B-199458.OM, FEB 23, 1981

B-199458.OM: Feb 23, 1981

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862.17 OFFICE OF GENERAL COUNSEL: WE ARE FORWARDING THE CLAIM OF AT&T LONG LINES FOR PAYMENT OF TELEPHONE SERVICE PROVIDED TO THE GENERAL SERVICES ADMINISTRATION. THE SERVICE WAS ORDERED FROM THE C&P TELEPHONE COMPANY OF WEST VIRGINIA AND THE GENERAL TELEPHONE COMPANY OF KENTUCKY. GSA INDICATES THAT THE CIRCUITS WERE INSTALLED IN LATE 1969 AND EARLY 1970. WHICH WAS INSTALLED ON OCTOBER 29. AT&T INDICATED THAT THE BILLING FOR THE FIVE CIRCUITS SHOULD HAVE BEEN BETWEEN HUNTINGTON. THE DATE THAT THE NEW BILLING WAS RECEIVED. AT&T DOES NOT DISPUTE THE FACT THAT THE MISTAKE WAS UNILATERAL. HOWEVER AT&T ASSERTS THAT THEY SHOULD BE PAID NOTWITHSTANDING THE MISTAKE SINCE TARIFF CHARGES HAVE THE SAME FORCE AND EFFECT AS LAW AND THEY MAY NOT BE WAIVED.

B-199458.OM, FEB 23, 1981

SUBJECT: CLAIM OF AT&T LONG LINES FOR $5,862.17

OFFICE OF GENERAL COUNSEL:

WE ARE FORWARDING THE CLAIM OF AT&T LONG LINES FOR PAYMENT OF TELEPHONE SERVICE PROVIDED TO THE GENERAL SERVICES ADMINISTRATION. ON JUNE 27, 1969, GSA REQUESTED THAT FOUR ROTARY, STATION-TO-TRUNK LINES BE INSTALLED BETWEEN THE GSA SERVING PBX, HUNTINGTON, WEST VIRGINIA, AND THE FEDERAL YOUTH CENTER, ASHLAND, KENTUCKY. THE SERVICE WAS ORDERED FROM THE C&P TELEPHONE COMPANY OF WEST VIRGINIA AND THE GENERAL TELEPHONE COMPANY OF KENTUCKY. GSA INDICATES THAT THE CIRCUITS WERE INSTALLED IN LATE 1969 AND EARLY 1970. GSA REQUESTED AN ADDITIONAL CIRCUIT ON JANUARY 22, 1974, WHICH WAS INSTALLED ON OCTOBER 29, 1974.

ON FEBRUARY 10, 1977, GSA REQUESTED THAT THE FIVE CIRCUITS BE RELOCATED FROM THE HUNTINGTON, WEST VIRGINIA PBX, TO THE GSA CENTREX, IN HUNTINGTON, WEST VIRGINIA, WITH ALL FIVE CIRCUITS TO BE CONNECTED TO THE FEDERAL YOUTH CENTER IN ASHLAND, KENTUCKY. AS A RESULT OF THIS CHANGE, AT&T REALIZED THAT A BILLING MISTAKE HAD BEEN MADE REGARDING THESE CIRCUITS, AND NOTIFIED THE CIRCUIT PROCUREMENT BRANCH OF GSA IN BELLEVILLE, ILLINOIS, ON MARCH 15, 1977, OF THE MISTAKE IN BILLING. AT&T INDICATED THAT THE BILLING FOR THE FIVE CIRCUITS SHOULD HAVE BEEN BETWEEN HUNTINGTON, WEST VIRGINIA, AND MEADS, KENTUCKY, RATHER THAN HUNTINGTON, WEST VIRGINIA, AND ASHLAND, KENTUCKY. THE CHANGE REQUIRED BILLING FOR AN ADDITIONAL THREE MILES OF INTERCHANGE FACILITIES AND A CHANGE IN THE BILLING PER CIRCUIT PER MONTH FROM $133.04 TO $139.52. GSA HAS PAID THE NEW, HIGHER RATE SINCE OCTOBER 10, 1977, THE DATE THAT THE NEW BILLING WAS RECEIVED.

