DOT Implements New Legal Paradigm for Regulating Airlines |

DOT Implements New Legal Paradigm for Regulating Airlines | Cozen O'Connor


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The U.S. Department of Transportation (DOT) recently issued new regulations codifying specific criteria for interpreting its fundamental regulatory authority under 49 U.S.C. section 41712 to prohibit airlines from engaging in “unfair or deceptive practices.”  DOT’s purpose in adopting these regulations is to provide “greater clarity and certainty about [DOT’s] interpretation of unfair or deceptive practices and process for making such determinations in the context of aviation consumer protection rulemaking and enforcement actions.”  DOT Final Rule at 78707.  DOT’s new regulations become effective on January 6, 2021.
Although DOT has enjoyed the statutory authority at issue in this proceeding since the early 1980s, this is the first time that DOT has formally articulated how it interprets the terms “unfair” and “deceptive.”  This is important because DOT has relied on this statutory authority as the legal basis for adopting a broad swath of regulations and pursuing hundreds of enforcement actions against airlines, yet the statute does not define the terms “unfair” and “deceptive” and, until now, neither has DOT.  For decades, DOT essentially has decided whether airlines have engaged in an “unfair or deceptive practice” by applying Justice Potter Stewart’s notorious definition of pornography: they know it when they see it.  Airlines have long chafed at such a subjective approach, arguing that DOT has adopted a multitude of rules and pursued enforcement actions without identifying objective evidence of unfairness or deception or specifying how DOT interprets those statutory terms.    

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