SUPPLEMENTARY INFORMATION:

I. Background and Legal Authority

On June 16, 2022, the Ocean Shipping Reform Act of 2022 (OSRA 2022) (Pub. L. 117-146) was enacted. Section 10 of the Act, “Charge complaints,” codified at 46 U.S.C. 41310, states that a person may submit to the Commission “information concerning complaints about charges assessed by a common carrier.” The statute directs the Commission, upon such a submission, to “promptly investigate the charge” and order refunds and penalties for charges that do not comply with 46 U.S.C. 41104(a) and 41102. Charge Complaints under 46 U.S.C. 41310 may be submitted regarding a broad range of noncompliant charges assessed by a common carrier. While complaints about the reasonableness of a demurrage or detention charge tend to be the most common, other carrier fees or charges which are not in compliance with 46 U.S.C. 41104(a) and 41102 may be submitted for investigation. During the investigation, the carrier has an opportunity to submit information related to the charge in question, 46 U.S.C. 41310(b)(1). Whereas a complainant typically bears the burden of establishing violations in adjudicatory hearing proceedings under 46 U.S.C. 41301, OSRA 2022 provides that the respondent carrier “bear[s] the burden of establishing the reasonableness of any demurrage or detention charges pursuant to [46 CFR] 545.5” when a Charge Complaint is involved. 46 U.S.C. 41310(b)(2). Section 41310 of the United States Code is self-implementing and became applicable and enforceable on June 16, 2022, when OSRA 2022 was signed into law.

Because the Charge Complaint provisions are self-executing, the Commission adopted an Interim Procedure for Charge Complaints (“Interim Procedure”) to address the new type of complaint.^[1] The Interim Procedure is a streamlined procedure designed for faster resolution of Charge Complaint claims without significant participation by the filer. Under the Interim Procedure, a person submits a Charge Complaint and supporting information to the Commission by email ( printed page 56054) to chargecomplaints@fmc.gov. Commission staff acknowledge the submission and, if necessary, contact the filer to obtain clarification or missing information. When the Commission receives sufficient information, it promptly investigates the complaint by contacting the common carrier and asking the carrier to respond/justify the charge or fee being investigated. Upon completion of the investigation, Commission staff notify both parties.

If the investigation supports a finding that the common carrier's charge or fee is not in compliance with statutes or Commission rules, the parties are informed that the matter will be referred to the Commission's Bureau of Enforcement, Investigations, and Compliance (BEIC). For matters where the investigation supports a finding of a violation, BEIC will recommend that the Commission institute Show Cause proceedings under 46 CFR 502.91 to formally adjudicate the Charge Complaint. Upon approval of FMC staff's recommendation, the Commission will issue an Order to Show Cause naming the specific common carrier and describing the actions alleged to violate 46 U.S.C. 41104(a), 41102, or both, and directing that common carrier to “show cause” why it should not be ordered to refund the fees or charges paid or waive such fees. The common carrier is provided the opportunity to “show cause” why the common carrier's actions should not be found to constitute a violation of 46 U.S.C. 41104(a) or 41102. The common carrier may submit an affidavit(s) of fact, memoranda of law, and any documentary evidence in support of its position. The Order to Show Cause defines what procedures apply. Charge Complaint-related Show Cause proceedings are conducted on a fast-track basis to provide an early determination concerning the shipper's entitlement to a refund. Procedures not consistent with achieving an expedited decision on refunds or waivers, such as discovery or oral argument, are waived for the refund proceeding. Additional procedures, however, may be requested if desired. If the Commission orders a refund by the common carrier, a separate civil penalty proceeding may also be initiated and referred to the Commission's Office of Administrative Law Judges for consideration of penalties under 46 U.S.C. 41107 and 41109. This is an entirely separate proceeding handled under the Commission's more detailed rules of practice and procedure.

