Shippers are expected to band together in complaints against carriers, including container liner operators, after the Federal Maritime Commission opened the door for hearing class actions.
Maritime and trade lawyers believe class action complaints will be filed at the FMC even if US President Donald Trump ratchets back its enforcement authority, as he has done with other federal agencies.
The potential for class-action litigation at Washington’s main regulator of international shipping comes after an already elevated caseload in recent years, which led it in October to temporarily expand the number of administrative law judges handling cases.
At the beginning of January, less than three weeks before Trump took power, the FMC released policy guidance “making clear it is an appropriate venue where private parties may bring class actions to resolve disputes”, covered by the laws under its jurisdiction, which include the Shipping Act.
Class actions allow a group of plaintiffs with similar claims to bring a single case that also seeks to represent all other parties who are in a similar situation.
Trade lawyers at Washington DC firm Venable described the guidance as an attempt by the commission to “level the playing field” for shippers and other parties.
“While there is currently no commission precedence regarding adjudication of class action complaints, the FMC noted that there is well-established precedence from the federal courts from which to draw guidance,” Venable said in a note to clients.
“Accordingly, even if commission enforcement activities are curbed under the new administration, private parties may start taking advantage of the ability to bring class action complaints at the FMC this year.”
Reversing Biden
Although Trump has sought to reverse many policy decisions of the waning days of his predecessor, Joe Biden, the class action guidance is poised to stick.
Four commissioners voted for the guidance, with one recusing himself from the vote, according to FMC spokesman John DeCrosta.
That means chairman Louis Sola was among those in favour of the policy before Trump appointed him to lead the commission.
DeCrosta told TradeWinds there are no plans to change the guidance.
Since the publication of the guidance, one lawyer with knowledge of the FMC’s caseload pointed out that the judges temporarily assigned to the commission came from the Department of Health & Human Services, with no experience in maritime or transportation.
“Think about adding the complexity of a class action onto that,” he said.
Some of the commission’s procedures may have to evolve to handle class-action cases.
The FMC said in January that it will look to the Federal Rules of Civil Procedure, which govern litigation in the US district courts, to set out the rules on class action.
Christopher Nolan, a maritime lawyer at law firm Holland & Knight who represents clients in FMC cases, noted that the commission’s own procedures give only 150 days for fact discovery in its regular cases.
‘Rocket docket’
“The FMC is already a super rocket docket,” he said. “In a class action, that’s impossible.”
But the FMC has expressed confidence in its ability to handle more complex class action cases.
“If a class action got filed, it would not challenge the judges or the commission in being able to manage the case,” DeCrosta said.
“They would rise to the occasion.”(Copyright)
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