The Federal Maritime Commission has issued a final rule that, effective April 10, will amend its rules of practice and procedure governing the compromise, assessment, mitigation, settlement, and collection of civil penalties. These changes will align with statutory changes in the Ocean Shipping Reform Act of 2022 on penalties or refunds.
The primary change being made by this rule is that the FMC may order the refund of a charge in addition to or in lieu of a civil penalty in response to violations of the 1984 Shipping Act or an FMC regulation or order issued under that law.
In determining the amount of a civil penalty the FMC must take the following into account: (1) the nature, circumstances, extent, and gravity of the violation committed; (2) the violator’s degree of culpability, history of prior offenses, and ability to pay, as well as “such other matters as justice may require;” and (3) the amount of any refund ordered.
In addition, in any case in which the FMC orders a refund in addition to a civil penalty, the amount of the penalty assessed must be decreased by any additional amounts included in the refund in excess of the actual injury. Refunds will be considered to be compensation paid to the applicable claimant and deducted from the total amount of damages awarded to that claimant in a civil action against the violator relating to the applicable violation.
ST&R’s team of former FMC and DOJ litigation personnel, freight forwarders, and former administration and congressional staffers can help shippers understand, comply with, and take advantage of these and other changes made by OSRA 22. For more information, please contact Jason Kenner (at (212) 549-0137 or via email), Andy Margolis (at (305) 894-1021 or via email), or Ned Steiner (at (202) 730-4970 or via email.)
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