B-85549, NOV. 3, 1959

B-85549, NOV. 3, 1959

TO EDWIN KNACHEL, ESQUIRE:

REFERENCE IS MADE TO YOUR LETTERS DATED AUGUST 12, AND OCTOBER 17, 1959, CONCERNING CERTAIN CLAIMS OF THE NEW YORK, CHICAGO AND ST. LOUIS RAILROAD COMPANY AS DETAILED ON EXHIBITS AA, BB, CC AND DD WHICH ARE PRESENTLY BEFORE OUR OFFICE FOR CONSIDERATION.

YOU CALL PARTICULAR ATTENTION TO THE FACT THAT CLAIMS INVOLVING I.C.C. SERVICE ORDER NO. 68 ARE NOT BEING SETTLED ON BASIS OF REPAYMENT BY THE GOVERNMENT OF 50 PERCENT OF THE AMOUNT HERETOFORE RECOVERED BY THE AUDIT AND COLLECTION ACTIONS OF OUR OFFICE, AND SUGGEST THAT LIKE TREATMENT BE ACCORDED THE CLAIMS OF THE NICKEL PLATE INVOLVING THIS ISSUE WHICH ARE INCLUDED IN THE SAID EXHIBITS AA, BB, CC, DD. WE ARE AGREEABLE TO THIS PROPOSAL AND IN ACCORDANCE WITH YOUR REQUEST SUCH NOTATIONS AS MAY BE REQUIRED WILL BE MADE ON THE INVOLVED NICKEL PLATE CLAIMS NOW BEFORE OUR OFFICE FOR CONSIDERATION.

YOU FURTHER INQUIRE WHETHER SIMILAR TREATMENT MAY NOW BE ACCORDED CLAIMS INVOLVING SERVICE ORDER NO. 68 WHICH WERE INCLUDED IN CIVIL ACTIONS NOS. 30818 AND 30819. OUR RECORDS SHOW THAT THESE CASES WERE CONCLUDED BY THE ENTRY OF JUDGMENTS ON APRIL 16, 1959, IN FAVOR OF THE NICKEL PLATE, AND THAT THE JUDGMENT CLAIMS WERE CERTIFIED FOR PAYMENT BY CERTIFICATES OF SETTLEMENT IN CLAIMS NUMBERED TK-674359 AND TK-674361, BOTH DATED JUNE 10, 1959. THE AMOUNTS OF THE RESPECTIVE JUDGMENTS WERE BASED ON AGREEMENTS REACHED AFTER SEVERAL CONFERENCES BETWEEN REPRESENTATIVES OF THE PARTIES, AND DID NOT INCLUDE ANY PAYMENTS BY THE GOVERNMENT TO THE CARRIER ON THE CLAIMS INVOLVING SERVICE ORDER NO. 68. SUCH CLAIMS, HOWEVER, WERE INCLUDED IN THE COMPLAINTS FILED IN THE DISTRICT COURT, AND THE COMPLAINTS WERE NOT AMENDED TO DELETE SUCH CLAIMS BEFORE THE ENTRY OF THE JUDGMENTS MENTIONED. UNDER THE CIRCUMSTANCES, IT WOULD APPEAR THE PAYMENT OF THE JUDGMENTS APPROVED BY THE COURT SETTLED ALL CLAIMS INCLUDED IN THE RESPECTIVE COMPLAINTS AND THAT ANY FURTHER PAYMENT ON SUCH CLAIMS WOULD BE PRECLUDED UNDER THE DOCTRINE OF RES JUDICATA. ACCORDINGLY, WE MUST RESPECTFULLY DECLINE YOUR SUGGESTION OF FURTHER CONSIDERATION OF SUCH CLAIMS.

WE HAVE COMPLETED THE SURVEY OF THE CLAIMS LISTED ON THE NICKEL PLATE EXHIBITS AA, BB, CC, AND DD, AND WILL DISCUSS SUCH CLAIMS HEREINAFTER IN GROUPS BY SUBJECT MATTER INVOLVED, USING THE ITEM NUMBERS SHOWN ON SAID EXHIBITS TO IDENTIFY THE CLAIMS INCLUDED IN EACH GROUP.

TABLE

GROUP 1. I.C.C. SERVICE ORDER 68

EXHIBIT NO. ITEM NO. AMOUNT CLAIMED

BB 23-51, INCLUSIVE $ 810.12

CC 1-80, INCLUSIVE 2,076.48

DD 92-153, INCLUSIVE 1,977.28

TOTAL$4,863.88

IT WILL BE NOTED FROM THE ABOVE TABULATION THAT WE HAVE NOT INCLUDED ITEMS 154 TO 168, INCLUSIVE, OF EXHIBIT DD, IN THE LIST OF CLAIMS INVOLVING I.C.C. SERVICE ORDER 68, FOR THE REASON THAT THE SAID ORDER WAS CANCELLED AS OF APRIL 16, 1949, WHEREAS THOSE SHIPMENTS MOVED IN JUNE, 1950, OCTOBER, 1951, AND FEBRUARY, 1953. THE AMOUNT OF $891.63 CLAIMED ON ITEMS 154 TO 168, INCLUSIVE, ALTHOUGH DESIGNATED ON EXHIBIT DD AS BEING DUE AS A PART OF THE "SERVICE ORDER 68" CLAIMS, ACTUALLY INVOLVE THE CONTROVERSY CONCERNING "CAR ORDERED V. CAR USED" OR THE RULE 66 (A) ISSUE DISCUSSED HEREINAFTER.

