B-128134, DEC. 13, 1957

B-128134, DEC. 13, 1957

TO MR. C. E. WALKER:

FURTHER REFERENCE IS MADE TO YOUR LETTER OF JULY 6, 1957, CONCERNING YOUR REQUEST FOR RECONSIDERATION OF OUR DECISION OF JULY 1, 1957, B 128134. YOUR LETTER DOES NOT APPEAR TO RAISE ANY NEW POINTS OF SUBSTANCE NOT PREVIOUSLY CONSIDERED.

THE DECISION OF THE FIRST CIRCUIT COURT OF APPEALS IN UNITED STATES V. NEW YORK, NEW HAVEN AND HARTFORD RAILROAD COMPANY, 236 F.2D 101, AS WE POINTED OUT BEFORE, IS NOT YET FINAL AND THEREFORE IS NOT BINDING ON THE UNITED STATES. THE CAUSE CAME ON FOR ARGUMENT IN THE SUPREME COURT OF THE UNITED STATES IN MID-NOVEMBER, AND THE COURT HAS NOT YET HANDED DOWN ITS DECISION.

THE INTERSTATE COMMERCE COMMISSION, AS WE HAVE ADVISED YOU, FURNISHED US COPIES OF THE W-SERIES TARIFFS FILED BY WATKINS MOTOR LINES, AND STATED THAT CERTAIN NUMBERS IN THE SERIES HAD NOT BEEN USED. THE TARIFFS FURNISHED US NAMED RATES WHICH MIGHT BE APPLIED ONLY TO A VERY SMALL NUMBER OF THE SHIPMENTS COMPRISING THIS INDEBTEDNESS. BY FAR THE MAJORITY OF THE TRAFFIC MOVED OUTSIDE THE SCOPE OF THE W-SERIES TARIFFS, EITHER AS TO TIME, PLACE, OR GOODS CARRIED. SINCE YOU CONTEND THAT THE CARRIER DID USE CERTAIN OF THE NUMBERS REPORTED UNUSED BY THE COMMISSION, WE SUGGEST THAT YOU FURNISH US COPIES OF THOSE TARIFFS AND ANY OTHER AVAILABLE EVIDENCE FROM WHICH WE CAN DETERMINE WHETHER THEY WERE IN FACT FILED WITH THE INTERSTATE COMMERCE COMMISSION. IN THE ABSENCE OF EVIDENCE TO SUPPORT YOUR CONTENTION, WE MUST NECESSARILY RELY ON THE STATEMENT MADE BY THE INTERSTATE COMMERCE COMMISSION.

OUR FILES CONTAIN NO COPIES OF SECTION 22 QUOTATIONS OFFERED BY WATKINS MOTOR LINES, NOR HAVE WE ANY EVIDENCE OF RATE CONTRACTS OR"AGREED RATES" NEGOTIATED BY THAT CARRIER AND ANY GOVERNMENT REPRESENTATIVES. IN THIS SITUATION, THE PRINCIPLE OF THE SHUTT CASE, 218 F.2D 10, CERTIORARI DENIED, 350 U.S. 822, IS CONTROLLING, AND THE CARRIER IS BOUND BY ITS CERTIFICATION ON THE FACE OF THE VOUCHER THAT THE CHARGES BILLED WERE NO GREATER THAN THE TARIFF CHARGES. THE CASE OF UNITED STATES V. L. L. MAJURE, CIVIL ACTION NO. 574, IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF MISSISSIPPI, TO WHICH YOU ALSO ADVERT, IS IRRELEVANT HERE, AND, IN ANY EVENT, IT HAS NOT BEEN ESTABLISHED THAT THIS TRAFFIC MOVED ON AGREED RATES. THE HOLDING IN THE MAJURE CASE IS NOT FINAL; AND THE DEPARTMENT OF JUSTICE IS CONSIDERING AN APPEAL IN THAT CASE. WHATEVER EFFECT THAT CASE MIGHT HAVE IN THIS MATTER, IT REMAINS NECESSARY THAT YOU SUPPORT YOUR CONTENTION WITH COPIES OF SUCH QUOTATIONS AS MIGHT HAVE BEEN ISSUED AND OF THE RATE CONTRACTS ALLEGEDLY MADE.

