Document: 456 U.S. 336 102 S.Ct. 1815 72 L.Ed.2d 114 SOUTHERN PACIFIC TRANSPORTATION CO., Petitioner,v.COMMERCIAL METALS CO. No. 81-622. Argued March 31, 1982. Decided April 27, Syllabus Respondent, as consignor, shipped goods by rail to a third party under uniform straight bills of lading prescribed the Interstate Commerce Commission (ICC). Each bill provided that consignor was liable for freight charges unless it signed statement in "[t]he carrier shall not make delivery this shipment without payment and all other lawful charges." Respondent failed execute "nonrecourse" clause lading. Petitioner, common rail, delivered first consignee collecting advance investigating consignee's credit standing. Petitioner shipments only after receiving checks from consignee, but were dishonored bank insufficient funds. After unsuccessfully attempting collect unpaid petitioner requested respondent pay and, when made, filed suit against Federal District Court. The court ruled although had established prima facie case recovery charges, valid equitable defense showing comply with ICC's regulations. These regulations, promulgated pursuant § 3(2) Act, did allow on more than five days. Court Appeals affirmed. Held : Petitioner's violation regulations does bar its collection respondent. Pp. 342-352. (a) respondent's liability proving sign nonrecourse is basic transportation contract between shipper-consignor carrier, provides contrary, remains primarily charges. Thus, failing provision, continued be liable. 342-344. (b) provide an affirmative petitioner's case. Neither Act nor themselves intimate carrier's rules automatically precludes charge. Nor either contain any words charge action. history further indicates silence inadvertent—the intent protect carriers, penalize them. And public policy concerns disfavor judicial implication defenses based violations ICC has ample authority police practices thereby deter improper practices, judicially created remedy forfeiture 344-352. 641 F.2d 235, reversed. James H. Pipkin, Jr., Washington, D. C., petitioner. David M. Sudbury, Dallas, Tex., Justice BLACKMUN opinion 1 This presents question whether issued (ICC) bars who, terms shipment's lading, 2 * Southern Pacific Transportation Company (SP) rail. Commercial Metals (Metals), Delaware corporation principal place business buying selling steel goods. instituted action United States Northern Texas recover three cars cobble 1974 Detroit, Mich., Alhambra, Cal. 3 consigned Penn Central Company, initial carrier,1 ICC. included might sign. That reads: "Subject Section 7 Conditions, if recourse following statement: charges."2 In each instance, Metals, clause. however, already received prior shipment. Tr. Oral Arg. 5, 6, 24-25; Brief 21. 4 tendered at Detroit 11, 1974, Carco Steel Corporation (Carco), Alhambra. SP released car 25 delivery. On same day, mailed $4,634.11, correct amount patron never applied credit. before made Carco. Nevertheless, no investigation Carco's 5 second took May 2, two 16. time, respective amounts $5,761.79 $2,383.67 larger correct, smaller check should have been $3,283.66 thus $900 short.3 20, 6 August efforts proved fruitless, California state court. Attempts serve summons complaint unsuccessful. December 17, 1976, 30 months shipments, notified failure who provision $13,679.56 total satisfaction primary shipments. notice collected When forthcoming, present federal 8 record, stipulated parties, Metals. It found accord applicable tariffs part those paid. App. 22. "Absent defenses," then, carrier. Id., 23. rejected Metals' claim passage time barred SP's recovery; lacked until 1976 paid, noted period limitation years making locate receive payment. 9 Court, went hold 49 U.S.C. 3(2).4 See CFR pt. 1320 (1981). persuaded suggestion avail itself contractual opportunity exoneration afforded concluded: "The loss sustained [SP] due entirely own fault negligence take proper precautions . I think fundamentally unfair inequitable defendant gross plaintiff." 24. Accordingly, judgment entered 26. 10 Fifth Circuit affirmed judgment. 235 Like acknowledged absence defense, must held 236. felt, payment-before-delivery barrier consignor.5 implementing regulation,6 which modified statutory mandate allowing up days, nevertheless "quite strict." Ibid. could assert extension adequate excess regulation. "Under these circumstances, we are compelled available [Metals], 239. 11 Because conflict decided cases,7 granted certiorari. 454 1052, 595, 70 587 II 12 Since 1919, use interstate domestic re Bills Lading, 52 I.C.C. 671 (1919), modified, 64 357 (1921), 66 63 (1922).8 carrier; conditions bind shipper connecting carriers. & R. Co. v. Leatherwood, 250 478, 481, 39 517, 518, L.Ed. 1096 (1919). "Each [term] effect force statute, affected notice." Unless stated: 13 being one whom originally he specifically exempted provisions or transported such circumstances clearly indicate exemption him, entitled look his I.C.C., 721. 