The Commission's statement that the Interim Procedure “cannot be combined with formal proceedings under 46 CFR 502.61, or small claims proceedings—formal or informal, under 46 CFR 502.301-502.321” has been interpreted by some individuals as meaning that the Interim Procedure is the only route for bringing Charge Complaints.^[2] That is not the case. The Commission's Interim Procedure is merely one way for the Commission to meet its statutory obligation to “investigate” Charge Complaints. An “investigation” under 46 U.S.C. 41310 can also be satisfied through the same processes that satisfies the “investigation” of complaints under 46 U.S.C. 41301(c).^[3] The Commission's FAQs on Charge Complaints clearly explain, for example, that a person who has submitted a Charge Complaint under the Interim Procedure can still file a subsequent formal or small claims complaint with the Commission even where the initial investigation does not support a finding of a violation.^[4] Likewise, the Commission's “Industry Advisory—Interim Procedures for Submitting `Charge Complaints' Under 46 U.S.C. 41310” issued on July 14, 2022, stated that a filer may choose to “pursue and control their own legal case, including with the assistance of their own attorney if desired, . . . under . . . Part 502 of the Commission's regulations.” ^[5]

The Interim Procedure's prohibition on “combined claims” was implemented to recognize two limitations. First, a Charge Complaint cannot simultaneously be investigated by both an Administrative Law Judge (ALJ)/Small Claims Officer (SCO) and by agency staff under the Interim Procedure. Second, if choosing to file under the Interim Procedure, the filer cannot include claims other than Charge Complaints. This is because the Interim Procedure implemented under the authority of 46 U.S.C. 41310 only addressed Charge Complaints. As such, the Interim Procedure cannot address non-Charge Complaint claims. Thus, allowing filers to also include non-Charge Complaint claims when proceeding under the Interim Procedure would negate the goal of the new process, which is to allow for a streamlined and shortened timeframe to resolve Charge Complaint claims.

A filing that meets the requirement of 46 U.S.C. 41310(a) on its own or combined with other claims, in a private party formal or small claims complaint, is a Charge Complaint regardless of whether the filer submits it to the Commission under the Interim Procedure or files under Subparts E (§§ 502.61-502.75) or S (§§ 502.301-502.305) of the Commission's Part 502 rules. The Commission's July 2022 Industry Advisory incorrectly stated that Charge Complaints filed as a formal or small claims complaint could be filed under 46 U.S.C. 41301(a). A claim that meets the requirements of 46 U.S.C. 41310(a) is a Charge Complaint and must be resolved under the terms of 46 U.S.C. 41310, including the required burden shifting for demurrage or detention charges, regardless of whether the claim is submitted to the Commission under the Interim Procedure or under traditional complaint processes. So long as the submission includes the applicable bills of lading numbers and invoices, and alleges violations of 46 U.S.C. 41104(a), 46 U.S.C. 41102 (or both), 46 U.S.C. 41310 directs the Commission to consider such a submission as a Charge Complaint. If a Charge Complaint filed under traditional complaint process contains a mix of complaints under 46 U.S.C. 41301 and 41310, those portion(s) which concern charges assessed by a common carrier, provided that the submission includes the applicable bills of lading numbers and invoices, and alleges violation(s) of 46 U.S.C. 41104(a), 46 U.S.C. 41102, or both, must, by operation of law be considered by the Commission a “Charge Complaint” under 46 U.S.C. 41310. The remainder of the submission will continue to fall under 46 U.S.C. 41301.

The Commission is issuing this rule to highlight these existing statutory requirements.

II. Discussion of Rule

The Commission clarifies that a Charge Complaint must be treated consistent with 46 U.S.C. 41310 and further clarifies that a Charge Complaint may be investigated via a filer by: (1) filing it through the Interim Procedure, (2) filing a private party formal ( printed page 56055) complaint under § 502.62, or (3) filing a small claims complaint under § 502.304. A filer pursuing a traditional complaint process for a Charge Complaint must adhere to all procedural requirements set forth in 46 CFR part 502, including for the format and content of their complaint. Filers are encouraged to clearly identify claims as “Charge Complaints” in their submission. However, in accordance with law, so long as the complaint concerns charges assessed by a common carrier, alleges a violation of 46 U.S.C 41104(a) and/or 46 U.S.C. 41102, and includes the applicable bill of lading numbers and invoices, it is a Charge Complaint and it will be resolved in accordance with 46 U.S.C. 41310. This includes application of the burden shifting requirement for demurrage or detention charges under 46 U.S.C. 41310(b)(2). The Commission is amending 46 CFR 502.62(a)(3)(v) and adding a new 502.301(b) to alert readers to this fact.

For small claims complaints, both parties must consent to the determination of a Charge Complaint under informal adjudication procedures for the claim to be decided under subpart S. If both parties do not consent, the Charge Complaint will be decided under the procedures of subpart T. The potential application of civil penalties does not affect the $50,000 limit for small claims. Civil penalties are not part of the claim total—they may not be requested by claimants and are payable, if assessed, to the U.S. Treasury's General Fund. Paragraph (c) of section 502.301, as revised, (previous § 502.301(b)) reflects this. Paragraph 502.62(a)(4)(iv) has also been revised to reflect civil penalty application to Charge Complaints filed as formal complaints.

