Organization and Functions; Rules of Practice and Procedure; Attorney Fees, 10508-10519 [2016-04219]

Download as PDF 10508 Federal Register / Vol. 81, No. 40 / Tuesday, March 1, 2016 / Rules and Regulations (1) The eligible person’s basis for eligibility. Enrolled veterans will receive first priority, followed in order by non-enrolled veterans; servicemembers; Family Caregivers; persons receiving counseling, training, or mental health services under 38 U.S.C. 1782 and 38 CFR 71.50; CITI beneficiaries; and guests. Persons eligible under more than one designation will be considered in the highest priority category for which that trip permits. VA will provide transportation to any attendant accompanying a veteran or servicemember who is approved for transportation. (2) First in time request. (3) An eligible person’s clinical need. (4) An eligible person’s inability to transport him or herself (e.g., visual impairment, immobility, etc.). (5) An eligible person’s eligibility for other transportation services or benefits. (6) The availability of other transportation services (e.g., common carriers, veterans’ service organizations, etc.). (7) The VA facility’s ability to maximize the use of available resources. (The Office of Management and Budget has approved the information collection requirements in this section under control number 2900–0838.) (Authority: 38 U.S.C. 111A, 501) [FR Doc. 2016–04281 Filed 2–29–16; 8:45 am] BILLING CODE 8320–01–P ENVIRONMENTAL PROTECTION AGENCY Continuous Emission Monitoring CFR Correction In Title 40 of the Code of Federal Regulations, Parts 72 to 80, revised as of July 1, 2015, on page 223, in § 75.16, paragraphs (b)(1)(ii)(A) and (b)(1)(ii)(B) are removed. [FR Doc. 2016–04435 Filed 2–29–16; 8:45 am] BILLING CODE 1505–01–D asabaliauskas on DSK5VPTVN1PROD with RULES ENVIRONMENTAL PROTECTION AGENCY 40 CFR Part 75 Continuous Emission Monitoring CFR Correction In Title 40 of the Code of Federal Regulations, Parts 72 to 80, revised as of July 1, 2015, on page 365, in Appendix A to Part 75, the first heading ‘‘2.1.3. 18:20 Feb 29, 2016 [FR Doc. 2016–04437 Filed 2–29–16; 8:45 am] BILLING CODE 1505–01–D FEDERAL MARITIME COMMISSION 46 CFR Parts 501 and 502 [Docket No. 15–06] RIN 3072–AC61 Organization and Functions; Rules of Practice and Procedure; Attorney Fees Federal Maritime Commission. Final rule. AGENCY: ACTION: The Federal Maritime Commission amends its Rules of Practice and Procedure governing the award of attorney fees in Shipping Act complaint proceedings, and its regulations related to Commissioner terms and vacancies. The regulatory changes implement statutory amendments made by the Howard Coble Coast Guard and Maritime Transportation Act of 2014. DATES: This final rule is effective: March 1, 2016. FOR FURTHER INFORMATION CONTACT: Karen V. Gregory, Secretary, Federal Maritime Commission, 800 North Capitol Street NW., Washington, DC 20573–0001, Phone: (202) 523–5725, Email: secretary@fmc.gov. For legal questions, contact William H. Shakely, General Counsel, Phone: (202) 523– 5740. Email: generalcounsel@fmc.gov. SUPPLEMENTARY INFORMATION: SUMMARY: Table of Contents 40 CFR Part 75 VerDate Sep<11>2014 CO2 and O2 Monitors’’ and the text following it are removed. Jkt 238001 I. Executive Summary II. Background III. Summary of July 2, 2015, Notice of Proposed Rulemaking A. Conforming Amendments B. Implementing the Amended AttorneyFee Provision IV. Overview of Comments V. Final Rule and Response to Comments A. Conforming Amendments B. Implementing the Amended AttorneyFee Provision 1. Who is eligible to recover attorney fees? a. Proceedings b. Parties 2. How will the commission exercise its discretion? a. General b. Treatment of Prevailing Complainants vs. Prevailing Respondents c. Factors for Consideration When Determining Entitlement d. Different Entitlement Standards Depending on Type of Proceeding 3. How will the commission apply the provision to pending proceedings? VI. Rulemaking Analyses and Notices PO 00000 Frm 00076 Fmt 4700 Sfmt 4700 I. Executive Summary Title IV of the Howard Coble Coast Guard and Maritime Transportation Act of 2014, Public Law 113–281 (Coble Act), enacted on December 18, 2014, amended the Shipping Act of 1984 and the statutory provisions governing the general organization of the Commission. Specifically, section 402 of the Coble Act amended the statutory provision governing the award of attorney fees, which may now be awarded to any prevailing party in a complaint proceeding. See 46 U.S.C. 41305(e). Section 403 of the Coble Act established term limits for future Commissioners, limited the amount of time that future Commissioners will be permitted to serve beyond the end of their terms, and established conflict-of-interest restrictions for current and future Commissioners. See 46 U.S.C. 301(b). In response to these statutory amendments, the Commission published a Notice of Proposed Rulemaking (NPRM) on July 2, 2015. 80 FR 38153. Specifically, the Commission proposed to amend affected regulations to conform the regulatory language to the revised statutory text.1 In addition, the Commission sought comment on an appropriate framework for determining attorney fee awards under the amended fee-shifting provision. The Commission offered to provide additional guidance on this issue and, where appropriate, incorporate that guidance into the Commission Rules of Practice and Procedure. To that end, the NPRM discussed three general questions on which the Commission’s guidance would focus: • Who is eligible to recover attorney fees? • How will the Commission exercise its discretion to determine whether to award attorney fees to an eligible party? • How will the Commission apply the new attorney-fee provision to proceedings that were pending before the Commission when the Coble Act was enacted on December 18, 2014? The Commission received five comments, all of which focused on the framework for determining attorney fee awards and the three general questions described above. None of the comments discussed the conforming edits proposed in the NPRM. Accordingly, this final rule adopts the proposed conforming edits with minor changes, which are explained in detail below. 1 The Coble Act amendments to 46 U.S.C. 301(b) establishing conflict-of-interest restrictions for Commissioners were not addressed in the NPRM and are outside the scope of this rulemaking. The Commission is currently evaluating the need for regulatory action in response to these amendments. E:\FR\FM\01MRR1.SGM 01MRR1 Federal Register / Vol. 81, No. 40 / Tuesday, March 1, 2016 / Rules and Regulations With respect to the framework for awarding attorney fees under the amended statutory language, this final rule provides the following guidance. Regarding eligibility for fee awards, the Commission interprets § 41305(e) as permitting fee recovery by prevailing parties in any Shipping Act complaint proceeding. The provision does not, however, permit fee recovery in Commission-initiated investigations. In determining whether a party has ‘‘prevailed’’ in a proceeding, the Commission will look to federal case law, to the extent practicable. Based on relevant cases, the Commission initially concludes that a complainant would generally qualify as the ‘‘prevailing party’’ in a Commission proceeding when the presiding officer awards reparations or issues a cease and desist order. Regarding its discretion to award fees, the Commission is not specifying factors for consideration in determining fee awards. The primary consideration in determining entitlement to attorney fees will be whether such an award is consistent with the purposes of the Shipping Act, and any factors the Commission relies upon in individual cases should be consistent with these purposes. In identifying relevant factors, the Commission will keep in mind the following general principles: • There should be no general presumption for or against awarding attorney fees; • prevailing complainants and prevailing respondents should be treated in an even-handed manner; and • parties should be encouraged to litigate meritorious claims and defences. Finally, the Commission has decided to determine the applicability of § 41305(e) to pending cases on a caseby-case basis rather than through a bright-line rule. The preamble includes general guidance regarding several situations that may arise in proceedings going forward. asabaliauskas on DSK5VPTVN1PROD with RULES II. Background Section 11(a)–(b) of the Shipping Act of 1984, codified at 46 U.S.C. 41301, establishes a procedure by which a person may file a complaint with the Commission alleging a violation of the Shipping Act.2 Prior to the enactment of the Coble Act, 46 U.S.C. 41305(b) (section 11(g) of the Shipping Act) provided that ‘‘[i]f the complaint was filed within . . . [three years after the claim accrued], the Federal Maritime 2 The Shipping Act also authorizes the Commission to initiate investigations of possible violations of the Shipping Act on its own motion. 46 U.S.C. 41302. VerDate Sep<11>2014 18:20 Feb 29, 2016 Jkt 238001 Commission shall direct the payment of reparations to the complainant for actual injury caused by a violation of this part, plus reasonable attorney fees.’’ To implement this provision, the Commission added a sentence to Rule 253 of its Rules of Practice and Procedure. Final Rules To Implement the Shipping Act of 1984 and To Correct and Update Regulations, 49 FR 16994 (Apr. 23, 1984). After determining that more comprehensive regulations were needed, the Commission established Rule 254 (46 CFR 502.254) in 1987. Attorney’s Fees in Reparation Proceedings, 52 FR 6330 (Mar. 3, 1987) (1987 Final Rule). Section 402 of the Coble Act deleted the portion of 46 U.S.C. 41305(b) pertaining to attorney fees and added a new subsection (e), which reads as follows: ‘‘Attorney Fees.—In any action brought under section 41301, the prevailing party may be awarded reasonable attorney fees.’’ These amendments affect the award of attorney fees in three significant ways. First, the revised language expands the categories of persons eligible to recover attorney fees to include any ‘‘prevailing party,’’ not merely prevailing complainants. Second, the award of attorney fees is no longer conditioned on an award of reparations; under the amended language, attorney fees are recoverable ‘‘[i]n any action brought under section 41301.’’ Finally, whereas 46 U.S.C. 41305(b) previously directed the Commission to award reasonable attorney fees to an eligible party, the new provision in subsection (e) states that such fees ‘‘may be awarded,’’ thereby granting the Commission discretion to determine the circumstances under which eligible parties are entitled to attorney fees. The statutory provisions governing the general organization of the Commission are codified at 46 U.S.C. 301. Prior to the enactment of the Coble Act, there was no statutory limit on the number of terms a Commissioner could serve. In addition, when a Commissioner’s term ended, the Commissioner could continue to serve until a successor was appointed, without any prescribed time limitation. The Commission’s regulations at 46 CFR 501.2(c) reflect these statutory provisions. Section 403 of the Coble Act amended 46 U.S.C. 301(b) and established term limits for Commissioners appointed and confirmed by the Senate on or after the date of enactment, i.e., December 18, 2014. Specifically, future Commissioners will be limited to two terms, in addition to the remainder of any term for which the Commissioner’s PO 00000 Frm 00077 Fmt 4700 Sfmt 4700 10509 predecessor was appointed. See 46 U.S.C. 301(b)(2)–(3). Section 403 also limited the amount of time future Commissioners will be permitted to serve beyond the end of their terms to a period not to exceed one year. See 46 U.S.C. 301(b)(2). III. Summary of July 2, 2015, Notice of Proposed Rulemaking A. Conforming Amendments Given the amendments made by the Coble Act to 46 U.S.C. 301 and 41305, the NPRM proposed amendments to 46 CFR 502.254 and 46 CFR 501.2(c) to implement the revised statutory text. The proposed amendments to 46 CFR 502.254 included: • Replacing references to ‘‘complainant’’ with ‘‘prevailing party’’; • replacing references to ‘‘respondent’’ with ‘‘opposing party’’; • replacing references to reparations awards with references to complaint proceedings more generally; and • amending the language to clarify that the Commission now has discretion regarding the award of fees, and that fee petitions may be denied. The Commission also proposed deleting the clause stating that recoverable attorney fees include compensation for services in related federal court proceedings. In addition to these substantive amendments, the Commission proposed making a number of minor changes to improve the clarity and organization of Rule 254, including: Adding crossreferences to relevant provisions governing formal and informal small claims; and replacing the term ‘‘presiding officer’’ in Rule 254 with the phrase, ‘‘administrative law judge or small claims officer.’’ With respect to 46 CFR 501.2(c), the Commission proposed dividing the paragraph into several subparagraphs addressing the length of Commissioner terms, removal of Commissioners, vacancies on the Commission, and term limits for both current and future Commissioners. B. Implementing the Amended Attorney-Fee Provision The NPRM discussed three main areas that the Commission wanted to provide guidance on: (1) Eligibility; (2) entitlement; and (3) applicability. With respect to eligibility, the NPRM noted that the Commission had interpreted the original attorney-fee provision at § 41305(b) as providing for attorney fees only to prevailing complainants in reparation proceedings, and that Rule 254 reflects this limitation. See Attorney’s Fees in Reparation E:\FR\FM\01MRR1.SGM 01MRR1 asabaliauskas on DSK5VPTVN1PROD with RULES 10510 Federal Register / Vol. 81, No. 40 / Tuesday, March 1, 2016 / Rules and Regulations Proceedings, 51 FR 37917, 37918 (Oct. 27, 1986) (1986 NPRM); 46 CFR 502.254 (2015). In subsequent decisions, the Commission specified three conditions for recovering attorney fees pursuant to Rule 254: ‘‘(1) A violation of the 1984 Act; (2) actual injury caused by such violation; and (3) payment of reparations to compensate for such injury.’’ A/S Ivarans Rederi v. Companhia de Navegacao Lloyd Brasileiro, 25 S.R.R. 1061, 1063 (FMC 1990). Complainants who prevailed on the merits of the complaint, but who did not obtain a reparations award, were not eligible to recover attorney fees. See id. at 1064; 1986 NPRM, 51 FR at 37918. The NPRM noted that the new attorney-fee provision provides for the award of attorney fees to the prevailing party in any action brought under section 41301. The Commission proposed to interpret this language as permitting recovery of attorney fees in all complaint proceedings, not just those in which reparations were awarded. The Commission further proposed using the definition of ‘‘party’’ described in Rule 41 (46 CFR 502.41) when applying the attorney-fee provision, and proposed to rely on relevant federal case law, to the extent practicable, in determining whether a party ‘‘prevailed’’ in a particular proceeding. With respect to entitlement, the Commission noted in the NPRM that the new attorney-fee provision is silent as to how the Commission should exercise its discretion in awarding fees to an eligible party. Therefore, the Commission discussed two standards used by federal courts in determining entitlement to attorney fees under provisions with language similar to 46 U.S.C. 41305(e), i.e., those provisions that allow for, but do not require, the award of attorney fees to the prevailing party in an action. The first standard, used by federal courts applying the fee-shifting provision in the Copyright Act, treats prevailing plaintiffs and prevailing defendants similarly when making feeaward determinations, and the Supreme Court has cited with approval a nonexclusive list of factors for courts to consider when determining entitlement under this standard, including ‘‘frivolousness, motivation, objective unreasonableness (both in the factual and in the legal components of the case) and the need in particular circumstances to advance considerations of compensation and deterrence.’’ Fogerty v. Fantasy, Inc., 510 U.S. 517, 534 n.19 (1994) (quoting Lieb v. Topstone Industries, Inc., 788 F.2d 151, 156 (3rd Cir. 1986)) (internal quotation marks omitted). VerDate Sep<11>2014 18:20 Feb 29, 2016 Jkt 238001 The second standard, used by federal courts in applying various fee-shifting provisions in the Civil Rights Act, treats prevailing plaintiffs more favorably than prevailing respondents when determining entitlement to attorney fees. While prevailing plaintiffs ‘‘ordinarily recover an attorney’s fee unless special circumstances would render such an award unjust,’’ Newman v. Piggie Park Enterprises, Inc., 390 U.S. 400, 402 (1968) (per curiam), prevailing defendants are awarded attorney fees only ‘‘upon a finding that the plaintiff’s action was frivolous, unreasonable, or without foundation.’’ Christiansburg Garment Co. v. Equal Emp’t Opportunity Comm’n, 434 U.S. 412, 421 (1978). The NPRM highlighted the differences between the two standards and requested comment on them. The NPRM also requested comment on any other standards the Commission should consider, as well as any other criteria that the Commission should apply in determining entitlement to fee awards. Finally, the NPRM discussed the applicability of the new attorney fee provision to complaint proceedings initiated prior to December 18, 2014, the Coble Act’s effective date, that were pending before the Commission on that date. The NPRM presented two options: (1) The Commission could resolve the applicability issue on a case-by-case basis in accordance with the framework established by federal courts; or (2) the Commission could establish a brightline rule clearly defining when the old or new attorney-fee provision would apply to a case, e.g., based on the date the proceeding was initiated. IV. Overview of Comments The Commission received five comments in response to the NPRM from the following organizations: The World Shipping Council (WSC), an organization comprising many of the major ocean common carriers; the American Association of Port Authorities (AAPA); Cozen O’Connor (Cozen), a law firm that has represented both complainants and respondents in Commission proceedings; Maher Terminals, LLC (Maher); and the Port Authority of New York and New Jersey (PANYNJ). The comments focused on the Commission’s policy going forward with respect to attorney fee awards, particularly how the Commission will exercise its discretion to award fees. The commenters generally supported the Commission’s proposal to rely on federal court case law, to the extent practicable, in determining whether a party ‘‘prevailed’’ in a proceeding, though Maher recommended that the Commission look to its own case law PO 00000 Frm 00078 Fmt 4700 Sfmt 4700 first. All of the commenters except Maher recommended that the Commission treat prevailing complainants and prevailing respondents in an even-handed manner with respect to attorney fee awards. Maher, on the other hand, recommended that the Commission treat prevailing complainants more favorably than prevailing respondents. Only two commenters, PANYNJ and Maher, commented on the applicability of the new attorney-fee provision to pending Commission cases. PANYNJ urged the Commission to apply the new provision to all pending proceedings, while Maher argued that the new provision should not be applied to any pending proceedings. V. Final Rule and Response to Comments A. Conforming Amendments None of the commenters discussed the proposed conforming amendments to 46 CFR 501.2(c) and 46 CFR 502.254. For the reasons described in the NPRM, the final rule adopts these conforming amendments, with the following minor changes. First, in the newly created § 501.2(c)(4), the Commission has clarified that the applicability of the Coble Act’s new term limits for Commissioners depends on a Commissioner’s initial appointment date. This language more accurately reflects the Commission’s interpretation, as stated in the NPRM, that the new term limits apply only to future Commissioners. The proposed rule, which referred only to a Commissioner’s appointment date, could have been misconstrued to mean that the term limits apply not only to future Commissioners but also to current Commissioners appointed to a new term on or after the Coble Act’s effective date. Second, the Commission has reorganized the fee petition content requirements in § 502.254(d) in order make them easier to read, and has specified that petitions must explain why fees should be awarded in the relevant proceeding. The latter amendment clarifies Rule 254’s current requirement that petitioners explain the reasonableness of their claim in light of the discretionary nature of fee awards under § 41305(e). Finally, the Commission has revised § 502.254(h), which governs appeals of orders issued by administrative law judges (ALJs) and small claims officers, to include references to the formal and informal procedures governing small claims. As the Commission noted in the NPRM, Rule 254 currently applies to E:\FR\FM\01MRR1.SGM 01MRR1 Federal Register / Vol. 81, No. 40 / Tuesday, March 1, 2016 / Rules and Regulations small claims but does not reference the relevant procedural rules governing such claims.3 The Commission proposed including cross-references in proposed paragraphs § 502.254(c)(2)(i) and (ii), but inadvertently failed to include similar cross-references in proposed paragraph (h). The final rule corrects this error. B. Implementing the Amended Attorney-Fee Provision 1. Who is eligible to recover attorney fees? a. Proceedings Comments Maher asserts that § 41305(e) applies only to complaint proceedings authorized under 46 U.S.C. 41301 (i.e., private party complaint proceedings alleging violations of the Shipping Act (whether seeking reparations or a cease and desist order)) but not ‘‘other complaint proceedings, actions or investigations authorized under the Shipping Act or described in the Rules, such as complaints or proceedings under 46 U.S.C. 41302 and Rule 502.66.’’ Maher Comments at 2. Discussion The Commission agrees with Maher that the recovery of attorney fees under § 41305(e) is limited to proceedings initiated under § 41301, i.e., private party complaint proceedings, and that § 41305(e) does not apply to investigation proceedings initiated by the Commission under 46 U.S.C. 41302(a) 4 and 46 CFR 502.63.5 b. Parties asabaliauskas on DSK5VPTVN1PROD with RULES Comments Maher contends that the existing definition of ‘‘party’’ in 46 CFR 502.41 is only appropriate to the extent that the entities eligible for attorney fees are parties in complaint proceedings under § 41301 and 46 CFR 502.62 (e.g., complainants and respondents) and parties in proceedings under ‘‘Section 502.66’’ 6 would not be covered. Maher Comments at 2. Maher also asserts that while intervenors may in certain circumstances be a ‘‘party’’ for the 3 The proposed regulatory text for § 502.305(b) inadvertently failed to include amendments made to that paragraph by a March 19, 2015, direct final rule (80 FR 14318), which went into effect on June 24, 2015. The final rule reflects these amendments. 4 Subsections 41302(c)–(e) apply to both complaint proceedings under § 41301 and Commission investigations under § 41302(a). 5 The Commission assumes that Maher meant to cite § 502.63, which governs Commission enforcement actions, rather than § 502.66, which governs amendments and supplements to pleadings. 6 See supra n.4. VerDate Sep<11>2014 18:20 Feb 29, 2016 Jkt 238001 purposes of attorney fee recovery under federal case law, the standards applicable to specific types of parties may differ depending on the circumstances. Id. Maher cautioned that the definition of ‘‘party’’ in § 502.41 should not be applied in any manner suggesting an expansion of eligibility to attorney fees beyond those parties participating in complaint proceeding authorized under § 41301. Id. Regarding the question of whether a party is a ‘‘prevailing party’’ eligible to recover attorney fees, WSC, AAPA, and Cozen support the Commission’s proposal to rely on federal case law, to the extent practicable, in making such determinations. WSC Comments at 1; AAPA Comments at 2; Cozen Comments at 2. Cozen agrees with the Commission’s interpretation that attorney fees are available to any prevailing party under the amended statutory language, not just to complainants that obtain a reparations award. Cozen Comments at 2. WSC and AAPA urge the Commission to adopt the standard stated by the Supreme Court in Farrar v. Hobby, 506 U.S. 103 (1992), namely that a ‘‘in order to be a prevailing party, the party seeking an attorney fee award ‘must obtain an enforceable judgment against the [party] from whom fees are sought.’ ’’ WSC Comments at 1 (quoting Farrar, 506 U.S. at 111); AAPA Comments at 2. The two organizations differ, however, on the application of this standard to Commission proceedings. WSC disagrees with the Commission’s assertion in the NPRM that under the amended statutory language, the award of attorney fees is no longer conditioned on an award of reparations. WSC Comments at 2. WSC argues that the placement of the attorney fee provision in § 41305(e) was likely meant to reflect the expansion of attorney-fee recovery to any prevailing party, not just prevailing complainants, and that the new language does not compel or support the Commission abandoning its interpretation that the award of reparations is a prerequisite for a complainant’s eligibility to recover attorney fees. Id. AAPA, on the other hand, argues that ‘‘[t]o the extent the Commission might consider the statute to allow an award of fees where nonmonetary relief is awarded . . . , it would be required that an underlying Commission order mandate ‘some action (or cessation of action) by the defendant,’ ’’ AAPA Comments at 2 (quoting Hewitt v. Helms, 482 U.S. 755, 761 (1987)), ‘‘and ‘materially alter the legal relationship between the parties.’ ’’ AAPA Comments at 2 (quoting Lefemine PO 00000 Frm 00079 Fmt 4700 Sfmt 4700 10511 v. Wideman, 133 S. Ct. 9, 11 (2012) (per curiam)). Maher urges the Commission to apply and conform its own body of authority regarding the attorney-fee eligibility of complainants under the Shipping Act, as applicable, before looking to federal case law for guidance. Maher Comments at 3. Specifically, Maher states that ‘‘prevailing on the merits of the complaint should be the sole consideration for the threshold determination of whether a complainant ‘prevailed’ ’’ and that ‘‘additional factors concerning actual injury and/or reparation awards or cease and desist orders are not appropriate or necessary.’’ Id. at 3 & n.2. Regarding whether a respondent has prevailed under relevant federal case law, Maher asserts that the determination depends on which federal case law is considered relevant. Id. at 3. Maher argues that the Commission should adopt the standard used for other remedial statutes with similar ‘‘prevailing party’’ provisions, under which ‘‘a defendant successfully defending against an otherwise colorable complaint (absent a finding that the plaintiff’s complaint was frivolous, unreasonable, or without foundation) would not constitute ‘prevailing’ for the purposes of the attorney-fee provision.’’ Id. Discussion The Commission agrees with Maher that ‘‘parties’’ eligible for attorney awards are only those parties to complaint proceedings brought under § 41301. With that caveat, the Commission sees no reason to deviate from the definition of ‘‘party’’ in Rule 41 when determining eligibility for attorney fees. With respect to whether a party has ‘‘prevailed,’’ the Commission notes that the same standards ‘‘are generally applicable in all cases in which Congress has authorized an award of fees to a ‘prevailing party.’ ’’ Hensley v. Eckerhart, 461 U.S. 424, 433 n.7 (1983). ‘‘The term ‘prevailing party’ . . . is a ‘legal term of art,’ and is ‘interpreted . . . consistently’—that is, without distinctions based on the particular statutory context in which it appears.’’ Smyth v. Rivero, 282 F.3d 268, 274 (4th Cir. 2002) (quoting Buckhannon Bd. & Care Home v. W. Va. Dep’t of Health and Human Res., 532 U.S. 598, 603 & n.4 (2001)) (citation omitted). Nonetheless, some courts have left open the possibility that the ‘‘text, structure, or legislative history’’ of a particular feeshifting statute may indicate that the term ‘‘prevailing party’’ in that statute is not meant to have its ‘‘usual meaning.’’ E:\FR\FM\01MRR1.SGM 01MRR1 10512 Federal Register / Vol. 81, No. 40 / Tuesday, March 1, 2016 / Rules and Regulations asabaliauskas on DSK5VPTVN1PROD with RULES See T.D. v. La Grange Sch. Dist. No. 102, 349 F.3d 469, 475 (7th Cir. 2003). Nothing in the text, structure, or legislative history of section 402 of the Coble Act suggests Congressional intent to depart from the consistently applied standards for determining whether a party has prevailed in a proceeding. The text of § 41305(e) does not define ‘‘prevailing party,’’ and there is limited legislative history for section 402. An informational brochure issued by the House Transportation and Infrastructure Committee states only that section 402 ‘‘clarifies that in actions filed with the FMC alleging a violation of law pertaining to ocean shipping, the prevailing party in the proceeding may be awarded reasonable attorney fees.’’ 7 In the absence of any evidence that the term ‘‘prevailing party’’ in § 41305(e) is meant to have something other than its usual meaning, the Commission will apply the standards used by federal courts in determining whether a party has prevailed in complaint proceedings under the Shipping Act.8 ‘‘The touchstone of the prevailing party inquiry’’ is ‘‘the material alteration of the legal relationship of the parties in a manner which Congress sought to promote in the fee statute.’’ Tex. State Teachers Ass’n v. Garland Indep. Sch. Dist., 489 U.S. 782, 792–93 (1989); Cadkin v. Loose, 569 F.3d 1142, 1148– 49 (9th Cir. 2009) (applying the same test in a copyright case). In particular, the plaintiff in the proceeding ‘‘must obtain at least some relief on the merits’’ to qualify as the prevailing party. Farrar, 506 U.S. at 111. An award of damages, declaratory judgment, or injunction usually satisfies this test. Lefemine, 133 S. Ct. at 11 (citing Rhodes v. Stewart, 588 U.S. 1, 4 (1988) (per curiam)). Complainants in Commission proceedings generally seek reparations (damages) or a cease and desist order (order directing the respondent not to engage in proscribed behavior) 9 or both. Applying the test used in other statutes, the Commission concludes that a complainant would generally qualify as the ‘‘prevailing party’’ in a Commission proceeding when the presiding officer 7 House Committee on Transportation & Infrastructure, The Howard Coble Coast Guard & Maritime Transportation Act of 2014, at 20 (2014). senateagreement.pdf. 8 We disagree with Maher’s assertion that the courts use different standards for determining whether a defendant has prevailed. The cases cited by Maher illustrate that the courts have developed different standards for determining when a prevailing defendant is entitled to attorney fees under various statutes; they do not indicate different standards as to whether a defendant has, in fact, prevailed in the proceeding. 9 Brewer v. Maralan, 29 S.R.R. 6, 9 (FMC 2001). VerDate Sep<11>2014 18:20 Feb 29, 2016 Jkt 238001 awards reparations or issues a cease and desist order.10 WSC and Maher disagree with this approach. WSC argues that a reparation award should continue to be a prerequisite for attorney fee awards and downplays the importance of the placement and language of § 41305(e). Given that the Commission’s interpretation of the original attorney fee provision was based on the structure, language, and legislative history of that provision, see A/S Ivarans Rederi, 25 S.R.R. at 1063, we reject the notion that those elements should be ignored with respect to § 41305(e). As noted above, Congress replaced the original attorney-fee provision with one that incorporates language (i.e., ‘‘prevailing party’’) that is interpreted uniformly across different statutes, and WSC fails to offer any convincing justification to explain why the Commission should diverge from that interpretation with respect to § 41305(e). For similar reasons, the Commission rejects Maher’s suggestion that a complainant’s eligibility for attorney fees should not depend on whether the complainant has been awarded some form of relief.11 2. How will the Commission exercise its discretion? a. General Comments Maher recommends that the Commission establish a framework for determining fees as part of this rulemaking rather than taking a piecemeal approach through adjudicatory decisions, noting that the Commission ‘‘has the unique opportunity to address the scope and manner of discretion to be applied in matters pending before [it] (including before Administrative Law Judges) in a forthright and consistent manner.’’ Maher Comments at 6. AAPA recommends that the Commission provide direction on two broad issues related to attorney fee awards: (1) Treatment of prevailing 10 We offer no opinion at this time as to whether a complainant obtaining relief other than a reparations award or cease and desist order would be considered the prevailing party under § 41305(e). 11 Maher’s comments on this issue are somewhat confusing. Maher argues that we should apply existing Commission case law when interpreting § 41305(e) but then argues that, based on the new language, we should ignore one of the prerequisites for attorney fees described in those cases: The award of reparations. Moreover, Maher’s proposed standard represents a greater departure from the Commission’s eligibility standard under the old attorney fee provision (requiring that complainants obtain a reparations award) than the prevailing party standard used by federal courts (requiring that plaintiffs obtain some relief on the merits). PO 00000 Frm 00080 Fmt 4700 Sfmt 4700 complainants and prevailing respondents; and (2) whether the award of fees will be the rule or the exception in Shipping Act proceedings. AAPA Comments at 6–7. AAPA urges the Commission to clarify that attorney fee awards should be the exception and not the rule. Id. AAPA states that one of the justifications for awarding attorney fees under the Copyright Act is that ‘‘many copyright violations do not lead to significant or easily provable damages, and that fee awards are thus necessary to provide sufficient deterrence of violations.’’ Id. at 6 (citing Magnuson v. Video Yesteryear, 85 F.3d 1424, 1432 (9th Cir. 1996); Gonzalez v. Transfer Technologies, Inc., 301 F.3d 601, 609– 10 (7th Cir. 2002)). AAPA argues that this type of situation is not generally present in Shipping Act claims. Id. Accordingly, AAPA argues that the general rule should be that each party bears its own attorney fees (i.e., the American Rule) and that fee-shifting should only be imposed when the particular facts of a case warrant such an award. Id. Discussion As described in detail below, the Commission is setting out general guidance on some of the major issues associated with determining entitlement to fee awards under § 41305(e). When interpreting fee-shifting provisions, courts look to the text of the statute, as well as its purpose, structure, and legislative history, see, e.g., Bd. of Trs. of the Hotel & Rest. Emps. Local 25 v. JPR, Inc., 136 F.3d 794, 802 (D.C. Cir. 1998), and the Commission has carefully considered these elements in crafting its guidance. Regarding the statutory history, it should be noted that the American rule concerning attorney fees prevailed at Commission-level proceedings from 1916 until 1984. Section 30 of the Shipping Act of 1916 provided that fees and costs could be provided to the petitioner beginning with and only in the event that the petitioner was required to seek a federal district court order to effectuate enforcement of his successful Commission order of award for reparations. Regarding whether attorney fee awards will be the rule or the exception in Commission proceedings, the Commission notes that, in general, discretionary fee-shifting provisions in statutes protecting economic interests, like the Shipping Act, do not create a presumption that a prevailing party will be awarded fees. See Eddy v. Colonial Life Ins. Co. of Am., 59 F.3d 201, 205 (D.C. Cir. 1995) (citing Fogerty, 510 U.S. at 525 n.12 (1994)) (discussing a fee- E:\FR\FM\01MRR1.SGM 01MRR1 Federal Register / Vol. 81, No. 40 / Tuesday, March 1, 2016 / Rules and Regulations shifting provision in the Employee Retirement Income Security Act (ERISA)). In addition, Congress’s decision to amend § 41305 so that the award of attorney fees is now discretionary instead of mandatory indicates an intent to eliminate the automatic award of attorney fees, see Fogerty, 510 U.S. at 533, and the Commission believes that any general presumption in favor of fee awards would frustrate that intent. The Commission disagrees with AAPA’s contention, however, that fee awards should be ‘‘the exception and not the rule,’’ which would suggest a presumption against the award of fees not supported by the statutory text. The Commission believes that there should be no presumption in favor of or against attorney fee awards, entitlement to which will be determined based on factors that are consistent with the purposes of the Shipping Act. asabaliauskas on DSK5VPTVN1PROD with RULES b. Treatment of Prevailing Complainants vs. Prevailing Respondents Comments WSC, AAPA, Cozen, and PANYNJ support the Commission treating prevailing complainants and respondents even-handedly when determining entitlement to attorney fees. WSC Comments at 2; AAPA Comments at 1, 5; Cozen Comments at 2; PANYNJ Comments at 5–6. Comparing the Shipping Act with the Copyright Act and Civil Rights Act, WSC argues that the Shipping Act is much more similar to the Copyright Act. WSC Comments at 3. AAPA and Cozen argue that the policies underlying the Shipping Act do not rise to the same level of importance as those underlying the Civil Rights Act, i.e., the elimination of discrimination and the protection of fundamental personal rights. Cozen Comments at 3; AAPA Comments at 3– 4. WSC, AAPA, and Cozen distinguish the Civil Rights Act as the only one of the three statutes to make use of ‘‘private attorneys general’’ to implement the statute’s public policy goals, with Cozen and AAPA observing that, unlike complainants in Shipping Act proceedings, plaintiffs initiating actions under the Civil Rights Act often recover small amounts or only obtain injunctive relief. WSC Comments at 3; AAPA at 3–6; Cozen Comments at 3. AAPA argues that ‘‘there is no reason to encourage Shipping Act claims by parties who do not have a financial incentive in filing the claim,’’ and that ‘‘[t]o the contrary, wise policy would counsel disfavoring such claims.’’ AAPA Comments at 4–5. AAPA further VerDate Sep<11>2014 18:20 Feb 29, 2016 Jkt 238001 asserts that the Act’s stated purpose of providing ‘‘a non-discriminatory regulatory process’’ is best served by a non-discriminatory standard for awarding attorney fees. Id. at 6. WSC, AAPA, and PANYNJ further assert that proceedings under the Civil Rights Act, unlike the Shipping Act, generally involve a mismatch of resources between individuals litigating against more powerful businesses and organizations. WSC Comments at 3; AAPA Comments at 5; PANYNJ Comments at 2. In contrast, AAPA and PANYNJ state that both complainants and respondents in Shipping Act proceedings are often sophisticated businesses, and WSC posits that parties on either side ‘‘run the gamut from individuals and small businesses to very large corporations and public port agencies.’’ WSC Comments at 3; AAPA Comments at 5; PANYNJ Comments at 2. WSC, AAPA, Cozen, and PANYNJ also point to the fact that Congress discarded the provision granting complainants a preference with respect to attorney-fee recovery and replaced it with a facially neutral ‘‘prevailing party’’ provision, and they argue that the purpose of the amendment would be subverted if applied in a less than evenhanded manner. WSC Comments at 3; AAPA Comments at 2–3, 5–6; Cozen Comments at 2–3; PANYNJ Comments at 1–2. Finally, PANYNJ theorizes that adopting a standard that is less favorable to prevailing respondents may only encourage the filing of meritless complaints. PANYNJ Comments at 2. Maher asserts that, based on Supreme Court case law, ‘‘the relevant analysis to determine the most appropriate standard to use in applying the new attorney-fees provision in Shipping Act complaint proceedings is to look to the comparative Congressional ‘large objectives’ and ‘equitable considerations’ pertaining to private party proceedings under the Shipping Act.’’ Maher Comments at 4 (citing Martin v. Franklin County Capital Corp., 546 U.S. 132 (2005)). Under this analysis, Maher argues that the standard most applicable to § 41305(e) is the standard applied under other remedial statutes with similar provisions, such as the Civil Rights Act, rather than the Copyright Act. Id. at 4. In support, Maher states that the Shipping Act regulates common carriage and grants immunity from the antitrust statutes, with the primary purpose to foster and maintain a non-discriminatory transportation system. Id. (citing Consolo v. Fed. Mar. Comm’n, 383 U.S. 607, 622–23 (1966)). Maher further asserts that the Supreme Court has PO 00000 Frm 00081 Fmt 4700 Sfmt 4700 10513 identified two statutory factors warranting the ‘‘ordinary recovery’’ standard for prevailing plaintiffs: ‘‘(1) complainants vindicating public rights and acting as ‘private attorneys general’ in private party rights of action and (2) statutes where a defendant that is required to pay attorney’s fees violates federal law,’’ and argues that the private enforcement of the Shipping Act through the complaint process under § 41301 meets this test. Id. at 4–5. Maher notes that any person can bring a complaint under § 41301, even if the complainant has not been directly injured by the alleged violation, and that when a complainant establishes a violation, the respondent has necessarily violated federal law. Id. at 5. Based on the asserted similarities between the Shipping Act and statutes like the Civil Rights Act, Maher argues that the dual standard of entitlement under those statutes should apply. Maher Comments at 5–6. Specifically, Maher asserts that prevailing complainants should ordinarily recover fees while prevailing respondents should only recover fees when the complainant’s action was frivolous, unreasonable, or without foundation. Id. Maher argues that to treat prevailing complainants and respondents in an even-handed manner with respect to awarding attorney fees could ‘‘discourage all but the most airtight claims,’’ and neither the text of the Coble Act nor the differences between the text of § 41305(e) and the earlier feeshifting provision in § 41305(b) indicate that this was Congress’s intent. Id. at 6 (citing Franklin County Capital Corp, 546 U.S. at 140). Discussion Upon consideration of the text, legislative history, and purposes of the Shipping Act, as well as the relevant comments, the Commission concludes that prevailing complainants and prevailing respondents should be treated in an even-handed manner in determining whether to award attorney fees. Looking first at the plain text of § 41305(e), there is no indication that successful complainants should be treated differently than successful respondents. See Fogerty, 510 U.S. at 522. The provision refers only to the ‘‘prevailing party’’ in an action. Moreover, Congress’s decision to remove the previous fee-shifting provision, which limited eligibility for fee recovery to prevailing complainants, and replace it with a new fee-shifting provision that allows any prevailing party to recover fees, strongly suggests an intent to eliminate any preference for E:\FR\FM\01MRR1.SGM 01MRR1 asabaliauskas on DSK5VPTVN1PROD with RULES 10514 Federal Register / Vol. 81, No. 40 / Tuesday, March 1, 2016 / Rules and Regulations prevailing complainants in fee determinations. In addition, the various rationales justifying preferential treatment of plaintiffs in civil rights proceedings do not apply to Shipping Act complainants. Nothing in the Shipping Act’s purposes or legislative history suggests that the role of a complainant is equivalent to that of a Civil Rights Act plaintiff, i.e., ‘‘the chosen instrument of Congress to vindicate ‘a policy that Congress considered of the highest priority.’ ’’ Christiansburg Garment Co., 434 U.S. at 418 (quoting Newman, 390 U.S. at 402). Looking first at the Shipping Act’s purposes, the Commission reiterates that the Act’s focus is on commercial interests rather than ‘‘dignitary rights.’’ See Eddy, 59 F.3d at 204–05 (comparing the legislative histories of ERISA and the civil rights statutes). The purposes of the Shipping Act are to: • Establish a nondiscriminatory regulatory process for the common carriage of goods by water in the foreign commerce of the United States with a minimum of government intervention and regulatory costs; • provide an efficient and economic transportation system in the ocean commerce of the United States that is, insofar as possible, in harmony with, and responsive to, international shipping practices; • encourage the development of an economically sound and efficient liner fleet of vessels of the United States capable of meeting national security needs; and • promote the growth and development of United States exports through competitive and efficient ocean transportation and by placing a greater reliance on the marketplace. 46 U.S.C. 40101. Although these purposes are important, they do not involve the type of rights that the courts have found justify disparate treatment of prevailing plaintiffs and prevailing defendants under fee-shifting statutes. In fact, the Shipping Act’s several purposes provide support for treating prevailing complainants and prevailing respondents in an even-handed manner. The Shipping Act is intended not only to ensure a non-discriminatory process for the common carriage of goods, but also to provide and promote an efficient, competitive, and economic ocean transportation system. See 46 U.S.C. 40101(2), (4). These latter goals are furthered by encouraging the industry to continue to develop new ways of improving ocean transportation. In order to promote such improvements and assist the industry in evaluating potential options, it is important that VerDate Sep<11>2014 18:20 Feb 29, 2016 Jkt 238001 the boundary between legal and illegal conduct be demarcated as clearly as possible. To that end, respondents who seek to advance meritorious defenses of their actions should be encouraged to litigate them to the same extent that complainants are encouraged to litigate meritorious claims of violations. Cf. Fogerty, 510 U.S. at 526–27 (making similar arguments in the context of the Copyright Act). In addition, although complaint proceedings assist the Commission in enforcing the Shipping Act, there is no indication that Congress intended complainants to serve as ‘‘private attorneys general.’’ 12 As the Supreme Court discussed in Newman: When the Civil Rights Act of 1964 was passed, it was evident that enforcement would prove difficult and that the Nation would have to rely in part upon private litigation as a means of securing broad compliance with the law. A Title II suit is thus private in form only. When a plaintiff brings an action under that Title, he cannot recover damages. If he obtains an injunction, he does so not for himself alone but also as a ‘‘private attorney general,’’ vindicating a policy that Congress considered of the highest priority. If successful plaintiffs were routinely forced to bear their own attorneys’ fees, few aggrieved parties would be in a position to advance the public interest by invoking the injunctive powers of the federal courts. Congress therefore enacted the provision for counsel fees—not simply to penalize litigants who deliberately advance arguments they know to be untenable but, more broadly, to encourage individuals injured by racial discrimination to seek judicial relief under Title II. 390 U.S. at 401–02 (footnotes omitted). As noted by some of the commenters, the remedies and incentives under the Shipping Act are quite different. Prevailing complainants in Shipping Act proceedings are entitled to reparations for the injuries resulting from violations of the Act, and, if the injury is caused by certain prohibited activities, the complainant can recover up to twice the amount of the actual injury. 46 U.S.C. 41305(b)–(c). Accordingly, complainants have an incentive to bring claims even in the absence of fee recovery.13 In addition, 12 The Commission also disagrees with the comments suggesting that because losing respondents may have violated ‘‘federal law,’’ prevailing complainants should be treated more favorably in attorney fee determinations. As the Fogerty case amply demonstrates, this factor is not dispositive, and, even under the previous attorneyfee provision mandating fees, a violation alone was insufficient to justify an attorney-fee award; the complainant had to show injury and be awarded reparations. See A/S Ivarans Rederi, 25 S.R.R. at 1063. 13 The mere fact that anyone can file a complaint, even if the person has not been injured by a Shipping Act violation, does not support the PO 00000 Frm 00082 Fmt 4700 Sfmt 4700 the Commission itself may investigate any conduct or agreement that it believes may be in violation of the Act, reducing the need for private action. See 46 U.S.C. 41302; Aaacon Auto Transp., Inc. v. Medlin, 575 F.2d 1102, 1106 (5th Cir. 1978).14 Finally, we agree with the majority of commenters that whereas ‘‘[o]ftentimes, in the civil rights context, impecunious ‘private attorney general’ plaintiffs can ill afford to litigate their claims against defendants with more resources,’’ Fogerty, 510 U.S. at 524, entities of all sizes, from small shippers to large carriers and marine terminal operators (MTOs), appear as complainants in Shipping Act complaint proceedings, and, similarly, respondents range from small ocean transportation intermediaries to large carriers and MTOs. Accordingly, there is not the same disparity in resources between complainants and respondents that exist generally in civil rights cases. Based on the foregoing, the Commission will treat prevailing complainants and prevailing respondents in an even-handed manner when applying § 41305(e). c. Factors for Consideration When Determining Entitlement Comments WSC asserts that if the Commission determines that complainants may be considered prevailing parties eligible for attorney fees even if they have not been awarded reparations, the Commission should still consider whether reparations were awarded, and the amount, when determining whether and in what amount to award such fees. WSC comments at 2. Cozen recommends that the Commission adopt the Copyright Act standard and apply the criteria used by courts under that statute, and PANYNJ asserts that the Copyright Act factors are just as relevant in Shipping Act conclusion that Congress intended complainants to assume the role of ‘‘private attorneys general,’’ as Maher appears to suggest. As noted throughout the notice, fee recovery under the original attorney-fee provision was limited to injured complainants who were awarded reparations. Although § 41305(e) is broader in scope and may apply in proceedings in which no reparations are awarded, given the limited legislative history, reading this change as indicating Congressional intent to elevate the role of complainants would be a bridge too far. 14 Congress did not wish to provide the same encouragement for private claimants under the Interstate Commerce Act as it has for Title VII litigants. . . . The private attorneys general concept, which underlies the allowance of attorneys’ fees in Title VII cases, is notably absent from [the fee-shifting provision] since any required vindication of public rights in such matters as these can be accomplished by the [Interstate Commerce] Commission itself. 575 F.2d at 1106. (citation omitted). E:\FR\FM\01MRR1.SGM 01MRR1 Federal Register / Vol. 81, No. 40 / Tuesday, March 1, 2016 / Rules and Regulations asabaliauskas on DSK5VPTVN1PROD with RULES proceedings. Cozen Comments at 2; PANYNJ Comments at 1. Cozen also urges the Commission to consider the following factors in evaluating petitions for attorney fees: the degree to which the prevailing party has prevailed, i.e., did it prevail on all or only some of its claims; the relief sought versus the relief obtained; and the relationship of the attorney fees sought to those two foregoing factors. Id. at 3–4. In particular, Cozen asserts that the Commission should avoid situations in which the fees awarded far exceed the relief obtained, particularly when the relief awarded is far less than the amount sought by the complainant. Id. at 4–5. AAPA believes that the specific factors listed in the Fogerty case are useful guideposts for the exercise of discretion but cautions that ‘‘it would seem impracticable for the Commission to identify a priori each factor that might prove relevant to a case in the future, or that might prove necessary to fulfil the purposes of the Act.’’ AAPA Comments at 6–7. AAPA therefore discourages the Commission from codifying a comprehensive list of factors in the regulation. Id. at 7. Maher argues that the Copyright Act factors discussed in the NPRM are not appropriate authority or guidance to use in applying § 41305 because they are premised on the unique goals, objectives, and policies of that Act, as opposed to the goals, objectives, and policies at issue in federal remedial statutes. Maher Comments at 5 n.3. Instead, as discussed above, Maher recommends that the Commission adopt the party-specific standards used in Civil Rights Act cases. Id. at 5–6. Discussion The Commission agrees with AAPA and has elected not to codify a list of factors for consideration in determining entitlement to attorney fees. The Commission cannot predict the types of cases that may arise in the future, and specifying factors at this time unnecessarily risks restricting the discretion granted by § 41305(e).15 The primary consideration in determining entitlement to attorney fees is whether such an award is consistent with the purposes of the Shipping Act, and any factors the Commission relies upon in individual cases should be consistent with these purposes. See Fogerty, 510 U.S. at 534 n.19. In identifying relevant 15 Although the Commission declines to identify generally applicable factors for consideration in fee determinations, the Commission has identified below one specific factor for consideration with respect to pending cases: the status of the proceedings on Coble Act’s effective date. VerDate Sep<11>2014 18:20 Feb 29, 2016 Jkt 238001 factors, the Commission will keep in mind the following general principles discussed above: • There should be no general presumption for or against awarding attorney fees; • prevailing complainants and prevailing respondents should be treated in an even-handed manner; and • parties should be encouraged to litigate meritorious claims and defences. Several commenters urge the Commission to consider the degree of success obtained by the prevailing party in evaluating fee petitions. Cozen’s comments, in particular, cite several Commission orders in which the fees awarded greatly exceeded the reparations and suggest that the Commission use its discretion to avoid such results in the future. The degree of success obtained is a relevant factor when determining the amount of an attorney fee award, see Hensley v. Eckerhart, 461 U.S. 424, 434– 36 (1983), and the Commission, relying on relevant federal case law, has considered this a relevant factor when determining reasonable attorney fee awards. See Bernard & Weldcraft Welding Equip. v. Supertrans Intermodal, Inc., 29 S.R.R. 1348, 1358– 59 (ALJ 2002) (finding that although proposed fee award based on lodestar method was far in excess of the reparations awarded, it was reasonable given other factors); Transworld Shipping (USA), Inc. v. FMI Forwarding (San Francisco), Inc., 29 S.R.R. 876, 878–79 (FMC 2002) (affirming ALJ’s reduction in compensable hours because complainant obtained only partial success); see also 1987 Final Rule, 52 FR at 6331. Cozen’s comments fail to explain how the changes made by the Coble Act justify changing the Commission’s approach to adjusting fee awards. Congress granted the Commission discretion to determine when to award fees; it did not alter the standard for determining the amount of fees to be awarded after such a determination has been made. Section 41305(e), like the previous fee-shifting provision, allows for the award of ‘‘reasonable’’ attorney fees, and the Commission will continue to be guided by its own precedent and relevant federal case law in deciding when to adjust fee awards based on the degree of success obtained by the prevailing party. d. Different Entitlement Standards Depending on Type of Proceeding 10515 apply different fee entitlement standards for different proceedings (e.g., small claims proceedings), Maher stated that the interests of complainants are similar regardless of the type of proceeding or the different financial capacity of complainants because all types of complaint proceeding present financial barriers to complainants. Maher Comments at 7. With respect to pro se complainants and small claims generally, Maher suggests that effective management of the small claims process could be a means to promote adjudication in the face of limited or imbalanced resources, e.g., the Commission could consider limiting the ability of respondents to elect to remove a small claims complaint to a ‘‘full proceeding.’’ Id. Discussion The Commission agrees with Maher and has determined to apply the same standard of entitlement regardless of the type of proceeding. The Commission believes that the statute provides sufficient flexibility to address feeaward determinations in both formal and small claims proceedings.16 3. How will the Commission apply the provision to pending proceedings? Comments PANYNJ argues that the Commission ‘‘should have the discretion to award attorney fees in a fully retrospective manner whenever it finds that an unsuccessful action or defense had been conducted in a vexatious and wasteful fashion.’’ PANYNJ Comments at 2. PANYNJ cites Congress’s intent to make attorney fees available in Commission proceedings, Congressional policy to reimburse litigants for costs incurred due to vexatious and abusive litigation, and the inherent power of the federal courts to award attorney fees for abusive litigation conduct even in the absence of express statutory authorization or advance notice. Id. PANYNJ asserts that such a policy would not give the Coble Act impermissible retrospective effect because ‘‘[n]o litigant could have had a reasonable and legitimate expectation that it could engage in abusive, vexatious and wasteful litigation conduct without consequence’’ given the courts’ ability to sanction such conduct. Id. at 3. Maher urges the Commission to adopt a bright-line rule and not apply § 41305(e) to any claims initiated prior to the effective date of the Coble Act. Maher Comments at 7, 9. Maher asserts Comments In response to the Commission’s request for comment on whether to PO 00000 Frm 00083 Fmt 4700 Sfmt 4700 16 Maher’s suggestions regarding ways to improve the small claims process are outside the scope of this rulemaking. E:\FR\FM\01MRR1.SGM 01MRR1 10516 Federal Register / Vol. 81, No. 40 / Tuesday, March 1, 2016 / Rules and Regulations asabaliauskas on DSK5VPTVN1PROD with RULES that analyzing the applicability of § 41305(e) on a case-by-case basis would be administratively burdensome and ‘‘would unnecessarily extend the period of uncertainty in individual cases and it could result in inconsistent decisions and therefore engender continued uncertainty.’’ Id. at 7. Maher contends that there is no clear Congressional or express statutory language indicating that § 41305(e) should be applied retroactively, and, therefore, the general presumption against such an application of the statute applies. Maher Comments at 7– 8 (citing Landgraf v. USI Film Products, 511 U.S. 244 (1994)). Maher goes on to argue that any application of § 41305(e) would have retroactive effect on parties to pending proceedings, and therefore should not be applied to those proceedings. Id. at 8. Specifically, Maher asserts that for complainants to such proceedings, retroactive application of § 41305(e) would impair the rights they had when filing their complaints, i.e., the statutory right to recover attorney fees, and increase their liability for past conduct and/or impose a new duty by expanding attorney-fee eligibility to prevailing respondents. Id. Maher further asserts that the expansion of attorney-fee liability to cease and desist complaints would potentially increase respondents’ liability for past conduct and/or impose a new duty on them. Id. Finally, Maher contends that the potential expansion of attorney-fee recovery to intervenors or other parties would likewise increase liability and/or impose new duties on non-prevailing complainants and respondents. Id. at 8– 9. Discussion As the Commission discussed in the NPRM, in determining the applicability of a newly enacted statute to pending cases, the courts first look to ‘‘whether Congress has expressly prescribed the statute’s proper reach.’’ FernandezVargas v. Gonzales, 548 U.S. 30, 37 (2006) (quoting Landgraf, 511 U.S. at 280) (internal quotation marks omitted). If the statute’s reach cannot be determined from the text and the application of the normal rules of statutory construction, the court must ‘‘determine whether the application of the statute to the conduct at issue would result in a retroactive effect,’’ Martin v. Hadix, 527 U.S. 343, 352 (1999), i.e., ‘‘whether it would impair rights a party possessed when he acted, increase a party’s liability for past conduct, or impose new duties with respect to transactions already completed.’’ Landgraf, 511 U.S. at 280; see also Fernandez-Vargas, 548 U.S. at 37. ‘‘If VerDate Sep<11>2014 18:20 Feb 29, 2016 Jkt 238001 the answer is yes,’’ the courts then apply the traditional ‘‘presumption against retroactivity by construing the statute as inapplicable to the event or act in question owing to the ‘absen[ce of] a clear indication from Congress that it intended such a result.’ ’’ FernandezVargas, 548 U.S. at 37–38 (quoting Immigration & Naturalization Serv. v. St. Cyr, 533 U.S. 289, 316 (2001)); see also Landgraf, 511 U.S. at 280. In cases in which the statute would not have a ‘‘genuinely ‘retroactive’ effect,’’ the general rule is that ‘‘a court should ‘apply the law in effect at the time it renders its decision,’ even though that law was enacted after the events that gave rise to the suit.’’ Landgraf, 511 U.S. at 273, 277 (quoting Bradley v. Sch. Bd. of City of Richmond, 416 U.S. 696, 711 (1974)) (citation omitted). The Commission agrees with Maher that there is no indication from either the language of the Coble Act or its legislative history to suggest Congressional intent to apply the statute retroactively. Section 402 of the Coble Act is silent as to the scope of § 41305(e)’s applicability to proceedings pending before the Commission. Although an argument could be made that the use of the broad term ‘‘any action’’ in conjunction with the verb ‘‘brought’’ demonstrates congressional intent to apply the amended attorney fee provisions to all proceedings initiated under 46 U.S.C. 41301, even if those proceedings were commenced prior to the effective date of the Coble Act, the Supreme Court expressly rejected such an interpretation when examining similar language in an amended attorney-fee provision in the Prison Litigation Reform Act of 1995 (PLRA). See Martin, 527 U.S. at 353–55 (stating that the language ‘‘falls short . . . of the ‘unambiguous directive’ or ‘express command’ that the statute is to be applied retroactively’’) (quoting Landgraf, 511 U.S. at 263, 280). Accordingly, the relevant question is whether the application of § 41305(e) to pending proceedings would have retroactive effect, i.e., whether the amended attorney-fee provision ‘‘would impair rights a party possessed when he acted, increase a party’s liability for past conduct, or impose new duties with respect to transactions already completed.’’ Landgraf, 511 U.S. at 280. ‘‘The inquiry into whether a statute operates retroactively demands a common sense, functional judgment about ‘whether the new provision attaches new legal consequences to events completed before its enactment.’ This judgment should be informed and guided by ‘familiar considerations of fair notice, reasonable reliance, and PO 00000 Frm 00084 Fmt 4700 Sfmt 4700 settled expectations.’ ’’ Martin, 527 U.S. at 357–58 (quoting Landgraf, 511 U.S. at 270) (citation omitted). On the other hand, ‘‘[a] statute does not operate ‘retrospectively’ merely because it is applied in a case arising from conduct antedating the statute’s enactment, or upsets expectations based in prior law.’’ Landgraf, 511 U.S. at 269 & 270 n.24 (citing Republic Nat’l Bank of Miami v. United States, 506 U.S. 80, 100 (1992) (Thomas, J., concurring in part and concurring in judgment)) (internal citation omitted). The Commission has determined that the applicability of § 41305(e) to pending cases should be examined on a case-by-case basis rather than set through a bright-line rule. As explained below, the Commission disagrees with Maher’s assertion that the application of § 41305(e) would have a retroactive effect in all pending cases. Analyzing this issue on a case-by-case basis will allow the Commission to consider the facts of each case, including the status of individual proceedings on the effective date of the Coble Act. The Commission also disagrees with Maher’s contention that case-by-case consideration would be administratively burdensome, given the limited number of proceedings pending on the Coble Act’s effective date and the unlikelihood that fee petitions will be filed in every proceeding. The Commission offers the following general guidance on determining the applicability of § 41305(e) in the two most likely scenarios in which this issue would arise: (1) Pending proceedings in which the complainant prevails and is awarded reparations after the Coble Act went into effect (Scenario 1); and (2) pending proceedings in which the respondent prevails after the Coble Act went into effect (Scenario 2).17 For purposes of this discussion, we assume that the proceedings in each scenario were in their early stages when the Coble Act went into effect. In Scenario 1, the Commission does not believe that applying § 41305(e) would, as a general matter, have a retroactive effect. In Scenario 2, the Commission believes that application of § 41305(e) would not generally result in a retroactive effect so long as any fees awarded were limited to compensation for legal services performed on or after the effective date 17 Maher discusses retroactivity concerns in other situations (i.e., proceedings in which a cease-anddesist order is issued but no reparations are awarded; proceedings in which parties other than the complainant or respondent might be considered a prevailing party). The Commission does not believe that the same type of prospective guidance is warranted or necessary for these types of scenarios, which are less likely to occur. E:\FR\FM\01MRR1.SGM 01MRR1 asabaliauskas on DSK5VPTVN1PROD with RULES Federal Register / Vol. 81, No. 40 / Tuesday, March 1, 2016 / Rules and Regulations of the Coble Act, December 18, 2014. The Commission cautions that retroactivity determinations in individual proceedings will depend on the specific facts of each case, including the status of the proceedings on December 18, 2014. The Commission has further determined that, even in pending cases where application of § 41305(e) would not have a retroactive effect, the Commission may, in determining whether to award fees under the new provision, consider the status of the proceedings on the Coble Act’s effective date. Maher argues that in Scenario 1, application of § 41305(e) would have a retroactive effect because it would upset the complainant’s statutory right to attorney fees that existed when the complaint was filed. The Commission disagrees. Attorney fee determinations are generally considered ‘‘ ‘collateral to the main cause of action’ and ‘uniquely separable from the cause of action to be proved at trial.’ ’’ Landgraf, 511 U.S. at 277 (quoting White v. N.H. Dep’t of Emp’t Sec., 455 U.S. 445, 451–452 (1982)). Unlike other types of relief, attorney fees are not compensation for the injury giving rise to the action. White, 455 U.S. at 452. Attorney fees under the Shipping Act are no different. The structure of the Act does not support the contention that the ‘‘right’’ to recover attorney fees under the old fee-shifting provision vested with the complainant upon the filing of a complaint. The section governing the filing of complaints, 46 U.S.C. 41301, provides that if the complaint is filed within three years after the claim accrues, the complainant may seek reparations for injuries caused by the Shipping Act violation. 46 U.S.C. 41301(a). Attorney fees are not mentioned in this section; instead, they are referenced in 46 U.S.C. 41305, the section governing relief to be awarded by the Commission after notice and hearing, and this section has always made clear that attorney fees are a separate form of relief from reparations. See 46 U.S.C. 41305(b) (2013). Accordingly, the Commission viewed attorney fees under the old provision as ‘‘available only as an adjunct to an award of damages’’ and conditioned upon the Commission awarding reparations. See A/S Ivarans Rederi, 25 S.R.R. at 1063. Because there was no reparations award in Scenario 1 prior to the Coble Act’s effective date, the complainant was not entitled to attorney fees. The mere possibility of recovering attorney fees under the old provision cannot be considered the type of ‘‘matured or unconditional right’’ whose impairment would constitute a VerDate Sep<11>2014 18:20 Feb 29, 2016 Jkt 238001 retroactive effect. See Bradley, 416 U.S. at 720. Application of § 41305(e) might upset the complainant’s expectations under prior law, but, as noted above, this does not equate to a retroactive effect. See Landgraf, 511 U.S. at 269 & 270 n.24. With respect to Scenario 2, Maher asserts that § 41305(e) would have a retroactive effect because allowing the respondent to potentially recover attorney fees would increase the complainant’s liability for past conduct and impose a new duty. PANYNJ, on the other hand, asserts that application of the new provision would not have a retroactive effect because courts have always had the inherent authority to sanction abusive, vexatious, and wasteful litigation conduct, and no litigant could have a reasonable expectation that it could engage in such conduct without consequence. The Commission agrees with Maher to the extent that, prior to the Coble Act, complainants reasonably expected that they would not be liable for respondents’ attorney fees, even if they did not prevail. The old attorney-fee statutory provision and Rule 254 made clear that respondents were not eligible for attorney fee awards. See 1986 NPRM, 51 FR at 37918. The Commission disagrees with PANYNJ’s contention that the inherent power of the courts to penalize certain litigation conduct has some bearing on the parties’ expectations in Commission proceedings; administrative agencies, like the Commission, ‘‘may not award attorney’s fees without express statutory authority.’’ Trapp v. United States, 668 F.2d 1114, 1115 (10th Cir. 1977) (citing Turner v. Fed. Commc’n Comm’n, 514 F.2d 1354 (D.C. Cir. 1975)). Awarding attorney fees to the respondent in Scenario 2 for legal services rendered prior to December 18, 2014, would thus upset the parties’ reasonable expectations and would attach new legal consequences to actions undertaken by the complainant prior to the passage of the Coble Act, i.e., the filing of the complaint and initial prosecution of the claim. See Taylor P. v. Mo. Dep’t of Elementary & Secondary Educ., No. 06–4254–CV–C–NKL, 2007 U.S. Dist. LEXIS 59570, at *8 (W.D. Mo. Aug. 14, 2007) (finding that application of statutory provision allowing attorney fee recovery for defendants, which was enacted after proceeding was initiated, would have retroactive effect if applied to date of filing of complaint). Following the passage of the Coble Act, however, complainants were on notice that any prevailing party, including a prevailing respondent, was eligible for attorney fees. After that date, PO 00000 Frm 00085 Fmt 4700 Sfmt 4700 10517 any expectation of continued immunity from liability for such fees would be unreasonable. See Martin, 527 U.S. at 360. Accordingly, in Scenario 2, awarding attorney fees for services performed by respondent’s counsel on or after December 18, 2014, would not, as a general matter, attach new legal consequences to conduct completed before enactment and would not present a retroactivity problem. See id. at 360– 61; Taylor, 2007 U.S. Dist. LEXIS 59570, at *8 (denying plaintiff’s motion to dismiss defendant’s counterclaim for attorney fees after the effective date of the attorney fee provision). On or after December 18, 2014, complainants were on notice that they should consider the status of petitions and matters then pending before the Commission and then make reasoned decisions on how to proceed. If the complainant did not wish to be subjected to the potential liability for such fees, the complainant could have, for example, requested dismissal of the claim without prejudice under Rule 72 of the Commission’s Rules of Practice and Procedure (46 CFR 502.72). See Martin, 527 U.S at 361 (rejecting the assumption that the initial decision to file a claim is an irrevocable one). The Commission reemphasizes that the above discussions represent general guidance and the conclusions reached are not necessarily binding in individual proceedings. The specific facts of each case, including the status of the proceeding on the Coble Act’s effective date, may materially alter the considerations discussed above in the retroactivity analysis. VI. Rulemaking Analyses and Notices Effective Date The Administrative Procedure Act (APA) generally requires a 30-day period between the publication of a final rule and its effective date. 5 U.S.C. 553(d). This requirement does not apply, however, to: (1) Rules granting an exemption or relieving a restriction; (2) interpretative rules and statements of policy; and (3) when the agency finds good cause to shorten the period between publication and the effective date. Id. This final rule is effective upon publication. The final rule consists of three main components: amendments to the term and vacancy provisions in 46 CFR 501.2(c) to reflect the changes made to 46 U.S.C. 301; amendments to 46 CFR 502.254 to reflect the changes made to 46 U.S.C. 41305; and a statement of the Commission’s policy with respect to the disposition of attorney-fee petitions under the amended statutory language. E:\FR\FM\01MRR1.SGM 01MRR1 10518 Federal Register / Vol. 81, No. 40 / Tuesday, March 1, 2016 / Rules and Regulations statutory provisions. Therefore, the APA did not require publication of a notice of proposed rulemaking in this instance, and the Commission is not required to prepare an FRFA in conjunction with this final rule. Congressional Review Act The rule is not a ‘‘major rule’’ as defined by the Congressional Review Act, codified at 5 U.S.C. 801 et seq. The rule will not result in: (1) An annual effect on the economy of $100,000,000 or more; (2) a major increase in costs or prices; or (3) significant adverse effects on competition, employment, investment, productivity, innovation, or the ability of United States-based companies to compete with foreignbased companies. 5 U.S.C. 804(2). asabaliauskas on DSK5VPTVN1PROD with RULES Accordingly, this final rule consists of an interpretative rule and a statement of policy and is therefore not subject to the 30-day requirement. In addition, the Commission has determined that there is good cause to make this rule effective immediately. The statutory amendments made by the Coble Act went into effect on December 18, 2014, and there is an immediate need to update the Commission’s regulations (particularly the procedural regulations governing attorney-fee petitions) to reflect these changes. Further, interested parties have been provided with the opportunity to comment on the rulemaking, and none commented on the proposed amendments to the Commission’s regulations, instead focusing entirely on the Commission’s policy guidance with respect to attorney-fee petitions. Regulation Identifier Number The Commission assigns a regulation identifier number (RIN) to each regulatory action listed in the Unified Agenda of Federal Regulatory and Deregulatory Actions (Unified Agenda). The Regulatory Information Service Center publishes the Unified Agenda in April and October of each year. You may use the RIN contained in the heading at the beginning of this document to find this action in the Unified Agenda, available at http:// www.reginfo.gov/public/do/ eAgendaMain. Regulatory Flexibility Act The Regulatory Flexibility Act (codified as amended at 5 U.S.C. 601– 612) provides that whenever an agency promulgates a final rule after being required to publish a notice of proposed rulemaking under the Administrative Procedure Act (APA) (5 U.S.C. 553), the agency must prepare and make available a final regulatory flexibility analysis (FRFA) describing the impact of the rule on small entities. 5 U.S.C. 604. An agency is not required to publish an FRFA, however, for the following types of rules, which are excluded from the APA’s notice-and-comment requirement: interpretative rules; general statements of policy; rules of agency organization, procedure, or practice; and rules for which the agency for good cause finds that notice and comment is impracticable, unnecessary, or contrary to public interest. See 5 U.S.C. 553(b). Although the Commission elected to seek public comment on its proposed regulatory amendments and the application of the Coble Act’s new attorney-fee provision, these matters concern the organization of the Commission, its practices and procedures, and its interpretation of VerDate Sep<11>2014 18:20 Feb 29, 2016 Jkt 238001 Paperwork Reduction Act The Paperwork Reduction Act of 1995 (44 U.S.C. 3501–3521) requires an agency to seek and receive approval from the Office of Management and Budget (OMB) before collecting information from the public. 44 U.S.C. 3507. The agency must submit collections of information in rules to OMB in conjunction with the publication of the notice of proposed rulemaking. 5 CFR 1320.11. This final rule does not contain any collections of information, as defined by 44 U.S.C. 3502(3) and 5 CFR 1320.3(c). List of Subjects 46 CFR Part 501 Administrative practice and procedure, Authority delegations (Government agencies), Organization and functions (Government agencies), Seals and insignia. 46 CFR Part 502 Administrative practice and procedure, Claims, Equal access to justice, Investigations, Lawyers, Maritime carriers, Penalties, Reporting and recordkeeping requirements. Regulatory Text For the reasons stated in the preamble, the Commission amends 46 CFR parts 501 and 502 as follows: PART 501—THE FEDERAL MARITIME COMMISSION—GENERAL 1. The authority citation for part 501 continues to read as follows: ■ Authority: 5 U.S.C. 551–557, 701–706, 2903 and 6304; 31 U.S.C. 3721; 41 U.S.C. 414 and 418; 44 U.S.C. 501–520 and 3501–3520; 46 U.S.C. 301–307, 40101–41309, 42101– 42109, 44101–44106; Pub. L. 89–56, 70 Stat. PO 00000 Frm 00086 Fmt 4700 Sfmt 4700 195; 5 CFR part 2638; Pub. L. 104–320, 110 Stat. 3870. 2. Amend § 501.2 by revising paragraph (c) to read as follows: ■ § 501.2 General. * * * * * (c) Terms and vacancies. (1) Length of terms. The term of each member of the Commission is five years and begins when the term of the predecessor of that member ends (i.e., on June 30 of each successive year). (2) Removal. The President may remove a Commissioner for inefficiency, neglect of duty, or malfeasance in office. (3) Vacancies. A vacancy in the office of any Commissioner is filled in the same manner as the original appointment. An individual appointed to fill a vacancy is appointed only for the unexpired term of the individual being succeeded. (4) Term Limits. (i) Commissioners initially appointed and confirmed before December 18, 2014. When a Commissioner’s term ends, the Commissioner may continue to serve until a successor is appointed and qualified. (ii) Commissioners initially appointed and confirmed on or after December 18, 2014. (A) When a Commissioner’s term ends, the Commissioner may continue to serve until a successor is appointed and qualified, limited to a period not to exceed one year. (B) No individual may serve more than two terms, except that an individual appointed to fill a vacancy may serve two terms in addition to the remainder of the term for which the predecessor of that individual was appointed. * * * * * PART 502—RULES OF PRACTICE AND PROCEDURE 3. The authority citation for part 502 continues to read as follows: ■ Authority: 5 U.S.C. 504, 551, 552, 553, 556(c), 559, 561–569, 571–596; 5 U.S.C. 571– 584; 18 U.S.C. 207; 28 U.S.C. 2112(a); 31 U.S.C. 9701; 46 U.S.C. 305, 40103–40104, 40304, 40306, 40501–40503, 40701–40706, 41101–41109, 41301–41309, 44101–44106; E.O. 11222 of May 8, 1965. Subpart O—Reparation; Attorney Fees 4. Revise the heading of Subpart O to read as set forth above. ■ 5. Revise § 502.254 to read as follows: ■ § 502.254 Attorney fees in complaint proceedings. (a) General. In any complaint proceeding brought under 46 U.S.C. 41301 (sections 11(a)–(b) of the E:\FR\FM\01MRR1.SGM 01MRR1 asabaliauskas on DSK5VPTVN1PROD with RULES Federal Register / Vol. 81, No. 40 / Tuesday, March 1, 2016 / Rules and Regulations Shipping Act of 1984), the Commission may, upon petition, award the prevailing party reasonable attorney fees. (b) Definitions. Attorney fees means the fair market value of the services of any person permitted to appear and practice before the Commission in accordance with subpart B of this part. Decision means: (1) An initial decision or dismissal order issued by an administrative law judge; (2) A final decision issued by a small claims officer; or (3) A final decision issued by the Commission. (c) Filing petitions for attorney fees. (1) In order to recover attorney fees, the prevailing party must file a petition within 30 days after a decision becomes final. For purposes of this section, a decision is considered final when the time for seeking judicial review has expired or when a court appeal has terminated. (2) The prevailing party must file the petition with either: (i) The administrative law judge or small claims officer, if that official’s decision became administratively final under § 502.227(a)(3), § 502.227(c), § 502.304(g), or § 502.318(a); or (ii) The Commission, if the Commission reviewed the decision of the administrative law judge or small claims officer under § 502.227, § 502.304, or § 502.318. (d) Content of petitions. (1) The petition must: (i) Explain why attorney fees should be awarded in the proceeding; (ii) Specify the number of hours claimed by each person representing the prevailing party at each identifiable stage of the proceeding; and (iii) Include supporting evidence of the reasonableness of the hours claimed and the customary rates charged by attorneys and associated legal representatives in the community where the person practices. (2) The petition may request additional compensation, but any such request must be supported by evidence that the customary rates for the hours reasonably expended on the case would result in an unreasonably low fee award. (e) Replies to petitions. The opposing party may file a reply to the petition within 20 days of the service date of the petition. The reply may address the reasonableness of any aspect of the prevailing party’s claim and may suggest adjustments to the claim under the criteria stated in paragraph (d) of this section. (f) Rulings on petitions. (1) Upon consideration of a petition and any VerDate Sep<11>2014 18:20 Feb 29, 2016 Jkt 238001 reply thereto, the Commission, administrative law judge, or small claims officer will issue an order granting or denying the petition. (i) If the order awards the prevailing party attorney fees, the order will state the total amount of attorney fees awarded, specify the compensable hours and appropriate rate of compensation, and explain the basis for any additional adjustments. (ii) If the order denies the prevailing party attorney fees, the order will explain the reasons for the denial. (2) The Commission, administrative law judge, or small claims officer may adopt a stipulated settlement of attorney fees. (g) Timing of rulings. An order granting or denying a petition for attorney fees will be served within 60 days of the date of the filing of the reply to the petition or expiration of the reply period, except that in cases involving a substantial dispute of facts critical to the determination of an award, the Commission, administrative law judge, or small claims officer may hold a hearing on such issues and extend the time for issuing an order by an additional 30 days. (h) Appealing rulings by administrative law judge or small claims officer. The relevant rules governing appeal and Commission review of decisions by administrative law judges (§§ 502.227; 502.318) and small claims officers (§ 502.304) apply to orders issued by those officers under this section. [Rule 254.] 6. Amend § 502.305 by revising paragraph (b) to read as follows: ■ § 502.305 this part. Applicability of other rules of * * * * * (b) The following sections in subparts A through Q of this part apply to situations covered by this subpart: §§ 502.2(a) (Requirement for filing); 502.2(f)(1) (Email transmission of filings); 502.2(i) (Continuing obligation to provide contact information); 502.7 (Documents in foreign languages); 502.21 through 502.23 (Appearance, Authority for representation, Notice of appearance; substitution and withdrawal of representative); 502.43 (Substitution of parties); 502.101 (Computation); 502.113 (Service of private party complaints); 502.117 (Certificate of service); 502.253 (Interest in reparation proceedings); and 502.254 (Attorney fees in complaint proceedings). [Rule 305.] 7. Amend § 502.318 by revising paragraph (b) to read as follows: PO 00000 Frm 00087 Fmt 4700 Sfmt 4700 § 502.318 10519 Decision. * * * * * (b) Attorney fees may be awarded to the prevailing party in accordance with § 502.254. [Rule 318.] 8. Amend § 502.321 by revising paragraph (b) to read as follows: § 502.321 this part. Applicability of other rules of * * * * * (b) The following sections in subparts A through Q apply to situations covered by this subpart: §§ 502.2(a) (Requirement for filing); 502.2(f)(1) (Email transmission of filings); 502.2(i) (Continuing obligation to provide contact information); 502.7 (Documents in foreign languages); 502.21–502.23 (Appearance, Authority for representation, Notice of appearance; substitution and withdrawal of representative); 502.43 (Substitution of parties); 502.253 (Interest in reparation proceedings); and 502.254 (Attorney fees in complaint proceedings). [Rule 321.] By the Commission. Karen V. Gregory, Secretary. [FR Doc. 2016–04219 Filed 2–29–16; 8:45 am] BILLING CODE 6731–AA–P FEDERAL COMMUNICATIONS COMMISSION 47 CFR Part 90 Private Land Mobile Radio Service CFR Correction In Title 47 of the Code of Federal Regulations, Parts 80 to End, revised as of October 1, 2015, on page 413, in § 90.520, the second paragraph (b)(2) is removed. [FR Doc. 2016–04433 Filed 2–29–16; 8:45 am] BILLING CODE 1505–01–D NATIONAL AERONAUTICS AND SPACE ADMINISTRATION 48 CFR Parts 1812, 1819, and 1852 NASA Federal Acquisition Regulation Supplement National Aeronautics and Space Administration. ACTION: Final rule; technical amendments. AGENCY: NASA is making technical amendments to the NASA FAR Supplement (NFS) to provide needed editorial changes. DATES: Effective: March 1, 2016. SUMMARY: E:\FR\FM\01MRR1.SGM 01MRR1

