Source: http://openjurist.org/579/f2d/229
Timestamp: 2015-09-02 19:22:19
Document Index: 323336431

Matched Legal Cases: ['§ 296', '§ 1441', '§ 1441', '§ 1441', '§ 1373', '§ 2', '§ 202', '§ 317', '§ 20', '§ 1472']

579 F2d 229 North American Phillips Corporation v. Emery Air Freight Corporation | OpenJurist
579 F. 2d 229 - North American Phillips Corporation v. Emery Air Freight Corporation Home
579 F2d 229 North American Phillips Corporation v. Emery Air Freight Corporation 579 F.2d 229
NORTH AMERICAN PHILLIPS CORPORATION, Plaintiff-Appellant,v.EMERY AIR FREIGHT CORPORATION, Defendant-Appellee.
No. 385, Docket 77-7379.
Argued Dec. 14, 1977.Decided July 17, 1978.
C. Raymond Nelson, New York City, Rein, Mound & Cotton, New York City, for plaintiff-appellant.
John V. McAuliffe, New York City, Bigham, Englar, Jones & Houston, New York City, for defendant-appellee.
Before OAKES, VAN GRAAFEILAND, Circuit Judges, and BARTELS,* District Judge.
In 1971, North American Phillips (Norelco) retained Emery Air Freight1 to ship 1250 cartons of electric razors from a warehouse in Nevada to Norelco's Long Island plant. Because Emery had no facilities or personnel in Nevada, it used Parcel Delivery Service of Reno, Nevada, as its agent. On November 3, 1971, a Service representative went to the warehouse to check and label the cargo. He received and signed a document entitled "Straight Bill of Lading Short Form" but apparently did not deliver an airway bill as required by 14 C.F.R. § 296.73. Subsequently, the razors were transported to San Francisco by truck and then to New York City by air. On arrival, the cargo was loaded onto two trucks for delivery to Norelco. One of the trucks, carrying 795 cartons of razors, was hijacked en route, and the cargo was stolen.
On December 7, 1971, Norelco submitted a written claim to Emery for $114,003.00, the value of the lost cargo. On December 21, 1971, Emery informed Norelco that the claim was governed by the provisions of Emery's tariff, which limited its liability for negligence to $.50 per pound in the absence of a higher declared value. Because Norelco had not declared a higher value at the time of shipment, Emery tendered a check for.$10,527.50, its maximum liability under the tariff. Norelco held the check for over a year, returning it on December 28, 1972, and reasserting its claim for the full $114,003.00. Thereafter, it filed suit in the Supreme Court of the State of New York. Emery removed the action to the United States District Court for the Southern District of New York on the ground that plaintiff's claim arose under federal law. 28 U.S.C. § 1441(b).
In the district court, Emery raised three defenses to Norelco's claim. It asserted that under its tariff all suits against it had to be instituted within one year of the disallowance of a claim and that plaintiff's suit was not timely. It also contended that the tariff relieved it of liability for losses not due to its negligence and that it had not been negligent. Lastly, it argued that, even if negligent, its liability was limited to $.50 per pound. Norelco countered that the tariff was inapplicable because no airwaybill was delivered at the time of shipping, and that therefore the common law, not the tariff, governed Emery's liability.
After considering the pleadings, pre-trial depositions, and stipulated facts, the district judge ruled in defendant's favor, holding that delivery of an airwaybill was not a prerequisite to the application of the tariff. The district judge decided that Emery was not negligent and could avail itself of the exculpatory provision in the tariff. He also found that the action was not begun within the one-year period and therefore was time barred. His opinion is reported at 432 F.Supp. 519.
Appellant and appellee are Delaware corporations doing business in the State of New York, and there was no diversity of citizenship justifying removal of appellant's action to federal court under 28 U.S.C. § 1441(a). Appellee proceeded therefore under § 1441(b), which authorizes removal where the plaintiff's claim is one over which the federal courts would have original jurisdiction because the claim arises under the laws of the United States.2 In recent years, several courts have held that claims similar to appellant's did not arise under the laws or statutes of the United States. See, e. g., Security Insurance Co. v. National Airlines, Inc., 413 F.Supp. 493 (E.D.La.1976); Frenkel v. Western Union Telegraph Co., 327 F.Supp. 954 (D.Md.1971); Cf. Phillips Petroleum Co. v. Texaco Inc., 415 U.S. 125, 94 S.Ct. 1002, 39 L.Ed.2d 209 (1974). For this reason, we raised the question, Sua sponte, whether original federal jurisdiction existed in the district court to pass upon appellant's claim and requested the parties to brief this issue.3 We now hold that the district court did have jurisdiction.
Section 403(b) of the Federal Aviation Act of 1958, 49 U.S.C. § 1373(b)(1), contains language which is similar to that of the Interstate Commerce Act, 49 U.S.C. §§ 2, 3, 6(7), 906(c), the Federal Communications Act, 47 U.S.C. § 202(a), and the Motor Carrier Act, 49 U.S.C. § 317(b).4 The purpose of these provisions was to establish a uniformity and equality of rates in all interstate transactions to which the several statutes applied. Western Union Telegraph Co. v. Esteve Brothers & Co., 256 U.S. 566, 572, 41 S.Ct. 584, 65 L.Ed. 1094 (1921); New York, New Haven & Hartford Railroad v. ICC, 200 U.S. 361, 391-92, 26 S.Ct. 272, 50 L.Ed. 515 (1906); United States v. Associated Air Transport, Inc., 275 F.2d 827, 832-34 (5th Cir. 1960); Lichten v. Eastern Airlines, Inc., 189 F.2d 939, 941 (2d Cir. 1951).
Limitations of liability and cargo valuations are inherent parts of the rates, and the statutory mandate of uniformity must therefore apply to the liabilities which attend the carriage of goods. Western Union Telegraph Co. v. Esteve Brothers & Co., supra, 256 U.S. at 571-73, 41 S.Ct. 584; Kansas City Southern Railway v. Carl, 227 U.S. 639, 653, 33 S.Ct. 391, 57 L.Ed. 683 (1913). If a shipper in one state could hold a carrier to a higher standard or degree of liability than a shipper in another state who has paid the same rate, the first shipper would be getting a preference not granted to the second.5 Vaigneur v. Western Union Telegraph Co., 34 F.Supp. 92, 93 (E.D.Tenn.1940). This, the various commerce acts prohibit. Western Union Telegraph Co. v. Esteve Brothers & Co., supra, 256 U.S. at 571, 41 S.Ct. 584.
Although the liability of air carriers is not created by statute, as is the case with surface carriers, See 49 U.S.C. § 20(11), the prohibition against unlawful preferences is equally strong with regard to the former as the latter. Twentieth Century Delivery Service, Inc. v. St. Paul Fire and Marine Insurance Co., 242 F.2d 292, 299 (9th Cir. 1957). For example, 49 U.S.C. § 1472(d) makes it unlawful to give or receive rebates or commissions in shipments by air.6 It follows that both the rights and liabilities as between an airline and a shipper are determined by the shipper's valid tariffs. Tishman & Lipp, Inc. v. Delta Air Lines, 413 F.2d 1401, 1403 (2d Cir. 1969). In some cases, this conclusion is reached by treating the tariff rate as a matter of law instead of contract. See Western Un