United States v. Pan American Mail Line, Inc.

• Decision Date: 05 September 1972
• Docket Number: No. 69 Civ. 2381.,69 Civ. 2381.
• Citation: 359 F. Supp. 728
• Parties: UNITED STATES of America, Plaintiff, v. PAN AMERICAN MAIL LINE, INC., Defendant.
• Court: U.S. District Court — Southern District of New York

359 F. Supp. 728

UNITED STATES of America, Plaintiff, v. PAN AMERICAN MAIL LINE, INC., Defendant.

No. 69 Civ. 2381.

United States District Court, S. D. New York.

September 5, 1972.

Whitney North Seymour, Jr., U. S. Atty., by Gilbert S. Fleischer, Attorney-in-Charge, Admiralty and Shipping Section, U. S. Dept. of Justice, New York City, for plaintiff.

Edwin Longcope, Hill, Betts & Nash, New York City, for defendant.

PIERCE, District Judge.

OPINION

The United States claims that Pan American Mail Line has violated Section 18 of the Shipping Act, as amended, 46 U.S.C. § 817(b)(3)¹ by collecting an amount different from that stated in its tariff on file with the Federal Maritime Commission (hereinafter "the Commission"). The government seeks imposition of a civil penalty pursuant to 46 U.S.C. § 817(b)(6)² and it has moved for summary judgment. The parties have submitted affidavits and briefs, including supplemental briefs at the Court's request.

Rule 56 of the F.R.Civ.P. provides that summary judgment may be granted only upon a showing that "there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." It is clear that great care must be exercised in considering a motion for summary judgment and where there is any doubt as to the facts of a case, the motion must be denied. Dolgow v. Anderson, 438 F.2d 825 (2d Cir. 1971); Doehler Metal Furniture Co. v. United States, 149 F.2d 130 (2d Cir. 1945).

The parties do not dispute certain facts in this case. Defendant has admitted in its answer that during the period between July 1, 1965 and July 27, 1966 it was a common carrier by water engaged in foreign commerce, that is, engaged in the transportation of cargo between United States Atlantic ports and Cristobal, Canal Zone; that at all relevant times it was a corporation organized and existing under the laws of a foreign nation; that it transacts business through an agent; and that it is located within this district and within the jurisdiction of this Court.

In addition, all are agreed that prior to July 1, 1965 defendant's tariff contained the following provision on "Original page No. 8B," effective between July 1, 1964 and June 2, 1965, and on "Supplement No. 1 to Original page No. 8B," effective between June 3, 1965 and June 30, 1965:

"Item 8 (continued) . . . .

"All shipments from the following ports are subject to the charges specified below:

MIAMI, FLORIDA:

Handling—$1.35 per 40 cu. ft. or 2,000 lbs. as freighted with the exception of: AUTOMOBILES—$5.00 per unit.

Wharfage—$.30 per 2,000 lbs. with the exception of AUTOMOBILES— $1.00 per unit; TRUCKS—$2.00 per unit.

Minimum Wharfage and Handling Charges are $.30 and $1.35 respectively."

As of July 1, 1965 this language was deleted by "1st Revised Page No. 8B." In the introductory portion of defendant's tariff, however, on page "FMC-F No. 3 Original page No. 2," the following provisions remained as of July 1, 1965:

"Item 1. Application of Rates . .

"(b) . . . Any tollage, wharfage handling and/or unloading will be for account of the cargo."

Pan American filed a new tariff, effective on January 1, 1966, which was apparently designated "FMC—No. 4." The above language appeared on page 4 of the new tariff. This same provision appeared again on the first revised page 4, effective June 3, 1966. It was deleted entirely from defendant's tariff by amendment effective July 28, 1966.³

The defendant has admitted that subsequent to July 1, 1965, from approximately October 14, 1965 until July 27, 1966, it paid handling and wharfage charges for all cargo it carried through Miami. Affidavit of Edwin Longcope, dated December 17, 1971; Defendant's Answer to Interrogatories, dated April 30, 1971. See also Plaintiff's Exhibit 1. To exemplify defendant's actions, the government has adduced proof, through defendant's admissions that these charges were paid by defendant for three specific voyages dated October 14, 1965, March 25, 1966 and June 14, 1966. See Affidavit of Edwin Longcope, dated December 17, 1971; Defendant's Answers to Interrogatories dated April 30, 1971.

The government contends that these undisputed facts constitute the material facts which it must establish in order to recover as a matter of law. Defendant argues, however, that the general language regarding wharfage and handling appeared in its tariff between July 1, 1965 and July 27, 1966 as a result of inadvertence. It urges that intent is material to the question at hand and that a trial on this issue is necessary. Likewise, it argues that the word "absorption," found in Plaintiff's Exhibit 1, is a term of art which can be understood only after a trial. Defendant also claims that this case should be referred to the Commission. In addition, Pan American contends that an apportionment, such as that set out in the introductory portion of defendant's tariff, is ineffective unless implemented by a specific rate. Finally, defendant asserts that the government has not suggested any basis for applying a penalty.