Agencies

[Federal Register Volume 81, Number 40 (Tuesday, March 1, 2016)]
[Rules and Regulations]
[Pages 10508-10519]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-04219]


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FEDERAL MARITIME COMMISSION

46 CFR Parts 501 and 502

[Docket No. 15-06]
RIN 3072-AC61


Organization and Functions; Rules of Practice and Procedure; 
Attorney Fees

AGENCY: Federal Maritime Commission.

ACTION: Final rule.

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SUMMARY: The Federal Maritime Commission amends its Rules of Practice 
and Procedure governing the award of attorney fees in Shipping Act 
complaint proceedings, and its regulations related to Commissioner 
terms and vacancies. The regulatory changes implement statutory 
amendments made by the Howard Coble Coast Guard and Maritime 
Transportation Act of 2014.

DATES: This final rule is effective: March 1, 2016.

FOR FURTHER INFORMATION CONTACT: Karen V. Gregory, Secretary, Federal 
Maritime Commission, 800 North Capitol Street NW., Washington, DC 
20573-0001, Phone: (202) 523-5725, Email: secretary@fmc.gov. For legal 
questions, contact William H. Shakely, General Counsel, Phone: (202) 
523-5740. Email: generalcounsel@fmc.gov.

SUPPLEMENTARY INFORMATION:

Table of Contents

I. Executive Summary
II. Background
III. Summary of July 2, 2015, Notice of Proposed Rulemaking
    A. Conforming Amendments
    B. Implementing the Amended Attorney-Fee Provision
IV. Overview of Comments
V. Final Rule and Response to Comments
    A. Conforming Amendments
    B. Implementing the Amended Attorney-Fee Provision
    1. Who is eligible to recover attorney fees?
    a. Proceedings
    b. Parties
    2. How will the commission exercise its discretion?
    a. General
    b. Treatment of Prevailing Complainants vs. Prevailing 
Respondents
    c. Factors for Consideration When Determining Entitlement
    d. Different Entitlement Standards Depending on Type of 
Proceeding
    3. How will the commission apply the provision to pending 
proceedings?
VI. Rulemaking Analyses and Notices

I. Executive Summary

    Title IV of the Howard Coble Coast Guard and Maritime 
Transportation Act of 2014, Public Law 113-281 (Coble Act), enacted on 
December 18, 2014, amended the Shipping Act of 1984 and the statutory 
provisions governing the general organization of the Commission. 
Specifically, section 402 of the Coble Act amended the statutory 
provision governing the award of attorney fees, which may now be 
awarded to any prevailing party in a complaint proceeding. See 46 
U.S.C. 41305(e). Section 403 of the Coble Act established term limits 
for future Commissioners, limited the amount of time that future 
Commissioners will be permitted to serve beyond the end of their terms, 
and established conflict-of-interest restrictions for current and 
future Commissioners. See 46 U.S.C. 301(b).
    In response to these statutory amendments, the Commission published 
a Notice of Proposed Rulemaking (NPRM) on July 2, 2015. 80 FR 38153. 
Specifically, the Commission proposed to amend affected regulations to 
conform the regulatory language to the revised statutory text.\1\ In 
addition, the Commission sought comment on an appropriate framework for 
determining attorney fee awards under the amended fee-shifting 
provision. The Commission offered to provide additional guidance on 
this issue and, where appropriate, incorporate that guidance into the 
Commission Rules of Practice and Procedure. To that end, the NPRM 
discussed three general questions on which the Commission's guidance 
would focus:
---------------------------------------------------------------------------

    \1\ The Coble Act amendments to 46 U.S.C. 301(b) establishing 
conflict-of-interest restrictions for Commissioners were not 
addressed in the NPRM and are outside the scope of this rulemaking. 
The Commission is currently evaluating the need for regulatory 
action in response to these amendments.
---------------------------------------------------------------------------

     Who is eligible to recover attorney fees?
     How will the Commission exercise its discretion to 
determine whether to award attorney fees to an eligible party?
     How will the Commission apply the new attorney-fee 
provision to proceedings that were pending before the Commission when 
the Coble Act was enacted on December 18, 2014?
    The Commission received five comments, all of which focused on the 
framework for determining attorney fee awards and the three general 
questions described above. None of the comments discussed the 
conforming edits proposed in the NPRM. Accordingly, this final rule 
adopts the proposed conforming edits with minor changes, which are 
explained in detail below.

[[Page 10509]]

    With respect to the framework for awarding attorney fees under the 
amended statutory language, this final rule provides the following 
guidance. Regarding eligibility for fee awards, the Commission 
interprets Sec.  41305(e) as permitting fee recovery by prevailing 
parties in any Shipping Act complaint proceeding. The provision does 
not, however, permit fee recovery in Commission-initiated 
investigations. In determining whether a party has ``prevailed'' in a 
proceeding, the Commission will look to federal case law, to the extent 
practicable. Based on relevant cases, the Commission initially 
concludes that a complainant would generally qualify as the 
``prevailing party'' in a Commission proceeding when the presiding 
officer awards reparations or issues a cease and desist order.
    Regarding its discretion to award fees, the Commission is not 
specifying factors for consideration in determining fee awards. The 
primary consideration in determining entitlement to attorney fees will 
be whether such an award is consistent with the purposes of the 
Shipping Act, and any factors the Commission relies upon in individual 
cases should be consistent with these purposes. In identifying relevant 
factors, the Commission will keep in mind the following general 
principles:
     There should be no general presumption for or against 
awarding attorney fees;
     prevailing complainants and prevailing respondents should 
be treated in an even-handed manner; and
     parties should be encouraged to litigate meritorious 
claims and defences.
    Finally, the Commission has decided to determine the applicability 
of Sec.  41305(e) to pending cases on a case-by-case basis rather than 
through a bright-line rule. The preamble includes general guidance 
regarding several situations that may arise in proceedings going 
forward.

II. Background

    Section 11(a)-(b) of the Shipping Act of 1984, codified at 46 
U.S.C. 41301, establishes a procedure by which a person may file a 
complaint with the Commission alleging a violation of the Shipping 
Act.\2\ Prior to the enactment of the Coble Act, 46 U.S.C. 41305(b) 
(section 11(g) of the Shipping Act) provided that ``[i]f the complaint 
was filed within . . . [three years after the claim accrued], the 
Federal Maritime Commission shall direct the payment of reparations to 
the complainant for actual injury caused by a violation of this part, 
plus reasonable attorney fees.''
---------------------------------------------------------------------------

    \2\ The Shipping Act also authorizes the Commission to initiate 
investigations of possible violations of the Shipping Act on its own 
motion. 46 U.S.C. 41302.
---------------------------------------------------------------------------

    To implement this provision, the Commission added a sentence to 
Rule 253 of its Rules of Practice and Procedure. Final Rules To 
Implement the Shipping Act of 1984 and To Correct and Update 
Regulations, 49 FR 16994 (Apr. 23, 1984). After determining that more 
comprehensive regulations were needed, the Commission established Rule 
254 (46 CFR 502.254) in 1987. Attorney's Fees in Reparation 
Proceedings, 52 FR 6330 (Mar. 3, 1987) (1987 Final Rule).
    Section 402 of the Coble Act deleted the portion of 46 U.S.C. 
41305(b) pertaining to attorney fees and added a new subsection (e), 
which reads as follows: ``Attorney Fees.--In any action brought under 
section 41301, the prevailing party may be awarded reasonable attorney 
fees.'' These amendments affect the award of attorney fees in three 
significant ways. First, the revised language expands the categories of 
persons eligible to recover attorney fees to include any ``prevailing 
party,'' not merely prevailing complainants. Second, the award of 
attorney fees is no longer conditioned on an award of reparations; 
under the amended language, attorney fees are recoverable ``[i]n any 
action brought under section 41301.'' Finally, whereas 46 U.S.C. 
41305(b) previously directed the Commission to award reasonable 
attorney fees to an eligible party, the new provision in subsection (e) 
states that such fees ``may be awarded,'' thereby granting the 
Commission discretion to determine the circumstances under which 
eligible parties are entitled to attorney fees.
    The statutory provisions governing the general organization of the 
Commission are codified at 46 U.S.C. 301. Prior to the enactment of the 
Coble Act, there was no statutory limit on the number of terms a 
Commissioner could serve. In addition, when a Commissioner's term 
ended, the Commissioner could continue to serve until a successor was 
appointed, without any prescribed time limitation. The Commission's 
regulations at 46 CFR 501.2(c) reflect these statutory provisions. 
Section 403 of the Coble Act amended 46 U.S.C. 301(b) and established 
term limits for Commissioners appointed and confirmed by the Senate on 
or after the date of enactment, i.e., December 18, 2014. Specifically, 
future Commissioners will be limited to two terms, in addition to the 
remainder of any term for which the Commissioner's predecessor was 
appointed. See 46 U.S.C. 301(b)(2)-(3). Section 403 also limited the 
amount of time future Commissioners will be permitted to serve beyond 
the end of their terms to a period not to exceed one year. See 46 
U.S.C. 301(b)(2).

III. Summary of July 2, 2015, Notice of Proposed Rulemaking

A. Conforming Amendments

    Given the amendments made by the Coble Act to 46 U.S.C. 301 and 
41305, the NPRM proposed amendments to 46 CFR 502.254 and 46 CFR 
501.2(c) to implement the revised statutory text. The proposed 
amendments to 46 CFR 502.254 included:
     Replacing references to ``complainant'' with ``prevailing 
party'';
     replacing references to ``respondent'' with ``opposing 
party'';
     replacing references to reparations awards with references 
to complaint proceedings more generally; and
     amending the language to clarify that the Commission now 
has discretion regarding the award of fees, and that fee petitions may 
be denied.
    The Commission also proposed deleting the clause stating that 
recoverable attorney fees include compensation for services in related 
federal court proceedings.
    In addition to these substantive amendments, the Commission 
proposed making a number of minor changes to improve the clarity and 
organization of Rule 254, including: Adding cross-references to 
relevant provisions governing formal and informal small claims; and 
replacing the term ``presiding officer'' in Rule 254 with the phrase, 
``administrative law judge or small claims officer.''
    With respect to 46 CFR 501.2(c), the Commission proposed dividing 
the paragraph into several subparagraphs addressing the length of 
Commissioner terms, removal of Commissioners, vacancies on the 
Commission, and term limits for both current and future Commissioners.

B. Implementing the Amended Attorney-Fee Provision

    The NPRM discussed three main areas that the Commission wanted to 
provide guidance on: (1) Eligibility; (2) entitlement; and (3) 
applicability. With respect to eligibility, the NPRM noted that the 
Commission had interpreted the original attorney-fee provision at Sec.  
41305(b) as providing for attorney fees only to prevailing complainants 
in reparation proceedings, and that Rule 254 reflects this limitation. 
See Attorney's Fees in Reparation

[[Page 10510]]

Proceedings, 51 FR 37917, 37918 (Oct. 27, 1986) (1986 NPRM); 46 CFR 
502.254 (2015). In subsequent decisions, the Commission specified three 
conditions for recovering attorney fees pursuant to Rule 254: ``(1) A 
violation of the 1984 Act; (2) actual injury caused by such violation; 
and (3) payment of reparations to compensate for such injury.'' A/S 
Ivarans Rederi v. Companhia de Navegacao Lloyd Brasileiro, 25 S.R.R. 
1061, 1063 (FMC 1990). Complainants who prevailed on the merits of the 
complaint, but who did not obtain a reparations award, were not 
eligible to recover attorney fees. See id. at 1064; 1986 NPRM, 51 FR at 
37918.
    The NPRM noted that the new attorney-fee provision provides for the 
award of attorney fees to the prevailing party in any action brought 
under section 41301. The Commission proposed to interpret this language 
as permitting recovery of attorney fees in all complaint proceedings, 
not just those in which reparations were awarded. The Commission 
further proposed using the definition of ``party'' described in Rule 41 
(46 CFR 502.41) when applying the attorney-fee provision, and proposed 
to rely on relevant federal case law, to the extent practicable, in 
determining whether a party ``prevailed'' in a particular proceeding.
    With respect to entitlement, the Commission noted in the NPRM that 
the new attorney-fee provision is silent as to how the Commission 
should exercise its discretion in awarding fees to an eligible party. 
Therefore, the Commission discussed two standards used by federal 
courts in determining entitlement to attorney fees under provisions 
with language similar to 46 U.S.C. 41305(e), i.e., those provisions 
that allow for, but do not require, the award of attorney fees to the 
prevailing party in an action.
    The first standard, used by federal courts applying the fee-
shifting provision in the Copyright Act, treats prevailing plaintiffs 
and prevailing defendants similarly when making fee-award 
determinations, and the Supreme Court has cited with approval a 
nonexclusive list of factors for courts to consider when determining 
entitlement under this standard, including ``frivolousness, motivation, 
objective unreasonableness (both in the factual and in the legal 
components of the case) and the need in particular circumstances to 
advance considerations of compensation and deterrence.'' Fogerty v. 
Fantasy, Inc., 510 U.S. 517, 534 n.19 (1994) (quoting Lieb v. Topstone 
Industries, Inc., 788 F.2d 151, 156 (3rd Cir. 1986)) (internal 
quotation marks omitted).
    The second standard, used by federal courts in applying various 
fee-shifting provisions in the Civil Rights Act, treats prevailing 
plaintiffs more favorably than prevailing respondents when determining 
entitlement to attorney fees. While prevailing plaintiffs ``ordinarily 
recover an attorney's fee unless special circumstances would render 
such an award unjust,'' Newman v. Piggie Park Enterprises, Inc., 390 
U.S. 400, 402 (1968) (per curiam), prevailing defendants are awarded 
attorney fees only ``upon a finding that the plaintiff's action was 
frivolous, unreasonable, or without foundation.'' Christiansburg 
Garment Co. v. Equal Emp't Opportunity Comm'n, 434 U.S. 412, 421 
(1978). The NPRM highlighted the differences between the two standards 
and requested comment on them. The NPRM also requested comment on any 
other standards the Commission should consider, as well as any other 
criteria that the Commission should apply in determining entitlement to 
fee awards.
    Finally, the NPRM discussed the applicability of the new attorney 
fee provision to complaint proceedings initiated prior to December 18, 
2014, the Coble Act's effective date, that were pending before the 
Commission on that date. The NPRM presented two options: (1) The 
Commission could resolve the applicability issue on a case-by-case 
basis in accordance with the framework established by federal courts; 
or (2) the Commission could establish a bright-line rule clearly 
defining when the old or new attorney-fee provision would apply to a 
case, e.g., based on the date the proceeding was initiated.

IV. Overview of Comments

    The Commission received five comments in response to the NPRM from 
the following organizations: The World Shipping Council (WSC), an 
organization comprising many of the major ocean common carriers; the 
American Association of Port Authorities (AAPA); Cozen O'Connor 
(Cozen), a law firm that has represented both complainants and 
respondents in Commission proceedings; Maher Terminals, LLC (Maher); 
and the Port Authority of New York and New Jersey (PANYNJ). The 
comments focused on the Commission's policy going forward with respect 
to attorney fee awards, particularly how the Commission will exercise 
its discretion to award fees. The commenters generally supported the 
Commission's proposal to rely on federal court case law, to the extent 
practicable, in determining whether a party ``prevailed'' in a 
proceeding, though Maher recommended that the Commission look to its 
own case law first. All of the commenters except Maher recommended that 
the Commission treat prevailing complainants and prevailing respondents 
in an even-handed manner with respect to attorney fee awards. Maher, on 
the other hand, recommended that the Commission treat prevailing 
complainants more favorably than prevailing respondents. Only two 
commenters, PANYNJ and Maher, commented on the applicability of the new 
attorney-fee provision to pending Commission cases. PANYNJ urged the 
Commission to apply the new provision to all pending proceedings, while 
Maher argued that the new provision should not be applied to any 
pending proceedings.

V. Final Rule and Response to Comments

A. Conforming Amendments

    None of the commenters discussed the proposed conforming amendments 
to 46 CFR 501.2(c) and 46 CFR 502.254. For the reasons described in the 
NPRM, the final rule adopts these conforming amendments, with the 
following minor changes.
    First, in the newly created Sec.  501.2(c)(4), the Commission has 
clarified that the applicability of the Coble Act's new term limits for 
Commissioners depends on a Commissioner's initial appointment date. 
This language more accurately reflects the Commission's interpretation, 
as stated in the NPRM, that the new term limits apply only to future 
Commissioners. The proposed rule, which referred only to a 
Commissioner's appointment date, could have been misconstrued to mean 
that the term limits apply not only to future Commissioners but also to 
current Commissioners appointed to a new term on or after the Coble 
Act's effective date.
    Second, the Commission has reorganized the fee petition content 
requirements in Sec.  502.254(d) in order make them easier to read, and 
has specified that petitions must explain why fees should be awarded in 
the relevant proceeding. The latter amendment clarifies Rule 254's 
current requirement that petitioners explain the reasonableness of 
their claim in light of the discretionary nature of fee awards under 
Sec.  41305(e).
    Finally, the Commission has revised Sec.  502.254(h), which governs 
appeals of orders issued by administrative law judges (ALJs) and small 
claims officers, to include references to the formal and informal 
procedures governing small claims. As the Commission noted in the NPRM, 
Rule 254 currently applies to

[[Page 10511]]

small claims but does not reference the relevant procedural rules 
governing such claims.\3\ The Commission proposed including cross-
references in proposed paragraphs Sec.  502.254(c)(2)(i) and (ii), but 
inadvertently failed to include similar cross-references in proposed 
paragraph (h). The final rule corrects this error.
---------------------------------------------------------------------------

    \3\ The proposed regulatory text for Sec.  502.305(b) 
inadvertently failed to include amendments made to that paragraph by 
a March 19, 2015, direct final rule (80 FR 14318), which went into 
effect on June 24, 2015. The final rule reflects these amendments.
---------------------------------------------------------------------------

B. Implementing the Amended Attorney-Fee Provision

1. Who is eligible to recover attorney fees?
a. Proceedings
Comments
    Maher asserts that Sec.  41305(e) applies only to complaint 
proceedings authorized under 46 U.S.C. 41301 (i.e., private party 
complaint proceedings alleging violations of the Shipping Act (whether 
seeking reparations or a cease and desist order)) but not ``other 
complaint proceedings, actions or investigations authorized under the 
Shipping Act or described in the Rules, such as complaints or 
proceedings under 46 U.S.C. 41302 and Rule 502.66.'' Maher Comments at 
2.
Discussion
    The Commission agrees with Maher that the recovery of attorney fees 
under Sec.  41305(e) is limited to proceedings initiated under Sec.  
41301, i.e., private party complaint proceedings, and that Sec.  
41305(e) does not apply to investigation proceedings initiated by the 
Commission under 46 U.S.C. 41302(a) \4\ and 46 CFR 502.63.\5\
---------------------------------------------------------------------------

