Interpretive Rule, Shipping Act of 1984, 64478-64480 [2018-27181]
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Federal Register / Vol. 83, No. 241 / Monday, December 17, 2018 / Rules and Regulations
EPA-APPROVED INDIANA NONREGULATORY AND QUASI-REGULATORY PROVISIONS
Title
Indiana date
*
*
Section 110(a)(2) infrastructure requirements for the 1997 8-Hour Ozone
NAAQS.
Section 110(a)(2) infrastructure requirements for the 1997 PM2.5 NAAQS.
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*
12/7/2007, 9/19/2008, 3/23/2011, 4/7/
2011, and 11/24/2017.
Section 110(a)(2)
ments for the
NAAQS.
Section 110(a)(2)
ments for the
NAAQS.
Infrastructure Require2006 24-Hour PM2.5
10/20/2009, 6/25/2012, 7/12/2012, 5/
22/2013, and 11/24/2017.
Infrastructure Require2008 8-Hour Ozone
12/12/2011 and 11/24/2017 .................
*
12/7/2007, 9/19/2008, 3/23/2011, 4/7/
2011, and 11/24/2017.
*
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*
12/17/2018 [insert
Federal Register citation].
12/17/2018 [insert
Federal Register citation].
12/17/2018 [insert
Federal Register citation].
12/17/2018 [insert
Federal Register citation].
I. Introduction
BILLING CODE 6560–50–P
Through this interpretive rule, the
Federal Maritime Commission is
clarifying its 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.’’ This interpretive
rule clarifies that in order to violate
§ 41102(c), a regulated entity must
engage in an unjust or unreasonable
practice or regulation on a normal,
customary, and continuous basis.
46 CFR Part 545
[Docket No. 18–06]
RIN 3072–AC71
Interpretive Rule, Shipping Act of 1984
Federal Maritime Commission.
Final rule.
AGENCY:
ACTION:
The Federal Maritime
Commission (FMC or Commission) is
revising 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: This final rule is effective
December 17, 2018.
FOR FURTHER INFORMATION CONTACT:
Rachel E. Dickon, Secretary; Phone:
(202) 523–5725; Email: secretary@
fmc.gov.
SUMMARY:
SUPPLEMENTARY INFORMATION:
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II. NPRM and Summary of Comments
On September 7, 2018, the
Commission issued a Notice of
Proposed Rulemaking (NPRM) seeking
public comment on its proposed
interpretation.2 Five comments were
received in response to the NPRM,
which may be found at the Electronic
Reading Room on the Commission’s
website at https://www.fmc.gov/18-06/.
Comments were received from the
American Association of Port
Authorities (AAPA), New York New
Jersey Foreign Freight Forwarders and
Brokers Association (NYNJFFF&BA),
World Shipping Council (WSC),
International Trade Surety Association
(ITSA) and National Customs Brokers
and Forwarders Association of America
(NCBFAA). All five comments received
by the Commission were in support of
the rulemaking.
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 NPRM: Interpretive Rule, Shipping Act of 1984,
83 FR 45367 (Sept. 7, 2018).
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Explanation
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All CAA infrastructure elements have
been approved except the visibility
portion of 110(a)(2)(D)(i)(II).
All CAA infrastructure elements have
been approved except the visibility
portion of 110(a)(2)(D)(i)(II).
All CAA infrastructure elements have
been approved except the visibility
portion of 110(a)(2)(D)(i)(II).
All CAA infrastructure elements have
been approved except the visibility
portion of 110(a)(2)(D)(i)(II) and a
limited approval for 110(a)(2)(D)(i)(I).
*
[FR Doc. 2018–26920 Filed 12–14–18; 8:45 am]
FEDERAL MARITIME COMMISSION
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In their submission, AAPA affirms
that the rule would bring the
Commission’s interpretation of the
Shipping Act’s prohibition on unjust
and unreasonable practices and
regulations in line with the plain
language meaning of the word
‘‘practice,’’ Commission precedent and
the intent of Congress. AAPA does not
believe that the rule would leave
potential claimants without remedies,
but that the rule would stop individual
instances better suited for resolution
under the Carriage of Goods by Sea Act
(COGSA) or other venue from being
brought to the Commission.
NYNJFFF&BA also agrees that the
intent of Congress and the plain
language reading of § 41102(c) support
this rulemaking. NYNJFFF&BA believes
that without this rule, ocean
transportation intermediaries (OTIs) are
at risk of violating the Shipping Act
over a single disagreement or accidental
misstep, and this risk hinders
resolutions through settlement.
