B-179644, APR 19, 1974, 53 COMP GEN 784

B-179644: Apr 19, 1974

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CLAIMS - TRANSPORTATION - IMPROPER PACKING CHARGES - DISALLOWED DISALLOWANCE OF CLAIMS PRESENTED BY MOTOR CARRIER FOR IMPROPER PACKING CHARGES UNDER RULE 687 OF NATIONAL MOTOR FREIGHT CLASSIFICATION RELATING TO SHIPMENTS KNOWN TO BE CLASSIFIED MATERIALS TRANSPORTED UNDER CONTROL OF ARMED FORCES COURIER SERVICE IS SUSTAINED WHERE ONLY EVIDENCE RELATING TO MANNER OF PACKING IS INFERENCE DRAWN FROM THE FACT THAT GBL CONTAINED NO DESCRIPTION OF THE PACKING AND WHERE MOTOR CARRIER IS ESTOPPED FROM ASSERTING THAT SHIPMENTS WERE IMPROPERLY PACKED BECAUSE IT HAD KNOWLEDGE OF THE SECURITY PACKING. MCLEAN KNEW THAT THE SHIPMENTS WERE. EACH CLAIM WAS DISALLOWED BECAUSE ARFCOS WAS THE SHIPPER AND PREPARED THE SHIPMENT IN ACCORDANCE WITH AR 66-5.

B-179644, APR 19, 1974, 53 COMP GEN 784

CLAIMS - TRANSPORTATION - IMPROPER PACKING CHARGES - DISALLOWED DISALLOWANCE OF CLAIMS PRESENTED BY MOTOR CARRIER FOR IMPROPER PACKING CHARGES UNDER RULE 687 OF NATIONAL MOTOR FREIGHT CLASSIFICATION RELATING TO SHIPMENTS KNOWN TO BE CLASSIFIED MATERIALS TRANSPORTED UNDER CONTROL OF ARMED FORCES COURIER SERVICE IS SUSTAINED WHERE ONLY EVIDENCE RELATING TO MANNER OF PACKING IS INFERENCE DRAWN FROM THE FACT THAT GBL CONTAINED NO DESCRIPTION OF THE PACKING AND WHERE MOTOR CARRIER IS ESTOPPED FROM ASSERTING THAT SHIPMENTS WERE IMPROPERLY PACKED BECAUSE IT HAD KNOWLEDGE OF THE SECURITY PACKING.

IN THE MATTER OF LEE WAY MOTOR FREIGHT, INC., APRIL 19, 1974:

THE TRANSPORTATION AND CLAIMS DIVISION (TCD) OF THE UNITED STATES GENERAL ACCOUNTING OFFICE DISALLOWED CLAIMS PRESENTED BY LEE WAY MOTOR FREIGHT, INC. (LEE WAY) FOR $3,330.78 ON 23 SHIPMENTS OF ELECTRICAL INSTRUMENTS SHIPPED ON GOVERNMENT BILLS OF LADING (GBL) BY THE ARMED FORCES COURIER SERVICE (ARFCOS) FROM ALEXANDRIA, VIRGINIA, TO SAN ANTONIO, TEXAS, BETWEEN DECEMBER 5, 1967, AND DECEMBER 23, 1968. ARFCOS TENDERED THESE SHIPMENTS TO MCLEAN TRUCKING CO., INC. (MCLEAN) IN ACCORDANCE WITH ARMY REGULATION NO. 66-5 (AR 66-5) DATED JUNE 20, 1966, WHICH COVERED THE ADMINISTRATION AND OPERATIONS OF THAT SERVICE. MCLEAN KNEW THAT THE SHIPMENTS WERE, FOR SECURITY PURPOSES, CLASSIFIED MATERIAL.

MCLEAN ACCEPTED THE SHIPMENTS AT ORIGIN AND LEE WAY DELIVERED THEM. UPON PRESENTATION OF ITS ORIGINAL BILLS, LEE WAY COLLECTED FREIGHT CHARGES BASED ON THE EXCLUSIVE USE OF VEHICLE SERVICE PROVISIONS IN MCLEAN'S SECTION 22 I.C.C. TENDER 1427.

LEE WAY PRESENTED CLAIMS FOR PENALTY CHARGES BASED ON ITEM (RULE) 687 OF THE GOVERNING NATIONAL MOTOR FREIGHT CLASSIFICATION (NMFC), ALLEGING THAT THE ELECTRICAL INSTRUMENTS DID NOT COMPLY WITH THE PACKING REQUIREMENTS OF THE CLASSIFICATION. EACH CLAIM WAS DISALLOWED BECAUSE ARFCOS WAS THE SHIPPER AND PREPARED THE SHIPMENT IN ACCORDANCE WITH AR 66-5. A COPY OF THAT REGULATION AND A COPY OF THE CONTENTS OF AN EXPLANATORY ADMINISTRATIVE REPORT RECEIVED FROM THE ARFCOS ACCOMPANIED EACH DISALLOWANCE.

