BEFORE THE U.S. DEPARTMENT OF TRANSPORTATION OFFICE OF HEARINGS

WASHINGTON, D.C.

Delta Air Lines, Inc. Served January 16, 2015
Violations of 14 CFR Part 257 and 49 U
. S
.C
. 

### § 41712 DOT -OST-2014-0229 Enforcement Proceeding

RESPONSE OF OFFICE OF AVIATION ENFORCEMENT AND PROCEEDINGS TO DELTA AIR LINES' MOTION TO DISMISS ENFORCEMENT COMPLAINT Pursuant to the Department's Rules of Practice in Proceedings, 14 CFR 302.4 11 , the Office of Aviation Enforcement and Proceedings ("Enforcement Office") files thi s Response to the Motion to Dismiss Enforcement Complaint (" Motion to Dismiss" ) filed by Delta Air Lines , Inc
. (" Delta"). For the reasons set forth in the accompanying Memorandum, Delta's Motion to Dismiss should be denied. Blane A. Workie Assistant General Counsel for Aviation Enforcement and Proceedings

Robert M. Gorman U.S. Department ofTransportation Office ofthe General Counsel 1200 New Jersey Avenue SE Washington, DC 20590 (202) 366-9350 robert
.gorman@dot.gov Counsel for the Office of Aviation Enforcement and Proceedings

### BEFORE THE U.S. DEPARTMENT OF TRANSPORTATION OFFICE OF HEARINGS

WASHINGTON, D.C
.

Delta Air Lines , Inc. Served January 16, 2015
Violations of 14 CFR Part 257 and 49 U.S.C
. 

### § 41712 DOT -OST-2014-0229 Enforcement Proceeding

MEMORANDUM IN SUPPORT OF RESPONSE OF OFFICE OF AVIATION ENFORCEMENT AND PROCEEDINGS TO DELTA AIR LINES' MOTION TO DISMISS ENFORCEMENT COMPLAINT

Blane A. Workie Assistant General Counsel for Aviation Enforcement and Proceedings

Robert M. Gorman U.S
. Department ofTransportation Office ofthe General Counsel 1200 New Jersey Avenue SE Washington, DC 20590 (202) 366-9350 robert.gorman@ dot.gov
Co unsel for the Office of Aviation Enforcement andProceedingsTABLE OF CONTENTS TABLE OF AUTHORITIES
....... . . .. ... .... ..... ...... . ................. ... ... .... .. ....... .... ...... .... .3 FACTUAL AND PROCEDURAL HISTORY
....................... . ... . .. .. .... . . ....... . . ...... .. . .. .4 INTRODUCTION AND SUMMARY OF ARGUMENT
........... . ..... .... . ... . .. ...................5 STANDARD OF REVIEW
..... . .... . . ... .. ... . ......... .... . . ....... ..... . ..... . . .. ........ .... . .. . .. . ......6 ARGUMENT I. The Regulation Unambiguously Requires Disclosure ofCode-share Information in Any Oral Communication with a Prospective Consumer.
..... ... ............ ... .. ...... . ..6 A. Read as a Whole, the Statute and the Regulation Broadly And Unambiguously Protect Prospective Consumers By Requiring Early Notice of Code-Sharing Arrangements
..... ... ..... ..... ...... .. ......................... ... ..... . .. .......... .. . .. . ...6 B. Delta's Interpretation is Inconsistent with the Unambiguous Text and Overarching Purpose ofthe Statute and Regulation
....................................................9 II. Even Assuming that the Regulation is Ambiguous , the Ambiguity Extends Only to the Exact Timing ofDisclosure
. Here, the Preamble Provides Practical Guidance, Consistent with the Rule Text
...... . . . ...... . ....... . ..... . .................. . . . . . ........ . ... 1 0 III. The Complaint Clearly Alleges Violations ofthe Code-Share Disclosure Rule
. .. . ... 13 IV
. Delta's Remaining Arguments Do Not Compel, or Even Suggest, a Finding that the Complaint Should be Dismissed as a Matter ofLaw
....................................... 14 A. Delta' s Assertion of''No Consumer Harm" is Misguided
..... . .... .................. 14 B. The "First Mention" Rule is Not at Issue
... .. .................................... . .. . ... 15 C. The Department's Proposed Amendment to the Oral Code-share Rule is Irrelevant
........................................................................ . . . ....... . . 16 D. The Appropriate Civil Penalty is Not at Issue at This Time
.......................... 16 CONCLUSION
...... .. .... .. ... .. . . .. ......... ...... .. ........ .. .. . . .................. . .. ... .. . ............. . 17



### 2 Enforcement Office

- Response to Motion to Dismi ssTABLE OF AUTHORITIES
Cases BellAtlantic v. Twombly, 550 U.S. 544 (2007)
. ... ...... . .............................. ...................6 Ashcroft v. Iqbal, 556 U.S
. 662 (2009)
................. . ... ....... .. .......... ..... ........... ........ .. . .. .6 Decker v. Northwest Environmental Defense Center, _ U.S ._, 133 S.Ct. 1326 (2013)
.... . ...... 11 Auer v. Robbins, 519 U.S. 452 (1997)
......... .. .............. ................ ... ..... .. .. ... .. ... ... ..... 11 Wyoming Outdoor Council v. US Forest Service, 165 F.3d 43 (D.C. Cir. 1999)
.... . .. . .......... 11 Statutes 49 U.S.C. § 41712
....................................... . . . ........................................ . . ... passim 49 U.S.C. § 46301
.. .. ... . .. ... ... .. ....... . . . . ........ .. . . . ... .. . . .. .... . ... .. .... . .. .... ...... ... ...... . . ... 17 15 U.S.C. § 45(n)
. .. . ..... ... ..... ........ .. ...... ... ............................ ................. ............. 14 Regulations 14 CFR 257.5
. .. .. ............ . . . . . . . ..... . . . . . . . .... ... . ... .... . . .... ...... . ... .... . ..... ....... .. .... . passim 14 CFR Part 383
. . . .... . .... ..... . ... . ... ... ... ... . .. ....... ..... .... .. . . . . . . . ..................... .. . .... ... 17 Other Authorities 64 Fed. Reg
. 12845-46
........... ..... ...... .... .................. .. ............... . .. ... ...... . . .. ........... 11 79 Fed
. Reg
. 29970, 29999
...................... ...... .................. ...... . .. . .. ................ ... .. .. 16



### 3 Enforcement Office

- Response to Motion to Di smissFACTUAL AND PROCEDURAL IDSTORY In 2013 and 2014, the Office of Aviation Enforcement and Proceedings ("Enforcement Office") conducted an investigation to determine whether representatives ofDelta Air Lines, Inc. ("Delta") properly disclosed code-share information to prospective consumers during telephone conversations. This investigation was one of a number of similar investigations into the codeshare disclosure practices ofairlines and ticket agents. In this particular investigation, Transportation Industry Analysts of the Enforcement Office engaged in a total of 50 test calls with Delta's telephone representatives
. For each conversation, the Analyst expressed interest in a specific flight that was known to be operated under a code-sharing arrangement (the " target flight"). The Delta representative would provide information about the target flight (e.g., its availability, flight number, arrival time, departure time, city pair, and/or price). The Analyst would then determine whether the representative provided the required code-share information about that target flight. The Analysts terminated each conversation without booking a reservation
. While Delta' s representatives often did provide the required code-share information to the Analysts, they failed to do so a significant percentage ofthe time (approximately 16%, or in eight out of 50 calls). Details ofthose eight calls are set forth in paragraph 28 ofthe Complaint. After efforts to settle this matter failed , on December 23, 2014, the Enforcement Office filed a Notice ofEnforcement Proceeding and accompanying Complaint. The Complaint alleges violations of49 U.S.C. § 41712, 14 CFR 257.5 , and a 2010 consent order involving prior codeshare disclosure violations by Delta. On January 7, 2015 , Delta filed an Answer and a Motion to Dismiss. The Enforcement Office now files this Response to the Motion to Dismiss.

