Procedures in Regulating and Enforcing Unfair or Deceptive Practices

DEPARTMENT OF TRANSPORTATION <SUBAGY>Office of the Secretary of Transportation</SUBAGY> <CFR>14 CFR Part 399</CFR> <DEPDOC>[DOT-OST-2025-0633]</DEPDOC> <RIN>RIN 2105-AF38</RIN> <SUBJECT>Procedures in Regulating and Enforcing Unfair or Deceptive Practices</SUBJECT> <HD SOURCE="HED">AGENCY:</HD> Office of the Secretary of Transportation (OST), U.S. Department of Transportation (DOT or Department). <HD SOURCE="HED">ACTION:</HD> Notice of Proposed Rulemaking (NPRM). <SUM> <HD SOURCE="HED">SUMMARY:</HD> The Department proposes to reinstate the hearing procedures used when conducting a discretionary rulemaking action under its authority to regulate unfair or deceptive practices in air transportation or the sale of air transportation. This notice of proposed rulemaking (NPRM) also seeks comment on the rescission of a final rule published by the Department. </SUM> <EFFDATE> <HD SOURCE="HED">DATES:</HD> Comments must be received by December 1, 2025. To the extent practicable, DOT will consider late-filed comments. </EFFDATE> <HD SOURCE="HED">ADDRESSES:</HD> You may submit comments by any of the following methods (please choose only one of the ways listed): • <E T="03">Federal Rulemaking Portal: http://www.regulations.gov.</E> Follow the online instructions for submitting comments. • <E T="03">Mail:</E> Docket Management System; U.S. Department of Transportation, Docket Operations, M-30, Ground Floor, Room W12-140, 1200 New Jersey Avenue SE, Washington, DC 20590-0001. Mailed comments must be received by the close of the comment period. • <E T="03">Hand Delivery:</E> U.S. Department of Transportation, Docket Operations, M-30, Ground Floor, Room W12-140, 1200 New Jersey Avenue SE, Washington, DC 20590-0001 between 9:00 a.m. and 5:00 p.m., Monday through Friday, except Federal holidays. <E T="03">Instructions:</E> You must include the agency name and docket number (DOT-OST-2025-0633) or the Regulation Identifier Number (RIN) for the rulemaking at the beginning of your comment. All comments received will be posted to <E T="03">https://www.regulations.gov,</E> including any personal information provided. <E T="03">Privacy Act:</E> Anyone can search the comments received in any of our dockets by the name of the individual submitting the comment (or signing the comment, if submitted on behalf of an association, business, labor union, etc.). For information on DOT's compliance with the Privacy Act, visit <E T="03">https://www.transportation.gov/privacy.</E> <E T="03">Docket:</E> For access to the docket to read background documents and comments received, go to <E T="03">https://www.regulations.gov</E> or to the street address listed above. Follow the online instructions for accessing the docket. Do not include any personally identifiable information (such as name, address, or other contact information) or confidential business information that you do not want publicly disclosed. All comments are public records; they are publicly displayed exactly as received, and will not be deleted, modified, or redacted. Comments may be submitted anonymously. Follow the search instructions on <E T="03">https://www.regulations.gov</E> to view public comments. <FURINF> <HD SOURCE="HED">FOR FURTHER INFORMATION CONTACT:</HD> Robert Gorman, Beth Brodsky, or Blane Workie, Office of Aviation Consumer Protection, U.S. Department of Transportation, 1200 New Jersey Ave. SE, Washington, DC 20590; 202-366-9342; 202-366-7152 (fax); <E T="03">robert.gorman@dot.gov, beth.brodsky@dot.gov,</E> or <E T="03">blane.workie@dot.gov</E> (email). </FURINF> <SUPLINF> <HD SOURCE="HED">SUPPLEMENTARY INFORMATION:</HD> <HD SOURCE="HD1">I. Rulemaking Background</HD> <HD SOURCE="HD2">A. The Department's Unfair or Deceptive Practices Statute</HD> The Department has authority under 49 U.S.C. 41712 (Section 41712) to investigate and decide whether an air carrier, foreign air carrier, or ticket agent has been or is engaged in an unfair or deceptive practice in air transportation or the sale of air transportation. Under Section 41712, after notice and an opportunity for a hearing, the Department has authority to order the air carrier, foreign air carrier, or ticket agent to stop the unfair or deceptive practice. On its face, Section 41712 provides adjudicatory authority to the Department to issue case-by-case orders to stop a particular practice. The Department can issue regulations to declare a practice to be unfair or deceptive under Section 41712 using rulemaking authority found in 49 U.S.C. 40113 (Section 40113), which states that the Department may take action, including prescribing regulations, it considers necessary to carry out Part A of Subtitle VII of Title 49 of the U.S. Code, which includes Section 41712. The Department's authority to issue regulations under Section 41712 is limited to declaring a practice to be unfair or deceptive after notice and an opportunity for a hearing. The Department's rulemaking authority under Section 41712 does not extend beyond