IN ACCORDANCE WITH WHAT IS STATED IN THE SECOND PARAGRAPH ABOVE, WE ARE PREPARED TO PAY THE NICKEL PLATE 50 PERCENT OF THE AMOUNTS HERETOFORE RECOVERED BY OUR AUDIT ACTION IN FULL SETTLEMENT OF THE CLAIMS ENUMERATED IN THIS GROUP NO. 1. THE RECORDS AS TO SUCH CLAIMS ARE BEING REFERRED TO OUR TRANSPORTATION DIVISION FOR THE NECESSARY SETTLEMENT ACTION, NOTICE OF WHICH WILL BE FURNISHED THE NICKEL PLATE IN DUE COURSE. IN THE EVENT ADDITIONAL SUPPLEMENTAL BILLS ARE REQUIRED TO BE FILED TO FACILITATE SETTLEMENT OF ANY SUCH CLAIMS, APPROPRIATE NOTICE WILL BE FURNISHED THE CARRIER.

TABLE

GROUP NO. 2. RULE 66 (A)

EXHIBIT NO. ITEM NUMBERS AMOUNT CLAIMED

AA 15 TO 34, INCLUSIVE $1,341.44

BB 52 TO 53, INCLUSIVE 31.20

CC 81 TO 96, INCLUSIVE 1,885.05

DD) (48 TO 91, INCLUSIVE 2,087.66)

DD) (154 TO 168, INCLUSIVE 891.63)

TOTAL $6,236.98

(AS INDICATED IN THE DISCUSSION OF THE GROUP NO. 1 SERVICE ORDER 68 CLAIMS, WE HAVE INCLUDED CLAIMS FOR $891.63, IDENTIFIED AS ITEMS 154 TO 168, INCLUSIVE, OF EXHIBIT DD, AS BEING GROUP NO. 2--- RULE 66 (A) CLAIMS.)

SOME OF THE CLAIMS IN THIS GROUP NO. 2, HAVE APPARENTLY ALREADY BEEN SETTLED ON BASIS OF USING THE MINIMUM WEIGHTS PRESCRIBED BY TARIFF FOR THE SIZE CAR USED FOR THE SHIPMENTS IN QUESTION. SEE, IN THIS CONNECTION, THE CLAIMS IDENTIFIED AS ITEMS 16 TO 19 AND 21 TO 31, OF EXHIBIT AA, AND ITEMS 85 TO 87 OF EXHIBIT CC. WITH RESPECT TO THE CLAIMS INVOLVING ITEMS 88 TO 90 OF EXHIBIT CC, WE FIND THAT SUCH CLAIMS DO NOT INVOLVE THE RULE 66 (A) CONTROVERSY, BUT ARE SIMILAR TO THE CLAIMS INCLUDED IN THE CASE OF WINSTON -SALEM SOUTHBOUND RAILROAD CO. V. UNITED STATES, 152 F.SUPP. 245, WHICH WAS DECIDED ADVERSELY TO THE GOVERNMENT'S CONSTRUCTION OF THE APPLICABLE TARIFF ITEMS. THESE CLAIMS FOR $844.82 HAVE BEEN DISALLOWED, BUT WE ARE WILLING TO GIVE CONSIDERATION TO SETTLEMENTS OF THESE ITEMS IN ACCORDANCE WITH THE HOLDING OF THE COURT IN THE CITED WINSTON-SALEM SOUTHBOUND CASE IF SUPPLEMENTAL BILLS RECLAIMING SUCH AMOUNT ARE PRESENTED TO OUR TRANSPORTATION DIVISION. ON ALL OF THE TRUE RULE 66 (A) CLAIMS EXCEPT THESE MENTIONED ABOVE THAT HAVE ALREADY BEEN SETTLED ON BASIS OF THE SIZE OF CAR USED, WE ARE WILLING TO ISSUE FORMS T-109, HOLDING SUCH CLAIMS IN ABEYANCE, PENDING THE AUTHORITATIVE DETERMINATION OF THE ISSUES NOW IN LITIGATION IN THE CASE OF BALTIMORE AND OHIO RAILROAD COMPANY V. UNITED STATES, COURT OF CLAIMS NO. 275-55, AND THE RELATED I.C.C. PROCEEDINGS IN DOCKET NO. 32126, ET AL., WHICH IS THE SAME DISPOSITION MADE OF SIMILAR CLAIMS INCLUDED IN THE PRIOR SUITS WHICH WERE CONCLUDED BASED UPON THE ISSUANCE OF SUCH FORMS T-109.

IN ADDITION TO THE CLAIMS MENTIONED ABOVE, ITEMS 1 TO 14, INCLUSIVE, OF EXHIBIT AA ARE INDICATED AS BEING "CAR USED" CLAIMS. THESE SHIPMENTS COVERED IMPORT TRAFFIC FROM BALTIMORE, MARYLAND, TO CLEVELAND, OHIO, IN JUNE 1949. WE SHALL DISCUSS THESE CLAIMS, TOGETHER WITH OTHER IMPORT SHIPMENTS INCLUDED IN EXHIBIT BB UNDER THAT HEADING HEREINAFTER.

TABLE

GROUP 3 BOMB CLUSTER ADAPTERS

EXHIBIT NO. ITEM NO. AMOUNT CLAIMED

BB 17 TO 22, INCLUSIVE $ 420.80

CC 97, 98, 100 TO 104

INCLUSIVE 618.30

DD 1 TO 47 INCLUSIVE 4,305.33

TOTAL $5,344.43

THESE CLAIMS COVER SHIPMENTS OF AERIAL BOMB CLUSTER ADAPTERS WHICH WERE SHIPPED PRIOR TO DECEMBER 14, 1944. THE NICKEL PLATE CLAIMED CHARGES BASED ON THE CLASSIFICATION RATING APPLICABLE TO BOMB RACKS WHILE THE GOVERNMENT MADE SETTLEMENTS BASED UPON RATING THESE SHIPMENTS AS BEING ANALOGOUS TO EMPTY BOMB BODIES. LIKE CLAIMS WERE INCLUDED IN CIVIL ACTIONS NOS. 30818 AND 30819, AND IN THE AGREEMENT REACHED BETWEEN THE PARTIES CONCERNING SUCH CLAIMS, IT WAS DECIDED THAT THE CARRIER'S CLAIMS SHOULD BE PAID IN FULL. WE FIND THAT THE CLAIMS LISTED ABOVE AS ITEMS 17 TO 22 OF EXHIBIT BB AND ITEMS 97, 98 AND 100 TO 104, INCLUSIVE OF EXHIBIT CC HAVE BEEN DISALLOWED, WHILE THOSE IDENTIFIED AS ITEMS 1 TO 47, INCLUSIVE, OF EXHIBIT DD, HAVE ALREADY BEEN PAID IN THE AMOUNTS FOUND DUE, BASED UPON THE CARRIER'S THEORY WITH RESPECT TO THE APPLICABLE CLASSIFICATION INVOLVED. ACCORDINGLY, UPON RECEIPT OF SUPPLEMENTAL BILLS RECLAIMING THE AMOUNTS PREVIOUSLY DISALLOWED ON THE CLAIMS IDENTIFIED AS ITEMS 17 TO 22, INCLUSIVE, OF EXHIBIT BB, AND ITEMS 97, 98 AND 100 TO 104, INCLUSIVE, OF EXHIBIT CC, OUR TRANSPORTATION DIVISION WILL MAKE APPROPRIATE SETTLEMENTS. APPARENTLY, NO FURTHER ACTION IS REQUIRED WITH RESPECT TO THE CLAIMS COVERING THE SHIPMENTS IDENTIFIED AS ITEMS 1 TO 47, INCLUSIVE, OF EXHIBIT DD.

TABLE

GROUP NO. 4. SCRAP STEEL

EXHIBIT NO. ITEMS INVOLVED AMOUNT CLAIMED

BB 76 TO 85, INCLUSIVE $3,139.81

THE SHIPMENTS IDENTIFIED IN THIS GROUP CONSISTED OF CARLOADS OF SCRAP STEEL FROM PERMANENTO METAL CORPORATION, RICHMOND, CALIFORNIA, CONSIGNED TO THE UNITED STATES MARITIME COMMISSION, IN CARE OF LANTZ IRON WORKS, CANTON, OHIO. THE CARRIER CLAIMED FULL COMMERCIAL RATES ON THOSE SHIPMENTS, BUT THE GOVERNMENT MADE SETTLEMENT ON BASIS OF COMMERCIAL RATES, LESS APPLICABLE LAND-GRANT DEDUCTIONS. THE NICKEL PLATE'S SUPPLEMENTAL BILLS RECLAIMING THE AMOUNTS RECOVERED BY OUR AUDIT ACTION HAVE BEEN DISALLOWED. THESE SHIPMENTS ARE SIMILAR TO THOSE INCLUDED IN CIVIL ACTIONS NOS. 31585, 31586, 31587, 31588, AND 31589, WHICH WERE CLOSED BY CONSIDERING 75 PERCENT OF THE WEIGHT AS LAND-GRANT TONNAGE AND 25 PERCENT OF THE WEIGHT AS NON-LAND-GRANT TONNAGE. UPON RECEIPT OF APPROPRIATE SUPPLEMENTAL BILLS, WE ARE PREPARED TO MAKE A LIKE SETTLEMENT IN CONNECTION WITH THESE SHIPMENTS.

TABLE

GROUP NO. 5. CIVIL DEFENSE SHIPMENT

EXHIBIT NO. ITEM NUMBERS INVOLVED AMOUNT CLAIMED

AA 35, 36 AND 37 $113.57

CC 105 TO 115, INCLUSIVE 241.00

CC 116 AND 117 36.33

TOTAL $390.90

THE SHIPMENTS IDENTIFIED BY THE ITEM NUMBERS SHOWN ABOVE ALL COVERED CARLOAD SHIPMENTS CONSIGNED TO THE OFFICE OF CIVILIAN DEFENSE, SUPPLY DEPOT, NEW CASTLE, INDIANA. CHARGES WERE ORIGINALLY CLAIMED BY THE NICKEL PLATE BASED ON THE FULL COMMERCIAL RATES CONSIDERED APPLICABLE, BUT SINCE THE GOVERNMENT BILLS OF LADING WERE ALL MARKED "MILITARY," OUR OFFICE SETTLED ORIGINALLY ON BASIS OF NETLAND-GRANT RATES. SUBSEQUENTLY, IT WAS CONCLUDED HERE THAT THE CARRIER'S POSITION WAS CORRECT, AND THAT THE SHIPMENTS IN QUESTION WERE NOT ENTITLED TO THE LAND-GRANT DEDUCTIONS. ACCORDINGLY, IN OCTOBER AND NOVEMBER, 1956, WE SETTLED THE CLAIMS THEN BEFORE OUR OFFICE ON BASIS OF THE FULL COMMERCIAL RATES PROPERLY APPLICABLE ON THE SHIPMENTS IN QUESTION, GIVING EFFECT IN SUCH SETTLEMENTS TO CERTAIN NOTICES WHICH WE HAD RECEIVED FROM THE ADMINISTRATIVE OFFICES INVOLVED WITH RESPECT TO THE TRUE DESCRIPTION OF THE GOODS SHIPPED. NUMBER OF THESE SHIPMENTS WERE ORIGINALLY DESCRIBED AS "BEDS, FOLDING, NOIBN" AND CHARGES WERE ORIGINALLY CLAIMED AND PAID ON BASIS OF THE CLASS 50J RATES FROM CHICAGO AND ST. LOUIS (THE POINTS OF ORIGIN) TO NEW CASTLE, INDIANA. WE ARE SUBSEQUENTLY NOTIFIED THAT THE ARTICLES SHIPPED SHOULD BE DESCRIBED AS ,COTS, LINKED OR WOVEN WIRE, FOLDED FLAT NOT EXCEEDING 2 INCHES" SUBJECT TO THE 5TH-CLASS RATING AND RATES PER ITEM 20025 OF CONSOLIDATED FREIGHT CLASSIFICATION NO. 15. OUR SETTLEMENTS WERE BASED ACCORDINGLY. WE MADE THE FOLLOWING SETTLEMENT WHICH APPARENTLY IS ALL THAT IS DUE THE NICKEL PLATE ON THESE SHIPMENTS:

TABLE

ITEMS 25, EXHIBIT AA $ 13.16

ITEMS 36, EXHIBIT AA 17.87

ITEMS 37, EXHIBIT AA 15.96

ITEM 105 TO 112, INCLUSIVE EXHIBIT CC

203.56

ITEMS 113 TO 115, INCLUSIVE EXHIBIT CC

37.44

ITEMS 116 TO 117, EXHIBIT CC MILL (OVERPAYMENTS

OF $14.04

AND $12.64,

TOTAL $26.68

DETERMINED

AND

COLLECTED.)

IN VIEW OF THESE SETTLEMENTS HERETOFORE MADE ON THE CLAIMS INCLUDED IN THIS GROUP, WE BELIEVE THAT THESE ACCOUNTS HAVE BEEN CORRECTLY SETTLED AND THAT THERE IS NOTHING DUE THE CARRIER OR THE UNITED STATES ON THESE CIVILIAN DEFENSE CLAIMS.

TABLE

GROUP NO. 6. IMPORT SHIPMENTS

EXHIBIT NO. ITEM NUMBERS INVOLVED AMOUNT CLAIMED

AA 1 TO 14, INCLUSIVE $1,105.30

BB 54 TO 75, INCLUSIVE 1,739.35

TOTAL $2,844.65

THE SHIPMENTS IDENTIFIED BY THE ITEM NUMBERS SHOWN ABOVE ARE DESCRIBED AS INVOLVING THE "CAR USED" AND "SIZE OF CAR" ISSUES, IN EXHIBITS AA AND BB, RESPECTIVELY. NO SIMILAR CLAIMS WERE INCLUDED IN THE DISTRICT COURT CASES PREVIOUSLY CLOSED BY THE ENTRY OF JUDGMENTS UPON THE BASES AGREED UPON BY THE PARTIES, AND WHILE THESE CLAIMS BEAR A SUPERFICIAL RESEMBLANCE TO THE CLAIMS INVOLVING VIOLATIONS OF RULE 66 (A) OF THE INTERSTATE COMMERCE COMMISSION'S TARIFF CIRCULAR NO. 20, THEY DIFFER FROM SUCH CLAIMS BECAUSE OF THE FACT THAT THIS IS IMPORT TRAFFIC AND THAT THE PORT CARRIER HAS THE DUTY OF ORDERING CARS AND LOADING SUCH CARS SO AS TO INSURE THE APPLICATION OF THE LOWEST CHARGES CONSISTENT WITH THE REQUIREMENTS OF THE LADING PLACED THEREON OR THEREIN FOR FORWARDING TO THE CONSIGNEE AT THE ULTIMATE DESTINATION. TO INSURE THE AVAILABILITY OF THE LOWEST CHARGES, ITEM 1235 OF TRUCK LINE TARIFF BUREAU FREIGHT TARIFF NO. 90-K, AGENT OURLETT'S I.C.C.NO. 848, WHICH WAS IN EFFECT WHEN THESE SHIPMENTS WERE LOADED AT BALTIMORE, MARYLAND, PROVIDED THAT THE CARLOAD RATE APPLICABLE TO THE IMPORT SHIPMENTS WOULD BE APPLIED SUBJECT TO THE ACTUAL WEIGHT LOADED IN OR ON EACH CAR USED WHENEVER THE TOTAL WEIGHT OFFERED FOR SHIPMENT AS A SINGLE CONSIGNMENT IS EQUAL TO OR IN EXCESS OF THE CARLOAD MINIMUM WEIGHT PROVIDED BY TARIFF FOR THE INVOLVED TONNAGE, REGARDLESS OF THE NUMBER OF CARS USED TO LOAD THE ENTIRE SHIPMENT. THESE CLAIMS HAVE BEEN SETTLED ON A BASIS WHICH GAVE EFFECT TO THE PROVISIONS OF THE CITED ITEM 1235, AND NO ADDITIONAL CHARGES APPEAR TO BE DUE THE NICKEL PLATE RAILROAD ON SUCH CLAIMS.

