[Federal Register Volume 63, Number 194 (Wednesday, October 7, 1998)]
[Notices]
[Pages 53917-53918]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-26815]


=======================================================================
-----------------------------------------------------------------------

FEDERAL MARITIME COMMISSION

[Docket No. 98-18]


Owens Refrigerated Freight Limited Possible Violations of Section 
10(a)(1) of the Shipping Act of 1984; Order of Investigation and 
Hearing

    Owens Refrigerated Freight Limited (``Owens'') is a tariffed and 
bonded non-vessel-operating common carrier (``NVOCC'') located at 100 
Carlyle Street, P.O. Box 1044, Christ Church, New Zealand. Between 
April 8, 1994 and February 11, 1997, Owens maintained an effective 
tariff in the Commission's Automated Tariff Filing and Information 
System (``ATFI'') under the name Cooltainer Services Limited. (ATFI 
Tariff No. 012483-001) Since February 12, 1997, Owens has maintained 
its current tariff under the name, Owens Refrigerated Freight Limited 
(ATFI Tariff No. 014596-001). A NVOCC bond of $50,000 issued by 
Washington International Insurance Company (Bond No. 56065) has covered 
Owens' operations since April 8, 1994.1 Owens is the 
refrigerated freight division of a publicly traded New Zealand 
corporation, Owens Group Limited.2 According to its 
Directors' Report published on the Internet, Mr. Russell J. Hunter is 
the Group General Manager of Owens and, according to ATFI, he is the 
contact person for Owens' tariff filing. Owens' resident agent in the 
United States is NORAM Agencies Limited (``Noram''), 801 Second Ave., 
#419, Seattle, WA 98104.3
---------------------------------------------------------------------------

    \1\ Washington International Insurance Company is located at 
Suite 500, 300 Park Blvd., Itasca, IL 60143-2625.
    \2\ In addition to the refrigerated freight division, Owens 
Group Limited has operating divisions for specialized transport, 
ship agency, container services, international freight, etc.
    \3\ According to ATFI, Noram has been Owens' resident agent in 
the United States since July 28, 1995. Prior to that time, Owens 
apparently did not designate a resident agent in its NVOCC tariff.
---------------------------------------------------------------------------

    Between March 15, 1994 and August 19, 1997, Owens is believed to 
have entered into and participated in arrangements which allowed Owens 
to obtain ocean transportation for property at less than the rates or 
charges that would be otherwise applicable for shipments between 
Australia/New Zealand and the United States. In March 1994, Owens 
entered into an agreement with a common carrier, Ocean Management, Inc. 
(``OMI''), in which Owens obtained certain ocean transportation rates 
and other special transportation considerations from OMI for the 
transportation of Owens' cargo between the United States and Australia. 
The terms of this arrangement were not filed with the Commission. The 
agreement between OMI and Owens appears to have continued until March 
1, 1997, when Owens and OMI entered into a service contract which was 
filed with the Commission and became effective on March 1, 1997.
    In November 1996, Owens entered into another agreement with an 
ocean common carrier, South Seas Steamship Co., Ltd., in which Owens 
obtained certain ocean transportation rates and other special 
transportation

[[Page 53918]]

considerations for the transportation of Owens' cargo between the 
United States and New Zealand. The terms of this arrangement were not 
filed with the Commission until August 20, 1997, when they were filed 
in the tariff of South Seas Steamship Co., Ltd.
    Section 10(a)(1) of the Shipping Act of 1984 (``1984 Act''), 46 USC 
app. 1709(a)(1), prohibits any person from knowingly and willfully, 
directly or indirectly, by means of false billing, false 
classification, false weighing, false report of weight, false 
measurement, or by any other unjust or unfair device or means, 
obtaining or attempting to obtain ocean transportation for property at 
less than the rates or charges that would otherwise be applicable. 
Owens may have violated section 10(a)(1) of the 1984 Act by entering 
into and utilizing off-tariff agreements for ocean transportation. 
These arrangements appear to have given the NVOCC, Owens, ocean 
transportation rates which were less than the applicable tariff rates 
and may have provided Owens with various untariffed services and 
benefits for at least three years and involving hundreds of shipments.
    Under section 13 of the 1984 Act, 46 USC app. 1712, a person is 
subject to a civil penalty of not more than $25,000 for each knowing 
and willful violation of the 1984 Act, and not more than $5,000 for 
each other type of violation. 4 In addition, section 23 of 
the 1984 Act, 46 USC app. 1721, provides that a common carrier's tariff 
may be suspended for violations of section 10(a)(1) of the 1984 Act.
---------------------------------------------------------------------------

