Strickland Transportation Company v. United States, 20409

Citation334 F.2d 172
Decision Date08 July 1964
Docket Number20360.,No. 20409,20409
PartiesSTRICKLAND TRANSPORTATION COMPANY, Inc., Appellant, v. UNITED STATES of America, Appellee. T.I.M.E. FREIGHT, INC., Appellant, v. UNITED STATES of America, Appellee.
CourtUnited States Courts of Appeals. United States Court of Appeals (5th Circuit)

No. 20409:

Ralph W. Currie, Dallas, Tex., Muse, Currie & Kohen, Dallas, Tex., of counsel, for appellant.

Joseph McElroy, Jr., Asst. U. S. Atty., Dallas, Tex., Terence N. Doyle, Alan S. Rosenthal, Attys., John W. Douglas, Asst. Atty. Gen., Barefoot Sanders, U. S. Atty., Dept. of Justice, Washington, D. C., for appellee.

No. 20360:

W. D. Benson, Jr., Lubbock, Tex., for appellant.

Terence N. Doyle, Alan S. Rosenthal, Attys., Dept. of Justice, Washington, D. C., for appellee.

Before BROWN, WISDOM and BELL, Circuit Judges.

JOHN R. BROWN, Circuit Judge:

These two cases involving separate judgments in a number of separate cases filed by each of the Carriers1 against the United States as shipper, although briefed and argued separately, present the common question of the construction and application of a published tariff. The appeal of T.I.M.E. has two further points. In each appeal we affirm, thus rejecting the contentions of the Carrier.

I.

The facts were stipulated and may be briefly summarized. In doing so we have drawn heavily on the briefs in making our way through the tariffese.

Between 1954 and 1959 the United States shipped aircraft engines between various points in the United States. All of the shipments were made under U.S. Government Bills of Lading and the United States was billed for the transportation charges by the Carrier.

Upon presentment, and without first being audited by the General Accounting Office, the bills submitted by the Carrier were paid by the United States as required by Section 322 of the Transportation Act of 1940, 54 Stat. 955, 49 U.S.C.A. § 66.2 However, the General Accounting Office made post-payment audits of the charges paid and concluded that the Carrier had overcharged the United States. Therefore, pursuant to the rights reserved to it by Section 322 of the Transportation Act of 1940, the Government deducted the overpayments from amounts then due the Carrier for other shipments. This action followed.

The only issue in this Part is the applicable tariff provision for the shipments involved. However, before examining the competing tariff provisions in issue here, a brief explanation of the technical terms involved in these tariff provisions is helpful.

The basic element of the transportation rate scheme is the tariff rate — a dollars and cents amount stated as the rate per hundred pounds between two geographical locations. Variables of the basic rate are necessary to take into account such considerations as the type of merchandise being transported.

One of the factors utilized to vary the basic rate is a "classification rating," which is merely a stated per cent of the basic or first-class rate. Uniform classification ratings have been established on a nationwide basis on most of the articles that may be transported by carriers. These classification ratings are established in the National Motor Freight Classification (NMFC).

In addition to the uniform classification ratings, the basic rate may also be varied by the carriers to suit the exigencies of particular geographical areas. This is customarily done by "exceptions" to the uniform classification which the carriers or their regional agents may publish. These exceptions in effect amend, and usually lower, the classification ratings for designated articles and establish new ratings which, again, are a stated per cent of the first-class rate.3

Also much discussed and warranting a brief explanation is the technical term "released value" or "released valuation." Although Section 20(11) of the Interstate Commerce Act, 49 U.S.C.A. § 20(11),4 provides that carriers shall be liable for the full, actual loss, damage or injury to property delivered to them, a carrier's liability may be limited by agreement upon a "released value" of a shipment, i. e., the value declared by the shipper and to which he is limited in case of loss or damage to the shipment. Released value rates are lower than unreleased rates since the carrier's liability is limited and, in effect, the shipper becomes a co-insurer of the shipment.5

With this preliminary, we may now consider the relevant tariff provisions in effect at the time of the shipments involved here. Specifically, the Government contends that the properly applicable rating for all the shipments is the uniform classification rating on engines shipped at released value. On the other hand, the Carrier relies upon exception ratings on engines shipped at full or unreleased value, contending that its exception cancelled the released value ratings of the uniform classification.

