B-141153, MAR. 31, 1961

B-141153: Mar 31, 1961

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FENDER: WE HAVE CONSIDERED YOUR VARIOUS REQUESTS. OTHER OVERCHARGES PAID TO THE CARRIER ALSO HAVE NOT BEEN REFUNDED AS REQUESTED. THE CARRIER'S BILLS WERE SUBMITTED AND PAID UPON THE BASIS OF THE 14. THE OVERCHARGES ARE BASED UPON THE GENERALLY APPLICABLE 7. YOU CONTEND THAT OUR AUDIT ACTION IS PREDICATED UPON THE THEORY THAT THE HIGHER MINIMUM PUBLISHED SPECIFICALLY TO APPLY TO GOVERNMENT TRAFFIC IS DISCRIMINATORY AND UNREASONABLE. THAT THE LEGAL TARIFF CHARGE WHICH MUST AND SHOULD BE PAID IS THAT BASED UPON THE PUBLISHED MINIMUM WEIGHT APPLICABLE TO GOVERNMENT SHIPMENTS. YOU ATTEMPT TO SUPPORT YOUR POSITION WITH THE ASSERTION THAT THE HIGHER MINIMUM WEIGHT WAS JUSTIFIED ON GOVERNMENT SHIPMENTS.

B-141153, MAR. 31, 1961

TO JOE G. FENDER:

WE HAVE CONSIDERED YOUR VARIOUS REQUESTS, ON BEHALF OF YOUR CLIENT, THE GULF SOUTHWESTERN TRANSPORTATION COMPANY, FOR REVIEW OF THE AUDIT ACTION TAKEN ON A NUMBER OF ITS PAID BILLS FOR TRANSPORTATION OF GOVERNMENT SHIPMENTS DURING 1956, 1957 AND 1958. THIS AUDIT ACTION CULMINATED IN THE STATEMENT OF OVERCHARGES AGAINST THE CARRIER TOTALING APPROXIMATELY $12,000. OTHER OVERCHARGES PAID TO THE CARRIER ALSO HAVE NOT BEEN REFUNDED AS REQUESTED.

THE CONTROVERSY CONCERNING THE DISPUTED OVERCHARGES STEMS FROM THE PUBLICATION IN THE GOVERNING TARIFFS OF A 7,000-POUND MINIMUM WEIGHT APPLICABLE GENERALLY IN CONNECTION WITH COLUMN 1 RATES AND 14,000 POUND MINIMUM WEIGHT PURPORTEDLY APPLICABLE SPECIFICALLY TO GOVERNMENT SHIPMENTS. THE CARRIER'S BILLS WERE SUBMITTED AND PAID UPON THE BASIS OF THE 14,000-POUND MINIMUM WEIGHT, PRIOR TO AUDIT IN THE GENERAL ACCOUNTING OFFICE. THE OVERCHARGES ARE BASED UPON THE GENERALLY APPLICABLE 7,000- POUND MINIMUM WEIGHT. YOU CONTEND THAT OUR AUDIT ACTION IS PREDICATED UPON THE THEORY THAT THE HIGHER MINIMUM PUBLISHED SPECIFICALLY TO APPLY TO GOVERNMENT TRAFFIC IS DISCRIMINATORY AND UNREASONABLE, A THEORY NO LONGER TENABLE SINCE THE DECISION IN T.I.M.E., INC. V. UNITED STATES, 359 U.S. 464; THAT IT ATTEMPTS TO COMPEL A REDUCTION FROM THE PUBLISHED TARIFF CHARGE DESPITE THE ABSENCE OF A REDUCED RATE QUOTATION UNDER SECTION 22 OF THE INTERSTATE COMMERCE ACT, AS AMENDED, 49 U.S.C. 22 AND 317 (B); AND THAT THE LEGAL TARIFF CHARGE WHICH MUST AND SHOULD BE PAID IS THAT BASED UPON THE PUBLISHED MINIMUM WEIGHT APPLICABLE TO GOVERNMENT SHIPMENTS. YOU ATTEMPT TO SUPPORT YOUR POSITION WITH THE ASSERTION THAT THE HIGHER MINIMUM WEIGHT WAS JUSTIFIED ON GOVERNMENT SHIPMENTS, WHICH REQUIRED EXPEDITED HANDLING AND COULD NOT BE DELAYED AT ORIGIN LONG ENOUGH TO ACCUMULATE "LOADS IN PAYING QUANTITIES.'

OUR AUDIT ACTION RAISES NO ISSUES OF DISCRIMINATION OR UNREASONABLENESS; THE HOLDING IN THE T.I.M.E. CASE IS NOT GERMANE HERE. OUR DETERMINATION OF THE LEGALLY APPLICABLE CHARGES IS BASED UPON FUNDAMENTAL PRINCIPLES OF TRANSPORTATION LAW AND UPON THE CONTRACTS OF CARRIAGE BETWEEN THE GOVERNMENT AND THE CARRIER, AS REPRESENTED BY THE SEVERAL BILLS OF LADING. IT FORCES NO REDUCTION FROM THE APPLICABLE TARIFF CHARGE; INSTEAD, IT IS BASED UPON THE LEGALLY APPLICABLE TARIFF RATE AND MINIMUM WEIGHT.

WILSON TRUCK COMPANY TARIFF NO. 1, MF-I.C.C.NO. 2, APPLICABLE TO THE EARLIER SHIPMENTS BECAUSE OF ITS ADOPTION BY GULF SOUTHWESTERN TRANSPORTATION COMPANY, PROVIDED IN ITEM 705 A MINIMUM WEIGHT OF 7,000 POUNDS APPLICABLE IN CONNECTION WITH COLUMN 1 RATES. ITEM 705-A, SUPPLEMENT NO. 6, ADDS THIS EXCEPTION TO THE MINIMUM WEIGHT PROVISION:

"SHIPMENTS MOVING UNDER COLUMN 1 RATES WILL BE SUBJECT TO A MINIMUM WEIGHT OF 14,000 POUNDS WHEN MOVING ON GOVERNMENT BILL OF LADINGS OR WHEN MOVING ON BILL OF LADINGS WHICH ARE TO BE CONVERTED TO GOVERNMENT BILL OF LADINGS AT DESTINATION.'

GULF SOUTHWESTERN TRANSPORTATION COMPANY TARIFF NO. 8, MF-I.C.C.NO. 11,APPLICABLE TO THE LATER SHIPMENTS, PUBLISHED A SIMILAR EXCEPTION IN ITEM 2260-A, SUPPLEMENT NO. 5. THIS WAS NOT, HOWEVER, CARRIED OVER INTO THE REISSUE OF TARIFF NO. 8, SO THAT, AS TO TRAFFIC THEREAFTER THE QUESTION IS MOOT. UPON THIS EXCEPTION (PUBLISHING IN ADDITION TO A MINIMUM WEIGHT AVAILABLE TO THE GENERAL PUBLIC, A HIGHER MINIMUM APPLICABLE ONLY AND SPECIFICALLY TO GOVERNMENT SHIPMENTS), DEPENDS YOUR CLIENT'S CLAIM OF A RIGHT TO RETAIN THE FULL CHARGES ORIGINALLY COLLECTED. THE CLAIM FAILS BECAUSE THE EXCEPTION IS ILLEGAL AND VOID.

