In short, the decision reads, despite the fact that FMRA bars any promulgation of new rules or regulations for model aircraft, the 2015 registration rule is, in the FAA's own words, a "rule or regulation regarding a model aircraft".
"The FAA put registration and operational regulations in place to ensure that drones are operated in a way that is safe and does not pose security and privacy threats", the statement said. Failing to do so could land an operator in prison for up to three years with a maximum criminal penalty of $250,000.
"Statutory interpretation does not get much simpler", the appeals court said in siding with plaintiff John Taylor, a drone hobbyist from Washington, DC.
The FAA also declined to say whether it plans to return the $5 that almost 700,000 people have paid to the administration to register their drones-that's roughly $3.5 million.
"I started thinking, it's not going to accomplish what they say they're going to accomplish - the safety benefits are not there", Taylor said in an interview in February, shortly before he argued his case.
'We are in the process of considering our options and response to the decision, ' it said.
The FAA responded to the ruling on Friday by saying that it would review the decision before determining its next step, if any.More news: Donald Trump interviews four candidates for post of FBI Director
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The Association for Unmanned Vehicle Systems International is similarly disappointed in the ruling.
China-based DJI, now the world's biggest drone manufacturer, applauded the FAA's work to create the drone registration system.
There's a chance the FAA will appeal the decision, but others suspect Congress may step in and clarify the FAA's authority to pass laws about the use of model aircraft.
"The goal of the registration rule was to assist law enforcement and others to enforce the law against unauthorized drone flights, and to educate hobbyists that a drone is not just a toy and operators need to follow the rules", said Lisa Ellman, an attorney and specialist on the drone regulation with the law firm Hogan Lovells.
"In short, the Registration Rule is a rule regarding model aircraft", he said.
While the FAA can continue with its research - which will presumably be used to inform future drone policy decisions - all new rules on how hobbyist drone owners are allowed to fly will have to wait for clarification about the FAA's authority to regulate. For example, drone pilots still have to deal with restricted no-fly zones that include Disney theme parks, big events such as the Super Bowl, and the area around Washington, D.C. Today, that court ruled in his favor.