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33 Air & Space Law. 1 (2020)

handle is hein.journals/airspaclaw33 and id is 1 raw text is: 



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AMERICAN BAR ASSOCIATION


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VOLUME 33,   NUMBER 1, 2020


Why DOT Should Interpret Deceptive

Practices Using a Reasonable

Consumer Standard


By David  Heffernan and  Brian Doll


                   The U.S. Department of Transpor-
                   tation's (DOT's) primary source of
                   statutory authority to regulate air-
                   line consumer practices derives
                   from section 411 of the Federal
                   Aviation Act (codified at 49 U.S.C.
                   § 41712), which prohibits air carri-
                   ers and ticket agents from engaging
                   in unfair or deceptive practices
and unfair methods of competition. DOT frequently
cites section 41712, particularly its prohibition of decep-
tive practices, as primary (and often exclusive) statutory
authority for a wide range of regulations and enforcement
actions.1 Although DOT has enjoyed this authority since
Congress deregulated the domestic airline industry in the
late 1970s and early 1980s, DOT has never conducted a
rulemaking to interpret the term unfair or deceptive prac-
tices. That will change: DOT has initiated a rulemaking to
define the phrase 'unfair or deceptive practices.'2
   DOT  and the courts have recognized that section
41712 is modeled on the Federal Trade Commission's
(FTC's) substantively identical authority under section
5 of the Federal Trade Commission Act.3 Neither sec-
tion 41712 nor section 5 defines the terms unfair and
deceptive. Unlike DOT, however, the FTC has pub-
lished detailed formal interpretations of unfairness
and deception, including multipart tests that require
objective evidence (not merely the subjective judgment
of a regulator) to support a finding of a violation. DOT
now  has proposed to codify those FTC definitions of
unfairness and deception in DOT's regulations.4
   The FTC defines deception by relying on a


reasonable consumer standard. The FTC does not reg-
ulate to protect the uninformed consumer, but, rather,
assumes that consumers have a minimal obligation to
seek out available information before making a purchase
decision and should not expect the government to pro-
tect them if they fail to do so and are unhappy with their
purchase. If, however, a vendor (whether by represen-
tation or omission) actually and materially misleads (or
engages in conduct that is likely to mislead) consumers
who  have taken reasonable steps to inform themselves,
the FTC may deem  such conduct to be a deceptive
practice. The FTC's rationale is that such deceptive con-
duct distorts the information available to the reasonable
consumer, and it therefore may be appropriate for the
government to intervene in the marketplace to prohibit
the conduct when the deception is material and reason-
able consumers were actually deceived.
   DOT's proposed definition of deception follows
the FTC's lead by relying on a reasonable consumer
standard. DOT's proposal, however, does not explain
how  to interpret the standard. This article addresses
that issue. It begins by explaining how the FTC, in
applying its test for deception, determines what con-
stitutes reasonable consumer behavior. Next, the
article examines how DOT  has at times strayed from
a reasonable consumer point of reference toward a
more  expansive approach to regulation and enforce-
ment. Finally, the article concludes that DOT should
adopt the FTC's test for deception (as DOT has pro-
posed) and, in doing so, rely solely on a reasonable
consumer  standard.
                                continued on page 8


Published in The Air & Space Lawyer, Volume 33, Number 1, 2020. © 2020 by the American Bar Association. Reproduced with permission. All rights reserved. This information or any portion
thereof may not be copied or disseminated in any form or by any means or stored in an electronic database or retrieval system without the express written consent of the American Bar Association.

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