that application. Pursuant to another statute, 49 U.S.C. 46301, the Department has authority to issue civil penalties for violations of Section 41712 or for any regulation or order issued under the authority of Section 41712. To avoid misapplication of legal authority under Section 41712, the Department offers additional clarification. When Congress has provided the Department with explicit rulemaking authority outside of Section 41712 or Section 40113, then the Department follows that direction. However, when Congress has not provided the Department with explicit rulemaking authority, and the Department seeks to declare a practice to be unfair or deceptive, the following procedures must be followed: 1. <E T="03">Enforcement:</E> The Department may investigate an air carrier, foreign air carrier, or ticket agent to determine whether that individual air carrier, foreign air carrier, or ticket agent is engaged in an unfair or deceptive practice in air transportation or the sale of air transportation. The Department must use the definitions of unfair or deceptive, and the procedures proposed in this rulemaking, to declare the practice to be unfair or deceptive. If, after notice and an opportunity for a hearing, the Department finds the practice to be unfair or deceptive, the Department may order the air carrier, foreign air carrier, or ticket agent to stop the practice. The Department may issue civil penalties, as appropriate. 2. <E T="03">Rulemaking:</E> Trivial or speculative harms are insufficient to initiate a rulemaking. The Department may initiate a rulemaking only if it has evidence to suggest that an unfair or deceptive practice may be occurring. The Department investigates the practice, gathers data, and formulates a body of evidence demonstrating that a problem exists in the market. The Department issues a notice of proposed rulemaking using the definitions and procedures proposed in this rulemaking, to declare the practice to be unfair or deceptive. If, after notice and an opportunity for a hearing, the Department finds that the practice is unfair or deceptive, the Department may issue a final rule declaring what the unfair or deceptive practice is. After the final rule is effective, the Department may take enforcement action against an air carrier, foreign air carrier, or ticket agent for violation of the regulation following the enforcement procedures proposed in this rulemaking. The Department is analyzing its past use of Section 41712 under the direction of Executive Order 14219, “Ensuring Lawful Governance and Implementing the President's `Department of Government Efficiency' Deregulatory Initiative” (February 19, 2025). This Executive Order instructs the executive branch to direct its enforcement resources to regulations squarely authorized by constitutional Federal statutes, and it requires the Department to review its regulations to identify those that are based on anything other than the best reading of its underlying statutory authority. The Department finds that the best reading of its statutory authorities allows the Department first to investigate and then to declare a practice to be unfair or deceptive following the procedures that would be codified in the regulation proposed today. The Department's rulemaking authority is therefore limited to a declaration of what is unfair or deceptive when supported by evidence after notice and an opportunity for a hearing. This best reading of the statute is consistent with longstanding principles found in Executive Order 12866, as well as DOT Order 2100.6B, which both contemplate that regulations be supported by statutory authority, and direct the Department to consider whether a specific problem exists that must be addressed through rulemaking. Speculative harms do not support a need to regulate, nor do strained or unduly broad readings of statutory authorities. <HD SOURCE="HD2">B. The Department's 2020 Hearing Provisions for Discretionary Aviation Consumer Protection Rulemakings and Subsequent Revisions to the Procedures in 2022</HD> On December 20, 2020, the Department published in the <E T="04">Federal Register</E> a final rule titled: “Defining Unfair or Deceptive Practices” (2020 UDP Rule). <SU>1</SU> <FTREF/> The 2020 UDP Rule was intended to provide regulated entities and other stakeholders with greater clarity about the Department's enforcement and regulatory processes with respect to aviation consumer protection actions under Section 41712. Among other things, it set forth procedures the Department would use when conducting future discretionary rulemaking actions under the authority of Section 41712. Those procedures were revised meaningfully by a final rule the Department published on February 2, 2022 titled: “Procedures in Regulating Unfair or Deceptive Practices” (2022 UDP Rule). < ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━ Preview showing 10k of 45k characters. Full document text is stored and available for version comparison. ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━