Editor’s note: Attorneys Ashley Craig and Robert Hart of the Washington, DC-based law firm Venable look at the recent Appeals Court case that forced changes to the 1984 Shipping Act. The Landstar Express America v. Federal Maritime Commission affirms that it is lawful for a licensed OTI to engage an unlicensed person to act as its agent to perform OTI services. By Ashley W. Craig & Robert L. Hart, Venable’s International TradeOn November 6, 2009, the FMC (Federal Maritime Commission) granted a “Petition for Declaratory Order” from Team Ocean Services, Inc. (“Team Ocean”) that effectively affirmed that it is legal for OTIs (Ocean Transportation Intermediaries) to engage unlicensed persons to act as their agents in the conducting of OTI services. The Shipping Act of 1984, as amended, provides that “[a] person in the United States may not act as an ocean transportation intermediary unless the person holds an ocean transportation intermediary’s license issued by the Federal Maritime Commission.” In January 2006, Landstar Express America, Inc. (“Landstar”) requested an opinion letter from the FMC’s General Counsel concerning the legality of the use of unlicensed agents in certain aspects of the licensed OTI’s business. The General Counsel advised that such a practice would be legally permissible, since the agents would not be “holding out in their own right to provide OTI services.” However, when Team Ocean petitioned the FMC in August 2006 for a Declaratory Order affirming this position, the Commission rejected the General Counsel’s view. The Commission found that the licensing requirement of the Shipping Act of 1984 demonstrated an “overriding legislative intent . . . to protect the public from unqualified and potentially unscrupulous OTI services providers” and that “allowing licensed OTIs to introduce unknown and unqualified ‘agents’ to provide OTI services to the public would undermine Congress’s intent in enacting [the licensing requirement of the Act].” Taking the position that the requirements of the Shipping Act of 1984 mandated that only licensed OTIs provide OTI services, and that in providing services for an OTI agents would be “acting” as an ocean transportation intermediary,” the Commission rejected Team Ocean’s petition. In April 2009, Landstar petitioned the U.S. Court of Appeals for the District of Columbia Circuit to review the Commission’s decision. The Court of Appeals vacated the Commission’s Declaratory Order, noting that the Shipping Act of 1984’s definition of an OTI includes only those entities that are held out to the general public to provide the services of an OTI. The Court contended that an unlicensed agent would not hold itself out to the public to provide the services of an OTI, but would simply provide certain services on behalf of a disclosed principal, the licensed OTI. Accordingly, the Court found that agents necessarily could not fall within the definition of an OTI provided in the Shipping Act of 1984, and that the FMC thus lacked the authority to extend the OTI licensing requirement to agents. The Court additionally found that common law principles of agency were sufficient to protect the public from the activities of an unscrupulous agent since the identity of the principal, the licensed OTI, would be disclosed. Petition for declaratory order granted Following the decision of the Court of Appeals, Team Ocean again petitioned the FMC for a Declaratory Order affirming the legality of the use of unlicensed agents in OTI business. On November 6, 2009, the Court granted Team Ocean’s petition “to the extent consistent with the Court’s decision in Landstar” and affirmed that it is lawful for a licensed OTI to engage an unlicensed person to act as its agent to perform OTI services on behalf of the disclosed, licensed OTI. Notably, the FMC’s order included a concurrence by Commissioner Brennan, which suggested that additional regulatory changes from the FMC may be forthcoming. Commissioner Brennan took note of the “i