IT IS AXIOMATIC THAT THE GOVERNMENT IS AT ALL TIMES AND IN ALL CASES ENTITLED TO AVAIL ITSELF OF THE LOWEST APPLICABLE TARIFF RATE OR CHARGE OPEN TO THE PUBLIC. IT IS EQUALLY WELL SETTLED THAT THE LAW DOES NOT AUTHORIZE CARRIERS TO PUBLISH RATES AND CHARGES APPLICABLE ONLY TO THE UNITED STATES AND THAT THE UNITED STATES IS NOT BOUND TO PAY SUCH RATES AND CHARGES. IN THE ILLINOIS CENTRAL RAILROAD CASE, 58 CT.CL. 182, SUIT WAS BROUGHT TO RECOVER DEDUCTIONS MADE FOR LAND GRANT; THE CARRIER'S CLAIM THAT THE GOVERNMENT WAS NOT ENTITLED TO LAND GRANT RESTED UPON THE PUBLICATION BY TARIFF OF A "NET CASH" RATE APPLICABLE TO GOVERNMENT FREIGHT ONLY. THE GOVERNMENT PREVAILED BECAUSE THE COURT FOUND THE "NOT CASH" RATE INVALID SINCE, QUOTING FROM THE SYLLABUS, "THERE IS NO AUTHORITY IN LAW FOR A TRANSPORTATION COMPANY TO PUBLISH A SCHEDULE OF TARIFF RATES APPLICABLE TO GOVERNMENT PROPERTY ONLY.' IN ATCHISON, TOPEKA AND SANTA FE RAILWAY COMPANY V. UNITED STATES, 59 CT.CL. 275, THE COURT HELD THAT A CARRIER "CAN NOT BY MERELY FILING A SCHEDULE OF TARIFF RATES, NAMING A RATE APPLICABLE TO GOVERNMENT PROPERTY, BIND THE GOVERNMENT TO PAY RATES HIGHER THAN THOSE OPEN TO THE PUBLIC FOR A SIMILAR SERVICE. * * * "THERE IS NO STATUTE REQUIRING OR EVEN PROVIDING FOR THE PUBLISHING BY A TRANSPORTATION COMPANY OFA SCHEDULE OF RATES OR A SPECIAL RATE APPLICABLE ALONE TO GOVERNMENT PROPERTY.'" IN THE CIRCUMSTANCE OF THAT CASE, HOWEVER, THE COURT FOUND THAT THE UNITED STATES, HAD, BY PRIOR WRITTEN AGREEMENT WITH THE CARRIER, BOUND ITSELF TO A SPECIAL RATE FOR A SPECIAL SERVICE. IN SOUTHERN PACIFIC COMPANY V. UNITED STATES, 60 CT.CL. 662, 671, THE COURT REITERATED THE RULE THAT THE GOVERNMENT IS ENTITLED UNDER THE LAW TO THE LOWEST RATE OPEN TO THE PUBLIC FOR THE TRANSPORTATION OF SIMILAR PROPERTY, AND WENT ON TO SAY THAT, IN THE ILLINOIS CENTRAL CASE, IT HAD HELD THAT "A RATE OF THIS CHARACTER APPLICABLE SPECIALLY TO THE GOVERNMENT WAS NOT REQUIRED BY LAW AND WAS NOT THE LEGAL RATE REFERRED TO IN THE STATUTE; THAT, NOT BEING A LEGAL RATE, IT WAS IN EFFECT NO RATE AT ALL.'

FROM THIS IT IS CLEAR THAT THE PUBLICATION OF THE HIGHER MINIMUM WEIGHT, APPLICABLE SPECIFICALLY AND ONLY TO GOVERNMENT SHIPMENTS, WAS A VAIN ACT, VOID FROM ITS INCEPTION, AND THAT THE 14,000-POUND MINIMUM WEIGHT--- IN THE SENSE OF THE SOUTHERN PACIFIC CASE--- WAS IN EFFECT NO MINIMUM WEIGHT AT ALL. THE ONLY LEGAL MINIMUM WEIGHT TO BE OBSERVED IN COMPUTING THE CHARGES ON THESE SHIPMENTS WAS THE 7,000-POUND MINIMUM WEIGHT APPLICABLE ALIKE TO THE GENERAL PUBLIC AND TO THE UNITED STATES. THIS CONCLUSION DOES NO VIOLENCE TO THE RULE THAT TARIFFS HAVE THE FORCE AND EFFECT OF STATUTES. THE SUPREME COURT, IN AFFIRMING THE SOUTHERN PACIFIC DECISION, CITED THE ILLINOIS CENTRAL CASE WITH APPROVAL, AND STATED THAT "THE ORDINARY CONSEQUENCES THAT ATTEND THE FILING OF A SCHEDULE OF RATES WITH THE INTERSTATE COMMERCE COMMISSION AS DEMANDED OR PERMITTED BY STATUTE, CF. TEXAS AND PACIFIC RY. V. MUGG, 202 U.S. 242; CHICAGO AND ALTON R.R. V. KIRBY, 225 U.S. 155, CANNOT BE INVOKED BY THE CARRIER MERELY BECAUSE IT LODGED A SPECIAL TARIFF WITH THE COMMISSION WITHOUT STATUTORY AUTHORIZATION.' SOUTHERN PACIFIC COMPANY V. UNITED STATES, 272 U.S. 445, 448. SEE ALSO HUGHES TRANSPORTATION COMPANY V. UNITED STATES, 128 CT.CL. 221, 250; NATIONAL CARLOADING CORPORATION V. PHOENIX-EL PASO EXPRESS, 178 S.W. 2D 133, 136.

