[co-author: Stephanie Kozol]*

The U.S. Department of Transportation (DOT) recently announced an Airline Passenger Protection Partnership with state attorneys general (AGs), marking a significant expansion of AGs’ regulatory reach. This partnership, formed in response to growing frustration among AGs over their limited ability to investigate passenger complaints and enforce state consumer protection laws against airlines, empowers AGs to investigate complaints against airlines and grants them access to complaints filed directly by consumers with the DOT.

The Expanded AG Authority

Traditionally, because the DOT is the primary regulator of the airline industry, federal preemption has shielded the airline industry from AG regulatory scrutiny. This preemption prevents state and local governments and private parties from bringing claims under state consumer protection statutes or other state laws “related to a price, route, or service of an air carrier.” 49 U.S.C. § 41713(b). This has historically limited the AGs’ ability to investigate consumer complaints against airlines.

However, with the new partnership, 18 AGs have signed a memorandum of understanding (MOU) with the DOT, with seven more expressing interest in joining. The MOU encourages AGs to investigate consumer complaints about airlines and travel agencies, and effectively deputizes the AGs to make a preliminary determination as to whether the complaints indicate a potential violation of federal aviation consumer protection laws enforced by the DOT.

Our State AG team has been monitoring AGs’ desire to become active in the airline industry for quite some time. In August 2022, 39 state and territorial AGs and the National Association of Attorneys General sent a letter to Congress asserting that there is a “vacuum of oversight” over the airline industry. Accordingly, they “urge[d] Congress to take meaningful action and pass legislation that would authorize state attorneys general to enforce our state and federal consumer protection laws governing the airline industry.” Given this history, it is reasonable to expect that the AGs fully intend to take advantage of their newly vested authority in the airline space.

Implications for Airlines

Airlines should brace themselves for an influx of consumer complaints and proceed with caution in responding to those complaints. Connecticut AG William Tong deemed the MOU “a powerful breakthrough” that “explicitly authorizes attorneys general to participate in the enforcement of federal airline consumer protection laws.” And North Carolina AG Josh Stein had this to say about the partnership: “This partnership with the U.S. Department of Transportation authorizes my office to better protect North Carolina air travelers when they run into issues. I am grateful to the U.S. DOT for its commitment to protecting airline consumers.” The AGs are likely informing their constituents about their partnership with the DOT and inviting consumers to file complaints with their offices. As such, it is important for DOT-regulated entities to begin establishing and implementing consumer complaint structures.

Preparing for Increased Scrutiny

Complaints serve as the early warning system for regulatory enforcement. Regulated entities can mitigate regulatory scrutiny with timely resolutions. To that end, airlines must develop consumer complaint structures that are both cost-effective and are attuned to the unique concerns of state AGs, in addition to ensuring their compliance programs are calibrated to address these new requirements.

It is crucial for customer relations teams to be adequately equipped to manage the anticipated surge in complaints. In addition to comprehending and tackling the primary sources of consumer grievances, businesses should stay abreast of DOT’s legislative actions, particularly the two recently issued final rules concerning reimbursements for flight inconsistencies and improved clarity of airline ancillary service fees.

Conclusion

The broadening of cooperative efforts between state AGs and federal enforcement agencies is not a novel concept. AGs often join forces with the Federal Trade Commission, Consumer Financial Protection Bureau, and U.S. Department of Justice, capitalizing on the amplified impact of combined enforcement authority to probe and initiate enforcement actions against businesses for a range of consumer protection, antitrust, and data privacy infringements. Now that AGs have a role in guiding DOT’s regulatory direction, airlines and travel agencies should anticipate heightened regulatory oversight as AGs and DOT collaborate on consumer protection matters in the aviation industry.

*Senior Government Relations Manager