Opinion ID: 373658
Heading Depth: 1
Heading Rank: 2

Heading: Capitol's Defenses to the Demurrage Claims

Text: 31 The demurrage charges assessed against Capitol by MSC arose under the published tariffs filed by the various underlying ocean carriers with the Maritime Commission. These tariffs provide for the payment of demurrage by shippers and consignees upon the expiration of stated free time periods granted to allow the unloading and return of trailers to the ocean carrier's terminal. Capitol contends that insufficient evidence was introduced to establish that it was the consignee and therefore liable for the demurrage charges. Specifically Capitol argues that it was not the consignee to the shipments since the consignee was the United States Federal government and/or the United States Armed Forces. Capitol claims it acted merely as trucker and household mover for the government. 32 In order to establish Capitol's liability for demurrage, MSC introduced copies of Trailer Interchange Receipts (TIRs), documents which served as the basis for MSC's computation of charges owed. These TIRs were prepared by the various ocean carriers and submitted to MSC two or three times per week. Each TIR contains information on trailer numbers, vessels, voyages, bills of lading, dates free time began, and dates trailers were pulled out and returned to the carriers' terminal. TIRs are coded with a number previously assigned to each customer. According to testimony offered by MSC, the consignee of a particular shipment is identified on the TIR by the use of this customer code; the consignee's name is also printed in full in the space reserved for customer name out. 33 After receiving these TIRs from the ocean carriers, MSC, with the aid of a computer service, prepared invoices summarizing the demurrage owed by the named consignees. These invoices include references to vessel, voyage, bill of lading number, TIR number, trailer number, date free time started, date trailer was returned to the terminal, number of days of demurrage, and charges due. Invoices were mailed to customers with a copy of each of the relevant TIRs, and customers were afforded an opportunity to correct billing errors. 34 In the administrative proceeding, MSC introduced copies of the appropriate invoices and TIRs. Capitol is listed as customer on each, and is identified by its customer code number. As was explained by MSC's witnesses, this would indicate that Capitol was consignee of the various shipments involved. 35 There is also some further indication in the record of Capitol's having acted as consignee. In a letter from DuPont Puerto Rico, Inc. to Hiram Cabassa of MSC, DuPont's traffic manager stated: (Y)ou are definitely not correct in stating that Capitol Transportation is our trucker. They are a moving company and as such a Consignee in their own right. (Emphasis added.) And in its opening brief filed after the hearing before the ALJ, Capitol, in framing a jurisdictional attack, reasserted its position that the carriers cannot sue Consignees for demurrage before the Commission. (Emphasis added.) Capitol, it is clear, has been far from consistent in its disavowal of consignee status. 36 Despite the introduction of the TIRs identifying it as consignee, Capitol insists that it acted merely as trucker for the United States on the government shipments which it claims comprise eighty percent of its transportation business. 9 In a letter dated October 23, 1973 and introduced into evidence, Mr. Cabassa (of PR Ocean Service Association and MSC) explained to Ruben Figueroa, Capitol's attorney in the agency proceeding, MSC's policy toward the handling of government shipments: 37 Military or government cargoes may be carried either (1) by contracts or tenders between the carriers and the military or government agencies under section 6 of the Intercoastal Shipping Act on government bills of lading or (2) by regular commercial bills of lading under the usual commercial tariffs. MSC does not have responsibility of the former traffic, also known as 'special list traffic' in the MSC manual. Code 7540 eliminates those shipments from MSC billings. The carriers bill and collect the ocean charges and any other charges, including demurrage, from the appropriate military or government agency. However, MSC does bill and collect demurrage on the second category of cargoes which would be considered military or governmental, such as household goods and personal effects of military or government personnel, where those cargoes move under commercial bills of lading. 38 The TIRs introduced in the present case bear the code number 10640, identifying Capitol as customer-consignee. Thus it appears that MSC billed Capitol only for shipments handled under commercial bills of lading naming Capitol as consignee. The ALJ, in his initial decision, noted that while it is possible that Capitol may have made arrangements with the military for delivery of certain containers of household goods and Capitol may have some claims against the military, nevertheless such arrangements and claims cannot defeat MSC's rights . . . to collect billed demurrage due from Capitol where Capitol was the named consignee. As consignee Capitol was the party responsible for the demurrage. Capitol has pointed to no tariff or decision undermining the ALJ's conclusion. 