Interpretive Rule, Shipping Act of 1984, 45367-45373 [2018-19328]

Download as PDF daltland on DSKBBV9HB2PROD with PROPOSALS Federal Register / Vol. 83, No. 174 / Friday, September 7, 2018 / Proposed Rules • Email: rbailey@oshrc.gov. Include ‘‘Advance notice of proposed rulemaking, 29 CFR part 2200’’ in the subject line of the message. • Fax: 202–606–5417. • Mail: One Lafayette Centre, 1120 20th Street NW, Ninth Floor, Washington, DC 20036–3457. • Hand Delivery/Courier: Same as mailing address. Instructions: All submissions must include your name, return address, and email address, if applicable. Please clearly label submissions as ‘‘Advance notice of proposed rulemaking, 29 CFR part 2200.’’ FOR FURTHER INFORMATION CONTACT: Ron Bailey, via telephone at 202–606–5410, or via email at rbailey@oshrc.gov. SUPPLEMENTARY INFORMATION: In accordance with 29 U.S.C. 661(g), the Occupational Safety and Health Review Commission last implemented a comprehensive revision of its rules of procedure in 2005. Since that time, technological advances, including implementation of the E-filing system, as well as the evolution of practice before the Commission, have called for a careful reexamination of the Commission’s rules of procedure, as set forth in 29 CFR part 2200. To assist in determining what revisions should be made, the agency is soliciting recommendations from the public. It is especially interested in hearing from those who practice before it on what rules their experience suggests would benefit from a revision. While recommended changes to any rule will be considered, the Commission is especially interested in whether: Rules on the computation of time should be simplified; electronic filing and service should be mandatory and, if so, what exceptions, if any, should be allowed; the definition of ‘‘affected employee’’ should be broadened; citing to Commission decisions as posted on the agency’s website should be allowed; the rule on the staying of a final order is not needed and should be eliminated; the requirement for agency approval of settlements should be narrowed or eliminated; the grounds for obtaining Commission review of interlocutory orders issued by its administrative law judges should be revised; protection of sensitive personal information should be broadened; and whether the threshold amount for cases referred for mandatory settlement proceedings should be increased. Comments suggesting a rule change should include a brief discussion of the reasons for the change, why the change would facilitate improved practice before the VerDate Sep<11>2014 19:16 Sep 06, 2018 Jkt 244001 Commission, and a reference to authority where necessary. Dated: August 15, 2018. Heather L. MacDougall, Chairman. [FR Doc. 2018–18050 Filed 9–6–18; 8:45 am] BILLING CODE 7600–01–P FEDERAL MARITIME COMMISSION 46 CFR Part 545 [Docket No. 18–06] RIN 3072–AC71 Interpretive Rule, Shipping Act of 1984 Federal Maritime Commission. Notice of proposed rulemaking. AGENCY: ACTION: The Federal Maritime Commission (FMC or Commission) is seeking public comment on its interpretation of the scope of the Shipping Act prohibition against failing to establish, observe, and enforce just and reasonable regulations and practices relating to or connected with receiving, handling, storing, or delivering property. Specifically, the Commission is clarifying that the proper scope of that prohibition in the Shipping Act of 1984 and the conduct covered by it is guided by the Commission’s interpretation and precedent articulated in several earlier Commission cases, which require that a regulated entity engage in a practice or regulation on a normal, customary, and continuous basis and that such practice or regulation is unjust or unreasonable in order to violate that section of the Shipping Act. DATES: Submit comments on or before: October 10, 2018. ADDRESSES: You may submit comments, identified by the Docket No. 18–06 by the following methods: • Email: secretary@fmc.gov. Include in the subject line: ‘‘Docket 18–06, Interpretive Rule Comments.’’ Comments should be attached to the email as a Microsoft Word or textsearchable PDF document. Only nonconfidential and public versions of confidential comments should be submitted by email. • Mail: Rachel E. Dickon, Secretary, Federal Maritime Commission, 800 North Capitol Street NW, Washington, DC 20573–0001. • Instructions: For detailed instructions on submitting comments, including requesting confidential treatment of comments, and additional information on the rulemaking process, see the Public Participation heading of the SUPPLEMENTARY INFORMATION section SUMMARY: PO 00000 Frm 00009 Fmt 4702 Sfmt 4702 45367 of this document. Note that all comments received will be posted without change to the Commission’s website, unless the commenter has requested confidential treatment. • Docket: For access to the docket to read background documents or comments received, go to the Commission’s Electronic Reading Room at: https://www.fmc.gov/18-06, or to the Docket Activity Library at 800 North Capitol Street NW, Washington, DC 20573, 9:00 a.m. to 5:00 p.m., Monday through Friday, except Federal holidays. Telephone: (202) 523–5725. FOR FURTHER INFORMATION CONTACT: Rachel E. Dickon, Secretary; Phone: (202) 523–5725; Email: secretary@ fmc.gov. SUPPLEMENTARY INFORMATION: I. Executive Summary The Federal Maritime Commission is issuing this notice to obtain public comments on clarification and guidance regarding the Commission’s interpretation of the scope of 46 U.S.C. 41102(c) (section 10(d)(1) of the Shipping Act of 1984).1 Section 41102(c) provides that regulated entities ‘‘may not fail to establish, observe, and enforce just and reasonable regulations and practices relating to or connected with receiving, handling, storing, or delivering property.’’ 2 Beginning with the Houben 3 decision in 2010 and presented in full in the Commission’s 2013 decision in Kobel v. Hapag-Lloyd, the Commission has held in a line of recent cases that discrete conduct with respect to a particular shipment, if determined to be unjust or unreasonable, represents a violation of § 41102(c), regardless of whether that conduct represents a respondent’s practice or regulation.4 These decisions diverge from consistent Commission precedent dating back to 1935 and reaffirmed as recently as 2001 which required that a regulated entity must engage in a practice or regulation on a normal, customary, and continuous basis in order to be found to have violated § 41102(c) of the Shipping Act. In simple summary, discrete or 1 Some authorities cited herein refer to § 41102(c) while others refer to section 10(d)(1). For ease of reading, we will generally refer to § 41102(c) in analyzing these authorities. 2 46 U.S.C. 41102(c). 3 Houben v. World Moving Services, Inc., 31 S.R.R. 1400 (FMC 2010). 4 Kobel v. Hapag-Lloyd A.G., 32 S.R.R. 1720, 1731 (2013) (‘‘The allegation that a single failure to ‘‘observe or enforce’’ just and reasonable regulations or practices is not a failure does not comport with the language of section 10(d)(1), which mandates regulated entities not to ‘fail to . . . observe and enforce’ just and reasonable regulations and practices.’’). E:\FR\FM\07SEP1.SGM 07SEP1 45368 Federal Register / Vol. 83, No. 174 / Friday, September 7, 2018 / Proposed Rules daltland on DSKBBV9HB2PROD with PROPOSALS occasional actions by regulated entities not reflecting a practice or regulation would not constitute a violation of § 41102(c). Specifically, the Commission is considering an interpretive rule consistent with Commission precedent articulated in cases including Intercoastal Investigation,5 Altieri,6 Stockton Elevators,7 European Trade,8 A.N. Deringer,9 and Kamara 10 that would restore the scope of § 41102(c) to prohibiting unjust and unreasonable practices and regulations. These decisions require that a regulated entity engage in a practice or regulation on a normal, customary, and continuous basis and a finding that such practice or regulation is unjust or unreasonable to violate that section of the Shipping Act. The Commission believes that this represents the proper interpretation of the statutory language of the provision that, within the full context of the 1916 Act and the 1984 Act, is consistent with statutory and legislative history, judicial precedent and Commission case law embodied in cases such as Stockton Elevators, and comports with accepted rules of statutory construction. This interpretation restores § 41102(c) to its proper function and purpose under the Shipping Act of 1984 and will return the Commission’s focus and priorities to the activities of maritime regulated entities that negatively affect the broader shipping public—all as intended by Congress in its enactment of the 1916 Act and the 1984 Act. Recognizing that this interpretation would prune and pare back the types of recent claims that have been be filed with the Commission to those related to the purposes of the Shipping Act’s § 41102(c), traditional legal venues will continue to be available to parties injured by discrete instances of unreasonable or unjust conduct consistent with long established maritime actions and other statutes specifically enacted by Congress, and long recognized common law remedies, all designed to address such circumstances. We are seeking comment on this refocus of § 41102(c), how such an interpretation would affect regulated 5 Intercoastal Investigation, 1935, 1 U.S.S.B.B. 400 (1935). 6 J.M. Altieri v. Puerto Rico Ports Authority, 7 F.M.C. 416 (ALJ 1962). 7 Investigation of Certain Practices of Stockton Elevators, 3 S.R.R. 605 (FMC 1964). 8 European Trade Specialists v. Prudential-Grace Lines, 19 S.R.R. 59, 63 (FMC 1979). 9 A.N. Deringer, Inc. v. Marlin Marine Services, Inc., 25 S.R.R. 1273 (SO 1990). 10 Kamara v. Honesty Shipping Service, 29 S.R.R. 321 (ALJ 2001). VerDate Sep<11>2014 19:16 Sep 06, 2018 Jkt 244001 entities including ocean carriers, marine terminal operators (MTOs), and ocean transportation intermediaries (OTIs), as well as members of the shipping public, including cargo shippers and drayage truckers, and whether claims that would no longer fall under § 41102(c) under the contemplated interpretation would be adequately resolved before the Commission under other sections of the Act or in other legal dispute venues. The interpretation would take the form of an interpretive rule codified in 46 CFR part 545. The language of the proposed rule is set forth below. II. Background A. Statutory Language and Legislative History Congress first used the statutory language addressing the legal duty of transportation common carriers to ‘‘establish, observe, and enforce just and reasonable . . . regulations and practices . . . affecting [cargo] classification, rates, or tariffs . . . [and] the manner and method of presenting, marking, packing, and delivering property for transportation . . .’’ in the 1910 Mann-Elkins Act amendment (Mann-Elkins) 11 to the Interstate Commerce Act (ICA).12 The MannElkins language clearly focused on the operating and business practices of railroads as commonly used and imposed upon passengers and cargo shippers. This fundamental common carrier duty is the foundational cornerstone of the ICA legislation, its statutory purpose, and its proper interpretation. The provenance of the statutory language and its inclusion six years later in the Shipping Act of 1916 (1916 Act) 13 has been recognized by the courts. In United States Navigation Co. v. Cunard S.S. Co. Ltd. 284 U.S. 474 (1932), the U.S. Supreme Court tied a firm knot binding the ICA and the 1916 Act where the court gave a general review of various sections of the 1916 Act, including section 17 14 and held that, ‘‘[t]hese and other provisions of the Shipping Act clearly exhibit the close parallelism between the act and its prototype, the ICA, and the applicability both of the principals of construction and administration.’’ 15 As the enactment of the 1916 Act demonstrates, together with the use of 11 Mann-Elkins Act, 61st Congress, 2nd session, Ch. 309, 36 Stat. 539, enacted June 18, 1910. 12 The Interstate Commerce Act of 1887, Ch. 104, 24 Stat 379 (1887). 13 The Shipping Act of 1916, Sept. 7, 1916, Ch. 451, 39 Stat. 728. 14 Section 17 is the origin of section 10(d)(1), as discussed infra. 15 Id. at 484. PO 00000 Frm 00010 Fmt 4702 Sfmt 4702 identical language in other federal statutes,16 Congress fully understood what it was doing in using the phrase ‘‘establish, observe, and enforce just and reasonable regulations and practices’’— and what those words meant.17 Section 41102(c) of the 1984 Act originates from section 17 of the 1916 Act. Section 17 was commonly divided into two parts and referred to as ‘‘section 17, first paragraph’’ and ‘‘section 17, second paragraph.’’ The first paragraph addressed unjustly discriminatory rates charged to shippers while the second paragraph addressed just and reasonable practices by carriers and other persons subject to the Act. The second paragraph of section 17 reads as follows: Every such carrier and every other person subject to this act shall establish, observe, and enforce just and reasonable regulations and practices relating to or connected with the receiving, handling, storing, or delivering of property. Whenever the Board finds any such regulation or practice is unjust or unreasonable it may determine, prescribe, and order enforced a just and reasonable regulation or practice. Public Law 64–260 § 17 (1916) (emphasis added).18 As a part of the general transportation deregulatory reform trends in the 1970’s through 1990’s,19 Congress eliminated the sentence regarding the Commission’s authority to prescribe or order regulations or practices in the 1984 Act. Congress, however, reenacted the first sentence of section 17’s second paragraph and placed that provision in section 10(d)(1), which, following the 2006 recodification of the 1984 Act, became 46 U.S.C. 41102(c). That language from section 17, second 16 For example, the Packers and Stockyards Act of 1921, which was enacted to maintain competition in the livestock industry. The Act bans discrimination, manipulation of price, weight, livestock or carcasses; commercial bribery; misrepresentation of source, condition, or quality of livestock; and other unfair or manipulative practices. Section 208 of the Packers and Stockyards Act of 1921 provides that, ‘‘[i]t shall be the duty of every stockyard owner and market agency to establish, observe, and enforce just, reasonable and nondiscriminatory regulations and practices in respect to the furnishing of stockyard services.’’ 7 U.S.C. 208. 17 For a more detailed discussion of the legislative history of this statutory language, see GruenbergReisner v. Respondent Overseas Moving Specialist, 34 S.R.R. 613, 638–644 (FMC 2016). 18 The two separate provisions of section 17 of the Shipping Act are commonly referred to as ‘‘section 17, first paragraph’’ and ‘‘section 17, second paragraph.’’ 19 See the Railroad Revitalization and Regulatory Reform Act of 1976, Public Law 94–210; Staggers Act of 1980, Public Law 96–448; Motor Carrier Act of 1990, Public Law 96–296; Airline Deregulation Act, Public Law 95–504; and the Interstate Commerce Commission Termination Act of 1995, Public Law 104–88. E:\FR\FM\07SEP1.SGM 07SEP1 Federal Register / Vol. 83, No. 174 / Friday, September 7, 2018 / Proposed Rules paragraph, first sentence, requiring that no regulated entity may fail to establish, observe, and enforce just and reasonable regulations and practices relating to or connected with the receiving, handling, storing, or delivery of property—is now found in § 41102(c) of the 1984 Act. Having a long legislative provenance, Congress used the word ‘‘practice’’ and the full phrase, ‘‘establish, observe, and enforce just and reasonable regulations and practices,’’ in both the original 1916 Act and in section 10(d)(1) of the 1984 Act, now § 41102(c), in a particular way and in a context that was clear to the drafters, to the Commission, and to the reviewing courts. B. Judicial Precedent In Baltimore & Ohio Railroad Company v. United States, 277 U.S. 291 (1923), the U.S. Supreme Court considered the question of what constituted a ‘‘practice’’ within the contemplation of Congress in the Interstate Commerce Act: The word ‘‘practice’’, considered generally and without regard to context, is not capable of useful construction. If broadly used, it would cover everything carriers are accustomed to do. Its meaning varies so widely and depends so much upon the connection in which it is used that Congress will be deemed to have intended to confine its application to acts or things belonging to the same general class as those meant by the words associated with it. daltland on DSKBBV9HB2PROD with PROPOSALS Id. at 299–300 (citation omitted) (emphasis added). The Interstate Commerce Commission (ICC), the United States Shipping Board (USSB) (the agency created by Congress in the 1916 Act), its successor agencies, and the currently constituted Commission,20 together with state and federal courts have consistently ruled that ‘‘practice’’ means; (1) the acts/ omissions of the regulated common carrier that were positively established by the regulated common carrier and imposed on the passenger/cargo interest, and (2) such act/omission was the normal,21 customary, often 20 The United States Shipping Board (USSB) was succeeded in 1933 by the United States Shipping Board Bureau of the Department of Commerce (USSBB), Executive Order No. 6166 (1933). The USSBB was succeeded in 1936 by the United States Maritime Commission (USMC), 49 Stat. 1985. In 1950, the USMC was succeeded by the Federal Maritime Board (FMB), 64 Stat.1273. The FMC was established as an independent regulatory agency by Reorganization Plan No. 7, effective August 12, 1961. The U.S. Supreme Court treated the FMC and all predecessor agencies as the ‘‘Commission’’ for purposes of judicial review. See Volkswagenwerk v. Federal Maritime Commission, 390 U.S. 261, 269 (1968). 21 See European Trade Specialists v. PrudentialGrace Lines, 19 S.R.R. 59, 63 (FMC 1979). (Unless its normal practice was not to so notify the shipper, VerDate Sep<11>2014 19:16 Sep 06, 2018 Jkt 244001 repeated,22 systematic,23 uniform,24 habitual,25 and continuous manner 26 (hereinafter ‘‘Normal, Customary & Continuous’’) in which the regulated common carrier was conducting business. The USSBB, a predecessor to the Commission, considered the term ‘‘practice’’ as used in the 1916 Act in Intercoastal Investigation, 1935, 1 FMC 400 (1935), an investigation that covered sixteen years of steam ship conference activities. The USSBB held: The provisions of the Shipping Act, 1916, also apply to these respondents. It is there provided . . . that carriers shall establish, observe, and enforce just and reasonable rates, charges, (cargo) classifications, and tariffs and just and reasonable regulations and practices related thereto . . .The terms ‘‘rates’’, ‘‘charges’’, ‘‘tariffs’’, and ‘‘practices’’ as used in transportation have received such adverse treatment cannot be found to violate the section as a matter of law [emphasis in original].’’ 22 See Intercoastal Investigation, 1935, 1 U.S.S.B.B. 400, 432. (‘‘Owing to its wide and variable connotations, a practice which unless restricted ordinarily means an often and customary action, is deemed to acts or things belonging to the same class as those meant by the words of the law that are associated with it.’’ [cites omitted] [emphasis added]. 23 See Whitam v. Chicago, R.I. & P. Ry. Co., 66 F. Supp. 1014 (ND TX 1946) (‘‘The word ‘a practice’ as used in the decision, or used anywhere properly, implies systematic doing of the acts complained of, and usually as applied to carriers and shippers generally.’’ (emphasis added).’’ 24 See Stockton Elevators, 3 S.R.R. 605, 618 (FMC 1964). (‘‘It cannot be found that the Elevator engaged in a ‘practice’ within the meaning of Section 17. The essence of a practice is uniformity. It is something habitually performed and it implies continuity . . . the usual course of conduct. It is not an occasional transaction such as here shown. Intercoastal Investigation, 1935, 1 U.S.S.B.B. 400, 432; B&O By. Co. v. United States 277 U.S. 291, 300, Francesconi & Co. v. B&O Ry. Co., 274 F. 687, 690; Whitham v. Chicago R.I. & P. Ry. Co., 66 F. Supp. 1014; Wells Lamont Corp. v. Bowles, 149 F.2d 364 (emphasis added). See also, McClure v. Blackshere, F. Supp. 678, 682 (D. Md. 1964) (‘‘ ‘Practice’ ordinarily implied uniformity and continuity, and does not denote a few isolated acts, and uniformity and universality, general notoriety and acquiescence, must characterize the actions on which a practice is predicated.’’ (citations omitted) (emphasis added)). 25 See Stockton Elevators, 3 S.R.R. 605, 618 (FMC 1964). (‘‘It cannot be found that the Elevator engaged in a ‘practice’ within the meaning of Section 17. . . . It is something habitually performed and it implies continuity . . . the usual course of conduct.’’ (citations omitted) (emphasis added)). 26 See Stockton Elevators, 3 S.R.R. 605, 618 (FMC 1964). (‘‘It cannot be found that the Elevator engaged in a ‘practice’ within the meaning of Section 17. . . . It is something habitually performed and it implies continuity . . . .’’ (citations omitted) (emphasis added)). See also, McClure v. Blackshere, F. Supp. 678, 682 (D. Md. 1964) (‘‘ ‘Practice’ ordinarily implied uniformity and continuity, and does not denote a few isolated acts, and uniformity and universality, general notoriety and acquiescence, must characterize the actions on which a practice is predicated.’’ (citations omitted) (emphasis added)). PO 00000 Frm 00011 Fmt 4702 Sfmt 4702 45369 judicial interpretation . . . Owing to its wide and variable connotation, a practice, which unless restricted ordinarily means an often repeated and customary action, is deemed to apply only to acts or things belonging to the class as those meant by the words of the law that are associated with it . . . In section 18, the term ‘‘practices’’ is associated with various words, including ‘‘rates’’, ‘‘charges’’, and ‘‘tariffs’’. Id. at 431–432 (emphasis added).27 Prior to the 1984 Act, Commission decisions analyzing situations that involved discrete conduct focused on the meaning of the word ‘‘practice’’ and determined that conduct that did not reflect a practice was outside the scope of the first sentence of the second paragraph of section 17. In Altieri, Stockton Elevators, and European Trade Specialists, A.N. Deringer, Kamara, and other cases 28 the Commission used the term ‘‘practice’’ in a consistent manner for all the places it appears in the Shipping Act. In Stockton Elevators, which was later adopted by the Commission in its entirety, the FMC’s Presiding Examiner found that a violation did not occur because of the infrequency of the relevant actions. According to that decision, a practice is something that, ‘‘is habitually performed and implies continuity . . . not an occasional transaction such as here shown.’’ 29 The Presiding Examiner found the respondent’s actions to be occasional transactions and not a ‘‘practice’’ because they were not the ‘‘usual course of conduct’’ and so not a violation of section 17.30 Similarly, in European Trade Specialists, Inc. v. Prudential-Grace Lines, Inc., the ALJ specifically noted, ‘‘[a] ‘practice’ unless the term is in some way restricted by decision or statute, means ‘‘an often repeated and customary action.’’ 31 There, the ALJ was considering if an alleged failure to notify a shipper of a dispute on the applicable tariff rate violated section 17 of the 1916 Act. The ALJ found that in examining the record, the respondent’s normal practice was to notify shippers 27 Intercoastal Investigations cited two ICA railroad cases as authority. See Baltimore & Ohio Railroad Company v. United States, 277 U.S. 291 (1923) and Missouri Pacific R. Co. v. Norwood, 283 U.S. 249, 257 (1931). 28 A series of cases alleging section 10(d)(1) violations has established that a complainant must demonstrate regulations and practices, as opposed to identifying what might be an isolated error or understandable misfortune. See, e.g., Informal Docket No. 1745(I), Mrs. Susanne Brunner v. OMS Moving Inc., slip decision served January 27, 1994, administratively final March 8, 1994. 29 Investigation of Certain Practices of Stockton Elevators, 8 F.M.C. 187, 200–201 (Examiner 1964). 30 Id. 31 17 S.R.R. 1351, 1361 (ALJ 1977). E:\FR\FM\07SEP1.SGM 07SEP1 45370 Federal Register / Vol. 83, No. 174 / Friday, September 7, 2018 / Proposed Rules daltland on DSKBBV9HB2PROD with PROPOSALS of problems and this case involved the allegation of a single departure from that practice which was otherwise just and reasonable. Regardless of the unjustness or unreasonableness of the respondent’s failure to notify the shipper, such action did not represent a practice and thus there could be no section 17 violation. In Kamara v. Honesty Shipping Service, 29 S.R.R. 321 (ALJ 2001), the ALJ held that, ‘‘It is not clear that a carrier’s simple failure to remit payment to a subcontracting carrier constitutes a Shipping Act violation, although the shipper would certainly have a commercial contractual claim. These cases addressing Section 10(d)(1) violations correctly hold that a complainant must demonstrate regulations and practices and articulates the correct scope and interpretation of § 41102(c). This precedent stands in stark contrast to recent Commission decisions that adopted a far more expansive interpretation of the conduct covered by § 41102(c) untethered to the language of the statute, the legislative history, Commission precedent, or, most importantly, the purpose of the Shipping Act to address common carrier duties.32 In the 2013 Kobel decision, the Commission charted a different course by disjoining the statute’s conjunctive language of ‘‘establish, observe, and enforce’’ and specifically identified that § 41102(c) contains three discrete prohibitions: (1) A prohibition against failing to establish just and reasonable regulations and practices; (2) a prohibition against failing to observe just and reasonable regulations and practices; and (3) a prohibition against failing to enforce just and reasonable regulations.33 Since Kobel, the Commission has interpreted section § 41102(c) to mean that a single failure to fulfill a single legal obligation of any description itself could constitute a violation of § 41102(c).’’ 34 The Commission looked to a single rule of construction, the surplusage cannon, to support its course change from prior Commission and court rulings. That rule provides that, ‘‘If possible, every word and every 32 See Adair v. Penn-Nordic Lines, Inc., 26 S.R.R. 11 (ALJ 1991); Tractors & Farm Equip. Ltd v. Cosmos Shipping Co., Inc., 26 S.R.R. 788 (ALJ 1992); Houben v. World Moving Servs., Inc., 31 S.R.R. 1400 (FMC 2010). 33 Kobel, 32 S.R.R. at 1735. 34 See, e.g., Bimsha Int’l v. Chief Cargo Servs., 32 S.R.R. 1861, 1865 (FMC 2013) (‘‘NVOCCs violate [§ 41102(c)] when they fail to fulfill NVOCC obligations, through single or multiple actions or mistakes, and therefore engage in an unjust and unreasonable practice’’ (emphasis added)). VerDate Sep<11>2014 19:16 Sep 06, 2018 Jkt 244001 provision is to be given effect.’’ 35 However, the commentators offer two relevant notes of caution. First, in discussing the Principle of Interrelating Canons, they advise, ‘‘No canon of interpretation is absolute. Each may be overcome by the strength of differing principles that point in other directions . . . It is a rare case in which each side does not appeal to a different canon to suggest its desired outcome.’’ 36 Second, in later discussion of the surplusage canon, they note, ‘‘If a provision is susceptible of (1) a meaning that . . . deprives another provision of all independent effect, and (2) another meaning that leaves both provisions with some independent operation, the later should be preferred . . . So, like all other canons, this one must be applied with judgement and discretion, and with careful regard to context.’’ 37 The Commission has, in these recent cases, strained to give independent application of the elements, ‘‘establish, observe, or enforce’’ but, in so doing, has deprived any operation of a discussion or application of the alleged unjust or unreasonable practice or regulation being inflicted upon the general shipping public. The ‘‘context’’ of § 41102(c) itself within the Shipping Act and other factors discussed below demonstrate the flaws in the Commission’s recent line of section 41102(c) decisions. Moreover, numerous other canons of construction ‘‘point in other directions,’’ 38 all as discussed below. It is this line of recent cases determining that a discrete failure to observe and enforce an established just and reasonable regulation or practice that the Commission seeks to reform in this rulemaking so as to return the scope of § 41102(c) to its proper role and purpose within the Shipping Act. In the future, the Commission intends to follow the reasoning in Intercoastal Investigation, Altieri, Stockton Elevators, European Trade Specialists, Deringer, and Kamara which offer precedent as to what properly applies the full meaning and purpose of ‘‘establish, observe, and enforce just and reasonable regulations and practices’’ under the Shipping Act and a violation of § 41102(c). C. Rules of Statutory Construction The precedent in Intercoastal Investigation, Altieri, Stockton 35 Reading Law: The Interpretation of Legal Texts, Scalia and Garner, 2012, pg. 174. 36 Id. at 59, emphasis in the original. 37 Id. at page 176, emphasis added. 38 Id. at 59. PO 00000 Frm 00012 Fmt 4702 Sfmt 4702 Elevators, European Trade Specialists, Deringer, and Kamara as to what constitutes ‘‘regulations and practice’’ under the Shipping Act is supported by and consistent with multiple accepted rules of statutory construction. Proper consideration and application of numerous canons of statutory construction demonstrates that Congress has spoken to the issue at hand.39 (1) The Syntactic Canon concerns grammar. Reviewing § 41102(c), the regulated entity is the subject of the sentence. The subject is directed—i.e. do not fail to—then comes the active verbs—‘‘establish, observe, and enforce’’ just and reasonable regulations and practices. The regulated entity is ordered to, first, initiate the creation, dissemination, and publication of such just and reasonable regulations and practices, and simultaneously, to observe and enforce those regulations and practices that were created by that regulated entity.40 (2) The Ordinary Meaning Canon requires that the words of a statute are to be taken in their natural and ordinary signification and import.41 The judicial interpretation of the phrase ‘‘practices’’ by multiple courts applying the MannElkins Act, the 1916 Act, and other statutes, all utilized the Ordinary Meaning Canon to find the meaning of the term ‘‘practice’’ as intended by Congress.42 All came to a reasoned conclusion that confirms the Commission’s proposed interpretation.43 (3) The Prior-Construction Canon requires that ‘‘[w]hen administrative and judicial interpretations have settled the meaning of an existing statutory provision, repetition of the same language in a new statute indicates, as a general matter, the intent to incorporate its administrative and 39 See Bell Atlantic Telephone Companies v. Federal Communications Commission, 131 F.3d 1044, 1047 (D.C. Cir. 1997) (‘‘Context serves an especially important role in textual analysis of a statute when Congress has not expressed itself as univocally as might be wished.’’). 40 For a fuller discussion of the Syntactic Canon, see Gruenberg-Reisner v. Respondent Overseas Moving Specialist, 34 S.R.R. 613, 641 (FMC 2016). 41 See, e.g., James Kent, Commentaries on American Law 432 (1826) (‘‘The words of a statute are to be taken in their natural and ordinary signification and import; and if technical words are used, they are to be taken in a technical sense.’’). 42 See Intercoastal Investigation, 1935, 1 U.S.S.B.B. 400 (1935); Whitam v. Chicago, R.I. & P. Ry. Co., 66 F. Supp. 1014 (N.D. Tex. 1946); McClure v. Blackshere, 231 F. Supp. 678 (D. Md. 1964); Stockton Elevators, 8 F.M.C. 187 (1964); and European Trade Specialists, 19 S.R.R. 59 (FMC 1979). 43 For a fuller discussion of the Ordinary Meaning Canon, see Gruenberg-Reisner v. Respondent Overseas Moving Specialist, 34 S.R.R. 613, 641–642 (FMC 2016). E:\FR\FM\07SEP1.SGM 07SEP1 Federal Register / Vol. 83, No. 174 / Friday, September 7, 2018 / Proposed Rules daltland on DSKBBV9HB2PROD with PROPOSALS judicial interpretations as well.’’ 44 Congress used the same 1916 Shipping Act language in the new 1984 Act. The Commission’s holdings in Intercoastal Investigation, 1935, 1 U.S.S.B.B. 400 (1935), the case law, including ICA federal court cases, cited therein as supporting precedent,45 Altieri, 46 Stockton Elevators,47 the case law, including ICA federal court cases, cited therein as supporting precedent, and European Trade 48 was incorporated into the new statute as well.49 Justice Felix Frankfurter expressed the maxim as ‘‘if a word is obviously transplanted from a legal source, whether the common law or other legislation, it brings the old soil with it.’’ 50 (4) The Associated Words Canon of construction requires that associated words bear on one another’s meaning. In Intercoastal Investigation, 1935, the United States Shipping Board considered the term ‘‘practice’’ as used in the 1916 Act and determined that, ‘‘[o]wing to its wide and variable connotation, a practice which unless restricted ordinarily means an often repeated and customary action, is deemed to apply only to acts or things belonging to the class as those meant by the words of the law that are associated with it.’’ 1 U.S.S.B.B. at 431–432 44 Bragdon v. Abbott, 524 U.S. 624, 645 (1998) (emphasis added). 45 Intercoastal at 432. 46 J.M. Altieri v. Puerto Rico Ports Authority, 7 F.M.C. 416 (ALJ 1962). ‘‘If the action of respondent were one of a series of such occurrences, a practice might be spelled out that would invoke the coverage of section 17. Hecht, Levis and Kahn, Inc. v. Isbrandtsen, Co., Inc., 3 F.M.B. 798 (1950). However, the action of the respondent is an isolated or ‘one shot’ occurrence. Complainant has alleged and proved only the one instance of such conduct. It cannot be found to be a ‘practice’ within the meaning of the last paragraph of section 17.’’ Id. at 420 (emphasis in original).) 47 3 S.R.R. at 618 (‘‘It cannot be found that the Elevators engaged in a ‘practice’ within the meaning of section 17. The essence of a practice is uniformity. It is something habitually performed and it implies continuity . . . the usual course of conduct. It is not an occasional transaction such as here shown. Intercostal Investigation, 1935, 1. USSBB 400, 432; B&O Ry. Co., 274 F. 687, 690; Whitham v. Chicago R.I. & P. Ry. Co., 66 F. Supp. 1014; Wells Lamont Corp. v. Bowles, 149 F.2d 364.’’). 48 19 S.R.R. at 63. (‘‘Even assuming, without deciding, that European was not notified of the classification and rating problem we cannot say that such conduct by Hipage amounts to a violation of Section 17. Unless its normal practice was not to so notify the shipper, such adverse treatment cannot be found to violate the section as a matter of law. Investigation of Certain Practices of Stockton Elevators, 8 F.M.C. 181, 200 [3 S.R.R. 605] (1964).’’ (emphasis in original)). 49 For a more detailed discussion of the PriorConstruction Canon, see Gruenberg-Reisner v. Respondent Overseas Moving Specialist, 34 S.R.R. 613, 647–649 (FMC 2016). 50 Felix Frankfurter, Some Reflections on the Reading of Statutes, 47 Colum. L. Rev. 527, 537 (1947). VerDate Sep<11>2014 19:16 Sep 06, 2018 Jkt 244001 (emphasis added). The application of the term ‘‘practices’’ must be confined within the regulated transportation world of common carriage, its specialized lexicon and its association with various words including ‘‘rates,’’ ‘‘charges,’’ and ‘‘tariffs.’’ 51 (5) In Atlantic Cleaners & Dryers, Inc. v. United States, 286 U.S. 427 (1932), the U.S. Supreme Court framed the Presumption of Consistent Usage Canon as follows, ‘‘[t]here is a natural presumption that identical words used in different parts of the same act are intended to have the same meaning. Id. at 433 (emphasis added). In the 1984 Act, Congress used the term ‘‘practice’’ or ‘‘practices’’ eight times in three different sections of the new legislation: Section 5 (Agreements); section 8 (Tariffs); and section 10 (Prohibited Acts). These usages of ‘‘practice’’ are in complete harmony with the original 1910 Mann-Elkins Act and the original section 17 of the 1916 Act’s usage of ‘‘practices’’ referenced above.52 (6) The Whole-Text Canon requires that the entire statutory structure, statutory scheme and analysis must be considered. In K Mart Corp. v. Cartier, Inc., 486 U.S. 281 (1988), the U.S. Supreme Court expressed the WholeText Canon as follows, ‘‘In ascertaining the plain meaning of the statute, the court must look to the particular statutory language at issue, as well as the language and design of the statute as a whole.’’ Id. at 291. The Congressional intent, overall context and statutory mandate of the 1984 Shipping Act makes clear that Congress wanted the Commission to focus its regulatory authority on ‘‘establish[ing] a nondiscriminatory regulatory process for the common carriage of goods by water . . .’’ 53 and on maritime activities that: Result in substantial reduction in competition and are detrimental to commerce. In the 1998 amendments, Congress injected additional competitive market-driven provisions into the Shipping Act of 1984.54 (7) The Gruenberg-Reisner decision, supra, also discusses the relevant application of the negative implication canon and the presumption against 51 For a more detailed discussion of the Associated Word Canon, see Gruenberg-Reisner v. Respondent Overseas Moving Specialist, 34 S.R.R. 613, 645 (FMC 2016). 52 For a more detailed discussion of the Presumption of Consistent Usage Canon, see Gruenberg-Reisner v. Respondent Overseas Moving Specialist, 34 S.R.R. 613, 642–643 (FMC 2016). 53 See 46 U.S.C. 40101. 54 For a more detailed discussion of the Whole Text Canon, see Gruenberg-Reisner v. Respondent Overseas Moving Specialist, 34 S.R.R. 613, 644 (FMC 2016). PO 00000 Frm 00013 Fmt 4702 Sfmt 4702 45371 extraterritorial application canon. Last, Gruenberg-Reisner also discusses the duty of federal agencies to observe and adhere to the doctrine of stare decisis.55 D. Remedies The Commission is aware that modifying the application of recent § 41102(c) cases may pare back complainants’ ability in some factual circumstances to claim a Shipping Act violation and thus seek redress before the Commission when they are harmed by an act or omission of a regulated entity. However, § 41102(c) was not designed to be the universal panacea for each and every problem or grievance that arises in the maritime realm of receiving, handling, storing, or delivering property. To interpret the Shipping Act as duplicative of every other statutory and common law maritime remedy would frustrate Congressional intent in enacting different statutory schemes and undermine the purpose of the Shipping Act. In A.N. Deringer, Inc. v. Marlin Marine Services, Inc., 25 S.R.R. 1273, 1276, 1277 (SO 1990), a post 1984 case that followed the Altieri, Intercoastal Investigation, Stockton Elevators, European Trade Specialists line of precedent in a case considering what is now § 41102(c), the Settlement Officer addressed the effect of an overly broad interpretation of section 10(d)(1) on other maritime statutes, such as the Carriage of Goods by Sea Act (COGSA).56 COGSA is the United States enactment of the international convention commonly referred to as the Hague Rules. This treaty was intended 55 See Motor Vehicle Mfrs. Ass’n v. State Farm Insurance, 463 U.S. 29 (1983). ‘‘[A]n agency changing its course . . . is obligated to supply a reasoned analysis for the change . . . .’’ Id. at 42. The Commission’s case law affirmed this obligation in Harrington & Co. v. Georgia Ports Authority, 23 S.R.R. 753 (ALJ 1986), where the Commission held, ‘‘the decision to depart from precedent is not taken lightly and requires compelling reasons . . . the courts are emphatic in requiring agencies to follow their precedents or explain with good reason why they choose not to do so.’’ Id. at 766. 56 46 U.S.C. 3070, Public Law 109–304, 6(c), 120 Stat. 1516 (2006). 