Trans Ocean Van Service v. United States

• Decision Date: 15 May 1970
• Docket Number: No. 137-66.,137-66.
• Citation: 426 F.2d 329
• Parties: TRANS OCEAN VAN SERVICE v. The UNITED STATES.
• Court: U.S. Claims Court

426 F.2d 329 (1970)

TRANS OCEAN VAN SERVICE v. The UNITED STATES.

No. 137-66.

United States Court of Claims.

May 15, 1970.

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COPYRIGHT MATERIAL OMITTED

Alan F. Wohlstetter, Washington, D. C., attorney of record, for plaintiff.

John C. Ranney, Washington, D. C., with whom was Asst. Atty. Gen. William D. Ruckelshaus, for defendant.

Before COWEN, Chief Judge, LARAMORE, DURFEE, DAVIS, COLLINS, SKELTON, and NICHOLS, Judges.

OPINION

COWEN, Chief Judge.^*

The plaintiff, a California corporation, sues to recover additional compensation in connection with the transportation for the defendant (represented by the Department of Defense) of household goods belonging to military personnel between points in the continental United States and points overseas. This is a test case, and the final disposition of the issues involved in this case will govern the disposition of similar issues in many other cases that are pending before the court.

Since June 30, 1961, the plaintiff has been authorized by the Department of Defense to transport, for compensation, the household goods of military personnel between points in the continental United States and points overseas, by two modes of service:

(1) door-to-door container service; and

(2) door-to-door container-Government (MSTS) service, otherwise known as Mode 5.

Door-to-door container service involves the pre-packing and loading of each shipment of household goods into specially designed, carrier-owned containers at the origin residence of a military family, transporting the loaded containers to the port of departure, arranging for the movement of the shipment by ocean-going vessel or by air to the port of discharge, transporting the loaded containers beyond the port of discharge to the destination residence of the family, and placing the household goods into the new residence. The plaintiff assumes complete responsibility for the shipment from the point of origin to the point of destination.

Door-to-door container-Government (MSTS) service, or Mode 5, is identical with door-to-door container service except that water transportation between military ocean terminals is provided by vessels owned by, or under charter to, the defendant's Military Sea Transportation Service ("MSTS").

Prior to March 1, 1963, the plaintiff performed the transportation service previously described pursuant to various tenders which were submitted by the plaintiff to, and accepted by, the Department of Defense. Those tenders set forth in detail the rules, regulations, rates, and charges governing shipments of military household goods.

During the early 1960's, many other companies, in addition to the plaintiff, were engaged in the business of transporting military household goods for the Department of Defense by means of door-to-door container service and Mode 5. Each company performed such service pursuant to tenders which it individually submitted to the Department of Defense for acceptance.

By the fall of 1962, it had become apparent that the then-existing system of individual rate tender filings by carriers of military household goods precluded the efficient processing of the rate tenders by the Defense Traffic Management Service ("DTMS") of the Department of Defense. The transmission of rate information from DTMS to the transportation offices at military installations was unduly delayed by the manual processing of thousands of individual tenders. Accordingly, DTMS drafted a uniform basic tender with the idea that all companies engaged in the transportation of military household goods would be required to adopt the provisions of the uniform tender instead of formulating their own tenders on an individual basis.

Copies of the uniform basic tender drafted by DTMS were distributed by that agency to members of the household goods transportation industry on or about November 28, 1962. Members of the industry were informed by DTMS that all companies wishing to continue to participate in the transportation of military household goods must submit to DTMS not later than January 22, 1963, either individually or through an association to which they belonged, the uniform basic tender as a replacement for the many diverse tenders which the companies had previously submitted to DTMS. Members of the industry were further informed by DTMS that all tenders previously submitted would be canceled on February 1, 1963. Thus, the adoption by a company of the provisions of the uniform basic tender was a prerequisite to continued participation by the company in the household goods traffic of the Department of Defense.

The uniform basic tender drafted by DTMS was officially designated as Military Basic Tender No. 1 ("MBT No. 1"). It was duly filed with DTMS by the Household Goods Forwarders Association of America, Inc. ("Forwarders Association"), on behalf of the plaintiff and the other companies that belonged to the Forwarders Association. MBT No. 1 became effective on March 1, 1963; and it, as supplemented and reissued, covered all the shipments of military household goods that are involved in this case.

