B-167065, AUG. 18, 1970

B-167065: Aug 18, 1970

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WAS SUBJECT TO STAY ORDER THAT PRECLUDED THE CARRIER FROM TRANSPORTING GOVERNMENT CARGO UNDER ITS TENDERS. AMERICAN FARM LINES IS AN INTERVENING DEFENDANT IN THE SUIT OF BLACK BALL FREIGHT SERVICE. WAS BROUGHT IN THE TACOMA COURT ASKING FOR A STAY IN THE TEMPORARY AUTHORITY GRANTED TO AMERICAN FARM LINES BY INTERSTATE COMMERCE COMMISSION ORDERS OF SEPTEMBER 3. THE STAY WAS GRANTED ON AUGUST 21. THE BASIS OF YOUR MOTION FILED SUBSEQUENT TO THE SUPREME COURT'S DECISION IS APPARENTLY THAT DURING THE 11-MONTH PERIOD FROM OCTOBER 2. WERE EFFECTIVE. THE ACTIONS OF THE PLAINTIFF CARRIERS CAUSED AMERICAN TO LOSE PROFITS WHICH IT OTHERWISE WOULD HAVE EARNED IF THE TEMPORARY OPERATING AUTHORITIES GRANTED TO IT WERE PERMITTED TO BECOME EFFECTIVE.

B-167065, AUG. 18, 1970

MOTOR CARRIER -- LOSS OF PROFITS -- LITIGATION ASSISTANCE GAO WOULD NOT BE JUSTIFIED IN PARTICIPATING IN LITIGATION OVER POSSIBLE RECOVERIES OF LOSS OF PROFITS OR EXCESSIVE TRANSPORTATION CHARGES RESULTING WHEN CARRIER, AN AGRICULTURAL COOPERATIVE MOTOR CARRIER, WAS SUBJECT TO STAY ORDER THAT PRECLUDED THE CARRIER FROM TRANSPORTING GOVERNMENT CARGO UNDER ITS TENDERS.

TO MR. JOSEPH A. CALIFANO:

WE REFER TO YOUR LETTER OF JUNE 9, 1970, WITH ENCLOSURES, IN WHICH YOU DISCUSS THE MOTION FOR AN ACCOUNTING AND OTHER RELIEF FILED ON BEHALF OF AMERICAN FARM LINES, AN AGRICULTURAL COOPERATIVE MOTOR CARRIER. AMERICAN FARM LINES IS AN INTERVENING DEFENDANT IN THE SUIT OF BLACK BALL FREIGHT SERVICE, INC., ET AL. V UNITED STATES AND INTERSTATE COMMERCE COMMISSION, CIVIL ACTION NO. 3828, IN THE UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF WASHINGTON, SOUTHERN DIVISION, AT TACOMA.

THE SUIT OF BLACK BALL FREIGHT SERVICE, INC., JOINED BY SEVERAL OTHER MOTOR COMMON CARRIERS IN ROCKY MOUNTAIN MOTOR TARIFF BUREAU TERRITORY, WAS BROUGHT IN THE TACOMA COURT ASKING FOR A STAY IN THE TEMPORARY AUTHORITY GRANTED TO AMERICAN FARM LINES BY INTERSTATE COMMERCE COMMISSION ORDERS OF SEPTEMBER 3, 1968, AND DECEMBER 19, 1968. A THREE JUDGE PANEL, ON MARCH 26, 1969, SET ASIDE THE COMMISSION ORDERS AND INDEFINITELY CONTINUED ITS STAY ORDERS PREVIOUSLY ISSUED ON OCTOBER 2, 1968, AND JANUARY 6, 1969. 298 F. SUPP. 1006.

AMERICAN FARM LINES THEN APPLIED TO THE SUPREME COURT OF THE UNITED STATES FOR A STAY OF THE DISTRICT COURT JUDGMENT OF MARCH 26, 1969; THE STAY WAS GRANTED ON AUGUST 21, 1969. ON SEPTEMBER 4, 1969, AMERICAN FARM LINES RESUMED ITS COMMON CARRIER OPERATIONS UNDER ITS TEMPORARY AUTHORITY, FIRST GRANTED ON SEPTEMBER 3, 1968. ON APRIL 20, 1970, THE SUPREME COURT REVERSED THE DISTRICT COURT'S JUDGMENT OF MARCH 26, 1969. AMERICAN FARM LINES V BLACK BALL FREIGHT SERVICE, INC., ET AL., 397 U.S. 532.