57 See Gilmore and Black, The Law of Admiralty, (2d ed. 1975). ‘‘This compromise was so well thought of that when, between 1921 and 1924, representatives of the shipping world and of the maritime nations sought by conference to arrive at terms suitable for uniform worldwide treatment of the shipper carrier relation under ocean bills of lading, the ‘‘Hague Rules’’ which they adopted, first as a set of clauses for voluntary inclusion in bills of lading and then as a Convention to which the adherence of maritime nations was invited, embodied the Harter Act compromise in the main outline. In 1936, the United States adhered to the Convention, and Congress passed in implementation the Carriage of Goods By Sea Act, which with minor differences follows verbatim the Hague Rules.’’ Id. at 144–145. E:\FR\FM\07SEP1.SGM 07SEP1 daltland on DSKBBV9HB2PROD with PROPOSALS 45372 Federal Register / Vol. 83, No. 174 / Friday, September 7, 2018 / Proposed Rules to achieve a common set of international rules for the handling of cargo damage and loss claims.57 The Commission ALJ acknowledged the status of COGSA with the following Commission ruling: As a last observation concerning the comity between COGSA and the Shipping Act, consider section 2 of the Shipping Act’s Declaration of Policy where Congress stated: Commission.’’ 61 The Commission is seeking public comment on whether alternative avenues for redress would be available should the Commission choose to reinterpret § 41102(c). It is clear that COGSA was enacted to clarify the responsibilities as well as the rights and immunities of carriers and ships with respect to loss and damage claims. Consequently, the use of the Shipping Act of 1984 to circumvent COGSA provisions would constitute a wholly unwarranted frustration of Congressional intent. Furthermore, some of the logical conclusions of such a step would be absurd. For example, COGSA provides a one-year period for the filing of suit; after that period, a claim is time barred. To accept Deringer’s premise, one would have to conclude that a one-year period exists during which a claimant may file suit, but two additional years exist in which to file with the FMC. Inasmuch as COGSA stipulates that the carrier and ship, in the absence of a suit, are discharged from liability after one year, such a conclusion is unacceptable. The purposes of this Act are . . . (2) to 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 . . .59 IV. Conclusion Id. at 1277 (footnotes omitted).58 As a further note on the discordant conflict between COGSA and the Commission’s current usage of section 10(d)(1) of the Shipping Act, consider that COGSA provides for a limitation of liability scheme, including a cargo valuation cap of $500 per customary freight unit unless the shipper declares a higher cargo value. As the A.N. Deringer decision noted, a claimant could wait for 366 days and then file its claim at the Commission under section 10(d)(1) and thereby avoid any COGSA limitations on the value of its cargo loss. This proffer of a conflict between section 10(d)(1) and COGSA is not speculation or a mere hypothetical. In the Commission’s Kobel decision, supra, Respondent Hapag-Lloyd, the ocean vessel common carrier, was found to have violated section 10(d)(1) by virtue of damaging the Claimant’s container during the loading process and then subsequently placing that damaged container on a later Hapag-Lloyd ship. The Commission then held that HapagLloyd was; however, not liable for reparations because the damage to the container was not the proximate cause of the losses to the cargo. If the damaged container had allowed for water inundation with resulting cargo damage, then all legal elements would have been presented for an award to Claimants by virtue of the section 10(d)(1) violation. 58 In addition, with any COGSA litigation, the parties pay their own legal fees. Under a recent amendment to the 1984 Act in Title IV of the Howard Coble Coast Guard and Maritime Transportation Act of 2014, Public Law 113–281 enacted on December 18, 2014, the prevailing party in Shipping Act claims wins full reparation and may be awarded attorney fees. VerDate Sep<11>2014 19:16 Sep 06, 2018 Jkt 244001 As the Commission looks for guidance on Congressional intent concerning the scope, applicability, and proper interpretation of section 10(d)(1) and its relationship to the COGSA/Hague Rules, we find here a clear affirmative Congressional statement that directs the Commission to harmonize the Shipping Act with international shipping practices. The Hague Rules, as adopted by Congress, provide for a single internationally accepted set of rules for the treatment of the shipper-carrier relation under ocean bills of lading. An interpretation of the Shipping Act’s section 10(d)(1) that provides for an alternative legal remedy for a cargo claim in the United States would create diametrical discord to this area of law. Returning the Commission’s interpretation to its proper statutory purpose and scope will not leave claimants without remedy. Claimants would have full and adequate remedies under numerous legal proscriptions including common law, state statutes, admiralty law, and other federal statutes. Such claims should be presented to proper courts of common pleas. The Commission notes that other provisions or regulations of the Shipping Act could also provide remedy.60 The Commission also notes that bringing actions in traditional venues, such as state and federal courts, may be appropriate. Matters that may now be brought under § 41102(c) could also potentially be adjudicated as matters of contract law, agency law, or admiralty law. In cases prior to Kobel, it has been noted that remedy could have been sought in other venues. In Adair v. Penn-Nordic Lines, Inc., 26 S.R.R. 11 (ALJ 1991), the ALJ noted that the relevant conduct ‘‘would undoubtedly have contravened other standards of law under principles of contract and common carrier law applicable in courts of law and quite possibly Mr. Adair could have obtained relief . . . in a court of law or perhaps admiralty rather than before this 59 46 U.S.C. 40101(2) (emphasis added). Total Fitness Equipment, Inc. d/b/a/ Professional Gym v. Worldlink Logistics, Inc., 28 S.R.R. 45 (ID 1997); Brewer v. Maralan, 29 S.R.R. 6 (FMC 2001). 60 See PO 00000 Frm 00014 Fmt 4702 Sfmt 4702 The Commission believes that the interpretation and application of § 41102(c) should be properly aligned with the broader common carriage foundation and purposes of the Act. The interpretive rule is consistent with the purposes of the Shipping Act and focuses Commission activities on regulated entities who abuse the maritime shipping public by imposing unjust and unreasonable business methods, and who do so on a normal, customary, and continuous basis, and thereby negatively impact maritime transportation competition or inflict detrimental effect upon the commerce of the United States. This interpretation reflects the clear intent of Congress and reflects Commission precedent articulated in Intercoastal Investigation, Altieri, Stockton Elevators, European Trade, and Deringer. Though the Commission is aware that the interpretive rule may redirect some claims in certain fact situations from being brought under the Shipping Act, the Commission believes that existing alternative avenues of redress are fully sufficient to address those cases. The Commission is therefore seeking comment on the proposed interpretation. V. Public Participation How do I prepare and submit comments? Your comments must be written and in English. To ensure that your comments are correctly filed in the docket, please include the docket number of this document in your comments. You may submit your comments via email to the email address listed above under ADDRESSES. Please include the docket number associated with this notice and the subject matter in the subject line of the email. Comments should be attached to the email as a Microsoft Word or text-searchable PDF document. Only non-confidential and public versions of confidential comments should be submitted by email. You may also submit comments by mail to the address listed above under ADDRESSES. 61 Adair, E:\FR\FM\07SEP1.SGM 26 S.R.R. at 20–21. 07SEP1 Federal Register / Vol. 83, No. 174 / Friday, September 7, 2018 / Proposed Rules How do I submit confidential business information? The Commission will provide confidential treatment for identified confidential information to the extent allowed by law. If your comments contain confidential information, you must submit the following by mail to the address listed above under ADDRESSES: • A transmittal letter requesting confidential treatment that identifies the specific information in the comments for which protection is sought and demonstrates that the information is a trade secret or other confidential research, development, or commercial information. • A confidential copy of your comments, consisting of the complete filing with a cover page marked ‘‘Confidential-Restricted,’’ and the confidential material clearly marked on each page. You should submit the confidential copy to the Commission by mail. • A public version of your comments with the confidential information excluded. The public version must state ‘‘Public Version—confidential materials excluded’’ on the cover page and on each affected page, and must clearly indicate any information withheld. You may submit the public version to the Commission by email or mail. Will the Commission consider late comments? The Commission will consider all comments received before the close of business on the comment closing date indicated above under DATES. To the extent possible, we will also consider comments received after that date. How can I read comments submitted by other people? You may read the comments received by the Commission at the Commission’s Electronic Reading Room or the Docket Activity Library at the addresses listed above under ADDRESSES. daltland on DSKBBV9HB2PROD with PROPOSALS VI. Rulemaking Analyses Regulatory Flexibility Act The Regulatory Flexibility Act (codified as amended at 5 U.S.C. 601– 612) provides that whenever an agency is 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 for public comment an initial regulatory flexibility analysis (IRFA) describing the impact of the proposed rule on small entities. 5 U.S.C. 603. An agency is not required to publish an IRFA, however, for the following types of rules, which are VerDate Sep<11>2014 19:16 Sep 06, 2018 Jkt 244001 45373 excluded from the APA’s notice-andcomment 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 has elected to seek public comment on this proposed rule, the rule is an interpretative rule. Therefore, the APA does not require publication of a notice of proposed rulemaking in this instance, and the Commission is not required to prepare an IRFA. Regulation Identifier Number National Environmental Policy Act Antitrust, Exports, Freight forwarders, Maritime carriers, Non-vessel-operating common carriers, Ocean transportation intermediaries, Licensing requirements, Financial responsibility requirements, Reporting and recordkeeping requirements. The Commission’s regulations categorically exclude certain rulemakings from any requirement to prepare an environmental assessment or an environmental impact statement because they do not increase or decrease air, water or noise pollution or the use of fossil fuels, recyclables, or energy. 46 CFR 504.4. The proposed rule describes the Commission’s proposed interpretation of the scope of 46 U.S.C. 41102(c) and the elements necessary for a successful claim for reparations under that section. This rulemaking thus falls within the categorical exclusion for matters related solely to the issue of Commission jurisdiction and the exclusion for investigatory and adjudicatory proceedings to ascertain past violations of the Shipping Act. See 46 CFR 504.4(a)(20), (22). Therefore, no environmental assessment or environmental impact statement is required. Paperwork Reduction Act The Paperwork Reduction Act of 1995 (44 U.S.C. 3501–3521) (PRA) 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 proposed rules to OMB in conjunction with the publication of the notice of proposed rulemaking. 5 CFR 1320.11. This proposed rule does not contain any collections of information as defined by 44. U.S.C. 3502(3) and 5 CFR 1320.3(c). Executive Order 12988 (Civil Justice Reform) This rule meets the applicable standards in E.O. 12988 titled, ‘‘Civil Justice Reform,’’ to minimize litigation, eliminate ambiguity, and reduce burden. PO 00000 Frm 00015 Fmt 4702 Sfmt 9990 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 https:// www.reginfo.gov/public/do/ eAgendaMain. List of Subjects in 46 CFR Part 545 For the reasons set forth above, the Federal Maritime Commission proposes to amend 46 CFR part 545 as follows: PART 545—INTERPRETATIONS AND STATEMENTS OF POLICY 1. The authority citation for part 545 continues to read as follows: ■ Authority: 5 U.S.C. 553; 46 U.S.C. 305, 40307, 40501–40503, 41101–41106, and 40901–40904; 46 CFR 515.23. ■ 2. Add § 545.4 to read as follows: § 545.4 Interpretation of Shipping Act of 1984–Unjust and unreasonable practices. 46 U.S.C. 41102(c) is interpreted to require the following elements in order to establish a successful claim for reparations: (a) The respondent is an ocean common carrier, marine terminal operator, or ocean transportation intermediary; (b) The claimed acts or omissions of the regulated entity are occurring on a normal, customary, and continuous basis; (c) The practice or regulation relates to or is connected with receiving, handling, storing, or delivering property; (d) The practice or regulation is unjust or unreasonable; and (e) The practice or regulation is the proximate cause of the claimed loss. By the Commission. Rachel Dickon, Secretary. [FR Doc. 2018–19328 Filed 9–6–18; 8:45 am] BILLING CODE 6731–AA–P E:\FR\FM\07SEP1.SGM 07SEP1

