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

> Briefs, arguments, decisions, and more.

URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385606_0236%3A1

## Record

- **Collection:** Supreme Court brief
- **Document type:** Petition for Writ of Certiorari
- **Published:** January 1, 1972
- **Citation:** 404 U.S. 1059

## Text

Beit ot - Supreme Courl, U.».
weapon: CC r UU. KF I = D
exe IN 1m: |

Sieeune Court of the United § tel ae .

_-—
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
NS ia icchesnsereieiniseiainannn enieiiman naan 2
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
Remon cet Tenney nnn nnn 24
Be Te I anise cccreceress 26

I Te So ai aeeeinpineeanndaas 27

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.

Rrsvadeehinnteineremheslinaneaeasekeieete

¥ BA i:
=a ar. dL

um ee

ws wr

er. pe

in: SY

5

ee Gy, Ge ‘en! -
by: Pears ror pare

. > ‘ ”
Ce ee Me NMOOG WWae

SaldO3 NoByv> 9 GNV TWNISRIO JHL ONINWW aa NOA

---

Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385606_0236%3A1. Public record. Not legal advice.