Petition for Writ of Certiorari — City Messenger Service of Hollywood, Inc. v. Capitol Records Distributing Corp.

Beit ot - Supreme Courl, U.».

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Sieeune Court of the United § tel ae .

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et

October Term 1971

i Jeon,

CITY MESSENGER SERVICE OF HOLLYwoop, INC., dba

CiTy MESSENGER AIR ExprREss and/or C.M.A.X.,

Petitioner,

VS.

CAPITOL RECORDS DISTRIBUTING CoORP..,.

Respondent.

Petition for Writ of Certiorari to the United States

Court of Appeals for the Sixth Circuit.

THOMAS E. RUBBERT,

606 South Olive Street,

Suite 2104,

Los Angeles, Calif. 90014,

GOLDMAN, COLE & PUTNICK,

911 First National Bank Bldg.,

Cincinnati, Ohio 45202,

Attorneys for Petitioner.

SUBJECT INDEX

Page

Options Belew... 1

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SE TI asiniieniiectecccscinsnciniennnsiicsisnnminsianiniaiti 2

NE I iiciciicssinenirnssinrnesininnninnniidiansnanemeniddialniine 3

I Er TE GW niece iccsvetinscsics- cwereninenionsennicns 5

No Federal Statute of Limitations -.....................---- 6

Pamala We Te CR ainsi icnsinennne 6

Appeal to United States Court of Appeals ....... aged 7

BE I serricinesiciccccntianisccnsctosnsteieninenninicntiantiintinetiat 7

Be Te Fe I niciiceciintcsccevernnicericicaminmnicanninnte 9

Reasons for Granting Writ of Certiorari .................. 10

Importance of the Issue —......................-.-----~-+-------- 10

Conflict With Federal Policy at Issue .................... 11

Decision Below Conflicts With Settled Law That the

Contract Creates the Liability, the Statutory Tar-

iff Determines the Amount of That Liability ...... 14

Court of Appeals’ Decision Below in Direct Con-

flict With All Other Federal Decisions, Including

by United States Supreme Court ...................---.--- 17

Court of Appeals’ Decision Below Exactly Contra

to Prior Ruling of Same Court of Appeais ........ 19

Court of Appeals’ Ruling Below Contrary to Ohio

BE cecomensbinrcanenipnetinerensaniislintevconsannndinenineansnantncanansatinn 21

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INDEX TO APPENDICES

Page

Appendix A. Appeal From the United States Dis-

trict Court for the Southern District of Ohio,

Wom Deki —............................ App. p. 1

Appendix B. Summary Judgment in Favor of De-

IG ccc cnrnscwceemenenannnsnonnmstenanei App. p. 4

(

TRAE PL OEE IT RE Om Ay Were

TABLE OF AUTHORITIES CITED

Cases Page

Arrasmith vy. Pennsylvania Railroad, 410 F. 2d

IPE sisunsielcccnscciniolcnssiacsuthlakanessanssalGsilendaicapsesaiadintitiante 24

Bartlett-Collins Co. v. Surinam Nav. Co., 381 F.

BEE dita iicskicn a decaneiteeenaeaasmaiaaaaentes 12

Carter v. Arcerican Telephone & Telegraph Com-

I, FE Fe BE ktcncccnietssennicbinialesian 18

Charney v. Thomas, 372 F. 2d 97 ...................--.---- 13

Chicago R.I. & P.R. Co. v. Furniture Forwarders

Company of St. Louis, Inc., 420 F. 2d 385 ........ 19

Church v. Public Utilities Commission of California,

ee ee ee Mircea anaandannmanh 16

Electrical Fittings Corporation v. Thomas & Betts

RS Fer en ee 24

F.T.C. v. Flotill Products Co., 389 U.S. 179 ............ 21

Johnson Motor Transport v. U.S., 149 Fed. Supp.

ETP \=scsincicisilanbvestiadeaeanietbedimabaientageiaetiitoeinsdaetiataieeeieieetaimediies 19

Junker v. Midterra Associates, Inc., 49 Fed. 310 .... 24

Louisville & National Railroad v. Central Iron &

I i Se ia I spss Blancs ac cnnintennnciascianasinds 18

Louisville & Nashville Railroad v. Dickerson, 191

_, Se Beennennes siacatiesia ti dinhenseheaseteitetsbecliessinsdaialalaiiiias 19

Mich. Central R.R. v. Mark Owen Co., 256 USS.

~ (RT stdiechasieshiametenaedenaidensaldnasladictaacnicatieaniannbalaiielinns 18

Pennsylvania Railroad v. Greene, 173 Fed. Supp.

BE secniscicnencksnsniaanidlaebedinstaliadapenienanaenennioveatiiens 19

Potter v. Columbia Broadcasting Systems, Inc., 368

I MIE siaitecccssbiesiclamnisaploemiasnibiae topes ciel cnieiananiieiaebns 24

St. Louis, etc. Railroad v. Starbird, 243 U.S. 592....

Page

Sartor v. Arkansas Natural Gas Corporation, 321

ON I ic sasitannnescnncensnsnnarenonsesnnenedecenaaninnanennnnnee

Thomas Foods, Inc. v. Pennsylvania Railroad Com-

pany, 168 N.E. 2d 6.2 .....-------------1eeeeereeee

Transcontinental Bus System, Inc. v. CAB, 383 F.

Tc cnsiekeccnhadebniceravabocesaeiiinnsintetsnenanomennnntnt

United States v. Associated Air Traasport, Inc., 275

Oe a nkcscmcvendeceasensonsen anombnesoutien ‘i. ¥,

United States v. Louisville & Nashville Railroad,

A | ae nenen CET 14, 18, 19,

United States v. Mississippi Barge Line Co., 285

SE | Ere

Vanderboom v. Sexton, 422 F. 2d 1233 ..........--------

Von der Ahe Van Lines, Inc. v. US., 385 F. 2d

999, cert. den. 385 U.S. 837 .......-.--------- 17, 18,

J. L. Waring & Company v. The Baltimore & Ohio

Railroad Company, 4 Ohio Dec. Rep. 553 .......-

Statutes

Ohio Revised Code, Sec. 2305.06 ..........--------+---+-+- 6,

Ohio Revised Code, Sec. 2305.7 ........-------+----+- i.

Ohio Revised Code, Sec. 2305.13 .........---------------++-

United States Code, Title 28, Sec. 2)

United States Code, ‘! tle 28, Sec. 1651 ..............

United States Code, Title 49, Sec. 1300 .......... 3

United States Code, Title 49, Sec. 1373(b) -.......

United States Code, Title 49, Sec. 1472(d) ........

Supreme Court of the United States

October Term 1971

TIN iiliitsciiallibeeicadel

CiTy MESSENGER SERVICE OF HOLLywoop, INC., dba

CiTy MESSENGER AIR Express and/or C.M.A.X.,

Petitioner,

VS.

CAPITOL RECORDS DISTRIBUTING CORP.,

Respondent.

Petition for Writ of Certiorari to the United States

Court of Appeals for the Sixth Circuit.