AT&T HAS ALSO REQUESTED THAT GSA PAY A BACK BILL OF $5,862.17, COVERING EACH CIRCUIT FOR THE PERIOD PRIOR TO OCTOBER 10, 1977. GSA HAS DENIED LIABILITY, MAINTAINING THAT AT&T MADE A UNILATERAL MISTAKE IN DETERMINING THE CORRECT BILLING CHARGES, AND THAT THE GOVERNMENT SHOULD NOT BE LIABLE FOR AT&T'S MISTAKE. AT&T DOES NOT DISPUTE THE FACT THAT THE MISTAKE WAS UNILATERAL, HOWEVER AT&T ASSERTS THAT THEY SHOULD BE PAID NOTWITHSTANDING THE MISTAKE SINCE TARIFF CHARGES HAVE THE SAME FORCE AND EFFECT AS LAW AND THEY MAY NOT BE WAIVED. AT&T RELIES ON 47 U.S.C. 202 WHICH PROVIDES THAT A COMMON CARRIER MAY NOT DISCRIMINATE OR GIVE PREFERENCE TO ANY CUSTOMER; THEREFORE, THEY MAINTAIN THAT THE ADDITIONAL CHARGES MUST BE COLLECTED BY LAW. THUS, THE FIRST QUESTION PRESENTED IS WHETHER THE UNITED STATES MAY PROPERLY DENY LIABILITY SINCE THE MISTAKE WAS UNILATERAL OR WHETHER THE UNITED STATES IS LIABLE SINCE TARIFF CHARGES HAVE THE FORCE AND EFFECT OF LAW.

IF YOU DETERMINE THAT THE UNITED STATES SHOULD BE HELD LIABLE, THEN IT BECOMES NECESSARY TO DETERMINE THE APPROPRIATE STATUTE OF LIMITATIONS. AT&T HAS ASSERTED THAT THE APPROPRIATE STATUTE OF LIMITATIONS HAS BEEN DETERMINED BY GAO IN 51 COMP.GEN. 20 (JULY 9, 1971), WHICH INDICATED THAT THE 10 YEAR STATUTE OF LIMITATIONS (SINCE AMENDED TO SIX) FOUND AT 31 U.S.C. 71(A) WAS APPLICABLE. ALTHOUGH GSA HAS ACKNOWLEDGED THAT GAO WOULD PROBABLY CONSIDER THE CLAIM TO THE EXTENT THAT IT FALLS WITHIN THE 6 YEAR PERIOD, THEY BELIEVE THAT THE 2 YEAR STATUTE OF LIMITATIONS PROVIDED BY THE COMMUNICATIONS ACT AT 47 U.S.C. 415 SHOULD BE CONTROLLING. GSA ARGUES THAT THE 2-YEAR STATUTE OF LIMITATIONS IS INDICATIVE OF THE LEGISLATIVE INTENT IN ESTABLISHING LIABILITIES FOR CARRIER-CAUSED MISTAKES. ESSENCE, THEY ASK THAT GAO RE-CONSIDER THE FINDING IN 51 COMP.GEN. 20 THAT THE 2-YEAR STATUTE IS INAPPLICABLE TO CLAIMS FILED BY COMMON CARRIERS WITH OUR OFFICE. ALTHOUGH THE STATUTORY LANGUAGE APPEARS TO BE CLEAR IN LIMITING THE 2 YEAR STATUTE OF LIMITATIONS TO ACTIONS AT LAW, AND 51 COMP. GEN. 20 IS CONSISTENT WITH THESE STATUTES, GSA INDICATES THAT THIS DECISION WILL BE USED AS GUIDANCE FOR OTHER CLAIMS FROM COMMUNICATIONS COMMON CARRIERS WHICH THEY ANTICIPATE WILL DEVELOP DUE TO THE CHANGING MARKET ENVIRONMENT IN THE TELECOMMUNICATIONS FIELD. THUS, WE REQUEST THAT YOU PROVIDE ADVICE AND GUIDANCE AS TO THE APPROPRIATE STATUTE OF LIMITATIONS TO BE APPLIED TO THESE CLAIMS.

INDORSEMENT

DIRECTOR, AFMD

RETURNED. THESE CLAIMS ARE FOR BACK PAYMENTS OF UNDERCHARGES STEMMING FROM AT&T'S HAVING APPLIED THE WRONG TARIFF RATE ON LONG DISTANCE CIRCUITS ORDERED BY THE GSA. THESE CIRCUITS WERE INSTALLED BETWEEN HUNTINGTON, WEST VIRGINIA, AND ASHLAND, KENTUCKY, AT VARIOUS TIMES BETWEEN 1969 AND 1974; THE MISTAKE WAS NOT DISCOVERED BY AT&T UNTIL OCTOBER 1977. GSA HAS DENIED THE CLAIMS ON THE BASIS THAT AT&T MADE A UNILATERAL MISTAKE FOR WHICH THE GOVERNMENT SHOULD NOT BE HELD LIABLE.

QUESTION 1: MAY THE UNITED STATES DENY LIABILITY FOR ITS FAILURE TO PAY THE FULL AMOUNT OF AN ESTABLISHED TARIFF ON THE GROUNDS THAT THE UNDERPAYMENT WAS THE RESULT OF A UNILATERAL MISTAKE ON THE PART OF THE CARRIER?

SHORT ANSWER: NO. IT IS A PRINCIPLE WELL-ESTABLISHED BY DECISIONS OF THE COURTS AND OF THIS OFFICE THAT VALIDLY-FILED TARIFFS HAVE THE FORCE AND EFFECT OF LAW. NEITHER THE INTENTIONAL NOR ACCIDENTAL MISSTATEMENT OF THE APPLICABLE PUBLISHED RATE WILL BIND THE CARRIER.

QUESTION 2: DOES THE 2 YEAR STATUTE OF LIMITATIONS OF THE COMMUNICATIONS ACT PREVENT AT&T LONG LINES FROM SEEKING ADMINISTRATIVE SETTLEMENT OF ITS CLAIM? SHORT ANSWER: NO. THE 2 YEAR STATUTE OF LIMITATIONS OF THE COMMUNICATIONS ACT APPLIES ONLY TO ACTIONS FILED IN COURT. THE 6 YEAR LIMITATIONS ON CLAIMS REVIEWABLE BY THE GAO IS APPLICABLE TO THIS CASE.

DISCUSSION

GSA HAS TAKEN THE POSITION THAT ORDERS FOR SERVICE UNDER TARIFF RESULT IN A CONTRACTUAL RELATIONSHIP, AND THAT BECAUSE THE MISTAKE WAS ONE OF WHICH THE TELEPHONE COMPANY SHOULD HAVE BEEN AWARE, GSA SHOULD NOT BE LIABLE FOR THE TELEPHONE COMPANY'S ERROR. SUCH A POSITION IS CONTRARY TO THE GENERAL PRINCIPLE THAT WHERE A RATE IS REQUIRED BY LAW TO BE PUBLISHED, PAYMENT OF THAT RATE IS NOT A MERE MATTER OF CONTRACT, BUT IS REQUIRED AS A MATTER OF LAW. LOWDEN V. SIMONDS-SHIELDS-LONSDALE GRAIN CO., 306 U.S. 516 (1939). SEE 10 WILLISTON, THE LAW OF CONTRACTS SEC. 1134 (1967 SUPP. 1979). THIS PRINCIPLE HAS BEEN FOLLOWED BY THE COURTS IN THE SPECIFIC CONTEXT OF RATES FILED UNDER THE COMMUNICATIONS ACT. SEE AMERICAN TEL. & TEL. CO. V. FLORIDA-TEXAS FREIGHT, INC., 357 F.SUPP. 977 (DC FLA. 1973), AFF'D. MEM. 485 F.2D 1390 (5TH CIR. 1973); KOMATZ CONSTR. INC. V. WESTERN UNION TEL. CO., 290 MINN. 129, 186 N. W. 2D 691 (1971), CERT. DENIED, 404 U.S. 856 (1971). IT HAS ALSO BEEN APPLIED EVEN WHERE IT IS ASSERTED AGAINST THE GOVERNMENT AS THE SHIPPER OR CUSTOMER. SEE, UNITED STATES V. ASSOCIATED AIR TRANSPORT, INC., 275 F2D 827 (5TH CIR. 1960) (TARIFF FILED PURSUANT TO THE CIVIL AERONAUTICS ACT OF 1938). SEE ALSO OUR DISCUSSION IN B-153311, APRIL 24, 1964, WHERE WE STATED, IN THE CONTEXT OF INTERSTATE REGULATION OF TELEPHONE RATES:

"THE RATES, TOLLS, AND CHARGES FOR SERVICE FIXED OR APPROVED BY GOVERNMENTAL REGULATORY AGENCIES ARE NOT A MATTER OF CONTRACT, UNDER WHICH THE LEGAL LIABILITY OF THE PARTIES CAN BE MODIFIED BY AGREEMENT, BUT A MATTER OF LAW BY WHICH A UNIFORM LIABILITY IS IMPOSED. *** SUCH PRINCIPLE IS EQUALLY APPLICABLE TO SITUATIONS WHERE THE FEDERAL GOVERNMENT IS THE USER ***."

A COROLLARY TO THE RULE THAT TARIFFS HAVE THE FORCE AND EFFECT OF STATUTES IS THAT "NO ACT OR OMISSION OF THE CARRIER (EXCEPT THE RUNNING OF THE STATUTE OF LIMITATIONS) MAY ESTOP OR PRECLUDE IT FROM ENFORCING PAYMENT OF THE FULL AMOUNT BY A PERSON LIABLE THEREFOR." LOUISVILLE & N.R. CO., V. CENTRAL IRON & COAL CO., 265 U.S. 59, 65 (1924). SEE ALSO, TEXAS & PACIFIC RY. CO., V. MUGG & DRYDEN, 202 U.S. 242 (1906). WHETHER THIS COROLLARY SHOULD APPLY IN THE CASE OF THE COMMUNICATIONS ACT HAS NEVER BEEN SPECIFICALLY DECIDED BY THIS OFFICE. A COMPARISON, HOWEVER, TO DECISIONS CONCERNING RATES REQUIRED TO BE FILED UNDER THE CIVIL AERONAUTICS ACT OF 1938 (SINCE REPLACED BY THE FEDERAL AVIATION ACT OF 1958, 49 U.S.C. SEC. 1373) AND THE INTERSTATE COMMERCE ACT, INDICATES THAT THIS COROLLARY IS EQUALLY APPLICABLE HERE.

IN 12 COMP.GEN. 411 (1932), WE RECOGNIZED THE GENERAL RULE THAT WHERE A CARRIER MAKES A MISTAKE IN QUOTING A RATE OR ROUTE, THE SHIPPER IS NONETHELESS RESPONSIBLE FOR THE PUBLISHED TARIFF. IN THAT DECISION, HOWEVER, WE HELD THAT THE GENERAL RULE WAS NOT APPLICABLE UNDER THE INTERSTATE COMMERCE ACT WHERE THE SHIPPER WAS THE UNITED STATES AND THE UNDERCHARGE WAS THE FAULT OF THE CARRIER. THE RATIONALE OF THAT DECISION WAS THAT THE PURPOSE SERVED BY THAT RULE, NAMELY THE PREVENTION OF DISCRIMINATION BY CARRIERS AGAINST SHIPPERS, IS NOT PRESENT WHERE SECTION 22 OF THE INTERSTATE COMMERCE ACT EXPRESSLY ALLOWS REDUCED RATES TO BE GRANTED BY CARRIERS TO THE UNITED STATES. NO SUCH PROVISION EXISTS IN THE COMMUNICATION ACT. IN THIS RESPECT, THE SITUATION IS PARALLEL TO THAT OF THE CIVIL AERONAUTICS ACT. NEITHER THE CIVIL AERONAUTICS ACT NOR THE COMMUNICATIONS ACT HAS AN EXPRESS PROVISION FOR REDUCED UNITED STATES GOVERNMENT RATES; BOTH HAVE ALMOST IDENTICAL PROVISIONS PROHIBITING DISCRIMINATORY RATES; AND BOTH EXPRESSLY FORBID THE CARRIER FROM RECEIVING LESS COMPENSATION FOR THE SERVICE PROVIDED THAN THAT EXPRESSED BY THE APPLICABLE TARIFF. COMPARE 47 U.S.C. SECS. 202, 203 TO SECTION 403 OF THE CIVIL AERONAUTICS ACT OF 1938, 52 STAT. 992 (1938).