    \4\ Subsections 41302(c)-(e) apply to both complaint proceedings 
under Sec.  41301 and Commission investigations under Sec.  
41302(a).
    \5\ The Commission assumes that Maher meant to cite Sec.  
502.63, which governs Commission enforcement actions, rather than 
Sec.  502.66, which governs amendments and supplements to pleadings.
---------------------------------------------------------------------------

b. Parties
Comments
    Maher contends that the existing definition of ``party'' in 46 CFR 
502.41 is only appropriate to the extent that the entities eligible for 
attorney fees are parties in complaint proceedings under Sec.  41301 
and 46 CFR 502.62 (e.g., complainants and respondents) and parties in 
proceedings under ``Section 502.66'' \6\ would not be covered. Maher 
Comments at 2. Maher also asserts that while intervenors may in certain 
circumstances be a ``party'' for the purposes of attorney fee recovery 
under federal case law, the standards applicable to specific types of 
parties may differ depending on the circumstances. Id. Maher cautioned 
that the definition of ``party'' in Sec.  502.41 should not be applied 
in any manner suggesting an expansion of eligibility to attorney fees 
beyond those parties participating in complaint proceeding authorized 
under Sec.  41301. Id.
---------------------------------------------------------------------------

    \6\ See supra n.4.
---------------------------------------------------------------------------

    Regarding the question of whether a party is a ``prevailing party'' 
eligible to recover attorney fees, WSC, AAPA, and Cozen support the 
Commission's proposal to rely on federal case law, to the extent 
practicable, in making such determinations. WSC Comments at 1; AAPA 
Comments at 2; Cozen Comments at 2. Cozen agrees with the Commission's 
interpretation that attorney fees are available to any prevailing party 
under the amended statutory language, not just to complainants that 
obtain a reparations award. Cozen Comments at 2.
    WSC and AAPA urge the Commission to adopt the standard stated by 
the Supreme Court in Farrar v. Hobby, 506 U.S. 103 (1992), namely that 
a ``in order to be a prevailing party, the party seeking an attorney 
fee award `must obtain an enforceable judgment against the [party] from 
whom fees are sought.' '' WSC Comments at 1 (quoting Farrar, 506 U.S. 
at 111); AAPA Comments at 2. The two organizations differ, however, on 
the application of this standard to Commission proceedings. WSC 
disagrees with the Commission's assertion in the NPRM that under the 
amended statutory language, the award of attorney fees is no longer 
conditioned on an award of reparations. WSC Comments at 2. WSC argues 
that the placement of the attorney fee provision in Sec.  41305(e) was 
likely meant to reflect the expansion of attorney-fee recovery to any 
prevailing party, not just prevailing complainants, and that the new 
language does not compel or support the Commission abandoning its 
interpretation that the award of reparations is a prerequisite for a 
complainant's eligibility to recover attorney fees. Id. AAPA, on the 
other hand, argues that ``[t]o the extent the Commission might consider 
the statute to allow an award of fees where nonmonetary relief is 
awarded . . . , it would be required that an underlying Commission 
order mandate `some action (or cessation of action) by the defendant,' 
'' AAPA Comments at 2 (quoting Hewitt v. Helms, 482 U.S. 755, 761 
(1987)), ``and `materially alter the legal relationship between the 
parties.' '' AAPA Comments at 2 (quoting Lefemine v. Wideman, 133 S. 
Ct. 9, 11 (2012) (per curiam)).
    Maher urges the Commission to apply and conform its own body of 
authority regarding the attorney-fee eligibility of complainants under 
the Shipping Act, as applicable, before looking to federal case law for 
guidance. Maher Comments at 3. Specifically, Maher states that 
``prevailing on the merits of the complaint should be the sole 
consideration for the threshold determination of whether a complainant 
`prevailed' '' and that ``additional factors concerning actual injury 
and/or reparation awards or cease and desist orders are not appropriate 
or necessary.'' Id. at 3 & n.2. Regarding whether a respondent has 
prevailed under relevant federal case law, Maher asserts that the 
determination depends on which federal case law is considered relevant. 
Id. at 3. Maher argues that the Commission should adopt the standard 
used for other remedial statutes with similar ``prevailing party'' 
provisions, under which ``a defendant successfully defending against an 
otherwise colorable complaint (absent a finding that the plaintiff's 
complaint was frivolous, unreasonable, or without foundation) would not 
constitute `prevailing' for the purposes of the attorney-fee 
provision.'' Id.
Discussion
    The Commission agrees with Maher that ``parties'' eligible for 
attorney awards are only those parties to complaint proceedings brought 
under Sec.  41301. With that caveat, the Commission sees no reason to 
deviate from the definition of ``party'' in Rule 41 when determining 
eligibility for attorney fees.
    With respect to whether a party has ``prevailed,'' the Commission 
notes that the same standards ``are generally applicable in all cases 
in which Congress has authorized an award of fees to a `prevailing 
party.' '' Hensley v. Eckerhart, 461 U.S. 424, 433 n.7 (1983). ``The 
term `prevailing party' . . . is a `legal term of art,' and is 
`interpreted . . . consistently'--that is, without distinctions based 
on the particular statutory context in which it appears.'' Smyth v. 
Rivero, 282 F.3d 268, 274 (4th Cir. 2002) (quoting Buckhannon Bd. & 
Care Home v. W. Va. Dep't of Health and Human Res., 532 U.S. 598, 603 & 
n.4 (2001)) (citation omitted). Nonetheless, some courts have left open 
the possibility that the ``text, structure, or legislative history'' of 
a particular fee-shifting statute may indicate that the term 
``prevailing party'' in that statute is not meant to have its ``usual 
meaning.''

[[Page 10512]]

See T.D. v. La Grange Sch. Dist. No. 102, 349 F.3d 469, 475 (7th Cir. 
2003).
    Nothing in the text, structure, or legislative history of section 
402 of the Coble Act suggests Congressional intent to depart from the 
consistently applied standards for determining whether a party has 
prevailed in a proceeding. The text of Sec.  41305(e) does not define 
``prevailing party,'' and there is limited legislative history for 
section 402. An informational brochure issued by the House 
Transportation and Infrastructure Committee states only that section 
402 ``clarifies that in actions filed with the FMC alleging a violation 
of law pertaining to ocean shipping, the prevailing party in the 
proceeding may be awarded reasonable attorney fees.'' \7\ In the 
absence of any evidence that the term ``prevailing party'' in Sec.  
41305(e) is meant to have something other than its usual meaning, the 
Commission will apply the standards used by federal courts in 
determining whether a party has prevailed in complaint proceedings 
under the Shipping Act.\8\
---------------------------------------------------------------------------

    \7\ House Committee on Transportation & Infrastructure, The 
Howard Coble Coast Guard & Maritime Transportation Act of 2014, at 
20 (2014).
    senateagreement.pdf.
    \8\ We disagree with Maher's assertion that the courts use 
different standards for determining whether a defendant has 
prevailed. The cases cited by Maher illustrate that the courts have 
developed different standards for determining when a prevailing 
defendant is entitled to attorney fees under various statutes; they 
do not indicate different standards as to whether a defendant has, 
in fact, prevailed in the proceeding.
---------------------------------------------------------------------------

    ``The touchstone of the prevailing party inquiry'' is ``the 
material alteration of the legal relationship of the parties in a 
manner which Congress sought to promote in the fee statute.'' Tex. 
State Teachers Ass'n v. Garland Indep. Sch. Dist., 489 U.S. 782, 792-93 
(1989); Cadkin v. Loose, 569 F.3d 1142, 1148-49 (9th Cir. 2009) 
(applying the same test in a copyright case). In particular, the 
plaintiff in the proceeding ``must obtain at least some relief on the 
merits'' to qualify as the prevailing party. Farrar, 506 U.S. at 111. 
An award of damages, declaratory judgment, or injunction usually 
satisfies this test. Lefemine, 133 S. Ct. at 11 (citing Rhodes v. 
Stewart, 588 U.S. 1, 4 (1988) (per curiam)).
    Complainants in Commission proceedings generally seek reparations 
(damages) or a cease and desist order (order directing the respondent 
not to engage in proscribed behavior) \9\ or both. Applying the test 
used in other statutes, the Commission concludes that a complainant 
would generally qualify as the ``prevailing party'' in a Commission 
proceeding when the presiding officer awards reparations or issues a 
cease and desist order.\10\
---------------------------------------------------------------------------

    \9\ Brewer v. Maralan, 29 S.R.R. 6, 9 (FMC 2001).
    \10\ We offer no opinion at this time as to whether a 
complainant obtaining relief other than a reparations award or cease 
and desist order would be considered the prevailing party under 
Sec.  41305(e).
---------------------------------------------------------------------------

    WSC and Maher disagree with this approach. WSC argues that a 
reparation award should continue to be a prerequisite for attorney fee 
awards and downplays the importance of the placement and language of 
Sec.  41305(e). Given that the Commission's interpretation of the 
original attorney fee provision was based on the structure, language, 
and legislative history of that provision, see A/S Ivarans Rederi, 25 
S.R.R. at 1063, we reject the notion that those elements should be 
ignored with respect to Sec.  41305(e). As noted above, Congress 
replaced the original attorney-fee provision with one that incorporates 
language (i.e., ``prevailing party'') that is interpreted uniformly 
across different statutes, and WSC fails to offer any convincing 
justification to explain why the Commission should diverge from that 
interpretation with respect to Sec.  41305(e). For similar reasons, the 
Commission rejects Maher's suggestion that a complainant's eligibility 
for attorney fees should not depend on whether the complainant has been 
awarded some form of relief.\11\
---------------------------------------------------------------------------

    \11\ Maher's comments on this issue are somewhat confusing. 
Maher argues that we should apply existing Commission case law when 
interpreting Sec.  41305(e) but then argues that, based on the new 
language, we should ignore one of the prerequisites for attorney 
fees described in those cases: The award of reparations. Moreover, 
Maher's proposed standard represents a greater departure from the 
Commission's eligibility standard under the old attorney fee 
provision (requiring that complainants obtain a reparations award) 
than the prevailing party standard used by federal courts (requiring 
that plaintiffs obtain some relief on the merits).
---------------------------------------------------------------------------

2. How will the Commission exercise its discretion?
a. General
Comments
    Maher recommends that the Commission establish a framework for 
determining fees as part of this rulemaking rather than taking a 
piecemeal approach through adjudicatory decisions, noting that the 
Commission ``has the unique opportunity to address the scope and manner 
of discretion to be applied in matters pending before [it] (including 
before Administrative Law Judges) in a forthright and consistent 
manner.'' Maher Comments at 6.
    AAPA recommends that the Commission provide direction on two broad 
issues related to attorney fee awards: (1) Treatment of prevailing 
complainants and prevailing respondents; and (2) whether the award of 
fees will be the rule or the exception in Shipping Act proceedings. 
AAPA Comments at 6-7. AAPA urges the Commission to clarify that 
attorney fee awards should be the exception and not the rule. Id. AAPA 
states that one of the justifications for awarding attorney fees under 
the Copyright Act is that ``many copyright violations do not lead to 
significant or easily provable damages, and that fee awards are thus 
necessary to provide sufficient deterrence of violations.'' Id. at 6 
(citing Magnuson v. Video Yesteryear, 85 F.3d 1424, 1432 (9th Cir. 
1996); Gonzalez v. Transfer Technologies, Inc., 301 F.3d 601, 609-10 
(7th Cir. 2002)). AAPA argues that this type of situation is not 
generally present in Shipping Act claims. Id. Accordingly, AAPA argues 
that the general rule should be that each party bears its own attorney 
fees (i.e., the American Rule) and that fee-shifting should only be 
imposed when the particular facts of a case warrant such an award. Id.
Discussion
    As described in detail below, the Commission is setting out general 
guidance on some of the major issues associated with determining 
entitlement to fee awards under Sec.  41305(e). When interpreting fee-
shifting provisions, courts look to the text of the statute, as well as 
its purpose, structure, and legislative history, see, e.g., Bd. of Trs. 
of the Hotel & Rest. Emps. Local 25 v. JPR, Inc., 136 F.3d 794, 802 
(D.C. Cir. 1998), and the Commission has carefully considered these 
elements in crafting its guidance. Regarding the statutory history, it 
should be noted that the American rule concerning attorney fees 
prevailed at Commission-level proceedings from 1916 until 1984. Section 
30 of the Shipping Act of 1916 provided that fees and costs could be 
provided to the petitioner beginning with and only in the event that 
the petitioner was required to seek a federal district court order to 
effectuate enforcement of his successful Commission order of award for 
reparations.
    Regarding whether attorney fee awards will be the rule or the 
exception in Commission proceedings, the Commission notes that, in 
general, discretionary fee-shifting provisions in statutes protecting 
economic interests, like the Shipping Act, do not create a presumption 
that a prevailing party will be awarded fees. See Eddy v. Colonial Life 
Ins. Co. of Am., 59 F.3d 201, 205 (D.C. Cir. 1995) (citing Fogerty, 510 
U.S. at 525 n.12 (1994)) (discussing a fee-

[[Page 10513]]

shifting provision in the Employee Retirement Income Security Act 
(ERISA)). In addition, Congress's decision to amend Sec.  41305 so that 
the award of attorney fees is now discretionary instead of mandatory 
indicates an intent to eliminate the automatic award of attorney fees, 
see Fogerty, 510 U.S. at 533, and the Commission believes that any 
general presumption in favor of fee awards would frustrate that intent. 
The Commission disagrees with AAPA's contention, however, that fee 
awards should be ``the exception and not the rule,'' which would 
suggest a presumption against the award of fees not supported by the 
statutory text. The Commission believes that there should be no 
presumption in favor of or against attorney fee awards, entitlement to 
which will be determined based on factors that are consistent with the 
purposes of the Shipping Act.
b. Treatment of Prevailing Complainants vs. Prevailing Respondents
Comments
    WSC, AAPA, Cozen, and PANYNJ support the Commission treating 
prevailing complainants and respondents even-handedly when determining 
entitlement to attorney fees. WSC Comments at 2; AAPA Comments at 1, 5; 
Cozen Comments at 2; PANYNJ Comments at 5-6. Comparing the Shipping Act 
with the Copyright Act and Civil Rights Act, WSC argues that the 
Shipping Act is much more similar to the Copyright Act. WSC Comments at 
3. AAPA and Cozen argue that the policies underlying the Shipping Act 
do not rise to the same level of importance as those underlying the 
Civil Rights Act, i.e., the elimination of discrimination and the 
protection of fundamental personal rights. Cozen Comments at 3; AAPA 
Comments at 3-4.
    WSC, AAPA, and Cozen distinguish the Civil Rights Act as the only 
one of the three statutes to make use of ``private attorneys general'' 
to implement the statute's public policy goals, with Cozen and AAPA 
observing that, unlike complainants in Shipping Act proceedings, 
plaintiffs initiating actions under the Civil Rights Act often recover 
small amounts or only obtain injunctive relief. WSC Comments at 3; AAPA 
at 3-6; Cozen Comments at 3. AAPA argues that ``there is no reason to 
encourage Shipping Act claims by parties who do not have a financial 
incentive in filing the claim,'' and that ``[t]o the contrary, wise 
policy would counsel disfavoring such claims.'' AAPA Comments at 4-5. 
AAPA further asserts that the Act's stated purpose of providing ``a 
non-discriminatory regulatory process'' is best served by a non-
discriminatory standard for awarding attorney fees. Id. at 6.
    WSC, AAPA, and PANYNJ further assert that proceedings under the 
Civil Rights Act, unlike the Shipping Act, generally involve a mismatch 
of resources between individuals litigating against more powerful 
businesses and organizations. WSC Comments at 3; AAPA Comments at 5; 
PANYNJ Comments at 2. In contrast, AAPA and PANYNJ state that both 
complainants and respondents in Shipping Act proceedings are often 
sophisticated businesses, and WSC posits that parties on either side 
``run the gamut from individuals and small businesses to very large 
corporations and public port agencies.'' WSC Comments at 3; AAPA 
Comments at 5; PANYNJ Comments at 2.
    WSC, AAPA, Cozen, and PANYNJ also point to the fact that Congress 
discarded the provision granting complainants a preference with respect 
to attorney-fee recovery and replaced it with a facially neutral 
``prevailing party'' provision, and they argue that the purpose of the 
amendment would be subverted if applied in a less than even-handed 
manner. WSC Comments at 3; AAPA Comments at 2-3, 5-6; Cozen Comments at 
2-3; PANYNJ Comments at 1-2. Finally, PANYNJ theorizes that adopting a 
standard that is less favorable to prevailing respondents may only 
encourage the filing of meritless complaints. PANYNJ Comments at 2.
    Maher asserts that, based on Supreme Court case law, ``the relevant 
analysis to determine the most appropriate standard to use in applying 
the new attorney-fees provision in Shipping Act complaint proceedings 
is to look to the comparative Congressional `large objectives' and 
`equitable considerations' pertaining to private party proceedings 
under the Shipping Act.'' Maher Comments at 4 (citing Martin v. 
Franklin County Capital Corp., 546 U.S. 132 (2005)). Under this 
analysis, Maher argues that the standard most applicable to Sec.  
41305(e) is the standard applied under other remedial statutes with 
similar provisions, such as the Civil Rights Act, rather than the 
Copyright Act. Id. at 4. In support, Maher states that the Shipping Act 
regulates common carriage and grants immunity from the antitrust 
statutes, with the primary purpose to foster and maintain a non-
discriminatory transportation system. Id. (citing Consolo v. Fed. Mar. 
Comm'n, 383 U.S. 607, 622-23 (1966)). Maher further asserts that the 
Supreme Court has identified two statutory factors warranting the 
``ordinary recovery'' standard for prevailing plaintiffs: ``(1) 
complainants vindicating public rights and acting as `private attorneys 
general' in private party rights of action and (2) statutes where a 
defendant that is required to pay attorney's fees violates federal 
law,'' and argues that the private enforcement of the Shipping Act 
through the complaint process under Sec.  41301 meets this test. Id. at 
4-5. Maher notes that any person can bring a complaint under Sec.  
41301, even if the complainant has not been directly injured by the 
alleged violation, and that when a complainant establishes a violation, 
the respondent has necessarily violated federal law. Id. at 5.
    Based on the asserted similarities between the Shipping Act and 
statutes like the Civil Rights Act, Maher argues that the dual standard 
of entitlement under those statutes should apply. Maher Comments at 5-
6. Specifically, Maher asserts that prevailing complainants should 
ordinarily recover fees while prevailing respondents should only 
recover fees when the complainant's action was frivolous, unreasonable, 
or without foundation. Id. Maher argues that to treat prevailing 
complainants and respondents in an even-handed manner with respect to 
awarding attorney fees could ``discourage all but the most airtight 
claims,'' and neither the text of the Coble Act nor the differences 
between the text of Sec.  41305(e) and the earlier fee-shifting 
provision in Sec.  41305(b) indicate that this was Congress's intent. 
Id. at 6 (citing Franklin County Capital Corp, 546 U.S. at 140).
Discussion
    Upon consideration of the text, legislative history, and purposes 
of the Shipping Act, as well as the relevant comments, the Commission 
concludes that prevailing complainants and prevailing respondents 
should be treated in an even-handed manner in determining whether to 
award attorney fees. Looking first at the plain text of Sec.  41305(e), 
there is no indication that successful complainants should be treated 
differently than successful respondents. See Fogerty, 510 U.S. at 522. 
The provision refers only to the ``prevailing party'' in an action. 
Moreover, Congress's decision to remove the previous fee-shifting 
provision, which limited eligibility for fee recovery to prevailing 
complainants, and replace it with a new fee-shifting provision that 
allows any prevailing party to recover fees, strongly suggests an 
intent to eliminate any preference for

