334 F.2d 172 (5th Cir. 1964), 20409, Strickland Transp. Co. v. United States

Docket Nº:20409, 20360.
Citation:334 F.2d 172
Party Name:STRICKLAND TRANSPORTATION COMPANY, Inc., Appellant, v. UNITED STATES of America, Appellee. T.I.M.E. FREIGHT, INC., Appellant, v. UNITED STATES of America, Appellee.
Case Date:July 08, 1964
Court:United States Courts of Appeals, Court of Appeals for the Fifth Circuit
 
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Page 172

334 F.2d 172 (5th Cir. 1964)

STRICKLAND TRANSPORTATION COMPANY, Inc., Appellant,

v.

UNITED STATES of America, Appellee.

T.I.M.E. FREIGHT, INC., Appellant,

v.

UNITED STATES of America, Appellee.

Nos. 20409, 20360.

United States Court of Appeals, Fifth Circuit.

July 8, 1964

Page 173

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.

Page 174

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 Carriers 1 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.

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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

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for the Southwestern territory 7 and for the Rocky Mountain territory 8 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...

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