IN UNITED STATES V. ASSOCIATED AIR TRANSPORT, INC., 275 F.2D 827 (5TH CIR. 1960), THE FIFTH CIRCUIT REJECTED A CONTENTION BY THE UNITED STATES THAT A CARRIER SHOULD BE ESTOPPED FROM ASSERTING THE TERMS OF A PUBLISHED TARIFF DIFFERENT FROM THAT OF AN ACCEPTED BID OR PROPOSAL. IN DOING SO THE COURT STRESSED THAT, BECAUSE THE TARIFF HAD THE FORCE AND EFFECT OF LAW, NO ACT OR OMISSION OF ANY PARTY COULD CHANGE THE REQUIREMENTS OF THE FILED TARIFF. WHILE THE DECISIONS OF THIS OFFICE HAVE FREQUENTLY RELIED UPON ASSOCIATED AIR TRANSPORT (SEE, E.G., B-162884, AUGUST 2, 1968; B-176460, FEBRUARY 15, 1973), WE HAVE OFTEN DISTINGUISHED SITUATIONS SUCH AS THAT OF SECTION 22 OF THE INTERSTATE COMMERCE ACT WHERE THE STATUTE EXPRESSLY ALLOWS LOWER RATES TO BE APPLIED AGAINST THE UNITED STATES. SEE B-157382, APRIL 27, 1972. SUCH A DISTINCTION, HOWEVER, CLEARLY CANNOT BE MADE IN THE INSTANT CASE.

WE CONCLUDE, THEREFORE, THAT LACKING AN EXPRESS PROVISION IN THE COMMUNICATIONS ACT THAT REDUCED RATES MAY BE MADE AVAILABLE TO THE UNITED STATES, THE RULE REMAINS THAT WHERE A CARRIER MAKES A MISTAKE IN QUOTING A RATE OR ROUTE, THE UNITED STATES IS NONETHELESS RESPONSIBLE FOR THE PUBLISHED TARIFF.

HAVING DETERMINED THAT GSA IS LIABLE FOR THE CORRECT TARIFF CHARGES FOR CIRCUITS PROVIDED BY AT&T LONG LINES, WE TURN TO THE QUESTION OF THE APPROPRIATE STATUTE OF LIMITATIONS TO BE APPLIED TO THESE CLAIMS. AT&T ARGUES THAT THE APPLICABLE STATUTE IS 31 U.S.C. SEC. 71(A), WHICH SETS A 6 YEAR LIMIT ON THE JURISDICTION OF THE GENERAL ACCOUNTING OFFICE TO CONSIDER ANY CLAIM AGAINST THE UNITED STATES. GSA ARGUES THAT THE CLAIM SHOULD BE DENIED ADMINISTRATIVELY ON THE BASIS THAT IT IS BARRED BY THE 2 YEAR LIMITATIONS OF ACTIONS PROVISION OF THE COMMUNICATIONS ACT, 47 U.S.C. SEC. 415. GSA RECOGNIZES THAT IN OUR DECISION OF JULY 9, 1971, 51 COMP. GEN. 21, THIS OFFICE SPECIFICALLY HELD THAT THE LIMITATIONS OF THE COMMUNICATIONS ACT DID NOT AFFECT THE RIGHTS OF FIRMS PROVIDING SERVICE UNDER THAT ACT TO HAVE THEIR CLAIMS CONSIDERED BY THE GENERAL ACCOUNTING OFFICE, IF PRESENTED WITHIN THE TIME LIMITS SET OUT IN 31 U.S.C. SEC. 71(A). ACCORDING TO GSA THIS DECISION SHOULD EITHER BE DISTINGUISHED FROM THE INSTANT CASE ON ITS FACTS, OR MODIFIED TO EXCLUDE SITUATIONS SUCH AS THIS WHERE THE CLAIM ARISES OUT OF A CARRIER-CAUSED MISTAKE. DISAGREE.

