This Transportation Department team secured a billion dollars in refunds for airline passengers
Few experiences, at least in the civilized world, are worse than airline screw-ups. Flights that take off hours late, if they take off at all. Passengers forced to...
Few experiences, at least in the civilized world, are worse than airline screw-ups. Flights that take off hours late, if they take off at all. Passengers forced to sleep in cold, noisy airports. But a team at the Transportation Department has managed to get compensation for thousands of passengers. Now they’re finalists in this year’s service to America Medals program. The Federal Drive with Tom Temin spoke with Senior Trial Attorney Rob Gorman.
Interview Transcript:
Tom Temin And we should point out that Blane Workie and Jessica Ilitch are also your co named coconspirators here in the Sammies Award. But you’re the one we’re speaking with. And what did you actually do here? Because it wasn’t clear that the airlines were obligated to pay people if a plane never took off or whatever. And yet, I think it was last year, we had a series of horrible delays that grounded the air traffic system for tens of thousands of people.
Rob Gorman Right. The Sammie award went to our team, which is the Office of Aviation Consumer Protection within the Department of Transportation, and we’re a team of about 20 to 25 lawyers and another 20 to 25 non attorney analysts who take in complaints from passengers and analyze them and determine whether the airlines have been breaking our consumer protection laws. So we were nominated this year for our work on helping passengers to receive refunds for flights that were canceled or significantly delayed by airlines, mostly beginning during the pandemic. At that time, airlines were canceling flights at massive rates and not providing refunds to consumers. So immediately after the pandemic, our office put out a notice saying to airlines and to consumers that it is what’s known as an unfair or deceptive practice for airlines to cancel flights and not provide refunds. Whether that cancellation was for any reason, including COVID, and that we expected airlines to provide refunds posthaste.
Tom Temin Isn’t there fine print language in your carriage agreement if anyone ever reads that? It used to be the Warsaw Convention was printed on the back of paper tickets, but they don’t have those anymore. Mostly not. So did the law support you? That is, was there enough statutory authority in place that you could demand these refunds?
Rob Gorman Well, we do have statutory authority from Congress to investigate and prohibit and order airlines to cease and desist from engaging in what are known as unfair and deceptive practices. So what we did in 2020 is to define what unfair and deceptive practices are. And we did so by using essentially the same model that the Federal Trade Commission had done with definitions of unfairness and definitions of deceptiveness. And we also said that if we went after airlines or ticket agents for the things that we believed were unfair or deceptive, that we would use those definitions. And so the definition of unfairness, as we set it out in our rule, was that it is a practice that imposes substantial harm on consumers, that the harm cannot be easily avoided by the consumer’s own self-help, and also that there is no countervailing benefit to consumers, because some practices may impose some harm on one side, but there’s an over riding benefit to consumers in some other way. And it was relatively easy to explain, I think, that canceling a flight, not providing the service that you promised that you would provide, and most importantly, keeping people’s money is unfair. Certainly from the passenger’s perspective, the passenger has already paid for that flight. The airline did not provide that service and it’s certainly not the consumer’s fault. They couldn’t avoid that problem because the airlines were the ones who canceled the flight. And there was certainly no other benefit to consumers in doing that. So that was the argument that we made when we had to take a case to an administrative law judge against Air Canada, because Air Canada was not settling our enforcement action with them. And shortly after we filed that case, Air Canada came back to the negotiating table and we negotiated an agreement to settle that case for a civil penalty.
Tom Temin We’re speaking with Rob Gorman. He’s a senior trial attorney at the Transportation Department. He, along with Assistant General Counsel Blane Workie and Director of Consumer Advocacy Jessica Ilitch, are finalists in this year’s Service to America Medals Program. And I’m not a lawyer, but it seems like, yes, it’s definitely an unfair trade practice to take money and not render the service. But isn’t it also contract law where both sides enter into an agreement when you buy a ticket and there’s consideration but no service? Could that have been a route to this?
Rob Gorman No. And that’s simply because no company is allowed to write illegal terms into their contracts. So we would say that that term of a contract, if it was in a contract, would be void and unenforceable because it effectively illegal.
Tom Temin And so how much in refunds were you able to get over and tell us the period of time?
Rob Gorman Well, since the beginning of the pandemic, March 2020 to roughly today, we have helped to ensure that over $2.5 billion in required refunds were returned to consumers.
Tom Temin Wow. And you also got some fines against airlines as well. What was the basis of that and how much came in that way?
Rob Gorman The fines were imposed as part of consent orders that we have entered into with attorneys, and we have had a number of enforcement actions against airlines. So we imposed civil penalties thus far of over $15 million, and $21 billion in required refunds.
Tom Temin And would you say that as a result of this team’s action over the COVID period and then we’ve had some horrible situations since then has changed, I don’t know, the culture of the way airlines treat passengers. Do you think they’re just generally more inclined to say, gosh, we didn’t fly anybody anywhere, we have to give them their money back?
Rob Gorman I certainly think so. And I certainly hope so, yes.
Tom Temin And what’s next on the agenda for the team now that you’ve kind of got that situation licked? I guess there’s no shortage of complaints about airlines.
Rob Gorman There are no shortage of complaints. And the department is working on a number of new rules. We’re very proud, by the way, we also have a civil rights section to our office. So we also write and enforce the disability rules for passengers. And we’re very proud to say that just recently we issued a final rule that will require wheelchair accessible bathrooms on single aisle aircraft. And that is a game changer, I think, for passengers with disabilities that they’ll be able to have in the future a wheelchair accessible bathroom on large single aisle aircraft. But on the consumer side, we’re also working on a number of different rules, a family seating rule, a rule to help to ensure that the fees that airlines are imposing are transparent things like seating fees, baggage fees, all of the fees that you see that they’re transparent and easy to understand. We’re also clarifying our refund rules. So we have a lot in the works in the near future.
Tom Temin Anything you can do about legroom?
Rob Gorman Legroom tends to be within the [Federal Aviation Administration (FAA)] jurisdiction. FAA is, of course, part of the DOT, but they tend to handle legroom issues.
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Tom Temin
Tom Temin is host of the Federal Drive and has been providing insight on federal technology and management issues for more than 30 years.
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