B-155377, SEP. 13, 1965

B-155377, SEP. 13, 1965

TO THE DAVIDSON TRANSFER AND STORAGE CO.:

WE AGAIN REFER TO YOUR LETTER OF MAY 25, 1965 (WITH ENCLOSURES), WHICH, IN EFFECT, IS A REQUEST FOR RECONSIDERATION OF OUR DECISION OF DECEMBER 2, 1964, B-155377, TO NAVAJO FREIGHT LINES, INC., CONCERNING THE EXCLUSIVE USE OF VEHICLE CHARGES COLLECTED BY DAVIDSON ON THREE SHIPMENTS CONSISTING MOSTLY OF GUN MOUNTS, NOI, TRANSPORTED UNDER GOVERNMENT BILLS OF LADING FROM THE ROCK ISLAND ARSENAL, ROCK ISLAND, ILLINOIS, TO ABERDEEN PROVING GROUNDS, MARYLAND, DURING DECEMBER 1962 AND APRIL AND MAY 1963. THE SHIPMENTS WERE INTERLINED WITH NAVAJO AND DELIVERED AT DESTINATION BY DAVIDSON. YOUR FILE REFERENCES ARE OC 597-G, 598-G, AND 603-G.

IN OUR DECISION OF DECEMBER 2, 1964, WE ADHERED TO THE VIEW THAT A TRUCKLOAD CHARGE BASIS YIELDING FREIGHT CHARGES LOWER THAN THOSE DERIVED FROM THE EXCLUSIVE USE CHARGE BASIS WAS APPLICABLE ON THE THREE SHIPMENTS BECAUSE THE ISSUE CONCERNING THE PROPRIETY OF PAYING EXCLUSIVE USE CHARGES ON SHIPMENTS MOVING IN FULLY LOADED TRAILERS, A PRINCIPLE DERIVED FROM CURTIS LIGHTING COMPANY, INC. V. MID-STATES FREIGHT LINES, INC., 303 I.C.C. 576 (1958/--- WAS THEN BEING LITIGATED IN GARRETT FREIGHT LINES, INC. V. UNITED STATES, 236 F.SUPP. 594 (1964). WE ALSO INDICATED THAT, IF THE CURTIS LIGHTING CASE PRINCIPLE WAS FOUND TO BE INAPPROPRIATE FOR APPLICATION TO THE THREE SHIPMENTS, THERE SEEMED TO BE NO REASON WHY WE COULD NOT APPLY TO THE SHIPMENTS THE MORE ECONOMICAL SPECIAL MILITARY SERVICES CHARGE BASIS PROVIDED IN ITEM NO. 130 OF EASTERN CENTRAL MOTOR CARRIERS ASSOCIATION GOVERNMENT RATE TARIFF NO. 1.

THE DECISION IN THE GARETT CASE WAS AGAINST THE GOVERNMENT AND WE LATER CONCEDED THAT THE CURTIS LIGHTING CASE PRINCIPLE WAS NOT APPLICABLE TO FULLY LOADED VEHICLES WHEN THE BILL OF LADING INDICATES THAT EXCLUSIVE USE OF VEHICLE WAS REQUESTED. YOU WERE THEN SENT AMENDED NOTICES OF OVERCHARGE (USGAO FORM 1003) SHOWING THAT THE APPLICABLE FREIGHT CHARGES ON THE THREE SHIPMENTS ARE DERIVED FROM THE CHARGE BASIS IN ITEM NO. 130 OF GOVERNMENT RATE TARIFF NO. 1. YOUR MAY 25 LETTER PROTESTS THE AMENDED NOTICES OF OVERCHARGE.