The petitioner, City Messenger Service of Holly-

wood, Inc., dba City Messenger Air Express and/or

C.M.A.X., prays that a Writ of Certiorari issue to re-

view the opinion and judgment of the United States

Court of Appeals for. the Sixth Circuit rendered in

these proceedings on August 12, 1971.

Op‘nions Below.

The Opinion of the United States Court of Appeals

For the Sixth Circuit, not yet reported, appears in

Appendix A, infra, at pages 2, 3, 4. The Opinion of

the United States District Court, Southern District of

Ohio, is also not yet reported and appears at Appen-

dix B, infra, pages 5-11. The United States Court

of Appeals for the Sixth Circuit affirmed the Judgment

of the District Court.

a

Jurisdicti

The Order or Judgment of the United States Court

of Appeals was decided and filed on August 12, 1971.

See Appendix A, infra, pages 2, 3, 4. This Petition

for Certiorari was filed less than ninety (90) days

from the date aforesaid. The jurisdiction of this Court

is invoked under 28 U.S.C. 1254, subsection (1) or,

in the alternative, under common law certiorari 28

U.S.C. 1651.

Questions Presented.

There is a single, major, issue of first impression

presented and a number cf closely related issues. The

central issue is:

“In the absence of a Federal Statute of Limita-

tions governing actions by or against an air carrier

to recover undercharges from a shipper or the

opposite where there has been interstate air trans-

portation of goods, what is the nature of the legal

action (is it founded on contract or on the statute

fixing the tariff?) and, therefore, what state stat-

ute of limitations applies?”

Three closely related issues are also involved:

(1) Whether a bill of lading (Forwarder Air-

bill) setting forth all of the terms of the agree-

ment between a carrier and a shipper is a written

contract for the purpose of statutes of limitation?

(2) Whether an action by an air carrier against

a shipper to recover undercharges for the inter-

state carrying of goods by air is an action based

upon the contract (bill of lading) or an action

based upon the statute fixing the tariff rate?

ondies

(3) Whether the Federal poiicy of the inter-

state commerce act requiring erforcement of the

lawful tariff rate is served by permitting a ship-

per of goods by air in interstate commerce: to

evade paying the Federal tariff rate where a siat-

ute of limitations is available allowing action by

the carrier against the shipper to recover the Fed-

eral tariff rate?

(4) In the absence of a Federal statute of

limitations governing actions by or against an air

carrier to recover undercharges from the shipper

or the opposite in Ohio, does the Ohio Statute

of Limitations governing liability created by stat-

ute control or that statute of limitations governing

written contracts control?

There are two procedural issues presented:

(1) In ruling upon a motion for summary judg-

ment, must a Federal trial court resolve all doubts

on an issue against the moving party?

(2) Where there is doubt as to which statute

of limitations in Ohio to apply in an action by

an air carrier against a shipper to recover under-

charges, is it proper for a trial court to resolve

that doubt in favor of the moving party on rul-

ing upon a motion for summary judgment?

Statates Involved.

Within the Interstate Commerce Act the Federal

Aviation Act is set forth. Petitioner, CMAX, at the

times of intcrest in this case, was an “air carrier” as

that term is used in Chapter 20 of 49 U.S.C. As such,

it had filed with the “Board” tariffs applicable to var-

a a

ious of its carriages. Having done so, it was subject

to 49 U.S.C. Section 1373 and specifically (b) of

that section which provides:

“No air carrier shall charge or demand or col-

lect or receive a greater or less or different com-

pensation for air transportation, or for any serv-

ice in connection therewith, than the rates, fares

and charges specified in its currentiy effective

tariffs...”

Section 1472(d) of Title 49 makes it a criminal

offense for any air carrier or ticket agent or employee

or representative thereof to willfully grant or give, or

cause to be offered, granted, or given, any rebate or

other concession in violation of the provisions of the

Act, and specifically makes it a criminal offense for

any such person to suffer or permit any shipper to

obtain transportation or services at less than the pub-

lished tariff rates.

This Section 49 U.S.C. 1472(d), states:

“Any air carrier, foreign air carrier, or ticket

agent, or any officer, agent, employee or represen-

tative thereof, who shall, knowingly and willfully,

offer, grant, or give, or cause to be offered, grant-

ed, or given, any rebate, or other concession in

violation of the provisions of this Act, or who,

by any device or means, shall, knowingly and will-

fully, assist, or shall willingly suffer or permit,

any person to obtain transportation or services sub-

ject to this Act at less than the rate, fares or

charges lawfully in effect, shall be deemed guilty

of a misdemeanor and, upon conviction thereof,

shall be subject for each offense of a fine of not

less than $100.00 or more than $5,000.”

—_

Statement of the Case.

The facts of this case are brief and not unique, but

do frame an issue of fizst impression. This is a con-

tract action brought by an air freight forwarder against

a shipper of goods to collect from the shipper under-

charges for the interstate carrying of goods by air from

California to Ohio by the Air Forwarder on behalf of

the shipper. The shipper paid less than the required

Federal Tariff rate for the shipping. Now the Air

Freight Forwarder seeks to recover the difference be-

tween the amount paid by the shipper and the required

Federai tariff rate. The action is in Federal Court be-

cause it involves interstate commerce and the interstate

Commerce Act. It is a contract action based upon

many bills of lading (called “Forwarder Air Bills”)

which constituted the contracts between the air freight

forwarder and the shipper. A specimen is provided ini

the Appendix for reference, marked “C”.

The plaintiff and appellant, City Messenger Service

of Hollywood, Inc., dba City Messenger Air Express

(hereinafter called CMAX) filed an amended com-

plaint and an answer thereto was filed by the de-

fendant and respondent Capitol Records Distributing

Corp., (hereinaftzr described as Capitol Records).

Capitol Records thereupon made a motion for sum-

mary judgment on the ground that the action by CMAX

was untimely and was barred by one or more of Ohio’s

Statutes of limitation in the absence of any Federal

statute of limitations applicable to an action by or

against an air Carrier to recover undercharges for the

opposite. In the Federal Aviation Act (49 U.S.C.

$1300 et seg.), Congress did not — for a period

of limitations.

por

No Federal Statute of Limitations.

There is no statute of limitations governing actions

by or against an air carrier to recover undercharges

or the opposite provided for by the Interstate Commerce

Act as it applies to air transportation of goods (Fed-

eral Aviation Act 49 U.S.C. §1300 et seq.). The ac-

tion by the air freight forwarder was filed in the

United States District Court for the Southern District

of Ohio, Western Division. The Motion for Summary

Judgment made by the shipper was based upon the

statute of limitations in Ohio which provides as fol-

lows (Ohio Revised Code, Sec. 2305.7):

“An action upon a contract not in writing, ex-

press or implied, or upon a liability created by

statute, other than a forfeiture or penalty, shall

be brought within six years aiter the cause there-

of accrued.”

The air freight forwarder, CMAX, ccntended that

the action was governed by the Ohio statute of limi-

tations governing written contracts, Ohio Revised Code,

Sec. 2305.06, which provided:

“An action upon a specialty or an agreement,

contract, or promise in writing, shall be brought

within fifteen years after the cause thereof ac-

crued”.