Generally speaking, the structure of compensation under MBT No. 1 was as follows: single-factor rates, filed by the carriers on electronic key-punch EAM cards, covered the entire straight-line transportation from origin to destination; MBT No. 1 itself covered the charges to be assessed for the performance of additional or accessorial services, and provided for allowances from the single-factor rates in certain circumstances.

A single-factor rate applied from a military installation in the continental United States, or from an area within a 50-mile radius thereof, to an entire country overseas; and, in the reverse direction, such a rate applied from a military installation overseas, or within a 50-miles radius thereof, to an entire State in the United States.

The "Normal Port" Diversion Claims

These claims arose out of situations wherein a shipment of military household goods would originate at an overseas point and be consigned to a certain point in the continental United States, and the shipment, after its arrival at the port of debarkation but prior to its departure therefrom, would be diverted in accordance with instructions from the defendant to a point in the United States other than the one stated in the bill of lading.

The question to be decided is the interpretation and application of the phrase "ordinarily be serviced," which appears in the following portion of Item 150 of MBT No. 1:

DIVERTED PRIOR TO SHIPMENT LEAVING PORT OF DEBARKATION:

U.S. DESTINATION: If shipment is diverted to another point within the Continental United States that would ordinarily be serviced through the same Port of Debarkation, apply the single factor transportation rate applicable to the new destination point.

If shipment is diverted to another point within the Continental United States that would not ordinarily be serviced through the same Port of Debarkation, the Port of Debarkation will be considered the destination point and the single-factor transportation rate to such point will be applicable. Further transportation to the new destination point within the Continental United States will be at the diversion rate * * *.

Shipments Nos. 20 and 30 are illustrative of the "normal port" diversion claims. The facts with respect to the shipments are not in dispute and are set forth in findings 30-37. The parties are agreed that there was a diversion in each instance, but they disagree as to plaintiff's entitlement to mileage diversion charges provided for in Item 150 of MBT No. 1. Both shipments originated in Germany and were destined for Brooklyn, New York. After arrival at the Port of New York, shipment No. 20 was diverted by order of defendant to Rochester, New York, and shipment No. 30 was similarly diverted to Arcola, Illinois. On shipment No. 20, plaintiff billed the defendant for, and was paid, an amount based upon the single-factor rate between the point of origin in Germany and the Port of New York, plus a diversion fee of $5. On shipment No. 30, plaintiff billed the defendant for, and was paid, an amount based upon the single-factor rate between the point of origin in Germany and the Port of New York, plus the diversion mileage charge from the Port of New York to Arcola, Illinois, and the $5 flat diversion fee. Thereafter, the General Accounting Office hereinafter sometimes referred to as "GAO" issued a notice of overcharge against the plaintiff with respect to the latter shipment. The amount of the overcharge, which plaintiff refunded, was computed by applying the single-factor rate from the point of origin in Germany to Arcola, Illinois, and adding the flat $5 diversion fee. Plaintiff here seeks to recover diversion mileage charges under Item 150 in the amount of $55.51 due for the movement of shipment No. 20 from the Port of New York to Rochester, New York, and in the amount of $115.58 for the movement of shipment No. 30 from the Port of New York to Arcola, Illinois.

As shown above, Item 150 provides in substance that when a shipment is diverted prior to leaving the port of debarkation to a destination which would not "ordinarily be serviced" by that port of debarkation, the single-factor rate applies from the point of origin to the port of debarkation, and the diversion mileage rate applies from the port of debarkation to the diverted destination. On the other hand, when the diverted destination would "ordinarily be serviced" by the port of debarkation, the single-factor rate applies from the point of origin to the diverted destination. Therefore, in assessing the applicable rates for such shipments that were diverted prior to leaving the port of debarkation, a determination must be made as to what port would ordinarily or normally service the diverted destination.

At the trial and in its brief, plaintiff took the position that the sole test to be employed in determining whether...