    \4\ The $25,000 and $5,000 penalties have been increased to 
$27,500 and $5,500, respectively, effective November 7, 1996. See 
Inflation Adjustment of Civil Monetary Penalties, 27 SRR 809 (1996), 
and 46 CFR Part 506.
---------------------------------------------------------------------------

    Now therefore, It is ordered, That pursuant to sections 10, 11, 13, 
14 and 23 of the 1984 Act, 46 USC app. 1709, 1710, 1712, 1713 and 1721, 
an investigation is instituted to determine:
    (1) whether Owens Refrigerated Freight Limited violated section 
10(a)(1) of the 1984 Act between March 15, 1994 and August 19, 1997, by 
knowingly and willfully, directly or indirectly obtaining or attempting 
to obtain ocean transportation at less than the rates and charges 
otherwise applicable by means of agreements whose terms were not filed 
in the applicable tariff(s) or essential terms publication(s) with the 
Commission;
    (2) whether, in the event violations of section 10(a)(1) of the 
1984 Act are found, civil penalties should be assessed against Owens 
Refrigerated Freight Limited and, if so, the amount of penalties to be 
assessed;
    (3) whether, in the event violations of section 10(a)(1) of the 
1984 Act are found, the tariff of Owens Refrigerated Freight Limited 
should be suspended or canceled; and 4) whether, in the event 
violations are found, an appropriate cease and desist order should be 
issued against Owens Refrigerated Freight Limited.
    It is further ordered, That a public hearing be held in this 
proceeding and that this matter be assigned for hearing before an 
Administrative Law Judge of the Commission's Office of Administrative 
Law Judges at a date and place to be hereafter determined by the 
Administrative Law Judge in compliance with Rule 61 of the Commission's 
Rules of Practice and Procedure, 46 CFR 502.61. The hearing shall 
include oral testimony and cross-examination in the discretion of the 
Presiding Administrative Law Judge only after consideration has been 
given by the parties and the Presiding Administrative Law Judge to the 
use of alternative forms of dispute resolution, and upon a proper 
showing that there are genuine issues of material fact that cannot be 
resolved on the basis of sworn statements, affidavits, depositions, or 
other documents or that the nature of the matters in issue is such that 
an oral hearing and cross-examination are necessary for the development 
of an adequate record;
    It is further ordered, That Owens Refrigerated Freight Limited is 
designated as Respondent in this proceeding;
    It is further ordered, That the Commission's Bureau of Enforcement 
is designated a party to this proceeding;
    It is further ordered, That notice of this Order be published in 
the Federal Register, and a copy be served on parties of record;
    It is further ordered, That other persons having an interest in 
participating in this proceeding may file petitions for leave to 
intervene in accordance with Rule 72 of the Commission's Rules of 
Practice and Procedure, 46 CFR 502.72;
    It is further ordered, That all further notices, orders, and/or 
decisions issued by or on behalf of the Commission in this proceeding, 
including notice of the time and place of hearing or prehearing 
conference, shall be served on parties of record;
    It is further ordered, That all documents submitted by any party of 
record in this proceeding shall be directed to the Secretary, Federal 
Maritime Commission, Washington, DC 20573, in accordance with Rule 118 
of the Commission's Rules of Practice and Procedure, 46 CFR 502.118, 
and shall be served on parties of record; and
    It is further ordered, That in accordance with Rule 61 of the 
Commission's Rules of Practice and Procedure, the initial decision of 
the Administrative Law Judge shall be issued by October 1, 1999 and the 
final decision of the Commission shall be issued by January 31, 2000.

    By the Commission.
Joseph C. Polking,
Secretary.
[FR Doc. 98-26815 Filed 10-6-98; 8:45 am]
BILLING CODE 6730-01-P