NYNJFFF&BA argues that this rule
would limit the risk of frivolous claims
being brought and allow OTIs to operate
and settle claims more fairly and cost
effectively. NYNJFFF&BA contends that
claims that cannot be settled can still be
brought through other venues.3
In its comment, WSC notes that from
1935 to 2001, the Commission
precedent was in line with the
3 In addition to its comments on the current
interpretive rule, NYNJFFF&BA also encourages the
Commission to review other prohibitions in § 41102
as part of future interpretive rulemakings, alleging
that its members have been subject to penalties for
technical violations involving no injured parties
and that these investigations do not serve the
purposes of the Shipping Act of 1984. As
NYNJFFF&BA notes, these issues are outside the
scope of this rulemaking, but the Commission will
consider these comments in determining whether to
initiate future rulemakings.
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Federal Register / Vol. 83, No. 241 / Monday, December 17, 2018 / Rules and Regulations
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interpretation presented by this rule, but
the Commission departed from this
interpretation between 2010 and 2013.
WSC believes that this rule will remove
the uncertainty in the Commission’s
precedent and interpretation of
§ 41102(c). WSC argues that the rule
will also meet the appropriate balance
of encouraging meritorious Shipping
Act cases and discourage matters that
should be heard in other forums. WSC
also does not believe that this
interpretation will prevent would-be
litigants from bringing meritorious
claims and that parties will still be able
to take advantage of the other forums
that were used prior to the 2010 change
in the Commission’s interpretation.
ITSA also fully supports the
Commission’s proposed interpretation
of § 41102(c). ITSA states that adoption
of this interpretation will not cause a
barrier to claimants with legitimate
disputes. ITSA asserts that this rule still
allows claimants to seek resolutions
through the claim procedures in 46 CFR
515.23, the Commission’s ADR services,
presenting a claim to an OTI’s surety or
bringing an action in a proper legal
venue.
Finally, NCBFAA also supports the
interpretive rule and believes that this
rule will bring § 41102(c) back in line
with its original purpose. NCBFAA
believes that, as originally written, the
term practice was not intended to refer
to single instances and from 1935 to
2010, Commission precedent supported
this interpretation. NCBFAA argues that
cargo owners will still possess ample
civil remedies to resolve disputes.
NCBFAA also emphasizes the
importance of § 41102(c) for stopping
systemic malpractices and believes that
this rule will assist the Commission in
returning their focus and priorities to
the activities that negatively affect the
broader shipping public.
III. Final Rule
For the reasons stated in the NPRM
and by the commenters, the
Commission is adopting the proposed
interpretive rule without change.
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.’’
Beginning with the Houben 4 decision in
2010 and presented in full in the
Commission’s 2013 decision in Kobel v.
Hapag-Lloyd,5 the Commission has held
4 Houben v. World Moving Services, Inc., 31
S.R.R. 1400 (FMC 2010).
5 Kobel v. Hapag-Lloyd A.G., 32 S.R.R. 1720, 1731
(2013).
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Jkt 247001
in a line of recent cases that discrete
conduct with respect to a single
shipment, if determined to be unjust or
unreasonable, represents a violation of
§ 41102(c). As discussed in the NPRM,
this recent interpretation runs contrary
to the original intent of Congress, the
rules of statutory construction, and
Commission precedent.6 This rule
restores the Commission’s interpretation
of § 41102(c) to its pre-2010
understanding and returns the
Commission’s focus and priorities to the
activities of maritime regulated entities
that negatively affect the broader
shipping public.
Section 41102(c) was never intended
to be a method of resolving every
dispute that arises in the receiving,
handling, storing or delivering of cargo.
In drafting the 1916 Act, and through its
revisions and reenactment in 1984,
Congress chose the word ‘‘practice’’ and
the phrase, ‘‘establish, observe, and
enforce just and reasonable regulations
and practices,’’ to describe actions or
omissions engaged in on a normal,
customary, and continuous basis. From
its origin and as recently as 2001,7
§ 41102(c) was interpreted in line with
this understanding. To find a violation
of § 41102(c), the Commission
consistently required that the
unreasonable regulation or practice was
the normal,8 customary, often repeated,9
systematic,10 uniform,11 habitual,12 and
continuous manner 13 in which the
regulated common carrier was
conducting business. This
understanding as to what constitutes
‘‘regulations and practice’’ under the
Shipping Act is supported by multiple
accepted rules of statutory
construction.14
Through this rule, the Commission
will return to an interpretation
consistent with its precedent and
consistent with rules of statutory
construction. The Commission is aware
that the interpretive rule may prevent
some claims from being brought under
the Shipping Act. Matters that may
previously have been brought under
6 See
83 FR at 45368–45373.
v. Honesty Shipping Service, 29 S.R.R.