YOU FURNISH A COPY OF A LETTER DATED MAY 19, 1965, TO YOUR COMPANY, FROM NAVAJO. THAT CARRIER URGES THAT ITEM NO. 130 DOES NOT APPLY TO THESE SHIPMENTS. IT IS STATED THAT "SPECIAL MILITARY SERVICE AS DEFINED IN THAT ITEM DOES NOT NECESSARILY INCLUDE WHAT WAS REQUESTED, "EXCLUSIVE USE OF VEHICLE.'" NAVAJO MAINTAINS THAT NO MENTION IS MADE IN ITEM NO. 130 OF "EXCLUSIVE USE OF VEHICLE OR ANY TERMS WHICH WILL INCLUDE SOLE OCCUPANCY OF A TRAILER FOR A PARTICULAR SHIPMENT FOR THE GOVERNMENT," AND THAT THE "VALUABLE SERVICE OF EXCLUSIVE USE OF VEHICLE" IS NOT INCLUDED IN THE ITEM.

WE AGREE THAT THE TERM "EXCLUSIVE USE OF VEHICLE" IS NOT SPECIFICALLY SET FORTH IN ITEM NO. 130. IT IS OBVIOUS, HOWEVER, THAT UNDER THE PROVISIONS OF THE ITEM EXCLUSIVE USE OF A VEHICLE WILL BE AFFORDED ONCE IT HAS BEEN SEALED, AS WAS THE CASE IN THE SEVERAL INSTANCES HERE INVOLVED.

GOVERNMENT RATE TARIFF NO. 1 IS A QUOTATION OF RATES AND CHARGES MADE TO THE GOVERNMENT UNDER SECTIONS 22 AND 217 (B) OF THE INTERSTATE COMMERCE ACT, AS AMENDED, 49 U.S.C. 22 AND 317 (B). ITEM NO. 130 OF THE RATE TARIFF OFFERS WHAT THE CARRIERS CALL A SPECIAL MILITARY SERVICE WHICH IS DEFINED IN THE ITEM AS "A SERVICE WHICH PROVIDES A MORE EXPEDITIOUS HANDLING AND DELIVERY OF GOVERNMENT FREIGHT THAN AVAILABLE UNDER TARIFFS OR TO THE PUBLIC GENERALLY, AND GUARANTEES THE SEPARATION AND SEGREGATION OF FREIGHT FOR PROTECTION AGAINST DAMAGE, SCRUTINY AND/OR PILFERAGE.'

WHEN SPECIAL MILITARY SERVICE IS REQUESTED BY THE GOVERNMENT RATE TARIFF NO. 1 PROVIDES THAT THE CARRIER, AMONG OTHER THINGS, WILL TRANSPORT THE SHIPMENT FASTER THAN WITH REASONABLE DISPATCH; USE DIRECT ROUTES TO THE MAXIMUM PRACTICABLE EXTENT; OPERATE VEHICLES IN CONTINUOUS LINE HAUL SERVICE; AND PICK UP THE SHIPMENT AT HOURS WHICH ARE UNUSUAL AND NORMALLY CONSIDERED UNREASONABLE. ADDITIONALLY, RATE TARIFF NO. 1 PROVIDES THAT

"E. CLOSED CARGO VEHICLE BODIES, WHEN SEALED, WILL REMAIN SEALED FROM ORIGIN TO DESTINATION UNLESS SPECIFICALLY INSTRUCTED OTHERWISE BY THE SHIPPING OFFICER IN EXCEPTIONAL CASES FOR THE BENEFIT OF THE GOVERNMENT OR IN THE INTEREST OF SAFETY. CLOSED CARGO BODIES NOT SEALED WILL NOT BE STOPPED FOR LOADING OTHER SHIPPER FREIGHT TO THE DETRIMENT OF THIS SPECIAL SERVICE.'