TABLE

GROUP NO. 7. MILWAUKEE LAND GRANT

EXHIBIT NO. ITEMS INVOLVED AMOUNT CLAIMED

CC 99 $13.98

DD 169 TO 173, INCLUSIVE 41.70

TOTAL $55.68

THESE CLAIMS INVOLVE A DISPUTE AS TO THE PROPER METHOD OF COMPUTING NET LAND-GRANT DEDUCTIONS ON SHIPMENTS ORIGINATING ON THE TRACKS OF THE CHICAGO AND NORTHWESTERN RAILWAY COMPANY AT MILWAUKEE, WISCONSIN, AND DESTINED TO NEW HAVEN, INDIANA. WE COMPUTED THE NET LAND-GRANT RATES BY DIVIDING THE APPLICABLE COMMERCIAL RATE OF 39 CENTS PER 100 POUNDS BY ALLOWING THE PERE MARQUETTE RAILROAD COMPANY 70 PERCENT (LESS 22,666 PERCENT LG) TO TOLEDO, OHIO, AND THE WABASH RAILROAD 30 PERCENT BEYOND, PER PERE MARQUETTE RAILWAY PERCENTAGE SHEET NO. 457, RESULTING IN A NET RATE ON THE INVOLVED SHIPMENTS OF RAPID FIRE GUN MOUNTS OF 32.812 CENTS PER 100 POUNDS. UNDER THE STANDARD LAND-GRANT EQUALIZATION AGREEMENTS ON FILE WITH THE GOVERNMENT, THE NICKEL PLATE AND ITS CONNECTIONS AGREED TO ACCEPT THE LOWEST RATE ACCOUNT LAND GRANT DEDUCTIONS FOR TRANSPORTING SUCH SHIPMENTS, AND OUR SETTLEMENTS WERE MADE ACCORDINGLY. THESE CLAIMS FOR ADDITIONAL REVENUE ON THE SIX CARLOAD SHIPMENTS INVOLVED ARE SIMILAR TO LIKE CLAIMS INCLUDED IN CIVIL ACTION NO. 30818, WHICH THE NICKEL PLATE AGREED TO WITHDRAW WHEN THE CLAIMS INCLUDED IN THAT SUIT WERE CONSIDERED BY THE PARTIES AT THE CONFERENCES HELD HERE IN 1957 AND 1958 WHICH RESULTED IN THE DISPOSITION OF CIVIL ACTION NO. 30818 AND NINE OTHER SUITS THEN PENDING IN THE DISTRICT COURT AT CLEVELAND. WHEN WE AGREE TO SURVEY THE CLAIMS INCLUDED IN THE NICKEL PLATE EXHIBITS AA, BB, CC, AND DD, WE WERE ASSURED BY MR. RICHARD C. OGLINE THAT ALL CLAIMS INCLUDED ON THE SAID EXHIBITS WHICH WERE SIMILAR TO THOSE FORMERLY CONSIDERED IN CIVIL ACTION NO. 30818 AND THE NINE OTHER SUITS WOULD BE FOR DISPOSITION ON THE SAME BASIS AS THAT ADOPTED IN THE CONFERENCE AGREEMENTS. ACCORDINGLY, WE ARE OF THE VIEW THAT THESE MILWAUKEE LAND GRANT CLAIMS SHOULD BE WITHDRAWN, AND THE SETTLEMENTS HERETOFORE MADE HERE (WHICH WERE CONSISTENT WITH THE ABANDONMENT OF SUCH CLAIMS BY THE NICKEL PLATE) BE PERMITTED TO STAND.

TABLE

GROUP NO. 8. PICK-UP AND DELIVERY CHARGES

EXHIBIT NO. ITEMS INVOLVED AMOUNT CLAIMED

BB 15 AND 16 $264.82

DD 175 117.34

TOTAL $382.16

THE ITEMS SHOWN IN THIS GROUP NO, 8, COVER THREE SHIPMENTS ON WHICH THE NICKEL PLATE CLAIMS THE LESS-THAN-CARLOAD RATES AT ACTUAL WEIGHT, WHEREAS OUR OFFICE MADE ADJUSTMENTS IN THE CHARGES INITIALLY PAID ON THE BASIS OF THE APPLICABLE CARLOAD RATES AT ACTUAL WEIGHT OR THE AUTHORIZED CARLOAD MINIMUM WEIGHT. THE CARRIER CONTENDS THAT FREE PICK-UP SERVICE WAS FURNISHED IN CONNECTION WITH THESE SHIPMENTS, AND THAT RULE 15, SECTION 1, PARAGRAPH (B), OF CONSOLIDATED FREIGHT CLASSIFICATION NO. 16, IN EFFECT WHEN THESE SHIPMENTS WERE MADE, AUTHORIZED THE USE OF THE LESS-THAN- CARLOAD RATES AT ACTUAL WEIGHT, EVEN THOUGH THE RESULTING FREIGHT CHARGES GREATLY EXCEED THOSE THAT WOULD OBTAIN FROM THE USE OF PROVIDED FOR SUCH SHIPMENTS. SECTION 1 (A) OF RULE 15 PROVIDES THAT:

"/A) EXCEPT AS PROVIDED IN SECTION 2, THE CHARGE FOR A LCL SHIPMENT MUST NOT EXCEED THE CHARGE FOR A MINIMUM CARLOAD OF THE SAME FREIGHT AT THE CL RATE; THE CHARGE FOR A CAR FULLY LOADED MUST NOT EXCEED THE CHARGE FOR THE SAME LOT OF FREIGHT IF TAKEN AS A LCL SHIPMENT.'

SECTION 1 (B) OF THIS RULE 15, RELIED UPON BY THE NICKEL PLATE, READS AS FOLLOWS:

"/B) EXCEPT FURTHER THAT THE PROVISIONS OF THIS RULE WILL NOT APPLY ON SHIPMENTS ON WHICH PICK-UP OR DELIVERY SERVICE HAS BEEN PERFORMED, OR ON WHICH AN ALLOWANCE HAS BEEN MADE IN LIEU OF PICK-UP OR DELIVERY SERVICE.'

THIS EXCEPTION TO THE GENERAL RULE PUBLISHED IN SECTION 1 (A) OF RULE 15 WAS CONSIDERED AND CONDEMNED BY THE INTERSTATE COMMERCE COMMISSION IN DOCKET NO. 29478, CRANE COMPANY V. ALTON RAILROAD COMPANY, 268 I.C.C. 511, DECIDED MAY 14, 1947, WHICH INVOLVED A SHIPMENT OF 146 IRON VALVES, WEIGHING 36,476 POUNDS, SHIPPED JANUARY 6, 1944, FROM CHICAGO, ILLINOIS, TO LAREDO, TEXAS, FOR EXPORT. THE COMMISSION FOUND THAT BECAUSE AN ALLOWANCE OF $18.24 IN LIEU OF FREE DELIVERY SERVICE HAD BEEN MADE TO THE CONSIGNEE, WHO EFFECTED DELIVERY FROM THE CARRIER'S FREIGHT STATION AT DESTINATION, THE LESS-THAN CARLOAD LINE HAUL RATE OF 154 CENTS PER 100 POUNDS, PRODUCING CHARGES OF $561.73, MUST BE CONSIDERED APPLICABLE IN LIEU OF THE CARLOAD RATE OF 50 CENTS PER 100 POUNDS, SUBJECT TO THE CARLOAD MINIMUM WEIGHT OF 60,000 POUNDS, WHICH WOULD RESULT IN LINE HAUL FREIGHT CHARGES OF $300. EMPHASIZING THE FACT IN THIS CASE THAT THE PROVISION OF SECTION I (B) RESULTED IN A PENALTY OF $261.73 BECAUSE AN ALLOWANCE OF $18.24 IN LIEU OF FREE DELIVERY SERVICE AT DESTINATION HAD BEEN MADE TO THE CONSIGNEE, THE COMMISSION SAID, AT PAGE 513:

"THE CIRCUMSTANCES SURROUNDING THIS SHIPMENT WERE NOT UNUSUAL. SIMILAR RESULTS WILL OCCUR UNDER THE RULE WHENEVER PICK-UP OR DELIVERY SERVICE IS PERFORMED ON A SHIPMENT WHICH COMPRISES A SUBSTANTIAL PORTION OF A CARLOAD, AND THERE IS A LARGE DIFFERENCE BETWEEN THE CORRESPONDING CARLOAD AND LESS-THAN-CARLOAD RATE. SUCH AN EXCEPTION TO THE RULE IS PATENTLY UNJUST AND UNREASONABLE, WHEN IT RESULTS IN THE EXACTION (AS IN THIS CASE) OF CHARGES WHICH ARE EXTORTIONATE, UNJUST, AND UNREASONABLE.'

AN APPROPRIATE AWARD OF REPARATION WAS ACCORDINGLY MADE TO THE SHIPPER WHO PAID AND BORE THE FREIGHT CHARGES.

IN EACH OF THE THREE SHIPMENTS FALLING INTO THIS GROUP, THE CIRCUMSTANCES ATTENDING SUCH SHIPMENTS ARE COMPARABLE TO THOSE DESCRIBED IN THE COMMISSION'S REPORT IN THE CRANE CASE, SUPRA, AND THE CLAIMS HERETOFORE PRESENTED TO OUR TRANSPORTATION DIVISION HAVE BEEN DISALLOWED. WE DO NOT CONSIDER THAT PUBLIC FUNDS ARE AVAILABLE TO PAY TRANSPORTATION CHARGES BASED UPON A RULE OF THE CLASSIFICATION WHICH HAS BEEN DECLARED TO BE "PATENTLY UNJUST AND UNREASONABLE" BY THE INTERSTATE COMMERCE COMMISSION, AND THEREFORE WE SUGGEST THAT THESE CLAIMS BE WITHDRAWN FROM FURTHER CONSIDERATION.

TABLE

GROUP NO. 9. RULE 10 AND CFA ANNOUNCEMENT NOTICE 737

EXHIBIT NO. ITEMS INVOLVED AMOUNT CLAIMED

BB 1 TO 14, INCLUSIVE $102.00

THE SHIPMENTS IDENTIFIED BY THE ITEM NUMBERS SHOWN ABOVE CONSISTED OF OIL FILTER CARTRIDGES, IN BOXES, AND WOODEN PALLETS, SHIPPED IN NOVEMBER 1947, FROM NEW HAVEN, INDIANA, TO THE ROSSFORD ORDNANCE DEPOT AT TOLEDO, OHIO, FOR STORAGE IN TRANSIT PRIVILEGES, BUT THE RECORD SHOWS THAT THE TRANSIT TONNAGE WAS SUBSEQUENTLY CANCELLED, AND THAT THE APPLICABLE CHARGES ON THE INBOUND TONNAGE ARE BASED ON THE LOCAL RATES FROM NEW HAVEN, INDIANA, TO TOLEDO, OHIO, AT THE TIME OF SHIPMENT. CHARGES WERE INITIALLY CLAIMED AND PAID BASED UPON THE USE OF THE CLASS 40 RATE OF 32 CENTS PER 100 POUNDS, APPLIED TO THE WEIGHT OF THE OIL FILTER CARTRIDGES, SUBJECT TO A MINIMUM WEIGHT OF 40,000 POUNDS PER CAR, PLUS THE LCL 6TH CLASS RATE OF 20 CENTS PER 100 POUNDS ON THE ACTUAL WEIGHT OF THE WOODEN PALLETS INCLUDED IN EACH CAR, PLUS APPROPRIATE INCREASES PER EX PARTE 162 WHICH ARE NOT IN DISPUTE. IN THE AUDIT OF THE CHARGES SO PAID, IT WAS DETERMINED HERE THAT THE WOODEN PALLETS SHOULD BE RATED THE SAME AS THE OIL CARTRIDGE FILTERS, AND ADJUSTMENTS WERE MADE ACCORDINGLY. LATER, THE CARRIER'S SUPPLEMENTAL BILL RECLAIMING A PART OF THE CHARGES COLLECTED BY REFUND AND SETOFF WAS DISALLOWED ON THE GROUND THAT ITEM 4 OF C.F.A. ANNOUNCEMENT NOTICE NO. 737 AUTHORIZED THE USE OF THE MODIFIED RULE 10 AS PUBLISHED IN THE EXCEPTIONS TO OFFICIAL CLASSIFICATION, C.F.A.L.F.T. NO. 130-C, IN EFFECT WHEN THESE SHIPMENTS MOVED, AND THAT OUR PRIOR AUDIT ACTION WAS PROPER. SIMILAR CLAIMS SHOULD BE WITHDRAWN AT THE JOINT CONFERENCES WHICH RESULTED IN THE SETTLEMENT MADE OF ALL OF THE CLAIMS IN CIVIL ACTION NO. 30818. UNDER THE CIRCUMSTANCES, WE ARE OF THE VIEW THAT NO FURTHER CONSIDERATION SHOULD BE GIVEN TO THE NICKEL PLATE CLAIM FOR $102 INCLUDED IN EXHIBIT BB, ITEMS 1 TO 14, INCLUSIVE.

