B-145560, JUN. 27, 1961

B-145560: Jun 27, 1961

Additional Materials:

Contact:

Edda Emmanuelli Perez
(202) 512-2853
EmmanuelliPerezE@gao.gov

 

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

TO THE LEHIGH VALLEY RAILROAD COMPANY: REFERENCE IS MADE TO YOUR LETTER OF APRIL 5. FOR THIS TRANSPORTATION YOU CLAIMED AND WERE PAID $5. IN OUR AUDIT OF THE PAYMENT VOUCHER IT WAS CONSIDERED THAT THE THROUGH RATE ON WHICH YOU ORIGINALLY BILLED WAS UNREASONABLE AND UNJUST AND NOR MORE THAN $4. 855.86 WAS PROPERLY DUE. YOU WERE REQUESTED TO REFUND THE SUM OF $1. 129.14 THUS DETERMINED TO HAVE BEEN OVERPAID. UPON YOUR REFUSAL TO DO SO THE EXCESS PAYMENT WAS DEDUCTED IN JUNE 1952 FROM AMOUNTS OTHERWISE DUE YOU. THE LAWS OF THAT COUNTRY ARE CONTROLLING AND UNDER THOSE LAWS THE ONLY APPLICABLE RATE IS THE JOINT THROUGH RATE ORIGINALLY BILLED BY YOU. FORBIDS HIGHER JOINT RATES THAN THE AGGREGATE OF INTERMEDIATE LOCAL RATES ONLY WHERE THE INTERMEDIATE POINT IS IN THE UNITED STATES.

B-145560, JUN. 27, 1961

TO THE LEHIGH VALLEY RAILROAD COMPANY:

REFERENCE IS MADE TO YOUR LETTER OF APRIL 5, 1961, WITH ENCLOSURES, REQUESTING REVIEW OF OUR SETTLEMENT DATED NOVEMBER 12, 1953, WHICH DISALLOWED YOUR CLAIM FOR $1,129.14 ADDITIONAL FREIGHT CHARGES, PER BILL NO. NB-23511-B (OUR CLAIM NO. TK-481765), FOR THE TRANSPORTATION OF NINE SHIPMENTS OF AMMUNITION FOR CANNON WITH SOLID PROJECTILE FROM CHERRIER, QUEBEC, CANADA, TO KENDAIA, NEW YORK, UNDER GOVERNMENT BILLS OF LADING NOS. WQ-2845380 THROUGH WQ-2845388, DURING MARCH 1943.

FOR THIS TRANSPORTATION YOU CLAIMED AND WERE PAID $5,985, COMPUTED ON THE BASIS OF THE CLASS-75A RATING, MINIMUM WEIGHT 70,000 POUNDS, AS PROVIDED IN ITEM 765-SERIES OF CANADIAN FREIGHT ASSOCIATION TARIFF NO. 15-I, I.C.C.NO. 119, AND THE 95-CENT RATE PER 100 POUNDS NAMED IN TRUNK LINE TARIFF BUREAU FREIGHT TARIFF NO. 125-A, AGENT CURLETT'S I.C.C.NO. A-721. IN OUR AUDIT OF THE PAYMENT VOUCHER IT WAS CONSIDERED THAT THE THROUGH RATE ON WHICH YOU ORIGINALLY BILLED WAS UNREASONABLE AND UNJUST AND NOR MORE THAN $4,855.86 WAS PROPERLY DUE, BASED ON A RATE OF 96 1/2 CENTS PER 100 POUNDS ON THE ACTUAL WEIGHTS OF THE SHIPMENTS, CONSTRUCTED ON A COMBINATION OF RATES AS FOLLOWS:

61 1/2 CENTS, 4TH CLASS TO NIAGARA FALLS, ONTARIO, PER CANADIAN FREIGHT CLASSIFICATION NO. 19, AND CANADIAN NATIONAL RAILWAY TARIFF NO. C-39, C.T.C. E-1539.

35 CENTS, 4TH CLASS BEYOND, PER ITEM 1810, CONSOLIDATED FREIGHT CLASSIFICATION NO. 15, AND TRUNK LINE TARIFF BUREAU BORDER FREIGHT TARIFF NO. 68-A, I.C.C.NO. A-755.

BY FORM 1003 DATED NOVEMBER 5, 1951, YOU WERE REQUESTED TO REFUND THE SUM OF $1,129.14 THUS DETERMINED TO HAVE BEEN OVERPAID, AND UPON YOUR REFUSAL TO DO SO THE EXCESS PAYMENT WAS DEDUCTED IN JUNE 1952 FROM AMOUNTS OTHERWISE DUE YOU, PURSUANT TO THE AUTHORITY IN SECTION 322 OF THE INTERSTATE COMMERCE ACT, 49 U.S.C. 66, 1952 ED., PRIOR TO ITS AMENDMENT BY THE ACT OF AUGUST 26, 1958, 72 STAT. 860.

