Biden-Era Airline Fee Disclosure Rule Nixed by Fifth Circuit (1)

The Department of Transportation under the Biden administration violated federal administrative law when it imposed a rule requiring airlines to disclose additional fees upfront for items such as checked bags, the full Fifth Circuit ruled Tuesday.

The “Enhancing Transparency of Airline Ancillary Service Fees” wasn’t issued in compliance with the Administrative Procedure Act’s notice-and-comment requirement, the US Court of Appeals for the Fifth Circuit said in an unsigned opinion.

“Therefore, we must apply the APA’s ‘default’ remedy—vacatur,” the Fifth Circuit said. The 17-judge ruling exceeded the court’s earlier remedy, which had simply been to order the agency to permit time for public comment.

The vacated rule required carriers to communicate extra charges upfront for checked luggage, carry-on bags and canceling or changing reservations. The major carriers and the trade group Airlines for America suing the DOT contend the rule forces the industry to use specific language in a specific way to reveal ancillary costs. The Fifth Circuit in July 2024 granted the industry’s request to temporarily block the measure from taking effect as it considered the suit.

The US Department of Justice had asked the full Fifth Circuit to vacate the rule during oral argument in January, backing airlines and a trade industry group that had urged the appeals court to hold the DOT had no authority to issue the rule in the first place.

Prior Ruling

A three-judge Fifth Circuit panel ruled in January 2025 that DOT must provide a fresh opportunity to comment on the rule. The court held DOT didn’t give airlines an opportunity to comment on the data justifying the rule since the data wasn’t available during the notice-and-comment period.

This “procedural defect compromised the entire regulation,” the Fifth Circuit said then.

The en banc Fifth Circuit panel included Judges Jennifer Walker Elrod, Edith H. Jones, Jerry E. Smith, Carl E. Stewart, Priscilla Richman, Leslie H. Southwick, Catharina Haynes, James E. Graves Jr., Stephen A. Higginson, Don R. Willett, James C. Ho, Stuart Kyle Duncan, Kurt D. Engelhardt, Andrew S. Oldham, Cory T. Wilson, Dana M. Douglas, and Irma Carrillo Ramirez.

Haynes, Southwick, and Douglas—who served on the three-judge panel in 2025—agreed with vacatur in a concurring opinion. “This case has evolved into a different arena since a year ago when we issued the panel opinion that I wrote,” Haynes said.

Skadden, Arps, Slate, Meagher & Flom, LLP and McDermott Will & Emery, LLP represent the airlines.

The case is Airlines for America v. Dept. of Transportation, 5th Cir., No. 24-60231, 2/3/26.