4 Enfor cement Of fi ce - Response to Moti on to Dismi ssINTRODUCTION AND SUMMARY OF ARGUMENT Delta bases its Motion to Dismiss on the central premise that a violation of the Department' s code-share disclosure rule cannot take place as a matter of law unless the
consumer actually book s a flight. This premise is fundamentally flawed. Consistent with the purpose and plain text of the relevant statute and regulation, code

- share information must be provided early during any conversation with a prospective consumer regarding a code-share flight. lbis disclosure must take place regardless of whether the prospective consumer actually books a flight at the end of the conversation
. That basic standard is easily understood and has been well known for many years . Delta' s technical , " booking-centered" argument provides no basis for dismissing the Complaint as a matter of law
. The Complaint sets forth ample evidence that Delta violated the code

-share disclosure rule and committed an unfair and deceptive practice
. In each of the telephone exchanges described in the Complaint, Delta' s representatives provided important information about its flights to prospective consumers , such as the flight number, the time of arrival , and the price of the flight. In each case, however, they failed to disclose one key fact that is required to be disclosed by statute and rule

-- the fact that the flight was operated by another airline
. Delta' s significant failure rate constitutes evidence of a practice that is unfair and deceptive to
consumers . Delta' s argument regarding the absence of direct consumer harm is unsupported by law ;
moreover, it misconstrues the proper standard for determining unfair and deceptive practices
. Finally, Delta claims that the Enforcement Office is somehow attempting to enforce a strict " first mention" standard; this claim is demonstrably incorrect.



### 5 Enforcement Office

- Response to Motion to DismissThe Complaint sets forth plausible prima facie factual evidence of code-share violations under existing, well-understood legal standards
. Accordingly, Delta' s Motion to Dismiss should be denied. STANDARD OF REVIEW The Enforcement Office does not dispute Delta' s statement of the standard of review: to survive a motion to dismiss for failure to state a claim under Rule 12(b)(6), the complaint must articulate "enough facts to state a claim to relief that is plausible on its face." Bell Atlantic v. Twombly, 550 U.S. 544, 570 (2007)
. The allegations in the complaint must be accepted as true, but the plaintiff must "plead[] factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged. " Ashcroft v . Iqbal, 556 U.S. 662 , 678 (2009). ARGUMENT I. The Regulation Unambiguously Requires Disclosure of Code-share Information in Any Oral Communication With a Prospective Consumer. A. Read as a Whole, the Statute and the Regulation Broadly And Unambiguously Protect Prospective Consumers By Requiring Early Notice of Code-Sharing Arrangements As Delta recognizes, 49 U.S.C. § 41712(c)(l) states that it is an unfair or deceptive practice for an air carrier to fail to provide code-share information "whether verbally in oral communication or written or electronic communication, prior to the purchase of a ticket " 1

1 The statute provides: (c) Disclosure Requirement for Sellers ofTickets for Flights.

- (I) In general.

- It shall be an unfair or deceptive practice under subsection (a) for any ticket agent, air carrier, foreign air carrier, or other person offering to sell tickets for air transportation on a flight of an air carrier to fail to disclose, whether verbally in oral communication or in writing in written or electronic communication, prior to the purchase ofa ticket

- ( A) the name ofthe air carrier providing the air transportation; and 6 Enf orcement Office - Response to Moti on to Dismi ssSection 41712(c)(1) is written simply and broadly: it requires code-share disclosure in oral, written, or electronic communications
. It also requires that these disclosures take place before, not after, any purchase. Congress enacted section 41712(c) in 201 0, when the code-share disclosure regulation (14 CFR 257.5) had already been in effect for many years. Congress , being aware of this regulatory backdrop, not only enacted section 41712(c)(1) in broad terms , but also added section 41712(c)(2)(requiring code-share disclosure on the first display of a website following a search of a requested itinerary). Through its enactment of§ 41712(c) , Congress demonstrated its intent that code-share information should be provided early to prospective consumers. The Department's code-share disclosure regulation, 14 CFR 257.5, applies the broad rule in more detail by setting forth specific requirements for each type of communication? For example, code-share information must be prominently included in advertisements. 14 CFR 257.5(d)
. Code-share information must also be included "in written or electronic schedule information provided by carriers in the United States to the public, the Official Airline Guides and comparable publications, and, where applicable, computer reservations systems. " 14 CFR 257.5(a). This rule ensures , among other things , that code-share information appears on a carrier's website when the site first displays a code-share flight in response to a consumer inquiry
. Through these regulations, prospective consumers learn of code-sharing arrangements long before they decide to book a flight, and indeed regardless of whether they book a flight at all. (B) ifthe flight has more than one flight segment, the name ofeach air carrier providing the air transportation for each such flight segment. 2 

