Shipping Act Violations: FMC Informal Small Claims

Part of the Federal Maritime Commission’s (FMC) job is to regulate international ocean transportation as it relates to U.S. exporters, importers and consumers.  One way the FMC fulfills its mission is by protecting the trading community from financial harm through dispute resolution and proceedings.  The FMC can hear disputes that arise under the Shipping Act of 1984 as amended by the Ocean Shipping Reform Act of 1998, which governs international ocean shipment of goods, codified at 46 U.S.C. § 40101-41309.  So what does this mean for you, the importer, exporter, or consumer?

You may have found yourself in the situation where, as a shipper, you cannot determine the location of your cargo, or your cargo was lost or damaged and you are having problems processing your claims.  You may have economic problems with an NVOCC that is defaulting, or you might not be able to agree with a carrier on a service contract.  As a freight forwarder, you may have difficulty collecting compensation from a carrier, or you may have issues with a carrier objecting to your document preparation.  If any of these issues involves a claim of less than $50,000.00, then FMC small claims proceedings are one of the ways you can go about resolving your problem.^[1]

The FMC provides a standard format for preparing a small claim, whether prepared by an attorney or on your own, and it must include the following^[2]:

• a statement of which section of the Shipping Act you believe has been violated (46 U.S.C. Ch. 411)
• a dated, signed, sworn, and notarized statement that the information contained in the claim is true and correct

In addition to those requirements, you would generally set out the facts of your case briefly and succinctly then send to the FMC the original claim along with two copies of the claim and any documentation you have that supports your claim.  Keep in mind that your claim must be filed within three years from the date of the violation.  As of this publication, the filing fee for a small claim complaint is $67.00^[3].

Once you have filed your claim, the FMC will allow the person or company against whom you are complaining (the respondent) 25 days to object to the informal small claims procedure.  If the respondent objects, then the claim would go through the formal process in front of an Administrative law judge as required under Subpart T of the FMC rules.  If there is no objection, an FMC Settlement Officer appointed by the FMC’s Alternative Dispute Resolution Specialist will decide the issue on behalf of the parties.^[4] 46 C.F.R. §502.304 The Settlement Officer will issue a decision that is final after a 30 day period as long as no individual Commissioner decides to review the decision and neither of the parties involved asks for reconsideration.

Going through the informal procedure can be faster and less onerous than more formal proceedings, and may be a good option for you if you find yourself harmed by someone’s violation of the Shipping Act.  For more information on small claims and other proceedings before the FMC, please contact us by phone at (800) 583-0250 or (850) 893-0670; by fax at (850) 391-4228; by mail at 1911 Capital Circle N.E., Tallahassee, FL 32308; or by email at smorrison@customscourt.com or nmooney@customscourt.com.  You may also find more information by visiting the FMC website at www.fmc.gov.