THE BASIS OF YOUR MOTION FILED SUBSEQUENT TO THE SUPREME COURT'S DECISION IS APPARENTLY THAT DURING THE 11-MONTH PERIOD FROM OCTOBER 2, 1968, TO SEPTEMBER 4, 1969, WHEN THE DISTRICT COURT'S STAY ORDERS OF OCTOBER 2, 1968, AND JANUARY 6, 1969, WERE EFFECTIVE, THE ACTIONS OF THE PLAINTIFF CARRIERS CAUSED AMERICAN TO LOSE PROFITS WHICH IT OTHERWISE WOULD HAVE EARNED IF THE TEMPORARY OPERATING AUTHORITIES GRANTED TO IT WERE PERMITTED TO BECOME EFFECTIVE. YOUR MOTION ASKS THAT THE DISTRICT COURT ORDER AN ACCOUNTING BEFORE A SPECIAL MASTER TO DETERMINE THE AMOUNT OF SUCH LOST PROFITS AND THAT THE COURT ENTER A JUDGMENT OF RESTITUTION TO THE EXTENT THAT THE PLAINTIFFS WERE UNJUSTLY ENRICHED BY REASON OF THE STAYS OF AMERICAN'S TEMPORARY OPERATING AUTHORITIES.

IT IS YOUR BELIEF THAT THE GOVERNMENT SUFFERED VERY SUBSTANTIAL LOSSES BY REASON OF THE STAY OF AMERICAN'S TEMPORARY AUTHORITIES. YOU FEEL IT IS ESTABLISHED THAT AMERICAN'S RATES TO THE GOVERNMENT WERE (APPARENTLY DURING THE 11-MONTH PERIOD IN QUESTION) SUBSTANTIALLY LOWER THAN THE REGULATED MOTOR COMMON CARRIERS, PARTICULARLY ON EXPLOSIVE AMMUNITION AND OTHER CLASS A AND B EXPLOSIVES. EXHIBIT C, ATTACHED TO YOUR MOTION FOR RESTITUTION, IS DESIGNED TO SHOW THAT AMERICAN WAS FORCED TO TURN DOWN TENDERS OF 683 TRUCKLOADS OF GOVERNMENT FREIGHT OFFERED TO IT DURING THE 11-MONTH PERIOD (OCTOBER 2, 1968, TO SEPTEMBER 4, 1969). EXHIBIT D SHOWS THAT AMERICAN ESTIMATES A REVENUE LOSS OF $1,111,847 BECAUSE IT WAS UNABLE TO TRANSPORT THE 683 TRUCKLOADS TENDERED TO IT.

YOUR LETTER OF JUNE 9 IS FOR THE PURPOSE OF INFORMING US OF THE SITUATION AND YOU ASK FOR SUCH ASSISTANCE AS WE MAY BE ABLE TO FURNISH YOU IN PRESSING THIS SUIT. WE HAVE GIVEN YOUR PRESENTATION CAREFUL CONSIDERATION BUT ARE UNABLE TO PROVIDE ANY INFORMATION THAT WOULD BE USEFUL IN FURTHERING YOUR SUIT.

IN THE AUDIT OF PAID CARRIER BILLS PURSUANT TO THE PROVISIONS OF 49 U.S.C. 66 (AUTHORIZING PAYMENT OF CARRIER BILLS UPON PRESENTATION PRIOR TO AUDIT BY OUR OFFICE), WE ARE CONCERNED WITH THE BILL OF LADING RECORD PRESENTED BY THE CARRIERS IN SUPPORT OF THEIR BILLS FOR FREIGHT CHARGES. WE DO NOT MAINTAIN RECORDS THAT WOULD SHOW (1) THE TOTAL NUMBER OF SHIPMENTS MADE FROM A PARTICULAR MILITARY INSTALLATION, (2) THE CARRIERS TO WHICH SUCH SHIPMENTS WERE TENDERED, OR (3) THE IDENTITY OF THE CARRIERS ACTUALLY TRANSPORTING THE SHIPMENTS IF THEY WERE DIFFERENT FROM THE CARRIERS FIRST OFFERED THE SHIPMENTS. SUCH INFORMATION MIGHT BE OBTAINABLE FROM THE ADMINISTRATIVE AGENCY INVOLVED, BUT PROBABLY THE EXPENSE AND EFFORT INVOLVED WOULD BE DISPROPORTIONATE TO THE BENEFITS THAT REASONABLY MIGHT BE ANTICIPATED.

