[Federal Register Volume 85, Number 21 (Friday, January 31, 2020)]
[Rules and Regulations]
[Pages 5579-5583]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-00907]


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

FEDERAL MARITIME COMMISSION

46 CFR Parts 502 and 515

[Docket No. 19-04]
RIN 3072-AC75


Hearing Procedures Governing the Denial, Revocation, or 
Suspension of an OTI License

AGENCY: Federal Maritime Commission.

ACTION: Final rule.

-----------------------------------------------------------------------

SUMMARY: The Federal Maritime Commission (Commission) is modifying the 
hearing procedures governing the denial, revocation, or suspension of 
an ocean transportation intermediary (OTI) license. The revised hearing 
procedures align more with other Commission hearing procedures, ensure 
a more streamlined process, and fulfill the need for more detailed 
procedural requirements.

[[Page 5580]]


DATES: This final rule is effective March 2, 2020.

FOR FURTHER INFORMATION CONTACT: Rachel E. Dickon, Secretary; Phone: 
(202) 523-5725; Email: [email protected].

SUPPLEMENTARY INFORMATION:

I. Introduction

    Through this final rule, the Commission is modifying its processes 
for the denial, suspension, and revocation of OTI licenses.\1\ The 
revised hearing procedures are based on the procedure for formal small 
Shipping Act claims under 46 CFR part 502, subpart T. The new hearing 
procedure, overseen by an administrative law judge (ALJ), represents an 
expedient, low-burden process that also fulfills the need for more 
structure in the proceedings.
---------------------------------------------------------------------------

    \1\ These hearing procedures also apply to suspensions and 
terminations of foreign-based non-vessel-operating common carrier 
(NVOCC) registrations. See 46 CFR 515.19(g)(2).
---------------------------------------------------------------------------

    A notice of proposed rulemaking (NPRM) was issued by the Commission 
on September 3, 2019.\2\ The Commission received no comments.
---------------------------------------------------------------------------

    \2\ NPRM: Hearing Procedures Governing the Denial, Revocation, 
or Suspension of an OTI License, 84 FR 45934 (Sept. 3, 2019), as 
corrected by 84 FR 48578 (Sep. 16, 2019).
---------------------------------------------------------------------------

II. Background

    The Shipping Act requires anyone desiring to operate as an OTI to 
obtain a license from the Commission.\3\ The Act provides that ``[t]he 
Commission shall issue a license to a person that the Commission 
determines to be qualified by experience and character to act as an 
ocean transportation intermediary.'' \4\ The Commission has delegated 
the authority to approve or disapprove applications for OTI licenses to 
the Bureau of Certification and Licensing (BCL).\5\
---------------------------------------------------------------------------

    \3\ 46 U.S.C. 40901.
    \4\ Id. at section 40901(a).
    \5\ 46 CFR 501.26(a)(1).
---------------------------------------------------------------------------

A. Current Procedure

    Hearings on the revocation, denial, or suspension of an OTI license 
are conducted under the procedures in 46 CFR 515.17. All hearing 
requests are submitted to the Commission's Secretary. The Secretary 
then designates a hearing officer. After being advised by the hearing 
officer that a hearing request had been made, BCL sends the hearing 
officer and applicant or licensee a copy of the notice of intent (which 
had already been sent to the applicant or licensee) along with 
materials supporting the notice under Sec.  515.15 or Sec.  515.16.\6\
---------------------------------------------------------------------------

    \6\ 46 CFR 515.17(a).
---------------------------------------------------------------------------

    The hearing officer then provides the licensee or applicant with a 
written notice advising the party of its right to submit written 
arguments, affidavits of fact, and documents. The licensee or applicant 
then has 30 days to submit information and documents in support of a 
license or in support of continuation of a license. BCL then submits 
its response within 20 days of the licensee or applicant's submission. 
These records and submissions constitute the entire record for the 
hearing officer's decision. The hearing officer's decision must be 
issued within 40 days of the record being closed.\7\ The applicant or 
licensee, but not BCL, can seek review of the hearing officer's 
decision by the Commission by filing exceptions in accordance with 46 
CFR 502.227, and the Commission can determine to conduct a formal 
evidentiary hearing under part 502.\8\
---------------------------------------------------------------------------

    \7\ 46 CFR 515.17(b).
    \8\ 46 CFR 515.17(c).
---------------------------------------------------------------------------

B. Concerns With Current Procedure

    Despite the Commission's goal of streamlining OTI proceedings with 
the Sec.  515.17 procedures, hearings under Sec.  515.17 have taken 
over 150 days to complete. A contributing factor to the length of time 
in these cases is the delay in the selection of an appropriate hearing 
officer, which took between 13 and 50 days. These delays resulted from 
not having a designated office from which to select the hearing 
officer.
    In addition to the delays in selecting a hearing officer, because 
Sec.  515.17 provides little detail about the hearing procedure other 
than deadlines for submission of information, Commission staff have had 
to resolve several procedural issues arising in hearing proceedings. 
These experiences demonstrated the need for additional clarification of 
the procedure and the authority of the hearing officer.