THE TARIFF TREATMENT OF EXCLUSIVE USE AND SPECIAL MILITARY SERVICE PROVISIONS, AS, FOR EXAMPLE, SHOWN IN EASTERN CENTRAL MOTOR CARRIERS ASSOCIATION TARIFF NO. 35-J, REFLECTS AN INTENT TO ESTABLISH SEPARATE RECOGNITION OF THE EXCLUSIVE USE OF VEHICLE PROBLEM AS RELATED TO CIVIL OR COMMERCIAL TRAFFIC ON THE ONE HAND AND MILITARY TRAFFIC ON THE OTHER. THUS ITEM NO. 84 IN TARIFF NO. 35-J (AND ITEM NO. 120-5 OF TARIFF NO. 35-K WHICH SUPERSEDED NO. 35-J) NOWHERE IN TERMS REFERS TO MILITARY TRAFFIC UNDER THE CAPTION "CONTROL AND EXCLUSIVE USE OF VEHICLE," WHILE IN ITEM NO. 85 OF THE TARIFF, UNDER THE CAPTION "EXCLUSIVE USE OF EQUIPMENT," SPECIAL EXPEDITED MILITARY SERVICE IS PROVIDED FOR SHIPMENTS "MOVING ON GOVERNMENT BILLS OF LADING OR ON COMMERCIAL BILLS OF LADING TO BE CONVERTED TO GOVERNMENT BILLS OF LADING AT DESTINATION.'

THE PROVISIONS OF ITEM NO. 85 OF TARIFF NO. 35-J ARE MATERIALLY SIMILAR TO THOSE EMBODIES IN ITEM NO. 130 OF GOVERNMENT RATE TARIFF NO. 1 ON WHICH OUR AMENDED NOTICES OF OVERCHARGE ARE BASED. SINCE THE QUOTATION IS SUBMITTED TO THE GOVERNMENT UNDER SECTION 22 OF THE INTERSTATE COMMERCE ACT IT IS INTENDED TO AFFORD THE GOVERNMENT SOMETHING BETTER THAN AVAILABLE UNDER PUBLISHED AND FILED TARIFFS, AND IT IS UNNECESSARY TO SPECIFY THE USE OF GOVERNMENT BILLS OF LADING, AS IN ITEM NO. 85. SHOULD BE NOTED THAT ITEM NO. 84 OF TARIFF NO. 35-J DOES NOT REMOVE THE REQUIREMENT FOR PAYMENT OF EXCLUSIVE USE CHARGES IN THE EVENT THE SEALS PLACED ON THE VEHICLES ARE BROKEN, WHEREAS, ITEM NO. 130 OF TARIFF NO. 1 STATES THAT IF THE SEALS ARE BROKEN FOR REASONS OTHER THAN THOSE SPECIFIED IN THE ITEM, THE SPECIAL MILITARY SERVICE CHARGES ARE NOT APPLICABLE. ALSO, AS EVIDENCE OF ITS COMMERCIAL, AS DISTINGUISHED FROM GOVERNMENT, CHARACTER, ITEM NO. 84 STATES THAT EXCLUSIVE USE SHIPMENTS "MUST BE PREPAID.' ITEM NO. 130 DOES NOT CONTAIN ANY REQUIREMENT FOR PREPAYMENT, WHICH, OF COURSE, DOES NOT OCCUR WHERE GOVERNMENT BILLS OF LADING ARE USED. WE NOTE, TOO, THAT GOVERNMENT RATE TARIFF NO. 1 CONTAINS NO RATE BASIS FOR EXCLUSIVE USE COMPARABLE TO THAT IN ITEM NO. 84 OF TARIFF NO. 35 -J AND ITEM NO. 120-5 OF TARIFF NO. 35-K, THE ITEMS WHICH YOU CONTEND APPLY TO THE THREE DISPUTED SHIPMENTS.

