Union Pacific Railroad v. United States

490 F.2d 1385, 203 Ct. Cl. 368, 1974 U.S. Ct. Cl. LEXIS 246
CourtUnited States Court of Claims
DecidedJanuary 23, 1974
DocketNo. 316-68
StatusPublished
Cited by5 cases

This text of 490 F.2d 1385 (Union Pacific Railroad v. United States) is published on Counsel Stack Legal Research, covering United States Court of Claims primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Union Pacific Railroad v. United States, 490 F.2d 1385, 203 Ct. Cl. 368, 1974 U.S. Ct. Cl. LEXIS 246 (cc 1974).

Opinions

Bennett, Judge,

delivered the opinion of the court:

This transportation case comes before us from the Trial Division on a decision by Trial Judge Willi. We adopt his findings of fact, with modifications, but reach a different legal conclusion for reasons which hereafter appear, and con-[370]*370elude that plaintiff is entitled to judgment and that the counterclaim should be dismissed.

Plaintiff, Union Pacific Eailroad Company, a Utah corporation, filed this suit on October 16,1968, to recover unpaid demurrage charges of $5,385 which it had billed the Commodity Credit Corporation (CCC), an agency of the United States, on carlot shipments of wheat hauled by plaintiff from various Kansas points of origin to Denver, Colorado, during July and August 1966. On January 17, 1969, the United States, filed its answer denying liability on the claim asserted and stating a counterclaim of $7,880, plus interest. The counterclaim concerned demurrage charges assessed against CCC on wheat consigned to CCC at Denver and hauled there by plaintiff in July and August 1964.

For purposes of this decision, the court concludes that the facts respecting defendant’s counterclaim are substantially identical to the facts respecting plaintiff’s claim, except that the counterclaim shipments were in July and August 1964 and the demurrage charges, totaling $7,880, were paid by the CCC.

In the years in suit, unprocessed wheat was valued in the market place on the basis of federal grade and protein content.1 In a given transaction these value indices were determined by laboratory analysis of a sample drawn from the bulk quantity of wheat involved. Since laboratory facilities under authorized management and supervision were essential to these determinations, trade practice found rail carriers typically affording carlot shippers of unprocessed wheat in-transit inspection privileges so that official grade and protein analysis could be conducted at relatively few focal points of rail movement rather than at myriad points of origin and final destination. Denver served as such a point for the large volume of wheat grown in Kansas in 1964 and 1966.

Because of its route structure, plaintiff carried the bulk of wheat that came into Denver by rail in the mid-1960’s. Peak movement occurred each year during July and August in the [371]*371wake of harvest. The temporary congestion, of rail facilities inherent in this seasonal pattern of wheat traffic was increased in 1964 and 1966 ‘because in July and August of those years CCC routed approximately 10 million bushels of wheat through Denver to Portland, Oregon, for export sale to Japan. Most of this grain originated along plaintiff’s lines.

Plaintiff had an inspection yard in the Denver terminal area with a capacity of nearly 200 cars during the years in suit. Under normal traffic conditions plaintiff’s cars carrying CCC wheat under a Denver 'billing were brought into the terminal area and placed on plaintiff’s inspection tracks. Plaintiff would notify the Denver Grain Exchange (DGE), the agent of the CCC in Denver, of the arrival of each individual car. The DGE would then send one of its inspectors to the yard to draw a grain sample for grade and protein analysis at DGE’s Denver laboratory. When the test results were available, the DGE would telephone them to the CCC office in Kansas 'City and that office would telephone disposition instructions to plaintiff at Denver. Thereafter, the car would proceed to its final destination. In due course, the CCC Kansas City office would confirm in writing its telephone advice to plaintiff.

In the months of July and August 1964 and 1966, plaintiff’s grain traffic into Denver was so great that its inspection yard was unable to accommodate all of the incoming CCC cars. In these circumstances, plaintiff placed many cars at hold points at distances ranging from '3 to 55 miles short of the Denver terminal area. In some instances these cars overstayed the “free time” allotted by tariff for inspection purposes, and the demurrage charges in suit here were assessed.

The arrangement whereby incoming grain cars were placed at hold points short of Denver when the Denver inspection tracks were filled had been agreed upon 'by plaintiff and the DGE management long prior to the time periods in suit. This practice had been allowed for more than 20 years prior to this suit. In agreeing to inspect cars at such outlying points, DGE officials expected that plaintiff would use this accommodation only when space was not available in the Denver terminal area. Though it appears that plaintiff did not always limit its use of this procedure to instances of yard con-[372]*372gestión, neither the COC nor the DGE ever chose to mate a formal complaint to plaintiff or the IOC regarding such deviations.

Within 24 hours of arrival at the Denver terminal area or at a hold point short of the Denver terminal of a car on which the disputed demurrage was imposed, plaintiff mailed a written notice of arrival to “Commodity Credit Corporation, Denver, Colorado.” Plaintiff also prepared a bulletin notice respecting every car of CCC wheat consigned to Denver regardless of whether the car was placed in the terminal area or was stopped short at a hold point. These bulletin notices listed the number and location of all cars received in the Denver area since the previous bulletin notice. Though the written notices were all returned to plaintiff because CCC had no mailing address in Denver, the bulletin notices were received by the DGE inspectors daily, except Saturday and Sunday, before 7 a.m. As DGE was CCC’s authorized agent in Denver, notice to it was the same as notice to the CCC. An excerpt from a January 7, 1954 CCC letter indicated that CCC accepted bulletining as adequate notice of car arrivals at stations, such as Denver, where official inspection was performed :

This office has always accepted bulletining of cars of grain, seeds or soybeans billed to CCC for inspection and disposition as due notice of arrival at stations in the states of Missouri, Kansas, Nebraska, Colorado and Wyoming, where bulletining and official inspection is provided. However, our attention has been directed to some instances where carrier agents cannot locate on file a written notice from this office of acceptance of bulletining as notice of arrival as prescribed in Rule 2 of Demur-rage Tariff 4-A.
Therefore, in order to insure that the agents of the individual carriers at all stations concerned have a proper record on file, this letter shall constitute notification that this office accepts the bulletining of cars described above as due and adequate notice of arrival at stations where official inspection is performed.

Accordingly, this court concludes that the bulletin notice given by plaintiff and received by the DGE constituted good and adequate notice for purposes of this case.

[373]*373When a car was stopped at a hold point outside Denver, the inspector and the DGE followed the same procedure as that employed in the case of 'CCC cars brought into the Denver terminal area for inspection. Except for the limited additional travel time to and from the various hold points, the CCC was not substantially prejudiced by the fact that cars consigned to Denver were stopped short of inspection at the terminal itself.

The single question confronting the court in this case concerns whether or not the demurrage charges assessed by plaintiff were proper.

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490 F.2d 1385, 203 Ct. Cl. 368, 1974 U.S. Ct. Cl. LEXIS 246, Counsel Stack Legal Research, https://law.counselstack.com/opinion/union-pacific-railroad-v-united-states-cc-1974.