83 FR 45367 - Interpretive Rule, Shipping Act of 1984
FEDERAL MARITIME COMMISSION Federal Register Volume 83, Issue 174 (September 7, 2018)
Federal Register Volume 83, Issue 174 (September 7, 2018)
| Page Range | 45367-45373 | |
| FR Document | 2018-19328 |
[Federal Register Volume 83, Number 174 (Friday, September 7, 2018)] [Proposed Rules] [Pages 45367-45373] From the Federal Register Online [www.thefederalregister.org] [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: http://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 http://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
![Federal Register / Vol. 83, No. 174 / Friday, September 7, 2018 / Proposed Rules 45367
• Email: rbailey@oshrc.gov. Include Commission, and a reference to of this document. Note that all
‘‘Advance notice of proposed authority where necessary. comments received will be posted
rulemaking, 29 CFR part 2200’’ in the Dated: August 15, 2018. without change to the Commission’s
subject line of the message. Heather L. MacDougall,
website, unless the commenter has
• Fax: 202–606–5417. Chairman.
requested confidential treatment.
• Mail: One Lafayette Centre, 1120 • Docket: For access to the docket to
[FR Doc. 2018–18050 Filed 9–6–18; 8:45 am] read background documents or
20th Street NW, Ninth Floor,
Washington, DC 20036–3457.
BILLING CODE 7600–01–P comments received, go to the
Commission’s Electronic Reading Room
• Hand Delivery/Courier: Same as at: http://www.fmc.gov/18-06, or to the
mailing address. FEDERAL MARITIME COMMISSION Docket Activity Library at 800 North
Instructions: All submissions must Capitol Street NW, Washington, DC
include your name, return address, and 46 CFR Part 545 20573, 9:00 a.m. to 5:00 p.m., Monday
email address, if applicable. Please through Friday, except Federal holidays.
[Docket No. 18–06]
clearly label submissions as ‘‘Advance Telephone: (202) 523–5725.
notice of proposed rulemaking, 29 CFR RIN 3072–AC71
FOR FURTHER INFORMATION CONTACT:
part 2200.’’ Rachel E. Dickon, Secretary; Phone:
Interpretive Rule, Shipping Act of 1984
FOR FURTHER INFORMATION CONTACT: Ron (202) 523–5725; Email: secretary@
Bailey, via telephone at 202–606–5410, AGENCY: Federal Maritime Commission. fmc.gov.
or via email at rbailey@oshrc.gov. ACTION: Notice of proposed rulemaking. SUPPLEMENTARY INFORMATION:
SUPPLEMENTARY INFORMATION: In
SUMMARY: The Federal Maritime I. Executive Summary
accordance with 29 U.S.C. 661(g), the
Occupational Safety and Health Review Commission (FMC or Commission) is The Federal Maritime Commission is
Commission last implemented a seeking public comment on its issuing this notice to obtain public
comprehensive revision of its rules of interpretation of the scope of the comments on clarification and guidance
procedure in 2005. Since that time, Shipping Act prohibition against failing regarding the Commission’s
technological advances, including to establish, observe, and enforce just interpretation of the scope of 46 U.S.C.
implementation of the E-filing system, and reasonable regulations and practices 41102(c) (section 10(d)(1) of the
as well as the evolution of practice relating to or connected with receiving, Shipping Act of 1984).1 Section
before the Commission, have called for handling, storing, or delivering 41102(c) provides that regulated entities
a careful reexamination of the property. Specifically, the Commission ‘‘may not fail to establish, observe, and
Commission’s rules of procedure, as set is clarifying that the proper scope of that enforce just and reasonable regulations
forth in 29 CFR part 2200. To assist in prohibition in the Shipping Act of 1984 and practices relating to or connected
determining what revisions should be and the conduct covered by it is guided with receiving, handling, storing, or
made, the agency is soliciting by the Commission’s interpretation and delivering property.’’ 2
recommendations from the public. It is precedent articulated in several earlier Beginning with the Houben 3 decision
especially interested in hearing from Commission cases, which require that a in 2010 and presented in full in the
those who practice before it on what regulated entity engage in a practice or Commission’s 2013 decision in Kobel v.
rules their experience suggests would regulation on a normal, customary, and Hapag-Lloyd, the Commission has held
benefit from a revision. While continuous basis and that such practice in a line of recent cases that discrete
recommended changes to any rule will or regulation is unjust or unreasonable conduct with respect to a particular
be considered, the Commission is in order to violate that section of the shipment, if determined to be unjust or
especially interested in whether: Rules Shipping Act. unreasonable, represents a violation of
on the computation of time should be DATES: Submit comments on or before: § 41102(c), regardless of whether that
simplified; electronic filing and service October 10, 2018. conduct represents a respondent’s
should be mandatory and, if so, what practice or regulation.4 These decisions
ADDRESSES: You may submit comments,
exceptions, if any, should be allowed; identified by the Docket No. 18–06 by diverge from consistent Commission
the definition of ‘‘affected employee’’ the following methods: precedent dating back to 1935 and
should be broadened; citing to • Email: secretary@fmc.gov. Include reaffirmed as recently as 2001 which
Commission decisions as posted on the in the subject line: ‘‘Docket 18–06, required that a regulated entity must
agency’s website should be allowed; the Interpretive Rule Comments.’’ engage in a practice or regulation on a
rule on the staying of a final order is not Comments should be attached to the normal, customary, and continuous
needed and should be eliminated; the email as a Microsoft Word or text- basis in order to be found to have
requirement for agency approval of searchable PDF document. Only non- violated § 41102(c) of the Shipping Act.
settlements should be narrowed or confidential and public versions of In simple summary, discrete or
eliminated; the grounds for obtaining confidential comments should be 1 Some authorities cited herein refer to § 41102(c)
Commission review of interlocutory submitted by email. while others refer to section 10(d)(1). For ease of
orders issued by its administrative law • Mail: Rachel E. Dickon, Secretary, reading, we will generally refer to § 41102(c) in
judges should be revised; protection of Federal Maritime Commission, 800 analyzing these authorities.