III. Final Rule

    For the reasons stated in the NPRM and described above, the 
Commission is adopting the proposed rule with virtually no changes.\9\ 
The new hearing procedures will be conducted by an ALJ, thereby 
removing the delay in the appointment of a hearing officer. Using a 
modified form of the subpart T procedures will ensure a more 
streamlined procedure than a typical hearing under part 502, which 
allows for 150 days of discovery,\10\ while giving the presiding 
officer more flexibility in conducting the hearing than the current 
Sec.  515.17 procedures. The new proceedings will be included in part 
502 as subpart X (the existing subpart X will be redesignated) and 
cross-referenced in Sec.  515.17.
---------------------------------------------------------------------------

    \9\ The NPRM inadvertently listed the wrong authorities for part 
502. This has been corrected in the final rule. The final rule also 
makes very minor wording changes to the new Sec.  502.706 governing 
requests for oral hearing and argument.
    \10\ See 46 CFR 502.141-502.150. Given that the record in OTI 
license application and revocation/suspension is generally more 
limited, such a substantial discovery process is not necessary.
---------------------------------------------------------------------------

A. New Procedure for License Hearings

    As described in the NPRM, the Commission will not change the 
process for requesting a hearing as stated in Sec. Sec.  515.15(c) and 
515.16(a). If an applicant or licensee requests a hearing after 
receiving a notice of intent to deny, suspend, or revoke their license, 
they will continue to have 20 days to do so, and, if no hearing is 
requested, the decision to deny, revoke, or suspend will become final.
    If a hearing request is received, the Secretary will transmit the 
request to the Office of Administrative Law Judges for assignment. The 
hearing will then take place under the new subpart X of part 502. 
Section 515.17 retains its first sentence, indicating that hearing 
requests under Sec. Sec.  515.15 and 515.16 must be submitted to the 
Commission's Secretary, and then cross-references subpart X.
    The preliminary portions of the new subpart X mirror the previous 
procedures in Sec.  515.17, save that an ALJ, rather than a hearing 
officer, will preside over the proceeding. Once a timely request is 
received, the Secretary will transmit the request to the Office of 
Administrative Law Judges who would notify BCL and Bureau of 
Enforcement (BOE) of the hearing request. BOE will provide the 
applicant or licensee a copy of the notice previously given as well as 
the BCL materials supporting the decision. The ALJ will then issue a 
notice advising the applicant or licensee of the right to respond in 
support of a license application or continuation of a current OTI 
license. The licensee or applicant will have 30 days to file a response 
and supporting documentation. BOE will then have 20 days to submit a 
reply memorandum and supporting documents. These proposed deadlines are 
identical to those currently listed in Sec.  515.17.
    To provide the ALJ with discretion and flexibility, the new subpart 
X will permit the ALJ to require additional information from the 
parties. Additionally, the new subpart X allows for parties to request 
oral hearing or oral argument in either the applicant/

[[Page 5581]]