EVEN IF THE MINIMUM WEIGHT OF 14,000 POUNDS HAD BEEN A LEGALLY EFFECTIVE MINIMUM WEIGHT, IT WOULD NOT BE APPLICABLE TO THESE SHIPMENTS, SINCE THE GOVERNMENT HAD CONTRACTED WITH THE CARRIER FOR RATES AND CHARGES APPLICABLE TO COMMERCIAL SHIPMENTS. ALL OF THE GOVERNMENT BILL OF LADING CONTRACTS CONTAINED CERTAIN CONDITIONS "MUTUALLY AGREED AND UNDERSTOOD BETWEEN THE UNITED STATES AND CARRIERS WHO ARE PARTIES TO THIS BILL OF LADING," AMONG WHICH WERE THE FOLLOWING:

"2. UNLESS OTHERWISE SPECIFICALLY PROVIDED OR OTHERWISE STATED HEREON, THIS BILL OF LADING IS SUBJECT TO THE SAME RULES AND CONDITIONS AS GOVERN COMMERCIAL SHIPMENTS MADE ON THE USUAL FORMS PROVIDED THEREFOR BY THE CARRIER.

"3. SHIPMENT MADE UPON THIS BILL OF LADING SHALL TAKE NO HIGHER RATE THAN WOULD BE CHARGED HAD THE SHIPMENT BEEN MADE UPON THE UNIFORM STRAIGHT BILL OF LADING OR UNIFORM EXPRESS RECEIPT.'

THESE BILLS OF LADING WERE ISSUED TO AND SIGNED BY AN AGENT OF THE GULF SOUTHWESTERN TRANSPORTATION COMPANY. IN VIEW OF THE EXISTENCE AND EFFECTIVENESS OF THESE CONDITIONS, THE CONTRACTUAL RELATIONSHIP BETWEEN THE PARTIES, IN MATERIAL RESPECTS CONCERNING APPLICABLE RATES AND CHARGES, WAS NO DIFFERENT THAN IT WOULD HAVE BEEN HAD UNIFORM STRAIGHT COMMERCIAL BILLS OF LADING BEEN USED. CF. ALCOA STEAMSHIP COMPANY V. UNITED STATES, 338 U.S. 421, ON THE EFFECT OF CONDITION 2 OF THE GOVERNMENT BILL OF LADING. A VERY IMPORTANT CONDITION OF THE CONTRACTUAL RELATIONSHIP IS EVIDENCED BY THE PAYEE'S CERTIFICATES ON THE PUBLIC VOUCHERS SUBMITTED TO COLLECT THE TRANSPORTATION CHARGES. THESE CERTIFICATES, SIGNED BY AN EXECUTIVE OF THE CARRIER, RECITE:

"I CERTIFY THAT THE ACCOUNT STATED HEREON, AS EVIDENCED BY THE ATTACHED SUB-VOUCHERS, IS CORRECT AND JUST; THAT THE SERVICES HAVE BEEN RENDERED AS INDICATED: THAT PAYMENT HAS NOT BEEN RECEIVED; AND THAT THE RATES CHARGED ARE NOT IN EXCESS OF THE LOWEST NET RATES AVAILABLE FOR THE GOVERNMENT, BASED ON TARIFFS EFFECTIVE AT THE DATE OF SERVICE.'

FOR THE BINDING LEGAL EFFECT OF THESE CERTIFICATES SEE R. E. SHUTT V. UNITED STATES, 218 F.2D 10, REHEARING DENIED, CERTIORARI DENIED, 350 U.S. 822; UNITED STATES V. GARCIA AND DIAZ, INC., DECIDED JUNE 13, 1960, UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK, CIVIL ACTION NO. 128-179.

AS TO YOUR ARGUMENT CONCERNING THE JUSTIFICATION FOR THE HIGHER MINIMUM WEIGHT ON GOVERNMENT TRAFFIC, THERE IS NO EVIDENCE IN OUR RECORDS WHICH WOULD SUPPORT PAYMENT FOR HIGHER-THAN-TARIFF CHARGES BASED ON EXPEDITED HANDLING OF THIS TRAFFIC. IN SUCH SITUATIONS IT IS NECESSARY FOR TARIFFS TO MAKE SPECIFIC PROVISIONS FOR ADDITIONAL COMPENSATION, SUCH AS BY EXCLUSIVE USE RULES.

IN THE CIRCUMSTANCES, THE AUDIT ACTION COMPLAINED OF WAS CORRECT AND IS SUSTAINED. THE OVERCHARGES SHOULD BE REFUNDED PROMPTLY TO AVOID COLLECTION BY OTHER AVAILABLE MEANS.