IN A LETTER DATED AUGUST 31, 1973, SEEKING REVIEW OF THE DISALLOWANCES, THE CLAIMANT, CITING JANICE, INC. V. ACME FAST FREIGHT, INC., 302 I.C.C. 596, 598 (1958) CONTENDS THAT TCD FAILED TO PRESENT SUFFICIENT EVIDENCE TO SUPPORT ITS DETERMINATION OF THE INAPPLICABILITY OF RULE 687. IT CONTENDS THAT:

THE MERE FACT THE SETTLEMENT CERTIFICATES INDICATE THE IMPROPER PACKING PENALTY IS NOT APPLICABLE ON THESE MOVEMENTS IS NOT SUFFICIENT EVIDENCE TO DISALLOW OUR SUPPLEMENTAL VOUCHERS WITHOUT FURTHER SUPPORTING EVIDENCE

THE INTERSTATE COMMERCE COMMISSION STATED IN JANICE (BEGINNING AT THE BOTTOM OF PAGE 597) THAT THE BURDEN IS UPON THE COMPLAINANT TO SHOW BY CONVINCING EVIDENCE THAT THE COMMODITY DESCRIPTIONS IN THE SHIPPING PAPERS WERE ERRONEOUS, AND THAT THE COMMODITY WAS OF A CHARACTER EMBRACED WITHIN THE DESCRIPTION ON WHICH THE RATE CLAIMED WAS APPLICABLE.

WE DO NOT DISAGREE WITH THE RULE OF EVIDENCE APPLIED IN JANICE; THE RULE IS AN INCIDENT OF THE GENERAL RULE THAT THE PARTY HAVING THE AFFIRMATIVE OF AN ISSUE HAS THE BURDEN OF PROOF. IN VIEW OF THE FACTS IN JANICE, HOWEVER, WE DO NOT UNDERSTAND HOW IT SUPPORTS LEE WAY'S POSITION.

IN THAT CASE, A SHIPPER INITIATED A PROCEEDING BEFORE THE COMMISSION BY FILING A COMPLAINT SEEKING, IN EFFECT, A DETERMINATION THAT WOULD HAVE CHANGED THE COMMODITY DESCRIPTION APPEARING ON THE SHIPPING DOCUMENTS. THESE FACTS, THE COMMISSION HELD THAT A MERE STATEMENT BY THE COMPLAINING PARTY, WITHOUT EVIDENCE, IS NOT SUFFICIENT TO PROVE THE NATURE OF THE COMMODITY SHIPPED.

LEE WAY WAS PAID FREIGHT CHARGES UPON PRESENTATION OF ITS ORIGINAL BILLS, AS REQUIRED BY 49 U.S. CODE 66. SUBSEQUENTLY, CLAIMS WERE FILED FOR THE PENALTY CHARGES. ALTHOUGH LEE WAY HAD THE BURDEN TO SHOW THAT THE ARTICLES WERE NOT PROPERLY PACKED, OUR TCD APPARENTLY WAS EXPECTED BY LEE WAY TO ALLOW THE CLAIMS ON A MERE INFERENCE DRAWN FROM THE FACT THAT THE GBLS CONTAINED NO REFERENCE TO THE PACKING. TCD PROPERLY DETERMINED THAT THIS WAS INSUFFICIENT EVIDENCE TO CARRY LEE WAY'S BURDEN OF PROOF AND FURNISHED EVIDENCE SHOWING THAT ARFCOS WAS THE SHIPPER AND HAD PREPARED THE SHIPMENTS IN ACCORDANCE WITH AR 66-5. THIS EVIDENCE, WHICH WAS PECULIARLY WITHIN THE KNOWLEDGE OF THE GOVERNMENT, SERVED TO REBUT LEE WAY'S INFERENCE.

PERHAPS FOR SECURITY REASONS ARFCOS COULD NOT STATE POSITIVELY HOW THE SHIPMENTS WERE PACKAGED, BUT IT CAN BE INFERRED FROM REGULATIONS PRESCRIBING MINIMUM PACKAGING STANDARDS FOR MATERIALS ENTERED INTO THE ARFCOS SYSTEM THAT IF THE EQUIPMENT HAD NOT BEEN PACKAGED ACCORDING TO AR 66-5, IT WOULD NOT HAVE BEEN LOADED BY THE ARFCOS.