licensee's response or BOE's reply to the response. A request for oral 
hearing or argument will be ruled on within 10 days of receipt of the 
request and will only occur at the discretion of the ALJ. While neither 
oral proceedings nor additional information were expressly permitted 
under Sec.  515.17 and could potentially extend the proceeding beyond 
the current Sec.  515.17 timeline, we expect use of these procedures to 
be the exception rather than the norm. In addition, expressly 
permitting the use of these procedures when necessary will help ensure 
that determinations are based on a complete and accurate record and 
eliminate confusion regarding the presiding officer's authority.
    To ensure a streamlined process, the Commission will still require 
that the presiding officer issue a decision within 40 days of the 
record being closed, which will be either when the reply to the 
response is submitted, or, if additional information is required or 
oral hearing or argument is conducted, the completion of either event.
    The exceptions process remains the same as under the current Sec.  
515.17, except that either party (BOE or the applicant/licensee) has 
the ability to file exceptions within 22 days after the ALJ's decision 
is issued.
    The discretionary review process has also been altered somewhat. 
Previously, discretionary Commission review of hearing officer 
decisions was governed by the general provisions in 46 CFR 501.27, 
which allowed for review if one less than a majority of Commissioners 
(i.e., two Commissioners if there are four or five Commissioners total) 
voted to review the matter. The change makes the discretionary review 
procedures consistent with those for other decisions under part 502 
(i.e., ALJ and small claims officer decisions), and a single 
Commissioner may now request Commission review within 30 days after the 
ALJ's decision is issued.
    Through this rule, the Commission also incorporates via cross-
reference nearly all of subparts G, governing time, and H, governing 
service of documents, of part 502. This brings license hearings in line 
with other proceedings under part 502 and any future improvements to 
the Commission rules on service and time will automatically apply to 
these proceedings. The only section in these subparts that will not 
apply to license hearings under subpart X is Sec.  502.115, which 
concerns service in rulemaking and petition proceedings.
    To ensure consistency across part 502 proceedings, other sections 
of part 502 will also apply to license hearings under subpart X, 
including: Sec. Sec.  502.1-502.13 (General information); 502.21-502.23 
(Appearance, Authority for representation, Notice of appearance; 
substitution and withdrawal of a representative); 502.42 (Bureau of 
Enforcement); 502.43 (Substitution of parties); and 502.223-502.230 
(Decisions).

IV. Conclusion

    Under the hearing procedures in Sec.  515.17, the Commission has 
encountered issues with regards to expediency and clarity of process. 
To resolve these issues and improve the license hearing process, the 
Commission is replacing the current hearing procedures with a modified 
version of the procedures in subpart T of the Commission's Rules of 
Practice and Procedure. This new procedure will provide additional 
structure while ensuring a low-burden and efficient process.

V. Rulemaking Analyses and Notices

Congressional Review Act

    This final rule is not a ``rule'' as defined by the Congressional 
Review Act (CRA), codified at 5 U.S.C. 801 et seq., and is not subject 
to the provisions of the CRA. The CRA adopts the Administrative 
Procedure Act's definition of a ``rule'' in 5 U.S.C. 551, subject to 
certain exclusions. See 5 U.S.C. 804(3). In particular, the CRA does 
not apply to rules of agency organization, procedure, and practice that 
do not substantially affect the rights or obligations of non-agency 
parties. Id. This final rule relates to agency organization, 
procedures, and practices. Specifically, the rule will amend the 
Commission's procedures for OTI license hearings. These changes will 
not, however, substantially affect the rights or obligations of non-
agency parties. Applicants and licensees will still have the 
opportunity to request a hearing on proposed denials, suspensions, or 
revocations, and will still have the ability to seek Commission review 
of initial decisions. The final rule merely designates an ALJ as the 
presiding officer, brings the OTI license hearing procedures into 
alignment with other Commission proceedings, and adds additional 
procedural flexibility by allowing the ALJ to request additional 
information and documents from the parties, as well as allowing parties 
to request oral hearing or argument. The final rule also creates 
additional avenues for Commission review of initial license decisions 
by: (1) Permitting BOE to file exceptions; and (2) allowing a single 
Commissioner to request review of the ALJ's decision. While these 
changes will alter the way OTI license hearings are conducted, they do 
not substantially affect the rights of applicants or licensees, and 
therefore the final rule is not a ``rule'' under the CRA and is not 
subject to the CRA's requirements.

Regulatory Flexibility Act

    The Regulatory Flexibility Act (codified as amended at 5 U.S.C. 
601-612) provides that whenever an agency is required to publish a 
notice of proposed rulemaking under the Administrative Procedure Act 
(APA) (5 U.S.C. 553), the agency must prepare and make available a 
final regulatory flexibility analysis (FRFA) describing the impact of 
the rule on small entities. 5 U.S.C. 604. An agency is not required to 
publish an FRFA, however, for the following types of rules, which are 
excluded from the APA's notice-and-comment requirement: Interpretative 
rules; general statements of policy; rules of agency organization, 
procedure, or practice; and rules for which the agency for good cause 
finds that notice and comment is impracticable, unnecessary, or 
contrary to public interest. See 5 U.S.C. 553(b).
    Although the Commission elected to seek public comment, the rule is 
a rule of agency organization, procedure, or practice. Therefore, the 
APA did not require publication of a notice of proposed rulemaking in 
this instance, and the Commission is not required to prepare a FRFA.

