[Federal Register Volume 79, Number 183 (Monday, September 22, 2014)]
[Proposed Rules]
[Pages 56546-56547]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2014-22427]



[[Page 56546]]

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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: Notice of proposed rulemaking.

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SUMMARY: The Federal Maritime Commission proposes to amend its rules 
governing dismissals of actions by complainants, by order of the 
presiding officer, and by respondents when complainant fails to 
prosecute.

DATES: Comments are due on or before October 22, 2014.

ADDRESSES: Address all comments concerning this proposed rule to: Karen 
V. Gregory, Secretary, Federal Maritime Commission, 800 North Capitol 
Street NW., Washington, DC 20573-0001, Phone: (202) 523-5725, Email: 
[email protected].

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 proposes 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. When Sec.  502.72 was 
published in October 2012, 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 language of the rule, however, did not expressly 
address the procedure to follow if a stipulation of dismissal by the 
parties is the result of a settlement between the parties. The proposed 
revision 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.
    Section 502.72 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, fatigue, etc.). The 
rule does not, however, expressly address the circumstance when a 
voluntary dismissal is the result of a settlement between the parties.
    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, 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, 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. 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 expressed 
in adopted section 502.72 that it is 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.

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 proposes to revise 46 CFR Part 502 Rule 72 as follows:

PART 502--RULES OF PRACTICE AND PROCEDURE

Subpart E--Proceedings; Pleadings; Motions; Replies

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.

0
2. Revise Sec.  502.72 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

[[Page 56547]]

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.

    By the Commission.
Karen V. Gregory,
Secretary.
[FR Doc. 2014-22427 Filed 9-19-14; 8:45 am]
BILLING CODE 6730-01-P