Cozen O’Connor: Legislation Alters Shipping Act Treatment of Attorneys’ Fees [Transportation & Logistics Alert]

Legislation Alters Shipping Act Treatment of Attorneys’ Fees

Transportation & Logistics Alert

December 11, 2014

Late yesterday, both the U.S. House of Representatives and the U.S. Senate passed S. 2444, the Howard Coble Coast Guard and Maritime Transportation Act of 2014.

In addition to appropriating funds for Federal Maritime Commission (FMC) operations for fiscal year 2015 and limiting the terms of future FMC commissioners, this legislation, if signed into law by the president, would make a potentially significant change in the U.S. Shipping Act of 1984, as amended (the Shipping Act).

The Shipping Act currently provides that the FMC shall award reasonable attorneys’ fees to a complainant that recovers reparations for actual injury suffered as a result of a violation of the Shipping Act in a complaint proceeding before the agency. See, 46 U.S.C. § 41301(b). In other words, an award of attorneys’ fees to a complainant that succeeds in a claim for reparations is mandatory.

S. 2444 would revise section 41301(b) to delete the reference to attorneys’ fees. It would add a new Section 41305(e) to the Shipping Act that would read as follows:

Attorney Fees. – In any action brought under section 41301, the prevailing party may be   awarded reasonable attorney fees.

This change in language is significant for three reasons. First, by using the word “may” rather than the word “shall,” the new statutory provision quoted above makes the award of attorneys’ fees discretionary, rather than mandatory. Second, the new language severs the link between an award of reparations and the recovery of attorneys’ fees. Thus, a claimant that does not recover monetary damages but still prevails in its claim (e.g., obtains a cease and desist order) may now be able to recover attorneys’ fees whereas it could not under the current statute. Third, the new language appears to permit a respondent that successfully defends itself against an alleged Shipping Act violation to seek recovery of attorneys’ fees, whereas presently only claimants may recover such fees.

This statutory change could have significant strategic implications for parties contemplating litigation before the FMC.


Authors

Wayne R. Rohde

Member

wrohde@cozen.com

(202) 463-2507

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Should you have any questions regarding The Shipping Act or any other legislation affecting the Maritime industry, please do not hesitate to contact a member of Cozen O’Connor’s Transportation & Logistics Department.