05-2796. Non-Vessel-Operating Common Carrier Service Arrangements

Served: February 8, 2005.

Order

The Commission's rule exempting non-vessel-operating common carriers (NVOCCs) from the Shipping Act's tariff publication requirements, conditioned upon the filing of confidential service arrangements (NSAs), went into effect on January 19, 2005. 69 FR 75850 (Dec. 20, 2004). The International Shippers' Association (ISA) and the American Institute for Shippers' Associations (AISA) have filed petitions seeking reconsideration of the new rule, and asking the Commission to stay the effectiveness of that rule.^[1] Both petitions were filed under Rule 261 of the Commission's Rules of Practice and Procedure; both also seek a waiver, under Rule 10, if the Commission finds them deficient under Rule 261.

For the reasons set forth below, we summarily reject both petitions, pursuant to Rule 261. We further deny the requests for waiver under Rule 10, and deny the requests for stay as moot.

I. Background

Both ISA and AISA participated in the NSA rulemaking by filing comments, and both objected to the Commission's determination not to allow NVOCCs, in their capacity as shippers, to enter into NSAs. They disagreed with the Commission's decision to define “NSA shipper” as excluding “NVOCCs or shippers’ associations whose membership includes NVOCCs.” 46 CFR 531.3(o). ISA and AISA now contend that in the rulemaking process, the Commission failed to consider their arguments; acted beyond its statutory authority in enacting the new rule; failed to adequately analyze the rule's potential effects on competition between large NVOCCs and smaller NVOCCs; and improperly regulated the membership of shippers' associations.

Two joint replies in opposition to the petitions were filed by the National Industrial Transportation League, United Parcel Service, BAX Global, FedEx Trade Networks Transport & Brokerage, the Transportation Intermediaries Association, C.H. Robinson Worldwide, and BDP International. The first joint reply addresses the two petitions' request for a stay of the rule's effective date, arguing that a stay is not warranted. The second joint reply contends that the substantive arguments advanced by the two petitioners are erroneous. In particular, the second joint reply argues that the Commission did make adequate findings concerning the new rule's potential effects on competition, and that the new rule is within the agency's statutory authority under section 16 of the Shipping Act, 46 U.S.C. app. 1715.

II. Discussion

Both petitions were filed pursuant to the Commission's Rule 261. That rule provides:

(a) Within thirty (30) days after issuance of a final decision or order by the Commission, any party may file a petition for reconsideration * * *. A petition will be subject to summary rejection unless it:

(1) Specifies that there has been a change in material fact or in applicable law, which change has occurred after issuance of the decision or order;

(2) Identifies a substantive error in material fact contained in the decision or order; or

(3) Addresses a finding, conclusion or other matter upon which the party has not previously had the opportunity to comment or which was not addressed in the briefs or arguments of any party. Petitions which merely elaborate upon or repeat arguments made prior to the decision or order will not be received. A petition shall be verified if verification of the original pleading is required and shall not operate as a stay of any rule or order of the Commission.

46 CFR 502.261(a).

We conclude that the two petitions have failed to meet any one of these standards. First, neither petition alleges that there has been a “change in material fact or in applicable law” subsequent to the issuance of the Commission's new rule. Neither petition cites an intervening judicial decision published subsequent to the issuance of the Commission's rule, nor to any alleged changes in material fact.

Second, neither petition seeks to identify “a substantive error in material fact” within the Commission's new rule. On the contrary, both petitions contend that the Commission reached an erroneous legal conclusion. As the text of Rule 261 makes clear, however, this is not an acceptable ground for seeking reconsideration.

Finally, neither ISA nor AISA contends that it did not have the opportunity to comment on any provision of the rule. Indeed, AISA even incorporates by reference its previously filed comments, in lieu of reiterating them. See AISA Petition at 2.

Pursuant to the standards of Rule 261, both petitions will be summarily rejected. See 46 CFR 502.261 (petitions failing to meet threshold standard for reconsideration “will be” summarily rejected). Both petitioners also request, if their petitions are deemed subject to summary rejection, that the Commission instead grant a waiver of Rule 261's requirements, pursuant to Rule 10. That rule provides:

Except to the extent that such waiver would be inconsistent with any statute, any of the rules in this part, except §§ 502.11 and 502.153, may be waived by the Commission or the presiding officer in any particular case to prevent undue hardship, manifest injustice, or if the expeditious conduct of business so requires.

46 CFR 502.10.

Neither petition sets forth an argument why summary rejection would constitute “undue hardship” or “manifest injustice,” and neither contends that the “expeditious conduct of business” requires a waiver. Accordingly, the Commission concludes that “undue hardship” or “manifest injustice” will not arise from the summary rejection of the two petitions for reconsideration. The requests for a waiver are denied.

Finally, both petitions ask the Commission to stay the effective date of the new rule. As mentioned, the rule went into effect on January 19. The requests for stay are denied as moot.

III. Conclusion

We summarily reject the two petitions for reconsideration, decline to authorize a waiver under Rule 10, and deny the requests for stay as moot.

Therefore, it is ordered, That the petitions are denied.

By the Commission.

Karen V. Gregory,

Assistant Secretary.

Footnotes

1.  ISA's petition was filed on January 7, 2005, and AISA's petition was filed on January 11. The 15 day comment periods for both petitions extended beyond the scheduled effective date of the new rule. See 46 CFR 502.74. However, neither petitioner requested a shorter comment period for consideration of its request for a stay. See 46 CFR 502.103 (time may be shortened “for good cause”).