After defeats in court over airline passenger rules and attempts to stretch the bounds of their authority, the Department of Transportation is changing tactics. They’re deliberately slowing down rulemaking—aiming to craft tougher, legally durable consumer protections that airlines can’t easily challenge. A new proposed rule explains how.
The Department of Transportation has a broad mandate to (1) ensure safe and efficient air transportation, and (2) regulate ‘unfair and deceptive practices’. When airline regulations are put forward, they generally rely on this mandate.
The Biden administration took the position that ‘unfair and deceptive’ means ‘any practice we don’t like’. For instance,
- They proposed a rule to force airlines to compensate passengers for delays. This isn’t provided for by Congress. They didn’t pass legislation for it, even when they controlled both the Senate and the House. Instead, they sought a regulation which effectively argues not compensating passengers is unfair and deceptive.
- They also finalized a rule to require all sellers of tickets to display prices including fees for baggage, changes, and cancellations upfront at the first instance where itineraries and fares were displayed. The U.S. Court of Appeals for the Fifth Circuit blocked the rule – not saying it went beyond DOT authority, but because the analysis they used to justify the costs and benefits of the rule was highly flawed.
The Trump administration, in 2020, tried to create objective standards for DOT rules.
- It locked in specific legal definitions, along the lines of what the Federal Trade Commission uses.
- “Unfair” – a practice that causes or is likely to cause substantial injury, which consumers can’t reasonably avoid, and which isn’t outweighed by benefits to consumers or competition.
- “Deceptive” – a practice that is likely to mislead a reasonable consumer about something material (important enough to affect their decision).
- Required DOT to use these definitions in all future consumer rules or enforcement cases. This meant they would have to play by fixed, FTC-like rules whenever calling something unfair or deceptive.
For rules that DOT proposed based on their broad authority, rather than mandated by Congress, the 2020 rule created a right to an evidentiary hearing if an interested party asked for one and met a threshold. There only had to be a “plausible” prima facie showing that the rule depended on disputed factual, economic, or technical issues; normal notice-and-comment wouldn’t test those issues well enough; and resolving those facts could change the costs/benefits of the rule.
If granted, DOT had to use a neutral hearing officer (not the rule’s own staff); allow testimony and a chance to question witnesses; have the officer issue proposed findings of fact; and put the whole hearing record into the rulemaking record. This gave airlines and others a relatively easy path to a mini-trial on disputed facts before DOT could finalize new consumer rules it proposed on its own authority.
Once the administration changed, DOT walked away from this approach as too unfriendly to new rulemakings. In 2022 they said that the hearing rules were “overly particularized” and could cause “unnecessary delay” in consumer rulemakings, and that they wanted more “flexibility” so that important consumer protections wouldn’t be “bogged down by overly prescriptive procedural constraints.” In addition, President Biden’s Executive Order 14036 directed DOT to revisit the definitions of “unfair” and “deceptive.”
They ultimately left the 2022 definitionsin place, but issued a detailed guidance document explaining how it interprets those terms in a more expansive, consumer-protective way (what counts as “substantial injury,” how likely “likely to cause” must be, etc.). Asking for a hearing required a “clear and convincing” showing that it would be in the “public interest.” And whereas the 2020 rule required a neutral officer and a chance to question presenters, the 2022 rule let DOT’s General Counsel appoint anyone they wanted. And it eliminated the right to cross-examine or present testimony. This was all labeled an internal procedural rule, skipping the normal notice and comment process.
Returning to the 2020 hearing process, with some adjustments, would mean:
- Airlines can get a hearing on the facts being used to justify a rule, with a neutral officer,
real evidence presentation, and a chance to question others’ experts. That is not a veto over consumer rules. But it constrains the ability of DOT to do whatever it wishes – they’re going to have to demonstrate they have the facts and economics right first. - Consumers will see that new rules take longer, but the ones that do make it through will be better, and less subject to legal challenge. Consumer groups will also be able to petition for hearings if they think DOT is being too industry-friendly.