A. Primary Jurisdiction

Preliminarily the Court must determine whether the case is properly before it at this time. Defendant has argued, in its papers and informally, that the Commission must decide whether defendant violated § 817(b) before the government may sue in district court to recover a penalty. Pan American points to 46 U.S.C. §§ 821, 822 in support of its position. It also asserts that the Commission's expertise in tariff interpretation and administration requires the Court to defer, at least temporarily, to proceedings which should be instituted before the Commission. In this fashion, it is argued, decisional uniformity within the tariff system may be assured. The government responds that defendant's argument is unfounded and cites United States v. Anchor Line, 257 F.Supp. 99 (S.D.N.Y.1967); United States v. Federal Steam Navigation Co., 64 Civ. 2061 (S.D.N.Y. September 1, 1965); and United States v. Dittlev-Simonsen Lines, et al., No. 41912 (N.D. Cal. October 9, 1964) in support of its position.

The Court is persuaded that the Anchor Line case correctly construes the Shipping Act. Section 821 authorizes complaint to the Commission alleging a violation and investigation by the Commission on its own initiative; it also authorizes the award of reparations where violations are found. Section 822 specifies that orders of the Commission relating to violations shall be made only after a full hearing. Section 817(b)(6), on the other hand, permits the United States to institute a civil action for recovery of penalties for violations of certain provisions of the act; nowhere in the statute has Congress suggested that proceedings under §§ 821 and 822 are necessary predicates to the institution of a § 817(b)(6) action. See also 1961 U.S.Code Cong. and Admin.News, pp. 3125-3126.

Furthermore, insofar as defendant claims that the instant situation falls within the concept of primary jurisdiction, its arguments are misplaced. As the Second Circuit has recently stated in Danna v. Air France, et al., 463 F.2d 407 (2d Cir. 1972), claims that a tariff has been violated or unequally applied are properly brought before a court. Granting that Danna arose in a context different from the case at bar, the principle stated merely recasts the broader proposition enunciated in United States Navigation Co. v. Cunard S.S. Co., 284 U S. 474, 481-482, 52 S.Ct. 247, 249, 76 L.Ed. 408 (1932):

. . . resort . . . must be had where a rate, rule or practice is attacked as unreasonable or as unjustly discriminatory, and also where it is necessary in the construction of a tariff, to determine upon evidence the peculiar meaning of words or the existence of incidents alleged to be attacked by the usage to the transaction . . . . "But what construction shall be given to a railroad tariff presents ordinarily a question of law which does not differ in character from those presented when the construction of any other document is in dispute."

See United States v. Western Pacific R.R., 352 U.S. 59, 69, 77 S.Ct. 161, 1 L.Ed.2d 126 (1956); Board of Railroad Commissioners v. Great Northern Ry., 281 U.S. 412, 421-422, 50 S.Ct. 391, 74 L.Ed. 936 (1930); Great Northern Ry. v. Merchants Elevator Co., 259 U.S. 285, 291, 294, 42 S.Ct. 477, 66 L.Ed. 943 (1922); Pennsylvania R. R. v. Int'l Coal Mining Co., 230 U.S. 184, 196-197, 33 S.Ct. 893, 57 L.Ed. 1446 (1913); CAB v. Modern Air Transport, Inc., 179 F.2d 622, 625 (2d Cir. 1950); 3 K.Davis, Administrative Law Treatise §§ 19.01-.02 (1958, Supp.1970); Fremlin, Primary Jurisdiction and the Federal Maritime Commission, 18 Hastings L.J. 733 (1967). See also Far East Conference v. United States, 342 U.S. 570, 573-575, 72 S.Ct. 492, 96 L.Ed. 576 (1952).

This Court finds, as did the Court in United States v. Dittlev-Simonsen Lines, supra, that no special expertise is necessary to resolve the issue presented; there are no technical words which require expert construction, nor are there complicated facts whose significance can be grasped only by expert analysts. Additionally, there are no circumstances here which address themselves to administrative discretion or the need for uniform decisional law. The sole issues here are the construction of defendant's tariff and the determination of whether defendant complied with its mandate. Therefore, defendant's claim that the Court is without jurisdiction is found to be without merit.

B. The Alleged Violation

The Supreme Court has held that the only lawful rate which a carrier may charge is that rate appearing in the carrier's filed tariff. Dayton Coal & Iron Co. v. Cincinnati, New Orleans & Texas Pacific Ry., 239 U.S. 446, 36 S.Ct. 137, 60 L.Ed. 375 (1915); Louisville & Nashville Ry. v. Maxwell, 237 U.S. 94, 35 S.Ct. 494, 59 L.Ed. 853 (1915); Louisville & Nashville Ry. v. Mottley, 219 U.S. 467, 31 S.Ct. 265, 55 L.Ed. 297 (1911); Texas & Pacific Ry. v. Mugg & Dryden, 202 U.S. 242, 26 S.Ct. 628, ...