POINT FOUR OF YOUR LETTER IS APPARENTLY DIRECTED TO THE WAR MATERIALS REPARATION CASES, 294 I.C.C. 5. THESE CASES RESULTED FROM COMPLAINTS BY THE UNITED STATES TO THE INTERSTATE COMMERCE COMMISSION OF CHARGES PAID ON WAR-TIME RAIL TRAFFIC, BASED UPON ALLEGATIONS OF UNREASONABLENESS OF CERTAIN RAIL RATES AND RULES CONTAINED IN TARIFFS DULY PUBLISHED AND FILED WITH THE INTERSTATE COMMERCE COMMISSION. THE COMPLAINTS CONTAINED GENERAL PRAYERS FOR RELIEF AND REPARATION, BUT NAMED NO SPECIFIC SUMS SOUGHT TO BE AWARDED. THE EXAMINER IN HIS PROPOSED REPORT, COUNSEL FOR DEFENSE AT THE ORAL HEARING, AND THE COMMISSION ITSELF, ESTIMATED THAT THE AMOUNT RECOVERABLE IN THE EVENT OF A DETERMINATION FAVORABLE TO THE UNITED STATES RANGED FROM $300,000,000 TO $3,000,000,000. NO COMPUTATIONS WERE EVER MADE, HOWEVER, AND NO EVIDENCE WAS ADDUCED TO SHOW THE AMOUNT ACTUALLY OVERPAID BY THE GOVERNMENT ON THE BASIS OF UNREASONABLENESS. THE INTERSTATE COMMERCE COMMISSION, IN THESE CASES, DETERMINED THAT THE ASSAILED RATES AND CHARGES WERE NOT UNREASONABLE. UPON THAT DETERMINATION THE GOVERNMENT WAS NOT, THEREFORE, ENTITLED TO AN AWARD OF REPARATION, NOR HAD IT ANY LEGAL GROUND ON WHICH TO RECOVER THE ALLEGED EXCESS CHARGES PAID ON THE BASIS OF THE ASSAILED RATES. THE COMMISSION'S DETERMINATION DID NOT OPERATE TO PRECLUDE THE UNITED STATES FROM RECOVERING MILLIONS OF DOLLARS IN TRANSPORTATION CHARGES EXCEEDING PUBLISHED TARIFF OR QUOTATION BASES WHICH INITIALLY WERE PAID TO COMMON CARRIERS WITHOUT PRIOR AUDIT HERE, PURSUANT TO THE PROVISIONS OF SECTION 322 OF THE TRANSPORTATION ACT OF 1940, 54 STAT. 898, 955. THE COMMISSION'S DETERMINATION DID NOT RESULT, AS YOU SEEM TO CONCLUDE, IN ANY WAIVER BY THE UNITED STATES OF LEGALLY PROVABLE CLAIMS AGAINST RAIL OR OTHER CARRIERS.