- DOT will have more up front work, but face less vulnerability in their final rules.
Overall, the Department of Transportaiton is proposing a more court-proof, evidence-heavy structure for discretionary rules after a few years of trying a faster, more legally questionable ones.
Well, let’s get something done, for once, because major corporations are not going to ‘do the right thing’ by consumers on their own. We need a US-261 equivalent, yesterday. It should be bipartisan; Republicans, Democrats and unaffiliated voters all travel and get screwed by airlines. C’mon folks.
At what point does the Civil Aeronautics Board and subsequent route/fare regulation come back?
Your writing is difficult to understand. You miss words, which creates an incomplete sentence and much of what you write is disjointed. Please get someone to review your work before you post it.
And, Gary, let me be clear: I am not pleased with the so-called ‘Autopen’ (psh) or the corporate shills within his party who failed to adequately address this when they had the chance.
Members of both parties should have attached requirements for these new compensation rules along with the massive pandemic-era airline bailouts, which, sadly, those airlines then mostly used for stock-buybacks, while still forcing retirements and not really investing those funds in better things. Sure, that was a boost for executive compensation, Scott, Ed, and Bob all got their $30,000,000 pay those year(s), but the workers and passengers did not get much benefit from that otherwise.
So, if #47 wanted to do some actual good, he’d ignore the airline lobby, and actually get a ‘win’ for the people (with an actual ‘air passenger rights’ legislation including compensation for excessively delayed flight), but, seeing as he’s mostly in this for himself, and that he didn’t do it during his first administration, either, I highly doubt much will happen anytime soon. I’ll keep advocating for it, regardless.
Other than inadequate air traffic control capacity (not coincidentally administered by the government) the US airline industry functions quite well these days. Having been to over 100 countries, flying into most of them, I can assure you the grass is not greener elsewhere. Most foreign airlines are frankly a pain in the butt to deal with, especially if things go wrong.The idea that more government “consumer” regulation is somehow going to make this experience better or more affordable is foolish. The current level of competition in the US airline industry is healthy, and leaving well enough alone is the smart move.
I worry that, perhaps, the current administration is not exactly aligned to protect consumers’ interests. You present your argument in a way that suggests we are going to see more robust, even-handed rules here, but this greatly overlooks the overturning of “Chevron deference” – a goal of the conservative and pro-business lobby for decades.
In short, courts no longer have to defer as much to agency rules (yes, the doctrine referred to interpretations of ambiguous laws, but whether something is ambiguous is up to the court construing it (and the agency’s rule)) . Thus, these “robust” new rules are – at best – for show, and are potentially not going to become rules at all, since we’re slow-walking it now.
I just ask that maybe a reasonable amount of skepticism should accompany these thoughts.
@Chopsticks — Having also been to about 100 countries, I respectfully disagree; the jurisdictions that have actual air passenger rights legislation (like the EU, UK, Canada, Mexico, Thailand, and elsewhere), while delays and cancellations are never ‘fun,’ the compensation is better than nothing (which is what we currently have, lest you consider United’s $20 voucher that expires in 24 hours sufficient.) The use of the word ‘competition’ is a go-to phrase from the airline lobby against improvements. For anyone who has experienced the difference between EU261 and our current system in the USA, they should know. We deserve better.
Not to the content of the article, but there are a few cases where the text seems to be garbled (e.g. “Consumers will see that new rules that longer” – I presume you meant “take longer”). You might want to re-proof this one.
We need legislation to compensate us when there’s a delay of more than one hour to see our doctor. If our restaurant meal is delayed more than 45 minutes, after we ordered it, it should be free. Also, if Amazon fails to deliver our packages when they promised, then we should receive a coupon for money off our next order.
Let’s get working on these “ideas” right now.
chopsticks is right.
Anyone that thinks that government fixes any problem is detached from market reality.
The US airline industry delivers operations as good as any country in the world – and moves far more passengers doing so.
Even w/ the ATC issues – which peaked during the government shutdown – the US airline industry has run and is running better than many countries.