National Environmental Policy Act

    The Commission's regulations categorically exclude certain 
rulemakings from any requirement to prepare an environmental assessment 
or an environmental impact statement because they do not increase or 
decrease air, water or noise pollution or the use of fossil fuels, 
recyclables, or energy. 46 CFR 504.4. The proposed rule would amend the 
Commission procedures for the revocation, suspension, and denial of OTI 
licenses. This rulemaking thus falls within the categorical exclusion 
for ``issuance, modification, denial and revocation of ocean 
transportation intermediary licenses.'' 46 CFR 504.4(a)(1). Therefore, 
no environmental assessment or environmental impact statement is 
required.

Paperwork Reduction Act

    The Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3521) (PRA) 
requires an agency to seek and receive approval from the Office of 
Management and Budget (OMB) before collecting information from the 
public. 44 U.S.C. 3507. The agency must submit collections of 
information in proposed

[[Page 5582]]

rules to OMB in conjunction with the publication of the notice of 
proposed rulemaking. 5 CFR 1320.11. This rule does not contain any 
collections of information as defined by 44 U.S.C. 3502(3) and 5 CFR 
1320.3(c).

Executive Order 12988 (Civil Justice Reform)

    This rule meets the applicable standards in E.O. 12988 titled, 
``Civil Justice Reform,'' to minimize litigation, eliminate ambiguity, 
and reduce burden.

Regulation Identifier Number

    The Commission assigns a regulation identifier number (RIN) to each 
regulatory action listed in the Unified Agenda of Federal Regulatory 
and Deregulatory Actions (Unified Agenda). The Regulatory Information 
Service Center publishes the Unified Agenda in April and October of 
each year. You may use the RIN contained in the heading at the 
beginning of this document to find this action in the Unified Agenda, 
available at http://www.reginfo.gov/public/do/eAgendaMain.

List of Subjects

46 CFR Part 502

    Administrative practice and procedure, Claims, Equal access to 
justice, Investigations, Lawyers, Maritime carriers, Penalties, 
Reporting and recordkeeping requirements.

46 CFR Part 515

    Freight, Freight forwarders, Maritime carriers, Reporting and 
recordkeeping requirements.

    For the reasons set forth above, the Federal Maritime Commission 
amends 46 CFR parts 502 and 515 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; 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; 5 CFR part 2635.

Subpart X [Redesignated as Subpart Y]

0
2. Redesignate subpart X, consisting of Sec.  502.991, as subpart Y.

0
3. Add new subpart X, consisting of Sec. Sec.  502.701 through 502.709, 
to read as follows:

Subpart X--Hearing Procedure Governing Denial, Suspension, or 
Revocation of OTI License

Sec.
502.701 Purpose and scope.
502.702 Hearing requests.
502.703 Applicant or licensee response.
502.704 Reply.
502.705 Additional information.
502.706 Request for an oral hearing or argument.
502.707 Intervention.
502.708 Decision.
502.709 Applicability of other rules to this subpart.

Subpart X--Hearing Procedure Governing Denial, Suspension, or 
Revocation of OTI License


Sec.  502.701  Purpose and scope.

    (a) The purpose of this subpart is to provide the hearing 
procedures for the denial, suspension, or revocation of an ocean 
transportation intermediary (OTI) license applied for or issued under 
part 515 of this chapter when the Bureau of Certification and Licensing 
has issued a notice of intent to deny under Sec.  515.15 of this 
chapter or notice of revocation or suspension under Sec.  515.16 of 
this chapter and the applicant or licensee timely requests a hearing 
under those sections.
    (b) Denial, suspension, and revocation proceedings under this 
subpart will be adjudicated by the administrative law judges of the 
Commission under the procedures set forth in this subpart. [Rule 701.]


Sec.  502.702  Hearing requests.

    (a) Upon receipt of a timely hearing request under Sec.  515.17 of 
this chapter, the Secretary will transmit the request to the Office of 
Administrative Law Judges.
    (b) The assigned administrative law judge will notify the Bureau of 
Certification and Licensing (BCL) and the Bureau of Enforcement of the 
hearing request, and the Bureau of Enforcement must file with the 
administrative law judge and serve on the applicant or licensee a copy 
of the notice given to the applicant or licensee and a copy of BCL 
materials supporting the notice. [Rule 702.]


Sec.  502.703  Applicant or licensee response.