Action by District Court.

The motion for summary judgment of Capitol Rec-

ords (the shipper) was heard and granted with the

District Court below holding that a statute or statutes

of limitation in Ohio other than that governing written

contracts, controls this case. Thus, the District Court

ruled that there was no triable issue between the par-

nile

ties. The District Court found that the action was either

governed by the Ohio Statute of Limitations controlling

liabilities created by Statute (Ohio Revised Code, Sec.

2305.7) or upon the Ohio Statute of Limitations govern-

ing intrastate commerce (Ohio Revised Code, Sec. 2305.-

13). The court determined for the purpose of its de-

cision that the Bills of Lading (Forwarder Air Bills)

were ail signed by both parties.

Appeal to United States Court of Appeals.

Following the granting of the motion for summary

judgment in favor of Capitol Records, the air freight

forwarder, CMAX, appealed to the United States Court

of Appeals for the Sixth Circuit. No trial has taken

place and the only evidence of record in the matter is

a deposition containing a specimen bill of lading (For-

warder Air Bill) offered by the moving party, Capitol

Records. The Court of Appeals ruled:

“In this case we agree with the District Court that

the plaintiff is not suing for freight charges de-

scribed in written contracts, but is suing for the

statutory undercharges represented by the differ-

ence between the charges set forth in the bills of

lading and the amount prescribed by the specified

tariff required by law to be filed.”

The Pleadings.

Because summary judgment is involved, the District

Court and the Court of Appeals were passing upon

issues framed by the pleadings. For this reason, a brief

analysis of the pleadings is in order as part of the

statement of the case.

The capacities of the parties should be noted; CMAX

is an air freight forwarder hauling goods by aircraft

oe an

for varics shippers in interstate commerce. CMAX

used different airlines to forward this freight on be-

half _f the shippers pursuant to the bills of lading

giving rise to the relationship between CMAX and the

shippers. Capitol Records (the shipper) produced a va-

riety of products largely in the entertainment field,

and shipped these products in interstate commerce. The

Amended Complaint filed by CMAX alleges that there

were contracts of carriage between CMAX and Capi-

tol Records and thet between February 5, 1955, and

January 8, 1959, CMAX forwarded freight for Cap-

itol Records. The Amended Complaint further alleges

that CMAX complied with the Interstate Commerce

Act and posted the lawful, Federal tariff rates. CMAX

further alleges that the posted tariffs were part of the

contract of carriage between CMAX and Capitol Rec-

ords and that Capitol Records has paid certain por-

tions of the charges for the shipment, but not the law-

ful, Federal tariff rate.

The Amended Complaint, therefore, seeks to recover

the difference between the amount paid by Capitol

Records for the services performed by CMAX, and

the required Federal tariff rate, some $65,196.04, which

is the alleged amount of the undercharges.

The Answer filed by Capitol Records expressly ad-

mits that CMAX performed services for Capitol Rec-

ords between February, 1955, and January 8, 1959,

and further admits that shipments were from various

business locations to other business Iecations of Capi-

tol Records in interstate commerce. Capitol Records

—9—

expressly admits that each of the shipments were ac-

companied by a written instrument covering the con-

tractual relationship between CMAX and Capitol Rec-

ords for every single transaction.

Finally, the Answer of Capitol Records alleges that

the action is barred by the Ohio Statute of Limitations

governing actions upon a contract not in writing or

upon a liability created by statutes (Ohio Revised Code,

Sec. 2305.7 as quoted above).

The Bill of Lading.

The Bill of Lading forms the basis of this action by

the Air Freight Forwarder against the shipper. As

noted, a specimen is provided in the Appendix for

reference, and it is a matter of record. All of the terms

of the agreement vetween CMAX and Capitol Records

are contained therein and it is this agreement which

forms the basis of the lawsuit by CMAX to collect the

required Federal tariff rate. Attention is particularly di-

rected to the upper left-hand corner of the specimen

wherein the following language is set forth:

“It is mutually agreed that the goods herein de-

scribed are accepted in apparent good order (ex-

cept as noted) for transportation as specified here-

in, subject to governing rules, classifications and

tariffs, in effect as of the date hereof, which are

filed in accordance with law. Said rules, classifi-

cations and tariffs, copies of which are available

for inspection, are hereby incorporated into and .

made part of this contract.”

—

REASONS FOR GRANTING WRIT

OF CERTIORARI.

This is a case of first impression in the Federal

Courts. The ruling by the Court of Appeals below iS

the first ruling in a Federal court upon the major is-

sue raised by the case which, in essence, is: In the ab-

sence of a Federal statute of limitations governing ac-

tions by or against an air carrier to recover under-

charges from a shipper or the opposite where there

has been interstate air transportation of goods, what

is the nature of the legal action (Is it founded on con-

tract or on the statute creating the tariffs) and, there-

fore, what statute of limitation governs? Many cases

in the State and Federal courts have passed upon this

issue in other methods of transportation, including rail,

highway, and water, but no Federal case has arisen

thus far involving transportation of goods by air in in-

terstate commerce. The ruling of the Court of Appeals

below is directly contra to the host of decisions of

both state and federal courts. including the United

States Supreme Court, on exactly the same issue as it

relates to other me :hods of transportation.

Importance of the Issue.

It goes without saying that transportation by air of

goods is becoming an increasingly important method of

shipping. Most of the airlines in the United States and

elsewhere are involved in such air transportation of

goods. The dictates of present day commerce require

speedy transit of goods for much of industry. All ship-

ping in interstate commerce is, of course, controlled by

the Interstate Commerce Act and there are tariffs gov-

erning shipment of every description of goods. And

there can be only one rate: the tariff rate.

—

The transportation of goods for all methods of trans-

port is universally handled by the use of bills of lad-

ing. These bills of lading invariably include a descrip-

tion of what goods are being shipped, to whom, from

whom, and at what rate.

The question presented by this case is one that af-

fects every air freight forwarder, air-carrier and shipper

engaged in interstate commerce by air in the United

States. It is not a problem existing only between the

parties to this lawsuit. The ruling of the Court of Ap-

peals below has fixed the rights and liabilities of

every air freight forwarder, air carrier and shipper in

the United States and, in fact, that ruling directly con-

flicts with long-standing and well-established legal prin-

ciples as well as being in conflict with decisions of the

United States Supreme Court. These aspects of the mat-

ter are explored below.

Conflict With Federal Policy at Issue.

No one can disagree that the Federal policy in es-

tablishing tariffs governirg transportation of goods is

to enforce the tariff rate which can be the only rate

charged for the transportation of the specific goods in-

volved. “The tariff rate is the lawful rate which the

carrier must exact and that which the shipper must

pay and no ac* or omission of the carrier can pre-

clude or estop it from enforcing payment of the full

amount of the tariff rate.” United States v. Associated

Air Transport, Inc., 275 F. 2d 827 (1970). The Fed-

eral policy at isse is that the lawful tariff rate shall

be paid in every case with no exceptions. No one can

argue with the proposition that the Federal policy is

that no shipper and no carrier shall evade the tariff set

by Federal Law. The policy of the law is, of course,

—

to insure payment to the carrier of the freight charges.

Bartlett-Collins Co. v. Surinam Nav. Co., 381 F. 2d

546 (1967). The Federal Aviation Act was. enacted

to enforce this policy ard to halt the granting of pref-

erential and discriminatory rates. Transcontinental

Bus System, Inc. v. CAB, 383 F. 2d 466 (1967).

In the instant case, there has been interstate trans-

port of goods by air and the shipper has paid a rate

less than the required Federal tariff rate. The Court of

Appeals below has rendered a decision permitting the

shipper to evade the lawful tariff rate, a decision clear-

ly contrary to the Federal policy that every shipper

shall pay the lawful Federal tariff rate. Thus, the Fed-

eral policy has not been effectuated and, indeed, has

been defeated. It would seem that the key to enforcing

and effectuating the Federal policy at issue here (that

the tariff rate shall be charged) is to utilize that statute

of limitation permitting enforcement of the tariff rate in

the absence of a Federal Statute of Limitations.

Fortunately, there is considerable Federal authority

providing guidance on the subject of selection of an

appropriate statute of limitations in this precise situa-

tion. Most recently we find Vanderboom v. Sexton,

422 F. 2d 1233 (1970), an SEC case. First, that case

restates the well established principle that when the

Federal Legislative Act is silent as to the statute of

limitations applicable to it, the limitation of the forum

state is applied. The Vanderboom court states:

“The cases of Internationa! Union of the United

Auto Workers v. Hoosier Cardinal Corporation,

383 U.S. 696 (1966), Cope v. Anderson, Receiver,

331 U.S. 461, and Holberg v. Armbrecht, 327

U. S. 392 as well as a legion of lower court cases,

_—

make it clear that when the Federal Legislative

Act is silent as to the statute of limitations appli-

cable to it, the limitation of the forum state is

applied”.

The second major principle ruled upon by the Van-

derboom court, which principle has been well estab-

lished fo: many years, is a statement of the basic guide-

line for decision making in this area:

“The basic standard for determining which of the

various local periods of limitation to utilize is that

it should be one which effectuates the Federal pol-

icy at issue.” (Citing Charney v. Thomas, 372

F. 2d 97 (6th Cir. 1967).)

No cases can be cited for the proposition that the

basic standard for determining which local period of

limitation to utilize is that it should be one that de-

feats the Federal policy at issue.

The decision of the Court of Appeals below, how-

ever, appears to be an exception. That decision does,

indeed, permit a shipper to evade the lawful Federal

tariff rate even though a local statute of limitations in

Ohio is available to permit collection of the lawful

Federal tariff rate and, thereby, to effectuate the Fed-

eral policy that the tariff rate shall be charged with no

exceptions. The Court of Appeals below decision, there-

fore, provides a new and extraordinary exception to

the long and well-established legal principles recited

above. That decision is based on the theory that the

action by the air freight forwarder is not founded upon

the contract (Bill of Lading), but is founded upon

the statute creating the tariffs. This subject is briefly

analyzed immediately below. '

onttinn

Decision Below Conflicts With Settled Law That the

Contract Creates the Liability, the Statutory Tariff

Determines the Amount of That Liability.

Capitol Records and CMAX would not be in court

but for a contractual relationship existing between them.

The contract here is the bill of lading (Forwarder Air-

bill). The bill of lading here describes what freight

CMAX< is to pick up at what point and at what time

and from what consignor and further describes to whom

it is to be delivered. The contract also describes how

much Capitol Records is going to pay for this service

which is to be the tariff rate as noted on the upper

left-hand corner of the bill of lading. Thus, the agree-

ment between the parties is set forth by the contract

which is the Forwarder Airbill in this case.

The Federal statute setting forth the tariff rate does

not create a relationship between the Airfreight For-

warder and the shipper. It only provides that if and

when the shipper is going to ship goods in interstate

commerce by air transportation, he shall pay the tariff

rate. Obviously the shipper selects who the airfreight

forwarder is going to be and enters into a contract

with that airfreight forwarder. The Federal statute fix-

ing the tariff rate does not command that a shipper

will enter into a relationship with any particular Air-

freight Forwarder. The tariff rate is not a contract but is

simply a measure of compensation applicable if ship-

ment is made. United States v. Louisville & N.R.R.

Co., 221 F. 2d 698 (6th Cir. 1955).

Thus, it is clear that the contract between the ship-

per and Airfreight Forwarder creates the liability of a

party in the event of nonperformance by that party. If

CMAX failed to deliver. Capitol Records could bring

an action against CMAX for its damages, which ac-

— =

tion would be based upon liability created by this

contract. In like manner, if Capitol Records failed to

pay for the shipping, CMAX could bring an action

against Capitol Records for that nonperformance which

action is also based upon the coniract.

The statute fixing the Federal tariff rate does not

create a new and distinct species of legal action pre-

viously unknown to the law. It does state:

“No air carrier shall charge or demand or collect

or receive a greater or less or different compensa-

tion for air transportation, or for any service in

connection therewith, than the rate, fares and

charges specified in its currently effective tariffs.

If a rate at variance with the tariff is charged, then

legal action in an appropriate court and based upon

an appropriate legal theory will take place. The le-

gal theory most obviously arises from contract law.

In the instant case, the parties agreed to be bound

by the tariff rate as noted in the upper left-hand cor-

ner of the Forwarder Airbill (see Specimen in Appen-

dix). It is this agreement, which is implied in every

contract of carriage in any event, which forms the basis

of the legal action. Like any other agreement, it is

a contract which carries with it all of the rights and

responsibilities of any other agreement or contract. It

forms the basis of legal action.

The present lawsuit is just this situation: CMAX is

seeking to recover the rate agreed upon by both par-

ties, which is the tariff rate. The liability on the part

of Capitol Records to pay for the service is created by

the contract and arises from the relationship of the

parties; i.c., the shipper must pay the carrier for the

LTS

=

carrier’s service when there is a contract of carriage.

The liability to pay is created by the contract entered

into between the parties; it is not created by any statute.

A hypothetical example will serve to focus this point:

“Suppose CMAX ships freight for Capital Records

from California to Ohio pursuant to a Forwarder

Airbill which describes all of the particulars. After

the shipment has been completed and the freight

arrives at its destination, Capitol Records refuses

to pay for anything. Suppose further that the For-

warder Airbill sets forth a rate which is less than

the tariff rate. Now CMAX sues Capitol Records

to recover the charge for carrying the latter’s

freight. Is the obligation of Capitol Records to

pay for the carriage created by statute? Hardly,

for the contract of carriage created that liability.

The statute merely fixes the amount which Capi-

tol Records will pay. In short, the contract creates

the liability. the statute merely fixes the amount.”