2 46 U.S.C. 41102(c).
sensitive personal information should North Capitol Street NW, Washington,
daltland on DSKBBV9HB2PROD with PROPOSALS
3 Houben v. World Moving Services, Inc., 31
be broadened; and whether the DC 20573–0001.
S.R.R. 1400 (FMC 2010).
threshold amount for cases referred for • Instructions: For detailed 4 Kobel v. Hapag-Lloyd A.G., 32 S.R.R. 1720, 1731
mandatory settlement proceedings instructions on submitting comments, (2013) (‘‘The allegation that a single failure to
should be increased. Comments including requesting confidential ‘‘observe or enforce’’ just and reasonable regulations
suggesting a rule change should include treatment of comments, and additional or practices is not a failure does not comport with
the language of section 10(d)(1), which mandates
a brief discussion of the reasons for the information on the rulemaking process, regulated entities not to ‘fail to . . . observe and
change, why the change would facilitate see the Public Participation heading of enforce’ just and reasonable regulations and
improved practice before the the SUPPLEMENTARY INFORMATION section practices.’’).
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![45368 Federal Register / Vol. 83, No. 174 / Friday, September 7, 2018 / Proposed Rules
occasional actions by regulated entities entities including ocean carriers, marine identical language in other federal
not reflecting a practice or regulation terminal operators (MTOs), and ocean statutes,16 Congress fully understood
would not constitute a violation of transportation intermediaries (OTIs), as what it was doing in using the phrase
§ 41102(c). well as members of the shipping public, ‘‘establish, observe, and enforce just and
Specifically, the Commission is including cargo shippers and drayage reasonable regulations and practices’’—
considering an interpretive rule truckers, and whether claims that would and what those words meant.17
consistent with Commission precedent no longer fall under § 41102(c) under Section 41102(c) of the 1984 Act
articulated in cases including the contemplated interpretation would originates from section 17 of the 1916
Intercoastal Investigation,5 Altieri,6 be adequately resolved before the Act. Section 17 was commonly divided
Stockton Elevators,7 European Commission under other sections of the into two parts and referred to as
Trade,8 A.N. Deringer,9 and Kamara 10 Act or in other legal dispute venues. ‘‘section 17, first paragraph’’ and
that would restore the scope of The interpretation would take the form ‘‘section 17, second paragraph.’’ The
§ 41102(c) to prohibiting unjust and of an interpretive rule codified in 46 first paragraph addressed unjustly
unreasonable practices and regulations. CFR part 545. The language of the discriminatory rates charged to shippers
These decisions require that a regulated proposed rule is set forth below. while the second paragraph addressed
entity engage in a practice or regulation II. Background just and reasonable practices by carriers
on a normal, customary, and continuous and other persons subject to the Act.
basis and a finding that such practice or A. Statutory Language and Legislative The second paragraph of section 17
regulation is unjust or unreasonable to History reads as follows:
violate that section of the Shipping Act. Congress first used the statutory Every such carrier and every other person
The Commission believes that this language addressing the legal duty of subject to this act shall establish, observe,
represents the proper interpretation of transportation common carriers to and enforce just and reasonable regulations
the statutory language of the provision ‘‘establish, observe, and enforce just and and practices relating to or connected with
that, within the full context of the 1916 reasonable . . . regulations and the receiving, handling, storing, or delivering
Act and the 1984 Act, is consistent with practices . . . affecting [cargo] of property. Whenever the Board finds any
statutory and legislative history, judicial such regulation or practice is unjust or
classification, rates, or tariffs . . . [and] unreasonable it may determine, prescribe,
precedent and Commission case law the manner and method of presenting, and order enforced a just and reasonable
embodied in cases such as Stockton marking, packing, and delivering regulation or practice.
Elevators, and comports with accepted property for transportation . . .’’ in the
rules of statutory construction. 1910 Mann-Elkins Act amendment Public Law 64–260 § 17 (1916)
This interpretation restores § 41102(c) (Mann-Elkins) 11 to the Interstate (emphasis added).18
to its proper function and purpose As a part of the general transportation
Commerce Act (ICA).12 The Mann-
under the Shipping Act of 1984 and will deregulatory reform trends in the 1970’s
Elkins language clearly focused on the
return the Commission’s focus and operating and business practices of through 1990’s,19 Congress eliminated
priorities to the activities of maritime railroads as commonly used and the sentence regarding the
regulated entities that negatively affect imposed upon passengers and cargo Commission’s authority to prescribe or
the broader shipping public—all as shippers. This fundamental common order regulations or practices in the
intended by Congress in its enactment carrier duty is the foundational 1984 Act. Congress, however, reenacted
of the 1916 Act and the 1984 Act. cornerstone of the ICA legislation, its the first sentence of section 17’s second
Recognizing that this interpretation statutory purpose, and its proper paragraph and placed that provision in
would prune and pare back the types of interpretation. section 10(d)(1), which, following the
recent claims that have been be filed The provenance of the statutory 2006 recodification of the 1984 Act,
with the Commission to those related to language and its inclusion six years later became 46 U.S.C. 41102(c). That
the purposes of the Shipping Act’s in the Shipping Act of 1916 (1916 language from section 17, second
§ 41102(c), traditional legal venues will Act) 13 has been recognized by the
16 For example, the Packers and Stockyards Act
continue to be available to parties courts. In United States Navigation Co.
