BEFORETHE U.S. DEPARTMENT OFTRANSPORTATION OFFICE OFHEARINGS

WASHINGTON,D.C.

DeltaAirLines, Inc. Alleged Violations of 14 CFRPart257 and49 U.S.C. 

### § 41712 EnforcementProceeding Leaveto file granted February 10,2015 ServedFebruary26, 2015 DOT-OST-2014-0229

RESPONDENT DELTAAIRLINES' FINAL SUR-REPLYIN SUPPORT OFMOTIONTODISMISS Pursuantto the Order issued by Judge Sullivan on February 10, 2015, Respondent Delta Air Lines respectfully submits this Final Sur-reply in support of its Motion to Dismissthe Enforcement Complaint. A. Delta's position is clear, workable, and grounded in the unambiguous text ofthe relevant statute and regulation: a carrier complies with its code-share disclosure obligations as long as it makes the required disclosures "before booking transportation," 14 C.F.R. § 257.5(b), or "priorto thepurchase ofaticket," 49 U.S.C. §41712(c). The Office, in contrast, remains unable to articulate any workable rule ofwhen the code-share disclosure must be made, much less a rule that has some basis in the text ofthe statute and regulation. Indeed, the Office has now changed its legal theory at least three times in this proceeding alone. The Office initially demanded a $200,000 "compromise civil penalty" on the ground that Deltahad violated a "first mention" rule. 

### See Delta Mot. To Dismiss Exhibit A (Apr. 7, 2014 letter). Then, in its response to Delta's motion to dismiss, the Office disclaimed reliance on a "first mention" rule and instead asserted that "code-share information must be provided early during any 1 DeltaFinal Sur-replyconversation" with a prospective customer. DOT Resp. 5; see id. at 6 (statute and regulation "requir[e] early notice of code-share arrangements"); id. at 7 ("code-share information should be provided early"); id. at 12 n.8 ("relatively early"); id. at 17 ("early inthe process"). Remarkably, the Office now abandons its "early" rule as well, arguing (at 5-6 & n.1) that a code-share disclosure must be made in every telephone call "before the oral communication ends." Butthere are two obvious problems withthatrule. First, it has no basis inthe text ofthe statute orregulation. Congress and DOT easily could have written the statute and regulationto require disclosure "in any direct oral communication, before the communication ends." Butthey did no such thing. Instead, the regulation requires a carrier to "tell the consumer, before booking transportation, that the transporting carrier is not the carrier whose designator code will appear on the ticket." 14 C.F.R. §257.5(b) (emphasis added). If carriers were actually required to make a disclosure in every telephone call, regardless ofwhether a booking occurred, it would have made no sense for the onlytime limit inthe statute and regulationto be expressly linkedto booking. Second, it is unfair and unworkable to have a rule in which carriers' regulatory obligations turn on actions that are entirely within the customer's control. A carrier can hardly be faulted if-as in the case ofthe Office's secret shoppers-a caller voluntarily ends the call before disclosure has been made. The Office notes (at 5-6 n.1) that Delta often provides code-share disclosures to customers even when they do not book tickets. But the fact that Delta encourages its reservation agents to make code-share disclosures

as soon as possible does not in any way suggest that the failure to make disclosures in this manneris an "unfair" or "deceptive"practice that canresult ina $27,500 fine.