It can be said without fear of contradiction that all

cases in every jurisdiction hold that the prescribed

tariff rules and raie regulations become a part of every

contract of carriage. This must be the rule as the en-

tire purpose of tariff regulations is to make certain

that all carriers will charge the tariff rate and not

give rebates, refunds, or special preference to any par-

j shipper. This rule is very strictly enforced and

every jurisdiction in the United

with decisions making this obvious

Ohio (Thomas Foods, Inc. v. Penn-

Company, 168 N.E. 2d 612). Cali-

v. Public Utilities Commission of Cali-

. 2d 399) and, of course, our Federal

E

ati

ith!

il

= =

courts (United States v. Associated Air Transports,

Inc., 275 F. 2d 827, a recent case concerning air

freight).

As already indicated, this particular Forwarder Air-

bill contains language that the parties do mutually

agree that the transportation shall be governed by the

tariffs which “. . . are hereby incorporated into 2nd

made a part of this contract”. Reference is made to

the specimen attached in the Appendix.

It follows, then, that there is only one rate: the tariff

rate. No other rate may be charged. Thus, those stat-

utes setting tariffs simply fix the amount which must

be paid by every shipper to every carrier. The li-

ability to pay the carrier, however, is not created by

the statute; that lability has been created by the con-

tract. It should be noted in the recent Federal case,

United States v. Associated Air Transport, Inc., 275

F. 2d 827, an air carrier case, that the court therein

ruled upon this precise point. It was held that the

lawful rate is the rate that every carrier must exact

and that which every shipper must pay, and that no

act nor omission of any carrier can estop or preclude

it from enforcing the full amount of the tariff charges.

The court in that case adopts the identical prior de-

cisions rendered in the railroad and truck cases on

this point.

Court of Appeals’ Decision Below in Direct Conflict

With All Other Federai Decisions, Including by

United States Supreme Court.

Fortunately, the precise issue involved here has been

raised before, but not in an Air Transportation case.

In the case of Von der Ahe Van Lines, Inc. v. US.,

385 F. 2d 999, 1001 (1966) cert. denied 385 US.

837, the exact issue was raised as it relates to highway

=

transportation. That was a common carrier action to

recover undercharges from the shipper wherein each

shipment was made pursuant to a bill of lading. The

action went up on appeal from a ruling made on a

motion for summary judgment. That motion was based

upon a statute of limitations. Therefore, the question

arose as to whether the common carrier’s action was

based upon the contract (bill of lading) or on some

other basis. The Von der Ahe court ruled:

“The Bill of Lading is the contract of carriage upon

which the carrier’s action is based. St. Louis, etc.

Railroad v. Starbird, 243 U.S. 592; Johnson Motor

Transport v. U.S., 149 Fed. Supp. 175; U.S. v.

Louisville & Nashville Railroad, 221 Fed. 2d 698

(6th Cir. 1955).”

The United States Supreme Court has enunciated this

very basic principle as already noted in denying

certiorari in the Von der Ake case as well as ruling

upon it in the St. Louis, etc. Railroad v. Starbird case

cited above, and in Mich. Central R.R. v. Mark Owen

Co., 256 U.S. 427 and Louisville & National Railroad

v. Central Iron & Coal Co., 265 U.S. 59. It is interesting

to note that the Court of Appeals below, for the Sixth

Circuit, apparently has reversed its ruling made on this

precise issue in the celebrated case of United States v.

Louisville & National Railroad, 221 F. 2d 698 (6th

Circuit 1955). The opinion of the Court of Appeals’

decision below, however, makes no reference to that

case. The court below, however, does cite Carter v.

American Telephone & Telegraph Company, 355 F. 2d

486 (Sth Circuit 1966) wherein it is held: “First, a

tariff, required by law to be filed, is not a mere con-

tract. It is the law”. The case of United States v. As-

sociated Air Transport, Inc., 275 F. 2d 827 (Sth

—_—-

Circuit 1960) is cited by the Court of Appeals below

to the same effect.

It should be noted, however, thet these cases do not

state that there is no contract. The principle enunciated

is that a tariff carries the weight of law and cannot

be altered by the contract between the parties. This is

vastly different from saying that there is no contract

at all. It is true that a tariff is not a mere matter of

contract, for “a rate once regularly published is no

longer merely the rate imposed by the carrier, but be-

comes the rate imposed by law.” Louisville & Nashville

Railroad v. Dickerson, 191 Fed. 705 (6th Cir. 1911).

No one argues with the fact that a contract between

carrier and shipper cannot vary the tariff rate. But

there is still a contract between carrier and shipper

describing the particulars of the agreement. It is this

contract which forms the basis and foundation of any

legal action between carrier and shipper. This is the

instruction provided by such cases Von der Ahe Van

Lines, Inc. v. U.S., (cited above), St. Louis, etc. Rail-

road v. Starbird, 243 U.S. 592; Johnson Motor Trans-

port v. U.S., 149 Fed. Supp. 175; United States v.

Louisville & Nashville Railroad, 221 F. 2d 698; Chicago

R.I. & P.R. Co. v. Furniture Forwarders Company of

St. Louis, Inc., 420 F. 2d 385 (1970); Pennsylvania

Railroad v. Greene, 173 Fed. Supp. 657; United States

v. Mississippi Barge Line Co., 285 F. 2d 381, as well

as those United States Supreme Court cases cited above.

Court of Appeals’ Decision Below Exactly Contra to

Prior Ruling of Same Court of Appeals.

The Court of Appeals for the Sixth Circuit has had

an occasion to rule upon precisely the same issues

involved in this case, previously in the celebrated case

of United States v. Louisville & Nashville Railroad Com-

—_

pany, 221 F. 2d 698 (6th Cir. 1955). This was a rail-

road rate case involving bills of lading. The court there

ruled that a tariff rate itself is not a contract but is

simply a measure of compensation applicable if shipment

is made. The court states in this decision:

“Each shipment was made under a bill of lading

which as declared by the Supreme Court of the

United States constituted the contracts. Michigan

Central Railroad vs. Mark Owen Company 256

U.S. 427, Louisville & Nashville Railroad v.

Central Iron & Coal Company, 265 U.S. 59. The

bill of lading contains the ‘entire contract’ upon

which the responsibilities of the parties rest. St.

Louis Iron Mountain & S. R.R. vs. Starbird, 243

U.S. 592.”

Of great importance is that the Sixth Circuit ruled in

this case that the right to compensation on the part of

the Railroad carrier arises not with the establishment

of the rate but with the shipment.

No mention of this case is made in the instant ruling

of the Court of Appeals below. Obviously, the instznt

decision is exactly contra to and overruled the United

States v. Louisville & Nashville Railroad case. This can-

not have been the intention of the Court of Appeals

below since the United States v. Louisville & Nashville

decision was based upon prior decisions by the United

States Supreme Court and, of course, was consistent

with rulings of all other United States Courts of Appeal.

This inconsistency calls for review and clarification

by the United States Supreme Court to once again

declare the law as stated in the very cases cited by the

Sixth Circuit in the portion of the Opinion quoted above.

There is nothing special about air transportation to call

for completely different judicial interpretation than we

= =

find with railroad, motor carrier, pipeline or water

transportation cases. Precisely the same issues are in-.

volved arising out of identical fact situations. It 13

suggested that the Opinion of the Court of Appeals

below is aberrant and inconsistent with a long line of

cases decided by the United States Supreme Court as

well as other Federal Courts of Appeal.

