New FMC Policy Statements Address Carrier Retaliation, Shipper Complaint Process

The Federal Maritime Commission issued three new policy statements this week to provide the shipping industry more guidance on its complaint process and clarify how it will address cases of carrier retaliation. The shipper-friendly policy statements, originally recommended by Commissioner Rebecca Dye in July (see 2107290021), describe how the FMC defines who can allege complaints, how the commission approaches reparations for attorney fees and a broad outline of who can bring forward a retaliation complaint.

The policies, issued Dec. 28, are part of an FMC effort to address issues in the international freight delivery system that have been exacerbated during the COVID-19 pandemic, including litigation between carriers and shippers over unfair shipping practices. The three statements are specifically meant to reduce barriers faced by shippers that may serve as “disincentives to filing actions at the agency,” the FMC said.

In one statement, a nine-page document on carrier retaliation, the FMC describes what constitutes retaliation by common carriers and outlines a range of factors it will consider during the complaint process. The commission specifically emphasized that it “broadly” defines which parties qualify as a shipper, which includes cargo owners, “the person for whose account the ocean transportation of cargo is provided, the person to whom delivery is to be made,” a shipping association or a non-vessel operating common carrier that “accepts responsibility for payment of all charges applicable under the tariff or service contract.”

Despite laws against retaliation, some shippers have specifically said they haven’t followed through with their complaints because they’re worried about carrier backlash (see 2106150038). In the policy statement, the FMC describes shipper activity that is “specifically protected” under federal regulations, which includes, but also extends beyond, filing a complaint with the FMC. The commission said carriers can’t retaliate against shippers for commenting on FMC rulemakings or participating in the agency’s investigative efforts.

The FMC also stressed that shippers that file retaliation-related complaints don’t need to prove the retaliation resulted from a carrier competition issue. “It is not hard to envision situations where a carrier might engage in retaliatory conduct that has nothing to do with competition with other carriers,” the FMC said. “It is enough that a complainant can show that a carrier engaged in unfair or unjustly discriminatory conduct because a shipper filed a complaint-related activity.”

In another policy statement, the FMC clarified that “any person” can file a complaint with the commission, including shipping associations or other trade groups. The agency said individual shippers sometimes decide not to follow through with a complaint because they don’t have the time, attention, money or relationships, so the “cost-benefit analysis weighs against bringing an otherwise valid, or potentially valid, claim.”

“The Commission emphasizes that individuals and companies are not the only persons who may file complaints,” the FMC said, adding that it has “consistently interpreted the term broadly to include not only natural persons but also corporations, partnerships, associations, and public or private organizations.”

The third policy statement is meant to address the “lack of clarity” among shippers about reparations for attorney fees stemming from successful complaints. The statement describes how soon following a successful complaint shippers must file for fee reimbursement, who is eligible and other procedures.

The agency also stressed that successful respondents as well as successful complainants are eligible for reparations, meaning the commission can reimburse parties wrongfully accused of violating shipping laws. But the FMC said it has only once required an unsuccessful complainant to pay for the respondent's attorney fees, and that was because the complainant “abandoned its claim, forced multiple [r]espondents to expend significant resources of both time and money in their defense and, perhaps most egregiously, failed to terminate the claim when it could have limited the expense of the Respondents.”

Complainants “who raise non-frivolous claims in good faith, who litigate zealously but within the rules and for proper purposes, and who comply with Commission orders are at little risk of attorney fee liability if they are unsuccessful, absent unusual circumstances,” the FMC said.