Mercker, A. E., executive secretary, Vegetable Growers Association of Page 84 National Council of Farmer Cooperatives. Quin, Joseph E., transportation counsel, National Grange, June 24, 1969. Story, William S., vice president, Institute of Scrap Iron & Steel, Inc.. Walker, Norman, general traffic manager, Bunge Corp. Washer, Charles A., American Retail Federation, letter of June 5, 1969__ Weitzel, Frank H., Assistant Comptroller General of the United States, letter of February 24, 1967-.. RECOVERY OF A REASONABLE ATTORNEY'S FEE IN CASE OF SUCCESSFUL MAINTENANCE OF AN ACTION FOR RECOVERY OF DAMAGES SUSTAINED IN TRANSPORTATION OF PROPERTY TUESDAY, JUNE 10, 1969 U.S. SENATE, COMMITTEE ON COMMERCE, SUBCOMMITTEE ON SURFACE TRANSPORTATION, Washington, D.C. The subcommittee met at 10:35 a.m. in room 5110, New Senate Office Building, Hon. Vance Hartke (chairman of the subcommittee) presiding. Present: Senators Hartke, Cannon, and Pearson. OPENING STATEMENT OF THE CHAIRMAN Senator HARTKE. Good morning. The hearing this morning is for the purpose of reviewing S. 1653, which was introduced by the chairman of the committee, Senator Magnuson, and was cosponsored by Senator Hart, Senator Pearson, and myself. The bill proposes to amend the Interstate Commerce Act, with respect to recovery of a reasonable attorney's fee in case of successful maintenance of an action for recovery of damages sustained in transportation of property. An identical bill was introduced in the 90th Congress and was reported out of committee in an amended form. Because there is available to the committee members a very complete hearing record from the last Congress and because the members are familiar with the issues involved, I have asked the witnesses to limit their oral testimony with the understanding, of course, that the complete prepared statement for each witness will be made a part of the hearing record. There will be inserted in the record at this point the text of S. 1653 and the agencies' comments. (The information follows:) [S. 1653, 91st Cong., first sess.] A BILL To amend the Interstate Commerce Act, with respect to recovery of a reasonable attorney's fee in case of successful maintenance of an action for recovery of damages sustained in transportation of property Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That paragraph 11 of section 20 of the Interstate Commerce Act (49 U.S.C., sec. 20, par. 11) is amended by inserting at the end of the fifth proviso and immediately before the sixth proviso the following: "And provided further, That if the plaintiff shall finally prevail in any action, he shall be allowed a reasonable attorney's fee, to be taxed and collected as part of the suit:". Staff member assigned to this hearing: A. Daniel O'Neal. DEPARTMENT OF AGRICULTURE, Hon. WARREN G. MAGNUSON, U.S. Senate. DEAR MR. CHAIRMAN: Your letter of March 26, 1969, requested the views of the Department of Agriculture with respect to S. 1653. This bill would amend paragraph 11 of section 20 of the Interstate Commerce Act (49 U.S.C., sec. 20, par. 11) by inserting at the end of the fifth proviso and immediately before the sixth proviso the following: "And provided further, that if the plaintiff shall finally prevail in any action, he shall be allowed a reasonable attorney's fee, to be taxed and collected as part of the suit." The Department recommends enactment of this bill. The benefits of this bill to agricultural shippers, particularly those involved in the movement of grain and perishable freight, would be twofold: It would permit grain and fresh fruit and vegetable shippers to seek redress through the courts of the losses sustained in the transportation of property. This avenue of relief is effectively barred in many instances because reasonable attorney's fees may not be recovered by successful plaintiffs at the present time and such fees very often equal or exceed the amount of an individual shipper's claim. It would provide an incentive for the carriers to improve their services in the handling of fresh fruit and vegetable shipments. Prior to June 1964, there was an understanding between most railroads in the United States and the fresh fruit and vegetable shippers, guaranteeing the arrival time of cars at the principal destination markets east of Buffalo, New York. Based upon this understanding, producers and shippers of fresh fruit and vegetables could schedule their shipments for these markets so as to have them arrive in time to permit the efficient and orderly marketing of their commodi ties. If a car