Agencies

[Federal Register Volume 83, Number 174 (Friday, September 7, 2018)]
[Proposed Rules]
[Pages 45367-45373]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-19328]


=======================================================================
-----------------------------------------------------------------------

FEDERAL MARITIME COMMISSION

46 CFR Part 545

[Docket No. 18-06]
RIN 3072-AC71


Interpretive Rule, Shipping Act of 1984

AGENCY: Federal Maritime Commission.

ACTION: Notice of proposed rulemaking.

-----------------------------------------------------------------------

SUMMARY: The Federal Maritime Commission (FMC or Commission) is seeking 
public comment on its interpretation of the scope of the Shipping Act 
prohibition against failing to establish, observe, and enforce just and 
reasonable regulations and practices relating to or connected with 
receiving, handling, storing, or delivering property. Specifically, the 
Commission is clarifying that the proper scope of that prohibition in 
the Shipping Act of 1984 and the conduct covered by it is guided by the 
Commission's interpretation and precedent articulated in several 
earlier Commission cases, which require that a regulated entity engage 
in a practice or regulation on a normal, customary, and continuous 
basis and that such practice or regulation is unjust or unreasonable in 
order to violate that section of the Shipping Act.

DATES: Submit comments on or before: October 10, 2018.

ADDRESSES: You may submit comments, identified by the Docket No. 18-06 
by the following methods:
     Email: [email protected]. Include in the subject line: 
``Docket 18-06, Interpretive Rule Comments.'' Comments should be 
attached to the email as a Microsoft Word or text-searchable PDF 
document. Only non-confidential and public versions of confidential 
comments should be submitted by email.
     Mail: Rachel E. Dickon, Secretary, Federal Maritime 
Commission, 800 North Capitol Street NW, Washington, DC 20573-0001.
     Instructions: For detailed instructions on submitting 
comments, including requesting confidential treatment of comments, and 
additional information on the rulemaking process, see the Public 
Participation heading of the SUPPLEMENTARY INFORMATION section of this 
document. Note that all comments received will be posted without change 
to the Commission's website, unless the commenter has requested 
confidential treatment.
     Docket: For access to the docket to read background 
documents or comments received, go to the Commission's Electronic 
Reading Room at: https://www.fmc.gov/18-06, or to the Docket Activity 
Library at 800 North Capitol Street NW, Washington, DC 20573, 9:00 a.m. 
to 5:00 p.m., Monday through Friday, except Federal holidays. 
Telephone: (202) 523-5725.

FOR FURTHER INFORMATION CONTACT: Rachel E. Dickon, Secretary; Phone: 
(202) 523-5725; Email: [email protected].

SUPPLEMENTARY INFORMATION:

I. Executive Summary

    The Federal Maritime Commission is issuing this notice to obtain 
public comments on clarification and guidance regarding the 
Commission's interpretation of the scope of 46 U.S.C. 41102(c) (section 
10(d)(1) of the Shipping Act of 1984).\1\ Section 41102(c) provides 
that regulated entities ``may not fail to establish, observe, and 
enforce just and reasonable regulations and practices relating to or 
connected with receiving, handling, storing, or delivering property.'' 
\2\
---------------------------------------------------------------------------

    \1\ Some authorities cited herein refer to Sec.  41102(c) while 
others refer to section 10(d)(1). For ease of reading, we will 
generally refer to Sec.  41102(c) in analyzing these authorities.
    \2\ 46 U.S.C. 41102(c).
---------------------------------------------------------------------------

    Beginning with the Houben \3\ decision in 2010 and presented in 
full in the Commission's 2013 decision in Kobel v. Hapag-Lloyd, the 
Commission has held in a line of recent cases that discrete conduct 
with respect to a particular shipment, if determined to be unjust or 
unreasonable, represents a violation of Sec.  41102(c), regardless of 
whether that conduct represents a respondent's practice or 
regulation.\4\ These decisions diverge from consistent Commission 
precedent dating back to 1935 and reaffirmed as recently as 2001 which 
required that a regulated entity must engage in a practice or 
regulation on a normal, customary, and continuous basis in order to be 
found to have violated Sec.  41102(c) of the Shipping Act. In simple 
summary, discrete or

[[Page 45368]]

occasional actions by regulated entities not reflecting a practice or 
regulation would not constitute a violation of Sec.  41102(c).
---------------------------------------------------------------------------

    \3\ Houben v. World Moving Services, Inc., 31 S.R.R. 1400 (FMC 
2010).
    \4\ Kobel v. Hapag-Lloyd A.G., 32 S.R.R. 1720, 1731 (2013) 
(``The allegation that a single failure to ``observe or enforce'' 
just and reasonable regulations or practices is not a failure does 
not comport with the language of section 10(d)(1), which mandates 
regulated entities not to `fail to . . . observe and enforce' just 
and reasonable regulations and practices.'').
---------------------------------------------------------------------------

    Specifically, the Commission is considering an interpretive rule 
consistent with Commission precedent articulated in cases including 
Intercoastal Investigation,\5\ Altieri,\6\ Stockton Elevators,\7\ 
European Trade,\8\ A.N. Deringer,\9\ and Kamara \10\ that would restore 
the scope of Sec.  41102(c) to prohibiting unjust and unreasonable 
practices and regulations. These decisions require that a regulated 
entity engage in a practice or regulation on a normal, customary, and 
continuous basis and a finding that such practice or regulation is 
unjust or unreasonable to violate that section of the Shipping Act. The 
Commission believes that this represents the proper interpretation of 
the statutory language of the provision that, within the full context 
of the 1916 Act and the 1984 Act, is consistent with statutory and 
legislative history, judicial precedent and Commission case law 
embodied in cases such as Stockton Elevators, and comports with 
accepted rules of statutory construction.
---------------------------------------------------------------------------

    \5\ Intercoastal Investigation, 1935, 1 U.S.S.B.B. 400 (1935).
    \6\ J.M. Altieri v. Puerto Rico Ports Authority, 7 F.M.C. 416 
(ALJ 1962).
    \7\ Investigation of Certain Practices of Stockton Elevators, 3 
S.R.R. 605 (FMC 1964).
    \8\ European Trade Specialists v. Prudential-Grace Lines, 19 
S.R.R. 59, 63 (FMC 1979).
    \9\ A.N. Deringer, Inc. v. Marlin Marine Services, Inc., 25 
S.R.R. 1273 (SO 1990).
    \10\ Kamara v. Honesty Shipping Service, 29 S.R.R. 321 (ALJ 
2001).
---------------------------------------------------------------------------

    This interpretation restores Sec.  41102(c) to its proper function 
and purpose under the Shipping Act of 1984 and will return the 
Commission's focus and priorities to the activities of maritime 
regulated entities that negatively affect the broader shipping public--
all as intended by Congress in its enactment of the 1916 Act and the 
1984 Act. Recognizing that this interpretation would prune and pare 
back the types of recent claims that have been be filed with the 
Commission to those related to the purposes of the Shipping Act's Sec.  
41102(c), traditional legal venues will continue to be available to 
parties injured by discrete instances of unreasonable or unjust conduct 
consistent with long established maritime actions and other statutes 
specifically enacted by Congress, and long recognized common law 
remedies, all designed to address such circumstances.
    We are seeking comment on this refocus of Sec.  41102(c), how such 
an interpretation would affect regulated entities including ocean 
carriers, marine terminal operators (MTOs), and ocean transportation 
intermediaries (OTIs), as well as members of the shipping public, 
including cargo shippers and drayage truckers, and whether claims that 
would no longer fall under Sec.  41102(c) under the contemplated 
interpretation would be adequately resolved before the Commission under 
other sections of the Act or in other legal dispute venues. The 
interpretation would take the form of an interpretive rule codified in 
46 CFR part 545. The language of the proposed rule is set forth below.

II. Background

A. Statutory Language and Legislative History

    Congress first used the statutory language addressing the legal 
duty of transportation common carriers to ``establish, observe, and 
enforce just and reasonable . . . regulations and practices . . . 
affecting [cargo] classification, rates, or tariffs . . . [and] the 
manner and method of presenting, marking, packing, and delivering 
property for transportation . . .'' in the 1910 Mann-Elkins Act 
amendment (Mann-Elkins) \11\ to the Interstate Commerce Act (ICA).\12\ 
The Mann-Elkins language clearly focused on the operating and business 
practices of railroads as commonly used and imposed upon passengers and 
cargo shippers. This fundamental common carrier duty is the 
foundational cornerstone of the ICA legislation, its statutory purpose, 
and its proper interpretation.
---------------------------------------------------------------------------

    \11\ Mann-Elkins Act, 61st Congress, 2nd session, Ch. 309, 36 
Stat. 539, enacted June 18, 1910.
    \12\ The Interstate Commerce Act of 1887, Ch. 104, 24 Stat 379 
(1887).
---------------------------------------------------------------------------

    The provenance of the statutory language and its inclusion six 
years later in the Shipping Act of 1916 (1916 Act) \13\ has been 
recognized by the courts. In United States Navigation Co. v. Cunard 
S.S. Co. Ltd. 284 U.S. 474 (1932), the U.S. Supreme Court tied a firm 
knot binding the ICA and the 1916 Act where the court gave a general 
review of various sections of the 1916 Act, including section 17 \14\ 
and held that, ``[t]hese and other provisions of the Shipping Act 
clearly exhibit the close parallelism between the act and its 
prototype, the ICA, and the applicability both of the principals of 
construction and administration.'' \15\
---------------------------------------------------------------------------

    \13\ The Shipping Act of 1916, Sept. 7, 1916, Ch. 451, 39 Stat. 
728.
    \14\ Section 17 is the origin of section 10(d)(1), as discussed 
infra.
    \15\ Id. at 484.
---------------------------------------------------------------------------

    As the enactment of the 1916 Act demonstrates, together with the 
use of identical language in other federal statutes,\16\ Congress fully 
understood what it was doing in using the phrase ``establish, observe, 
and enforce just and reasonable regulations and practices''--and what 
those words meant.\17\
---------------------------------------------------------------------------

    \16\ For example, the Packers and Stockyards Act of 1921, which 
was enacted to maintain competition in the livestock industry. The 
Act bans discrimination, manipulation of price, weight, livestock or 
carcasses; commercial bribery; misrepresentation of source, 
condition, or quality of livestock; and other unfair or manipulative 
practices. Section 208 of the Packers and Stockyards Act of 1921 
provides that, ``[i]t shall be the duty of every stockyard owner and 
market agency to establish, observe, and enforce just, reasonable 
and nondiscriminatory regulations and practices in respect to the 
furnishing of stockyard services.'' 7 U.S.C. 208.
    \17\ For a more detailed discussion of the legislative history 
of this statutory language, see Gruenberg-Reisner v. Respondent 
Overseas Moving Specialist, 34 S.R.R. 613, 638-644 (FMC 2016).
---------------------------------------------------------------------------

    Section 41102(c) of the 1984 Act originates from section 17 of the 
1916 Act. Section 17 was commonly divided into two parts and referred 
to as ``section 17, first paragraph'' and ``section 17, second 
paragraph.'' The first paragraph addressed unjustly discriminatory 
rates charged to shippers while the second paragraph addressed just and 
reasonable practices by carriers and other persons subject to the Act. 
The second paragraph of section 17 reads as follows:

    Every such carrier and every other person subject to this act 
shall establish, observe, and enforce just and reasonable 
regulations and practices relating to or connected with the 
receiving, handling, storing, or delivering of property. Whenever 
the Board finds any such regulation or practice is unjust or 
unreasonable it may determine, prescribe, and order enforced a just 
and reasonable regulation or practice.

Public Law 64-260 Sec.  17 (1916) (emphasis added).\18\
---------------------------------------------------------------------------

    \18\ The two separate provisions of section 17 of the Shipping 
Act are commonly referred to as ``section 17, first paragraph'' and 
``section 17, second paragraph.''
---------------------------------------------------------------------------

    As a part of the general transportation deregulatory reform trends 
in the 1970's through 1990's,\19\ Congress eliminated the sentence 
regarding the Commission's authority to prescribe or order regulations 
or practices in the 1984 Act. Congress, however, reenacted the first 
sentence of section 17's second paragraph and placed that provision in 
section 10(d)(1), which, following the 2006 recodification of the 1984 
Act, became 46 U.S.C. 41102(c). That language from section 17, second

[[Page 45369]]

paragraph, first sentence, requiring that no regulated entity may fail 
to establish, observe, and enforce just and reasonable regulations and 
practices relating to or connected with the receiving, handling, 
storing, or delivery of property--is now found in Sec.  41102(c) of the 
1984 Act.
---------------------------------------------------------------------------

    \19\ See the Railroad Revitalization and Regulatory Reform Act 
of 1976, Public Law 94-210; Staggers Act of 1980, Public Law 96-448; 
Motor Carrier Act of 1990, Public Law 96-296; Airline Deregulation 
Act, Public Law 95-504; and the Interstate Commerce Commission 
Termination Act of 1995, Public Law 104-88.
---------------------------------------------------------------------------

    Having a long legislative provenance, Congress used the word 
``practice'' and the full phrase, ``establish, observe, and enforce 
just and reasonable regulations and practices,'' in both the original 
1916 Act and in section 10(d)(1) of the 1984 Act, now Sec.  41102(c), 
in a particular way and in a context that was clear to the drafters, to 
the Commission, and to the reviewing courts.