WHILE IT IS TRUE THAT THE BILLS OF LADING DO NOT CONTAIN A SPECIFIC REQUEST FOR SPECIAL MILITARY SERVICE, THE REQUEST FOR EXCLUSIVE USE WOULD NOT SEEM TO PRECLUDE THE APPLICABILITY OF SPECIAL MILITARY SERVICE CHARGES IN THESE THREE INSTANCES. AS WE HAVE INDICATED, AN ASSURANCE OF EXCLUSIVE USE OF VEHICLE BY THE CARRIERS IS CLEARLY ONLY A PART OF THE TOTAL GUARANTEE MADE BY THEM IN THE SPECIAL MILITARY SERVICE PROVISIONS. SINCE THE BILL OF LADING REQUEST FOR EXCLUSIVE USE BY A MILITARY INSTALLATION PUT THE CARRIERS ON NOTICE THAT THE MILITARY MATERIAL BEING SHIPPED WAS TO BE HANDLED IN A MANNER WHICH WAS ONLY THE PARTIAL EQUIVALENT OF A MORE COMPREHENSIVE SERVICE--- SPECIAL MILITARY SERVICE--- SUFFICIENT DOUBT ARISES TO JUSTIFY THE ACTION OF OUR OFFICE IN LIMITING THE ALLOWABLE CHARGES TO THE LESSER AMOUNT APPLICABLE FOR THE PERFORMANCE OF THE GREATER SERVICE. IN THE CIRCUMSTANCES THE REQUEST FOR EXCLUSIVE USE BY A MILITARY INSTALLATION MUST BE REGARDED AS SUBSTANTIALLY A REQUEST FOR SPECIAL MILITARY SERVICE.

WE UNDERSTAND THAT THE SPECIAL MILITARY SERVICE PROVISIONS ORIGINALLY WERE PLACED IN SECTION 22 QUOTATIONS AND LATER IN PUBLISHED AND FILED TARIFFS IN AN EFFORT TO AVOID THE OBJECTIONS OF OUR OFFICE TO THE LAWFULNESS OF EXCLUSIVE USE PROVISIONS WHICH REQUIRED THE SHIPPER TO PAY MORE THAN THE USUAL TRUCKLOAD CHARGES WHERE EXCLUSIVE USE OF VEHICLE WAS PROVIDED BY THE CARRIER.

AFTER THE DECISION IN THE CASE OF BRODERICK AND BASCOM ROPE CO. V. HALL FREIGHT LINES, INC., 302 I.C.C. 347 (1957), WHICH FOUND CERTAIN EXCLUSIVE USE CHARGES UNREASONABLE TO THE EXTENT THAT THEY EXCEEDED TRUCKLOAD CHARGES, OUR OFFICE CONSISTENTLY APPLIED THE PRINCIPLE OF THAT CASE IN THE AUDIT OF EXCLUSIVE USE TRANSPORTATION ACCOUNTS UNTIL MAY 1959, WHEN THE SUPREME COURT OF THE UNITED STATES, IN T.I.M.E., INC. V. UNITED STATES, 359 U.S. 464, RULED THAT RECOVERY OF UNLAWFUL CHARGES ON PAST MOTOR CARRIER SHIPMENTS WAS NOT AUTHORIZED UNDER PART II OF THE INTERSTATE COMMERCE ACT. THE SPECIAL MILITARY SERVICE PROVISIONS WHICH BEGAN TO APPEAR IN QUOTATIONS AND TARIFFS BEFORE THE T.I.M.E. CASE WERE SO DESIGNED AS TO MAKE EXCLUSIVE USE ONE OF THE SEVERAL CONDITIONS, WHICH, IF SATISFIED, WOULD ENTITLE MOTOR CARRIERS TO THE EQUIVALENT OF EXCLUSIVE USE CHARGES, AS SET FORTH ELSEWHERE IN THE TARIFFS.

IN THESE CIRCUMSTANCES WE AFFIRM OUR DECISION OF DECEMBER 2, 1964, INSOFAR AS IT REFERS TO THE APPLICABILITY OF ITEM NO. 130 OF GOVERNMENT RATE TARIFF NO. 1. THE AMOUNTS SHOWN AS OVERPAID ON THE THREE AMENDED NOTICES OF OVERCHARGE SHOULD BE REFUNDED PROMPTLY IN ORDER TO AVOID COLLECTION BY OTHER MEANS.