of 1921, which was enacted to maintain
injured by discrete instances of v. Cunard S.S. Co. Ltd. 284 U.S. 474 competition in the livestock industry. The Act bans
unreasonable or unjust conduct (1932), the U.S. Supreme Court tied a discrimination, manipulation of price, weight,
consistent with long established firm knot binding the ICA and the 1916 livestock or carcasses; commercial bribery;
Act where the court gave a general misrepresentation of source, condition, or quality of
maritime actions and other statutes livestock; and other unfair or manipulative
specifically enacted by Congress, and review of various sections of the 1916 practices. Section 208 of the Packers and
long recognized common law remedies, Act, including section 17 14 and held Stockyards Act of 1921 provides that, ‘‘[i]t shall be
all designed to address such that, ‘‘[t]hese and other provisions of the the duty of every stockyard owner and market
Shipping Act clearly exhibit the close agency to establish, observe, and enforce just,
circumstances. reasonable and nondiscriminatory regulations and
We are seeking comment on this parallelism between the act and its practices in respect to the furnishing of stockyard
refocus of § 41102(c), how such an prototype, the ICA, and the applicability services.’’ 7 U.S.C. 208.
interpretation would affect regulated both of the principals of construction 17 For a more detailed discussion of the legislative
and administration.’’ 15 history of this statutory language, see Gruenberg-
5 Intercoastal Investigation, 1935, 1 U.S.S.B.B. As the enactment of the 1916 Act Reisner v. Respondent Overseas Moving Specialist,
34 S.R.R. 613, 638–644 (FMC 2016).
400 (1935). demonstrates, together with the use of 18 The two separate provisions of section 17 of the
6 J.M. Altieri v. Puerto Rico Ports Authority, 7
daltland on DSKBBV9HB2PROD with PROPOSALS
Shipping Act are commonly referred to as ‘‘section
F.M.C. 416 (ALJ 1962). 11 Mann-Elkins Act, 61st Congress, 2nd session,
17, first paragraph’’ and ‘‘section 17, second
7 Investigation of Certain Practices of Stockton Ch. 309, 36 Stat. 539, enacted June 18, 1910. paragraph.’’
Elevators, 3 S.R.R. 605 (FMC 1964). 12 The Interstate Commerce Act of 1887, Ch. 104, 19 See the Railroad Revitalization and Regulatory
8 European Trade Specialists v. Prudential-Grace 24 Stat 379 (1887). Reform Act of 1976, Public Law 94–210; Staggers
Lines, 19 S.R.R. 59, 63 (FMC 1979). 13 The Shipping Act of 1916, Sept. 7, 1916, Ch.
Act of 1980, Public Law 96–448; Motor Carrier Act
9 A.N. Deringer, Inc. v. Marlin Marine Services, 451, 39 Stat. 728. of 1990, Public Law 96–296; Airline Deregulation
Inc., 25 S.R.R. 1273 (SO 1990). 14 Section 17 is the origin of section 10(d)(1), as
Act, Public Law 95–504; and the Interstate
10 Kamara v. Honesty Shipping Service, 29 S.R.R. discussed infra. Commerce Commission Termination Act of 1995,
321 (ALJ 2001). 15 Id. at 484. Public Law 104–88.
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paragraph, first sentence, requiring that repeated,22 systematic,23 uniform,24 judicial interpretation . . . Owing to its wide
no regulated entity may fail to establish, habitual,25 and continuous manner 26 and variable connotation, a practice, which
observe, and enforce just and reasonable (hereinafter ‘‘Normal, Customary & unless restricted ordinarily means an often
repeated and customary action, is deemed to
regulations and practices relating to or Continuous’’) in which the regulated
apply only to acts or things belonging to the
connected with the receiving, handling, common carrier was conducting class as those meant by the words of the law
storing, or delivery of property—is now business. that are associated with it . . . In section 18,
found in § 41102(c) of the 1984 Act. The USSBB, a predecessor to the the term ‘‘practices’’ is associated with
Having a long legislative provenance, Commission, considered the term various words, including ‘‘rates’’, ‘‘charges’’,
Congress used the word ‘‘practice’’ and ‘‘practice’’ as used in the 1916 Act in and ‘‘tariffs’’.
the full phrase, ‘‘establish, observe, and Intercoastal Investigation, 1935, 1 FMC
Id. at 431–432 (emphasis added).27
enforce just and reasonable regulations 400 (1935), an investigation that covered Prior to the 1984 Act, Commission
and practices,’’ in both the original 1916 sixteen years of steam ship conference decisions analyzing situations that
Act and in section 10(d)(1) of the 1984 activities. The USSBB held: involved discrete conduct focused on
Act, now § 41102(c), in a particular way The provisions of the Shipping Act, 1916, the meaning of the word ‘‘practice’’ and
and in a context that was clear to the also apply to these respondents. It is there determined that conduct that did not
drafters, to the Commission, and to the provided . . . that carriers shall establish, reflect a practice was outside the scope
reviewing courts. observe, and enforce just and reasonable
rates, charges, (cargo) classifications, and
of the first sentence of the second
B. Judicial Precedent tariffs and just and reasonable regulations paragraph of section 17. In Altieri,
and practices related thereto . . .The terms Stockton Elevators, and European Trade
In Baltimore & Ohio Railroad Specialists, A.N. Deringer, Kamara, and
‘‘rates’’, ‘‘charges’’, ‘‘tariffs’’, and ‘‘practices’’
Company v. United States, 277 U.S. 291 as used in transportation have received other cases 28 the Commission used the
(1923), the U.S. Supreme Court term ‘‘practice’’ in a consistent manner
considered the question of what such adverse treatment cannot be found to violate for all the places it appears in the
constituted a ‘‘practice’’ within the the section as a matter of law [emphasis in Shipping Act.
contemplation of Congress in the original].’’