### See 14 CFR 257
.5(a) (written and electronic schedule information) ; 257
.5(b) (oral disclosure); 257
.5(c) (other written notices) ; and 257.5(d) (advertisements). 

### 7 Enf or

cement Office

- Response to Moti on to Dismi ssSimilarly, with respect to oral disclosures, the regulation states: (b) Oral 

### notice to prospective consumers. 

### In any direct oral communication in the United States with a prospective consumer and in any telephone calls placed from the United States concerning a flight that is part of a code-sharing arrangement or long-term wet lease, a ticket agent doing business in the United States or a carrier shall tell the consumer, before booking transportation, that the transporting carrier is not the carrier whose designator code will appear on the ticket and shall identify the transporting carrier by its corporate name and any other name under which that service is held out to the public. Id. (emphasis added). The plain language of the oral code-share disclosure rule sets forth two basic principles. First, code-share information must be provided "in any direct oral communication" or "any telephone call" with a "prospective" consumer about a code-share flight. 3 Second, if that communication happens to result in a booking, the code-share information must be provided before the booking, not after the fact. This common-sense interpretation Is fully consistent with section 41712(c) , which broadly states that code

- share information must be provided to prospective consumers , and it
must be provided before a booking, not after the fact. This interpretation is also fully consistent with the remainder of section 257.5, which protects prospective consumers who read advertisements or begin searching for flights online, even ifno bookings take place.

3 This does not mean that code-share information must be provided if a consumer simply expresses interest in flying between two cities on a given day , but a specific flight has not been identified or offered. However, once a specific flight has been identified and that flight is part of a code-sharing arrangement, then the carrier' s obligation to disclose code

- share information is triggered
. 

### 8 Enforcement Office

- Response to Motion to DismissB. Delta's Interpretation is Inconsistent with the Unambiguous Text and Overarching Purpose of the Statute and Regulation. Delta does not dispute that its representatives failed to disclo se the required code-share information during each of the telephone calls described in the Complaint. Nevertheless, according to Delta, it is impossible to find any code-share disclosure violations in this matter, because the time to disclose the code-share information had not yet expired. Motion to Dismiss at 9
. Delta arrives at this position by importing the "before booking" provision into every oral communication, even those communications where a prospective consumer is not yet prepared to book a flight. Delta asserts that without a completed booking, there can be no code-share violation as a matter of law. This position is unavailing. First, it distorts the "before booking" provision far beyond its clear, intended meaning. " Before booking" is a clear and concise way to indicate that disclosing codeshare information after a booking is insufficient to comply, should there be a booking. The phrase "before booking" logically applies to those instances where a booking takes place ; it has
no function in those instances where a booking does not take place
. Moreover, Delta' s interpretation runs contrary to the regulation ' s clear, intended purpose. As noted above, the regulation mandates code-share disclo sures in advertisements and electronic schedules, in order to inform prospective consumers of code-share arrangements , regardles s of whether bookings result. Likewise, the oral code-share disclosure rule should be read with the view of informing "prospective" consumers, not just those actual consumers who happen to complete a booking. Delta's attempt to convert an important clarifying provision for a small subset of cases into a technical deadline for all cases is unavailing, and is no basis for dismissing the Complaint. 4

4 While Delta's representatives failed to disclose the required code-share information in a significant percentage of calls, the fact that this information was properly disclo sed in most of 

