Orient Overseas Container Line (OOCL) has launched a legal challenge against the Federal Maritime Commission, arguing the regulator’s in-house adjudication process is unconstitutional following a $45m ruling against the liner operator.
In a filing submitted to a federal court in Texas on Tuesday, OOCL asked the court to halt ongoing FMC administrative proceedings and vacate an initial decision that ordered the company to pay $45m.
The carrier argued that the FMC’s internal court structure violates constitutional protections by allowing agency-appointed administrative law judges to decide cases that, OOCL contends, should instead be heard in federal courts before juries.
The dispute centres on the FMC’s enforcement powers and its growing role in policing detention and demurrage billing practices under the US Shipping Act, an area that has become increasingly contentious since pandemic-era supply chain disruptions.
Last week, Splash reported on a judge’s ruling that OOCL must pay a record $45.6m in reparations to the bankruptcy estate of collapsed retailer Bed Bath & Beyond.. Chief administrative law judge Erin Wirth issued the 203-page decision, finding that OOCL, the Hong Kong subsidiary of China’s COSCO, violated multiple provisions of the US Shipping Act by failing to meet contracted space commitments during the covid pandemic freight boom, retaliating against the shipper when it raised complaints. The ruling is the largest reparations award in FMC history.
OOCL’s challenge reflects a broader wave of legal attacks on the authority of US federal agencies, particularly their use of in-house courts and administrative judges. Recent rulings by the US Supreme Court have emboldened companies to question whether regulators can impose penalties through internal proceedings rather than through the traditional judicial system.
The initial FMC decision against OOCL reportedly stemmed from allegations related to carrier practices and financial penalties under the commission’s regulatory oversight. By seeking to overturn the ruling entirely, OOCL is escalating what could become a landmark test of the FMC’s enforcement framework.
The case is likely to attract close attention across the liner sector, where carriers have faced mounting regulatory scrutiny in the US over pricing, congestion surcharges, detention and demurrage practices, and competition concerns.
If successful, OOCL’s lawsuit could significantly weaken the FMC’s ability to pursue enforcement actions through its existing administrative process, potentially forcing more disputes into federal courts and slowing future regulatory action.
The legal challenge also comes at a sensitive moment for Washington’s maritime policy agenda as US authorities push for stricter oversight of foreign shipping lines and greater federal intervention in supply chain resilience and maritime competition.
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