    Upon receiving the materials described in Sec.  502.702(b), the 
administrative law judge will issue a notice advising the applicant or 
licensee of the right to respond in support of an OTI application or 
continuation of a current OTI license. The response must be:
    (a) Filed with the administrative law judge within 30 days of the 
administrative law judge's notice; and
    (b) Include any supporting information or documents, such as 
affidavits of fact, memoranda, or written argument. [Rule 703.]


Sec.  502.704  Reply.

    The Bureau of Enforcement may, within twenty (20) days of service 
of the response filed by the applicant or licensee, file with the 
administrative law judge and serve upon the applicant or licensee a 
reply memorandum accompanied by appropriate affidavits and supporting 
documents.


Sec.  502.705  Additional information.

    The administrative law judge may require the submission of 
additional affidavits, documents, or memoranda from the Bureau of 
Enforcement or the licensee or applicant. [Rule 705.]


Sec.  502.706  Request for an oral hearing or argument.

    (a) In the usual course of disposition of matters filed under this 
subpart, no oral hearing or argument will be held, but the 
administrative law judge, in their discretion, may order such hearing 
or argument.
    (b) A request for oral hearing or argument may be incorporated in 
the applicant or licensee's response or in the Bureau of Enforcement's 
reply to the response. Requests for oral hearing or argument will not 
be entertained unless they set forth in detail the reasons why the 
filing of affidavits or other documents will not permit the fair and 
expeditious disposition of the matter, and the precise nature of the 
facts sought to be proved or issues to be addressed at an oral hearing 
or argument.
    (c) The administrative law judge will rule upon a request for oral 
hearing or argument within ten (10) days of its receipt.
    (d) In the event oral hearing or argument is ordered, it will be 
held in accordance with the rules applicable to other formal 
proceedings, as set forth in subparts A through Q of this part. [Rule 
706.]


Sec.  502.707  Intervention.

    Intervention will ordinarily not be permitted. [Rule 707.]


Sec.  502.708  Decision.

    (a) Except as described in paragraph (b) of this section, the 
administrative law judge will issue a decision within forty (40) days 
after the submission of the Bureau of Enforcement's reply.
    (b) If oral hearing or argument is conducted or additional 
information is

[[Page 5583]]

required, then the decision will be issued within forty (40) days after 
the oral proceeding or the deadline for submission of additional 
information, whichever is later.
    (c) The decision of the administrative law judge will be final, 
unless, within twenty-two (22) days from the date of service of the 
decision, either party files exceptions under Sec.  502.227(a)(1) or 
the Commission makes a determination to review under Sec.  
502.227(a)(3) and (d). [Rule 708.]


Sec.  502.709  Applicability of other rules to this subpart.

    (a) Except as otherwise specifically provided in this subpart or in 
paragraph (b) of this section, the sections in subparts A through Q, 
inclusive, of this part do not apply to proceedings covered by this 
subpart.
    (b) The following sections in subparts A through Q apply to 
proceedings covered by this subpart: Sec. Sec.  502.1 through 502.11, 
502.13 (Filing requirements, Document requirements, and General rules); 
502.21 through 502.23 (Appearance, Authority for representation, Notice 
of appearance, Substitution, and Withdrawal of representative); 502.42 
(Bureau of Enforcement); 502.43 (Substitution of parties); 502.101 
through 502.105 (Computation of time); 502.114, 502.116 through 502.117 
(Service of documents); 502.223 through 502.230 (Decisions). [Rule 
709.]

PART 515--LICENSING, REGISTRATION, FINANCIAL RESPONSIBILITY 
REQUIREMENTS AND GENERAL DUTIES FOR OCEAN TRANSPORTATION 
INTERMEDIARIES

0
4. The authority citation for part 515 continues to read as follows:

    Authority: 5 U.S.C. 553; 31 U.S.C. 9701; 46 U.S.C. 305, 40102, 
40104, 40501-40503, 40901-40904, 41101-41109, 41301-41302, 41305-
41307; Pub. L. 105-383, 112 Stat. 3411; 21 U.S.C. 862.


0
5. Revise Sec.  515.17 to read as follows:


Sec.  515.17  Hearing procedures governing denial, revocation, or 
suspension of OTI license.

    All hearing requests under Sec. Sec.  515.15 and 515.16 shall be 
submitted to the Commission's Secretary. The hearing will be 
adjudicated under the procedures set forth in subpart X of part 502 of 
this chapter.

    By the Commission.
Rachel Dickon,
Secretary.
[FR Doc. 2020-00907 Filed 1-30-20; 8:45 am]
BILLING CODE 6731-AA-P