arrived at one of these markets later than the scheduled arrival time, and as a result of this late arrival the shipper suffered a loss of market, the carriers would honor a shipper claim for this loss. Since June 1964, the eastern carriers which serve these principal destination markets have been denying liability on loss-of-market claims. In denying li ability, the carriers rely upon the language in the bill of lading which states in part: No carrier is bound to transport said property by any particular train or vessel, or in time for any particular market or otherwise than with reasonable dispatch. Orderly marketing of perishable food commodities requires a dependable schedule of deliveries to market. Allowing a successful plaintiff to recover reasonable attorney's fees would furnish an incentive for the railroads to improve service and achieve more dependable delivery schedules. Grain shippers in recent years also have encountered a serious claim problem with the carriers. Since 1966, the carriers have refused to honor loss-in-transit claims on grain when transported in covered hopper cars-even in those cases where official weights have been obtained at both origin and destination. Prior to 1966, most carriers honored such claims. The Bureau of the Budget advises that there is no objection to the presentation of this report from the standpoint of the Administration's program. Sincerely, J. PHIL CAMPBELL, Acting Secretary. COMPTROLLER GENERAL OF THE UNITED STATES, Hon. WARREN G. MAGNUSON, DEAR MR. CHAIRMAN: We refer to your letter of March 26, 1969, in which you ask for our comments on S. 1653. The bill would amend paragraph 11 of section 20 of the Interstate Commerce Act, as amended, 49 U.S.C. 20(11), to provide for allowance of a reasonable attorney's fee to any plaintiff prevailing in an action at law against a common carrier subject to regulation under the Act for loss, damage or injury to property transported by such carrier. The only limitations provided in the bill on the plaintiff's right to recover an attorney's fee are that the plaintiff must finally prevail in the action and that the fee must be a reasonable one. A similar bill, S. 858, was introduced in the 90th Congress and as amended was favorably reported by the Committee on Commerce in Senate Report No. 1389, ordered printed July 11, 1968. S. 858, as originally introduced, contained exactly the same language as that appearing in the subject bill; however, the Committee chose to amend the bill to provide for certain limitations on a plaintiff's right to recover an attorney's fee. These limitations and the reasons for them are explained in some detail in the Senate report. In our reports to your Committee on S. 858, printed in Senate Report No. 1389, we took the position that allowance of an attorney's fee in the circumstances would be equitable and in harmony with other provisions of the Interstate Commerce Act and court decisions permitting an attorney's fee in other kinds of actions. For these reasons we have no objection to favorable consideration of S. 1653 by your Committee. DEAR MR. CHAIRMAN: This letter is in reply to your request for the views of this Department with respect to S. 1653, a bill "To amend the Interstate Commerce Act, with respect to recovery of a reasonable attorney's fee in case of successful maintenance of an action for recovery of damages sustained in transportation of property." S. 1653 would amend paragraph 11, section 20 of the Interstate Commerce Act, which relates to the liability of any common carrier, railroad, or transportation company to the holder of a bill of lading for loss, damage, or injury to property, by adding an additional proviso allowing a reasonable attorney's fee to a successful plaintiff in an action under that paragraph. The attorney's fee would be taxed and collected as part of the suit. The amendment would be applicable to motor carriers and freight forwarders, as well as railroads. This bill is identical to S. 858 which was introduced during the first session of the 90th Congress. In our comments to you on that bill, we expressed concern over the potential for abuse contained in the bill as drafted. Our concern was that a shipper with a meritorious claim might resort to litigation, rather than out-ofcourt settlement, since he would be assured of recovering attorney's fees. The Department would have no objection to enactment of S. 1653, provided it were amended to incorporate measures to prevent abuse of the relief basically provided by the recovery provisions. The