14 rule changed over time. Recently, again observed consignor's "is governed parties interpreting contract." C-G-F Grain Atchison T. S. F. Co., 351 710, 712 (1976). 15 Clearly, question. Just clearly, position effectuate release executing Signing would operated excuse liability. By Illinois Baltimore O. 320 508, 513, 322, 325, 88 259 (1944); New York, N. Fruit Growers Exchange, 125 Conn. 241, 254-255, A.2d 353, 359, cert. denied, 308 567, 60 79, 84 476 (1939). also Louisville Nashville Iron 265 59, 65-67, 44 441, 442, 68 900 (1924). 16 perhaps appropriate note right duty services performed. 65-66, n. 3, S.Ct., 442 3. Pitts- burgh, C. St. L. Fink, 577, 581-583, 40 27-28, 1151 strict adherence standards line historic purpose Act—to achieve uniformity eliminate discrimination favoritism plagued railroad industry late 19th century. Midstate Horticultural Pennsylvania 356, 361, 128, 130, 96 (1943); ICC, 200 391, 26 272, 276, 50 515 (1906). 17 Both correctly much, indeed, conceded 11; 31. III 18 concedes releasing violated regulation regard least 4, 17. 1320.1 (1981), quoted supra. question, properly case.9 19 A. comprehensively regulated shippers Yet neither statute promulgated, 3(2), Indeed, extent spoken "[A] section [a carrier], itself, consignor's] responsibility undercharges." Atchison, 712. Although "prohibits delivering thereon[,] contains shielding dictum, suggested [under lading] turn act violated." 20 We view administrative construction aids our determination congressional intent. "[L]egislative always result lack prescience; may instead betoken permission or, perhaps, considered abstention caution temper creativity face legislative regulatory silence." Ford Motor Credit Milhollin, 444 555, 565, 100 790, 797, 22 (1980). so here. agency historically engaged comprehensive industry's agency's regarding deemed significant. 21 B. Prior 1918, Government regulate Wartime revealed, general requirement working capital carriers avoid among recipients. Cf. Ex parte MC-1, M.C.C. 365, 374 (1937). World War, Congress returned railroads private control, 405 1920, 41 Stat. 479, added paragraph (2) Act. adopted 1920 amended permitted extend limited nondiscriminatory basis. remained largely unchanged Until 1971, seriously precluded Instead, estoppel inconsistent themselves. Courts concerned permitting selective estoppels defeat antidiscriminatory weaken structure See, e.g., Western Maryland Cross, W.Va. 666, 673, 123 S.E. 572, 575 (1924); Chicago Junction Duluth Log 161 Minn. 466, 469, 202 N.W. 24, (1925); East Freight Lines Franklin County Distilling 184 S.W.2d 505, 507 (Tex.Civ.App.1944). Despite textual historical support concluded raise fully absolute relied what regarded "a closely analogous situation," F.2d, 237, presented Consolidated Freightways Corp. Admiral Corp., 56 (CA7 1971). examination, Seventh plainly distinguishable one. there marked "prepaid." Relying upon explicit representation prepayment, paid shipper-consignor. fact, extended within allowed out business, turned Appeals, divided vote, estopped. 23 differs four crucial respects. First, Admiral, material misrepresentation prepayment. here, contrast, charged solely observe Second, case, consignee-defendant full consignor. Had awarded relief "require[d] innocent defray exactly double contemplated tariffs." 65 (Stevens, J., concurring). Here, charges; thus, award creates possibility enforcing 24 Third, grounds detrimental reliance misrepresentation. offered "additional intervention principles equity." (majority opinion). knew of, detrimentally on, violation. Fourth, most significant, defendant-consignee means course, defendant-consignor protected completely simply signing Finally, Commission's recognize technical. Thousands railcars every day country's railroads. Association American Railroads, Yearbook Railroad Facts (1981) (approximately 62,000 deliveries per day). Almost inevitably, some will noncredit patrons, sent late, accounts specified A 1966 study Bureau Enforcement almost 15,751 examined overdue half delinquent Regulations Payment Rates Charges, 326 483, 485 (1966).10 appraising data, agreed "the evidence establishes many However, unable conclude record rigid practical desirable solution. [T]here reasons beyond correction rules, where unexpected peak workloads, controversies due, additional information needed weights evaluations, standard office procedures process change, temporary cash flow problems occur, becomes necessary validity persons. Stringent destroy flexibility meet nature." 489-490. 