trip-leasing. The sure result of this approach was to generate the highly partisan views of all segments of the industry. In an industry with a long tradition of regulation and with sophisticated methods of dealing with and being heard on regulatory problems, this approach worked well. All views were represented and the Commission had maximum enlightenment before reaching its conclusions. The results were evident in a series of billing and tariff rules that were generally acceptable to shippers and carriers alike. IV. Conclusion The piggyback case will undoubtedly emerge as one of the truly important ICC opinions simply because it sets that agency's guide for an entire area of transportation which is fast emerging as a very important one. All the problems of TOFC are not solved by these rules, nor is there any guarantee that all of the rules even properly interrelate. Problems will continue to exist, and perhaps one or more of the rules will be changed or even circumvented. One thing is certain, however; litigation will continue, particularly in the areas where the rules do not tread, e.g., in costing. Nevertheless, the basic guides are here and, as important economic criteria, there can be little doubt that their impact will be felt for some time. LIFE'S RECORDS CLOSED Honorable Walter R. McDonald Honorable Grant E. Syphers, Honorary Member, Interstate Commerce Commission, Washington, D. C. (February 5, 1968) John J. Corbin, Charter Member, Hubbard, Ohio (November 30, 1966) Sam Goodstein, Dallas, Texas Clifton A. Lando, New York, New York (December 28, 1967) W. M. Miller, Past President, Atlanta, Georgia (February 19, 1968) Lewis T. Thoman, Birmingham, Alabama Samuel J. Wettrick, Charter Member, Seattle, Washington (January 30, 1968) DAMAGE CLAIMS AGAINST AIR CARRIERS ALLEN J. O'BRIEN Legislation to regulate air transportation was initially enacted in 1938, some fifty-one years after passage of the original Act to Regulate Commerce. It is surprising, therefore, how little advantage was taken by the drafters of the air statutes of the historical background of, and experience accumulated under, the surface legislation. This oversight is particularly apparent in the liability-of-carriers provisions of the Interstate Commerce Act, Section 20(11), and the lack of any such provisions in today's aeronautic legislation, the Federal Aviation Act of 1958. In the year 1938, however, it would have taken considerable imagination and foresight to anticipate the day when the circumstances surrounding the movement of cargo by air would be such as to require remedial legislation patterned after that which then applied to surface carriers. A smaller measure of those two qualities would have been required in 1958 when today's governing statutes were enacted. Although Section 20 (11) has not been a part of the Interstate Commerce Act from the date of original enactment, it has been on the statute books a sufficient number of years to have acquired many refining amendments.1 Additionally, numerous court decisions concerning the rights, liabilities and responsibilities of carriers and shippers served as a spur to enactment of remedial legislation by Congress, particularly so as related to the liability of carriers for loss, damage, or injury to property. Unfortunately, the absence of comparable language in the aeronautic statutes leaves carriers, their customers and the Civil Aeronautics Board without primary standards or intelligible principles to follow. As a result, numerous provisions of questionable validity have been woven into the tariff structure of air carriers, provisions which would be unlawful under Section 20(11) of the Interstate Commerce Act. The net result of this statutory hiatus, coupled with the hesitancy or possible reluctance of the Civil Aeronautics Board to exercise juris * Reproduced with permission from the Transportation Journal, quarterly publication of the American Society of Traffic and Transportation. Mr. O'Brien is Director and Attorney, Traffic Service, Aerospace Industries Association of America, Inc., Washington, D. C. 1 Originally enacted as the Carmack Amendment to the Hepburn Act, June 29, 1906, effective August 28, 1906. diction in this dimly lighted area, is that the courts have very often rushed into the breach, occasionally with some puzzling and conflicting decisions. A tariff provision in point is Rule No. 60 of Official Air Freight Tariff No. 1-B, C.A.B. No. 96. That rule provides in pertinent part as follows: Damage and/or loss discovered by the consignee after delivery and after a clear receipt has been given to the carrier must be reported in writing to the delivering carrier at destination within 15 days after delivery of the shipment, with the privilege to the carrier to make inspection of the shipment and container(s) within 15 days after receipt of such notice.2 It is common practice for large manufacturing concerns to place merchandise in stock or storage immediately upon delivery by carriers. Generally, such merchandise is retained in the original packages. Unless exteriors of packages indicate evidence of rough handling, interior damage is not discovered until the removal of the merchandise from the package some time later, usually after more than 15 days have elapsed from the date of delivery. Air carriers disallow claims, generally on the basis that deviations from tariff rules are prohibited by the law. Accordingly, even if carriers acknowledge liability and accept responsibility for the damage or loss, they are prohibited from making an adjustment because a report in writing was not made "to the delivering carrier at destination within 15 days after delivery of the shipment,' per the above-quoted rule. Rule 62 of the same tariff discourages many shippers from taking claims of this type to court. Rule 62 provides: "Limitation of Actions No carrier shall be liable in any action brought to enforce a claim unless the applicable provisions of Rule 60 have been complied with by the claimant, and unless such action is brought within two years after the date written notice is given to the claimant that the carrier has disallowed the claim in whole or in part.' The following questions are presented: 1. Does Rule 60 prohibit carriers from honoring a claim for concealed loss or damage which is filed after the expiration of 15 days from date of delivery? 