Court Opinion

ID: 9471788
Source: CourtListenerOpinion
Date Created: 2023-08-05 03:41:17.95198+00
Date Added: 2024-06-11T17:42:35.017763
License: Public Domain

JOHNSON, Circuit Judge,
dissenting:
I do not agree that Union Camp’s consolidation of cargoes and renegotiation of deadfreight penalty fees did not constitute unjust or unfair devices under Section 16 of the Shipping Act, and I therefore dissent from the decision of the majority.
A central policy concern behind the Shipping Act of 1916 was the prohibition of discrimination in the rates that common carriers charge to the shippers whose cargo they transport. Companía Anonima Venezolana de Navegacion v. A.J. Perez Export Co., 303 F.2d 692, 696 & n. 11 (5th Cir.1962). The Shipping Act and all of its amendments reflect this “rigorous policy which ... prohibits] not only discrimination but the possibility of it....” Id. (footnote omitted). Thus, common carriers such as Troll are required to file with the Federal Maritime Commission (FMC) tariffs that set forth the rates and charges for specific goods carried between specific ports. 46 U.S.C.A. *1067§ 817(b)(1). Each tariff is required to reflect “the one and only rate to be charged and collected for the specified transportation service.” United States v. Stephens Brothers Line, 384 F.2d 118, 120 (5th Cir. 1967) (footnote omitted). A common carrier and shipper who wish to contract for a special service or rate can legally do so only if the carrier publishes the special service or rate in its tariff, thus making it equally available to all shippers. Kansas City Southern Railway Co. v. Carl, 227 U.S. 639, 653, 33 act 391, 395, 57 L.Ed. 683 (1913).
The policy against rate discrimination is evident in the prohibition contained in Section 16 of the Shipping Act, 46 U.S.C.A. § 815, against the use of any unjust or unfair device to obtain or attempt to obtain water carriage at less than the applicable rate. See Prince Line Ltd. v. American Paper Exports, Inc., 55 F.2d 1053, 1055 (2d Cir.1932) (Hand, J.) (primary purpose of Section 815 is maintenance of equality of treatment between shippers). The policy concern, again, extends not only to discrimination, but also to the possibility of discrimination. The decision of the majority in this case, that the lower shipping rate achieved by Union Gamp’s consolidation of cargo under a tariff that did not explicitly permit consolidation and its renegotiation of deadfreight penalties without a corresponding revision in Troll’s filed tariff did not violate Section 815, does not adequately protect against the possibility, if not the reality, of rate discrimination.
An unjust or unfair device under Section 815 must employ some fraud or concealment. Capital Transportation, Inc. v. United States, 612 F.2d 1312, 1323-24 (1st Cir. 1979). The majority finds no concealment from the consolidation of cargo because, in its effort to find shipments for consolidation, Union Camp contacted some of the members of its trade association. Disclosure to some shippers, however, does not mean that no concealment has occurred. When the law requires that tariffs filed with the FMC reflect the rate actually charged for specified transportation services, and when the tariff does not indicate whether combined cargoes are permitted, then, when cargoes are combined to achieve the lower rate, concealment is avoided only by the filing of an appropriate tariff revision to reflect the amended agreement. In the absence of a filed revision, the consolidation involves concealment and constitutes an unjust device under Section 815. The same principles apply when the amended agreement between shipper and carrier provides for a renegotiation of deadfreight penalties.
Thus, by means of the undisclosed consolidation of cargo and renegotiation of deadfreight penalties, Union Camp obtained ocean carriage for its cargo at a rate lower than otherwise applicable, in violation of 46 U.S.C.A. § 815. Accordingly, I dissent from the decision of the majority.