Here's an interesting little piece. According to these guys, who SEEM to know the law, this was not an overbook. They didn't really sell more seats than they had. What they had was an unexpected need to get four employees somewhere else, so they threw out people who were already seated. Legally, this was giving one passenger preference over another, and while that's fine for how you treat
your passengers, it's not legal to bump one passenger to make room for one you have deemed more important.
Mister Dao gonna kick some butt with this one. United Airlines Did Not Have the Legal Right to Refuse Service to the Doctor Dragged Off Its Plane
However, other passengers on the flight, and the CEO of United Airlines, explained that the flight was not, in fact, overbooked but that four passengers had been requested to give up their seats for crew members who had to commute to Louisville, Kentucky, to work on flights the following day.
The fact that the flight was not overbooked may seem trivial, or pedantic, but there is very important legal distinction to be made. There may not be a difference in how an airline (typically) responds when it needs additional seats, such as asking for volunteers who wish to give up their seat for a voucher or cash. But there is a legal difference between bumping a passenger in the instance of overselling a flight versus bumping a passenger to give priority to another passenger. Any thoughtful person can see the problem that arises if an airline were allowed to legally remove one fare-paying passenger to allow for another passenger it prefers.
Since the flight was not actually overbooked, but instead only fully booked, with the exact number of passengers as seats available, United Airlines had no legal right to force any passengers to give up their seats to prioritize others. What United did was give preference to their employees over people who had reserved confirmed seats, in violation of 14 CFR 250.2a. Since Dr. Dao was already seated, it was clear that his seat had already been "reserved" and "confirmed" to accommodate him specifically.
Nowhere in the terms of service does United Airlines claim to have unilateral authority to refuse service to anyone, for any reason (which would be illegal anyway).
I wonder if this opened the door for the other three passengers to launch suits of their own?