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29 July 2020
The US Department of Transportation (DOT) recently issued a consent order assessing a $70,000 civil penalty against Volaris, the Mexican low-cost airline, for alleged violations of the DOT's regulations governing lengthy tarmac delays. The facts of the case and the DOT's rationale for assessing violations did not break new ground, but aspects of the DOT's order may provide insights into how it is approaching enforcement during the COVID-19 pandemic. Although the order makes no mention of COVID-19 or whether Volaris sought relief from the DOT because of the current operating environment, the order includes a few features that could be interpreted as reflecting some recognition on the DOT's part of COVID-19's impact on carriers.
The alleged violations occurred in September 2017, but the DOT issued the consent order in July 2020, even though the case involved only a single flight and therefore should not have required a complicated investigation. While the DOT has generally refrained from issuing consent orders against airlines in the current environment, possibly reflecting some reluctance to impose monetary penalties on carriers that are struggling to survive the pandemic's effects, this order shows that the DOT is not willing to entirely discontinue imposing civil penalties on airlines during the COVID-19 pandemic.
Of the $70,000 penalty amount, the DOT requires payment of $35,000, subject to the DOT's frequently used format whereby the remaining $35,000 will be forgiven if Volaris does not commit another violation within the next year. However, the format of the penalty is novel. The DOT has established a payment schedule whereby Volaris will be required to pay the $35,000 in three instalments: $10,000 is due within 120 days, an additional $10,000 is due after 180 days and the final $15,000 is due after 270 days. In previous cases, the DOT would require the carrier to pay the full $35,000 amount in one instalment within 30 days of the order's issuance.
Finally, the DOT, as a legal matter, continues to take the position that it may assess tarmac delay penalties on a per-passenger basis. However, airlines disagree and argue that the DOT's civil penalty statute authorises the DOT to assess such a penalty only on a per-flight basis. This is an important issue because, by statute, the DOT may not impose a civil penalty in excess of $34,174 per violation. Thus, if the airlines are correct, the statute would allow the DOT to assess only a maximum $34,174 penalty against Volaris in this case (because the case concerns only one flight), whereas, under the DOT's interpretation, its maximum penalty amount would be $34,174 multiplied by 92 (ie, the number of passengers on the Volaris flight).
In support of its position, the DOT contends that because the policy purpose of its tarmac delay regulation is to protect passengers who experience a lengthy tarmac delay, it is justified in assessing penalties on a per-passenger basis. This is a questionable assertion because, as a matter of statutory interpretation, agencies lack authority to decide (or alter) how a statute should be interpreted based on the claimed policy goal of the agency's implementing regulations. The Volaris case does not resolve the dispute about how to interpret the DOT's statutory penalty authority because Volaris, like most carriers, opted to settle rather than litigate the DOT's enforcement case.
For further information on this topic please contact David Heffernan at Cozen O'Connor by telephone (+1 202 912 4800) or email (firstname.lastname@example.org). The Cozen O'Connor website can be accessed at www.cozen.com.
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