Order 2011-8-7

UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY

WASHINGTON, D.C.

Issued by the Department of Transportation

On the Fourth day of August, 2011

United Air Lines, Inc. Docket OST 2011-0003

Violations of 49 U.S.C. § 41712 Served August 4, 2011

 

CONSENT ORDER

This consent order concerns inaccurate information provided by United Air Lines, Inc., 

(United) to consumers regarding its liability limit for lost, damaged, or delayed baggage 

on flights covered by the Montreal Convention (Convention) in violation of 49 U.S.C. 

§ 41712. The order directs United to cease and desist from future similar violations of 

section 41712, and assesses the carrier a compromise civil penalty of $20,000.

Applicable Law

Article 24 of the Montreal Convention (Convention) authorizes the International Civil 

Aviation Organization (ICAO) to adjust for inflation the carrier liability limit under the 

Convention for inter alia loss, damage, or delay of baggage. Accordingly, on June 30, 

2009, ICAO notified State Parties that, effective December 30, 2009, the baggage 

liability limit in Article 22 would increase from 1,000 to 1,131 Special Drawing Rights 

(SDR). On November 9, 2009, the Office of Aviation Enforcement and Proceedings 

(Enforcement Office) published a notice alerting U.S. and foreign air carriers to revise 

their contracts of carriage, tariffs, required notices, and practices to reflect the increase. 

The notice also warned carriers that the Enforcement Office would consider failure to do 

so by the effective date to be an unfair or deceptive business practice in violation of 49 

U.S.C. § 41712.

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 1 See Inflation Adjustments to Liability Limits Governed by the Montreal Convention Effective 

December 30, 2009, Notice of the Assistant General Counsel for Aviation Enforcement and Proceedings, 

74 FR 59017 (Nov. 9, 2009).
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Background

In January 2011, the Enforcement Office learned that, notwithstanding our notice, United 

was distributing ticket wallets printed after the effective date of the increase in the 

liability limit that stated that the carrier’s baggage liability limit per ticketed passenger 

for flights covered by the Convention was still 1,000 SDRs. An Enforcement Office 

investigation subsequently found that a significant number of these ticket wallets were 

given to a small group of customers who checked in at United ticket counters. However, 

the investigation found no evidence that United had applied the old 1,000 SDR limit 

when handling baggage-related complaints arising out of transportation that it provided 

after the effective date of the new 1,131 SDR limit. Further, there was no evidence that 

any passenger who had traveled after the effective date of the limit increase had 

unilaterally adjusted downward the amount of his or her claim based on the erroneous 

information in the ticket wallets. 

Mitigation

In mitigation, United states that it is strongly committed to providing proper disclosures 

of all information that its customers need to receive, including notices concerning the 

Montreal Convention. United further states that the ticket wallet in question came from a 

single batch of erroneous wallets printed in June 2010, a time long after its nearly 30 

different documents, tariffs webpages and other publications had all been properly 

updated to reflect the otherwise fully implemented Montreal Convention baggage liability 

limit at United. Importantly, United notes that it fully complied with the Montreal 

Convention by applying the proper baggage liability limitation which was listed on its 

more widely utilized and referenced passenger ticket receipts, its contract of carriage, and 

its passenger claims forms. United believes that no consumers were misled by this 

isolated batch of ticket wallets, which were distributed to less than one half of one 

percent of its passengers in 2010. Nevertheless, promptly upon notification of the issue, 

United states that all such remaining outdated wallets anywhere in its worldwide system 

were removed and destroyed. 

Decision

The Enforcement Office has carefully considered the information provided by United, but 

continues to believe that enforcement action is warranted. The Enforcement Office and 

United have reached a settlement of this matter in order to avoid litigation. Without 

admitting or denying the violations described above, United consents to the issuance of 

an order to cease and desist from future violations of 49 U.S.C. § 41712, and to the 

assessment of $20,000 in compromise of potential civil penalties otherwise due and 

payable pursuant to 49 U.S.C. § 46301. 

This compromise assessment is appropriate considering the nature and extent of the 

violations described herein and the size and sophistication of the carrier and serves the 

public interest. It represents a strong deterrent to future noncompliance with notice 
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requirements related to the Montreal Convention by United, as well as by other air 

carriers. 

This order is issued under the authority contained in 49 CFR 1.57a and 14 CFR 385.15.

ACCORDINGLY,

1. Based on the above discussion, we approve this settlement and the provisions of 

this order as being in the public interest;

2. We find that United Air Lines, Inc., engaged in unfair and deceptive practice and 

unfair method of competition in violation of 49 U.S.C. § 41712 by failing to 

accurately inform consumers of the liability limits under the Montreal Convention 

for lost, damaged, and delayed baggage; 

4. We order United Air Lines, Inc., and all other entities owned or controlled by or 

under common ownership with United Air Lines, Inc., and their successors and 

assignees, to cease and desist from violations of 49 U.S.C. § 41712. Failure to 

comply with this cease and desist provision shall subject United Air Lines, Inc., 

and their successors and assignees to further enforcement action;

5. We assess United Air Lines, Inc., a compromise civil penalty of $20,000 in lieu of 

civil penalties that might otherwise be assessed for the violations described in 

ordering paragraph 2, above. Of this total penalty amount, $10,000 shall be due 

and payable within fifteen (15) days of the date of issuance of this order. The 

remaining $10,000 shall be due and payable immediately if United Air Lines, 

Inc., violates this order’s cease and desist or payment provisions during the twelve 

(12) months following the service date of this order; and

6. We order United Air Lines, Inc., to remit the payment ordered in paragraph 5 above, 

by wire transfer through the Federal Reserve Communications System, commonly 

known as “Fed Wire,” to the account of the U.S. Treasury in accordance with the 

instructions contained in the Attachment to this order. Failure to pay the penalty 

as ordered shall subject United Air Lines, Inc., to the assessment of interest, 

penalty, and collection charges under the Debt Collection Act and to further 

enforcement action for failing to comply with this order.
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This order will become a final order of the Department 10 days after its service date 

unless a timely petition for review is filed or the Department takes review on its own 

motion.

BY:

ROSALIND A. KNAPP

Deputy General Counsel

(SEAL)

An electronic version of this document is available at

www.regulations.gov