CONCERNING YOUR POINT ABOUT THE DELAY IN OUR AUDIT AND PROSECUTION OF CLAIMS ARISING OUT OF WAR-TIME TRAFFIC, IT IS NOTED THAT THE RECORD OF THIS INDEBTEDNESS SHOWS THAT OUR REQUESTS FOR REMITTANCES OF OVERPAYMENTS WERE SENT TO THE CARRIER INITIALLY ON APRIL 1, 1946; THAT 34 NOTICES OF OVERPAYMENT WERE MAILED TO WATKINS MOTOR LINES BETWEEN APRIL 1, 1946, AND AUGUST 15, 1947, IN CONNECTION WITH SHIPMENTS CARRIED DURING 1943, 1944, AND 1945; AND THAT WATKINS MOTOR LINES MADE NO RESPONSE TO THESE NOTICES OF OVERPAYMENT. IN 1948, UPON INSTRUCTIONS FROM CONGRESS, WE UNDERTOOK A REAUDIT OF WAR-TIME TRANSPORTATION ACCOUNTS, AND ADDITIONAL NOTICES OF OVERPAYMENT WERE SENT TO THE DEBTOR. ON FEBRUARY 11, 1953, MR. WATKINS, OF WATKINS MOTOR LINES, VISITED OUR OFFICE TO DISCUSS THE CARRIER'S INDEBTEDNESS, AND REQUESTED THAT COLLECTION PROCEEDINGS BE SUSPENDED PENDING RECEIPT HERE OF THE CARRIER'S ALLEGED UNDERCHARGE CLAIMS. SUCH CLAIMS WERE NEVER SUBMITTED. AFTER THE LAPSE OF A REASONABLE TIME, WE REPORTED THE DEBT TO THE ATTORNEY GENERAL FOR COLLECTION.

THE FOREGOING INFORMATION AS TO THE DEVELOPMENTS IN THIS CASE CLEARLY SHOWS THAT THE CARRIER WAS WELL AWARE, BEGINNING SHORTLY AFTER THE TERMINATION OF HOSTILITIES IN WORLD WAR II, THAT THE GOVERNMENT WAS UNDERTAKING THE COLLECTION OF CLAIMS FROM THE CARRIER ON WAR-TIME TRAFFIC. YOUR STATEMENTS RELATING TO THE ATTITUDE OF THE PRESIDENT AND OF THE INTERSTATE COMMERCE COMMISSION TOWARD LIMITING THE TIME WITHIN WHICH THE GOVERNMENT MAY RECOVER TRANSPORTATION OVERPAYMENTS, AND TO SENATE BILL S-377, ARE NOT MATERIAL HERE, AS OUR ACTIONS ARE IN ACCORDANCE WITH THE REQUIREMENT OF THE LAW. WE ARE REQUIRED TO COLLECT OVERPAYMENTS MADE FOR THE TRANSPORTATION OF GOVERNMENT PROPERTY, AND NO STATUTES OF LIMITATION RUN AGAINST THIS STATUTORY REQUIREMENT. SEE, IN THIS CONNECTION, THE AUTHORITIES CITED IN OUR LETTER OF JULY 1, 1957.

ON PAGE 3 OF YOUR LETTER, YOU ASSERT THAT THE GOVERNMENT, DURING THE PERIOD THESE OVERPAYMENTS WERE MADE,"WAS EXACTING AS HIGH AS 90 PERCENT EXCESS PROFITS TAX," AND THAT THE TAXES PAID SHOULD BE DEDUCTED FROM THE OVERPAYMENTS. IT SHOULD BE NOTED THAT WE HAVE NO JURISDICTION OVER TAX MATTERS, AND THAT SUCH MATTERS ARE FOR HANDLING WITH THE INTERNAL REVENUE SERVICE.

THE TOTAL INDEBTEDNESS OF THE WATKINS MOTOR LINES NOW STANDS AT $23,213.88, EXCLUSIVE OF INTEREST. ENCLOSED ARE TWO COPIES OF A SUPERSEDING CERTIFICATE OF INDEBTEDNESS, DATED NOVEMBER 15, 1957, IN THE AMOUNT OF $22,253.76, WHICH IS THE AGGREGATE OF THE TRANSPORTATION OVERPAYMENTS. THE BALANCE OF THE DEBT, $960.12, WHICH RESULTED FROM LOSSES OF GOVERNMENT PROPERTY DURING TRANSPORTATION, WAS STATED IN OUR CERTIFICATE DATED JULY 30, 1955, WHICH HAS ALREADY BEEN FURNISHED TO THE CARRIER.