39 Instead, Capitol contends that the TIRs introduced by MSC identify only the party taking possession of the container rather than the actual consignee. Capitol argues that the bills of lading, not introduced by MSC, are needed if the true consignee is to be identified. 10 In addition, Capitol similarly suggests that the failure of MSC to offer notices of arrival, which the tariffs require be sent no later than the day free time begins, renders the evidence on the issue of Capitol's consignee status insufficient. 40 Capitol is mistaken in its assertion that the invoices and TIRs were insufficient to establish, prima facie, that Capitol was consignee. They were adequately relevant, material, reliable and probative, and thus properly received in evidence, See 46 C.F.R. § 502.156 (1978); and in the absence of any more authoritative contrary evidence the Commission could reasonably accept those documents as reflecting the true consignee. If as Capitol suggests, the bills of lading and arrival notices would have shown something different, Capitol was free to seek them out by timely discovery under the Commission's rules. But, it could not, as it did, sit back until discovery had closed or wait until the ALJ decided the case adversely, and then, for the first time, insist that the bills and notices be produced. 11 The evidence submitted supplied ample support for the Commission's finding that Capitol was the consignee and therefore liable for the amount of demurrage assessed. Indeed, since Capitol was best situated to furnish evidence, if there was any, to support its claim that others were in fact liable for the charges, its failure to do so reinforces the impression that the claim is baseless. 41
42 Capitol makes another unavailing argument concerning MSC's failure to offer notices of arrival. The ocean carriers' tariffs (using Sea-Land's as an example) provide that notice of arrival will be given by mail and only to one party at one address, as designated by the shipper on the bill of lading, and not later than the day when free time begins. Capitol, pointing to MSC's failure to introduce into evidence the relevant notices, claims that such a failure estops MSC from pursuing its claim for demurrage. In support of this argument, Capitol relies principally upon the Second Circuit's decision in Empire Box Corp. v. Delaware, L. & W. R. Co., 171 F.2d 389 (2d Cir. 1948). In Empire, the plaintiff sought to recover demurrage paid to a railroad for the constructive placement of loaded freight cars on its tracks. The applicable tariff required that written notice of such placement be sent. Instead, the parties had agreed that oral notice would suffice. The court held, reaffirming the canon of rigid adherence to published tariffs, that such oral waiver of the written notice requirement was ineffective and that demurrage could not be collected. See also Davis v. Henderson, 266 U.S. 92, 45 S.Ct. 24, 69 L.Ed. 182 (1924) (waiver of ICC rule requiring shipper to provide written request for railway cars ineffective); Campbell Construction Co. v. LaCrosse & Southeastern Ry. Co., 95 I.C.C.Rep. 603 (1925) (no demurrage where required written notice of arrival not given, even though actual notice received); 6 A.L.R.2d 874. 43 In the present case the ALJ found that the record is convincing that the appropriate arrival notices were given to Capitol, (and) that copies are in storage. . . . The Commission likewise indicated a finding that notice was given. In denying Capitol's petition for reconsideration, it said, (T)he fact that the TIR's indicate that the containers were in fact picked up and returned by Capitol raises the presumption that Capitol actually received arrival notices for these containers, a presumption Capitol has not rebutted. We agree with the Commission that notice was sufficiently established so as to place upon Capitol the burden of coming forward with evidence to show that such notice was, in fact, inadequate. Thus we reject Capitol's argument that MSC's failure to produce the arrival notices as part of its own case was fatal. On the showing made, it was up to Capitol to establish lack of notice as a defense, and this it failed to do. Capitol first sought copies of the arrival notices at the second pre-hearing conference, after discovery had been closed. The ALJ determined that belated retrieval of the notices at that time would be unduly burdensome to MSC, and declined to order their production. We find nothing unreasonable about this ruling. See 46 C.F.R. § 502.20(b)(2). It is true that counsel for MSC indicated, at the pre-hearing conference, that sometimes they are even oral notices, telephone calls by parties, some of the notices of arrival even came from the (NVOCC's) people themselves back in the States as well as from the carriers . . . But the ALJ was not required to treat these vague statements of counsel as establishing that written notice was not ordinarily given, nor were they sufficient reason to relieve Capitol from the consequences of its inertia throughout the discovery period. It is to be observed that Capitol's president, Charles Darmanin, nowhere denied in his written testimony that the notices were received. 12 If Capitol had, in good faith, wished to contest notice, the issue should have been affirmatively raised at an appropriate time.