A conflict in decisions among the Federal Courts of

Appeal, of course, is reason enough for the granting of

certiorari F.T.C. v. Fiotill Products Co., 389 U.S. 179.

Court of Appeals’ Ruling Below Contrary to Ohio Law.

Indeed, this is a case of first impression regarding

what statute of limitations applies to actions between

carriers and shippers in air transportation. Yet there are

numerous cases ruling that a bill of lading is a written

contract and that an action to recover undercharges

is an action on a contract and that the statute of limi-

tations governing written contracts controls, as already

noted above. No mention is made by either the District

Court nor the Court of Appeals below of these author-

ities and yet not a single case is cited for the proposi-

tion that in Ohio, or elsewhere, an action to recover

undercharges on a bill of lading is not controlled by the

statute of limitations for written contracts. The law of

Ohio is clearly stated in J. L. Waring & Company v.

The Baltimore & Ohio Railroad Company, 4 Ohio Dec.

Rep. 553 wherein we read:

“Though a bill of lading is silent as to the goods

being delivered within a reasonable time, yet that

obligation is part of written contract, and an

action for fai:ure to deliver in a reasonable time

is not barred within 6 years but in 15 years”.

=

That has been the law of Ohio for nearly 100 years

up to and including the present time. The Court of

Appeals below, however, has apparently decided upon

a major departure, although the reasons for such a de-

parture are not set forth.

In the absence of a Federal statute of limitations,

the only statute of limitations which can apply to this

situation is the Ohio statute of limitations governing

written contracts. It has already been demonstrated

above that this most certainly is not an action upon a

statute since the contract creates the liability and the

statute only fixes the amount of that liability. Both par-

ties agree that this is not an oral agreement either ex-

press or implied. Both parties agree that the transporta-

tion performed by CMAX for Capitol Records and ac-

cepted by Capitol Records was in interstate commerce.

This leaves but one conclusion: The rights and liabil-

ities created in each of the parties through these written

instruments are protected by the Ohio statute of limita-

tions governing written contracts. (Revised Code of

Ohio, Section 2305.06). To hold otherwise is to hold

that the parties to a written instrument such as a bill

of lading or Forwarder Airbill are not afforded the

same protection as given to all other parties to written

contracts in Ohio.

In the alternative, to hold otherwise is to rule that an

undercharge action such as this is one based upon

statute, quite contrary to the overwhelming authorities

and legal reasoning. Needless to say, to hold otherwise

is to give to unscrupulous carriers and/or shippers a de-

vice to evade the tariff, somethirg for which they

have been searching for decades. Through the ruling

of the District Court below. Capitol Records escapes

paying the one and only lawful rate, the tarriff rate, even

—

— =

though it entered into lawful and binding contract of

carriage (Forwarder Airbill) with all terms reduced to

a concise written instrument, in the state of Ohio. The

iiogic of such a conclusion is apparent as is the lack of

justice. In short, it means that one party doing business

in Ohio pursuant to a written contract may successfully

avoid the obligation he contracted for, whereas the

other party doing business in Ohio pursuant to that

contract is precluded from having the protection of the

law (the rights afforded by the 15 year statute of

limitations ).

Stated in a different way, the problem is that: Capitol

Records has admittedly accepted all of the benefits of

the written contract in Ohio (delivery is admitted in the

-Answer). It admits that it is qualified to do business

under the laws of the State of Ohio (Answer, Second

Defense) and therefore harvests all of the rights con-

ferred by Ohio law and, of course, is subject to the

obligations imposed by Ohio law. Bills of Lading (For-

warder Airbills) covered each shipment, setting forth

the precise terms of the agreement in a written instru-

ment (admitted to in the Answer). In the event of non-

performance by CMAX, Capitol Records could have

enforced its contractual rights against CMAX under

Ohio law, obviously. It would be afforded all of the

protection and rights conferred by Ohio law. Indeed, one

of those rights which it might claim would be the pro-

tection afforded by the 15 year statute of limitations.

But now the situation is reversed; having accepted

all of the rights conferred by Ohio law, Capitol Rec-

ords wishes to deny those same rights to CMAX, also

doing business in the State of Ohio and also entitled to

the same rights and privileges conferred by the laws of

Ohio. The District Court and the Court of Appeal be-

px

low has denied these rights and privileges of Ohio law to

CMAX and has permitted Cap:tol Records to success-

fully “beat the tariff” and avoid the liabilities created

under the very contract whose benefits Capitol Records

admittedly accepted, apparently without complaint. This

is unjust, illogical, and legally untenable.

Appellant (CMAX) submits that the appropriate

law of Ohio to be applied is the statute of limitations

governing written contracts. If there was any doubt as

to which statute should be applied, CMAX was en-

titled to have that doubt resolved in its favor as the

resisting party in a Motion for Summary Judgment.

It has been settled law for a great many years and is

still the law that all doubts on an issue must be resolved

against the moving party in Summary Judgment. Potter

y. Columbia Broadcasting Systems, Inc., 368 U.S. 464;

Sartor v. Arkansas Natural Gas Corporation, 321 US.

620; Electrical Fittings Corporation v. Thomas & Betts

Company, 3 Fed. 256; Junker v. Midterra Associates,

Inc., 49 Fed. 310. A Federal case arising in Ohio and

commenting upon this same point, noting that the law

of Ohio is the same, is Arrasmith v. Pennsylvania

Railroad, 410 F. 2d 1311.

Impact on Industry.

If the decision of the Court of Appeals below is

permitted to stand, it means that all parties to every

bill of lading covering air transportation of guods in

Interstate Commerce in the United States are no longer

prot ‘ted by that statute of limitations governing

written contracts in the forum wherein an action is

brought since there is no applicable Federal statute of

limitations. This represents a complete departure from

the established lew in this field and utterly defeats the

=

Federal policy of enforcing the tariff rate as noted

above.

The obvious result of the decision below is to per-

mit a shipper to “beat” the tariff rate. As the case now

stands, the Court of Appeals below has sanctioned

the shipper paying a rate less than the tariff rate. This,

even though carrier and shipper have reduced every

single agreement to a concise written instrument and

where both parties agreed that the tariff rate was the

rate. Further, even though the law of Ohio provided that

parties to a written instrument would be protected by

the 15-year statute of limitations, CMAX and Capitol

Records are not protected by the law of the land while

they are transacting business in Ohio. This is patently

unjust and highly discriminatory.

It seems fundamental justice that all parties to writ-

ten instruments should be protected by that statute

of limitations governing written instruments. Bills of

lading qualify as among the most precise and detailed

of written contracts—far more so than many agree-

ments reuuced to writing by laymen. There is no rea-

son why parties to a bill of lading should be treated in

any way different from parties to any other written

instrument when it comes to the period of limitation

within which they may bring an action founded upon

that contract.