2 DeltaFinal Sur-replyThe Office asserts (at 1-2) that Delta's position would "render meaningless" the language in the regulation stating that disclosure must be made "in any direct oral communication." But, when properly read in the context ofthe regulation as a whole, this language simply underscores that the code-share disclosure must always be made "before booking transportation." The word "any" hardly suggests-as the Office contends-that a violation can be established even when no booking has been made. To take another example, consider a hypothetical SEC regulation that states: "In any proposed securities offering, the company shall issue a prospectus before shares are sold to the public." The fact that this regulation uses the word "any" does not change the fact that the relevant time limit is "before shares are sold to the public." And a company would obviously have no obligation to issue a prospectus ifshares were not sold to the public. The code-share regulation is no different: the reference to "any direct oral communication" does not change the fact that the regulatory obligation is explicitly linked to "bookingtransportation," and that no violation can be shownunless a customer makes a booking orpurchasewithoutreceiving the required disclosure. Based onthe regulation's reference to "prospective" customers, the Office further contends (at 5) that "it is logical to conclude that disclosure must take place before the communication about a flight option ends." But the use ofthe word "prospective" to modify "consumer" simply reflects the obvious fact that any caller is a "prospective" customer until he actually books a ticket. See Delta Reply at 5 n.1. Indeed, the same sentence that contains the word "prospective" also clearly states that the carrier must make the code-share disclosure "beforebookingtransportation." 14 C.P.R. § 257.5(b). It is not "logical to conclude" from this sentence as a whole that the carrier must make the

3 DeltaFinal Sur-reply

### disclosure "before the communication about a flight option ends," even ifthe customer hangs up without booking aticket. To the contrary, interpreting the sentence inthat way would violate basic principles of statutory construction by reading the phrase "before booking transportation" out ofthe regulation entirely. 

### See Hibbs v. Winn, 542 U.S. 88, 101 (2004) (statute or regulation must be construed "so that effect is given to all its provisions, so thatno part will be inoperative or superfluous, void or insignificant"). The Office also asserts (at 3-4) that it would be "absurd" and "misleading" for a carrier to fail to provide code-share information to consumers who do not book tickets. But the Office ignores the fundamental mismatch between its legal theory and the policy goals ofthe disclosure rules. The primarypolicy concerns underlying the regulation were that-absent a stronger disclosure 

### rule-customers who bookedflights might not know that they would be traveling on a regional airline or smaller plane, might not know how they would earnfrequent flier miles, and might notknow where to check in atthe airport. 

### See Delta Reply 8-9 (citing 59 Fed. Reg. 40,836, 40,838 (1994)). In light of these explicit policy concerns-all of which apply only to customers who actually book tickets-it is not surprising that the regulation applies only to customers who "book[] transportation." The Office (at 7) dismisses all ofthis as a "policy disagreement," but Delta's arguments directly quote 

### DOT's own statedpolicy rationales for adopting the currentregulation. B. 

### Finally, the Office concludes by raising yet another new argument. Even ifDelta's conduct did not violate the statute and regulationthat specifically address codeshare disclosures, the Office contends (at 6-7 & 

### n.3) that Delta's actions violate the 

### general prohibition on unfair or deceptive practices in §

### 41712(a). That argument gets

4 

### DeltaFinal Sur-reply

### things exactly backwards. When a statute or regulation contains both specific provisions and general provisions, it is the specific 

### that controls the general. "The law is settledthat however inclusive may be the general language ofa statute, it will notbe held to apply to

a matter specifically dealt with in another part ofthe same enactment." Fourco Glass v. Transmirra Prods., 

### 353 U.S. 222, 228 (1957); see also RadLAXHotel v. Amalgamated Bank, 

### 132 S. Ct. 2065, 2070 (2012) (specific-controls-the-general rule applies when a "general"prohibition and a "more limited, specific" prohibition "exist side-by-side"). This rule of interpretation has "special force" where an agency has targeted "specific problems with specific solutions." Doe v. Nat'l Bd. of Med. Examiners, 

### 199 F.3d 146, 155 (3d Cir. 1999). For example, the Americans with Disabilities Act ("ADA") contains general provisiOns regarding discrimination m public accommodations, as well as specific provisions regarding accommodations for written examinations. In Doe, 

### the plaintiffsought to challenge a written examination under the ADA's general prohibition on discrimination. The Third Circuit (including then-Judge Alito), had little difficulty rejecting that argument. Because Congress adopted a "specific definition of what [the ADA] requires in the context of examinations," it was wholly inappropriate for the plaintiffto seek to challenge an examination under the general antidiscrimination provision. Id. 