B. Judicial Precedent

    In Baltimore & Ohio Railroad Company v. United States, 277 U.S. 291 
(1923), the U.S. Supreme Court considered the question of what 
constituted a ``practice'' within the contemplation of Congress in the 
Interstate Commerce Act:

    The word ``practice'', considered generally and without regard 
to context, is not capable of useful construction. If broadly used, 
it would cover everything carriers are accustomed to do. Its meaning 
varies so widely and depends so much upon the connection in which it 
is used that Congress will be deemed to have intended to confine its 
application to acts or things belonging to the same general class as 
those meant by the words associated with it.

Id. at 299-300 (citation omitted) (emphasis added).

    The Interstate Commerce Commission (ICC), the United States 
Shipping Board (USSB) (the agency created by Congress in the 1916 Act), 
its successor agencies, and the currently constituted Commission,\20\ 
together with state and federal courts have consistently ruled that 
``practice'' means; (1) the acts/omissions of the regulated common 
carrier that were positively established by the regulated common 
carrier and imposed on the passenger/cargo interest, and (2) such act/
omission was the normal,\21\ customary, often repeated,\22\ 
systematic,\23\ uniform,\24\ habitual,\25\ and continuous manner \26\ 
(hereinafter ``Normal, Customary & Continuous'') in which the regulated 
common carrier was conducting business.
---------------------------------------------------------------------------

    \20\ The United States Shipping Board (USSB) was succeeded in 
1933 by the United States Shipping Board Bureau of the Department of 
Commerce (USSBB), Executive Order No. 6166 (1933). The USSBB was 
succeeded in 1936 by the United States Maritime Commission (USMC), 
49 Stat. 1985. In 1950, the USMC was succeeded by the Federal 
Maritime Board (FMB), 64 Stat.1273. The FMC was established as an 
independent regulatory agency by Reorganization Plan No. 7, 
effective August 12, 1961. The U.S. Supreme Court treated the FMC 
and all predecessor agencies as the ``Commission'' for purposes of 
judicial review. See Volkswagenwerk v. Federal Maritime Commission, 
390 U.S. 261, 269 (1968).
    \21\ See European Trade Specialists v. Prudential-Grace Lines, 
19 S.R.R. 59, 63 (FMC 1979). (Unless its normal practice was not to 
so notify the shipper, such adverse treatment cannot be found to 
violate the section as a matter of law [emphasis in original].''
    \22\ See Intercoastal Investigation, 1935, 1 U.S.S.B.B. 400, 
432. (``Owing to its wide and variable connotations, a practice 
which unless restricted ordinarily means an often and customary 
action, is deemed to acts or things belonging to the same class as 
those meant by the words of the law that are associated with it.'' 
[cites omitted] [emphasis added].
    \23\ See Whitam v. Chicago, R.I. & P. Ry. Co., 66 F. Supp. 1014 
(ND TX 1946) (``The word `a practice' as used in the decision, or 
used anywhere properly, implies systematic doing of the acts 
complained of, and usually as applied to carriers and shippers 
generally.'' (emphasis added).''
    \24\ See Stockton Elevators, 3 S.R.R. 605, 618 (FMC 1964). (``It 
cannot be found that the Elevator engaged in a `practice' within the 
meaning of Section 17. The essence of a practice is uniformity. It 
is something habitually performed and it implies continuity . . . 
the usual course of conduct. It is not an occasional transaction 
such as here shown. Intercoastal Investigation, 1935, 1 U.S.S.B.B. 
400, 432; B&O By. Co. v. United States 277 U.S. 291, 300, 
Francesconi & Co. v. B&O Ry. Co., 274 F. 687, 690; Whitham v. 
Chicago R.I. & P. Ry. Co., 66 F. Supp. 1014; Wells Lamont Corp. v. 
Bowles, 149 F.2d 364 (emphasis added). See also, McClure v. 
Blackshere, F. Supp. 678, 682 (D. Md. 1964) (`` `Practice' 
ordinarily implied uniformity and continuity, and does not denote a 
few isolated acts, and uniformity and universality, general 
notoriety and acquiescence, must characterize the actions on which a 
practice is predicated.'' (citations omitted) (emphasis added)).
    \25\ See Stockton Elevators, 3 S.R.R. 605, 618 (FMC 1964). (``It 
cannot be found that the Elevator engaged in a `practice' within the 
meaning of Section 17. . . . It is something habitually performed 
and it implies continuity . . . the usual course of conduct.'' 
(citations omitted) (emphasis added)).
    \26\ See Stockton Elevators, 3 S.R.R. 605, 618 (FMC 1964). (``It 
cannot be found that the Elevator engaged in a `practice' within the 
meaning of Section 17. . . . It is something habitually performed 
and it implies continuity . . . .'' (citations omitted) (emphasis 
added)). See also, McClure v. Blackshere, F. Supp. 678, 682 (D. Md. 
1964) (`` `Practice' ordinarily implied uniformity and continuity, 
and does not denote a few isolated acts, and uniformity and 
universality, general notoriety and acquiescence, must characterize 
the actions on which a practice is predicated.'' (citations omitted) 
(emphasis added)).
---------------------------------------------------------------------------

    The USSBB, a predecessor to the Commission, considered the term 
``practice'' as used in the 1916 Act in Intercoastal Investigation, 
1935, 1 FMC 400 (1935), an investigation that covered sixteen years of 
steam ship conference activities. The USSBB held:

    The provisions of the Shipping Act, 1916, also apply to these 
respondents. It is there provided . . . that carriers shall 
establish, observe, and enforce just and reasonable rates, charges, 
(cargo) classifications, and tariffs and just and reasonable 
regulations and practices related thereto . . .The terms ``rates'', 
``charges'', ``tariffs'', and ``practices'' as used in 
transportation have received judicial interpretation . . . Owing to 
its wide and variable connotation, a practice, which unless 
restricted ordinarily means an often repeated and customary action, 
is deemed to apply only to acts or things belonging to the class as 
those meant by the words of the law that are associated with it . . 
. In section 18, the term ``practices'' is associated with various 
words, including ``rates'', ``charges'', and ``tariffs''.

Id. at 431-432 (emphasis added).\27\
---------------------------------------------------------------------------

    \27\ Intercoastal Investigations cited two ICA railroad cases as 
authority. See Baltimore & Ohio Railroad Company v. United States, 
277 U.S. 291 (1923) and Missouri Pacific R. Co. v. Norwood, 283 U.S. 
249, 257 (1931).
---------------------------------------------------------------------------

    Prior to the 1984 Act, Commission decisions analyzing situations 
that involved discrete conduct focused on the meaning of the word 
``practice'' and determined that conduct that did not reflect a 
practice was outside the scope of the first sentence of the second 
paragraph of section 17. In Altieri, Stockton Elevators, and European 
Trade Specialists, A.N. Deringer, Kamara, and other cases \28\ the 
Commission used the term ``practice'' in a consistent manner for all 
the places it appears in the Shipping Act.
---------------------------------------------------------------------------

    \28\ A series of cases alleging section 10(d)(1) violations has 
established that a complainant must demonstrate regulations and 
practices, as opposed to identifying what might be an isolated error 
or understandable misfortune. See, e.g., Informal Docket No. 
1745(I), Mrs. Susanne Brunner v. OMS Moving Inc., slip decision 
served January 27, 1994, administratively final March 8, 1994.
---------------------------------------------------------------------------

    In Stockton Elevators, which was later adopted by the Commission in 
its entirety, the FMC's Presiding Examiner found that a violation did 
not occur because of the infrequency of the relevant actions. According 
to that decision, a practice is something that, ``is habitually 
performed and implies continuity . . . not an occasional transaction 
such as here shown.'' \29\ The Presiding Examiner found the 
respondent's actions to be occasional transactions and not a 
``practice'' because they were not the ``usual course of conduct'' and 
so not a violation of section 17.\30\
---------------------------------------------------------------------------

    \29\ Investigation of Certain Practices of Stockton Elevators, 8 
F.M.C. 187, 200-201 (Examiner 1964).
    \30\ Id.
---------------------------------------------------------------------------

    Similarly, in European Trade Specialists, Inc. v. Prudential-Grace 
Lines, Inc., the ALJ specifically noted, ``[a] `practice' unless the 
term is in some way restricted by decision or statute, means ``an often 
repeated and customary action.'' \31\ There, the ALJ was considering if 
an alleged failure to notify a shipper of a dispute on the applicable 
tariff rate violated section 17 of the 1916 Act. The ALJ found that in 
examining the record, the respondent's normal practice was to notify 
shippers

[[Page 45370]]

of problems and this case involved the allegation of a single departure 
from that practice which was otherwise just and reasonable. Regardless 
of the unjustness or unreasonableness of the respondent's failure to 
notify the shipper, such action did not represent a practice and thus 
there could be no section 17 violation.
---------------------------------------------------------------------------

    \31\ 17 S.R.R. 1351, 1361 (ALJ 1977).
---------------------------------------------------------------------------

    In Kamara v. Honesty Shipping Service, 29 S.R.R. 321 (ALJ 2001), 
the ALJ held that, ``It is not clear that a carrier's simple failure to 
remit payment to a subcontracting carrier constitutes a Shipping Act 
violation, although the shipper would certainly have a commercial 
contractual claim.
    These cases addressing Section 10(d)(1) violations correctly hold 
that a complainant must demonstrate regulations and practices and 
articulates the correct scope and interpretation of Sec.  41102(c). 
This precedent stands in stark contrast to recent Commission decisions 
that adopted a far more expansive interpretation of the conduct covered 
by Sec.  41102(c) untethered to the language of the statute, the 
legislative history, Commission precedent, or, most importantly, the 
purpose of the Shipping Act to address common carrier duties.\32\
---------------------------------------------------------------------------

    \32\ See Adair v. Penn-Nordic Lines, Inc., 26 S.R.R. 11 (ALJ 
1991); Tractors & Farm Equip. Ltd v. Cosmos Shipping Co., Inc., 26 
S.R.R. 788 (ALJ 1992); Houben v. World Moving Servs., Inc., 31 
S.R.R. 1400 (FMC 2010).
---------------------------------------------------------------------------

    In the 2013 Kobel decision, the Commission charted a different 
course by disjoining the statute's conjunctive language of ``establish, 
observe, and enforce'' and specifically identified that Sec.  41102(c) 
contains three discrete prohibitions: (1) A prohibition against failing 
to establish just and reasonable regulations and practices; (2) a 
prohibition against failing to observe just and reasonable regulations 
and practices; and (3) a prohibition against failing to enforce just 
and reasonable regulations.\33\ Since Kobel, the Commission has 
interpreted section Sec.  41102(c) to mean that a single failure to 
fulfill a single legal obligation of any description itself could 
constitute a violation of Sec.  41102(c).'' \34\
---------------------------------------------------------------------------

    \33\ Kobel, 32 S.R.R. at 1735.
    \34\ See, e.g., Bimsha Int'l v. Chief Cargo Servs., 32 S.R.R. 
1861, 1865 (FMC 2013) (``NVOCCs violate [Sec.  41102(c)] when they 
fail to fulfill NVOCC obligations, through single or multiple 
actions or mistakes, and therefore engage in an unjust and 
unreasonable practice'' (emphasis added)).
---------------------------------------------------------------------------

    The Commission looked to a single rule of construction, the 
surplusage cannon, to support its course change from prior Commission 
and court rulings. That rule provides that, ``If possible, every word 
and every provision is to be given effect.'' \35\ However, the 
commentators offer two relevant notes of caution.
---------------------------------------------------------------------------

    \35\ Reading Law: The Interpretation of Legal Texts, Scalia and 
Garner, 2012, pg. 174.
---------------------------------------------------------------------------

    First, in discussing the Principle of Interrelating Canons, they 
advise, ``No canon of interpretation is absolute. Each may be overcome 
by the strength of differing principles that point in other directions 
. . . It is a rare case in which each side does not appeal to a 
different canon to suggest its desired outcome.'' \36\ Second, in later 
discussion of the surplusage canon, they note, ``If a provision is 
susceptible of (1) a meaning that . . . deprives another provision of 
all independent effect, and (2) another meaning that leaves both 
provisions with some independent operation, the later should be 
preferred . . . So, like all other canons, this one must be applied 
with judgement and discretion, and with careful regard to context.'' 
\37\
---------------------------------------------------------------------------

    \36\ Id. at 59, emphasis in the original.
    \37\ Id. at page 176, emphasis added.
---------------------------------------------------------------------------

    The Commission has, in these recent cases, strained to give 
independent application of the elements, ``establish, observe, or 
enforce'' but, in so doing, has deprived any operation of a discussion 
or application of the alleged unjust or unreasonable practice or 
regulation being inflicted upon the general shipping public. The 
``context'' of Sec.  41102(c) itself within the Shipping Act and other 
factors discussed below demonstrate the flaws in the Commission's 
recent line of section 41102(c) decisions. Moreover, numerous other 
canons of construction ``point in other directions,'' \38\ all as 
discussed below.
---------------------------------------------------------------------------

    \38\ Id. at 59.
---------------------------------------------------------------------------

    It is this line of recent cases determining that a discrete failure 
to observe and enforce an established just and reasonable regulation or 
practice that the Commission seeks to reform in this rulemaking so as 
to return the scope of Sec.  41102(c) to its proper role and purpose 
within the Shipping Act. In the future, the Commission intends to 
follow the reasoning in Intercoastal Investigation, Altieri, Stockton 
Elevators, European Trade Specialists, Deringer, and Kamara which offer 
precedent as to what properly applies the full meaning and purpose of 
``establish, observe, and enforce just and reasonable regulations and 
practices'' under the Shipping Act and a violation of Sec.  41102(c).

