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.

Our State AG team has significant experience with helping large corporate clients establish consumer complaint structures that are both cost-effective and attuned to the unique concerns of state AGs. More broadly, our team is one of only a few recognized nationally by Chambers USA in the Government Relations—State Attorneys General category and the only law firm with two Band 1 attorneys, Clayton S. Friedman and Ashley L. Taylor, Jr., who co-lead the team.

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Troutman Pepper State Attorneys General Team

	Ashley Taylor – Co-leader and Firm Vice Chair Ashley is co-leader of the firm’s nationally ranked State Attorneys General practice, vice chair of the firm, and a partner in its Regulatory Investigations, Strategy + Enforcement (RISE) Practice Group. He helps his clients navigate the complexities involved with multistate attorneys general investigations and enforcement actions, federal agency actions, and accompanying litigation.
	Clay Friedman – Co-leader Clayton is a partner in the firm’s Regulatory Investigations, Strategy + Enforcement (RISE) Practice Group and co-leader of the State Attorneys General practice, multidisciplinary teams with decades of experience crafting effective strategies to help deter or mitigate the risk of enforcement actions and litigation.
	Judy Jagdmann Judy is a partner in the firm’s Regulatory Investigations, Strategy and Enforcement (RISE) practice, based in the Richmond office. She brings experience serving as chair and commissioner of the Virginia State Corporate Commission (VSCC) from 2006 through 2022, which includes regulating the utilities, insurance, banking, and securities industries. She also served as Virginia’s attorney general from 2005-2006.
	Stephen Piepgrass Stephen leads the firm’s Regulatory Investigations, Strategy + Enforcement (RISE) Practice Group. He focuses his practice on enforcement actions, investigations, and litigation. Stephen primarily represents clients engaging with, or being investigated by, state attorneys general and other state or local governmental enforcement bodies, including the CFPB and FTC, as well as clients involved with litigation, with a particular focus on heavily regulated industries.
	Avi Schick A former deputy attorney general of New York, Avi applies his experience in bet-the-company matters, representing clients in criminal and civil investigations and enforcement actions before state and federal regulators, prosecutors and enforcement agencies.
	Michael Yaghi Michael is a partner in the firm’s State Attorneys General and Regulatory Investigations, Strategy + Enforcement (RISE) Practice Groups, nationwide teams that advise clients on consumer protection enforcement matters and other regulatory issues.
	Samuel E. “Gene” Fishel Gene is a member of the firm’s Regulatory Investigations, Strategy + Enforcement (RISE) practice, based in the Richmond office. He brings extensive regulatory experience, having most recently served as senior assistant attorney general and chief of the Computer Crime Section in the Office of the Attorney General of Virginia, and as special assistant U.S. attorney in the Eastern District of Virginia for 20 years.
	Tim Bado Tim is an associate in the firm’s Regulatory Investigations, Strategy + Enforcement (RISE) Practice Group, where he represents corporations and individuals facing potential civil and criminal exposure. Tim’s experience in government investigations, enforcement actions, and white-collar litigation spans a number of industries, including financial services, pharmaceutical, health care, and government contracting, among others.
	Chris Carlson Chris Carlson represents clients in regulatory, civil and criminal investigations and litigation. In his practice, Chris regularly employs his prior regulatory experience to benefit clients who are interacting with and being investigated by state attorneys general.
	Natalia Jacobo Natalia is an associate in the firm’s Regulatory Investigations, Strategy and Enforcement (RISE) practice. She focuses her practice on two primary areas: government contracting and state attorney general work.
	Namrata Kang Namrata (Nam) is an associate in the firm’s Regulatory Investigations, Strategy + Enforcement (RISE) Practice Group, based in the Washington, D.C. office. She routinely advises clients on a wide variety of state and federal regulatory matters, with a particular emphasis on state consumer protection laws relating to consumer financial services and marketing and advertising.
	Michael Lafleur Michael is an associate in the firm’s Regulatory Investigations, Strategy, and Enforcement Practice Group. Based out of the firm’s Boston office, Mike has deep experience in litigation, investigations, and other regulatory matters involving state-level regulators and state attorneys general.
	Susan Nikdel Susan is an associate in the firm’s Consumer Financial Services Practice Group, and focuses her practice on consumer financial services matters. She has defended several of the nation’s largest and most influential financial institutions in individual and class action litigation involving the Telephone Consumer Protection Act (TCPA), Fair Credit Reporting Act (FCRA), Fair Debt Collection Practices Act (FDCPA), and other consumer privacy statutes.
	John Sample John is an associate in the firm’s Regulatory Investigations, Strategy + Enforcement (RISE) Practice Group. He focuses his practice on a wide range of general and complex litigation matters, including shareholder disputes, fraud, products liability, breach of contract, and Biometric Information Privacy Act claims.
	Whitney Shephard Whitney is an associate in the firm’s Regulatory Investigations, Strategy + Enforcement (RISE) Practice Group. She represents clients facing state and federal regulatory investigations and enforcement actions, as well as related civil litigation.
	Trey Smith Trey is an associate in the firm’s Regulatory Investigations, Strategy + Enforcement Practice. He focuses his practice on helping financial institutions and consumer facing companies navigate regulatory investigations and resulting litigation.
	Daniel Waltz Daniel is a member of the firm’s Regulatory Investigations, Strategy + Enforcement (RISE) Practice Group and State Attorneys General team. He counsels clients in connection with navigating complex government investigations, regulatory compliance, and transactions, involving state and federal government contracting obligations. Drawing on his broad experience as a former assistant attorney general for the state of Illinois, Daniel is a problem solver both inside and outside the courtroom.
	Stephanie Kozol Stephanie is Troutman Pepper’s senior government relations manager in the state attorneys general department.