[[Page 10514]]

prevailing complainants in fee determinations.
    In addition, the various rationales justifying preferential 
treatment of plaintiffs in civil rights proceedings do not apply to 
Shipping Act complainants. Nothing in the Shipping Act's purposes or 
legislative history suggests that the role of a complainant is 
equivalent to that of a Civil Rights Act plaintiff, i.e., ``the chosen 
instrument of Congress to vindicate `a policy that Congress considered 
of the highest priority.' '' Christiansburg Garment Co., 434 U.S. at 
418 (quoting Newman, 390 U.S. at 402). Looking first at the Shipping 
Act's purposes, the Commission reiterates that the Act's focus is on 
commercial interests rather than ``dignitary rights.'' See Eddy, 59 
F.3d at 204-05 (comparing the legislative histories of ERISA and the 
civil rights statutes). The purposes of the Shipping Act are to:
     Establish a nondiscriminatory regulatory process for the 
common carriage of goods by water in the foreign commerce of the United 
States with a minimum of government intervention and regulatory costs;
     provide an efficient and economic transportation system in 
the ocean commerce of the United States that is, insofar as possible, 
in harmony with, and responsive to, international shipping practices;
     encourage the development of an economically sound and 
efficient liner fleet of vessels of the United States capable of 
meeting national security needs; and
     promote the growth and development of United States 
exports through competitive and efficient ocean transportation and by 
placing a greater reliance on the marketplace.
    46 U.S.C. 40101. Although these purposes are important, they do not 
involve the type of rights that the courts have found justify disparate 
treatment of prevailing plaintiffs and prevailing defendants under fee-
shifting statutes.
    In fact, the Shipping Act's several purposes provide support for 
treating prevailing complainants and prevailing respondents in an even-
handed manner. The Shipping Act is intended not only to ensure a non-
discriminatory process for the common carriage of goods, but also to 
provide and promote an efficient, competitive, and economic ocean 
transportation system. See 46 U.S.C. 40101(2), (4). These latter goals 
are furthered by encouraging the industry to continue to develop new 
ways of improving ocean transportation. In order to promote such 
improvements and assist the industry in evaluating potential options, 
it is important that the boundary between legal and illegal conduct be 
demarcated as clearly as possible. To that end, respondents who seek to 
advance meritorious defenses of their actions should be encouraged to 
litigate them to the same extent that complainants are encouraged to 
litigate meritorious claims of violations. Cf. Fogerty, 510 U.S. at 
526-27 (making similar arguments in the context of the Copyright Act).
    In addition, although complaint proceedings assist the Commission 
in enforcing the Shipping Act, there is no indication that Congress 
intended complainants to serve as ``private attorneys general.'' \12\ 
As the Supreme Court discussed in Newman:
---------------------------------------------------------------------------

    \12\ The Commission also disagrees with the comments suggesting 
that because losing respondents may have violated ``federal law,'' 
prevailing complainants should be treated more favorably in attorney 
fee determinations. As the Fogerty case amply demonstrates, this 
factor is not dispositive, and, even under the previous attorney-fee 
provision mandating fees, a violation alone was insufficient to 
justify an attorney-fee award; the complainant had to show injury 
and be awarded reparations. See A/S Ivarans Rederi, 25 S.R.R. at 
1063.

    When the Civil Rights Act of 1964 was passed, it was evident 
that enforcement would prove difficult and that the Nation would 
have to rely in part upon private litigation as a means of securing 
broad compliance with the law. A Title II suit is thus private in 
form only. When a plaintiff brings an action under that Title, he 
cannot recover damages. If he obtains an injunction, he does so not 
for himself alone but also as a ``private attorney general,'' 
vindicating a policy that Congress considered of the highest 
priority. If successful plaintiffs were routinely forced to bear 
their own attorneys' fees, few aggrieved parties would be in a 
position to advance the public interest by invoking the injunctive 
powers of the federal courts. Congress therefore enacted the 
provision for counsel fees--not simply to penalize litigants who 
deliberately advance arguments they know to be untenable but, more 
broadly, to encourage individuals injured by racial discrimination 
---------------------------------------------------------------------------
to seek judicial relief under Title II.

390 U.S. at 401-02 (footnotes omitted).
    As noted by some of the commenters, the remedies and incentives 
under the Shipping Act are quite different. Prevailing complainants in 
Shipping Act proceedings are entitled to reparations for the injuries 
resulting from violations of the Act, and, if the injury is caused by 
certain prohibited activities, the complainant can recover up to twice 
the amount of the actual injury. 46 U.S.C. 41305(b)-(c). Accordingly, 
complainants have an incentive to bring claims even in the absence of 
fee recovery.\13\ In addition, the Commission itself may investigate 
any conduct or agreement that it believes may be in violation of the 
Act, reducing the need for private action. See 46 U.S.C. 41302; Aaacon 
Auto Transp., Inc. v. Medlin, 575 F.2d 1102, 1106 (5th Cir. 1978).\14\
---------------------------------------------------------------------------

    \13\ The mere fact that anyone can file a complaint, even if the 
person has not been injured by a Shipping Act violation, does not 
support the conclusion that Congress intended complainants to assume 
the role of ``private attorneys general,'' as Maher appears to 
suggest. As noted throughout the notice, fee recovery under the 
original attorney-fee provision was limited to injured complainants 
who were awarded reparations. Although Sec.  41305(e) is broader in 
scope and may apply in proceedings in which no reparations are 
awarded, given the limited legislative history, reading this change 
as indicating Congressional intent to elevate the role of 
complainants would be a bridge too far.
    \14\ Congress did not wish to provide the same encouragement for 
private claimants under the Interstate Commerce Act as it has for 
Title VII litigants. . . . The private attorneys general concept, 
which underlies the allowance of attorneys' fees in Title VII cases, 
is notably absent from [the fee-shifting provision] since any 
required vindication of public rights in such matters as these can 
be accomplished by the [Interstate Commerce] Commission itself. 575 
F.2d at 1106. (citation omitted).
---------------------------------------------------------------------------

    Finally, we agree with the majority of commenters that whereas 
``[o]ftentimes, in the civil rights context, impecunious `private 
attorney general' plaintiffs can ill afford to litigate their claims 
against defendants with more resources,'' Fogerty, 510 U.S. at 524, 
entities of all sizes, from small shippers to large carriers and marine 
terminal operators (MTOs), appear as complainants in Shipping Act 
complaint proceedings, and, similarly, respondents range from small 
ocean transportation intermediaries to large carriers and MTOs. 
Accordingly, there is not the same disparity in resources between 
complainants and respondents that exist generally in civil rights 
cases.
    Based on the foregoing, the Commission will treat prevailing 
complainants and prevailing respondents in an even-handed manner when 
applying Sec.  41305(e).
c. Factors for Consideration When Determining Entitlement
Comments
    WSC asserts that if the Commission determines that complainants may 
be considered prevailing parties eligible for attorney fees even if 
they have not been awarded reparations, the Commission should still 
consider whether reparations were awarded, and the amount, when 
determining whether and in what amount to award such fees. WSC comments 
at 2.
    Cozen recommends that the Commission adopt the Copyright Act 
standard and apply the criteria used by courts under that statute, and 
PANYNJ asserts that the Copyright Act factors are just as relevant in 
Shipping Act

[[Page 10515]]

proceedings. Cozen Comments at 2; PANYNJ Comments at 1. Cozen also 
urges the Commission to consider the following factors in evaluating 
petitions for attorney fees: the degree to which the prevailing party 
has prevailed, i.e., did it prevail on all or only some of its claims; 
the relief sought versus the relief obtained; and the relationship of 
the attorney fees sought to those two foregoing factors. Id. at 3-4. In 
particular, Cozen asserts that the Commission should avoid situations 
in which the fees awarded far exceed the relief obtained, particularly 
when the relief awarded is far less than the amount sought by the 
complainant. Id. at 4-5.
    AAPA believes that the specific factors listed in the Fogerty case 
are useful guideposts for the exercise of discretion but cautions that 
``it would seem impracticable for the Commission to identify a priori 
each factor that might prove relevant to a case in the future, or that 
might prove necessary to fulfil the purposes of the Act.'' AAPA 
Comments at 6-7. AAPA therefore discourages the Commission from 
codifying a comprehensive list of factors in the regulation. Id. at 7.
    Maher argues that the Copyright Act factors discussed in the NPRM 
are not appropriate authority or guidance to use in applying Sec.  
41305 because they are premised on the unique goals, objectives, and 
policies of that Act, as opposed to the goals, objectives, and policies 
at issue in federal remedial statutes. Maher Comments at 5 n.3. 
Instead, as discussed above, Maher recommends that the Commission adopt 
the party-specific standards used in Civil Rights Act cases. Id. at 5-
6.
Discussion
    The Commission agrees with AAPA and has elected not to codify a 
list of factors for consideration in determining entitlement to 
attorney fees. The Commission cannot predict the types of cases that 
may arise in the future, and specifying factors at this time 
unnecessarily risks restricting the discretion granted by Sec.  
41305(e).\15\ The primary consideration in determining entitlement to 
attorney fees is whether such an award is consistent with the purposes 
of the Shipping Act, and any factors the Commission relies upon in 
individual cases should be consistent with these purposes. See Fogerty, 
510 U.S. at 534 n.19. In identifying relevant factors, the Commission 
will keep in mind the following general principles discussed above:
---------------------------------------------------------------------------

    \15\ Although the Commission declines to identify generally 
applicable factors for consideration in fee determinations, the 
Commission has identified below one specific factor for 
consideration with respect to pending cases: the status of the 
proceedings on Coble Act's effective date.
---------------------------------------------------------------------------

     There should be no general presumption for or against 
awarding attorney fees;
     prevailing complainants and prevailing respondents should 
be treated in an even-handed manner; and
     parties should be encouraged to litigate meritorious 
claims and defences.
    Several commenters urge the Commission to consider the degree of 
success obtained by the prevailing party in evaluating fee petitions. 
Cozen's comments, in particular, cite several Commission orders in 
which the fees awarded greatly exceeded the reparations and suggest 
that the Commission use its discretion to avoid such results in the 
future.
    The degree of success obtained is a relevant factor when 
determining the amount of an attorney fee award, see Hensley v. 
Eckerhart, 461 U.S. 424, 434-36 (1983), and the Commission, relying on 
relevant federal case law, has considered this a relevant factor when 
determining reasonable attorney fee awards. See Bernard & Weldcraft 
Welding Equip. v. Supertrans Intermodal, Inc., 29 S.R.R. 1348, 1358-59 
(ALJ 2002) (finding that although proposed fee award based on lodestar 
method was far in excess of the reparations awarded, it was reasonable 
given other factors); Transworld Shipping (USA), Inc. v. FMI Forwarding 
(San Francisco), Inc., 29 S.R.R. 876, 878-79 (FMC 2002) (affirming 
ALJ's reduction in compensable hours because complainant obtained only 
partial success); see also 1987 Final Rule, 52 FR at 6331.
    Cozen's comments fail to explain how the changes made by the Coble 
Act justify changing the Commission's approach to adjusting fee awards. 
Congress granted the Commission discretion to determine when to award 
fees; it did not alter the standard for determining the amount of fees 
to be awarded after such a determination has been made. Section 
41305(e), like the previous fee-shifting provision, allows for the 
award of ``reasonable'' attorney fees, and the Commission will continue 
to be guided by its own precedent and relevant federal case law in 
deciding when to adjust fee awards based on the degree of success 
obtained by the prevailing party.
d. Different Entitlement Standards Depending on Type of Proceeding
Comments
    In response to the Commission's request for comment on whether to 
apply different fee entitlement standards for different proceedings 
(e.g., small claims proceedings), Maher stated that the interests of 
complainants are similar regardless of the type of proceeding or the 
different financial capacity of complainants because all types of 
complaint proceeding present financial barriers to complainants. Maher 
Comments at 7. With respect to pro se complainants and small claims 
generally, Maher suggests that effective management of the small claims 
process could be a means to promote adjudication in the face of limited 
or imbalanced resources, e.g., the Commission could consider limiting 
the ability of respondents to elect to remove a small claims complaint 
to a ``full proceeding.'' Id.
Discussion
    The Commission agrees with Maher and has determined to apply the 
same standard of entitlement regardless of the type of proceeding. The 
Commission believes that the statute provides sufficient flexibility to 
address fee-award determinations in both formal and small claims 
proceedings.\16\
---------------------------------------------------------------------------

    \16\ Maher's suggestions regarding ways to improve the small 
claims process are outside the scope of this rulemaking.
---------------------------------------------------------------------------

3. How will the Commission apply the provision to pending proceedings?
Comments
    PANYNJ argues that the Commission ``should have the discretion to 
award attorney fees in a fully retrospective manner whenever it finds 
that an unsuccessful action or defense had been conducted in a 
vexatious and wasteful fashion.'' PANYNJ Comments at 2. PANYNJ cites 
Congress's intent to make attorney fees available in Commission 
proceedings, Congressional policy to reimburse litigants for costs 
incurred due to vexatious and abusive litigation, and the inherent 
power of the federal courts to award attorney fees for abusive 
litigation conduct even in the absence of express statutory 
authorization or advance notice. Id. PANYNJ asserts that such a policy 
would not give the Coble Act impermissible retrospective effect because 
``[n]o litigant could have had a reasonable and legitimate expectation 
that it could engage in abusive, vexatious and wasteful litigation 
conduct without consequence'' given the courts' ability to sanction 
such conduct. Id. at 3.
    Maher urges the Commission to adopt a bright-line rule and not 
apply Sec.  41305(e) to any claims initiated prior to the effective 
date of the Coble Act. Maher Comments at 7, 9. Maher asserts

[[Page 10516]]

that analyzing the applicability of Sec.  41305(e) on a case-by-case 
basis would be administratively burdensome and ``would unnecessarily 
extend the period of uncertainty in individual cases and it could 
result in inconsistent decisions and therefore engender continued 
uncertainty.'' Id. at 7.
    Maher contends that there is no clear Congressional or express 
statutory language indicating that Sec.  41305(e) should be applied 
retroactively, and, therefore, the general presumption against such an 
application of the statute applies. Maher Comments at 7-8 (citing 
Landgraf v. USI Film Products, 511 U.S. 244 (1994)). Maher goes on to 
argue that any application of Sec.  41305(e) would have retroactive 
effect on parties to pending proceedings, and therefore should not be 
applied to those proceedings. Id. at 8. Specifically, Maher asserts 
that for complainants to such proceedings, retroactive application of 
Sec.  41305(e) would impair the rights they had when filing their 
complaints, i.e., the statutory right to recover attorney fees, and 
increase their liability for past conduct and/or impose a new duty by 
expanding attorney-fee eligibility to prevailing respondents. Id. Maher 
further asserts that the expansion of attorney-fee liability to cease 
and desist complaints would potentially increase respondents' liability 
for past conduct and/or impose a new duty on them. Id. Finally, Maher 
contends that the potential expansion of attorney-fee recovery to 
intervenors or other parties would likewise increase liability and/or 
impose new duties on non-prevailing complainants and respondents. Id. 
at 8-9.
Discussion
    As the Commission discussed in the NPRM, in determining the 
applicability of a newly enacted statute to pending cases, the courts 
first look to ``whether Congress has expressly prescribed the statute's 
proper reach.'' Fernandez-Vargas v. Gonzales, 548 U.S. 30, 37 (2006) 
(quoting Landgraf, 511 U.S. at 280) (internal quotation marks omitted). 
If the statute's reach cannot be determined from the text and the 
application of the normal rules of statutory construction, the court 
must ``determine whether the application of the statute to the conduct 
at issue would result in a retroactive effect,'' Martin v. Hadix, 527 
U.S. 343, 352 (1999), i.e., ``whether it would impair rights a party 
possessed when he acted, increase a party's liability for past conduct, 
or impose new duties with respect to transactions already completed.'' 
Landgraf, 511 U.S. at 280; see also Fernandez-Vargas, 548 U.S. at 37. 
``If the answer is yes,'' the courts then apply the traditional 
``presumption against retroactivity by construing the statute as 
inapplicable to the event or act in question owing to the `absen[ce of] 
a clear indication from Congress that it intended such a result.' '' 
Fernandez-Vargas, 548 U.S. at 37-38 (quoting Immigration & 
Naturalization Serv. v. St. Cyr, 533 U.S. 289, 316 (2001)); see also 
Landgraf, 511 U.S. at 280. In cases in which the statute would not have 
a ``genuinely `retroactive' effect,'' the general rule is that ``a 
court should `apply the law in effect at the time it renders its 
decision,' even though that law was enacted after the events that gave 
rise to the suit.'' Landgraf, 511 U.S. at 273, 277 (quoting Bradley v. 
Sch. Bd. of City of Richmond, 416 U.S. 696, 711 (1974)) (citation 
omitted).
    The Commission agrees with Maher that there is no indication from 
either the language of the Coble Act or its legislative history to 
suggest Congressional intent to apply the statute retroactively. 
Section 402 of the Coble Act is silent as to the scope of Sec.  
41305(e)'s applicability to proceedings pending before the Commission. 
Although an argument could be made that the use of the broad term ``any 
action'' in conjunction with the verb ``brought'' demonstrates 
congressional intent to apply the amended attorney fee provisions to 
all proceedings initiated under 46 U.S.C. 41301, even if those 
proceedings were commenced prior to the effective date of the Coble 
Act, the Supreme Court expressly rejected such an interpretation when 
examining similar language in an amended attorney-fee provision in the 
Prison Litigation Reform Act of 1995 (PLRA). See Martin, 527 U.S. at 
353-55 (stating that the language ``falls short . . . of the 
`unambiguous directive' or `express command' that the statute is to be 
applied retroactively'') (quoting Landgraf, 511 U.S. at 263, 280).
    Accordingly, the relevant question is whether the application of 
Sec.  41305(e) to pending proceedings would have retroactive effect, 
i.e., whether the amended attorney-fee provision ``would impair rights 
a party possessed when he acted, increase a party's liability for past 
conduct, or impose new duties with respect to transactions already 
completed.'' Landgraf, 511 U.S. at 280. ``The inquiry into whether a 
statute operates retroactively demands a common sense, functional 
judgment about `whether the new provision attaches new legal 
consequences to events completed before its enactment.' This judgment 
should be informed and guided by `familiar considerations of fair 
notice, reasonable reliance, and settled expectations.' '' Martin, 527 
U.S. at 357-58 (quoting Landgraf, 511 U.S. at 270) (citation omitted). 
On the other hand, ``[a] statute does not operate `retrospectively' 
merely because it is applied in a case arising from conduct antedating 
the statute's enactment, or upsets expectations based in prior law.'' 
Landgraf, 511 U.S. at 269 & 270 n.24 (citing Republic Nat'l Bank of 
Miami v. United States, 506 U.S. 80, 100 (1992) (Thomas, J., concurring 
in part and concurring in judgment)) (internal citation omitted).
    The Commission has determined that the applicability of Sec.  
41305(e) to pending cases should be examined on a case-by-case basis 
rather than set through a bright-line rule. As explained below, the 
Commission disagrees with Maher's assertion that the application of 
Sec.  41305(e) would have a retroactive effect in all pending cases. 
Analyzing this issue on a case-by-case basis will allow the Commission 
to consider the facts of each case, including the status of individual 
proceedings on the effective date of the Coble Act. The Commission also 
disagrees with Maher's contention that case-by-case consideration would 
be administratively burdensome, given the limited number of proceedings 
pending on the Coble Act's effective date and the unlikelihood that fee 
petitions will be filed in every proceeding.
    The Commission offers the following general guidance on determining 
the applicability of Sec.  41305(e) in the two most likely scenarios in 
which this issue would arise: (1) Pending proceedings in which the 
complainant prevails and is awarded reparations after the Coble Act 
went into effect (Scenario 1); and (2) pending proceedings in which the 
respondent prevails after the Coble Act went into effect (Scenario 
2).\17\ For purposes of this discussion, we assume that the proceedings 
in each scenario were in their early stages when the Coble Act went 
into effect. In Scenario 1, the Commission does not believe that 
applying Sec.  41305(e) would, as a general matter, have a retroactive 
effect. In Scenario 2, the Commission believes that application of 
Sec.  41305(e) would not generally result in a retroactive effect so 
long as any fees awarded were limited to compensation for legal 
services performed on or after the effective date