Section 41301 complaints must be filed within three years after the claim accrues in order to obtain reparations, 46 U.S.C. 41301(a). Section 41310 of title 46 of the United States Code, however, does not contain a statute of limitations for Charge Complaints. A Charge Complaint may be filed for any covered violations that occurred on or after the enactment of OSRA 2022 (June 16, 2022). OSRA 2022 does not apply retroactively. The absence of a statute of limitations in section 41310 is reflected in the Commission's amendments to §§ 502.62(a)(4)(iii) and 502.302(a).

The Commission's Interim Procedure for Charge Complaints continues to provide important benefits to filers as an alternative to independently pursuing a traditional claim. First, it allows the Commission to assist filers by requesting missing information that might be necessary to perfect a complaint. That level of assistance is not available if a filer proceeds directly with a Charge Complaint under traditional procedures. Second, those filers using the Interim Procedure do not currently pay any fees.^[6] Complainants seeking resolution of a Charge Complaint through the Commission's traditional claims processes are required to pay the filing fee, currently $387 for Subpart E and $176 for Subpart S. Finally, because formal action arising out of a Charge Complaint investigation is brought by BEIC against the common carrier, the complaining party is not expected to testify or provide additional information in the Order to Show Cause proceeding before the Commission.

For these reasons, the Commission's current Interim Procedure for Charge Complaints remains in effect. A person who wants to file a Charge Complaint has the option to proceed under either the Interim Procedure for Charge Complaints or under the Commission's traditional complaint processes. The processes may not run simultaneously, however, and filers are prohibited from filing a duplicate claim that has been decided on the merits.

III. Rulemaking Analyses

A. Administrative Law Matters

These changes to the Code of Federal Regulations are informational only and are intended to draw attention to the application of 46 U.S.C. 41310, a self-implementing statute, within the existing hearing procedures of 46 CFR part 502. They are not intended to have the force and effect of law, or to implement, interpret, or prescribe law or policy. The rule does not change substantive standards or affect the rights or obligations of non-agency parties. In accordance with the Administrative Procedure Act (APA), the Commission therefore finds that good cause exists that public comment is impracticable and unnecessary, 5 U.S.C. 553(b)(B). For these same reasons, the Commission finds that there is good cause to establish an effective date less than 30 days after publication of this amendment, 5 U.S.C. 553(d)(3). This rule is effective upon publication in the Federal Register .

The Regulatory Flexibility Act, 5 U.S.C. 601 et seq., does not apply when notice and comment is not required by the APA or other law. See5 U.S.C. 601(2). The Commission is therefore not required to complete a regulatory flexibility analysis for this action. Additionally, the provisions of the Small Business Regulatory Enforcement Fairness Act (SBREFA) are not applicable, see5 U.S.C. 804(3)(C). SBREFA's definition of the term “rule” does not include “any rule of agency organization, procedure, or practice that does not substantially affect the rights or obligations of non-agency parties”.

Because this action is not intended to have the force and effect of law, or to implement, interpret, or prescribe law or policy, it is exempt from Executive Order 142192 and Office and Management Review under Executive Order 12866.

B. Congressional Review Act

This action is a not a “rule” for purposes of the Congressional Review Act because it is a rule of agency organization, procedure or practice that does not substantially affect the rights and obligation of non-agency parties.

C. Paperwork Reduction Act

This amendment does not contain any new or modified collection of information requirements as defined by the Paperwork Reduction Act of 1995. See5 CFR 1320.3(c).

D. National Environmental Policy Act

The National Environmental Policy Act (NEPA) is not applicable to this action. NEPA only applies to major federal actions. The terms “major” and “federal action” each have independent force. This is not a major federal action because it does not impact the legal rights or obligations of non-agency parties. Alternatively, this rule is categorically excluded under 46 CFR 504.4(a)(4) as promulgation of procedural rules pursuant to 46 CFR part 502.

E. Executive Order 12988 (Civil Justice Reform)

This rule meets the applicable standards in E.O. 12988, “Civil Justice Reform,” (61 FR 4729, Feb. 7, 1996) to minimize litigation, eliminate ambiguity, and reduce burden.

( printed page 56056)

For the reasons discussed in the preamble, the Federal Maritime Commission amends 46 CFR part 502 as follows:

91 FR 56053