In Stockton Elevators, which was later
22 See Intercoastal Investigation, 1935, 1
Interstate Commerce Act: adopted by the Commission in its
U.S.S.B.B. 400, 432. (‘‘Owing to its wide and
The word ‘‘practice’’, considered generally variable connotations, a practice which unless entirety, the FMC’s Presiding Examiner
and without regard to context, is not capable restricted ordinarily means an often and customary found that a violation did not occur
of useful construction. If broadly used, it action, is deemed to acts or things belonging to the
same class as those meant by the words of the law
because of the infrequency of the
would cover everything carriers are relevant actions. According to that
that are associated with it.’’ [cites omitted]
accustomed to do. Its meaning varies so [emphasis added]. decision, a practice is something that,
widely and depends so much upon the 23 See Whitam v. Chicago, R.I. & P. Ry. Co., 66
connection in which it is used that Congress ‘‘is habitually performed and implies
F. Supp. 1014 (ND TX 1946) (‘‘The word ‘a practice’
will be deemed to have intended to confine as used in the decision, or used anywhere properly,
continuity . . . not an occasional
its application to acts or things belonging to implies systematic doing of the acts complained of, transaction such as here shown.’’ 29 The
the same general class as those meant by the and usually as applied to carriers and shippers Presiding Examiner found the
words associated with it. generally.’’ (emphasis added).’’ respondent’s actions to be occasional
24 See Stockton Elevators, 3 S.R.R. 605, 618 (FMC
Id. at 299–300 (citation omitted) transactions and not a ‘‘practice’’
1964). (‘‘It cannot be found that the Elevator
(emphasis added). engaged in a ‘practice’ within the meaning of because they were not the ‘‘usual course
Section 17. The essence of a practice is uniformity. of conduct’’ and so not a violation of
The Interstate Commerce Commission It is something habitually performed and it implies section 17.30
(ICC), the United States Shipping Board continuity . . . the usual course of conduct. It is not Similarly, in European Trade
(USSB) (the agency created by Congress an occasional transaction such as here shown.
Specialists, Inc. v. Prudential-Grace
in the 1916 Act), its successor agencies, Intercoastal Investigation, 1935, 1 U.S.S.B.B. 400,
432; B&O By. Co. v. United States 277 U.S. 291, Lines, Inc., the ALJ specifically noted,
and the currently constituted 300, Francesconi & Co. v. B&O Ry. Co., 274 F. 687, ‘‘[a] ‘practice’ unless the term is in some
Commission,20 together with state and 690; Whitham v. Chicago R.I. & P. Ry. Co., 66 F. way restricted by decision or statute,
federal courts have consistently ruled Supp. 1014; Wells Lamont Corp. v. Bowles, 149 F.2d
means ‘‘an often repeated and
that ‘‘practice’’ means; (1) the acts/ 364 (emphasis added). See also, McClure v.
Blackshere, F. Supp. 678, 682 (D. Md. 1964) customary action.’’ 31 There, the ALJ
omissions of the regulated common (‘‘ ‘Practice’ ordinarily implied uniformity and was considering if an alleged failure to
carrier that were positively established continuity, and does not denote a few isolated acts, notify a shipper of a dispute on the
by the regulated common carrier and and uniformity and universality, general notoriety
and acquiescence, must characterize the actions on applicable tariff rate violated section 17
imposed on the passenger/cargo
which a practice is predicated.’’ (citations omitted) of the 1916 Act. The ALJ found that in
interest, and (2) such act/omission was (emphasis added)). examining the record, the respondent’s
the normal,21 customary, often 25 See Stockton Elevators, 3 S.R.R. 605, 618 (FMC
normal practice was to notify shippers
1964). (‘‘It cannot be found that the Elevator
20 The United States Shipping Board (USSB) was engaged in a ‘practice’ within the meaning of 27 Intercoastal Investigations cited two ICA
succeeded in 1933 by the United States Shipping Section 17. . . . It is something habitually
Board Bureau of the Department of Commerce performed and it implies continuity . . . the usual railroad cases as authority. See Baltimore & Ohio
(USSBB), Executive Order No. 6166 (1933). The course of conduct.’’ (citations omitted) (emphasis Railroad Company v. United States, 277 U.S. 291
USSBB was succeeded in 1936 by the United States added)). (1923) and Missouri Pacific R. Co. v. Norwood, 283
Maritime Commission (USMC), 49 Stat. 1985. In 26 See Stockton Elevators, 3 S.R.R. 605, 618 (FMC U.S. 249, 257 (1931).
28 A series of cases alleging section 10(d)(1)
1950, the USMC was succeeded by the Federal 1964). (‘‘It cannot be found that the Elevator
Maritime Board (FMB), 64 Stat.1273. The FMC was engaged in a ‘practice’ within the meaning of violations has established that a complainant must
daltland on DSKBBV9HB2PROD with PROPOSALS
established as an independent regulatory agency by Section 17. . . . It is something habitually demonstrate regulations and practices, as opposed
Reorganization Plan No. 7, effective August 12, performed and it implies continuity . . . .’’ to identifying what might be an isolated error or
1961. The U.S. Supreme Court treated the FMC and (citations omitted) (emphasis added)). See also, understandable misfortune. See, e.g., Informal
all predecessor agencies as the ‘‘Commission’’ for McClure v. Blackshere, F. Supp. 678, 682 (D. Md. Docket No. 1745(I), Mrs. Susanne Brunner v. OMS
purposes of judicial review. See Volkswagenwerk v. 1964) (‘‘ ‘Practice’ ordinarily implied uniformity Moving Inc., slip decision served January 27, 1994,
Federal Maritime Commission, 390 U.S. 261, 269 and continuity, and does not denote a few isolated administratively final March 8, 1994.
29 Investigation of Certain Practices of Stockton
(1968). acts, and uniformity and universality, general
21 See European Trade Specialists v. Prudential- notoriety and acquiescence, must characterize the Elevators, 8 F.M.C. 187, 200–201 (Examiner 1964).
30 Id.
Grace Lines, 19 S.R.R. 59, 63 (FMC 1979). (Unless actions on which a practice is predicated.’’
its normal practice was not to so notify the shipper, (citations omitted) (emphasis added)). 31 17 S.R.R. 1351, 1361 (ALJ 1977).