YOUR LETTER OF APRIL 5, 1961, RECEIVED HERE ON APRIL 7, 1961, MORE THAN SEVEN YEARS AFTER THE DATE OF OUR SETTLEMENT OF NOVEMBER 23, 1953, CONTENDS THAT AS THE SHIPMENT ORIGINATED IN CANADA, THE LAWS OF THAT COUNTRY ARE CONTROLLING AND UNDER THOSE LAWS THE ONLY APPLICABLE RATE IS THE JOINT THROUGH RATE ORIGINALLY BILLED BY YOU. YOU ALSO STATE YOUR RESEARCH INDICATES THAT SECTION 4 OF THE INTERSTATE COMMERCE ACT, AS TO TRANSPORTATION BETWEEN POINTS IN COUNTRIES CONTINGUOUS TO THE UNITED STATES TO DESTINATIONS IN THIS COUNTRY, FORBIDS HIGHER JOINT RATES THAN THE AGGREGATE OF INTERMEDIATE LOCAL RATES ONLY WHERE THE INTERMEDIATE POINT IS IN THE UNITED STATES.

THE REGULATIONS OF OUR OFFICE, 4 CODE OF FEDERAL REGULATIONS, 1960 SUPPLEMENT, SUBCHAPTER D, PART 55, PROVIDE FOR A REVIEW IN THE DISCRETION OF THE COMPTROLLER GENERAL OF A TRANSPORTATION CLAIM SETTLED HERE UPON THE APPLICATION OF A CARRIER. SUCH REGULATIONS DO NOT PLACE A SPECIFIC TIME LIMITATION UPON REQUESTS FOR REVIEW. HOWEVER, 31 U.S.C. 71A, 49 U.S.C. 66, 28 U.S.C. 2401 AND 2501, AND SIMILAR STATUTES, PLACE A LIMITATION ON THE TIME FOR FILING CLAIMS BEFORE OUR OFFICE AND THE COURTS. IN VIEW OF SUCH LIMITATIONS, IT SEEMS OBVIOUS THAT A REQUEST FOR REVIEW SHOULD BE RECEIVED HERE WITHIN A REASONABLE TIME OF THE DATE OF SETTLEMENT. WITHOUT ATTEMPTING A STRICT DEFINITION OF WHAT WOULD CONSTITUTE A REASONABLE TIME IN ALL CASES, YOUR REQUEST FOR REVIEW MORE THAN SEVEN YEARS AFTER YOUR COMPANY WAS ADVISED BY NOTICE OF SETTLEMENT OF THE DISALLOWANCE OF YOUR CLAIM IS NOT CONSIDERED TO BE TIMELY AND TO BE SUCH AS NECESSARILY WARRANTS AN EXTENSIVE REVIEW ON ITS MERITS. CF. 32 COMP. GEN. 107.

HOWEVER, THE RATE SOUGHT BY YOU IS A THROUGH RATE JOINTLY PROMULGATED BY YOU AND THE CANADIAN CARRIER. SUCH RATE IS SET FORTH IN AN EXCEPTION TARIFF HIGHER THAN THE RATING NAMED IN THE OTHERWISE GOVERNING CLASSIFICATION. THUS, CONSOLIDATED FREIGHT CLASSIFICATION NO. 15, AGENT GREENLY'S I.C.C.NO.O.C. 59, ITEM 1810 PROVIDES A RATING OF 4TH CLASS, MINIMUM WEIGHT 36,000 POUNDS, ON CARLOAD SHIPMENTS OF "AMMUNITION, FIXED FOR CANNON WITH EMPTY SAND LOADED OR SOLID PROJECTILE, LOOSE OR IN PACKAGES" AND THE JOINT THROUGH 4TH CLASS RATE FROM CHERRIER TO KENDAIA WAS 64 CENTS PER 100 POUNDS DURING THE PERIOD OF THE SHIPMENTS HERE INVOLVED. THUS THE NET CHARGES ALREADY PAID YOU BASED ON AN AGGREGATE OF LOCAL RATES TO AND FROM THE CANADIAN BORDER EXCEED THE REVENUES WHICH WOULD BE PAYABLE UNDER THE RATES SET OUT IN THE GOVERNING CLASSIFICATION.

