Commissioner Doyle’ Remarks to Widener University School of Law Alumni Association, Washington, DC
Contact: David Tubman, Counsel to Commissioner Doyle
Good afternoon. I would like to thank Dr. James T. Harris and Laurie Grant for affording me the pleasure to address my fellow alumni from Widener University School of Law today. I congratulate all of you in your admittance today to the Bar of the United States Supreme Court.
I am William Doyle, a 2000 graduate of Widener University School of Law (Harrisburg, PA). I am a Commissioner with the United States Federal Maritime Commission. I serve as one of five Commissioners appointed by the President and confirmed by the U.S. Senate.
I would like to explain what the Federal Maritime Commission is and what we do.
The Commission’s role is that of a regulatory body and an appeals court per se.
The Federal Maritime Commission is the federal agency responsible for regulating the nation’s international ocean transportation industry for the benefit of exporters, importers, and the American consumer. The FMC’s mission is to foster a fair, efficient, and reliable international ocean transportation system while protecting the public from unfair and deceptive practices.
The Commission has several bureaus and offices including the Office of Administrative Law Judges, Bureau of Enforcement, Bureau of Certification and Licensing, Bureau of Trade Analysis and the Office of Consumer Affairs and Dispute Resolution Services.
Administrative Law Judges (ALJs)
ALJs are independent decision makers whose independence is protected by the Administrative Procedures Act. Federal Maritime Commission ALJs resolve cases involving alleged violations of the Shipping Act of 1984 (as amended), and other laws within the Commission’s jurisdiction. Cases may be initiated by private parties or by the Commission where the Commission is represented by its Bureau of Enforcement.
An ALJ is assigned to a case and the ALJ may issue a variety of orders. For example, the ALJ may issue a scheduling order providing deadlines to the parties or an order explaining how and when to submit evidence. The parties are required to send motions or other papers to all other parties, except in certain situations such as requests for subpoenas. A case may be decided based on the written record or the ALJ may hold hearings, similar to a bench trial, where witnesses appear in person and give testimony under oath.
The parties may settle the case between themselves. A settlement should be written and submitted to the ALJ for approval. The ALJ will issue an initial decision approving a settlement or resolving a case by applying the law to the facts. Exceptions to the ALJ’s initial decision may be made to the full Commission (all Commissioners) or the initial decision may be reviewed by the Commission on its own motion.
The full Commission can amend ALJ orders, remand an order for further proceedings, take a specific issue from a decision and call for its own hearing, review matters de novo and take a whole host of other actions similar to that of a court.
Bureau of Enforcement
The Bureau of Enforcement is the prosecutorial arm of the Commission. Bureau attorneys participate as trial counsel in formal Commission proceedings and work closely with the FMC’s Area Representatives in investigations of potential violations of the Shipping Act and Commission regulations. Bureau attorneys also negotiate settlements and informal compromises of civil penalties. In addition, the Bureau of Enforcement monitors all other formal proceedings, including relevant court proceedings, in order to identify major regulatory issues and advises the Commission of evolving competitive practices in international oceanborne commerce.
I’ll give you one recent example of a matter handled by the Bureau of Enforcement:
Recently, the Commission announced compromise agreements with two common carriers operating pure car carriers (PCCs) and roll on/roll off (RO/RO) vessels in U.S. inbound and outbound trades. Under these separate agreements, Kawasaki Kisen Kaisha Ltd. (K Line), paid $1,100,000 in civil penalties and Nippon Yusen Kaisha (NYK Line), paid $1,225,000 in penalties. Both carriers are headquartered in Tokyo, Japan, and operate diverse fleets trading in the U.S.-foreign trades and globally. K Line paid $1,100,000 in civil penalties and NYK Line paid $1,225,000 in penalties. Both carriers are headquartered in Tokyo, Japan, and operate diverse fleets trading in the U.S.-foreign trades and globally. The compromise agreements resolved allegations that the companies violated the Shipping Act by acting in concert with other ocean common carriers with respect to the shipment of automobiles and other motorized vehicles, where such agreements had not been filed with the Commission or become effective under the Shipping Act. Commission staff alleged that these practices persisted over a period of years and involved numerous trade lanes. These compromise agreements were the first wave of settlements in this arena of antitrust and more settlements and investigations continue to follow.
The FMC regulates civil enforcement matters pursuant to the Shipping Act as opposed to the Department of Justice that has authority over criminal allegations under the antitrust laws of the United States.
Bureau of Certification and Licensing
The Bureau of Certification and Licensing (BCL) is responsible for the Passenger Vessel Certification and Ocean Transportation Intermediary programs. BCL issues certificates to operators of passenger vessels with 50 or more berths who embark with passengers from U.S. ports. The Certificate (Performance) evidences that the passenger vessel operator has on file with the Commission acceptable coverage to satisfy any liability incurred for nonperformance of transportation, such as a bankruptcy or failure to complete a cruise. The coverage is used to reimburse passengers. A second Certificate (Casualty) evidences acceptable coverage to satisfy any liability incurred for death or injury.