321 (ALJ 2001).
8 See European Trade Specialists v. PrudentialGrace Lines, 19 S.R.R. 59, 63 (FMC 1979).
9 See Intercoastal Investigation, 1935, 1 U.S.S.B.B.
400, 432 (1935).
10 See Whitam v. Chicago, R.I. & P. Ry. Co., 66
F. Supp. 1014 (N.D. Tex. 1946).
11 See, e.g., Stockton Elevators, 3 S.R.R. 605, 618
(FMC 1964); Intercoastal Investigation, 1935, 1
U.S.S.B.B. at 432.
12 See Stockton Elevators, 3 S.R.R. at 618.
13 See Stockton Elevators, 3 S.R.R. at 618. See
also, McClure v. Blackshere, 231 F. Supp. 678, 682
(D. Md. 1964).
14 See 83 FR at 45370–45371.
7 Kamara
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64479
§ 41102(c) however, can still find
resolution in other provisions or
regulations of the Shipping Act 15 or be
adjudicated as matters of contract law,
agency law, or admiralty law. The
Commission believes that existing
alternative avenues of redress are
sufficient to address those cases. The
Commission believes that this rule
returns § 41102(c) to its proper purpose
and allows the Commission to better
meet its mission as intended by
Congress.
VI. Rulemaking Analyses
Congressional Review Act
The rule is not a ‘‘major rule’’ as
defined by the Congressional Review
Act, codified at 5 U.S.C. 801 et seq. The
rule will not result in: (1) An annual
effect on the economy of $100,000,000
or more; (2) a major increase in costs or
prices; or (3) significant adverse effects
on competition, employment,
investment, productivity, innovation, or
the ability of United States-based
companies to compete with foreignbased companies. 5 U.S.C. 804(2).
Regulatory Flexibility Act
The Regulatory Flexibility Act
(codified as amended at 5 U.S.C. 601–
612) provides that whenever an agency
promulgates a final rule after being
required to publish a notice of proposed
rulemaking under the Administrative
Procedure Act (APA) (5 U.S.C. 553), the
agency must prepare and make available
for public comment a final regulatory
flexibility analysis (FRFA) describing
the impact of the rule on small entities.
5 U.S.C. 604. An agency is not required
to publish a FRFA, however, for the
following types of rules, which are
excluded from the APA’s notice-andcomment requirement: Interpretive
rules; general statements of policy; rules
of agency organization, procedure, or
practice; and rules for which the agency
for good cause finds that notice and
comment is impracticable, unnecessary,
or contrary to public interest. See 5
U.S.C. 553(b).
Although the Commission elected to
seek public comment, the rule is an
interpretive rule. Therefore, the APA
did not require publication of a notice
of proposed rulemaking in this instance,
and the Commission is not required to
prepare a FRFA.
National Environmental Policy Act
The Commission’s regulations
categorically exclude certain
15 See Total Fitness Equipment, Inc. d/b/a/
Professional Gym v. Worldlink Logistics, Inc., 28
S.R.R. 45 (ALJ 1997); Brewer v. Maralan, 29 S.R.R.
6 (FMC 2001).
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64480
Federal Register / Vol. 83, No. 241 / Monday, December 17, 2018 / Rules and Regulations
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. This rule regards the
Commission’s 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 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.
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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,
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16:18 Dec 14, 2018
Jkt 247001
Reporting and recordkeeping
requirements.
For the reasons set forth above, the
Federal Maritime Commission amends
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 E. Dickon,
Secretary.
[FR Doc. 2018–27181 Filed 12–14–18; 8:45 am]
BILLING CODE 6731–AA–P
DEPARTMENT OF COMMERCE
National Oceanic and Atmospheric
Administration
50 CFR Part 622
[Docket No. 141104927–4927–01]
RIN 0648–XG564
Fisheries of the Caribbean, Gulf of
Mexico, and South Atlantic; Reef Fish
Resources of the Gulf of Mexico;
Commercial Reef Fish Fishery of the
Gulf of Mexico; 2019 Red Grouper
Commercial Quota Retention
National Marine Fisheries
Service (NMFS), National Oceanic and
Atmospheric Administration (NOAA),
Commerce.