C. Rules of Statutory Construction

    The precedent in Intercoastal Investigation, Altieri, Stockton 
Elevators, European Trade Specialists, Deringer, and Kamara as to what 
constitutes ``regulations and practice'' under the Shipping Act is 
supported by and consistent with multiple accepted rules of statutory 
construction. Proper consideration and application of numerous canons 
of statutory construction demonstrates that Congress has spoken to the 
issue at hand.\39\
---------------------------------------------------------------------------

    \39\ See Bell Atlantic Telephone Companies v. Federal 
Communications Commission, 131 F.3d 1044, 1047 (D.C. Cir. 1997) 
(``Context serves an especially important role in textual analysis 
of a statute when Congress has not expressed itself as univocally as 
might be wished.'').
---------------------------------------------------------------------------

    (1) The Syntactic Canon concerns grammar. Reviewing Sec.  41102(c), 
the regulated entity is the subject of the sentence. The subject is 
directed--i.e. do not fail to--then comes the active verbs--
``establish, observe, and enforce'' just and reasonable regulations and 
practices. The regulated entity is ordered to, first, initiate the 
creation, dissemination, and publication of such just and reasonable 
regulations and practices, and simultaneously, to observe and enforce 
those regulations and practices that were created by that regulated 
entity.\40\
---------------------------------------------------------------------------

    \40\ For a fuller discussion of the Syntactic Canon, see 
Gruenberg-Reisner v. Respondent Overseas Moving Specialist, 34 
S.R.R. 613, 641 (FMC 2016).
---------------------------------------------------------------------------

    (2) The Ordinary Meaning Canon requires that the words of a statute 
are to be taken in their natural and ordinary signification and 
import.\41\ The judicial interpretation of the phrase ``practices'' by 
multiple courts applying the Mann-Elkins Act, the 1916 Act, and other 
statutes, all utilized the Ordinary Meaning Canon to find the meaning 
of the term ``practice'' as intended by Congress.\42\ All came to a 
reasoned conclusion that confirms the Commission's proposed 
interpretation.\43\
---------------------------------------------------------------------------

    \41\ See, e.g., James Kent, Commentaries on American Law 432 
(1826) (``The words of a statute are to be taken in their natural 
and ordinary signification and import; and if technical words are 
used, they are to be taken in a technical sense.'').
    \42\ See Intercoastal Investigation, 1935, 1 U.S.S.B.B. 400 
(1935); Whitam v. Chicago, R.I. & P. Ry. Co., 66 F. Supp. 1014 (N.D. 
Tex. 1946); McClure v. Blackshere, 231 F. Supp. 678 (D. Md. 1964); 
Stockton Elevators, 8 F.M.C. 187 (1964); and European Trade 
Specialists, 19 S.R.R. 59 (FMC 1979).
    \43\ For a fuller discussion of the Ordinary Meaning Canon, see 
Gruenberg-Reisner v. Respondent Overseas Moving Specialist, 34 
S.R.R. 613, 641-642 (FMC 2016).
---------------------------------------------------------------------------

    (3) The Prior-Construction Canon requires that ``[w]hen 
administrative and judicial interpretations have settled the meaning of 
an existing statutory provision, repetition of the same language in a 
new statute indicates, as a general matter, the intent to incorporate 
its administrative and

[[Page 45371]]

judicial interpretations as well.'' \44\ Congress used the same 1916 
Shipping Act language in the new 1984 Act. The Commission's holdings in 
Intercoastal Investigation, 1935, 1 U.S.S.B.B. 400 (1935), the case 
law, including ICA federal court cases, cited therein as supporting 
precedent,\45\ Altieri, \46\ Stockton Elevators,\47\ the case law, 
including ICA federal court cases, cited therein as supporting 
precedent, and European Trade \48\ was incorporated into the new 
statute as well.\49\ Justice Felix Frankfurter expressed the maxim as 
``if a word is obviously transplanted from a legal source, whether the 
common law or other legislation, it brings the old soil with it.'' \50\
---------------------------------------------------------------------------

    \44\ Bragdon v. Abbott, 524 U.S. 624, 645 (1998) (emphasis 
added).
    \45\ Intercoastal at 432.
    \46\ J.M. Altieri v. Puerto Rico Ports Authority, 7 F.M.C. 416 
(ALJ 1962). ``If the action of respondent were one of a series of 
such occurrences, a practice might be spelled out that would invoke 
the coverage of section 17. Hecht, Levis and Kahn, Inc. v. 
Isbrandtsen, Co., Inc., 3 F.M.B. 798 (1950). However, the action of 
the respondent is an isolated or `one shot' occurrence. Complainant 
has alleged and proved only the one instance of such conduct. It 
cannot be found to be a `practice' within the meaning of the last 
paragraph of section 17.'' Id. at 420 (emphasis in original).)
    \47\ 3 S.R.R. at 618 (``It cannot be found that the Elevators 
engaged in a `practice' within the meaning of section 17. The 
essence of a practice is uniformity. It is something habitually 
performed and it implies continuity . . . the usual course of 
conduct. It is not an occasional transaction such as here shown. 
Intercostal Investigation, 1935, 1. USSBB 400, 432; B&O Ry. Co., 274 
F. 687, 690; Whitham v. Chicago R.I. & P. Ry. Co., 66 F. Supp. 1014; 
Wells Lamont Corp. v. Bowles, 149 F.2d 364.'').
    \48\ 19 S.R.R. at 63. (``Even assuming, without deciding, that 
European was not notified of the classification and rating problem 
we cannot say that such conduct by Hipage amounts to a violation of 
Section 17. Unless its normal practice was not to so notify the 
shipper, such adverse treatment cannot be found to violate the 
section as a matter of law. Investigation of Certain Practices of 
Stockton Elevators, 8 F.M.C. 181, 200 [3 S.R.R. 605] (1964).'' 
(emphasis in original)).
    \49\ For a more detailed discussion of the Prior-Construction 
Canon, see Gruenberg-Reisner v. Respondent Overseas Moving 
Specialist, 34 S.R.R. 613, 647-649 (FMC 2016).
    \50\ Felix Frankfurter, Some Reflections on the Reading of 
Statutes, 47 Colum. L. Rev. 527, 537 (1947).
---------------------------------------------------------------------------

    (4) The Associated Words Canon of construction requires that 
associated words bear on one another's meaning. In Intercoastal 
Investigation, 1935, the United States Shipping Board considered the 
term ``practice'' as used in the 1916 Act and determined that, 
``[o]wing to its wide and variable connotation, a practice which unless 
restricted ordinarily means an often repeated and customary action, is 
deemed to apply only to acts or things belonging to the class as those 
meant by the words of the law that are associated with it.'' 1 
U.S.S.B.B. at 431-432 (emphasis added). The application of the term 
``practices'' must be confined within the regulated transportation 
world of common carriage, its specialized lexicon and its association 
with various words including ``rates,'' ``charges,'' and ``tariffs.'' 
\51\
---------------------------------------------------------------------------

    \51\ For a more detailed discussion of the Associated Word 
Canon, see Gruenberg-Reisner v. Respondent Overseas Moving 
Specialist, 34 S.R.R. 613, 645 (FMC 2016).
---------------------------------------------------------------------------

    (5) In Atlantic Cleaners & Dryers, Inc. v. United States, 286 U.S. 
427 (1932), the U.S. Supreme Court framed the Presumption of Consistent 
Usage Canon as follows, ``[t]here is a natural presumption that 
identical words used in different parts of the same act are intended to 
have the same meaning. Id. at 433 (emphasis added). In the 1984 Act, 
Congress used the term ``practice'' or ``practices'' eight times in 
three different sections of the new legislation: Section 5 
(Agreements); section 8 (Tariffs); and section 10 (Prohibited Acts). 
These usages of ``practice'' are in complete harmony with the original 
1910 Mann-Elkins Act and the original section 17 of the 1916 Act's 
usage of ``practices'' referenced above.\52\
---------------------------------------------------------------------------

    \52\ For a more detailed discussion of the Presumption of 
Consistent Usage Canon, see Gruenberg-Reisner v. Respondent Overseas 
Moving Specialist, 34 S.R.R. 613, 642-643 (FMC 2016).
---------------------------------------------------------------------------

    (6) The Whole-Text Canon requires that the entire statutory 
structure, statutory scheme and analysis must be considered. In K Mart 
Corp. v. Cartier, Inc., 486 U.S. 281 (1988), the U.S. Supreme Court 
expressed the Whole-Text Canon as follows, ``In ascertaining the plain 
meaning of the statute, the court must look to the particular statutory 
language at issue, as well as the language and design of the statute as 
a whole.'' Id. at 291. The Congressional intent, overall context and 
statutory mandate of the 1984 Shipping Act makes clear that Congress 
wanted the Commission to focus its regulatory authority on 
``establish[ing] a nondiscriminatory regulatory process for the common 
carriage of goods by water . . .'' \53\ and on maritime activities 
that: Result in substantial reduction in competition and are 
detrimental to commerce. In the 1998 amendments, Congress injected 
additional competitive market-driven provisions into the Shipping Act 
of 1984.\54\
---------------------------------------------------------------------------

    \53\ See 46 U.S.C. 40101.
    \54\ For a more detailed discussion of the Whole Text Canon, see 
Gruenberg-Reisner v. Respondent Overseas Moving Specialist, 34 
S.R.R. 613, 644 (FMC 2016).
---------------------------------------------------------------------------

    (7) The Gruenberg-Reisner decision, supra, also discusses the 
relevant application of the negative implication canon and the 
presumption against extraterritorial application canon. Last, 
Gruenberg-Reisner also discusses the duty of federal agencies to 
observe and adhere to the doctrine of stare decisis.\55\
---------------------------------------------------------------------------

    \55\ See Motor Vehicle Mfrs. Ass'n v. State Farm Insurance, 463 
U.S. 29 (1983). ``[A]n agency changing its course . . . is obligated 
to supply a reasoned analysis for the change . . . .'' Id. at 42. 
The Commission's case law affirmed this obligation in Harrington & 
Co. v. Georgia Ports Authority, 23 S.R.R. 753 (ALJ 1986), where the 
Commission held, ``the decision to depart from precedent is not 
taken lightly and requires compelling reasons . . . the courts are 
emphatic in requiring agencies to follow their precedents or explain 
with good reason why they choose not to do so.'' Id. at 766.
---------------------------------------------------------------------------

D. Remedies

    The Commission is aware that modifying the application of recent 
Sec.  41102(c) cases may pare back complainants' ability in some 
factual circumstances to claim a Shipping Act violation and thus seek 
redress before the Commission when they are harmed by an act or 
omission of a regulated entity. However, Sec.  41102(c) was not 
designed to be the universal panacea for each and every problem or 
grievance that arises in the maritime realm of receiving, handling, 
storing, or delivering property. To interpret the Shipping Act as 
duplicative of every other statutory and common law maritime remedy 
would frustrate Congressional intent in enacting different statutory 
schemes and undermine the purpose of the Shipping Act.
    In A.N. Deringer, Inc. v. Marlin Marine Services, Inc., 25 S.R.R. 
1273, 1276, 1277 (SO 1990), a post 1984 case that followed the Altieri, 
Intercoastal Investigation, Stockton Elevators, European Trade 
Specialists line of precedent in a case considering what is now Sec.  
41102(c), the Settlement Officer addressed the effect of an overly 
broad interpretation of section 10(d)(1) on other maritime statutes, 
such as the Carriage of Goods by Sea Act (COGSA).\56\ COGSA is the 
United States enactment of the international convention commonly 
referred to as the Hague Rules. This treaty was intended

[[Page 45372]]

to achieve a common set of international rules for the handling of 
cargo damage and loss claims.\57\ The Commission ALJ acknowledged the 
status of COGSA with the following Commission ruling:
---------------------------------------------------------------------------

    \56\ 46 U.S.C. 3070, Public Law 109-304, 6(c), 120 Stat. 1516 
(2006).
    \57\ See Gilmore and Black, The Law of Admiralty, (2d ed. 1975). 
``This compromise was so well thought of that when, between 1921 and 
1924, representatives of the shipping world and of the maritime 
nations sought by conference to arrive at terms suitable for uniform 
worldwide treatment of the shipper carrier relation under ocean 
bills of lading, the ``Hague Rules'' which they adopted, first as a 
set of clauses for voluntary inclusion in bills of lading and then 
as a Convention to which the adherence of maritime nations was 
invited, embodied the Harter Act compromise in the main outline. In 
1936, the United States adhered to the Convention, and Congress 
passed in implementation the Carriage of Goods By Sea Act, which 
with minor differences follows verbatim the Hague Rules.'' Id. at 
144-145.