2 Section 20(11) of the Interstate Commerce Act makes it unlawful for a carrier to provide a shorter period for the filing of claims than nine months. Miller in his Law of Freight Loss and Damage Claims, pp. 158-159, observes that both motor and rail carriers have adopted rules to govern their respective claim organizations. Included in the rules is a provision that loss or damage discovered after delivery to consignee shall be reported by the consignee to carrier immediately upon delivery, and, in any event, within fifteen days after receipt. Miller states: "Carriers have never contended that the fifteen-day requirement has the sanction of the Interstate Commerce Commission or courts of law." 2. Is Rule 62 an effective bar to recovery by a claimant in a court of law? The Civil Aeronautics Board has heretofore held unreasonable a similar tariff provision limiting the time for the filing of personal injury and death claims.3 In the Battista case, a carrier refused to give consideration to complainants' claims because of failure to comply with a tariff rule requiring notice to carriers within 30 days after the event giving rise to claim. Two issues were before the Board: (1) whether the rule in question was properly included in the tariff, and (2) if so, was the rule reasonable? The Board sidestepped the first issue by deciding the case on the second, finding the rule unreasonable. In commenting on the first issue, the Board stated that ". . . it is well settled that a tariff rule which is not required or authorized by statute is ineffectual to bind persons dealing with [a] carrier." The Board also noted that the first issue was present in an investigation which was then pending into the propriety of tariff-notice rules relating to loss or damage to property and cargo.1 Following the decision in the Battista case, the Board by an order effective March 2, 1964, provided that air carriers may not publish tariff rules placing conditions upon their liability for personal injury or death.5 Prior to reviewing the court cases in point, a final word is added regarding the Civil Aeronautics Board's more recent utterances on the subject. By an order dated April 10, 1959, the Board dismissed a proceeding instituted to determine the lawfulness of a carrier's rule requiring a 90-day notice of claims for personal injury and a requirement that suit be commenced within one year after the alleged occurrence of the event giving rise to a claim. The rule at issue in the case was effective in 1951, at the time of the occurrence. Dismissal of the proceedings before the Board followed a stipulation by the parties that the carrier would not plead the rule as a defense to the civil action brought by the claimant. Inasmuch as the stipulation by the carrier was in effect 3 Continental Charters, Inc., Complaint of Mary Battista, Et Al., 16 CAB 773 (1953). Investigation of Tariff Liability Rules Cases, Docket No. 4059. (On April 10, 1962, the C.A.B. issued an order terminating its investigation in Docket 4059. No determination was made as to the lawfulness of the tariff rules there under consideration.) 514 CFR 221.38(h)-Sec. 221.38(h) of the Board's Economic Regulations provides: "Personal Liability Rules. No provision of the Board's regulations issued under this part or elsewhere shall be construed to require on and after March 2, 1954, the filing of any tariff rules stating any limitation on, or condition relating to, the carrier's liability for personal injury or death. No subsequent regulation issued by the Board shall be construed to supersede or modify this rule of construction except to the extent that such regulation shall do so in express terms." 6 Order No. E-13729, Complaint of Ella and R. A. Fischer, Docket No. 9183. a waiver of an effective tariff provision, the Board's dictum on this subject is interesting: It is noted that Section 403(b) of the Act prohibits a carrier from deviating from its published tariffs, and Section 404 (b) prohibits undue preference and unjust discrimination. The Board questions whether a carrier may waive an applicable tariff rule for the benefit of a particular claimant without violating one or both of these sections. We do not, of course, rule upon this matter, and our action in dismissing this proceeding should not be construed as a finding as to the legality of such waiver. In this connection, the Board is troubled by the possibility of a carrier practice of waiving tariff rules of questionable validity in order to avoid Board determinations as to their lawfulness, thereby preserving such rules for use against other litigants who may not desire to incur the expense of seeking such determinations. In view of the foregoing, we intend to keep this matter under surveillance with the object of taking appropriate action should it appear that air carriers are applying tariff rules, such as those involved in this proceeding, in a discriminatory manner or otherwise in violation of the Act. The Board's uncertainty would appear justified in view of the conflicting court decisions on the subject. As noted above in connection with the decision of the Civil Aeronautics Board in the Battista case, reference was made to the wellsettled principle that tariff rules are not binding upon persons dealing with carriers if the rules pertain to subjects which are not required by law to be in tariffs. The case of Pacific S. S. Co. v. Cackette is usually cited as setting forth the controlling rule of law. In that case, damages were claimed by plaintiff, a passenger on a vessel operated in Interstate Commerce by the defendant, for injuries sustained as a result of an assault by one of defendant's employees. The defendant argued that the action was barred as the plaintiff had not given notice of damages within 10 days after landing as provided in the tariff filed by it with the Interstate Commerce Commission, the U. S. Shipping Board and the California Railroad Commission. The Court held for the plaintiff on the grounds that a passenger is not chargeable with notice of tariff provisions and such provisions do not become a part of the contract of carriage if the provisions are not required by law to be in the tariffs. Lichten v. Eastern Airlines is the case most often cited, but not necessarily followed, on the question of primary jurisdiction of the Civil Aeronautics Beard and the doctrine that a tariff properly filed with the Board is deemed valid until rejected by it. In the Lichten case a passenger checked a bag on her ticket. Included in the contents was some costly jevelry. Upon arrival at destination, the passenger 78 F.(2d) 259, 261 (1925) certiorari denied, 269 U.S. 586. |