### 9 Enforcement Office

- Response to Motion to Dismi ssII. Even Assuming that the Regulation is Ambiguous, the Ambiguity Extends Only to the Exact Timing of Disclosure. Here, the Preamble Provides Practical Guidance, Consistent with the Rule Text. As explained above, the regulation is unambiguous because it plainly requires code-share disclosure in any oral communications with prospective consumers regarding a code-share flight. According to this plain language, a carrier commits a code-share disclosure violation if it engages in an oral communication about a code-share flight and fails to disclose the required code-share information during that communication. With regard to when the disclosure must take place if there is no booking, the regulation's terms provide that the disclosure must take place in any oral communication with a prospective consumer once a specific flight that is part of a code-sharing arrangement has been identified. This triggering point, the offering of a code-share flight, may occur at some point between the beginning and the end of the communication. The regulation is otherwise silent as to the exact timing ofdisclosure in those instances where a booking does not take place. 5 The Enforcement Office submits that in non-booking scenarios , once the triggering event
occurs (the offering of a specific flight that is part of a code-sharing arrangement) , the carrier must disclose before the communication ends. In contrast, Delta argues that the "before booking" provision applies to non-booking scenarios , and that this provision gives a carrier extra time to comply (i.e., until a booking takes place). However, it is important to note that the regulation does not state that the disclosure can take place "at any time" before booking transportation. Delta's interpretation would read these words into the rule text, where they do not exist. the calls suggests that Delta, in practice, construes the code-share regulation as the Department does. 5 As noted above, where a booking takes place, the disclosure must take place before booking. 

### 10 Enforcement Office

- Respon se to Motion to Di smi ssAssuming arguendo that the regulation is ambiguous, it is appropriate to turn to the preamble to provide guidance, so long as the preamble does not "trump " the text itself. W yoming Outdoor Council v. US Forest Service, 165 F
.3d 43, 53 (D.C. Cir. 1999)
.6 The preamble states , in relevant part, that disclosure should take place during the "information and decisionmaking portion ofthe conversation." 64 Fed. Reg. at 12845-46. More specifically, the carrier "may not wait until after the consumer has decided to make the reservation or purchase the ticket and disclose the code-sharing arrangement only when reading back the flight information." ld. 7 The preamble recognizes the common-sense view that when prospective consumers are gathering flight information from an airline representative over the telephone, one important piece of information that should be disclosed is a fact of which many consumers are unaware: namely, that the flight may be operated by an entirely separate carrier. In short, the preamble advises that disclosure should take place during the portion of the conversation when the consumer is evaluating options , before making a decision to reserve or purchase.

6 The United States Supreme Court has long held that reviewing courts should generally give deference to an agency ' s own interpretation of its ambiguous regulations , so long as the interpretation is reasonable, it is not plainly inconsistent with the language of the regulation itself , and there is no indication that the interpretation at issue is a change from prior practice or is a post hocjustification adopted in response to litigation. Decker v. Northwest Environmental Defense Center,

_ U.S.

_ , 133 S.Ct. 1326, 1337 (2013) , citing, inter alia, Auer v. Robbins, 519 U.S
. 452, 461 (1997). Recognizing that the Office of Hearings is not an Article III Court, the Enforcement Office submits that these principles are helpful but not necessary to the disposition of Delta' s motion. 7 Delta argues: " The quoted statements from the preamble simply reaffirm that it is insufficient for a carrier to ' read back' information about a code-share arrangement aft er the customer has made a reservation orpurchased a ticket. " Motion to Dismiss at 11 (emphasis in original). Delta misconstrues the preamble language by removing the words " decided to. " The actual preamble text states: the carrier "may not wait until after the consumer has d ecided to mak e the reservation or purchase the ticket and disclose the code-sharing arrangement only when reading back the flight information. " Again, the preamble makes reference to a pre-decisional stage, not just a pre-booking stage. 11 Enforcement Office- Response to Motion to Di smissThis guidance has been available to Delta and all other carriers since 1999. Moreover, it is perfectly consistent with, and does not trump or override, the regulatory text. The preamble: (1) recognizes the regulation ' s time frame for providing disclosure as when a passenger is considering a specific flight to reserve or purchase; and (2) advises that the disclosure should take place in this information-gathering, pre-decisional (not merely pre-booking) stage of the conversation
.8 Delta argues that the entire time period up to the instant of a final booking is part of the