ACTION: Temporary rule; withholding of
red grouper allocation.
AGENCY:
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NMFS intends to withhold a
portion of the red grouper commercial
quota from the Individual Fishing Quota
Program for Grouper and Tilefishes
(IFQ) for the 2019 fishing year as a
result of a proposed commercial quota
reduction. The Gulf of Mexico Fishery
Management Council (Council)
requested that NMFS reduce the Gulf of
Mexico (Gulf) red grouper commercial
and recreational annual catch limits
(ACLs) and associated annual catch
targets (ACTs) through a temporary rule
to provide increased protections to the
stock. The commercial red grouper
quota is equivalent to the commercial
ACT. NMFS is currently evaluating the
Council’s request and may implement,
in early 2019, a temporary rule to
reduce the red grouper ACLs and ACTs.
Because red grouper is managed under
an IFQ program, NMFS distributes IFQ
allocation to the program shareholders
on January 1 of each year. After NMFS
distributes the applicable commercial
quota to shareholders, it cannot be
recalled. Therefore, in anticipation of
the possible commercial quota
reduction, NMFS will withhold
distribution of 59.4 percent, equivalent
to 4.78 million lb (2.17 million kg),
gutted weight, of red grouper IFQ
allocation on January 1, 2019. If the
quota reduction is not implemented by
June 1, 2019, the withheld quota will be
distributed to the shareholders. This
action is necessary to protect the red
grouper resource and to effectively
manage the IFQ program in 2019.
DATES: This rule effective 12:01 a.m.,
local time, January 1, 2019, until 12:01
a.m., local time, June 1, 2019.
FOR FURTHER INFORMATION CONTACT:
Peter Hood, telephone: 727–824–5305,
or email: Peter.Hood@noaa.gov.
SUPPLEMENTARY INFORMATION: The reef
fish fishery of the Gulf includes red
grouper and is managed under the
Fishery Management Plan for the Reef
Fish Fishery of the Gulf of Mexico
(FMP). The FMP was prepared by the
Council and is implemented by NMFS
under the authority of the MagnusonStevens Fishery Conservation and
Management Act (Magnuson-Stevens
Act) by regulations at 50 CFR part 622.
All weights in this temporary rule are
in gutted weight.
The current red grouper commercial
ACT (commercial quota) is 7,780,000 lb
(3,528,949 kg) and the commercial ACL
is 8,190,000 lb (3,714,922 kg). Under the
IFQ program for Gulf grouper and
tilefish species, NMFS distributes
allocation to shareholders on January 1
each year. However, regulations at 50
CFR 622.22(a)(4), authorize NMFS to
withhold distribution of IFQ allocation
SUMMARY:
E:\FR\FM\17DER1.SGM
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]]>Agencies
[Federal Register Volume 83, Number 241 (Monday, December 17, 2018)]
[Rules and Regulations]
[Pages 64478-64480]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-27181]
=======================================================================
-----------------------------------------------------------------------
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: Final rule.
-----------------------------------------------------------------------
SUMMARY: The Federal Maritime Commission (FMC or Commission) is
revising 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: This final rule is effective December 17, 2018.
FOR FURTHER INFORMATION CONTACT: Rachel E. Dickon, Secretary; Phone:
(202) 523-5725; Email: secretary@fmc.gov.
SUPPLEMENTARY INFORMATION:
I. Introduction
Through this interpretive rule, the Federal Maritime Commission is
clarifying its 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.'' This interpretive rule clarifies that in order to violate
Sec. 41102(c), a regulated entity must engage in an unjust or
unreasonable practice or regulation on a normal, customary, and
continuous basis.
---------------------------------------------------------------------------
\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.
---------------------------------------------------------------------------
II. NPRM and Summary of Comments
On September 7, 2018, the Commission issued a Notice of Proposed
Rulemaking (NPRM) seeking public comment on its proposed
interpretation.\2\ Five comments were received in response to the NPRM,
which may be found at the Electronic Reading Room on the Commission's
website at https://www.fmc.gov/18-06/. Comments were received from the
American Association of Port Authorities (AAPA), New York New Jersey
Foreign Freight Forwarders and Brokers Association (NYNJFFF&BA), World
Shipping Council (WSC), International Trade Surety Association (ITSA)
and National Customs Brokers and Forwarders Association of America
(NCBFAA). All five comments received by the Commission were in support
of the rulemaking.
