[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