Docket No. 99-20 - Gstaad, Inc. and Sergio Lemme

Served October 21, 1999

FEDERAL MARITIME COMMISSION

DOCKET NO. 99 - 20

GSTAAD, INC. AND SERGIO LEMME
POSSIBLE VIOLATIONS OF SECTION 10(a)(1)
OF THE SHIPPING ACT OF 1984

ORDER OF INVESTIGATION AND HEARING

Respondent Gstaad, Inc. ("Gstaad") is a tariffed and bonded non-vessel-operating common carrier ("NVOCC") based in Miami, Florida. Gstaad furnishes transportation services, including NVOCC services, inter alia, from ports in the United States to ports in South America.

Respondent Sergio Lemme is President and Treasurer of Gstaad.

It appears that Sergio Lemme and Gstaad received rebates from one or more ocean common carriers providing service to South America. Mr. Lemme entered into an agreement whereby Gstaad would pay the applicable rates and charges at the time of the shipment, but receive a rebate for the difference between the applicable rate and a lower agreed upon rate. It also appears that Sergio Lemme and Gstaad entered into at least one service contract which required Gstaad to make shipments pursuant to the contract as a NVOCC. However, Mr. Lemme and Gstaad knowingly and willfully allowed other shippers to make shipments under the contract to obtain the lower contract rates even though Gstaad did not perform any transportation functions or assume any NVOCC obligations with respect to the shipments.

Section 10 (a)(1) of the Shipping Act of 1984 Act prohibits any person knowingly and willfully, directly or indirectly, by any unjust device or means from obtaining or attempting to obtain ocean transportation at less than the rates or charges that would otherwise be applicable.

NOW THEREFORE, IT IS ORDERED, That pursuant to sections 10, 11, 13, and 19⁽¹⁾ of the 1984 Act, 46 U.S.C. app. 1709, 1710, 1712 and 1718, an investigation is instituted to determine:

1) Whether Gstaad and Sergio Leeme violated section 10(a)(1) of the 1984 Act by obtaining or attempting to obtain ocean transportation of property at less than the rates and charges shown in applicable tariffs or service contracts;

2) Whether, in the event violations of section 10(a)(1) of the 1984 Act are found, civil penalties should be assessed against Gstaad and Sergio Lemme and, if so, the amount of such penalties;

3) Whether, in the event violations of section 10(a)(1) of the 1984 Act are found, the Commission should cancel or suspend any or all tariffs of Gstaad; and;

4) Whether, in the event violations of section 10(a)(1) of the 1984 Act are found, the Commission should revoke Gstaad's license to operate as an Ocean Transportation Intermediary

5) Whether, in the event violations of section 10(a)(1) of the 1984 Act are found, an appropriate cease and desist order should be issued.

IT IS FURTHER ORDERED, That a public hearing be held in this proceeding and that this matter be assigned for hearing before an Administrative Law Judge of the Commission's Office of Administrative Law Judges in compliance with Rule 61 of the Commission's Rules of Practice and Procedure, 46 C.F.R. 502.61. The hearing shall include oral testimony and cross-examination in the discretion of the Presiding Administrative Law Judge only after consideration has been given by the parties and the Presiding Administrative Law Judge to the use of alternative forms of dispute resolution, and upon a proper showing that there are genuine issues of material fact that cannot be resolved on the basis of sworn statements, affidavits, depositions, or other documents or that the nature of the matters in issue is such that an oral hearing and cross-examination are necessary for the development of an adequate record;

IT IS FURTHER ORDERED, That Gstaad, Inc. and Sergio Lemme are designated as Respondents in this proceeding;

IT IS FURTHER ORDERED, That the Commission's Bureau of Enforcement is designated a party to this proceeding;

IT IS FURTHER ORDERED, That notice of this Order be published in the Federal Register, and a copy be served on parties of record;

IT IS FURTHER ORDERED, That other persons having an interest in participating in this proceeding may file petitions for leave to intervene in accordance with Rule 72 of the Commission's Rules of Practice and Procedure, 46 C.F.R. 502.72;

IT IS FURTHER ORDERED, That all further notices, orders, and/or decisions issued by or on behalf of the Commission in this proceeding, including notice of time and place of any hearing or prehearing conference, shall be served on parties of record;

IT IS FURTHER ORDERED, That all documents submitted by any party of record in this proceeding shall be directed to the Secretary, Federal Maritime Commission, Washington, D.C. 20573, in accordance with Rule 118 of the Commission's Rules of Practice and Procedure, 46 C.F.R. 502.118, and shall be served on parties of record; and

IT IS FURTHER ORDERED, That in accordance with Rule 61 of the Commission's Rules of Practice and Procedure, 46 C.F.R. 502.61, the initial decision of the Administrative Law Judge shall be issued by October 23, 2000, and the final decision of the Commission shall be issued by February 20, 2001.

By the Commission.

Bryant L. Van Brakle
Secretary

ENDNOTES

1. Section 23 of the 1984 Act, 46 U.S.C. app. 1721, which was applicable at the time of the alleged violations, was replaced on May 1, 1999, by section 19 (b) pursuant to the Ocean Shipping Reform Act of 1998, Pub. L. 105-258.