Drones are a hidden risk for business

Business moves fast, and the platform that worked yesterday just doesn't seem to be working to attract the customers you want today. So to stand out, you decide to use a drone to create a more dramatic view of your operations.

A friend mentions he has a friend who is a drone operator who can create exciting video and photos of your facilities and operations. You're intrigued, because you've seen some real estate organizations create dramatic video tours of property. You plan to use the film on your business blog, in YouTube promos, and in your company's next television commercial. With the dramatic in mind, you and your team plan out every detail of your shoot, and you schedule it.

The big day arrives. You've hired, planned, and instructed the drone operator on all of the key elements and you'll be on hand to direct this epic production.

Your facilities are near a busy street with auto traffic and pedestrians. In addition, there are a number of other buildings within close proximity. But you're assured by the drone operator that nothing has ever gone wrong.

About ten minutes into the shoot the unthinkable happens: The drone careens off a nearby building and plummets toward traffic. A driver sees the drone's impending impact, swerves violently (but too late) to avoid the drone's smash into the windshield and the car crashes into two unsuspecting pedestrians on the sidewalk.

The call to 911 is followed by sirens, ambulances and police. Not long after, a detective arrives to inquire about your hire of the drone operator. Now what?

The reality of the current regulatory environment soon sets in. Along with the meteoric increase in drone sales and use have come the inevitable increase in drone-related accidents. Not just "if" but "when" seems to be on the mind of the Federal Aviation Administration, which is charged with regulating all 'airspace' in the United States. Drones are technically "aircraft" under Idaho and federal law, and subject to FAA regulation.

FAA regulates drones under its rules, which have the same legal effect as laws. Commercial operations must have a Section 333 exemption to operate legally. The FAA defines commercial operations very broadly, and include any use of the drone for profit, including the use of any photo or video taken to be used for any purpose in any profit seeking manner. Electronic media posted on the internet may be used as evidence of a violation.

If the drone operator in our example does not have a Section 333 exemption, the operation of the drone is illegal. Even with a Section 333 exemption, certain operations may be illegal as the FAA prohibits operations within 500 feet of any "nonparticipating person, vessel, vehicle, or structure," creating other potential bases for 'illegal' operation. Further, a drone may not be operated within a 5-mile radius of any airport without appropriate authorization. An 'airport' can and does include, for example, hospital landing zones or other FAA authorized landing zones in addition to commercial and private airports.

The question then becomes; what potential liability exists for our entrepreneur/owner/business for their role in this tragedy? Under either a negligence or strict liability standard (violation of the law) the drone operator clearly faces liability.

Although we've yet to have a case under Idaho law, general legal principles provide insight to the prospect of legal liability for the business. As a general rule, under the doctrine of respondeat superior, principals are liable for the acts of their agents. The existence of this principal-agency relationship (business hires and directs drone operator) will be a question of fact for the judge or jury to decide.

The law provides a principal-agent relationship exists where there is mutual assent, benefit, and control. It doesn't take much to find these elements in the facts of our example. In addition, under Idaho law there appears to be a basis for liability for more than just negligence. Idaho law has provisions which can be read to include civil and criminal trespass for intrusion and activity on 'property' which can include the private airspace above real property.

Business success today must include management of risk. Risk management begins with knowing the potential risk. Drone photography and video can indeed provide spectacular results. Managing the risk by engaging properly licensed operators who understand and follow the rules is key. Absent effective risk management, even the best laid plans may bring unwanted exposure to your business.


Kim Trout is managing member at Trout Law PLLC, and his law practice is focused on, business risk management, real property issues, commercial litigation in real property, business and construction.

Published: Wed, Jun 01, 2016