TABLE

GROUP NO. 10 INBOUND TRANSIT REFUNDS

EXHIBITS ITEMS INVOLVED AMOUNTS CLAIMED

AA 43 AND 44 $ 729.45

DD 174 321.87

TOTAL $1,051.32

THE CLAIMS ON THE THREE SHIPMENTS IDENTIFIED BY THE ITEM NUMBERS SHOWN ABOVE WERE ISSUED TO RECOVER CHARGES COLLECTED IN THE COURSE OF OUR AUDIT ACTION. THE SHIPMENTS INVOLVED CONSISTED OF CARLOADS OF FIR LUMBER WHICH ORIGINATED AT COUNTRY ORIGINS IN OREGON, WERE SHIPPED INTO BAKER, OREGON, FOR MILLING-IN-TRANSIT PRIVILEGES, AND THEN RESHIPPED TO THE PLUM BROOK ORDNANCE WORKS IN CARE OF THE TROJAN POWDER COMPANY AT PLUM BROOK, OHIO. THROUGH CHARGES FROM THE COUNTRY ORIGINS (VERNONIA, SALEM, AND LEBANON, OREGON) TO PLUM BROOK, OHIO, LESS LAND-GRANT DEDUCTIONS WERE COMPUTED, AND FROM THE NET RATES SO DETERMINED, THERE WERE DEDUCTED THE CHARGES PAID INTO BAKER, OREGON, THE TRANSIT POINT, IN ORDER TO ARRIVE AT THE BALANCE DUE ON THE OUTBOUND SHIPMENTS. THE OVERPAYMENTS THUS DETERMINED TO HAVE BEEN MADE ON THE OUTBOUND SHIPMENTS FROM BAKER WERE RECOVERED BY SETOFFS. THE NICKEL PLATE PROTESTED SUCH SETOFFS, CLAIMING THAT THE AMOUNTS PAID IN FROM THE COUNTRY ORIGINS TO BAKER, OREGON, WERE REFUNDED TO THE TRANSIT OPERATOR AT BAKER IN ACCORDANCE WITH THE USUAL CUSTOM, AND THAT ALL CHARGES FROM THE COUNTRY ORIGINS TO FINAL DESTINATION, LESS ESTABLISHED LAND-GRANT DEDUCTIONS, WERE PROPERLY DUE ON THE OUTBOUND SHIPMENTS FROM BAKER. BY CERTIFICATE OF SETTLEMENT T-685645, DATED JUNE 24, 1957, IN CLAIM TK-590502, WE ALLOWED THE NICKEL PLATE'S CLAIM ON ITEMS 43 AND 44 OF EXHIBIT AA IN THE FULL AMOUNT CLAIMED, $729.45, AND PAYMENT OF THIS CERTIFICATE WAS MADE ON VOUCHER NO. 11748, DATED JULY 9, 1957, BY LT.COL. S. GADDIS, ARMY FINANCE OFFICER.

WITH RESPECT TO THE CLAIM IDENTIFIED AS ITEM 174 ON EXHIBIT DD, WE FIND THAT THE NICKEL PLATE'S CLAIM FOR $321.87 WAS DISALLOWED BY LETTER DATED NOVEMBER 18, 1957, WITH ADVICE THAT:

"THE RECORDS HERE FAIL TO SHOW THAT THE GOVERNMENT, BY TERMS OF THE PURCHASE CONTRACT, SPECIFIED THAT THE CARRIER WAS TO MAKE A TRANSIT REFUND TO THE TRANSIT OPERATOR. ANY SUCH REFUND MADE BY YOUR COMPANY WAS APPARENTLY DONE WITHOUT THE KNOWLEDGE OR CONSENT OF THE GOVERNMENT AND WOULD THEREFORE BE A MATTER FOR ADJUSTMENT BETWEEN THE CARRIER AND THE TRANSIT OPERATOR RATHER THAN THE GOVERNMENT.'

THERE WERE NO CLAIMS OF THIS NATURE INCLUDED IN CIVIL ACTION NO. 30818, ET AL., AND IN VIEW OF WHAT HAS BEEN STATED ABOVE, WE ARE OF THE VIEW THAT THE DISALLOWANCE OF THE CLAIM ON ITEM 174 OF EXHIBIT DD SHOULD BE PERMITTED TO STAND AS MADE. SINCE THE NICKEL PLATE'S CLAIMS ON ITEMS 43 AND 44 HAVE BEEN PAID IN FULL, NO ADJUSTMENT OF ANY OF THE ITEMS INCLUDED IN THIS GROUP WOULD APPEAR TO BE JUSTIFIED.

TABLE

GROUP NO. 11 COMBINATION RATES (TARIFF PLUS SECTION 22)

EXHIBIT NO. ITEMS INVOLVED AMOUNT CLAIMED

AA 38 TO 42, INCLUSIVE $2,137.10

THE FIVE BILLS OF LADING MENTIONED ABOVE COVERED SHIPMENTS OF USED VEHICLES FROM CHURCHILL, MANITOBA, CANADA, TO LIMA, OHIO, ALL SHIPPED IN JULY 1950. THROUGH CHARGES WERE COMPUTED HERE ON THE BASIS OF RATES TO AND BEYOND MOYES, MINNESOTA, USING FOR THE PORTION OF THE HAUL FROM MOYES TO LIMA, THE CLASS 37 1/2 RATE OF 157 CENTS PER 100 POUNDS, SUBJECT TO CARLOAD MINIMUM WEIGHT OF 40,000 POUNDS, AS PUBLISHED IN CFAIFT 491-D, AND AS AUTHORIZED IN A.A.R. SECTION 22 QUOTATION NO. 488. THE NICKEL PLATE PROTESTED THE USE OF THIS QUOTATION BASIS TO ARRIVE AT THE THROUGH CHARGES, STATING THAT ITEM 3 1/2, SUPPLEMENT 8, TO A.A.R. SECTION 22 QUOTATION NO. 488, EXPRESSLY PROVIDES THAT THE RATES SO NAMED MAY NOT BE USED IN CONSTRUCTING COMBINATION RATES IN CONNECTION WITH OTHER SECTION 22 RATES OR IN CONNECTION WITH PUBLISHED TARIFF RATES. HOWEVER, THIS AMENDMENT TO SECTION 22 QUOTATION NO. 488 DID NOT BECOME EFFECTIVE UNTIL FEBRUARY 15, 1955. PRIOR TO THAT TIME, THE QUOTATION DID NOT CONTAIN ANY EXPRESS PROHIBITION AGAINST THE USE OF SUCH RATES IN COMPUTING THROUGH CHARGES ON SHIPMENTS (SUCH AS THESE) ORIGINATING IN CANADA, AND MOVING TO THE BORDER ON PUBLISHED TARIFF RATES. UNDER THE CIRCUMSTANCES, WE BELIEVE THAT THE NICKEL PLATE'S CLAIM FOR REFUND OF $2,137.10 ON THESE FIVE SHIPMENTS WAS PROPERLY DISALLOWED, AND THAT SUCH CLAIM SHOULD NOW BE WITHDRAWN, AS NO FURTHER ADJUSTMENT IN THE ACCOUNTS, AS SETTLED, APPEARS TO BE JUSTIFIED.