[[Page 10517]]

of the Coble Act, December 18, 2014. The Commission cautions that 
retroactivity determinations in individual proceedings will depend on 
the specific facts of each case, including the status of the 
proceedings on December 18, 2014. The Commission has further determined 
that, even in pending cases where application of Sec.  41305(e) would 
not have a retroactive effect, the Commission may, in determining 
whether to award fees under the new provision, consider the status of 
the proceedings on the Coble Act's effective date.
---------------------------------------------------------------------------

    \17\ Maher discusses retroactivity concerns in other situations 
(i.e., proceedings in which a cease-and-desist order is issued but 
no reparations are awarded; proceedings in which parties other than 
the complainant or respondent might be considered a prevailing 
party). The Commission does not believe that the same type of 
prospective guidance is warranted or necessary for these types of 
scenarios, which are less likely to occur.
---------------------------------------------------------------------------

    Maher argues that in Scenario 1, application of Sec.  41305(e) 
would have a retroactive effect because it would upset the 
complainant's statutory right to attorney fees that existed when the 
complaint was filed. The Commission disagrees. Attorney fee 
determinations are generally considered `` `collateral to the main 
cause of action' and `uniquely separable from the cause of action to be 
proved at trial.' '' Landgraf, 511 U.S. at 277 (quoting White v. N.H. 
Dep't of Emp't Sec., 455 U.S. 445, 451-452 (1982)). Unlike other types 
of relief, attorney fees are not compensation for the injury giving 
rise to the action. White, 455 U.S. at 452. Attorney fees under the 
Shipping Act are no different.
    The structure of the Act does not support the contention that the 
``right'' to recover attorney fees under the old fee-shifting provision 
vested with the complainant upon the filing of a complaint. The section 
governing the filing of complaints, 46 U.S.C. 41301, provides that if 
the complaint is filed within three years after the claim accrues, the 
complainant may seek reparations for injuries caused by the Shipping 
Act violation. 46 U.S.C. 41301(a). Attorney fees are not mentioned in 
this section; instead, they are referenced in 46 U.S.C. 41305, the 
section governing relief to be awarded by the Commission after notice 
and hearing, and this section has always made clear that attorney fees 
are a separate form of relief from reparations. See 46 U.S.C. 41305(b) 
(2013). Accordingly, the Commission viewed attorney fees under the old 
provision as ``available only as an adjunct to an award of damages'' 
and conditioned upon the Commission awarding reparations. See A/S 
Ivarans Rederi, 25 S.R.R. at 1063. Because there was no reparations 
award in Scenario 1 prior to the Coble Act's effective date, the 
complainant was not entitled to attorney fees. The mere possibility of 
recovering attorney fees under the old provision cannot be considered 
the type of ``matured or unconditional right'' whose impairment would 
constitute a retroactive effect. See Bradley, 416 U.S. at 720. 
Application of Sec.  41305(e) might upset the complainant's 
expectations under prior law, but, as noted above, this does not equate 
to a retroactive effect. See Landgraf, 511 U.S. at 269 & 270 n.24.
    With respect to Scenario 2, Maher asserts that Sec.  41305(e) would 
have a retroactive effect because allowing the respondent to 
potentially recover attorney fees would increase the complainant's 
liability for past conduct and impose a new duty. PANYNJ, on the other 
hand, asserts that application of the new provision would not have a 
retroactive effect because courts have always had the inherent 
authority to sanction abusive, vexatious, and wasteful litigation 
conduct, and no litigant could have a reasonable expectation that it 
could engage in such conduct without consequence.
    The Commission agrees with Maher to the extent that, prior to the 
Coble Act, complainants reasonably expected that they would not be 
liable for respondents' attorney fees, even if they did not prevail. 
The old attorney-fee statutory provision and Rule 254 made clear that 
respondents were not eligible for attorney fee awards. See 1986 NPRM, 
51 FR at 37918. The Commission disagrees with PANYNJ's contention that 
the inherent power of the courts to penalize certain litigation conduct 
has some bearing on the parties' expectations in Commission 
proceedings; administrative agencies, like the Commission, ``may not 
award attorney's fees without express statutory authority.'' Trapp v. 
United States, 668 F.2d 1114, 1115 (10th Cir. 1977) (citing Turner v. 
Fed. Commc'n Comm'n, 514 F.2d 1354 (D.C. Cir. 1975)). Awarding attorney 
fees to the respondent in Scenario 2 for legal services rendered prior 
to December 18, 2014, would thus upset the parties' reasonable 
expectations and would attach new legal consequences to actions 
undertaken by the complainant prior to the passage of the Coble Act, 
i.e., the filing of the complaint and initial prosecution of the claim. 
See Taylor P. v. Mo. Dep't of Elementary & Secondary Educ., No. 06-
4254-CV-C-NKL, 2007 U.S. Dist. LEXIS 59570, at *8 (W.D. Mo. Aug. 14, 
2007) (finding that application of statutory provision allowing 
attorney fee recovery for defendants, which was enacted after 
proceeding was initiated, would have retroactive effect if applied to 
date of filing of complaint).
    Following the passage of the Coble Act, however, complainants were 
on notice that any prevailing party, including a prevailing respondent, 
was eligible for attorney fees. After that date, any expectation of 
continued immunity from liability for such fees would be unreasonable. 
See Martin, 527 U.S. at 360. Accordingly, in Scenario 2, awarding 
attorney fees for services performed by respondent's counsel on or 
after December 18, 2014, would not, as a general matter, attach new 
legal consequences to conduct completed before enactment and would not 
present a retroactivity problem. See id. at 360-61; Taylor, 2007 U.S. 
Dist. LEXIS 59570, at *8 (denying plaintiff's motion to dismiss 
defendant's counterclaim for attorney fees after the effective date of 
the attorney fee provision).
    On or after December 18, 2014, complainants were on notice that 
they should consider the status of petitions and matters then pending 
before the Commission and then make reasoned decisions on how to 
proceed. If the complainant did not wish to be subjected to the 
potential liability for such fees, the complainant could have, for 
example, requested dismissal of the claim without prejudice under Rule 
72 of the Commission's Rules of Practice and Procedure (46 CFR 502.72). 
See Martin, 527 U.S at 361 (rejecting the assumption that the initial 
decision to file a claim is an irrevocable one).
    The Commission reemphasizes that the above discussions represent 
general guidance and the conclusions reached are not necessarily 
binding in individual proceedings. The specific facts of each case, 
including the status of the proceeding on the Coble Act's effective 
date, may materially alter the considerations discussed above in the 
retroactivity analysis.

VI. Rulemaking Analyses and Notices

Effective Date

    The Administrative Procedure Act (APA) generally requires a 30-day 
period between the publication of a final rule and its effective date. 
5 U.S.C. 553(d). This requirement does not apply, however, to: (1) 
Rules granting an exemption or relieving a restriction; (2) 
interpretative rules and statements of policy; and (3) when the agency 
finds good cause to shorten the period between publication and the 
effective date. Id.
    This final rule is effective upon publication. The final rule 
consists of three main components: amendments to the term and vacancy 
provisions in 46 CFR 501.2(c) to reflect the changes made to 46 U.S.C. 
301; amendments to 46 CFR 502.254 to reflect the changes made to 46 
U.S.C. 41305; and a statement of the Commission's policy with respect 
to the disposition of attorney-fee petitions under the amended 
statutory language.

[[Page 10518]]

Accordingly, this final rule consists of an interpretative rule and a 
statement of policy and is therefore not subject to the 30-day 
requirement.
    In addition, the Commission has determined that there is good cause 
to make this rule effective immediately. The statutory amendments made 
by the Coble Act went into effect on December 18, 2014, and there is an 
immediate need to update the Commission's regulations (particularly the 
procedural regulations governing attorney-fee petitions) to reflect 
these changes. Further, interested parties have been provided with the 
opportunity to comment on the rulemaking, and none commented on the 
proposed amendments to the Commission's regulations, instead focusing 
entirely on the Commission's policy guidance with respect to attorney-
fee petitions.

Congressional Review Act

    The rule is not a ``major rule'' as defined by the Congressional 
Review Act, codified at 5 U.S.C. 801 et seq. The rule will not result 
in: (1) An annual effect on the economy of $100,000,000 or more; (2) a 
major increase in costs or prices; or (3) significant adverse effects 
on competition, employment, investment, productivity, innovation, or 
the ability of United States-based companies to compete with foreign-
based companies. 5 U.S.C. 804(2).

Regulatory Flexibility Act

    The Regulatory Flexibility Act (codified as amended at 5 U.S.C. 
601-612) provides that whenever an agency promulgates a final rule 
after being required to publish a notice of proposed rulemaking under 
the Administrative Procedure Act (APA) (5 U.S.C. 553), the agency must 
prepare and make available a final regulatory flexibility analysis 
(FRFA) describing the impact of the rule on small entities. 5 U.S.C. 
604. An agency is not required to publish an FRFA, however, for the 
following types of rules, which are excluded from the APA's notice-and-
comment requirement: interpretative rules; general statements of 
policy; rules of agency organization, procedure, or practice; and rules 
for which the agency for good cause finds that notice and comment is 
impracticable, unnecessary, or contrary to public interest. See 5 
U.S.C. 553(b).
    Although the Commission elected to seek public comment on its 
proposed regulatory amendments and the application of the Coble Act's 
new attorney-fee provision, these matters concern the organization of 
the Commission, its practices and procedures, and its interpretation of 
statutory provisions. Therefore, the APA did not require publication of 
a notice of proposed rulemaking in this instance, and the Commission is 
not required to prepare an FRFA in conjunction with this final rule.

Paperwork Reduction Act

    The Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3521) requires 
an agency to seek and receive approval from the Office of Management 
and Budget (OMB) before collecting information from the public. 44 
U.S.C. 3507. The agency must submit collections of information in rules 
to OMB in conjunction with the publication of the notice of proposed 
rulemaking. 5 CFR 1320.11. This final rule does not contain any 
collections of information, as defined by 44 U.S.C. 3502(3) and 5 CFR 
1320.3(c).

Regulation Identifier Number

    The Commission assigns a regulation identifier number (RIN) to each 
regulatory action listed in the Unified Agenda of Federal Regulatory 
and Deregulatory Actions (Unified Agenda). The Regulatory Information 
Service Center publishes the Unified Agenda in April and October of 
each year. You may use the RIN contained in the heading at the 
beginning of this document to find this action in the Unified Agenda, 
available at http://www.reginfo.gov/public/do/eAgendaMain.

List of Subjects

46 CFR Part 501

    Administrative practice and procedure, Authority delegations 
(Government agencies), Organization and functions (Government 
agencies), Seals and insignia.

46 CFR Part 502

    Administrative practice and procedure, Claims, Equal access to 
justice, Investigations, Lawyers, Maritime carriers, Penalties, 
Reporting and recordkeeping requirements.

Regulatory Text

    For the reasons stated in the preamble, the Commission amends 46 
CFR parts 501 and 502 as follows:

PART 501--THE FEDERAL MARITIME COMMISSION--GENERAL

0
1. The authority citation for part 501 continues to read as follows:

    Authority:  5 U.S.C. 551-557, 701-706, 2903 and 6304; 31 U.S.C. 
3721; 41 U.S.C. 414 and 418; 44 U.S.C. 501-520 and 3501-3520; 46 
U.S.C. 301-307, 40101-41309, 42101-42109, 44101-44106; Pub. L. 89-
56, 70 Stat. 195; 5 CFR part 2638; Pub. L. 104-320, 110 Stat. 3870.


0
2. Amend Sec.  501.2 by revising paragraph (c) to read as follows:


Sec.  501.2  General.

* * * * *
    (c) Terms and vacancies. (1) Length of terms. The term of each 
member of the Commission is five years and begins when the term of the 
predecessor of that member ends (i.e., on June 30 of each successive 
year).
    (2) Removal. The President may remove a Commissioner for 
inefficiency, neglect of duty, or malfeasance in office.
    (3) Vacancies. A vacancy in the office of any Commissioner is 
filled in the same manner as the original appointment. An individual 
appointed to fill a vacancy is appointed only for the unexpired term of 
the individual being succeeded.
    (4) Term Limits. (i) Commissioners initially appointed and 
confirmed before December 18, 2014. When a Commissioner's term ends, 
the Commissioner may continue to serve until a successor is appointed 
and qualified.
    (ii) Commissioners initially appointed and confirmed on or after 
December 18, 2014. (A) When a Commissioner's term ends, the 
Commissioner may continue to serve until a successor is appointed and 
qualified, limited to a period not to exceed one year.
    (B) No individual may serve more than two terms, except that an 
individual appointed to fill a vacancy may serve two terms in addition 
to the remainder of the term for which the predecessor of that 
individual was appointed.
* * * * *

PART 502--RULES OF PRACTICE AND PROCEDURE

0
3. The authority citation for part 502 continues to read as follows:

    Authority: 5 U.S.C. 504, 551, 552, 553, 556(c), 559, 561-569, 
571-596; 5 U.S.C. 571-584; 18 U.S.C. 207; 28 U.S.C. 2112(a); 31 
U.S.C. 9701; 46 U.S.C. 305, 40103-40104, 40304, 40306, 40501-40503, 
40701-40706, 41101-41109, 41301-41309, 44101-44106; E.O. 11222 of 
May 8, 1965.

Subpart O--Reparation; Attorney Fees

0
4. Revise the heading of Subpart O to read as set forth above.
0
5. Revise Sec.  502.254 to read as follows:


Sec.  502.254  Attorney fees in complaint proceedings.

    (a) General. In any complaint proceeding brought under 46 U.S.C. 
41301 (sections 11(a)-(b) of the

[[Page 10519]]

Shipping Act of 1984), the Commission may, upon petition, award the 
prevailing party reasonable attorney fees.
    (b) Definitions.
    Attorney fees means the fair market value of the services of any 
person permitted to appear and practice before the Commission in 
accordance with subpart B of this part.
    Decision means:
    (1) An initial decision or dismissal order issued by an 
administrative law judge;
    (2) A final decision issued by a small claims officer; or
    (3) A final decision issued by the Commission.
    (c) Filing petitions for attorney fees. (1) In order to recover 
attorney fees, the prevailing party must file a petition within 30 days 
after a decision becomes final. For purposes of this section, a 
decision is considered final when the time for seeking judicial review 
has expired or when a court appeal has terminated.
    (2) The prevailing party must file the petition with either:
    (i) The administrative law judge or small claims officer, if that 
official's decision became administratively final under Sec.  
502.227(a)(3), Sec.  502.227(c), Sec.  502.304(g), or Sec.  502.318(a); 
or
    (ii) The Commission, if the Commission reviewed the decision of the 
administrative law judge or small claims officer under Sec.  502.227, 
Sec.  502.304, or Sec.  502.318.
    (d) Content of petitions. (1) The petition must:
    (i) Explain why attorney fees should be awarded in the proceeding;
    (ii) Specify the number of hours claimed by each person 
representing the prevailing party at each identifiable stage of the 
proceeding; and
    (iii) Include supporting evidence of the reasonableness of the 
hours claimed and the customary rates charged by attorneys and 
associated legal representatives in the community where the person 
practices.
    (2) The petition may request additional compensation, but any such 
request must be supported by evidence that the customary rates for the 
hours reasonably expended on the case would result in an unreasonably 
low fee award.
    (e) Replies to petitions. The opposing party may file a reply to 
the petition within 20 days of the service date of the petition. The 
reply may address the reasonableness of any aspect of the prevailing 
party's claim and may suggest adjustments to the claim under the 
criteria stated in paragraph (d) of this section.
    (f) Rulings on petitions. (1) Upon consideration of a petition and 
any reply thereto, the Commission, administrative law judge, or small 
claims officer will issue an order granting or denying the petition.
    (i) If the order awards the prevailing party attorney fees, the 
order will state the total amount of attorney fees awarded, specify the 
compensable hours and appropriate rate of compensation, and explain the 
basis for any additional adjustments.
    (ii) If the order denies the prevailing party attorney fees, the 
order will explain the reasons for the denial.
    (2) The Commission, administrative law judge, or small claims 
officer may adopt a stipulated settlement of attorney fees.
    (g) Timing of rulings. An order granting or denying a petition for 
attorney fees will be served within 60 days of the date of the filing 
of the reply to the petition or expiration of the reply period, except 
that in cases involving a substantial dispute of facts critical to the 
determination of an award, the Commission, administrative law judge, or 
small claims officer may hold a hearing on such issues and extend the 
time for issuing an order by an additional 30 days.
    (h) Appealing rulings by administrative law judge or small claims 
officer. The relevant rules governing appeal and Commission review of 
decisions by administrative law judges (Sec. Sec.  502.227; 502.318) 
and small claims officers (Sec.  502.304) apply to orders issued by 
those officers under this section. [Rule 254.]

0
6. Amend Sec.  502.305 by revising paragraph (b) to read as follows:


Sec.  502.305  Applicability of other rules of this part.

* * * * *
    (b) The following sections in subparts A through Q of this part 
apply to situations covered by this subpart: Sec. Sec.  502.2(a) 
(Requirement for filing); 502.2(f)(1) (Email transmission of filings); 
502.2(i) (Continuing obligation to provide contact information); 502.7 
(Documents in foreign languages); 502.21 through 502.23 (Appearance, 
Authority for representation, Notice of appearance; substitution and 
withdrawal of representative); 502.43 (Substitution of parties); 
502.101 (Computation); 502.113 (Service of private party complaints); 
502.117 (Certificate of service); 502.253 (Interest in reparation 
proceedings); and 502.254 (Attorney fees in complaint proceedings). 
[Rule 305.]
    7. Amend Sec.  502.318 by revising paragraph (b) to read as 
follows:


Sec.  502.318  Decision.

* * * * *
    (b) Attorney fees may be awarded to the prevailing party in 
accordance with Sec.  502.254. [Rule 318.]
    8. Amend Sec.  502.321 by revising paragraph (b) to read as 
follows:


Sec.  502.321  Applicability of other rules of this part.

* * * * *
    (b) The following sections in subparts A through Q apply to 
situations covered by this subpart: Sec. Sec.  502.2(a) (Requirement 
for filing); 502.2(f)(1) (Email transmission of filings); 502.2(i) 
(Continuing obligation to provide contact information); 502.7 
(Documents in foreign languages); 502.21-502.23 (Appearance, Authority 
for representation, Notice of appearance; substitution and withdrawal 
of representative); 502.43 (Substitution of parties); 502.253 (Interest 
in reparation proceedings); and 502.254 (Attorney fees in complaint 
proceedings). [Rule 321.]

    By the Commission.
Karen V. Gregory,
Secretary.
[FR Doc. 2016-04219 Filed 2-29-16; 8:45 am]
 BILLING CODE 6731-AA-P