[Federal Register Volume 79, Number 246 (Tuesday, December 23, 2014)]
[Rules and Regulations]
[Pages 76901-76902]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2014-29946]
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FEDERAL MARITIME COMMISSION
46 CFR Part 502
[Docket No. 14-12]
RIN 3072-AC58
Amendments to Regulations Governing the Rules of Practice and
Procedure for Dismissals of Actions
AGENCY: Federal Maritime Commission.
ACTION: Final rule.
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SUMMARY: The Federal Maritime Commission is amending its rules
governing dismissals of actions by complainants, by order of the
presiding officer, and by respondents when complainant fails to
prosecute.
DATES: Effective: January 24, 2015.
FOR FURTHER INFORMATION CONTACT: Karen V. Gregory, Secretary, Federal
Maritime Commission, 800 North Capitol Street NW., Washington, DC
20573-0001, Phone: (202) 523-5725, Email: [email protected].
SUPPLEMENTARY INFORMATION: The Commission published a proposed rule on
September 22, 2014, 79 FR 56546, to amend Rule 72 of its Rules of
Practice and Procedure, 46 CFR 502.72, to reflect its intent with
regard to review and approval of settlement agreements prior to
dismissal of formal complaints. No comments were received to the
proposed rule and the Commission hereby adopts it as a final rule.
Section 502.72 currently permits voluntary dismissals by notice,
allowing a complainant to dismiss an action voluntarily before an
answer or other responsive pleading is served. Additionally, the rule
permits dismissal of complaints by stipulation of the parties, thereby
fostering efficient and speedy resolution of matters that have become
moot (e.g., cargo has been delivered, expense of litigation, etc.). The
rule does not, however, expressly address the circumstance when a
voluntary dismissal is the result of a settlement between the parties.
When Sec. 502.72 was published, the Commission stated that it
``did not intend to eliminate the requirement for review of
settlement.'' Docket No. 11-05, Rules of Practice and Procedure, Final
Rule, 77 FR 61519-20 (Oct. 10, 2012). The revision adopted here
reflects the Commission's intent to adhere to its long-standing policy
of reviewing settlements by adding language to clarify that when a
voluntary dismissal is based on a settlement agreement, the agreement
must be submitted for approval by the Commission.
The Commission has followed a well-established policy of
encouraging settlement agreements in proceedings brought before it. Old
Ben Coal Co. v. Sea-Land Serv., Inc., 18 S.R.R. 1085, 1091 (ALJ 1978).
The Commission has adhered to ``encourag[ing] settlements and
engage[ing] in every presumption which favors a finding that they are
fair, correct, and valid.'' Inlet Fish Producers, Inc. v. Sea-Land
Serv., Inc., 29 S.R.R. 975, 978 (ALJ 2002) (quoting Old Ben Coal, 18
S.R.R. at 1091); see also Ellenville Handle Works, Inc. v. Far E.
Shipping Co., 20 S.R.R. 761, 763 (ALJ 1981) (noting that settlements
may be approved upon a showing that the settlement is bona fide and not
a device for rebating). The Commission has exercised oversight of these
settlements to ensure that such agreements are free from ``fraud,
duress, undue influence, [or] mistake'' and do ``not contravene any law
or public policy.'' Old Ben Coal, 18 S.R.R. at 1093.
Although the Commission undertakes a relatively limited role in
scrutinizing settlements, see P.R. Shipping Ass'n v. P.R. Ports Auth.,
27 S.R.R. 645, 647 (ALJ 1996), it has also made clear that it ``does
not merely rubber stamp any proffered statement, no matter how anxious
the parties may be to terminate their litigation.'' Old Ben Coal, 18
S.R.R. at 1092. Previously, the Commission required proof of a
statutory violation before approving a settlement. An agreement to
settle a proceeding could only ``be approved . . . upon an affirmative
finding that such violation occurred.'' Consolidated International
Corporation v. Concordia Line, Boise Griffin Steamship Company, Inc.,
18 F.M.C. 180, 183 (ALJ 1975); cf. Ketchikan Spruce Mills v. Coastwise
Line, 5 F.M.B. 661 (1959) (settlement was not approved because it could
not be shown that the tariffs were unreasonable or violated the
Shipping Act).
