Spirit Airlines, Inc. v. United States Department of Transportation
402 U.S. App. D.C. 70
| D.C. Cir. | 2012Background
- DOT issued final rule Enhancing Airline Passenger Protections regulating unfair/deceptive practices in air transportation; three challenged provisions: Airfare Advertising Rule requiring total price be most prominent; Refund Rule allowing 24-hour free cancellation for bookings a week or more in advance; Post-purchase Price Rule prohibiting price increases after purchase for certain items; Spirit Airlines and Allegiant challenge all three as arbitrary/capricious, with Southwest contesting only the Airfare Advertising Rule; majority denies petitions for review.
- DOT relies on historical regulatory framework under Federal Aviation Act and Airline Deregulation Act to justify protections against deception; evidence basis includes 1984 rule, 2006 reaffirmation, consumer complaints, and DOT guidance; the challenged rule allows itemized pricing but requires total price to be most prominent to prevent consumer confusion; the Refund Rule limits penalties for cancellations to promote clear customer service standards; the Post-purchase Price Rule targets post-purchase price increases for common ancillary charges, with caveat that DOT will extend to ancillary services after rulemaking.”
- Spirit and Allegiant argue the Airfare Advertising Rule is arbitrary/capricious and bans taxes’ prominence; Spirit challenges the constitutionality of DS’s prominence restrictions; DOT asserts the rule meaningfully clarifies total price and is reasonably tailored; the agency deems the rule to be a disclosure requirement, not a prohibition on truthful information.
- The court upholds all three challenged provisions, finding DOT’s actions reasonable, supported by substantial evidence, and consistent with statutory authority.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Airfare Advertising Rule constitutional under First Amendment | Spirit/Southwest claim no deception; scant evidence supports requiring total price prominence | Rule targets deception; discloses total price and allows component breakdown; Zauderer standard applies | upheld; rule reasonably related to preventing deception under Zauderer; not an improper restriction on speech |
| Refund Rule validity under Airline Deregulation Act | Rule is unrelated to fares and imposes unlawful regulation | Rule promotes fair and informed consumer service policies; supported by substantial evidence | upheld; rule reasonable, supported by record, and within DOT’s authority |
| Price Rule procedural notice adequacy and scope | Final rule not a logical outgrowth of proposed rule; insufficient notice about ancillary services | Proposal covered post-purchase price increases; final rule clarified scope and added exceptions; adequate notice | upheld; final rule consistent with proposed scope and adequately supported by record |
Key Cases Cited
- Milavetz, Gallop & Milavetz, P.A. v. United States, 130 S. Ct. 1324 (U.S. 2010) (Zauderer applies to disclosure-based commercial speech regulations)
- Zauderer v. Office of Disciplinary Counsel of Ohio, 471 U.S. 626 (U.S. 1985) (upholds disclosure requirements reasonably related to preventing deception)
- Central Hudson Gas & Electric Corp. v. Pub. Serv. Comm’n of N.Y., 447 U.S. 557 (U.S. 1980) (intermediate scrutiny for truthful, non-misleading commercial speech; disclosure vs. prohibition framework)
- Ibanez v. Fla. Dep’t of Bus. & Prof'l Regulation, 512 U.S. 136 (U.S. 1994) (advertising may be regulated if false/deceptive; cannot be wholly banned when truthful)
- Edenfield v. Fane, 507 U.S. 761 (U.S. 1993) (commercial information accuracy is substantial government interest)