B-174926, DEC 4, 1972

B-174926, DEC 4, 1972

CARRIERS - ADOPTION OF PREVIOUS CARRIERS CONTRACT - SECTION 22 OFFERS DECISION CONCERNING THE CLAIM OF AERO TRUCKING, INC., FOR SHIPMENTS IT MADE FOR THE GOVERNMENT. AN ADOPTION NOTICE ISSUED IN COMPLIANCE WITH RULE 19 OF THE ICC TARIFF CIRCULAR MF NO. 3 TO A CARRIER WHO IS ADOPTING THE CONTRACT OF ANOTHER CARRIER DOES NOT MEAN THE PREVIOUS CARRIER'S TENDER CONTINUES TO APPLY, BUT RATHER THE ADOPTING CARRIERS OFFER PURSUANT TO SECTION 22 OF THE INTERSTATE COMMERCE ACT WOULD APPLY.

TO ROBERT H. HUNT:

WE HAVE CONSIDERED YOUR BRIEF, SUBMITTED ON BEHALF OF AERO TRUCKING, INC., TOGETHER WITH A DEPOSITION YOU DELIVERED HERE JULY 6, 1972, IN SUPPORT OF A FACTUAL ALLEGATION MADE IN THE BRIEF. YOUR BRIEF IS IN THE NATURE OF BOTH A REQUEST FOR REVIEW OF SETTLEMENTS MADE IN OUR TRANSPORTATION AND CLAIMS DIVISION WHICH DISALLOWED AERO'S CLAIMS FOR $8,053.34 ON 146 SHIPMENTS AND A CLAIM FOR $611.20 ON SIX ADDITIONAL SHIPMENTS.

THE CONTROVERSY OVER THE CHARGES PROPERLY PAYABLE FOR TRANSPORTING THESE SHIPMENTS STEMS FROM THE MERGER OF MCDADE TRANSFER CORPORATION WITH AERO TRUCKING, INC., IN 1967. PRIOR TO THE MERGER, MCDADE TRANSFER HAD OFFERED, PURSUANT TO SECTION 22 OF THE INTERSTATE COMMERCE ACT, 49 U.S.C. 22 AND 317(B), TO PERFORM CERTAIN TRANSPORTATION SERVICES FOR THE UNITED STATES AT REDUCED RATES. THAT OFFER WAS CONTAINED IN MCDADE'S TENDER I.C.C. NO. 35, EFFECTIVE JANUARY 1, 1966.

SUBSEQUENT TO THE MERGER, AERO TRUCKING, INC., THE SUCCESSOR COMPANY, FURNISHED THE GOVERNMENT COMPARABLE SERVICES FOR WHICH IT BILLED AND COLLECTED CHARGES EITHER AT PUBLISHED TARIFF RATES OR AT RATES AUTHORIZED IN ITS TENDERS I.C.C. NO. 6, EFFECTIVE AUGUST 1, 1967, AND I.C.C. NO. 10, EFFECTIVE OCTOBER 16, 1967. THESE TENDERS ALSO WERE ISSUED PURSUANT TO SECTION 22 OF THE INTERSTATE COMMERCE ACT, BUT OFFERED RATES HIGHER THAN THOSE WHICH HAD BEEN PROVIDED IN MCDADE'S TENDER I.C.C. NO. 35.

IN THE POSTPAYMENT AUDIT OF THE BILLS OF AERO TRUCKING, INC., CHARGES WERE COMPUTED ON THE BASIS OF MCDADE'S TENDER I.C.C. NO. 35. THE RESULTING OVERCHARGES WERE COLLECTED BY SETOFF WHEN AERO TRUCKING FAILED TO MAKE THE NECESSARY REFUNDS.

THE AUDIT ACTION COMPLAINED OF WAS BOTTOMED ON THE PROPOSITION THAT MCDADE'S TENDER I.C.C. NO. 35 WAS EMBRACED IN AERO TRUCKING, INC. ADOPTION NOTICE MF-I.C.C. NO. 15, EFFECTIVE JUNE 1, 1967, ISSUED IN COMPLIANCE WITH RULE 19 OF THE INTERSTATE COMMERCE COMMISSION'S TARIFF CIRCULAR MF NO. 3. ON THAT PREMISE, MCDADE'S TENDER I.C.C. NO. 35 WAS APPLICABLE VIA AERO TRUCKING UNTIL IT WAS CANCELLED EFFECTIVE DECEMBER 13, 1968, POSSIBLY TO MAKE CERTAIN THAT IT WOULD NOT BE FURTHER APPLIED IN THE AUDIT HERE.

THE ISSUE RAISED BY THIS CONTROVERSY, THEN, IS WHETHER AS A MATTER OF LAW ADOPTION NOTICE MF-I.C.C. NO. 15, REQUIRED BY THE COMMISSION'S RULES, EFFECTED THE ADOPTION BY AERO OF MCDADE'S TENDER I.C.C. NO. 35.

WE AGREE WITH YOUR POSITION THAT THE TRAFFIC HERE INVOLVED WHICH WAS TRANSPORTED BY AERO WAS SUBJECT TO THE RATES AND PROVISIONS OF AERO'S TENDERS TO THE EXCLUSION OF MCDADE'S TENDER. APPARENTLY, AS INDICATED IN MR. L. DALE TAYLOR'S DEPOSITION WHICH YOU FURNISHED, THE MILITARY TRAFFIC MANAGEMENT AND TERMINAL SERVICE INFORMED MR. TAYLOR THAT NO MILITARY FREIGHT WOULD BE TENDERED TO AERO UNLESS IT FILED TENDERS TO COVER THE "SAME TYPES OF WORK THAT THE MCDADE TENDERS COVERED."

IN THESE CIRCUMSTANCES, THEREFORE, IT DOES NOT APPEAR THAT THE DEPARTMENT OF DEFENSE AND AERO RECOGNIZED THE CONTINUING APPLICABILITY OF THE MCDADE TENDER EVEN THOUGH THE TENDER WAS NOT FORMALLY CANCELLED UNTIL 17 MONTHS AFTER THE JULY 1967 MERGER OF AERO AND MCDADE.

WE ARE INSTRUCTING OUR TRANSPORTATION AND CLAIMS DIVISION TO ADJUST THE ALLOWABLE CHARGES AND TO ISSUE SETTLEMENTS TO AUTHORIZE THE PAYMENT OF SUCH ADDITIONAL CHARGES AS MAY BE FOUND DUE ON THE SHIPMENTS IN QUESTION CONSISTENT WITH THE VIEW THAT THE MCDADE TENDER WAS NOT AVAILABLE FOR APPLICATION. NOTICE OF THE SETTLEMENTS WILL BE SENT TO AERO TRUCKING, INC., IN DUE COURSE.