Department believes the bill should be amended to provide that (1) a fee not exceed the amount of the judgment; (2) a fee be allowed only where the plaintiff shows he has filed a claim with the carrier which was not paid within 90 days; and (3) the judgement rendered in the plaintiff's favor be greater than any amount previously offered in settlement. With these amendments, the Department would recommend enactment of S. 1653. We have been advised by the Bureau of the Budget that there would be no objection to the submission of this report from the standpoint of the Administration's program. Sincerely, PAUL W. CHERINGTON, Assistant Secretary for Policy and International Affairs. Hon. PAUL CHERINGTON, AUGUST 5, 1969. Assistant Secretary for Policy and International Affairs, Department of Transportation, Washington, D.C. DEAR MR. SECRETARY: This is with reference to S. 1653, a bill to amend the Interstate Commerce Act, with respect to recovery of a reasonable attorney's fee in case of successful maintenance of an action for recovery of damages sustained in transportation of property. That bill has been favorably reported, without amendment, by the Subcommittee on Surface Transportation to the full Senate Committee on Commerce. The Department of Agriculture, the Department of Justice and the Comptroller General have either indicated support for or no objection to passage of the bill in its present form. The Interstate Commerce Commission has suggested an amendment providing a 90-day cooling off period before suit could be brought. Except for the suggested amendment, the ICC indicated support for the objectives of S. 1653. In view of these developments, it seems appropriate to provide the Department of Transportation with an opportunity to update its comments on this legislation. If the Department does wish to submit an additional statement, it would be welcomed by this Committee. Sincerely yours, WARREN G. MAGNUSON, Chairman. OFFICE OF THE SECRETARY OF TRANSPORTATION, Hon. WARREN G. Magnuson, Chairman, Committee on Commerce, DEAR MR. CHAIRMAN: I have your letter of August 5, 1969, providing this Department with an opportunity to update its comments with reference to S. 1653. You have indicated that this bill has been reported favorably, without amendment, by the Subcommittee on Surface Transportation to the full Senate Committee on Commerce. The bill would amend paragraph 11, section 20 of the Interstate Commerce Act, which relates to the liability of any common carrier, railroad, or transportation company to the holder of a bill of lading for loss, damage, or injury to property, by adding an additional proviso allowing a reasonable attorney's fee to a successful plaintiff in an action under that paragraph. The attorney's fee would be taxed and collected as part of the suit. The amendment would be applicable to motor carriers and freight forwarders, as well as railroads. In our prior comments of June 11, 1969, we indicated our belief that the bill should be amended to provide that (1) a fee not exceed the amount of the judgment; (2) a fee be allowed only where the plaintiff shows he has filed a claim with the carrier which was not paid within 90 days; and (3) the judgment rendered in the plaintiff's favor be greater than any amount previously offered in settlement. Upon further reflection and in an effort to achieve a reasonable accord in this important area, this Department is prepared to withdraw proposed amendments (1) and (3) stated above. Insofar as amendment (1) is concerned, we are now persuaded that a limitation of this type would unduly hinder the litigation of meritorious small claims. With reference to amendment (3), it appears to be somewhat speculative and complicated. However, as to amendment (2), the 90-day "cooling-off" period which the Interstate Commerce Commission has also proposed, we remain of the opinion that the period of time contemplated is a reasonable one with which available remedies should first be exhausted. Stated somewhat differently, it is designed to prevent "claims sharking," which, in our view, is a problem area deserving of recognition. We would hope, therefore, that the full Committee would give consideration to proposed amendment (2). We appreciate the opportunity to comment further. The Bureau of the Budget advises that from the standpoint of the Administration's program there is no objection to the submission of this report for the consideration of the Committee. Sincerely, PAUL W. CHERINGTON, Assistant Secretary for Policy and International Affairs. |