BCL also reviews applications for Ocean Transportation Intermediaries – Non Vessel Operating Common Carriers and Ocean Freight Forwarder licenses, ensuring acceptable proof of financial responsibility usually in the form of a surety bond.
I’ll give you an example of recent Commission action related to this topic:
The Commission updated its regulations in 2013 when we voted to approve a new rule which, included provisions that allow the Commission to recognize alternative protections submitted by certain passenger vessel operators. The potential relief will vary depending on a number of factors unique to each operator.
Earlier this year, we granted the first request for partial relief from financial requirements used to reimburse passengers when a passenger vessel operator fails to perform cruises as contracted. After careful scrutiny, we granted Un-Cruises, a small, reputable, cruise company in the Pacific Northwest, partial relief. It is rewarding for me when regulators and industry can sit down and reach an agreement that helps small businesses move forward by fashioning economical financial protections beneficial for both passengers and operators.
Earlier this year, the Commission approved the Certificates for Casualty and Performance for a new commercial – passenger vessel operation between New England and Nova Scotia. The ship, the M/V NOVA STAR was Christened in May and then placed into service on the Portland, Maine to Yarmouth, Nova Scotia trade route.
Bureau of Trade Analysis
The Bureau of Trade Analysis is an expert organization on the economics of international liner shipping and maritime agreements, especially with respect to issues of competition and unfair trade practices as they may affect the interests of the shipping public and U.S. international trade.
An integral part of BTA’s responsibilities is the systematic surveillance of ocean common carriers and MTO activity and commercial conditions in the U.S. liner trades. Accordingly, BTA administers a variety of monitoring programs, and other research efforts, designed to apprise the Commission of current trade conditions, emerging commercial trends, and carrier pricing and service activities. The Bureau also is responsible for competition oversight and market analysis, focusing on activity that is substantially anti-competitive under the standards known as 6(g) of the Shipping Act of 1984.
I’ll give you an example of the important work they do in the anti-trust arena:
This year the FMC considered two large vessel sharing agreements in which the liner companies agree to share vessels and space on their ships with one another along particular trade routes. One of these agreements involved the three largest container ocean carriers in the world; the other agreement involved another six of the largest top-twenty container ocean carriers. There were obvious antitrust concerns presented with these filings. The Commission is the agency with the responsibility to review these agreements prior to implementation and can seek to enjoin the agreements if found to be substantially anti-competitive.
The Commission’s standard of review is the following:
Action by commission.— If, at any time after the filing or effective date of an agreement under chapter 403 of this title, the Commission determines that the agreement is likely, by a reduction in competition, to produce an unreasonable reduction in transportation service or an unreasonable increase in transportation cost, the Commission, after notice to the person filing the agreement, may bring a civil action in the United States District Court for the District of Columbia to enjoin the operation of the agreement. The Commission’s sole remedy with respect to an agreement likely to have such an effect is an action under this subsection. 46 U.S.C. § 41307(b)(1)
In reliance upon the thorough analysis of the Commission’s expert economist, and some modifications made by the parties at the request of the Commission, it appears these agreements will not unreasonably reduce transportation service or unreasonably increase transportation cost. That is to say we do not foresee a reduction in competition with these two vessel sharing agreements, at this time.
Finally, in our decision, the Commission made it clear that the analysis and review of the vessel sharing arrangements would be scrutinized on an ongoing basis as the parties would be subject to special monitoring programs by the Commission—BTA.
Office of Consumer Affairs and Dispute Resolution Services
The Office of Consumer Affairs and Dispute Resolution Services (CADRS) offers Alternative Dispute Resolution (ADR) services to assist shippers, carriers, cruise operators and passengers, and other industry participants in resolving problems related to ocean transportation activities through collaboration and settlement. ADR methods include ombuds assistance, mediation and arbitration. There is no charge for this service.
There are two areas where CADRS has been particularly active: providing assistance with cargo shipments and cruise passenger issues.
Last year, after receiving complaints that consumers were unable to reach a particular shipper or locate their goods, the Commission revoked the FMC license and issued a consumer alert. A year has gone by and the staff at CADRS continue to work with domestic and international authorities in trying to track down hundreds of containers with lost goods.
With regard to cruise passenger issues, CADRs offers assistance to cruise passengers by contacting the cruise lines regarding a passenger’s problem and facilitating discussion of the issue. Typically this involves interrupted or cancelled sailings. CADRS frequently will send an alert out with information for affected passengers.
Let me wrap up by sharing an observation about the Commission and tie it in with the profession we’ve chosen. I was surprised by the number of attorneys within the FMC. I don’t know what percentage of employees are lawyers, but sometimes it feels like a law firm more than an agency.
I’m grateful for my Widener experience, which has served me well. It’s a great law school.
And I would be remiss not to note the presence of my colleague, the Commission’s Chief of Staff, Ms. Mary Hoang. She is of course Widener alum and she is a terrific asset to the Commission. She keeps the trains…ships running on time at the FMC.