In the NMFC tariff,6 item 61247 shows an LTL rate of 150 for unreleased shipments, i. e., those made at full value. Under item 61244 for shipments at a released value of $2.50 or less, the LTL rate is 85, and for values of $2.51-$5.00, the LTL rate is 100. The exception tariff for the Southwestern territory7 and for the Rocky Mountain territory8 each specify specific ratings for (a) radial-jet type engines, and (b) engines not radial or jet type. The center of this dispute is Note 1 (and its variant, Note 2) that "the released valuation provisions as shown in NMFC No. A-3 see note 6, supra will not apply in connection with the ratings shown in this item."

The Carrier urges that as to these Government aircraft engines, the Exception (notes 7 and 8) superseded the entire NMFC ratings, note 6. The Government, on the other hand, insists that by the words of Note 1 only so much of NMFC as pertained to unreleased shipments (Item 61247, note 6) was superseded, thus leaving intact Item 61244.

Were this problem left to us as a strict matter of tariff construction in the good old fashioned approach of contract analysis, the Carrier could not possibly sustain this appeal. As a minimum, following United States v. Western Pacific R. R., 1956, 352 U.S. 59, 77 S.Ct. 161, 1 L.Ed.2d 126, we would have to vacate the judgment with directions to refer this to the Interstate Commerce Commission for Primary Jurisdiction determination of the transportation policies inescapably mixed up in the operative effect of these classifications, exceptions, released and unreleased shipments. If not that, the judgment would have to be affirmed on the familiar principle that where "* * * there is an ambiguity in the tariff and it is not made clear under which rating the article shipped come, the ambiguity must be resolved in favor of the shipper, and the lower rate must be awarded to him." United States v. Strickland Transp. Co., 5 Cir., 1952, 200 F.2d 234.9

Of course there is still some room left for court construction of tariffs without primary jurisdiction referral to the Commission,10 but we must resist the temptation to take the ambiguity route as an easy and quicker way out. Hence, on the Court's own motion during argument, we raised the serious question of referral of this tariff construction problem to the Commission in the first instance. The supplemental briefs and careful consideration convince us that there is no need for referral here. This is not because the task of divining the meaning of these words is so simple, or the proper result so clear that Judges untrained in the transportation business have sufficient insight to resolve it. On that approach, referral would be essential. Rather, we decline referral because it is not needed since the Commission "in prior * * * opinions, has already construed" tariffs resembling "the particular tariff at issue" and, in any event, it "has clarified the factors underlying it." United States v. Western Pacific Railroad Co., supra, 352 U.S. 59, 69, 77 S.Ct. 161, 168, 1 L.Ed.2d 126.

We thus agree with the Government that the Commission has resolved this construction problem in three decisions which are directly in point. American Home Foods, Inc. v. Delaware, L. & W. R. Co., 303 I.C.C. 655; Upjohn Co. v. Pennsylvania R. Co., 306 I.C.C 325; Dow Chemical Co v. Chesapeake & Ohio R. Co., 306 I.C.C. 403.11

In American Home Foods, the carrier assessed charges for coffee shipped in carloads at released value. This was done on the basis of an exception rating for coffee which, like the exception in controversy here, made no provision for released value shipments. The shipper contended that the properly applicable rating was that provided by the uniform classification. That classification, like the uniform classification involved here, provided two ratings for coffee — one rating for coffee shipped at released value and one rating for coffee shipped without a declaration of released value. As is true with the present case, the sole issue was whether the exception rating superseded both the released value rating and the unreleased value rating or merely superseded the unreleased value rating. The full Commission concluded that the exception superseded only the unreleased value provisions of the uniform classification (303 I.C.C. at 656-657):

"The carriers contend that the exceptions rating on instant coffee superseded both the unreleased-and released-value classification ratings. They maintain that the language of the exceptions item is specific; that there is no expressed intent that the exceptions rating should supersede only unreleased-value ratings; and that there are no differences in the commercial or transportation characteristics of the commodity described in the several items naming rates on instant coffee, whether released or not released in value. * * *
"* * *
"As stated, the carriers contend that there are no differences in the commercial or transportation characteristics of the commodity described in the several items naming rates on instant coffee, whether released or not released in value. It seems apparent that from a
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