1980, proposed repealing altogether, noting "apparent, widespread noncompliance periods limits realistic situations they apply." Nos. 73, 143, 170, 45 Fed.Reg. 31766. appears implied just responsible administering pronouncing them unrealistic. prospect raised recovering even fails clause, possibly unavoidable rules. obvious consequence discourage [carriers] extending operation rather difficult doubt." Bruce's Juices, Inc. Can 330 743, 753, 67 1015, 1019, 91 1219 (1947). Ironically, their currently manner suffer result. 27 argues ruling places "in unrealistic incapable doing wrong" therefore "no incentive [for carriers] improve inefficient careless practices." 12. claims issue here occurred complied obligations answer practices. includes power cease-and-desist order, see Shaw Warehouse 609, 633-634, 637 (1959), appeal dism'd sub nom. States, 186 F.Supp. 29 (ND Ala.1960); seek federal-court injunction requiring All-American, Inc., 505 1360 1974); bring $5,000 civil forfeiture, 16(8) 11901(a) (1976 ed., Supp. III), knowing order Commission, see, 385 (CA10 1967), denied Denver G. W. 391 919, 1805, 656 (1968); 293 (ED Pa.1969). 28 Furthermore, reading cited cases reveals often require courts conduct factual inquiry violate "credit defense" requires forfeit nature violation.11 inflexible approach disenables considering intent, degree shipper's fault, enforcement existing permissible subjective factors deciding enforce advances number "double payment" defense. Transp. Campbell Soup 455 (CA8 1972); 1971); Farrell Lines, Titan Industrial 306 1348 (SDNY), aff'd, 419 835 (CA2 1969), 397 1042, 90 1365, 653 (1970); Valley Frosted Foods 178 Pa.Super. 217, 116 (1955). To sure, speak equity terms. But none involved misrepresentation, false assertion prepayment find later sued constitute category stand placement duplication party. As above, similar selected consignee. while services. pursued remedies turning run finally 31 We, condone slipshod governing specific clear. placed permit nullify enforceability do believe encourage compliance Railroads real economic incentives consignees insofar able. best left resolution thinks proper. 32 erred Such "equities" exist virtue delay magnitude overcome time-honored "act omission (except running limitations) [will] estop preclude person therefor." U.S., 65, 442. 33 34 ordered. moved lines Central, Louis Southwestern Railway (an subsidiary), SP. Pursuant interline agreement, proportionate shares earned Conditions Bill Lading reads pertinent part: owner average, any, accruing said property; but, except instances lawfully authorized so, deliver relinquish possession destination property covered tariff rates thereon stipulates, signature, space contrary stipulation, payment, hereinafter provided) term 'delivering carrier' line-haul ultimate delivery." (Emphasis added.) suggests difference occasioned transposition digits. No explanation one-cent variance offered. 1978, revised recodified Pub.L. 95-473, 92 1337, 10101 et seq. III). transactions refer form otherwise specified. "No prescribe govern settlement prevent unjust discrimination. ." taking sufficient assure part, undertake persons herein called shippers, days (or retention retard prompt equipment station facilities) set forth part." (emphasis added). agreement decision Brown Atcon, 144 Ga.App. 301, 241 S.E.2d (1977), Transport 439 1014, 99 626, 58 687 (1978) (with Justices dissenting). reached cases. Pacheco Int'l 488 (CD Cal.1979), Marcelletti, 256 Mich. 411, 240 (1932). There disagreement, too, asserted various Compare, Aero Mayflower Transit Hofberger, Ark. 532 759 (1976), Westover Van 154 865, 270 74 (1980) (defenses upheld), Bartlett-Collins Surinam Nav. 381 546 1967); Red Ball McCarthy, N.H. 514, 323 897 (1974), 420 930, 95 1131, 43 401 (1975); 572 Arizona Feeds Ariz.App. 346, 519 P.2d 199 (1974) recognized). division prompted commentator ago "striking decisions concerning consignors despite need commercial transactions." Note, Carriers: Lading: Liability Parties Prepaid Shipment, 38 Cornell L.Q. 596, 603 (1953). several times since 1922, 245 527 (1941), 1921 1922 modifications relevant now asserts, well, actions supra, constituted complete abrogation 11. answers argument Appeals. Reply 4. rely theory grant relief, because certiorari consider breach-of-contract claim, decline address it. methodology questioned roads' figures, showed 445,984 collectible items accrued during investigation, 10,000 resulted violations. 486. facts illustrate arise ventures create law highly technical field. rulings car, charge, demand acceptance practice industry. Fullerton Lumber Chicago, M., P. 282 520, 522, 51 227, 228, 75 502 (1931); 1320.13 possible insistence "precautions true, understated $900, noted, 1320.5 (carrier balance event undercharges). clear safely deferred car. lien covers immediate 105. Atlas Colombian Land 358, 361 1900). Once cars, serious suspicion about financial health withhold risking conversion (carrier's demand).

Category: 7