TABLE

GROUP NO. 12. MISROUTE

EXHIBIT NO. ITEMS INVOLVED AMOUNT CLAIMED

DD 176 $76.11

THIS ITEM COVERED A CARLOAD SHIPMENT OF EGG COAL, SHIPPED FROM PROVIDENCE, KENTUCKY, TO CAMBRIDGE CITY, INDIANA, ON JULY 24, 1954, ROUTED "IC-NIC AND STL.' CHARGES WERE INITIALLY CLAIMED AND PAID ON NICKEL PLATE BILL NO. 16785, DATED AUGUST 25, 1954, ON BASIS OF A THROUGH RATE OF 340 CENTS PER TON, PLUS 40 CENTS PER TON INCREASE, AS PUBLISHED IN ILLINOIS CENTRAL RAILROAD COMPANY COAL TARIFF NO. 2970-N, I.C.C. E-1850, EFFECTIVE OCTOBER 30, 1950, WHICH RATES APPLIED FROM PROVIDENCE, KENTUCKY (GROUP 9) TO CAMBRIDGE CITY, INDIANA (INDEX NO. 2435) VIA ,INDIANAPOLIS.' SUPPLEMENTAL BILL NO. 16785-A, CLAIMING ADDITIONAL CHARGES OF $76.11 ON THIS SHIPMENT WAS DISALLOWED BY OUR TRANSPORTATION DIVISION ON NOVEMBER 20, 1956, FILE TK-581576, WITH ADVICE THAT THE CHARGES AS ORIGINALLY PAID WERE APPARENTLY IN ACCORDANCE WITH THE TARIFF RATE AND CHARGES. THE MEMORANDUM ATTACHED TO SUCH SUPPLEMENTAL BILL DID NOT SHOW WHY THESE ADDITIONAL CHARGES WERE CLAIMED, BUT MERELY SHOWED THE THROUGH RATE AS 571 CENTS PER TON, APPARENTLY MADE ON A NEW LISBON COMBINATION. THE RECORD HERE DOES NOT SHOW THE ACTUAL ROUTE OF MOVEMENT OF THIS CAR OF COAL, BUT THE ROUTING INSTRUCTIONS SHOWN ON GOVERNMENT BILL OF LADING PO-229371, NAMELY, ,IC NYC AND STL" WAS CONSISTENT WITH THE TARIFF ROUTING VIA "INDIANAPOLIS" AND, UNDER THE CIRCUMSTANCES, WE BELIEVE THAT THE SUPPLEMENTAL BILL WAS PROPERLY DISALLOWED. WE SUGGEST THAT THIS CLAIM BE WITHDRAWN.

IT WILL BE NOTED FROM THE FOREGOING THAT WE ARE IN AGREEMENT AS TO DISPOSITION OF THE SERVICE ORDER 68 CLAIMS AND SETTLEMENT ON THESE CLAIMS WILL BE PROCESSED ACCORDINGLY. AS TO GROUPS 2 TO 4 WE HAVE INDICATED FURTHER ACTION ON OUR PART APPEARS APPROPRIATE BUT THAT NO FURTHER AMOUNTS APPEAR DUE ON GROUPS 5 TO 12. HOWEVER, THE FURTHER ACTION BY OUR OFFICE ON THE CLAIMS, EXCEPT AS TO THE SERVICE ORDER 68 ISSUE, APPEARS TO DEPEND ON THE ACQUIESCENCE OF THE CARRIER TO THE VARIOUS BASES PROPOSED FOR THEIR DISPOSITION AND THE RECEIPT OF SUPPLEMENTAL BILLS INDICATED. WE SUGGEST, THEREFORE, THAT OUR REPORT BE PRESENTED TO THE NICKEL PLATE WITH YOUR RECOMMENDATION THAT THE BASES OUTLINED ABOVE FOR DISPOSING OF THESE CLAIMS BE ADOPTED, THUS ENABLING THE CARRIER AND US TO CLOSE THE FILES ON THESE OLD MATTERS. ON RECEIPT OF ITS ACQUIESCENCE IN SUCH BASES AND THE SUPPLEMENTAL CLAIMS, PROMPT SETTLEMENT ACTION WILL BE INITIATED HERE AS TO SUCH ITEMS.

WITH RESPECT TO YOUR REQUEST FOR ADVICE AS TO THE SUPPLEMENTAL BILLS IN THE SUMS OF $103.48, $20.70 AND $62.63, TOTAL $186.81, IN CIVIL ACTION 27149, WE ARE PLEASED TO ADVISE THAT SUCH BILLS HAVE BEEN CERTIFIED FOR PAYMENT IN THE FULL AMOUNT CLAIMED AND NO DOUBT THE CARRIER HAS NOW RECEIVED PAYMENT IN DUE COURSE.