Sept. 13, 2022
In response to comments from NBAA and others, the U.S. Department of Transportation (DOT) recently published guidance regarding unfair and deceptive practices after codifying the terms in 2020.
The guidance summarized the 2020 final rule on the matter, stating, ”DOT defined a practice as being unfair to consumers if ‘it causes or is likely to cause substantial injury, which is not reasonably avoidable, and the harm is not outweighed by benefits to consumers or competition.’ DOT defined a practice as being deceptive to consumers ‘if it is likely to mislead a consumer, acting reasonably under the circumstances, with respect to a material matter.’”
NBAA was generally supportive of the codification of “unfair” and “deceptive,” but in its comments to the 2020 notice of proposed rulemaking (NPRM), requested additional guidance to ensure the terms are applied consistently.
NBAA, in its response to the NPRM, said, “Codifying the terms ‘unfair’ and ‘deceptive,’ which involve virtually every DOT consumer protection rulemaking, and specifying that the definitions are to be used in consumer protection rulemakings, will help alleviate real and perceived unfairness inherent in a system often seen to be relying on ad hoc definitions and de facto rulemaking via enforcement action.”
Jason Maddux, principal at Garofalo Goerlich Hainbach PC and vice chair of NBAA’s Regulatory Issues Advisory Group, said this guidance should be helpful to the industry, especially since “unfair” and “deceptive” have traditionally been applied subjectively.
“Any clarification of these terms and how they’ll be applied in future cases is good for the industry,” said Maddux. “For years, this has been a very subjective issue. Clear guidance is especially important because unlike the FAA and other agencies which publish civil penalties guidelines for violations, the DOT doesn’t have published civil penalties guidelines; so industry is left with only the statutory maximum civil penalty amounts for violations to go on.”
Maddux added the new guidance should lead to more consistent application of the terms and could result in fewer violations.
Further, this guidance doesn’t create any new obligations for the industry, Maddux explained.
The new guidance is a result of Executive Order 14036 “Promoting Competition in the American Economy.” That order directed the DOT to take a number of actions to protect aviation consumers, including that the department start development of proposed amendments to its definitions of the terms “unfair” and “deceptive.”