Buried in Regulations Emerging Issues in the Aviation Industry

ABA Tort Trial and Insurance Practice Section The Brief Spring 2014 Buried in Regulations Emerging Issues in the Aviation Industry By Jennifer P. Henry and Mackenzie S. Wallace Jennifer P. Henry is a partner in the Fort Worth and Dallas, Texas, offices of Thompson & Knight LLP, focusing her practice on business, aviation, and products liability litigation, with expertise in defending claims arising from mass disasters, such as air crash accidents. She is a frequent speaker and writer on aviation, litigation, and other professional topics. Mackenzie S. Wallace, a licensed private pilot, is an associate in the firm’s Dallas office, focusing her practice on federal and state trial actions involving securities, financial institutions, energy, aviation, and general business and commercial litigation. They may be reached, respectively, at [email protected] and [email protected]. TIP Recent regulations affect nearly all aspects of the aviation industry. Knowing them and how to comply is critical, given that severe penalties and consequences are possible. In recent years, the aviation industry has grown accustomed to increasing levels of governmental regu- lation designed to enhance security and safety, improve technology, and protect consumers. For exam- ple, in April 2010, the Department of Transportation’s (DOT’s) rules on tarmac delay times and other passenger protections took effect. In 2013, the Federal Aviation Administration (FAA) issued rules to protect passengers with disabilities as part of the DOT’s continuing implementation of the Air Carrier Access Act of 1986. The FAA Modernization and Reform Act of 2012 spawned new regulations and studies by the DOT, and the Airline Safety and FAA Extension Act led to new flightcrew member duty and rest requirements. The FAA has also published new rules on repair stations and fatigue tolerance evaluation of metallic structures. In 2013, the FAA issued a final rule that increased the qualification standards for commercial air carrier pilots. Also in 2013, the FAA determined that airlines can safely expand passenger use of portable electronic devices during all phases of flight. Not all of the rules and regulations are imposed by the DOT, though. Some in the aviation industry are being affected by the Office of Foreign Assets Control’s embargoes and regulations imposing economic sanctions for trading with prohibited countries. This article examines each of these new regulations and the response to—or effect of—the regulations within the industry. Rules to Enhance Airline Passenger Protections The DOT’s new rules on tarmac delay times and other passenger protections were triggered by a series of highly publicized incidents where travelers were left on the tarmac for long periods of time. Several lawsuits were filed in the wake of these events, and passenger advocacy groups were formed, demand- ing that a passenger bill of rights be adopted and putting pressure on the DOT to take action. As Con- Published in The Brief Spring 2014, Volume 43, Number 3, ©2014 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. 1 ABA Tort Trial and Insurance Practice Section The Brief Spring 2014 gress debated legislation to address the issue, the DOT published a notice of proposed rulemaking on enhancing airline passenger protections.1 After reviewing and considering the comments on the proposed rule, the DOT published a final rule, the stated purpose of which was “to mitigate hardships for airline passengers during lengthy tarmac delays and . bolster air carriers’ accountability to consumers.”2 The original rule became effective on April 29, 2010,3 and the amended rule became effective by October 24, 2011.4 The tarmac delay rule (TDR) applies to all flights (foreign or domestic) of a certificated or commuter air carrier if the carrier operates scheduled passenger service or public charter service using any aircraft with 30 or more passenger seats, with certain exceptions, and requires the carriers to adopt contingency plans for lengthy tarmac delays; respond to consumer problems; post flight delay information on their websites; and adopt, follow, and audit customer service plans.5 Contingency plans for lengthy tarmac delays. Under the TDR, certificated and commuter foreign and U.S. air carriers must adopt contingency plans in cases of long tarmac delays at each non-hub, small hub, medium hub, and large hub airport, including diversion airports, at which they operate.6 Each plan must, among other things, limit the number of hours an aircraft may sit on the tarmac before it must permit passengers to deplane.7 When the rule was published, then-Secretary of Transportation Ray LaHood explained that airlines that do not provide food and water after two hours or a chance to disembark after three hours as required by the TDR could face penalties of up to $27,500 per passenger.8 The rule provides exceptions where: (1) the pilot-in-command ascertains that the plane must remain on the tarmac because of safety or security reasons; or (2) air traffic control informs the pilot-in-command that leaving the tarmac to deplane passengers would significantly disturb airport operations.9 Foreign carriers with inter- national flights arriving at or departing from U.S. airports must also have a contingency plan, ensuring that the carrier will not permit an aircraft to remain on the tarmac for more than four hours before allowing passengers to deplane, subject to the same exceptions.10 The TDR requires notification regarding the status of delays every 30 minutes, including reasons for the delay if known.11 The TDR also requires the air carrier to provide passengers with adequate food and potable water within two hours of the plane leaving the gate for departure or touching down on arrival.12 An exception exists where the pilot-in-command determines that security or safety reasons prevent the provision.13 Additionally, all air carriers must assure operating bathrooms and medical attention if needed.14 Failure to comply with the contingency plan is considered to be an unfair and deceptive practice and is subject to enforcement by the DOT.15 Customer service plans. The TDR also requires foreign and U.S. air carriers to adopt customer service plans applicable to their scheduled flights.16 Such plans must contain provisions regarding: 1. disclosing the lowest fare available; 2. notifying customers of known delays, cancellations, and diversions; 3. delivering baggage on time; 4. allowing reservations to be held without payment or canceled without penalty for a defined amount of time; Published in The Brief Spring 2014, Volume 43, Number 3, ©2014 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. 2 ABA Tort Trial and Insurance Practice Section The Brief Spring 2014 5. providing prompt ticket refunds; 6. providing prompt accommodations for passengers with disabilities and other special needs; 7. seeing to passengers’ basic needs during lengthy tarmac delays; 8. handling “bumped” passengers with fairness and consistency in the case of oversales; 9. disclosing cancellation policies, frequent flyer rules, aircraft seating configuration, and changes in travel itineraries; 10. guaranteeing good customer service from code-share partners; 11. guaranteeing responsiveness to customer complaints; and 12. identifying the services it provides to mitigate passenger inconveniences resulting from cancellations and misconnects.17 Each airline must self-audit its adherence to the customer service plan annually and maintain those audit records for up to two years for review by the DOT.18 Notice of contingency plans, customer service plans, and contract of carriage. The DOT wanted to require carriers to include their contingency plans and customer service plans in their contracts of carriage, but this proposal met with resistance by industry groups. A compromise was reached: If the carrier’s contract of carriage does not include the carrier’s contingency plan for lengthy tarmac delays and/or customer service plan, the carrier must post the plan(s), including all updates, on its website in easily accessible forms.19 Response to consumer problems. The DOT’s regulations also address how foreign and U.S. air carriers should respond to consumer problems. Carriers must designate an employee to monitor the effects on passengers of flight delays, flight cancellations, and lengthy tarmac delays.20 This employee helps decide which flights to cancel and which flights will be delayed the longest. Each carrier also must provide the mailing address and e-mail or web address of the department that handles passenger complaints (1) on its website, (2) on e-ticket confirmations, and (3) if requested by a passenger, at each ticket counter and boarding gate staffed by the air carrier.21 When a carrier receives a complaint, defined as “a specific written expression of dissatisfaction concerning a difficulty or problem . expe- rienced when using or attempting to use [the] airline’s services,” the carrier must acknowledge receipt within

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