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![45370 Federal Register / Vol. 83, No. 174 / Friday, September 7, 2018 / Proposed Rules
of problems and this case involved the provision is to be given effect.’’ 35 Elevators, European Trade Specialists,
allegation of a single departure from that However, the commentators offer two Deringer, and Kamara as to what
practice which was otherwise just and relevant notes of caution. constitutes ‘‘regulations and practice’’
reasonable. Regardless of the unjustness First, in discussing the Principle of under the Shipping Act is supported by
or unreasonableness of the respondent’s Interrelating Canons, they advise, ‘‘No and consistent with multiple accepted
failure to notify the shipper, such action canon of interpretation is absolute. Each rules of statutory construction. Proper
did not represent a practice and thus may be overcome by the strength of consideration and application of
there could be no section 17 violation. differing principles that point in other numerous canons of statutory
In Kamara v. Honesty Shipping directions . . . It is a rare case in which construction demonstrates that Congress
Service, 29 S.R.R. 321 (ALJ 2001), the each side does not appeal to a different has spoken to the issue at hand.39
ALJ held that, ‘‘It is not clear that a canon to suggest its desired (1) The Syntactic Canon concerns
outcome.’’ 36 Second, in later discussion grammar. Reviewing § 41102(c), the
carrier’s simple failure to remit payment
of the surplusage canon, they note, ‘‘If regulated entity is the subject of the
to a subcontracting carrier constitutes a
a provision is susceptible of (1) a sentence. The subject is directed—i.e.
Shipping Act violation, although the
meaning that . . . deprives another do not fail to—then comes the active
shipper would certainly have a
provision of all independent effect, and verbs—‘‘establish, observe, and enforce’’
commercial contractual claim.
(2) another meaning that leaves both just and reasonable regulations and
These cases addressing Section provisions with some independent practices. The regulated entity is
10(d)(1) violations correctly hold that a operation, the later should be preferred ordered to, first, initiate the creation,
complainant must demonstrate . . . So, like all other canons, this one dissemination, and publication of such
regulations and practices and articulates must be applied with judgement and just and reasonable regulations and
the correct scope and interpretation of discretion, and with careful regard to practices, and simultaneously, to
§ 41102(c). This precedent stands in context.’’ 37 observe and enforce those regulations
stark contrast to recent Commission The Commission has, in these recent and practices that were created by that
decisions that adopted a far more cases, strained to give independent regulated entity.40
expansive interpretation of the conduct application of the elements, ‘‘establish, (2) The Ordinary Meaning Canon
covered by § 41102(c) untethered to the observe, or enforce’’ but, in so doing, requires that the words of a statute are
language of the statute, the legislative has deprived any operation of a to be taken in their natural and ordinary
history, Commission precedent, or, most discussion or application of the alleged signification and import.41 The judicial
importantly, the purpose of the unjust or unreasonable practice or interpretation of the phrase ‘‘practices’’
Shipping Act to address common carrier regulation being inflicted upon the by multiple courts applying the Mann-
duties.32 general shipping public. The ‘‘context’’ Elkins Act, the 1916 Act, and other
In the 2013 Kobel decision, the of § 41102(c) itself within the Shipping statutes, all utilized the Ordinary
Commission charted a different course Act and other factors discussed below Meaning Canon to find the meaning of
by disjoining the statute’s conjunctive demonstrate the flaws in the the term ‘‘practice’’ as intended by
language of ‘‘establish, observe, and Commission’s recent line of section Congress.42 All came to a reasoned
enforce’’ and specifically identified that 41102(c) decisions. Moreover, numerous conclusion that confirms the
§ 41102(c) contains three discrete other canons of construction ‘‘point in Commission’s proposed
prohibitions: (1) A prohibition against other directions,’’ 38 all as discussed interpretation.43
failing to establish just and reasonable below. (3) The Prior-Construction Canon
regulations and practices; (2) a It is this line of recent cases requires that ‘‘[w]hen administrative
prohibition against failing to observe determining that a discrete failure to and judicial interpretations have settled
just and reasonable regulations and observe and enforce an established just the meaning of an existing statutory
practices; and (3) a prohibition against and reasonable regulation or practice provision, repetition of the same
failing to enforce just and reasonable that the Commission seeks to reform in language in a new statute indicates, as
regulations.33 Since Kobel, the this rulemaking so as to return the scope a general matter, the intent to
Commission has interpreted section of § 41102(c) to its proper role and incorporate its administrative and
§ 41102(c) to mean that a single failure purpose within the Shipping Act. In the
39 See Bell Atlantic Telephone Companies v.
to fulfill a single legal obligation of any future, the Commission intends to
Federal Communications Commission, 131 F.3d
description itself could constitute a follow the reasoning in Intercoastal 1044, 1047 (D.C. Cir. 1997) (‘‘Context serves an
violation of § 41102(c).’’ 34 Investigation, Altieri, Stockton especially important role in textual analysis of a
The Commission looked to a single Elevators, European Trade Specialists, statute when Congress has not expressed itself as
Deringer, and Kamara which offer univocally as might be wished.’’).
rule of construction, the surplusage 40 For a fuller discussion of the Syntactic Canon,
cannon, to support its course change precedent as to what properly applies see Gruenberg-Reisner v. Respondent Overseas
from prior Commission and court the full meaning and purpose of Moving Specialist, 34 S.R.R. 613, 641 (FMC 2016).
rulings. That rule provides that, ‘‘If ‘‘establish, observe, and enforce just and 41 See, e.g., James Kent, Commentaries on
possible, every word and every reasonable regulations and practices’’ American Law 432 (1826) (‘‘The words of a statute
under the Shipping Act and a violation are to be taken in their natural and ordinary
signification and import; and if technical words are
32 See Adair v. Penn-Nordic Lines, Inc., 26 S.R.R. of § 41102(c). used, they are to be taken in a technical sense.’’).
11 (ALJ 1991); Tractors & Farm Equip. Ltd v. 42 See Intercoastal Investigation, 1935, 1
C. Rules of Statutory Construction
daltland on DSKBBV9HB2PROD with PROPOSALS
Cosmos Shipping Co., Inc., 26 S.R.R. 788 (ALJ U.S.S.B.B. 400 (1935); Whitam v. Chicago, R.I. & P.