" information and decisionmaking phase. " Motion to Dismiss at 12
. That is not correct, and it is not particularly helpful for those common instances where the consumer ends the information and decisionmaking phase by hanging up the telephone without booking
. Again, the preamble reflects the view (expressed in the regulation itself) that the regulation protects all consumers who seek flight information from airlines, not merely the smaller subset of consumers who happen to actually complete the conversation with a booking
.

8 There are several phases to an exchange between a prospective consumer and an airline representative: (1) the stage where the agent obtains general information about the prospective consumer' s travel plans; (2) the information and decisionmaking stage, where the prospective consumer is evaluating specific options; (3) the decision as to whether or not to book a flight, and if so, the selection of a specific flight ; (4) a post-decision stage, where the agent may, for example, confirm all of the information that reflects the customer' s decision ; and (5) the completion of the booking
. The preamble advises that the disclosure should take place in phase (2)
. Because the code-share information should be provided at this relatively early pre-decisional stage, it stands to reason that carriers will discharge this obligation by disclosing code-share information at that time. As noted above, Delta often does so, but at the same time, it failed to make any disclosure in a significant percentage oftest calls. 

### 12 Enforcement Office

- Response to Motion to Dismiss

### III. The Complaint Clearly Alleges Violations of the Code-Share Disclosure Rule. In its Complaint, the Enforcement Office alleges eight violations 14 CFR 257.5(b) as it is properly understood
. One example will suffice as an illustration. On September 24, 2014, Analyst Jessica Ilich called Delta's reservations and information line, expressing interest in a one-way flight from Atlanta, GA, to Baton Rouge, LA, on October 11 , 2014. The target flight was flight #5 166, departing at 9:00a.m. For this flight, the corporate
name of the operating carrier was ExpressJet; the marketing name of the operating carrier was Delta Connection
. The Delta agent stated that they had six flights on that route ; Ms. Ilich stated that she would like the first flight of the day. During this conversation, the Delta agent stated that they had a flight leaving at 9 :00a.m. , flight nwnber 5166, at a fare of $390.10. Ms. Ilich stated that she would have to think about that fare. The agent asked ifthere was anything else he could assist with, and Ms. llich said no. At no time did the Delta agent disclose the required code-share information
. See Complaint at 28g; Affidavit ofJessica Ilich, Exhibit G. Here, Delta' s representative engaged in an oral communication with a prospective
conswner about a specific code-share flight. The communication ended without any disclosure ofthe required code-share information. These facts are amply sufficient to support a finding that Delta violated 14 CFR 257 .5(b). Turning to the language of the preamble for guidance (asswning that such guidance is necessary) , the result is the same. The agent engaged in the information and decisionmaking phase of a conversation with a prospective conswner about a specific code-share flight. In that telephone call , the agent provided extensive information about one of several flights that were available on the route in question. The agent provided information such as the code-share flight 's nwnber, the time of departure, the city pair, and the price. The agent even went so far as 

### 13 Enforcement Ofiice - Response to Moti on to Di smissto ask whether there was " anything else he could assist with."9 This is the portion of the conversation where the preamble advises that the disclosure should have been provided

