According to Politico.com: "NTSB Administrative Law Judge Patrick Geraghty ruled Thursday that the policy notices the FAA issued as a basis for the ban weren’t enforceable because they hadn’t been written as part of a formal rulemaking process."
The case of course is the case against "Trappy" (Raphael Pirker that we've been following for months.
Congratulations to Brendan Schulman Trappy's lawyer. Brendan's comment is: "This is a victory for technology, in my opinion."
According to the Politico article the FAA can appeal the decision to the DC US Court of Appeals or it could issue an emergency rule banning small drone use.
Update Mar 7, 2014: Peter Sachs interpretation of the ruling at DroneLawJournal.com (Peter is a lawyer) is:
Right now, you may legally operate a remote-controlled model aircraft in any manner you choose whether for pleasure or for profit. You are not subject to any federal aviation regulations. If you wish to make Advisory Circular 91-57 your “self-imposed law,” that’s perfectly fine and not a bad idea, but legally you are not required to do so. Use commonsense and operate with safety in mind and you should be fine.
Remember, this will change in the future. Once the FAA does promulgate regulations, as it is required to do under the FMRA of 2012, RCMA operated commercially will not fall under the hobbyist (Section 336) exception.
Update Mar 7, 2014: Oops... hold one there folks. The FAA has appealed yesterdays decision to dismiss. According to faa.gov:
The FAA is appealing the decision of an NTSB Administrative Law Judge to the full National Transportation Safety Board, which has the effect of staying the decision until the Board rules. The agency is concerned that this decision could impact the safe operation of the national airspace system and the safety of people and property on the ground.
Update Mar 9, 2014:
Here is mashable.com article which has a statement from Raphael Pirker.