ALTHOUGH OUR DECISION IN 51 COMP.GEN. 21 INVOLVED A CLAIM BY A CARRIER FOR UNDERCHARGES STEMMING FROM A MISTAKE OF WHICH THE GOVERNMENT PRESUMABLY SHOULD HAVE NOTICE, THE PRINCIPLES OF LAW GOVERNING THAT DECISION ARE EQUALLY APPLICABLE HERE. IN THAT OPINION WE NOTED THAT THE STATUTE OF LIMITATIONS OF THE COMMUNICATIONS ACT, SET OUT AT 47 U.S.C. SEC. 415(A), APPLIES SOLELY TO "ACTIONS AT LAW," A PHRASE WHICH WE HAVE CONSISTENTLY INTERPRETED TO MEAN JUDICIAL PROCEEDINGS. 51 COMP.GEN. AT 22; SEE ALSO 57 COMP.GEN. 441. OUR OPINION IN 51 COMP.GEN. 21 DREW A CLEAR DISTINCTION BETWEEN ADMINISTRATIVE SETTLEMENT OF CLAIMS AND ACTIONS AT LAW:

"IT HAS BEEN OUR POSITION THAT THE TIME LIMITATIONS FOR THE COMMENCEMENT OF SUCH, 'ACTIONS AT LAW' DO NOT AFFECT THE JURISDICTION OF OUR OFFICE TO CONSIDER CLAIMS AGAINST THE UNITED STATES AND THAT, UNLESS OTHERWISE SPECIFICALLY PROVIDED FOR BY STATUTE, WE ARE REQUIRED, AS A GENERAL RULE, TO CONSIDER ANY CLAIM AGAINST THE UNITED STATES'S COGNIZABLE BY OUR OFFICE IF IT IS PRESENTED WITHIN 10 FULL YEARS NOW 6 YEARS AFTER THE DATE SUCH CLAIM FIRST ACCRUED."

ID. AT 22.

THE FACT, THEREFORE, THAT CONGRESS EXPRESSLY LIMITED TO 2 YEARS THE JURISDICTION OF THE COURTS TO HEAR CLAIMS ARISING UNDER THE COMMUNICATIONS ACT CANNOT BE INTERPRETED AS AN INTENTION TO DENY AN ADMINISTRATIVE REMEDY FOR THE SAME CLAIM. IN NO WAY DOES IT AFFECT EITHER THE MERITS OF THE CLAIM OR THE JURISDICTION OF THE GAO TO SETTLE THE CLAIM. THIS DISTINCTION IS APPLICABLE REGARDLESS OF WHETHER THE MISTAKE WAS CARRIER-CAUSED, SO LONG AS THE CLAIM IS OTHERWISE VALID.

ACCORDINGLY, THE AMOUNT CLAIMED BY AT&T LONG LINES TO HAVE ACCRUED DURING THE 6 YEARS PRIOR TO THE DATE THE CLAIM WAS FILED WITH THE GENERAL ACCOUNTING OFFICE SHOULD BE PAID IF OTHERWISE CORRECT.

DIGESTS 1. VALIDLY-FILED TARIFF RATES ON LONG DISTANCE CIRCUITS PROVIDED TO GSA BY AT&T LONG LINES HAVE FORCE AND EFFECT OF LAW. MISTAKEN TARIFF APPLIED BY AT&T WILL NOT ESTOPE IT FROM ASSERTING THE CORRECT TARIFF.

2. TWO YEAR STATUTE OF LIMITATIONS OF THE COMMUNICATIONS ACT, 47 U.S.C. SEC. 514(A) APPLIES SOLELY TO ACTIONS AT LAW AND DOES NOT AFFECT JURISDICTION OF GAO TO CONSIDER CLAIMS BROUGHT BY AT&T LONG LINES WITHIN SIX YEAR LIMITATION OF 31 U.S.C. SEC. 71(A).