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Legal Waypoints

Legal Waypoints for hiring a Drone

“Wouldn’t it be great if we could get a drone to take a photo or video of our [you fill in the blank: construction project; outdoor wedding; home for sale; public concert; football game; cell tower; farm field …].”  A quick search online finds several local drone operators claiming they are ready, willing, and able to meet your needs.  Sounds easy enough, but here are some questions you should be asking before you hire a drone operator:

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Cyber Risk – Are your crown jewels safe?

Question #1: How long would it take for someone to download critical data from a repair station computer onto a small thumb drive, put it in their pocket, and walk right out the door?  Best guess for even a novice hack – probably a minute or less.

Question #2: How long would it take to detect the incident, or even investigate the scope of the loss?  Probably days of IT, legal and management time and effort – if you even notice the breach at all.

Question #3: How long will it take to recover from this type of incident?  Getting back to normal will likely take months and the damages could accrue for years into the future.

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FAA streamlines UAS flight – bridge to new rules

Life for UAS operators just got a bit easier.  The FAA has issued a bridge between the current cumbersome system of Section 333 exemptions with airspace block specific Certificates of Authority (COAs) and the eventual final form of the recently released “new rules” that are still in the comment period.

The interim policy does not tract the technical parameters of the proposed new rules.  Instead the bridge seeks to grant a blanket COA for UAS operators who have a valid exemption under Section 333 so that the operator no longer needs an individual COA for a specific block of airspace.  The blanket COA will have more restrictive technical parameters than the proposed new rules.

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FAA’s Proposed UAS Rules – a missed opportunity.

The FAA issued the much awaited Notice of Proposed Rulemaking on Operation and Certification of Small Unmanned Aircraft Systems on February 15, 2015.  The proposed rules are described by the trade associations and other industry commentators as “flexible”, “a good first step”, and “lenient”.  This is mostly good news for those seeking to use drones in a commercial setting – keeping in mind the rules are just proposed at this time and are not currently in force.  Today you still cannot fly a drone for commercial use without an FAA exemption.  So far the FAA has granted only 24 Section 333 exemptions from a total of 342 application requests.

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PRODUCT RECALL – how would you survive?

“We need to do a product recall.” Whether you are a large OEM, or one of its Tier 1 or lower suppliers, the words “product recall”, signal an unexpected and often uncontrollable liability exposure. For the OEM this exposure is comprised of the direct cost of the recall plus the loss of company goodwill, loss of use of the product by upset end-users, and perhaps a precipitating traditional bodily injury or property damage claim. Product recalls are a significant financial risk for all OEM’s – witness the recent flurry of automaker recalls. For the supplier who provided a defective part or component, the results can be more devastating. Typically there is just not enough profit margin in the supply of a part or component to cover the risks of a recall. Unlike a standard warranty claim remedy, the supplier not only has the obligation to repair or replace the defective part or component, but will likely be saddled with the costs of removal and reinstallation plus the other direct and indirect recall costs incurred by the OEM and end-user. This exposure could be a terminal financial blow for many part and component manufacturers.

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Website Content Not Mere Puffery – Case Study

Your new company website looks great. The Marketing Department staff is thrilled with the content. The VP of Sales is happy with the “look and feel” and improved functionality. The word comes down from senior management – “go live”. Now fast forward to a time after a customer suffers a loss and seeks to recover its damages. Guess what “content” is front and center in the customer’s suit against the company? Right – text from the new website that among other things states that the company “has instituted the most stringent safety standards.”

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Accountable Manager – 14 CFR part 145

Acting in an official capacity on behalf of a certificated repair station is a serious matter.  Improper use of authority can result in violations of the law that risk assessments of civil and/or criminal penalties – notwithstanding the real possibility that aviation safety may be compromised in the process.  Understanding the sources and limits on your authority can aid in reducing the chance for unintended violations. Take a few minutes to check your authority and refresh your understanding of your role and obligations.

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Voluntary Disclosure – GoJet v. FAA Case Study

Proper aircraft maintenance requires attention to detail.  It is essential not only in the actual performance of tasks but in the associated records.  Checklists and other entries are part of an approved system of checks and balances to ensure that the work performed is compliant with the approved maintenance procedures.  This system drives all its participants toward decreasing non-conformities that impact airworthiness.  So what happens when despite all the checklists and sign-offs a step in the maintenance procedure goes missing?  The answer depends on who finds the error and how they choose to respond to it.

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Indemnification – the “I” word.

We all know indemnification provisions when we see them – those long, complex provisions that seek to allocate risk among parties to a contract.  We have a general appreciation for the indemnification concept – shifting responsibility for a loss from one person to another and compensating someone for a loss already sustained.  But a general appreciation for a concept doesn’t help us much when it comes time to read, interpret and negotiate the details of these complex and often poorly drafted provisions.  If we are going to do a better job of managing our contractual risks then we need to understand why these provisions seem so much more difficult to deal with than other aspects of most contracts.

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Business Teaming – turning trust into credibility

Today’s business world is a landscape of ever increasing competition and complexity.  Few organizations can gather and maintain all the resources they would like to have at their disposal as they pursue and execute new work.  In most industries this challenging reality is often overcome by taking advantage of strong teaming relationships between businesses.  Solid business teaming arrangements can be a solution to meeting your business goals.

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