and ; imprisonment for up to three years. Realities are slightly more difficult than the law suggests.

As an interesting sidebar, in Boggs v. Merideth, a drone owner has filed a complaint (complete with pictures) in the United States District Court for the Western District of Kentucky against a real property owner who shot down plaintiff’s drone with a shotgun. Plaintiff contends that he was flying his “aircraft” at “an altitude of approximately 200 feet above ground level” (AGL) within Class G airspace and was neither trespassing nor invading anyone’s privacy. Plaintiff argues that declaratory relief “necessarily require[s] resolution of [] substantial question[s] of federal law, to wit, the boundaries of the airspace surrounding real property, the reasonable expectation of privacy as viewed from the air, and the right to damage or destroy an aircraft in-flight, in relation to the exclusive federal regulation and protection of air safety, air navigation, and control over the national airspace.” The same questions are raised within the contours of the proposed and interim final rules, and may be resolved, at least in part, in an FAA final rule. Plaintiff’s altitude claims raise the interesting question that doubtless will be resolved in discovery: what load was in that shotgun?

COOL Removal: The Department of Agriculture (DOA) recently submitted a final Removal of Mandatory Country of Origin Labeling Requirements for Beef and Pork Muscle Cuts, Ground Beef, and Ground Pork to the Office of Management and Budget (OMB) for interagency and executive review. The rule follows the repeal of the underlying statutory authority in light of a World Trade Organization decision that the program was discriminatory and permitting Canada and Mexico to impose retaliatory customs duties. OMB lists the rule as economically significant and without a legal deadline.

► The removal of the rule eliminates a substantial amount of previously claimed economic benefits and costs, but likely not the precise economic benefits and costs ascribed to the promulgation of the rule. Some benefits of the original rule have undoubtedly already been achieved, just as some costs have already been expended and are unrecoverable. Removal because of a repeal of the underlying statute poses a rather unique analytical challenge that will make for interesting reading when completed. One question worth asking is whether the agencies will include the costs of litigating the efficacy of the rule before the United States District Court and the United States Court of Appeals for the District of Columbia Circuit – both private (and how they ascertain those costs) and by the agencies and the Department of Justice (DOJ). Look forward to a unique benefit / cost analysis.

The rule is also listed as a final rule – not a proposed rule for notice and comment under the APA. The final rule designation likely signals that DOA and, at least initially, OMB believe that DOA has no discretion in removing the regulations after repeal.

Passenger Screening: OMB completed review of the Department of Homeland Security (DHS) Transportation Security Administration (TSA) Passenger Screening Using Advanced Imaging Technology last Thursday, but do not expect any noticeable change in airport screening. In prior episodes of this saga, the D.C. Circuit held, in Electronic Privacy Information Center v. DHS, that TSA violated the APA by not promulgating regulations on the use of advanced imaging technology (AIT) in airport primary passenger screening. TSA proposed a rule in 2013, and the original petitioners sought and were granted mandamus commanding TSA to produce a schedule for finalization of the rule.

► The economic significance and much of the rule is “past tense” – TSA is catching up with the legal requirements that it avoided or evaded. Oddly without deadline, whereas Department of Justice (DOJ) advised the D.C. Circuit that barring unforeseen circumstances the final rule would be published by March 3, 2016, which is now likely to occur, mooting the point.

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