If this decision is permitted to stand, and the law

of the iand is thereby changed to provide that an action

between a carrier and a shipper is based upon the

statute fixing the tariff rather than the bill of lading,

then literally thousands of carriers and shippers who

previously relied upon the rights and liabilities created

by such bills of lading will now be frustrated in their

attempt to seek judicial relief; as one example, it is

_——

almost universally true that state statutes of limitation

governing written contracts are much longer than those

controlling other types of contracts, or obligations

created by statute, th: oughout the nation.

find themselves “out of court” because of this change

in the law which is not consistent with any other aspect

of transportation law such as that involved with motor

although they had a written contract and had relied

the statute fixing the tariff with its consequently shorter

period of limitation. This result could not have been in-

tended as it creates obvious chaos in the air transporta-

tion industry and creates a situation completely at var-

jance with other, long established transportation law.

it goes without saying that if a carrier

can “beat the tariff’ by no longer being exposed

that period of liability provided by those statutes

limitations governing written contracts,

The law is replete with innumerable methods tried over

the years to evade the tariff, but the law has always

been that there is only one right: the tariff rate.

conn ee——eeEeEeEeEeEeeeeeee

_— =

have a case holding just the opposite in the State of

Ohio. As far as research for both parties to this action

and the District Court has been able to reveal, there is

no Federal authority for the proposition that a bill of

lading is not a written contract governed by the ap-

propriate statute of limitations. Nor has research re-

—_— =

ities of shippers, air carriers and air freight forwarders

since written contracts (bills of lading) will no longer

be afforded the protection of statutes of limitation gov-

erning all other written contracts. Further, to permit

the Court of Appeals’ decision below to stand wiil do

violence to fundamental principles of contract law and

the legal actions flowing therefrom, in that no longer

will actions between air carriers and shippers be based

upon contracts but will be based upon a Federal tariff

which does not create any new species of legal action—

and which Federal tariff statute was not intended to

create any new species of legal action.

For these reasons, a Writ of Certiorari should issue

to review the judgment and opinion of the United

States Court of Appeals for the Sixth Circuit.

Respectfully submitted,

Tuomas E. Russert,

Gortpman, Coie & PuTNIcK,

By Tuomas E. Russert,

Attorneys for Petitioner.

APPENDIX A.

Appeal From the United States District Court for the

Southern District of Ohio, Western Division.

United States Court of Appeals for the Sixth Circuit.

City Messenger Service of Hollywood, Inc., dba City

Messenger Air Express and/or C.M.A.X., Plaintiffs-

Appellants, v. Capitol Records Distributing Corp., De-

fendant-Appellee. No. 71-1012.

Decided and Filed August 12, 1971.

Before: Phillips, Chief Judge, Brooks and Kent,

Circuit Judges.

Per Curiam. This is an appeal from an order of dis-

missal by the District Court. The facts are sufficiently

set forth in the opinion of District Judge Timothy

Hogan, ........ f , S.D. Ohio, 1971. The

parties will be decribed as in the District Court.

Briefly, the facts are as follows: The plaintiff is an

“air carrier” within the meaning of Title 49 U.S.C.

§ 1301(3), and as such was recuired to charge the

freight rate “specified in its currently effective tariffs.”

49 U.S.C. § 1373(b). More than 3700 shipments were

made during the period involved, which began in

February, 1955 and ended in January, 1959. The last

shipment was made more than six years before the

commencement of this action in the District Court.

Plaintiff brought the action te recover for the difference

between the tariff prescribed on the bill of lading and

the specified tariffs in effect at the time of the ship-

ments. Defendant filed a motion for summary judgment

on the ground that the action was Larred by the ap-

plicable statute of limitations of the State of Ohio. The

_

trial court granted the motion after concluding that the

right to recover was a liability created by statute, and,

therefore, barred by the provisions of Ohio Revised

Code §2305.07. “An action * * * upon a liability

created by statute * * * shall be brought within six

years after the cause thereof accrued.”

The basic issue in this case is whether the action is

based upon a written contract as claimed by the plain-

tiff and, therefore, controlled by the 15-year statute of

limitations contained in Ohio Revised Code §2305.06,

or whether the action is based upon a statutory liability

and therefore covered by the six-year statute of limita-

tions of Ohio upon which the trial court relied. The

Court of Appeals for the Fifth Circuit has had occasion

to determine whether a charge for air freight is based

on contract or is required by law. In United States v.

Associated Air Transport, Inc., 275 F.2d 827, 832,

(Sth Cir., 1960), that Court said:

Filed as it was under compulsion of §403(a) of

the Civil Aeronautics Act of 1938, the tariff

carried the statutory mandate of §403(b) that it

and it alone was to be the sole standard for

services to be rendered and charges assessed and

collected.* In the implementation of this stringent

legislative policy, the courts have been equally

emphatic that the basis for the charge or credit

must be found in the tariff. If it is not in the

tariff, it is not allowable. It is not a mere matter

of contract. For “a rate once regularly published

is no longer merely the rate imposed by the carrier,

but becomes the rate imposed by law.” Louisville

& N. R. Co. v. Dickerson, 6 Cir., 1911, 191

F. 705, 709. “Such tariffs, at least those which

are factors in determining the carrier’s charges,

=—

have the force and effect of statutes.” American

Ry. Express Co. v. American Trust Co., 7 Cir.,

1931, 47 F.2d 16, 18. The tariffs are both con-

clusive and exclusive; they may not be added to

through reference to outside contracts or agree-

ments or understandings or promises.”

And in Carter v. American Telephone & Telegraph

Company, 365 F.2d 486 (Sth Cir., 1966), the Court

said further at page 496:

“First, a tariff, required by law to be filed, is not

a mere contract. It is the law.”

In this case we agree with the District Court that the

plaintiff is not suing for freight charges described in

written contracts, but is suing for the statutory under-

charges represented by the differences between the

charges set forth in the bills of lading and the amounts

prescribed by the specified tariff required by law to be

filed.

For the reasons herein stated and for the reasons

stated by District Judge Hogan in his opinion, ........

F.Supp. ........ , (S.D. Ohio, 1971), the judgment of the

District Court is affirmed.

a

APPENDIX B.

Summary Judgment in Favor of Defendant.

United States District Court for the Southern Dis-

trict of Ohio, Western Division.

City Messenger Service of Hollywood, Inc., dba City

Messenger Air Express and/or C.M.A.X., Plaintiff,

v. Capitol Records Distributing Corp., Defendant. Civil

Action No. 6659.

Filed Oct. 29, 1970.

The plaintiff, at the times of interest in this case,

was a “air carrier” as that term is used in Ch. 20 of

49 U.S.C. As such, it had filed with the “Board” tariffs

applicable to various of its carriages. Having done so, it

was subject to 49 U.S.C. §1373 and specifically (b) of

that section, which provides:

“No air carrier shall charge or demand or collect

or receive a greater or less or different compensa-

tion for air transportation, or for any service in

connection therewith, than the rates, fares and

charges specified in its currently effective tariffs

** *”

Section 1472(d) of Title 49 makes it a criminal of-

fense for any air carrier or ticket agent or employee or

representative thereof to willfully grant or give, or

cause to be offered, granted, or giver, any rebate or

other concession in violation of the provisions of the

Act, and specifically makes it a criminal offense for

any such person to suffer or permit any shipper to ob-

tain transportation or services at less than the published

tariff rates. For some period of time prior to 1959— |

ending at a time more than six years before the

commencement of this action—the defendant made

—

some three thousand shipments at least via the plain-

tiffs air carrier services. Each of these shipments were

represented or covered by an “air bill.” This is a written

instrument which corresponds to a railroad bill of

lading. For our purposes we may assume that each air

bill was actually signed by both the shipper, the

defendant, and also by the air carrier, the plaintiff.

