Bakerly v. Seafrigo: A Rare Look Into The Commission's Award Of Attorneys' Fees

The Federal Maritime Commission's (FMC or Commission) recent decision on Seafrigo's petition for attorneys' fees in Bakerly, LLC v. Seafrigo USA, Inc., Dkt. No. 22‑17, offers a rare window into how the FMC evaluates the availability of attorneys' fees. Notably, this marks the first time since 2021 that the Commission has substantively weighed in on a post-Cobble Act attorneys'‑fees petition (Statement of the Commission on Attorney's Fees, Dkt. No. 21-14) and first grant of a petition for attorneys' fees since 2017 (Salomon and Jasmin Gruenberg-Reisner v. Overseas Moving Specialists, Inc. d/b/a International Sea & Air Shipping, Dkt. No. 1947(I)).

With Chief Administrative Law Judge Erin Wirth's Initial Decision, later affirmed by the Commission, establishing that Seafrigo had prevailed on every claim Bakerly asserted, the only remaining issue before the Commission was Seafrigo's request to recover its litigation costs. Seafrigo sought $268,728 in attorney's fees and $1,135 in expenses. The Commission ultimately awarded half of the fees, totaling $134,364.

To recover attorneys' fees, the Commission requires that the movant be a prevailing party – which Seafrigo was – and that it demonstrate entitlement under a set of discretionary factors. These factors include the colorability of the losing party's claims, whether the claims were pursued for an improper purpose, whether litigation misconduct occurred, whether a fee award is warranted to deter future baseless filings and whether a fee award is necessary to make the prevailing party whole.

The Commission's analysis focused heavily on whether Bakerly's claims had a legitimate factual and legal basis. It found that Bakerly's Section 41104 Negotiated Rate Arrangement (NRA) claim lacked factual foundation because the NRA clearly delineated responsibility for charges and that Bakerly's contract interpretation theories ran contrary to established precedent. The Commission also noted that Bakerly had previously paid nearly $1.2 million in similar charges over four years without any sign of protest until it filed the complaint. Taken together, these circumstances persuaded the Commission that the claim lacked merit and appeared to be motivated by an improper purpose rather than a genuine legal dispute.

The Commission similarly viewed Bakerly's Ocean Shipping Reform Act 2022 claim as nonviable because the statute was not in effect when the charges accrued. These deficiencies, combined with what the Commission viewed as indications of an improper purpose, tipped the scales toward awarding fees for those claims.

These claims ultimately failed, however, because the delays stemmed from pandemic-related conditions beyond Seafrigo's control, and Bakerly could not establish the negligence required to shift liability under the NRA. The Commission also found that Bakerly's billing practice claim also warranted litigation, as Seafrigo acknowledged isolated invoicing errors, and resolving the issue required the Commission to examine the underlying regulatory history.

On the remaining factors, the Commission found no litigation misconduct and saw no need for deterrence or compensation between sophisticated commercial parties, leading it to limit the fee award solely to the claims deemed baseless or improperly motivated.

As a final step, the Commission evaluated the reasonableness of the requested attorneys' fees using the Laffey Matrix, a recognized benchmark for assessing market-rate billing in the Washington, D.C., area. After reviewing the billed fees and corresponding tasks, the Commission concluded that the amounts charged for legal services were reasonable. However, applying its analysis regarding entitlement to fees, the Commission determined that only 50 percent of the total requested fees should be recoverable, reflecting the 50 percent of claims for which Seafrigo was entitled to recover fees under the above analysis.

Although the billing records did not allocate time spent by specific claim, the Commission found this was not a deficiency and determined that awarding 50 percent of the total fees, along with the full costs associated with litigation and e‑discovery support services, provided an accurate and fair measure. With that analysis, the Commission awarded Seafrigo 50 percent of its fees, offering a rare, detailed glimpse into how the agency navigates the discretionary standards governing fee petitions.

Holland & Knight will continue to monitor developments at the FMC and provide updates as they occur.

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