1992); Houben v. World Moving Servs., Inc., 31 The precedent in Intercoastal Ry. Co., 66 F. Supp. 1014 (N.D. Tex. 1946); McClure
S.R.R. 1400 (FMC 2010). v. Blackshere, 231 F. Supp. 678 (D. Md. 1964);
33 Kobel, 32 S.R.R. at 1735.
Investigation, Altieri, Stockton
Stockton Elevators, 8 F.M.C. 187 (1964); and
34 See, e.g., Bimsha Int’l v. Chief Cargo Servs., 32 European Trade Specialists, 19 S.R.R. 59 (FMC
35 Reading Law: The Interpretation of Legal Texts,
S.R.R. 1861, 1865 (FMC 2013) (‘‘NVOCCs violate 1979).
[§ 41102(c)] when they fail to fulfill NVOCC Scalia and Garner, 2012, pg. 174. 43 For a fuller discussion of the Ordinary Meaning
36 Id. at 59, emphasis in the original.
obligations, through single or multiple actions or Canon, see Gruenberg-Reisner v. Respondent
37 Id. at page 176, emphasis added.
mistakes, and therefore engage in an unjust and Overseas Moving Specialist, 34 S.R.R. 613, 641–642
unreasonable practice’’ (emphasis added)). 38 Id. at 59. (FMC 2016).
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![Federal Register / Vol. 83, No. 174 / Friday, September 7, 2018 / Proposed Rules 45371
judicial interpretations as well.’’ 44 (emphasis added). The application of extraterritorial application canon. Last,
Congress used the same 1916 Shipping the term ‘‘practices’’ must be confined Gruenberg-Reisner also discusses the
Act language in the new 1984 Act. The within the regulated transportation duty of federal agencies to observe and
Commission’s holdings in Intercoastal world of common carriage, its adhere to the doctrine of stare decisis.55
Investigation, 1935, 1 U.S.S.B.B. 400 specialized lexicon and its association
D. Remedies
(1935), the case law, including ICA with various words including ‘‘rates,’’
federal court cases, cited therein as ‘‘charges,’’ and ‘‘tariffs.’’ 51 The Commission is aware that
supporting precedent,45 Altieri, 46 (5) In Atlantic Cleaners & Dryers, Inc. modifying the application of recent
Stockton Elevators,47 the case law, v. United States, 286 U.S. 427 (1932), § 41102(c) cases may pare back
including ICA federal court cases, cited the U.S. Supreme Court framed the complainants’ ability in some factual
therein as supporting precedent, and Presumption of Consistent Usage Canon circumstances to claim a Shipping Act
European Trade 48 was incorporated as follows, ‘‘[t]here is a natural violation and thus seek redress before
into the new statute as well.49 Justice presumption that identical words used the Commission when they are harmed
Felix Frankfurter expressed the maxim in different parts of the same act are by an act or omission of a regulated
as ‘‘if a word is obviously transplanted intended to have the same meaning. Id. entity. However, § 41102(c) was not
from a legal source, whether the at 433 (emphasis added). In the 1984 designed to be the universal panacea for
common law or other legislation, it Act, Congress used the term ‘‘practice’’ each and every problem or grievance
brings the old soil with it.’’ 50 or ‘‘practices’’ eight times in three that arises in the maritime realm of
(4) The Associated Words Canon of different sections of the new legislation: receiving, handling, storing, or
construction requires that associated Section 5 (Agreements); section 8 delivering property. To interpret the
words bear on one another’s meaning. In (Tariffs); and section 10 (Prohibited Shipping Act as duplicative of every
Intercoastal Investigation, 1935, the Acts). These usages of ‘‘practice’’ are in other statutory and common law
United States Shipping Board complete harmony with the original maritime remedy would frustrate
considered the term ‘‘practice’’ as used 1910 Mann-Elkins Act and the original Congressional intent in enacting
in the 1916 Act and determined that, section 17 of the 1916 Act’s usage of different statutory schemes and
‘‘[o]wing to its wide and variable ‘‘practices’’ referenced above.52 undermine the purpose of the Shipping
connotation, a practice which unless (6) The Whole-Text Canon requires Act.
restricted ordinarily means an often that the entire statutory structure, In A.N. Deringer, Inc. v. Marlin
repeated and customary action, is statutory scheme and analysis must be Marine Services, Inc., 25 S.R.R. 1273,
deemed to apply only to acts or things considered. In K Mart Corp. v. Cartier, 1276, 1277 (SO 1990), a post 1984 case
belonging to the class as those meant by Inc., 486 U.S. 281 (1988), the U.S. that followed the Altieri, Intercoastal
the words of the law that are associated Supreme Court expressed the Whole- Investigation, Stockton Elevators,
with it.’’ 1 U.S.S.B.B. at 431–432 Text Canon as follows, ‘‘In ascertaining European Trade Specialists line of
the plain meaning of the statute, the precedent in a case considering what is
44 Bragdon v. Abbott, 524 U.S. 624, 645 (1998) court must look to the particular now § 41102(c), the Settlement Officer
(emphasis added). statutory language at issue, as well as addressed the effect of an overly broad
45 Intercoastal at 432.
the language and design of the statute as interpretation of section 10(d)(1) on
46 J.M. Altieri v. Puerto Rico Ports Authority, 7
a whole.’’ Id. at 291. The Congressional other maritime statutes, such as the
F.M.C. 416 (ALJ 1962). ‘‘If the action of respondent
were one of a series of such occurrences, a practice intent, overall context and statutory Carriage of Goods by Sea Act
might be spelled out that would invoke the mandate of the 1984 Shipping Act (COGSA).56 COGSA is the United States
coverage of section 17. Hecht, Levis and Kahn, Inc. makes clear that Congress wanted the enactment of the international
v. Isbrandtsen, Co., Inc., 3 F.M.B. 798 (1950).