Each air bill contained a blank for the insertion of

the charge for the service. Apparently the charge

was actually inserted in the air bill after the shipper

had signed it—in our view, it makes no difference

whether the insertion was after or before, since that

was the practice of the parties anyway. In any event.

in each of the some three thousand shipments, the

actual charges inserted in the air bill were less than

the tariff rates—that is, less than the applicable rates

on the published and filed tariffs of the plaintiff. The

defendant paid only what it was charged, of course,

and the purpose of this action is to recover the under-

charge in accordance with the requirements of the

above statutes.

For jurisdictional purposes—there is no problem of

the requisite amount. The parties are each residents or

citizens of California, so there is no diversity jurisdic-

tion, of course. Early in this controversy the defendant

objected to the subject matter juiisdiction on the

ground that no federal question was involved. The

plaintiff at that time resisted the objection to jurisdic-

tion and based its resistance on 28 U.S.C. §1337,

which, of course, provides:

“The district court shall have jurisdiction of any

civil action or proceeding arising under any act

of Congress regulating commerce * * *.”

wailies

That, of course, is the equivalent of claiming that this

action arises under a feceral statute.

There is no issue of fact at all on this point—every

service rendered by the plaintiff to the defendant in-

volved in this controversy was rendered more than six

years before this case was filed in February of 1968.

Every “air bill” involved was signed and delivered

more than six years before that date and every state-

ment covering all the transactions involved in this case

found some issue prior to the six-year period.

Concededly the plaintiff's cause or causes of action

arose more than six years prior to the commencement

of this action. The defendant has moved for a summary

judgment on the ground that the plaintiff's action is

barred by the statute of limitations.

The question is novel. While Congress has provided

statutes of limitation governing actions by licensed or

permitted freight forwarders or against them (49 U.S.C.

§1006(a)—two or three years as the case may be)

and while Congress has provided a statute of limita-

tions for such actions involving railroad common car-

riers and water common carriers (49 U.S.C. § 16—three

years) Congress has provided no statute of limitations

applicable to an action by or against an air carrier to

recover uncercharges or the opposite.

The duty of a district court in this circuit in the face

of a plea of the statute of limitations is set forth in

Valdecker v. Corn Products, 411 F.2d 850 (1969).

We need not repeat it.

The applicable rule of generality is set forth in Auto

Workers y. Hoosier Corp., 383 US. 696 (1965) at

705, as follows:

Nr ere eee en ee pa shennan Cine 0 Biv

— we

“Accordingly since nc federal provision governs, we

hold that the timeliness of a * * * suit is to

be determined, as a matter of federal law, by refer-

ence; to the appropriate state statute of limita-

tions.”

There are three Ohio statutes of limitation of pos-

sible application. Revised Code Section 2305.06 pro-

vides:

“An action upon a specialty or an agreement, con-

tract, or promise in writing shall be brought within

15 years after the cause thereof accrued.”

The plaintiff claims that this is the applicable statute

—-relying on numerous cases which refer to a bill of

lading or to an air bill as a “contract in writing” be-

tween the parties.

Section 2305.07 of the Revised Code of Ohio pro-

vides:

“An action upon a contract not in writing, express

or implied, or upon a liability created by statute,

other than a forfeiture or penalty, shall be brought

within six years after the cause thereof accrued.”

The defendant claims that this is the applicable Ohio

Statute. The c'aim has two bases. First, periodically the

plaintiff would tally up the charges and render the

defendant a cumulative bill, which leads the defendant

to the contention that this is an action on an account.

An action on an account clearly in Ohio is subject to

the six year statute. The second basis rests on the

Mahoning County Court of Appeals case of Rudolph

v. Husat, 187 N.E.2d 190 (1961)—in that case, the

court said: |

“In order for an action to come within statutes of

limitation governing actions upon a speciality or

wniilion

agreement, contract or promise in writing, the

action must grow oui of a written instrument which

acknowledges indebtedness or promises to 4 y in

such terms as to make supplemental evidence un-

necessary.”

The defendant points to the necessity of the tariffs as

supplemental evidence in this case.

The third statute is Section 2305.13 of the Ohio

Revised Code. This statute provides as follows:

“All actions by carriers for recovery of their

charges or part thereof, arising out of the intra-

State transportation of persons or property in this

state * * * shall be begun within three years

of the time the cause of action accrues * * *

The cause of action in respect of a shipment of

property shall accrue upon the delivery thereof by

the carrier. Overcharge as used in this section

means charges for transportation services in excess

of those applicable thereto under the tariffs law-

fully on file with the Public Utilities Commission.”

It is the conclusion of this Court that the “ap-

propriate state statute of limitations” to refer to “as a

matter of federal law” is cither the six-year or the

three-year statute for these reasons:

First—This actually is not an action on a contract.

The price stated in the contract is not what the plain-

tiff secks to recover—it is the difference between a tar-

iff price and the price contracted for. But for the fed-

eral statutes referred to above, the contract would have

been a perfectly valid one. The statute is as necessary

a basis for the plaintiff's cause of action as it is for the

jurisdiction of this Court. The Fifth Circuit has aptly

said in a case involving an air carrier—

enfin

“Such tariffs, at least those which are factors in

determining the carrier's charges, have the force

and effect of statutes.” United States v. Associated

Air Transport, 275 F.2d 827 (1960) at pg. 833.

which have been referred to hereinabove. Essentially

this is an action on a “statute” and for that reason the

policy at issue.” Citing Charney v. Thomas,

F.2d 97 (6th Cr. 1967).

See also Englander v. Ford Motor Co., 293 F.2d

(6th Cir. 1961); Reliford v. Eastern Coal, 260

$77 (6th Cir. 1958); Charney v. Thomas, 372

97 (6th Cir. 1967); Mulligan v. Schiachter, 389

231 (6th Cir. 1968); Crawford v. Zeitler, 326

—i9o—

119 (6th Cir. 1964). Furthermore, as the Supreme

Court pointed out in Auto Workers, in determining the

applicable st.te statute (whether the long or short pe-

riod of limitations should be described as the one most

effectuating federal policy; it is quite in order to look

to the federal statutory regulation in the general field.

As we have seen, the applicable limitation periods pro

vided by Congress in relaied fields, such as water ship-

pers or land shippers, is a short two or three-year

period.

The fifteen-year section is not the most “appropriate”

sec’ om. Either the six-year section or the three-year sec-

tion is. It is not necessary in this case to decide which

and we do refrain from so deciding.

The amended complaint will be and it hereby is

dismissed at the plaintiff's cost.

/s/ Timothy Morgan

United States District Judge.

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