Court Opinion

ID: 8915561
Source: CourtListenerOpinion
Date Created: 2022-11-27 04:53:49.812062+00
Date Added: 2024-06-11T17:08:56.900497
License: Public Domain

MERRITT, Circuit Judge,
dissenting.
I disagree with the Court’s conclusion that the reasoning employed by the ICC in denying relief from the penalty demurrage charges was not arbitrary or capricious.
The Commission stated that its refusal to consider the reasonableness of refunding the penalty portion of the demurrage charges was based on “longstanding Commission policy” which regards an average agreement as a concession from straight demurrage in favor of the shipper. The shipper under an average agreement, by releasing cars prior to the expiration of free time, can earn credits which partially offset debits received when cars are kept beyond free time. Under a straight demurrage agreement, no provision is made for offsetting debits with credits. According to this “longstanding policy” governing average contracts, the quid pro quo given in exchange for the right to offset debits is that no additional relief from the demurrage charges for delay caused by weather interference is permitted. A shipper under a straight demurrage agreement, but not un*175der an average contract, may recover the penalty portion of demurrage if he exercised due diligence and was not the proximate cause of the delay.
I do not doubt that the above-described policy is “long-standing,” but I dissent because I find little or no consistency in its application. In a number of cases the Commission has considered the appropriateness of relief from penalty demurrage, applying the proximate cause and due diligence tests, even though the agreement in question was an average agreement. In Davison Chemical Co. v. New York Central R.R. Co., 296 ICC 744 (1955) and United States Trucking Corp. v. New York N. H. & H. R.R. Co., 274 ICC 552 (1949) the Commission found that the complainant exercised due diligence and was not the proximate cause of the delay and granted relief from the demurrage charges in full or in part. In Ford Motor Co. v. Chesapeake & O. Ry. Co., 311 ICC 559 (1960) the Commission specifically stated that the due diligence and proximate cause tests were satisfied and that relief from penalty demurrage was appropriate; however, no relief was granted because the Commission found that the demurrage charge did not include a penalty portion. In International Paper Co. v. Bangor & A. R.R. Co., 279 ICC 449 (1950); Federal Chemical Co. v. New York Central R.R. Co., 308 ICC 386 (1959); and Ormet v. Illinois Central R.R. Co., 341 ICC 649 (1972) the Commission denied relief, finding that the due diligence and proximate cause tests were not satisfied. In each of these cases an average agreement was in effect; however, in none of these cases did an average agreement foreclose consideration of the reasonableness of penalty demurrage. It is apparent that the Commission has one line of cases which prevent consideration of the reasonableness of weather related penalty demurrage charges under an average contract and another line of eases in which the existence of an average contract is not considered a bar to consideration of the reasonableness of penalty demurrage.
In its decisions in the instant cases the Commission did not distinguish — in fact, did not even acknowledge — this second line of cases. In its brief, however, the Commission dismisses these cases as “an aberration from the mainstream of Commission precedent.” (Respondent brief at 34). I merely conclude that such unexplained “aberrations” constitute arbitrary and capricious behavior by a governmental agency. See, e.g. Atchison, T. & S.F. Ry. Co. v. Wichita Board of Trade, 412 U.S. 800, 808-09, 93 S.Ct. 2367, 2375-76, 37 L.Ed.2d 350 (1973); Ohio Fast Freight, Inc. v. United States, 574 F.2d 316, 319 (6th Cir. 1978). I would remand the case to the Commission for further consideration in light of the clear conflict that exists in the Commission’s treatment of the issue.