Zachry-Dillingham v. American President Lines, Ltd.
| Citation | 739 S.W.2d 420 |
| Decision Date | 16 September 1987 |
| Docket Number | ZACHRY-DILLINGHAM,No. 4-85-00527-CV,4-85-00527-CV |
| Parties | , a Joint Venture, Appellant, v. AMERICAN PRESIDENT LINES, LTD., Appellee. |
| Court | Court of Appeals of Texas |
Timothy Patton, San Antonio, for appellant.
Jonathan Pauerstein, San Antonio, John F. Unger, Robert Etnyre, Houston, for appellee.
Before CADENA, C.J., and BUTTS and CANTU, JJ.
Plaintiff, Zachry-Dillingham, a joint venture, appeals from an order granting summary judgment for defendant, American President Lines, Ltd.
Plaintiff was awarded a contract for the construction of canals and associated structures for an irrigation system in Sri Lanka. The construction required the use of heavy equipment and other supplies that required shipment from this country to Sri Lanka. Timely delivery to Sri Lanka was essential in order for plaintiff to fulfill its contract.
In May and June, 1982, defendant represented that it would ship the equipment and materials to Sri Lanka at a cost to plaintiff of $150.00 per 2,240 pounds or 40 CFT. Defendant acknowledged that the quoted rate was not then in effect but guaranteed that revised tariffs reflecting the quoted rates would be filed with the appropriate federal agency once it was awarded the contract. Defendant promised plaintiff that the quoted rates would be "all inclusive" and represented that the quoted rates would be in effect no later than June 21, 1982.
On June 24, defendant confirmed the rates in writing and reported that the quoted rates had not become effective on June 21 as expected, but would be in effect by the end of the following week. Relying on these representations, plaintiff agreed to have defendant ship the equipment and supplies.
After shipping began, plaintiff realized that defendant was (1) charging rates in excess of those quoted; (2) charging different rates for shipments originating in Houston from those shipments originating on the west coast; (3) charging additional fees for services which it had represented would be included in the "all inclusive" rate; and (4) charging on the basis of whichever method of computation produced the greatest income to defendant rather than, as defendant had promised, classifying the cargos by the greater number of tons as determined by weight or cubic measurement. When plaintiff protested, defendant said that the payments would have to be made as billed or the cargo would not be released to plaintiff in Sri Lanka. Since delivery of the equipment and supplies was necessary to enable plaintiff to fulfill its contractual obligations, plaintiff paid the amounts demanded by defendant under protest and filed this suit.
Plaintiff alleged that defendant was guilty of common law fraud by inducing plaintiff to enter into the shipping contract through false representation that (1) it would file new tariffs and apply for new rates, (2) it would make no extra charge for oversize and heavy items, and (3) it would charge on the basis of weight or cubic feet, whichever was greater. Plaintiff also alleged that defendant's misrepresentations constituted a violation of sections 17.46(b) and 17.50(a)(3) of the Texas Deceptive Trade Practices Act. TEX.BUS. & COM.CODE ANN. (Vernon Supp.1987).
Defendant moved for summary judgment, arguing that neither a common law action for fraud nor a claim under a state DTPA can be maintained under the circumstances of this case because granting relief to plaintiff would, in effect, be a rebate of charges in violation of § 18 of the Shipping Act 1 which provides:
No common carrier by water in foreign commerce ... shall charge or demand or collect or receive a greater or less or different compensation for the transportation of property or for any service in connection therewith than the rates and charges which are specified in its tariffs on file with the [Federal Maritime] Commission and duly published and in effect at the time; nor shall any carrier rebate, refund, or remit in any manner or by any device any portion of the rates or charges so specified, nor extend or deny to any person any privilege or facility, except in accordance with such tariffs....
The trial court granted summary judgment that plaintiff take nothing on its breach of contract, fraud, misrepresentation, negligence, and DTPA claims and severed plaintiff's claims under federal statutes.
State law is not preempted by federal legislation unless:
1) Congress has indicated its intent to preempt, Pacific Gas & Electric Co. v. State Energy Resources Conservation & Development Commission, 461 U.S. 190, 203, 103 S.Ct. 1713, 75 L.Ed.2d 752 (1983); or
2) State law is in conflict with federal law either by standing as an obstacle to Congress's purpose or because it is impossible to comply with both state and federal law. Where a partial conflict exists, state law is preempted to the extent of the conflict. Florida Lime and Avocado Growers, Inc. v. Paul, 373 U.S. 132, 142-43, 83 S.Ct. 1210, 1217, 10 L.Ed.2d 248 (1963); Hines v. Davidowitz, 312 U.S. 52, 67, 61 S.Ct. 399, 404, 85 L.Ed. 581 (1941).
There is no denying that the tariff provisions of the Shipping Act set out above are binding on both shipper and carrier and that a carrier may not charge a rate other than that which appears in its filed tariff. United States v. Pan American Van Line, Inc., 359 F.Supp. 728 (S.D.N.Y.1972). Even the misquotation of rates by a carrier resulting from mistake or inadvertence does not affect the requirement that the filed tariff rate must be charged. Gilbert Imported Hardwoods, Inc. v. 245 Packages of Guatambu Squares, More of Less, 508 F.2d 1116 (5th Cir.1975).
In this case, plaintiff may not recover on any theory of breach of contract or negligence, because the state law permitting such recovery would conflict with federal law to the extent that it would permit recovery for mistake, inadvertence, misquotation or the contrary intent of the parties. Florida Lime and Avocado Growers, supra. However, plaintiff's claims based on common law fraud and violation of the DTPA present a different problem.
The purposes of the tariff filing requirements of the Shipping Act are to avoid rebating of charges, to afford an equal opportunity to all shippers to avail themselves of the filed rates, and to afford a full opportunity to competing carriers to meet such rates. H.S.Rep. No. 53, part I, 98th Cong., 2d Sess. 18-19, reprinted in 1984 U.S.Code Cong. & Ad.News 167, 183-184. Prior to implementation of the tariff filing requirements of the Act there had been complaints by shippers that rate secrecy and instability hampered them in competing in foreign markets. Id. By requiring carriers to file tariffs, make those tariffs available to all shippers, and not rebate any charges, Congress attempted to establish a system under which a carrier could not unfairly discriminate against shippers. Id.
The tariff filing system in effect at the time of the contract between the parties to this suit was contained in 46 U.S.C. § 817(b). It required the filing of tariff information in detail sufficient to permit a shipper to determine...
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