---------------------------------------------------------------------------
\2\ NPRM: Interpretive Rule, Shipping Act of 1984, 83 FR 45367
(Sept. 7, 2018).
---------------------------------------------------------------------------
In their submission, AAPA affirms that the rule would bring the
Commission's interpretation of the Shipping Act's prohibition on unjust
and unreasonable practices and regulations in line with the plain
language meaning of the word ``practice,'' Commission precedent and the
intent of Congress. AAPA does not believe that the rule would leave
potential claimants without remedies, but that the rule would stop
individual instances better suited for resolution under the Carriage of
Goods by Sea Act (COGSA) or other venue from being brought to the
Commission.
NYNJFFF&BA also agrees that the intent of Congress and the plain
language reading of Sec. 41102(c) support this rulemaking. NYNJFFF&BA
believes that without this rule, ocean transportation intermediaries
(OTIs) are at risk of violating the Shipping Act over a single
disagreement or accidental misstep, and this risk hinders resolutions
through settlement. NYNJFFF&BA argues that this rule would limit the
risk of frivolous claims being brought and allow OTIs to operate and
settle claims more fairly and cost effectively. NYNJFFF&BA contends
that claims that cannot be settled can still be brought through other
venues.\3\
---------------------------------------------------------------------------
\3\ In addition to its comments on the current interpretive
rule, NYNJFFF&BA also encourages the Commission to review other
prohibitions in Sec. 41102 as part of future interpretive
rulemakings, alleging that its members have been subject to
penalties for technical violations involving no injured parties and
that these investigations do not serve the purposes of the Shipping
Act of 1984. As NYNJFFF&BA notes, these issues are outside the scope
of this rulemaking, but the Commission will consider these comments
in determining whether to initiate future rulemakings.
---------------------------------------------------------------------------
In its comment, WSC notes that from 1935 to 2001, the Commission
precedent was in line with the
[[Page 64479]]
interpretation presented by this rule, but the Commission departed from
this interpretation between 2010 and 2013. WSC believes that this rule
will remove the uncertainty in the Commission's precedent and
interpretation of Sec. 41102(c). WSC argues that the rule will also
meet the appropriate balance of encouraging meritorious Shipping Act
cases and discourage matters that should be heard in other forums. WSC
also does not believe that this interpretation will prevent would-be
litigants from bringing meritorious claims and that parties will still
be able to take advantage of the other forums that were used prior to
the 2010 change in the Commission's interpretation.
ITSA also fully supports the Commission's proposed interpretation
of Sec. 41102(c). ITSA states that adoption of this interpretation
will not cause a barrier to claimants with legitimate disputes. ITSA
asserts that this rule still allows claimants to seek resolutions
through the claim procedures in 46 CFR 515.23, the Commission's ADR
services, presenting a claim to an OTI's surety or bringing an action
in a proper legal venue.
Finally, NCBFAA also supports the interpretive rule and believes
that this rule will bring Sec. 41102(c) back in line with its original
purpose. NCBFAA believes that, as originally written, the term practice
was not intended to refer to single instances and from 1935 to 2010,
Commission precedent supported this interpretation. NCBFAA argues that
cargo owners will still possess ample civil remedies to resolve
disputes. NCBFAA also emphasizes the importance of Sec. 41102(c) for
stopping systemic malpractices and believes that this rule will assist
the Commission in returning their focus and priorities to the
activities that negatively affect the broader shipping public.
III. Final Rule
For the reasons stated in the NPRM and by the commenters, the
Commission is adopting the proposed interpretive rule without change.
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.'' Beginning with the Houben \4\ decision in
2010 and presented in full in the Commission's 2013 decision in Kobel
v. Hapag-Lloyd,\5\ the Commission has held in a line of recent cases
that discrete conduct with respect to a single shipment, if determined
to be unjust or unreasonable, represents a violation of Sec. 41102(c).
As discussed in the NPRM, this recent interpretation runs contrary to
the original intent of Congress, the rules of statutory construction,
and Commission precedent.\6\ This rule restores the Commission's
interpretation of Sec. 41102(c) to its pre-2010 understanding and
returns the Commission's focus and priorities to the activities of
maritime regulated entities that negatively affect the broader shipping
public.
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\4\ Houben v. World Moving Services, Inc., 31 S.R.R. 1400 (FMC
2010).
\5\ Kobel v. Hapag-Lloyd A.G., 32 S.R.R. 1720, 1731 (2013).
\6\ See 83 FR at 45368-45373.