However, the action of the respondent is an isolated Commission to focus its regulatory convention commonly referred to as the
or ‘one shot’ occurrence. Complainant has alleged authority on ‘‘establish[ing] a Hague Rules. This treaty was intended
and proved only the one instance of such conduct. nondiscriminatory regulatory process
It cannot be found to be a ‘practice’ within the for the common carriage of goods by 55 See Motor Vehicle Mfrs. Ass’n v. State Farm
meaning of the last paragraph of section 17.’’ Id. at Insurance, 463 U.S. 29 (1983). ‘‘[A]n agency
420 (emphasis in original).) water . . .’’ 53 and on maritime changing its course . . . is obligated to supply a
47 3 S.R.R. at 618 (‘‘It cannot be found that the activities that: Result in substantial reasoned analysis for the change . . . .’’ Id. at 42.
Elevators engaged in a ‘practice’ within the meaning reduction in competition and are The Commission’s case law affirmed this obligation
of section 17. The essence of a practice is detrimental to commerce. In the 1998 in Harrington & Co. v. Georgia Ports Authority, 23
uniformity. It is something habitually performed S.R.R. 753 (ALJ 1986), where the Commission held,
and it implies continuity . . . the usual course of amendments, Congress injected ‘‘the decision to depart from precedent is not taken
conduct. It is not an occasional transaction such as additional competitive market-driven lightly and requires compelling reasons . . . the
here shown. Intercostal Investigation, 1935, 1. provisions into the Shipping Act of courts are emphatic in requiring agencies to follow
USSBB 400, 432; B&O Ry. Co., 274 F. 687, 690; 1984.54 their precedents or explain with good reason why
Whitham v. Chicago R.I. & P. Ry. Co., 66 F. Supp. they choose not to do so.’’ Id. at 766.
1014; Wells Lamont Corp. v. Bowles, 149 F.2d (7) The Gruenberg-Reisner decision, 56 46 U.S.C. 3070, Public Law 109–304, 6(c), 120
364.’’). supra, also discusses the relevant Stat. 1516 (2006).
48 19 S.R.R. at 63. (‘‘Even assuming, without application of the negative implication 57 See Gilmore and Black, The Law of Admiralty,
deciding, that European was not notified of the canon and the presumption against (2d ed. 1975). ‘‘This compromise was so well
classification and rating problem we cannot say that thought of that when, between 1921 and 1924,
such conduct by Hipage amounts to a violation of representatives of the shipping world and of the
51 For a more detailed discussion of the
Section 17. Unless its normal practice was not to maritime nations sought by conference to arrive at
so notify the shipper, such adverse treatment Associated Word Canon, see Gruenberg-Reisner v.
terms suitable for uniform worldwide treatment of
cannot be found to violate the section as a matter Respondent Overseas Moving Specialist, 34 S.R.R.
the shipper carrier relation under ocean bills of
daltland on DSKBBV9HB2PROD with PROPOSALS
of law. Investigation of Certain Practices of 613, 645 (FMC 2016).
52 For a more detailed discussion of the
lading, the ‘‘Hague Rules’’ which they adopted, first
Stockton Elevators, 8 F.M.C. 181, 200 [3 S.R.R. 605] as a set of clauses for voluntary inclusion in bills
(1964).’’ (emphasis in original)). Presumption of Consistent Usage Canon, see of lading and then as a Convention to which the
49 For a more detailed discussion of the Prior- Gruenberg-Reisner v. Respondent Overseas Moving adherence of maritime nations was invited,
Construction Canon, see Gruenberg-Reisner v. Specialist, 34 S.R.R. 613, 642–643 (FMC 2016). embodied the Harter Act compromise in the main
Respondent Overseas Moving Specialist, 34 S.R.R. 53 See 46 U.S.C. 40101.
outline. In 1936, the United States adhered to the
613, 647–649 (FMC 2016). 54 For a more detailed discussion of the Whole Convention, and Congress passed in
50 Felix Frankfurter, Some Reflections on the Text Canon, see Gruenberg-Reisner v. Respondent implementation the Carriage of Goods By Sea Act,
Reading of Statutes, 47 Colum. L. Rev. 527, 537 Overseas Moving Specialist, 34 S.R.R. 613, 644 which with minor differences follows verbatim the
(1947). (FMC 2016). Hague Rules.’’ Id. at 144–145.
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![Federal Register / Vol. 83, No. 174 / Friday, September 7, 2018 / Proposed Rules 45373
How do I submit confidential business excluded from the APA’s notice-and- Regulation Identifier Number
information? comment requirement: Interpretative
rules; general statements of policy; rules The Commission assigns a regulation
The Commission will provide identifier number (RIN) to each
confidential treatment for identified of agency organization, procedure, or
practice; and rules for which the agency regulatory action listed in the Unified
confidential information to the extent Agenda of Federal Regulatory and
allowed by law. If your comments for good cause finds that notice and
comment is impracticable, unnecessary, Deregulatory Actions (Unified Agenda).
contain confidential information, you The Regulatory Information Service
must submit the following by mail to or contrary to public interest. See 5
U.S.C. 553(b). Center publishes the Unified Agenda in
the address listed above under April and October of each year. You
ADDRESSES: Although the Commission has elected may use the RIN contained in the
• A transmittal letter requesting to seek public comment on this heading at the beginning of this
confidential treatment that identifies the proposed rule, the rule is an document to find this action in the
specific information in the comments interpretative rule. Therefore, the APA Unified Agenda, available at http://
for which protection is sought and does not require publication of a notice www.reginfo.gov/public/do/
demonstrates that the information is a of proposed rulemaking in this instance, eAgendaMain.
