United States v. Key Line Freight, Inc.

481 F. Supp. 91, 1977 U.S. Dist. LEXIS 16965
CourtDistrict Court, W.D. Michigan
DecidedMarch 10, 1977
DocketNo. G74-122 Cr
StatusPublished
Cited by1 cases

This text of 481 F. Supp. 91 (United States v. Key Line Freight, Inc.) is published on Counsel Stack Legal Research, covering District Court, W.D. Michigan primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
United States v. Key Line Freight, Inc., 481 F. Supp. 91, 1977 U.S. Dist. LEXIS 16965 (W.D. Mich. 1977).

Opinion

OMNIBUS OPINION

FOX, Chief Judge.

Defendant Key Line Freight, Inc., has been charged in a 28-Count Information with giving rebates to shippers in violation of 49 U.S.C. § 322(c) which provides:

“Any person, whether carrier, shipper, consignee, or broker, or any officer, employee, agent, or representative thereof, who shall knowingly offer, grant, or give, or solicit, accept, or receive any rebate . or by any other means or device, shall knowingly and willfully assist, suffer or permit any person or persons, natural or artificial, to obtain transportation of passengers or property subject to this part for less than the applicable rate, fare, or charge . . . shall be deemed guilty of a misdemeanor and upon conviction thereof be fined not less than $200 nor more than $500 for the first offense . . . .”

The information alleges in each count that the defendant carrier furnished an employee of a particular shipper an expense-paid trip to the Kentucky Derby on May 6, 1972. The alleged rebate, being the value of the expense-paid trip, varied in each count from $148.90 to $448.60. Each count alleged that these amounts were rebates on a particular shipment made at some time after May 6, 1972. The scheduled tariff charge for each of said shipments is set forth in each count and varies in amount from $8.65 to $419.47.

Count One is fairly representative of the 28 counts:

“On or about May 6,1972, in the Western District of Michigan Key Line Freight, Inc., defendant, a motor carrier of property subject to Part II of the Interstate Commerce Act (Title 49, Chapter 8, U.S.Code) did, in violation of 49 U.S.Code 322(c), knowingly and unlawfully offer, grant and give a rebate to SpeeDee Check Out Systems, Inc., a shipper, .in that said defendant furnished George J. Glupker, Jr., an employee of said shipper, with a valuable consideration in the amount of $148.90 through the device of an expense paid trip to the Kentucky Derby. This constitutes a rebate and offset against the lawful freight charge of $232.73 specified in the tariff of the defendant on file with the Interstate Commerce Commission. This freight charge was collected by the defendant from SpeeDee Check Out Systems, Inc., on or about May 18, 1972, for the transporta[93]*93tion of crates counters N.O.I. performed by the defendant on or about May 18, 1972, by motor vehicle over the public highways from Grand Rapids, Michigan, to Bellvue, Nebraska.”

Defendant having waived its right to jury trial, and United States consenting to that waiver, trial was held before the Court on October 19, 1976.

Previous to trial, defendant moved to dismiss the information upon the following grounds: (1) that the allegations do not constitute a violation of the statute since bare and unrelated entertainment without a causal connection to tariff charges or traffic tendered does not amount to a rebate, (2) that the constitutional rights of the defendant are violated in that the information requires a broadening of the term “rebate” which is improper, and (3) that the statute and administrative interpretations are vague and fail constitutionally. This motion to dismiss was denied in an opinion entered October 8, 1975. Because many of the issues raised by defendant in the motion to dismiss were raised again by defendant at trial, the opinion of this Court denying that motion is hereby incorporated in this Omnibus Opinion and attached hereto as Appendix A.

On the date of trial and before the introduction of testimony, defendant renewed its motion to dismiss the information. The basis for this motion was that the information fails to allege that defendant’s actions were a willful violation of 49 U.S.C. § 322(c). Defendant apparently grounds this contention upon the fact that § 322(c) requires that a “device to obtain transportation of passengers or property subject to this part for less than the applicable rate, fare, or charge” must be done “knowingly and willfully” and that one phrase of each Count of the Information states that the alleged rebate was accomplished “through the device of an expense paid trip to the Kentucky Derby.” Defendant, however, ignores the fact that the information alleges that defendant did “knowingly offer, grant and give a rebate” and that the Derby trip “constitutes a rebate and offset against the lawful freight charge.” In fact, defendant’s trial brief admits that, in light of the statutory language, the activity alleged is the grant of a rebate. Defendant’s Trial Brief at 9. As I stated in my opinion denying defendant’s motion to dismiss, the information as it stands is sufficient. The government need prove beyond a reasonable doubt only that defendant did “knowingly offer, grant, or give” a rebate. Willfulness need not be shown. For this reason, defendant’s motion to dismiss the information was denied.

The parties stipulated to a number of facts. A copy of that stipulation is attached hereto as Appendix B and is hereby made a part of this Omnibus Opinion. Called as witnesses at the trial were John F. Rauch, Sales Manager of Key Line at the time of the Derby trip; Daniel B. Wallace, Secretary-Treasurer of W-B Advertising, formerly Wallace-Blakeslee Advertising, which is defendant’s public'relations firm and which set up the Derby trip; and Daniel A. Darling, Vice President of the defendant. Additionally, the government offered the testimony of Nicholas F. Williams, a transportation rate tariff examiner for the Interstate Commerce Commission. Mr. Williams was stipulated by the defendant to be an expert witness and testified that an examination of defendant’s tariff schedules at the time of the Derby trip show no application to include the Derby trip in an increase in tariff.

Stated simply and taken in the light most favorable to the defendant, the testimony of witnesses Rauch, Wallace, and Darling was as follows: That for a number of years defendant had had problems obtaining traffic on its Michigan to Louisville route; that traffic from Louisville had always exceeded traffic to Louisville, requiring defendant to “dead-head” trucks to Louisville; that advertising and visits by salesmen failed to increase defendant’s share of the Michigan-Louisville market; and that defendant’s public relations firm devised the Kentucky Derby trip as a promotional activity. Defendant’s representatives also testified that there was no intent thereby to give, grant, [94]*94or offer a rebate to the respective shippers; that the trip was not intended to reward shippers for past, present, or future traffic; and that the trip was not conditioned on past or present traffic with defendant. Assuming all this to be true, I am still compelled to find that defendant did “knowingly offer, grant or give,” rebates in violation of 49 U.S.C. § 322(c) and that the government did prove these violations beyond a reasonable doubt.

As I stated in my opinion denying defendant’s motion to dismiss the information:

“The cases hold that the Elkins Act was to prevent any and all means that might be resorted to to obtain or receive concessions and rebates from the published tariffs. Armour Packing Co. v. United States, 209 U.S. 56, 28 S.Ct. 428, 52 L.Ed. 681 (1907);

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481 F. Supp. 91, 1977 U.S. Dist. LEXIS 16965, Counsel Stack Legal Research, https://law.counselstack.com/opinion/united-states-v-key-line-freight-inc-miwd-1977.