### at 154-55; see also HCSC-Laundry v. United States, 

### 450 U.S. 1, 6 (1981) (more-specific provision of tax code governed non-profit status of a hospital, rather than general non-profitprovision); Mittleman v. PRC, 

### 757 F.3d 300, 305- 06 (D.C. Cir. 2014) (party cannot seekreviewunder generaljudicial review statute where

amore-specificprovisionprecludes review).

5 

### DeltaFinal Sur-reply

### Here, Congress and DOT have targeted the "specific problem" of code-share arrangements with the "specific solution[s]" in §257.5(b) and §41712(c)(l). Doe, 

### 199 F.3d at 155. It 

### is thus plainly inappropriate for DOT to claim that Delta's code-share disclosures independently violate the general prohibition on unfair or deceptive practices in§ 41712(a). 1 CONCLUSION 

### This should be an easy case. The relevant statute and regulation impose a clear and unambiguous time limit for when the code-share disclosure must be made: "before bookingtransportation" or "priorto the purchase ofaticket." Ifthe Office believes that a stricterrule is needed, it should encourage DOT to change the regulation on aprospective basis through the rulemaking process. But the Complaint fails to show that Delta violatedthe text ofthe statute and regulation as currentlywritten, 

### and should accordingly be dismissed inits entirety withprejudice.

1 

### The Office asserts in a footnote (at 7 n.3) that Delta's motion to dismiss should be denied because the Office has alleged "plausible violations" ofa 2010 consent order betweenDeltaand DOT. But any alleged violations oftheconsent order are derivative of the alleged violations of the code-share statute and regulation. See 

### Complaint 'lf31 (Delta's purported "failure to disclose all required code-share information to prospective consumers ... constitutes eight violations of' the consent order). Ifthe Office's claims under §257.5 and §41712(c) fail as a matter of law-as they plainly do-then any claims for a violation ofthe consent ordermustbe dismissed as well. 6 

### DeltaFinal Sur-replyJ. ScottMcClain Jon-PeterF. Kelly DELTAAIRLINES, INC. 1030 DeltaBoulevard Department 981 Atlanta, GA 30354 (404) 773-6514 scott.mcclain@delta.com jonpeter.f.kelly@delta.com Respectfully submitted,

PaulD. Clement JeffreyM. Harris BANCROFTPLLC 1919M Street,NW, Ste. 470 Washington, D.C. 20036 (202) 234-0090 pclement@bancroftpllc.com jharris@bancroftpllc.com

Counsel for DeltaAirLines, Inc.

7 DeltaFinal Sur-replyCERTIFICATE OF SERVICE Ihereby certifythat onFebruary 26, 2015, the original and one copy ofthe foregoing Final Sur-reply in Support ofMotionto Dismiss werehand-deliveredto: U.S. DepartmentofTransportation Dockets Operations, M-30 West Building, GroundFloor RoomW12-10 1200 NewJersey Avenue, S.E. Washington, DC 20590 I further certifythat one copy ofthe foregoing document was hand-deliveredto: Blane A. Workie Assistant General Counsel for AviationEnforcement and Proceedings, C-70 U.S. Department ofTransportation 1200 NewJersey Avenue, S.E. (W96-431) Washington, DC 20590 Robert Gorman SeniorTrial Attorney Office ofAviationEnforcement andProceedings, C-70 U.S. DepartmentofTransportation 1200 NewJersey Avenue, S.E. (W96-413) Washington, DC 20590 The Honorable J.E. Sullivan Administrative LawJudge U.S. Department ofTransportation Office ofHearings, M-20 1200 NewJersey Avenue, S.E. (E11-310) Washington, DC 20590 s/JeffreyM. Harris Jeffrey M. Harris

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