Passenger Baggage Liability

AGENCY:

Department of Transportation (DOT), Office of the Secretary (OST)

ACTION:

Final rule.

SUMMARY:

In accordance with the provisions of 14 CFR 254.6, this final rule revises the minimum limit on domestic baggage liability applicable to air carriers to reflect inflation since December 1999, the date of the most recent revision to the rule. Section 254.6 requires that the Department revise periodically the limit to reflect any changes in the Consumer Price Index during the interim. The rule adjusts the minimum limit of liability from the current amount of $2,500 to $2,800, taking into account the changes in price level over a period of approximately four years.

DATES:

Effective Date: This rule is effective on October 22, 2004.

FOR FURTHER INFORMATION CONTACT:

Nicholas Lowry, Senior Attorney, Office of Aviation Enforcement and Proceedings (C-70), Department of Transportation, 400 Seventh St., SW., Washington, DC 20590; (202) 366-9351.

SUPPLEMENTARY INFORMATION:

I. Background

Part 254 of the Department's rules, 14 CFR part 254, establishes minimum baggage liability limits applicable to domestic air service, currently $2,500 per passenger. Provisions of 14 CFR 254.6 require that the Department periodically review the minimum limit of liability prescribed in part 254 in light of changes in the Consumer Price Index for Urban Consumers and directs the Department to revise the limit of liability to reflect changes in the price index that have occurred in the interim. Section 254.6 prescribes the use of a specific formula to calculate the revised minimum liability amount when making these periodic adjustments. Applying the formula to changes occurring between December 1999 and July 2004, the appropriate inflation adjustment is $2,500 × 189.4/168.3, or $2,813.42. The provision requires us to round the adjustment to the nearest $100, or to $2,800.

II. Waiver of Rulemaking Procedural Requirements

With this final rule, we are waiving the usual notice of proposed rulemaking and public comment procedures set forth in the Administrative Procedure Act (APA) (5 U.S.C. 553). The APA allows agencies to dispense with such procedures on finding of good cause when they are impracticable, unnecessary or contrary to the public interest. We have determined that under 5 U.S.C. 553(b)(3)(B) good cause exists for dispensing with the notice of proposed rulemaking and public comment procedures for this rule. This rulemaking is required by the terms of 14 CFR 254.6, as most recently amended in December 1999 (64 FR 70575, December 17, 1999). Accordingly, we believe prior comment is unnecessary and contrary to the public interest, and we are issuing this revision as a final rule.

Although this final rule will become effective in 30 days, the Department will defer enforcement of the notice provision in the revised rule, as it pertains to written notice of the new limit, for a reasonable period to allow carriers to replace or correct their current paper ticket stock and envelopes so as to provide proper written notice of the increased minimum liability limit without imposing an undue burden. Carriers are, however, subject to enforcement action from the date of issuance of this final rule if they otherwise fail to provide proper notice of the $2,800 liability limit or fail to apply the new limit, as appropriate.

III. Regulatory Impact Statement

Executive Order 12866

This final rule has been evaluated in accordance with the existing policies and procedures and is considered not significant under both Executive Order 12866 and DOT Regulatory Policies and Procedures. The rule is exempt from review by the Office of Management and Budget (OMB) in accordance with the provisions of Executive Order 12866, because its provisions are required by current regulatory language, without interpretation.

Regulatory Flexibility Act

The Regulatory Flexibility Act of 1980 (5 U.S.C. 601-612) requires an assessment of the impact of the proposed and final rule on small entities unless the agency certifies that the proposed regulation will have no significant economic impact on small entities. This revision of 14 CFR part 254 provides for a minimal increase in the amount of the minimum baggage liability limit that air carriers may incur in cases of lost or damaged baggage. It will pose minor additional costs only in those instances in which carriers lose or damage baggage, or delay delivering baggage to the traveler, and it affects only carriers operating large aircraft or those small carriers interlining with such carriers. As a result, many operations of small entities, such as air taxis and commuter air carriers, are not covered by the rule. Accordingly, we certify that this action will not have a significant economic impact on a substantial number of small entities.

Paperwork Reduction Act

This final rule imposes no new reporting or recordkeeping requirements necessitating clearance by OMB.

List of Subjects in 14 CFR Part 254

• Administrative practice and procedure
• Air carriers
• Consumer protection
• Department of Transportation

Accordingly, the Department of Transportation revises 14 CFR part 254, Domestic Baggage Liability, to read as follows:

1. The authority citation continues to read as follows:

Authority: 49 U.S.C. 40113, 41501, 41501, 41504, 41510, 41702 and 41707.

2. Section 254.4 is revised to read as follows:

On any flight segment using large aircraft, or on any flight segment that is included on the same ticket as another flight segment that uses large aircraft, an air carrier shall not limit its liability for provable direct or consequential damages resulting from the disappearance of, damage to, or delay in delivery of a passenger's personal property, including baggage, in its custody to an amount less than $2,800 for each passenger.

3. Section 254.5 is revised to read as follows: