The cap is the legally required compensation limit, airlines are free to exceed it. But in the David Dao case, United didn't even reach that cap, offering $800

The cap is the legally required compensation limit, airlines are free to exceed it. But in the David Dao case, United didn't even reach that cap, offering $800 (as reported by witnesses, or $1,000 as reported by United). So it's not clear how this particular regulation brought us this mess when the airlines didn't even follow the regulation that required them to tell the passenger in writing what his rights (and compensation amount) were.