IT IS TRUE THAT COST IS AN IMPORTANT, IF NOT THE PRIMARY FACTOR, IN SOLICITING CARRIERS FOR TRANSPORTATION SERVICES. HOWEVER, THERE ARE OTHER FACTORS, SUCH AS CAPABILITY, SCHEDULING AT THE PORTS OR DESTINATIONS AND, OF COURSE, THE COST AND CAPABILITY FACTORS OF OTHER AVAILABLE MEANS OF TRANSPORTATION. WE ARE INFORMED THAT A LARGER PROPORTION OF THE OVER-ALL EXPLOSIVES SHIPMENTS WITHIN THE REACH OF AMERICAN'S TEMPORARY AUTHORITY IS TRANSPORTED BY RAIL THAN BY OTHER MODES.

SINCE THE RAIL RATES HAVE BEEN SOMEWHAT COMPETITIVE WITH AGRICULTURAL COOPERATIVE CARRIER RATES AND SINCE THE RAILROAD CARS ORDINARILY COULD ACCOMMODATE CONSIDERABLY LARGER LOADS THAN THE STANDARD MOTOR CARRIER TRAILERS, IT SEEMS POSSIBLE THAT A SUBSTANTIAL NUMBER OF THE LOADS THAT MIGHT HAVE BEEN HANDLED BY AMERICAN WERE ACTUALLY PLACED IN RAILROAD CARS. IT IS ALSO POSSIBLE THAT OTHER AGRICULTURAL COOPERATIVES TRANSPORTED SOME OF THE FREIGHT AT RATES COMPARABLE TO THOSE CHARGED BY AMERICAN.

WE ARE NOT IN A POSITION TO DEVELOP ANY RECORD WHICH WOULD SERVE TO ESTABLISH THAT THE GOVERNMENT SUFFERED MONETARY INJURY BY REASON OF THE STAY ORDERS FOR WHICH ACTION WAS INITIATED BY THE MOTOR CARRIERS COMPETING WITH AMERICAN FARM LINES. ANY RECORD WHICH MIGHT BE COMPILED AS A FOUNDATION FOR POSSIBLE COURT ACTION BY THE GOVERNMENT WOULD HAVE TO BE DEVELOPED IN THE DEPARTMENT OF DEFENSE. INFORMAL ADVICE FROM THE ARMY JUDGE ADVOCATE GENERAL'S OFFICE IS TO THE EFFECT THE COST OF INVESTIGATING, IDENTIFYING, ASSEMBLING, ANALYZING AND PREPARING EVIDENCE WHICH MIGHT BE ADVANTAGEOUSLY USED WOULD BE PROHIBITIVE AND COULD NOT BE ECONOMICALLY JUSTIFIED, CONSIDERING THE CHANCES OF ANY MONETARY AWARD IF THE OUTCOME OF LITIGATION WERE FAVORABLE TO THE UNITED STATES.

THE DEPARTMENT OF DEFENSE HAS NOT REPORTED THE POSSIBILITY OF ADDITIONAL COSTS INCURRED FOR THE TRANSPORTATION OF EXPLOSIVES DURING THE PERIOD OF THE STAY ORDERS THAT MIGHT HAVE BEEN AVOIDED IF AMERICAN HAD BEEN AVAILABLE; NOR HAS THE DEPARTMENT OF JUSTICE GIVEN US ANY NOTICE OF INTENTION TO ENGAGE IN THE PROCEEDINGS PENDING AT TACOMA FOR THE PURPOSE OF ESTABLISHING THAT THE UNITED STATES IS ENTITLED TO A MONEY JUDGMENT. OUR EXCLUSIVE CONCERN IN THIS MATTER RELATES TO THE BEST INTERESTS OF THE UNITED STATES; AT PRESENT, THERE APPEARS TO BE REASONABLE DOUBT THAT THE GOVERNMENT'S BEST INTEREST WOULD BE SERVED BY JOINING IN EFFORTS TO ESTABLISH COMPENSABLE INJURY. AS YOU KNOW, THE GOVERNMENT, IN ITS ROLE AS A USER OF MOTOR CARRIER SERVICES, HAS NOT PARTICIPATED IN THE COURT PROCEEDINGS AT TACOMA. PREVIOUS LACK OF PROSECUTION OF ANY INTERESTS IN THIS REGARD MAY BE OF SIGNIFICANCE ON THE QUESTION OF WHAT RIGHTS THE GOVERNMENT NOW HAS.

IN THESE CIRCUMSTANCES, WE DO NOT BELIEVE THAT OUR OFFICE WOULD BE JUSTIFIED IN PARTICIPATING IN THE LITIGATION OVER THE QUESTION OF POSSIBLE RECOVERIES OF LOST PROFITS OR EXCESSIVE TRANSPORTATION CHARGES THAT MIGHT BE INVOLVED IN THE COURT PROCEEDINGS AT TACOMA.