LEE WAY ALSO CONTENDS THAT AR 66-5, CITED ON THE SETTLEMENT CERTIFICATES, IS NOT A "GOVERNING PUBLICATION" UNDER MCLEAN'S SECTION 22 I.C.C. TENDER 1427. BUT UNDER PARAGRAPH 7 OF THE TENDER, LEE WAY, AMONG OTHER THINGS, AGREED TO PERFORM THE TRANSPORTATION"*** IN ACCORDANCE WITH ALL FEDERAL, STATE OR MUNICIPAL LAWS AND REGULATIONS ***."

RULE 687, WHICH IMPOSES ON THE SHIPPER A PENALTY OF 10 PERCENT OF THE APPLICABLE FREIGHT CHARGES FOR THE IMPROPER PACKING OF TRUCKLOAD OR VOLUME SHIPMENTS, READS, IN PERTINENT PART:

PACKING OR PACKAGING - NON-COMPLIANCE WITH

*** THIS RULE APPLIES ON ARTICLES WHICH DO NOT COMPLY WITH THE PACKING REQUIREMENTS APPLICABLE TO THE RESPECTIVE ARTICLES UNDER THE TERMS OF THIS CLASSIFICATION AND ONLY WHEN THE FAILURE TO COMPLY IS DISCOVERED AFTER THE ARTICLES HAVE BEEN ACCEPTED FOR TRANSPORTATION.

APPLICABILITY OF RULE 687 DEPENDS UPON TWO QUESTIONS OF FACT: WHETHER THE ELECTRICAL INSTRUMENTS WERE IMPROPERLY PACKED, AS DETERMINED BY THE COMMODITY DESCRIPTION IN ITEM 61700 OF THE GOVERNING CLASSIFICATION, AND IF SO, WHETHER THAT FACT WAS DISCOVERED BY THE CARRIERS OR THEIR AGENTS AFTER ACCEPTANCE OF THE SHIPMENTS FOR TRANSPORTATION.

THERE IS NO INDICATION ON THE GOVERNMENT BILLS OF LADING AS TO THE MANNER IN WHICH THE LADING WAS PACKAGED. THE ONLY NOTATION RELATING TO THE LADING IS TO A CERTAIN NUMBER OF PACKAGES OR PIECES OF "ELECTRICAL INSTRUMENTS, NOI." ITEM 61700 OF THE GOVERNING CLASSIFICATION APPLIES TO ELECTRICAL APPLIANCES OR INSTRUMENTS, NOI, IN INNER CONTAINERS IN CLOTH BAGS, OR IN BARRELS, BOXES, OR CRATES OR IN CERTAIN PACKAGES.

RULE 360, SECTION 2(C), OF THE NMFC REQUIRES THAT THE KIND OF PACKAGE USED BE SHOWN ON THE BILL OF LADING. ALTHOUGH, TECHNICALLY, ARFCOS MAY NOT HAVE COMPLIED WITH RULE 360, THAT RULE SEEMS TO BE CONCERNED WITH THE CORRECT IDENTIFICATION OF THE COMMODITY, RATHER THAN WITH THE PACKING USED. WE BELIEVE ALSO THAT SECTION 3 OF RULE 360, GIVING THE CARRIER A RIGHT OF INSPECTION, RELATES TO THE IDENTIFICATION OF THE COMMODITY, RATHER THAN TO THE PACKING USED.

ORDINARILY, THE LADING IS ACCESSIBLE TO A CARRIER'S AGENT AT THE TIME A SHIPMENT IS ACCEPTED FOR TRANSPORTATION; HOWEVER, IN VIEW OF THE CLASSIFIED NATURE OF THESE SHIPMENTS WHICH WERE PACKED IN ACCORDANCE WITH THE STANDARDS FOR SECURITY MATERIALS ENTERED INTO THE ARFCOS SYSTEM PRESCRIBED IN AR 66-5 - AND WHICH WAS KNOWN TO MCLEAN, THE ORIGIN CARRIER - THE COURIER OFFICER OR OFFICERS SEALED THE TRAILERS AND PREVENTED ACCESS BY THE CARRIERS' PERSONNEL. SINCE LEE WAY ALSO KNEW OF THE SECURITY PROVISIONS SURROUNDING THESE SHIPMENTS WHEN IT ACCEPTED THEM FROM ITS CONNECTING CARRIER, IT IS NOW ESTOPPED FROM ASSERTING THAT THEY WERE IMPROPERLY PACKED.

LEE WAY HAS THE BURDEN OF PROOF (UNITED STATES V. NEW YORK, NEW HAVEN & HARTFORD R.R., 355 U.S. 253 (1957)) AND ON THE PRESENT RECORD THERE IS NO COMPETENT EVIDENCE SUPPORTING A CONCLUSION AND LEE WAY IS ESTOPPED FROM SHOWING THAT EACH SHIPMENT WAS NOT PACKED IN ACCORDANCE WITH THE CLASSIFICATION PACKING REQUIREMENTS.

THE DISALLOWANCE OF THE CLAIMS IS SUSTAINED.