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Section 41102(c) was never intended to be a method of resolving
every dispute that arises in the receiving, handling, storing or
delivering of cargo. In drafting the 1916 Act, and through its
revisions and reenactment in 1984, Congress chose the word ``practice''
and the phrase, ``establish, observe, and enforce just and reasonable
regulations and practices,'' to describe actions or omissions engaged
in on a normal, customary, and continuous basis. From its origin and as
recently as 2001,\7\ Sec. 41102(c) was interpreted in line with this
understanding. To find a violation of Sec. 41102(c), the Commission
consistently required that the unreasonable regulation or practice was
the normal,\8\ customary, often repeated,\9\ systematic,\10\
uniform,\11\ habitual,\12\ and continuous manner \13\ in which the
regulated common carrier was conducting business. This understanding as
to what constitutes ``regulations and practice'' under the Shipping Act
is supported by multiple accepted rules of statutory construction.\14\
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\7\ Kamara v. Honesty Shipping Service, 29 S.R.R. 321 (ALJ
2001).
\8\ See European Trade Specialists v. Prudential-Grace Lines, 19
S.R.R. 59, 63 (FMC 1979).
\9\ See Intercoastal Investigation, 1935, 1 U.S.S.B.B. 400, 432
(1935).
\10\ See Whitam v. Chicago, R.I. & P. Ry. Co., 66 F. Supp. 1014
(N.D. Tex. 1946).
\11\ See, e.g., Stockton Elevators, 3 S.R.R. 605, 618 (FMC
1964); Intercoastal Investigation, 1935, 1 U.S.S.B.B. at 432.
\12\ See Stockton Elevators, 3 S.R.R. at 618.
\13\ See Stockton Elevators, 3 S.R.R. at 618. See also, McClure
v. Blackshere, 231 F. Supp. 678, 682 (D. Md. 1964).
\14\ See 83 FR at 45370-45371.
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Through this rule, the Commission will return to an interpretation
consistent with its precedent and consistent with rules of statutory
construction. The Commission is aware that the interpretive rule may
prevent some claims from being brought under the Shipping Act. Matters
that may previously have been brought under Sec. 41102(c) however, can
still find resolution in other provisions or regulations of the
Shipping Act \15\ or be adjudicated as matters of contract law, agency
law, or admiralty law. The Commission believes that existing
alternative avenues of redress are sufficient to address those cases.
The Commission believes that this rule returns Sec. 41102(c) to its
proper purpose and allows the Commission to better meet its mission as
intended by Congress.
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\15\ See Total Fitness Equipment, Inc. d/b/a/Professional Gym v.
Worldlink Logistics, Inc., 28 S.R.R. 45 (ALJ 1997); Brewer v.
Maralan, 29 S.R.R. 6 (FMC 2001).
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VI. Rulemaking Analyses
Congressional Review Act
The rule is not a ``major rule'' as defined by the Congressional
Review Act, codified at 5 U.S.C. 801 et seq. The rule will not result
in: (1) An annual effect on the economy of $100,000,000 or more; (2) a
major increase in costs or prices; or (3) significant adverse effects
on competition, employment, investment, productivity, innovation, or
the ability of United States-based companies to compete with foreign-
based companies. 5 U.S.C. 804(2).
Regulatory Flexibility Act
The Regulatory Flexibility Act (codified as amended at 5 U.S.C.
601-612) provides that whenever an agency promulgates a final rule
after being required to publish a notice of proposed rulemaking under
the Administrative Procedure Act (APA) (5 U.S.C. 553), the agency must
prepare and make available for public comment a final regulatory
flexibility analysis (FRFA) describing the impact of the rule on small
entities. 5 U.S.C. 604. An agency is not required to publish a FRFA,
however, for the following types of rules, which are excluded from the
APA's notice-and-comment requirement: Interpretive rules; general
statements of policy; rules of agency organization, procedure, or
practice; and rules for which the agency for good cause finds that
notice and comment is impracticable, unnecessary, or contrary to public
interest. See 5 U.S.C. 553(b).
Although the Commission elected to seek public comment, the rule is
an interpretive rule. Therefore, the APA did not require publication of
a notice of proposed rulemaking in this instance, and the Commission is
not required to prepare a FRFA.
National Environmental Policy Act
The Commission's regulations categorically exclude certain
[[Page 64480]]
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. This rule regards the
Commission's 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
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
amends 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 E. Dickon,
Secretary.
[FR Doc. 2018-27181 Filed 12-14-18; 8:45 am]
BILLING CODE 6731-AA-P
