Hearing Procedures Governing the Denial, Revocation, or Suspension of an OTI License
| Published date | 31 January 2020 |
| Citation | 85 FR 5579 |
| Record Number | 2020-00907 |
| Section | Rules and Regulations |
| Court | Federal Maritime Commission |
Federal Register, Volume 85 Issue 21 (Friday, January 31, 2020)
[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]
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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.
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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.
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\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).
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A notice of proposed rulemaking (NPRM) was issued by the Commission
on September 3, 2019.\2\ The Commission received no comments.
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\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).
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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\
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\3\ 46 U.S.C. 40901.
\4\ Id. at section 40901(a).
\5\ 46 CFR 501.26(a)(1).
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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\
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\6\ 46 CFR 515.17(a).
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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\
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\7\ 46 CFR 515.17(b).
\8\ 46 CFR 515.17(c).
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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.
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\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.
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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
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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