In Old Ben Coal, the Commission modified this requirement in favor
of a revised standard that allows the Commission to assess whether
``the settlement offered is fair, reasonable, and adequate,'' and
whether the settlement is ``free of fraud, duress, undue influence,
[or] mistake.'' 18 S.R.R. at 1091. Additionally, the Commission may
weigh the likelihood of the complainant's success if litigation were
pursued, as well as balance the adequacy of the terms of settlement
against the estimated cost and complexity of continued litigation. Id.
at, 1093-94. Finally, the Commission will review the settlement to
ensure that it is ``proper and does not itself violate any provision of
the law.'' Id. at 1091.
[[Page 76902]]
Settlements meeting these criteria ``will probably pass muster and
receive approval.'' Id. at 1093; see also World Chance Logistics (Hong
Kong), Ltd.-Possible Violations, 31 S.R.R. 1346, 1350 (FMC 2010).
The clarifying language reflects the Commission's intent as
expressed when it promulgated section 502.72 that it was not changing
its long standing policy with respect to review of settlement
agreements, and articulates the requisite procedure for voluntary and
involuntary dismissal of complaints.
This final rule is not a ``major rule'' under 5 U.S.C. 804(2). No
notice of proposed rulemaking is required; therefore, the provisions of
the Regulatory Flexibility Act, 5 U.S.C. 601 et seq., do not apply.
List of Subjects in 46 CFR Part 502
Administrative practices and procedures, Claims, Equal Access to
Justice, Investigations, Practice and procedure, Procedural rules,
Reporting and recordkeeping requirements.
For the reasons set forth in the preamble, the Federal Maritime
Commission amends 46 CFR part 502 as follows:
PART 502--RULES OF PRACTICE AND PROCEDURE
0
1. The authority citation for part 502 continues to read as follows:
Authority: 5 U.S.C. 504, 551, 552, 553, 556(c), 559, 561-569,
571-596, 5 U.S.C. 571-584; 18 U.S.C. 207; 28 U.S.C. 2112(a); 31
U.S.C. 9701; 46 U.S.C. 305, 40103-40104, 40304, 40306, 40501-40503,
40701-40706, 41101-41109, 41301-41309, 44101-44106; E.O. 11222 of
May 8, 1965.
Subpart E--Proceedings; Pleadings; Motions; Replies
0
2. Revise Sec. 502.72 to read as follows:
Sec. 502.72 Dismissals.
(a) Voluntary dismissal. (1) By the complainant. When no settlement
agreement is involved, the complainant may dismiss an action without an
order from the presiding officer by filing a notice of dismissal before
the opposing party serves either an answer, a motion to dismiss, or a
motion for summary decision. Unless the notice or stipulation states
otherwise, the dismissal is without prejudice.
(2) By stipulation of the parties. The parties may dismiss an
action at any point without an order from the presiding officer by
filing a stipulation of dismissal signed by all parties who have
appeared. In the stipulation the parties must certify that no
settlement on the merits was reached. Unless the stipulation states
otherwise, the dismissal is without prejudice.
(3) By order of the presiding officer. Except as provided in
paragraphs (a)(1) and (a)(2) of this section, an action may be
dismissed at the complainant's request only by order of the presiding
officer, on terms the presiding officer considers proper. If the motion
is based on a settlement by the parties, the settlement agreement must
be submitted with the motion for determination as to whether the
settlement appears to violate any law or policy and to ensure the
settlement is free of fraud, duress, undue influence, mistake, or other
defects which might make it unapprovable. Unless the order states
otherwise, a dismissal under this paragraph is without prejudice.
(b) Involuntary dismissal; effect. If the complainant fails to
prosecute or to comply with these rules or an order in the proceeding,
a respondent may move to dismiss the action or any claim against it, or
the presiding officer, after notice to the parties, may dismiss the
proceeding on its own motion. Unless the dismissal order states
otherwise, a dismissal under this subpart, except one for lack of
jurisdiction or failure to join a party, operates as an adjudication on
the merits.
(c) Dismissing a counterclaim, crossclaim, or third-party claim.
This rule applies to dismissals of any counterclaim, crossclaim, or
third-party claim.
Karen V. Gregory,
Secretary.
[FR Doc. 2014-29946 Filed 12-22-14; 8:45 am]
BILLING CODE 6730-01-P