    It is clear that COGSA was enacted to clarify the 
responsibilities as well as the rights and immunities of carriers 
and ships with respect to loss and damage claims. Consequently, the 
use of the Shipping Act of 1984 to circumvent COGSA provisions would 
constitute a wholly unwarranted frustration of Congressional intent. 
Furthermore, some of the logical conclusions of such a step would be 
absurd. For example, COGSA provides a one-year period for the filing 
of suit; after that period, a claim is time barred. To accept 
Deringer's premise, one would have to conclude that a one-year 
period exists during which a claimant may file suit, but two 
additional years exist in which to file with the FMC. Inasmuch as 
COGSA stipulates that the carrier and ship, in the absence of a 
suit, are discharged from liability after one year, such a 
---------------------------------------------------------------------------
conclusion is unacceptable.

Id. at 1277 (footnotes omitted).\58\
---------------------------------------------------------------------------

    \58\ In addition, with any COGSA litigation, the parties pay 
their own legal fees. Under a recent amendment to the 1984 Act in 
Title IV of the Howard Coble Coast Guard and Maritime Transportation 
Act of 2014, Public Law 113-281 enacted on December 18, 2014, the 
prevailing party in Shipping Act claims wins full reparation and may 
be awarded attorney fees.
---------------------------------------------------------------------------

    As a further note on the discordant conflict between COGSA and the 
Commission's current usage of section 10(d)(1) of the Shipping Act, 
consider that COGSA provides for a limitation of liability scheme, 
including a cargo valuation cap of $500 per customary freight unit 
unless the shipper declares a higher cargo value. As the A.N. Deringer 
decision noted, a claimant could wait for 366 days and then file its 
claim at the Commission under section 10(d)(1) and thereby avoid any 
COGSA limitations on the value of its cargo loss.
    This proffer of a conflict between section 10(d)(1) and COGSA is 
not speculation or a mere hypothetical. In the Commission's Kobel 
decision, supra, Respondent Hapag-Lloyd, the ocean vessel common 
carrier, was found to have violated section 10(d)(1) by virtue of 
damaging the Claimant's container during the loading process and then 
subsequently placing that damaged container on a later Hapag-Lloyd 
ship. The Commission then held that Hapag-Lloyd was; however, not 
liable for reparations because the damage to the container was not the 
proximate cause of the losses to the cargo. If the damaged container 
had allowed for water inundation with resulting cargo damage, then all 
legal elements would have been presented for an award to Claimants by 
virtue of the section 10(d)(1) violation.
    As a last observation concerning the comity between COGSA and the 
Shipping Act, consider section 2 of the Shipping Act's Declaration of 
Policy where Congress stated:

    The purposes of this Act are . . . (2) to 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 . . .\59\
---------------------------------------------------------------------------

    \59\ 46 U.S.C. 40101(2) (emphasis added).

As the Commission looks for guidance on Congressional intent concerning 
the scope, applicability, and proper interpretation of section 10(d)(1) 
and its relationship to the COGSA/Hague Rules, we find here a clear 
affirmative Congressional statement that directs the Commission to 
harmonize the Shipping Act with international shipping practices. The 
Hague Rules, as adopted by Congress, provide for a single 
internationally accepted set of rules for the treatment of the shipper-
carrier relation under ocean bills of lading. An interpretation of the 
Shipping Act's section 10(d)(1) that provides for an alternative legal 
remedy for a cargo claim in the United States would create diametrical 
discord to this area of law.
    Returning the Commission's interpretation to its proper statutory 
purpose and scope will not leave claimants without remedy. Claimants 
would have full and adequate remedies under numerous legal 
proscriptions including common law, state statutes, admiralty law, and 
other federal statutes. Such claims should be presented to proper 
courts of common pleas. The Commission notes that other provisions or 
regulations of the Shipping Act could also provide remedy.\60\ The 
Commission also notes that bringing actions in traditional venues, such 
as state and federal courts, may be appropriate. Matters that may now 
be brought under Sec.  41102(c) could also potentially be adjudicated 
as matters of contract law, agency law, or admiralty law. In cases 
prior to Kobel, it has been noted that remedy could have been sought in 
other venues. In Adair v. Penn-Nordic Lines, Inc., 26 S.R.R. 11 (ALJ 
1991), the ALJ noted that the relevant conduct ``would undoubtedly have 
contravened other standards of law under principles of contract and 
common carrier law applicable in courts of law and quite possibly Mr. 
Adair could have obtained relief . . . in a court of law or perhaps 
admiralty rather than before this Commission.'' \61\ The Commission is 
seeking public comment on whether alternative avenues for redress would 
be available should the Commission choose to reinterpret Sec.  
41102(c).
---------------------------------------------------------------------------

    \60\ See Total Fitness Equipment, Inc. d/b/a/Professional Gym v. 
Worldlink Logistics, Inc., 28 S.R.R. 45 (ID 1997); Brewer v. 
Maralan, 29 S.R.R. 6 (FMC 2001).
    \61\ Adair, 26 S.R.R. at 20-21.
---------------------------------------------------------------------------

IV. Conclusion

    The Commission believes that the interpretation and application of 
Sec.  41102(c) should be properly aligned with the broader common 
carriage foundation and purposes of the Act. The interpretive rule is 
consistent with the purposes of the Shipping Act and focuses Commission 
activities on regulated entities who abuse the maritime shipping public 
by imposing unjust and unreasonable business methods, and who do so on 
a normal, customary, and continuous basis, and thereby negatively 
impact maritime transportation competition or inflict detrimental 
effect upon the commerce of the United States. This interpretation 
reflects the clear intent of Congress and reflects Commission precedent 
articulated in Intercoastal Investigation, Altieri, Stockton Elevators, 
European Trade, and Deringer. Though the Commission is aware that the 
interpretive rule may redirect some claims in certain fact situations 
from being brought under the Shipping Act, the Commission believes that 
existing alternative avenues of redress are fully sufficient to address 
those cases. The Commission is therefore seeking comment on the 
proposed interpretation.

V. Public Participation

How do I prepare and submit comments?

    Your comments must be written and in English. To ensure that your 
comments are correctly filed in the docket, please include the docket 
number of this document in your comments.
    You may submit your comments via email to the email address listed 
above under ADDRESSES. Please include the docket number associated with 
this notice and the subject matter in the subject line of the email. 
Comments should be attached to the email as a Microsoft Word or text-
searchable PDF document. Only non-confidential and public versions of 
confidential comments should be submitted by email.
    You may also submit comments by mail to the address listed above 
under ADDRESSES.

[[Page 45373]]

How do I submit confidential business information?

    The Commission will provide confidential treatment for identified 
confidential information to the extent allowed by law. If your comments 
contain confidential information, you must submit the following by mail 
to the address listed above under ADDRESSES:
     A transmittal letter requesting confidential treatment 
that identifies the specific information in the comments for which 
protection is sought and demonstrates that the information is a trade 
secret or other confidential research, development, or commercial 
information.
     A confidential copy of your comments, consisting of the 
complete filing with a cover page marked ``Confidential-Restricted,'' 
and the confidential material clearly marked on each page. You should 
submit the confidential copy to the Commission by mail.
     A public version of your comments with the confidential 
information excluded. The public version must state ``Public Version--
confidential materials excluded'' on the cover page and on each 
affected page, and must clearly indicate any information withheld. You 
may submit the public version to the Commission by email or mail.

Will the Commission consider late comments?

    The Commission will consider all comments received before the close 
of business on the comment closing date indicated above under DATES. To 
the extent possible, we will also consider comments received after that 
date.
    How can I read comments submitted by other people?
    You may read the comments received by the Commission at the 
Commission's Electronic Reading Room or the Docket Activity Library at 
the addresses listed above under ADDRESSES.

VI. Rulemaking Analyses

Regulatory Flexibility Act

    The Regulatory Flexibility Act (codified as amended at 5 U.S.C. 
601-612) provides that whenever an agency is 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 for 
public comment an initial regulatory flexibility analysis (IRFA) 
describing the impact of the proposed rule on small entities. 5 U.S.C. 
603. An agency is not required to publish an IRFA, 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 has elected to seek public comment on this 
proposed rule, the rule is an interpretative rule. Therefore, the APA 
does not require publication of a notice of proposed rulemaking in this 
instance, and the Commission is not required to prepare an IRFA.

National Environmental Policy Act

    The Commission's regulations categorically exclude certain 
rulemakings from any requirement to prepare an environmental assessment 
or an environmental impact statement because they do not increase or 
decrease air, water or noise pollution or the use of fossil fuels, 
recyclables, or energy. 46 CFR 504.4. The proposed rule describes the 
Commission's proposed interpretation of the scope of 46 U.S.C. 41102(c) 
and the elements necessary for a successful claim for reparations under 
that section. This rulemaking thus falls within the categorical 
exclusion for matters related solely to the issue of Commission 
jurisdiction and the exclusion for investigatory and adjudicatory 
proceedings to ascertain past violations of the Shipping Act. See 46 
CFR 504.4(a)(20), (22). Therefore, no environmental assessment or 
environmental impact statement is required.

Paperwork Reduction Act

    The Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3521) (PRA) 
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 proposed rules to OMB in conjunction with the 
publication of the notice of proposed rulemaking. 5 CFR 1320.11. This 
proposed rule does not contain any collections of information as 
defined by 44. U.S.C. 3502(3) and 5 CFR 1320.3(c).

Executive Order 12988 (Civil Justice Reform)

    This rule meets the applicable standards in E.O. 12988 titled, 
``Civil Justice Reform,'' to minimize litigation, eliminate ambiguity, 
and reduce burden.

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 https://www.reginfo.gov/public/do/eAgendaMain.

List of Subjects in 46 CFR Part 545

    Antitrust, Exports, Freight forwarders, Maritime carriers, Non-
vessel-operating common carriers, Ocean transportation intermediaries, 
Licensing requirements, Financial responsibility requirements, 
Reporting and recordkeeping requirements.

    For the reasons set forth above, the Federal Maritime Commission 
proposes to amend 46 CFR part 545 as follows:

PART 545--INTERPRETATIONS AND STATEMENTS OF POLICY

0
1. The authority citation for part 545 continues to read as follows:

    Authority: 5 U.S.C. 553; 46 U.S.C. 305, 40307, 40501-40503, 
41101-41106, and 40901-40904; 46 CFR 515.23.

0
2. Add Sec.  545.4 to read as follows:


Sec.  545.4  Interpretation of Shipping Act of 1984-Unjust and 
unreasonable practices.

    46 U.S.C. 41102(c) is interpreted to require the following elements 
in order to establish a successful claim for reparations:
    (a) The respondent is an ocean common carrier, marine terminal 
operator, or ocean transportation intermediary;
    (b) The claimed acts or omissions of the regulated entity are 
occurring on a normal, customary, and continuous basis;
    (c) The practice or regulation relates to or is connected with 
receiving, handling, storing, or delivering property;
    (d) The practice or regulation is unjust or unreasonable; and
    (e) The practice or regulation is the proximate cause of the 
claimed loss.

    By the Commission.
Rachel Dickon,
Secretary.
[FR Doc. 2018-19328 Filed 9-6-18; 8:45 am]
 BILLING CODE 6731-AA-P