THE SUPREME COURT OF THE UNITED STATES HAS HELD, AS TO SHIPMENTS FROM A POINT IN A CONTINGUOUS COUNTRY TO DESTINATIONS IN THE UNITED STATES, THAT WHERE AN AMERICAN CARRIER FAILED TO ESTABLISH JUST AND REASONABLE RATES FOR TRANSPORTATION FROM THE INTERNATIONAL BOUNDARY TO DESTINATION, BUT INSTEAD PARTICIPATES IN UNREASONABLE JOINT RATES WITH A FOREIGN CARRIER OF THE CONTIGUOUS COUNTRY, THE AMERICAN CARRIER IS LIABLE FOR THE DAMAGES TO THE SHIPPER WITHOUT REGARD TO THE PROPORTION OF THE CHARGES ATTRIBUTABLE TO THE FOREIGN CARRIER. NEWS SYNDICATE CO. V. NEW YORK CENTRAL RAILROAD CO., 275 U.S. 179, AND LEWIS-SIMAS JONES CO. V. SOUTHERN PACIFIC CO., 283 U.S. 654. THE INTERSTATE COMMERCE COMMISSION ALSO, IN DISCLAIMING AUTHORITY TO REGULATE RATES IN COUNTRIES CONTIGUOUS TO THE UNITED STATES, STATED:

"* * * BUT WE MAY REQUIRE THE AMERICAN CARRIERS TO CEASE AND DESIST FROM CONTINUING TO APPLY A JOINT THROUGH RATE, OR ANY RULE, REGULATION OR PRACTICE IN CONNECTION WITH THAT JOINT THROUGH RATE, AND WE MAY, WHERE SUCH RATE HAS BEEN INVOLUNTARILY MAINTAINED, INQUIRE WHETHER IT HAS BEEN REASONABLE, AND IF UNREASONABLE, AWARD DAMAGES IN THAT BEHALF.' BLACK HORSE TOBACCO CO. V. I.C.R.R.CO., 17 I.C.C. 588, 589.

ALSO SEE CYANAMID AND CYANIDE FROM NIAGARA FALLS, 155 I.C.C. 488. MOREOVER THE COMMISSION HAS REPEATEDLY HELD THAT COMMODITY OR EXCEPTION RATINGS HIGHER THAN THE RATING NAMED IN THE GOVERNING CLASSIFICATION ARE ABNORMALITIES WHICH REQUIRE MUCH TO JUSTIFY THEM. LUMBER FABRICATORS, INC. V. ALABAMA G.S.R.CO., 288 I.C.C. 54, 57; AND, HAS AWARDED REPARATIONS TO THE EXTENT THE CHARGES BASED ON THE EXCEPTION RATINGS EXCEED THE CLASSIFICATION BASIS. BROOKVILLE VILLAGE HOMES CO. V. AKRON C AND YR.CO., 288 I.C.C. 371, 376; LEE BROTHERS FOUNDRY CO., INC. V. ALABAMA GREAT SOUTHERN RAILROAD CO., ET AL., 297 I.C.C. 779.

THUS YOUR RAILROAD APPEARS TO BE LIABLE UNDER THE COURT DECISIONS REFERRED TO ABOVE FOR DAMAGES TO THE SHIPPER, THE UNITED STATES, FOR THE FULL AMOUNT OF ANY UNJUST AND UNREASONABLE CHARGES INCLUDED IN THE JOINT THROUGH RATE. THE THROUGH RATE CHARGED, IN THAT IT IS BASED ON AN EXCEPTION TARIFF HIGHER THAN THE RATING NAMED IN THE GOVERNING CLASSIFICATION, APPEARS TO BE SUCH AS THE INTERSTATE COMMERCE COMMISSION IN SIMILAR SITUATIONS HAS TERMED AN ABNORMALITY JUSTIFYING REPARATIONS TO THE EXTENT THE CHARGES EXCEED THOSE IN THE GOVERNING CLASSIFICATION. ALSO, YOU ALREADY HAVE BEEN PAID, BASED ON THE COMBINATION OF THE LOCAL RATES TO AND FROM THE CANADIAN BORDER, CHARGES HIGHER THAN WOULD BE DUE UNDER THE RATING SET OUT IN THE CLASSIFICATION. OUR OFFICE IN CARRYING OUT ITS RESPONSIBILITIES UNDER THE BUDGET AND ACCOUNTING ACT, 31 U.S.C. 71, HAS THE DUTY OR PRECLUDING THE USE OF PUBLIC FUNDS FOR PAYMENTS IN EXCESS OF REASONABLE CHARGES. SEE UNITED STATES V. WESTERN PACIFIC R.CO., 352 U.S. 59; AND, UNITED STATES V. NEW YORK, N.H. AND N.R.CO., 355 U.S. 253. UNDER THE CIRCUMSTANCES, WE WOULD NOT BE WARRANTED IN AUTHORIZING PAYMENT OF THE ADDITIONAL CHARGES NOW CLAIMED. THE DISALLOWANCE OF YOUR CLAIM IS THEREFORE SUSTAINED.

WE NOTE THAT THE LEHIGH VALLEY RAILROAD FILED SUIT AGAINST THE UNITED STATES, COURT OF CLAIMS ACTION NO. 101-61, WHICH IS NOW PENDING, ON OTHER SHIPMENTS AS TO WHICH RECOURSE TO THE COURTS PRESUMABLY IS NOT BARRED UNDER 28 U.S.C. 2501 INVOLVING THE SAME ISSUE. WE WILL OF COURSE AWAIT WITH INTEREST THE FINAL JUDICIAL DETERMINATION OF SUCH ISSUE.