DOT ISSUES FINAL RULE DEFINING UNFAIR OR DECEPTIVE PRACTICES
December 1, 2020
On November 27, 2020, the U.S. Department of Transportation (“DOT” or “Department”) issued a final rule, available here, codifying the longstanding definitions of “unfair” and “deceptive” practices, and making other substantive changes, with regard to the Department’s aviation consumer protection regulations. The rule is intended to “provide regulated entities and other stakeholders with greater clarity and certainty about the Department’s interpretation of unfair or deceptive practices and the Department’s process for making such determinations in the context of aviation consumer protection rulemaking and enforcement actions.” Under the final rule:
- A practice is “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;
- A practice is “deceptive” to consumers if it is likely to mislead a consumer, acting reasonably under the circumstances, with respect to a material matter. A matter is material if it is likely to have affected the consumer’s conduct or decision with respect to a product or service;
- Proof of intent is not necessary to establish unfairness or deception;
- For future discretionary rulemakings, if the Department proposes that a practice is unfair or deceptive, and the rulemaking raises scientific, technical, economic, or other factual issues that are genuinely in dispute, then interested parties may request an evidentiary hearing to gather evidence on those disputed issues of fact;
- Before DOT determines how to resolve a matter involving a potential unfair or deceptive practice, DOT must provide an informal opportunity for the alleged violator to be heard and to present relevant evidence in its defense; and
- When DOT issues a consent order declaring that a practice is unfair or deceptive, and no specific regulation specifically applies to the conduct at issue, DOT must explain the basis for finding that the conduct was unfair or deceptive, using the definitions set forth in the rule;
The rule will become effective on December 27, 2020.
If you have any questions, please contact Evelyn Sahr (esahr@eckertseamans.com or 202-659-6622); Drew Derco (dderco@eckertseamans.com or 202-659-6665), or Andy Orr (aorr@eckertsemans.com or 202-659-6625).
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