SUPREME COURT TO REVIEW SOUTH CAROLINA PORT IMMUNITY CASE
The U.S. Supreme Court has granted a Federal Maritime Commission petition to review the decision issued by the U.S. Court of Appeals for the Fourth Circuit on in the South Carolina State Ports Authority vs. the FMC and United States case.
The case originated from a dispute between South Carolina Maritime Services and the port authority. South Carolina Maritime Services wanted to operate a passenger vessel service from Charleston to the Bahamas. Once in international waters, gambling would be allowed on board the company’s vessel.
The port authority rejected South Carolina Maritime Services’ request for berthing space in Charleston, although it allowed Carnival Cruise Lines, which allegedly has onboard gambling, to have berthing space.
South Carolina Maritime Services then filed a complaint with the FMC. Under the 11th Amendment of the Constitution, the port authority said it was immune from the company’s complaint with the FMC.
After receiving the complaint, however, the FMC found that the 11th Amendment and principles of state sovereign immunity do not bar privately initiated administrative adjudications against state-run marine terminal operators. The port authority appealed the FMC’s ruling to the Fourth Circuit.
The Fourth Circuit, which overturned the FMC’s decision, on March 12 concluded that sovereign immunity from suit is broader than the text of the 11th Amendment, and held that state sovereign immunity applies in “adversarial-style proceedings” before administrative agencies. The court ordered the FMC to dismiss the complaint.
The FMC, in turn, filed a petition with the Supreme Court on July 10 to review the Fourth Circuit’s decision. The port authority and the U.S. Solicitor General opposed the FMC’s petition, while the National Association of Waterfront Employers, the Carriers Container Council, and the United States Maritime Alliance filed amici curiae briefs in support of the agency’s petition.
“The commission has believed throughout this proceeding that the agency’s authority to hear administrative complaints against ports, whether they are state-run marine terminals or privately-run marine terminals, is crucial to effective and evenhanded regulation under the Shipping Act of 1984,” said FMC Chairman Harold J. Creel Jr. “I am glad that the Supreme Court has agreed that the issue is important enough to meet the difficult standards for granting certiorari.”
If the Supreme Court upholds the Fourth Circuit’s decision, shipping industry officials worry that the port authority will have immunity from any complaint filed against it and negate the obligation to uphold administrative rulings from any federal agency.