August 3, 2001 Volume 5, Number 9 Oakland, California

SIGNALS™ provides detailed information on the regulations and activities of the US Federal Maritime Commission (FMC), and related developments in the ocean freight industry. For past issues, please consult our index.

FMC to Conduct Hearings in Florida:   Fact Finding Investigation No. 24

The Federal Maritime Commission (FMC) has scheduled hearings to be held on August 8th and 9th in Forth Lauderdale, Florida to develop the issues set forth in its Fact Finding Investigation No. 24. This investigation focuses on exclusive arrangements for tug services at Florida ports that may be in violation of the Shipping Acts. A similar FMC investigation into exclusive tug franchises on the Lower Mississippi is now an on-ongoing proceeding (Docket 01-06). Commissioner Antony Merck, acting as the Investigative Officer in this matter, will conduct the hearings in confidential sessions. Witnesses will include officials of the Port Everglades Department of Broward County, representatives of the Port Everglades Pilot’s Association, and other interested parties.

Docket 01-06, Mississippi Tugs:   FMC Grants Petition of River Parishes Co., Inc. to Intervene

The FMC has agreed that River Parishes Co., Inc. (RIVCO) has a right to be heard in the matter of Docket 01-06, the investigation into exclusive tug franchises on the Lower Mississippi. While RIVCO was not named as a party to this proceeding, the Commission agreed grant its "Petition for Leave to Intervene." This Petition was supported by the FMC Bureau of Enforcement, who noted that RIVCO is the only tug company that has not been awarded an exclusive contract for tug services in the lower Mississippi. These exclusive franchises for tug services are under investigation by the FMC, and may be in violation of the Shipping Acts.

RIVCO’s Petition was opposed by six of the twelve marine terminal operators named in Docket 01-06, including the Peavey Company, whose request for an extension of time to reply to RIVCO’s Petition was denied by the FMC. These 12 marine terminal operators were each served in June 2000 with an "Order to Show Cause" why their exclusive arrangements with tug companies are not in violation of Shipping Acts, and why the Commission should not order them to cease and desist from operating under these exclusive tug assist service arrangements. The FMC dismissed the arguments of the marine terminal’s that opposed RIVCO’s Petition. The Commission ruled that RIVCO is entitled to intervene as a matter of right under Rule 72(b)(1) of the Commission’s Rules of Practice and Procedure, because it has a substantial interest in the proceeding, and because it would not be adequately represented by an existing party to the proceeding. The Commission appears determined to move swiftly in this matter; a final decision is expected by March 18, 2002.

Increased FMC Budget Proposed for 2002:   S. 1215 Introduced by Senator Hollings (D-SC)

A bill making appropriations for the Departments of Commerce, Justice, State, Judiciary, and related agencies including the Federal Maritime Commission has been introduced in the US Senate by Sen. Ernest Hollings (D-SC). Senate Bill S.1215 provides the FMC with a budget of $17.45 million for fiscal year 2002, which begins on October 1, 2001. If approved, this budget would increase FMC’s funding. For the current fiscal year, the FMC is funded under the "The FMC Authorization Act," which provides a budget of $15.3 million. For the fiscal year 2000, the FMC’s budget was $14.61 million; the Commission also collected $495,516.00 in user fees and almost $3.73 million in fines and penalties in fiscal year 2000. All receipts collected by the FMC are returned to the General Fund of the US Treasury.

Docket 01-09:   Transglobal Forwarding Co., Ltd. - Order of Investigation and Hearing

The Federal Maritime Commission has ordered an investigation into possible violations of the Shipping Acts by Transglobal Logistic Forwarding Co., Ltd. (Transglobal); a Taipei, Taiwan based NVOCC. According to Docket 01-09 between May 1998 and March 1999 Transglobal is alleged to have violated the Shipping Acts by accessing a service contract to which it was not a signatory or affiliate. It appears that on at least 73 shipments Transglobal knowingly and willfully obtained ocean transportation at less than the lawfully applicable rates.

Under Section 13 of the Shipping Acts, as amended, the penalty for these violations is $30,000 for each violation. A public hearing in this matter has been ordered, with Transglobal and the FMC Bureau of Enforcement named as participants. A decision in the matter by the FMC’s Administrative Law Judge is expected by July 30, 2002, however, the matter could be resolved earlier by a settlement agreement.

Docket 01-10:   Green Master Int’l Freight Services Ltd. - Order of Investigation and Hearing

Green Master Int'l Freight Services Ltd. (Green Master), an NVOCC based in Taipei, Taiwan, has been ordered to appear before the Federal Maritime Commission. According to FMC Docket 01-10, Greenmaster is alleged to have knowingly and willfully violated the Shipping Act on at least forty-nine shipments between May 1998 and May 1999 by accessing service contracts to which it was not a signatory or affiliate. Additionally, the FMC alleges that between November 1997 and January 1998, for at least twenty shipments, Green Master disregarded its filed tariff in the rates charged to its customers.

Docket 01-10 orders an investigation to determine whether Green Master violated the Shipping Acts. In the event violations of are found, the FMC will determine if penalties are applicable, and if the tariff of Green Master should be suspended. In the event violations are found, an appropriate cease and desist order should be issued. A public hearing will be held in this proceeding before an FMC Administrative Law Judge.

FMC Petitions US Supreme Court:    South Carolina State Ports Authority v. FMC

The Federal Maritime Commission has filed a petition for a writ of certiorari in the United States Supreme Court.

The FMC is seeking Supreme Court review of the decision by the U.S. Court of Appeals for the Fourth Circuit in South Carolina State Ports Authority v. Federal Maritime Commission and United States of America, 243 F.2d 165 (March 12, 2001). This case required the Fourth Circuit Court to decide whether a State’s sovereign immunity protects it from being brought before a federal administrative tribunal by a private party. The Court decided in favor of the States. That decision overruled the Commission's order in Docket No. 99-21, South Carolina Maritime Services, Inc. v. South Carolina State Ports Authority.

The issue in Docket No. 99-21 is whether a cruise ship company, South Carolina Maritime Services, was subjected to discriminatory treatment by a marine terminal operator, the South Carolina State Ports Authority. The Fourth Circuit Court held that regardless of whether there was discriminatory treatment, the FMC did not have jurisdiction in this matter, and ordered the FMC to dismiss the complaint. The writ of certiorari filed by the FMC with the Supreme Court is a formal request to review a lower court's decision. The Supreme Court will decide whether it wishes to review the case. The text of the Commission's petition is available at www.fmc.gov

Volume 5   Number 9      August 3, 2001

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