- before
a decision is made, and while the prospective consumer is evaluating options. Similar fact patterns exist with the other code-share disclosure violations described in Paragraph 28 of the Complaint and the accompanying affidavits. IV. Delta's Remaining Arguments Do Not Compel, or Even Suggest, a Finding that the Complaint Should Be Dismissed as a Matter of Law. A. Delta's Assertion of "No Consumer Harm" Is Misguided. Early and often, Delta reminds the Office of Hearings that the code-share disclosure violations in this case were discovered by Transportation Industry Analysts
. 10 Delta' s point is unclear. The carrier appears to argue that evidence ofharm to a specific consumer is a necessary prerequisite to an enforcement action. Delta cites no law for this proposition, the logic of which would undermine any undercover investigation
. Section 5 of the Federal Trade Commission Act, on which section 41712 is based, provides that an act is unfair if it " causes or is likely to cause substantial injury to consumers which is not reasonably avoidable by consumers themselves and not outweighed by countervailing benefits to consumers or to competition." 15 U.S
.C. § 45(n) (emphasis added). Similarly, the FTC defines a deceptive practice as " a representation, omission or practice that is
9 At this point, it is clear that the agent had provided all of the information that he was going to provide, in the absence ofany other question by the Analyst. 10 Delta correctly observes that the Analysts could have booked the flights and then cancelled without penalty for 24 hours. Delta states that it is "baffling" that the Analysts did not do so. Motion to Dismiss at 8, n. l
. This decision was hardly baffling: going through the process of charging this many flights to personal or government credit cards, and then cancelling the flights, would have been an unnecessary waste of both Delta' s and the Enforcement Office' s time and resources , and would have unnecessarily tied up Delta inventory and potentially denied seats to consumers. Moreover, bookings are not necessary to find violations as a matter oflaw. 

### 14 Enforcement Office

- Response to Motion to Dismisslikely to mislead the consumer acting reasonably m the circumstances, to the consumer's detriment. " 1 1 The overarching goal of the code-share disclosure rule, like other rules enforced by the Enforcement Office, is to protect consumers from unfair or deceptive practices. The Enforcement Office may investigate and discover such practices on its own initiative. 49 U.S.C. § 41712(a). Here, the Enforcement Office discovered evidence that Delta failed to make the proper code-share disclosures in 16% of test calls. Given this rate of failure, it is hardly a leap of logic to conclude that similar failures are taking place every day in a substantial number of telephone contacts that Delta processes with its consumers. Indeed, individual consumers may be unlikely to complain that a code-share violation has taken place, precisely because they may not be aware ofthe code-share arrangement (or the code-share disclosure rule itself) in the first place. The evidence described in the Complaint is easily sufficient to sustain action for unfair and deceptive practices , because it demonstrates a significant likelihood that Delta's actions are harmful and misleading to unsuspecting consumers. B. The "First Mention" Rule is Not at Issue. Delta repeatedly insists that the Enforcement Office is attempting to enforce a "first mention" ru1e (i.e., a ru1e that code-share disclosure must take place at the frrsr mention of a code-share flight). This is simply not the case. The Complaint does not recite any instance where Delta representatives provided full disclosure, but not at the frrst mention. Instead, the Complaint alleges eight instances where Delta failed entirely to provide code-share information

II http: //www.ftc.gov/public-statements / 1983/ l 0 /ftc-policy-statement-deception added). 

### 15 Enforcement Office- Response to Motion to Dismiss (emphasisduring the information and decisionmaking portion of the conversation. The "first mention"
standard has no bearing on this action. 12 C. The Department's Proposed Amendment to the Oral Code-share Rule is Irrelevant Similarly, Delta takes issue with the fact that the Department has proposed changing the text of 14 CFR 257.5(b) to incorporate a "first mention" rule
. Notice of Proposed Rulemaking , Transparency of Airline Ancillary Fees and Other Consumer Protection I ssues, 79 Fed.Reg. 29970, 29999 (May 23 , 2014). Delta reasons : " of course, this amendment to the regulation would be entirely unnecessary and redundant if the regulation already meant what the Office claims it means. " Motion to Dismiss at 15 (emphasis in original). Delta's central premise, again, is that the Enforcement Office is privately measuring Delta's performance against a " first mention" standard. That premise is demonstrably incorrect, and distracts from the issues in the
case, where Delta' s telephone reservation agents in 16% of test calls failed to disclose the full , required code-share information
. The merits, timing, and motivations for proposing a " first mention" rule are all irrelevant to the central question of whether the Complaint states a claim when measured against well-established legal standards. D. The Appropriate Civil Penalty is Not at Issue at this Time. In its Motion to Dismiss , Delta makes pas sing reference to the fact that the Enforcement Office seeks $660 ,000 in civil penalties in this case. Delta suggests that the Enforcement Office has double-counted violations, and/or improperly seeks the maximum amount of $27 ,500 per violation. It is a fact that violations of section 41712 carry a maximum penalty of $27 ,500. 49