trade secret or other confidential and the Commission is not required to
research, development, or commercial prepare an IRFA. List of Subjects in 46 CFR Part 545
information. Antitrust, Exports, Freight forwarders,
• A confidential copy of your National Environmental Policy Act
Maritime carriers, Non-vessel-operating
comments, consisting of the complete The Commission’s regulations common carriers, Ocean transportation
filing with a cover page marked categorically exclude certain intermediaries, Licensing requirements,
‘‘Confidential-Restricted,’’ and the rulemakings from any requirement to Financial responsibility requirements,
confidential material clearly marked on prepare an environmental assessment or Reporting and recordkeeping
each page. You should submit the an environmental impact statement requirements.
confidential copy to the Commission by because they do not increase or decrease
mail. For the reasons set forth above, the
air, water or noise pollution or the use
• A public version of your comments Federal Maritime Commission proposes
of fossil fuels, recyclables, or energy. 46
with the confidential information to amend 46 CFR part 545 as follows:
CFR 504.4. The proposed rule describes
excluded. The public version must state
the Commission’s proposed PART 545—INTERPRETATIONS AND
‘‘Public Version—confidential materials
interpretation of the scope of 46 U.S.C. STATEMENTS OF POLICY
excluded’’ on the cover page and on
41102(c) and the elements necessary for
each affected page, and must clearly
a successful claim for reparations under ■ 1. The authority citation for part 545
indicate any information withheld. You
that section. This rulemaking thus falls continues to read as follows:
may submit the public version to the
within the categorical exclusion for
Commission by email or mail. Authority: 5 U.S.C. 553; 46 U.S.C. 305,
matters related solely to the issue of
40307, 40501–40503, 41101–41106, and
Will the Commission consider late Commission jurisdiction and the 40901–40904; 46 CFR 515.23.
comments? exclusion for investigatory and
The Commission will consider all adjudicatory proceedings to ascertain ■ 2. Add § 545.4 to read as follows:
comments received before the close of past violations of the Shipping Act. See
§ 545.4 Interpretation of Shipping Act of
business on the comment closing date 46 CFR 504.4(a)(20), (22). Therefore, no
1984–Unjust and unreasonable practices.
indicated above under DATES. To the environmental assessment or
environmental impact statement is 46 U.S.C. 41102(c) is interpreted to
extent possible, we will also consider
required. require the following elements in order
comments received after that date.
How can I read comments submitted to establish a successful claim for
Paperwork Reduction Act reparations:
by other people?
You may read the comments received The Paperwork Reduction Act of 1995 (a) The respondent is an ocean
by the Commission at the Commission’s (44 U.S.C. 3501–3521) (PRA) requires an common carrier, marine terminal
Electronic Reading Room or the Docket agency to seek and receive approval operator, or ocean transportation
Activity Library at the addresses listed from the Office of Management and intermediary;
above under ADDRESSES. Budget (OMB) before collecting (b) The claimed acts or omissions of
information from the public. 44 U.S.C. the regulated entity are occurring on a
VI. Rulemaking Analyses
3507. The agency must submit normal, customary, and continuous
Regulatory Flexibility Act collections of information in proposed basis;
The Regulatory Flexibility Act rules to OMB in conjunction with the (c) The practice or regulation relates
(codified as amended at 5 U.S.C. 601– publication of the notice of proposed to or is connected with receiving,
612) provides that whenever an agency rulemaking. 5 CFR 1320.11. This handling, storing, or delivering
is required to publish a notice of proposed rule does not contain any property;
proposed rulemaking under the collections of information as defined by (d) The practice or regulation is unjust
Administrative Procedure Act (APA) (5 44. U.S.C. 3502(3) and 5 CFR 1320.3(c). or unreasonable; and
daltland on DSKBBV9HB2PROD with PROPOSALS
U.S.C. 553), the agency must prepare Executive Order 12988 (Civil Justice (e) The practice or regulation is the
and make available for public comment Reform) proximate cause of the claimed loss.
an initial regulatory flexibility analysis
(IRFA) describing the impact of the This rule meets the applicable By the Commission.
proposed rule on small entities. 5 U.S.C. standards in E.O. 12988 titled, ‘‘Civil Rachel Dickon,
603. An agency is not required to Justice Reform,’’ to minimize litigation, Secretary.
publish an IRFA, however, for the eliminate ambiguity, and reduce [FR Doc. 2018–19328 Filed 9–6–18; 8:45 am]
following types of rules, which are burden. BILLING CODE 6731–AA–P
VerDate Sep<11>2014 19:16 Sep 06, 2018 Jkt 244001 PO 00000 Frm 00015 Fmt 4702 Sfmt 9990 E:\FR\FM\07SEP1.SGM 07SEP1](https://thefederalregister.org/doc/83_FR_45541/page/7.svg)
Document Created: 2018-09-07 00:15:35
Document Modified: 2018-09-07 00:15:35
| Category | Regulatory Information | |
| Collection | Federal Register | |
| sudoc Class | AE 2.7: GS 4.107: AE 2.106: | |
| Publisher | Office of the Federal Register, National Archives and Records Administration | |
| Section | Proposed Rules | |
| Action | Notice of proposed rulemaking. | |
| Dates | Submit comments on or before: October 10, 2018. | |
| Contact | Rachel E. Dickon, Secretary; Phone: (202) 523-5725; Email: [email protected] | |
| FR Citation | 83 FR 45367 | |
| RIN Number | 3072-AC71 | |
| CFR Associated | Antitrust; Exports; Freight Forwarders; Maritime Carriers; Non-Vessel-Operating Common Carriers; Ocean Transportation Intermediaries; Licensing Requirements; Financial Responsibility Requirements and Reporting and Recordkeeping Requirements |
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