United Services Automobile Association v. Paul Arpin Van Lines, Inc.

652 F.2d 198, 1981 U.S. App. LEXIS 12054
CourtCourt of Appeals for the First Circuit
DecidedJune 23, 1981
Docket80-1795
StatusPublished
Cited by4 cases

This text of 652 F.2d 198 (United Services Automobile Association v. Paul Arpin Van Lines, Inc.) is published on Counsel Stack Legal Research, covering Court of Appeals for the First Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
United Services Automobile Association v. Paul Arpin Van Lines, Inc., 652 F.2d 198, 1981 U.S. App. LEXIS 12054 (1st Cir. 1981).

Opinion

COFFIN, Chief Judge.

The question is whether the government and a trucking company may, in the absence of an authorizing order from the Interstate Commerce Commission, enter into a contract limiting a trucker’s liability for its damage to government cargo in return for reduced trucking rates to the government. We decide they may so contract and affirm the judgment of the district court.

I

Lt. Col. James F. Sherry, U.S.M.C., who is not a party to this suit, was reassigned to duty from Concord, California to Newport, Rhode Island. He therefore was eligible to be moved at government expense. See 37 U.S.C. § 406(b) (uniformed service members entitled to transportation of household effects in connection with changes of station). Col. Sherry applied for government shipment of his belongings on DOD Form 1299. A government transportation officer then contracted with Suhr Transport — apparently an organization with which appellee is an associated member trucking firm — for the carriage of Col. Sherry’s household effects. A government bill of lading was issued on June 15, 1977, which purported to set a ceiling on appellee’s liability for damage to these effects of 60 cents per pound.

The parties agree that this bill of lading incorporated a preexisting ICC filing called “Military Rate Tender No. 1-H”, ICC No. *199 35 (“MET 1-H”), together with its subsequent amendments. This filing states

“[t]his tariff represents an exception to applicable rates on file with the Interstate Commerce Commission for the account of carriers named herein and names reduced rates under authority of Section 22 of the Interstate Commerce Act, 1 applicable to a Government Bill of Lading .... ” [Emphasis added].

The tender also purports to specify that shipments moving on government bills of lading “will be deemed released to a value of 60 cents per pound per article, unless otherwise specifically annotated thereon.”

It is stipulated that Col. Sherry knew appellee was taking only this limited responsibility for his possessions. He signed DOD Form 1797, a “Personal Property Counseling Checklist”, which included two entries entitled “[c]arrier, storage firm & Govt liability for loss or damage” and “[^imitations on Govt liability”. He, however, was not forced to bear the remaining risk of loss himself. He had the opportunity to ship at rates which provided for a less limited carrier liability. Col. Sherry also was aware that he had a statutory right to claim reimbursement from the government for up to $15,000 of any uninsured loss. See 31 U.S.C. § 241. He in fact decided to augment this statutory protection by purchasing from the appellant insurance company a $30,000 policy covering the transport of his belongings. Appellant concedes that its rates for this insurance were calculated on the assumption that appellee’s liability for any damaged cargo would be limited to 60 cents per pound.

On July 1, 1977, Col. Sherry’s belongings — valued in excess of $30,000 — were destroyed by fire in the course of transit. Appellant paid Col. Sherry $30,000 under its policy. It obtained from him a subrogation agreement giving it the right to proceed against appellee. Appellant then sued ap-pellee for $30,000 and, after answer and stipulations of fact, moved for summary judgment in that amount. Appellee admitted liability for $5916 — the amount if the 60 cent per pound limit were effective — but moved for summary judgment in its favor regarding additional sums. The district court granted the appellee’s motion and denied the appellant’s motion.

II

Appellant claims that the 60 cent per pound cargo liability limitation, that all parties to the contract thought protected appellee, in reality does not validly do so. The argument is that the limitation does not comply with 49 U.S.C. § 20(11). In relevant part this section voided liability limitations by common carriers, except with respect to property

“concerning which the carrier shall have been ... expressly authorized or required by order of the Interstate Commerce Commission to establish and maintain rates dependent upon . .. the released value of the property, .. . and any tariff schedule which may be filed with the commission pursuant to such order shall contain specific reference thereto 49 U.S.C. § 20(11) [emphasis added].

MRT 1-H and its amendments, which together establish the liability limit here at issue, neither were filed pursuant nor made specific reference to an ICC order. Appellant concludes that appellee must be liable for the whole cargo loss since failure to comply with section 20(11) voids the appel-lee’s attempt to limit its responsibility.

This appellant insurance company made the same claim to a panel of the Third Circuit one year ago. In a careful and scholarly opinion gathering unanimous support, Judge Gibbons rejected it and found a *200 similar liability limitation to be effective. 2 Howe v. Allied Van Lines, 622 F.2d 1147 (3d Cir.), cert. denied, 449 U.S. 992, 101 S.Ct. 528, 66 L.Ed.2d 289 (1980). To summarize, the Howe court found that section 20(ll)’s application is limited by section 22. 3 It reasoned that the “early history of section 22 compels the conclusion that Congress intended to preserve the federal government’s power to bargain with carriers, or to impose upon carriers preferential rates and terms — free of the antidiscrimination prohibitions of the Interstate Commerce Act, and free of regulation by the Commission which the Act created.” Id. at 1154. Section 20(11), on the other hand, was in relevant part designed to prevent the rate discrimination that threatened when private parties were allowed to contract for special rates based on declared value. Id. at 1157. Section 20(11) thus did not “intend to modify the longstanding policy that the federal government was not bound by the antidiscrimination principle.” Id. at 1158. Since “section 20(11) itself recognized the interrelationship between the declared value of property and the rate charged for carriage”, id., section 22’s exception for reduced government shipping rates concomitantly excepted from section 20(ll)’s requirements provisions for liability limitations in government bills of lading. Howe therefore decided that the requirements of section 20(11) have no application to cases, like this one, that involve government bills of lading. 4

Appellant criticizes Howe’s reasoning on several grounds. First it claims that Howe

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Bluebook (online)
652 F.2d 198, 1981 U.S. App. LEXIS 12054, Counsel Stack Legal Research, https://law.counselstack.com/opinion/united-services-automobile-association-v-paul-arpin-van-lines-inc-ca1-1981.