12 The Enforcement Office recognizes that the " first mention" rule does appear in certain precomplaint correspondence and consent orders. Those documents have no bearing on this action, which focuses on the Enforcement Office ' s evidence as set forth in the Complaint measured against the proper legal standard, including the standard ofreview
. 

### 16 Enforcement Office

- Response to Motion to Di smissU.S.C. § 46301; 14 CFR Part 383
. The Office of Hearings has the authority to determine the appropriate penalty for the violations at issue, up to the maximum allowable by law. Moreover, the Office of Hearings cannot determine the number of violations until after deciding the Motion to Dismiss. These questions regarding the scope ofthe penalty are best reserved to a later time. CONCLUSION The narrow question at issue in this Motion to Dismiss is whether the Complaint states a claim as a matter of law
. At the pleading stage, a liberal standard of review applies: the Office of Hearings must accept well-pleaded facts as true, and is limited to determining only if the Complaint alleges plausible prima facie evidence of violations. That standard is easily met here. The broad, express purpose of the code-share disclosure statute and regulation is to ensure that prospective consumers are informed about code-sharing arrangements early in the process while they are gathering information and making decisions about whether and how to book a flight. Delta's fundamental argument
-- that these protections do not exist unless the consumer completes a booking

- subverts this purpose and runs contrary to the plain language ofthe statute and rule. The Enforcement Office respectfully requests that Delta' s Motion to Dismiss be denied in its entirety, because it is predicated on legal standards that simply do not apply
.

# ~~bA**v~** Blane A. Workie Assistant General Counsel for Aviation Enforcement and Proceedings

Robert M. Gorman U.S. Department of Transportation Office ofthe General Counsel 1200 New Jersey Avenue SE Washington, DC 20590 (202) 366-9350 robert
.gorman @ dot.gov 

### 17 Enfor cement Office

- Response to Motion to Dismi ssCERTIFICATE OF SERVICE I hereby certify that on January 16 , 2015 , the original and one copy of the foregoing " Response of Office of Aviation Enforcement and Proceedings to Delta Air Lines ' Motion to Dismiss Enforcement Complaint," and Memorandum in support thereof , were hand-delivered to: U. S
. Department of Transportation Dockets Operations , M-30 West Building, Ground Floor Room W12-10 1200 New Jersey Avenue SE Washington, DC 20590 I further certify that one copy of the forgoing document was hand-delivered to: The Honorable J
.E
. Sullivan, Administrative Law Judge U.S
. Department ofTransportation Office ofHearings , M-20 1200 New Jersey Avenue, SE (E11-310) Washington, DC 20590 I further certify that copies of the foregoing document were served on the Respondent by electronic mail and certified mail-return receipt requested at the following addresses: J
. Scott McClain Jon-Peter F
. Kelly Delta Air Lines , Inc
. 1030 Delta Boulevard, Dept. 981 Atlanta, GA 30354-1989 Scott
.McClain @ delta
.com JonPeter
.F .Kelly @ delta
.com Paul D. Clement Jeffrey M. Harris BANCROFT PLLC 1919 M Street, NW, Ste
. 470 Washington, DC 20036 pclement@ bancroftpllc.com jharris @ bancroftpllc
.com
Blane A. Workie Assistant General Counsel for Aviation Enforcement and Proceedings B y: 

# (__(v**~** Robert M
. Gorman U
.S. Department of Transportation Office ofthe General Counsel 1200 New Jersey Avenue SE Washington, DC 20590 (202) 366-9350 robert
.gorman @ dot.gov 

### 18 Enforcement Office - Response to Moti on to Dismiss