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February 4, 1961, we found such excess charges totaling $1,200,000. The average weekly rate of accumulation at the end of the reporting period was approximately $4,000. Because we lack legal means to recover such overpayments, because of the audit workload otherwise, and because we felt that a fairly constant rate of overpayments per week was being maintained, we discontinued recording overpayment statistics.

An example of the way in which shippers are deprived of a chance for possible reparations against motor carriers under the existing state of the law was described in the April 3, 1965, issue of the weekly trade magazine, Traffic World. An editorial describes a proceeding before the Interstate Commerce Commission titled L.T.L. Class Rates and Minimum Charges Between Midwest and Central Territories, 325 I.C.C. 106 (1965). In that proceeding, increases in less-truckload and any quantity rates and a minimum charge increase published by the Middle West Motor Freight Bureau on behalf of its member carriers was allowed by the Interstate Commerce Commission to go into effect in July 1963. However, in a decision dated February 24, 1965, and served on the parties March 16, those increases were found not reasonable and the carriers were ordered to cancel them on or before April 14, 1965. When the lower rates in effect prior to July 1963 are restored, the shippers who have paid the rates now found not reasonable will not be able to recover the amounts paid by them in excess of the reasonable levels which were in effect until July 1963.

The situation produced by the T.I.M.E. decision continues to prevail and it has been complicated by another Supreme Court decision, Hewitt-Robins, Inc. v. Eastern Freight-Ways, Inc., 371 U.S. 84, decided November 19, 1962. In that case a private shipper sued a motor carrier for damages caused by the unreasonable practice of misrouting. Instead of transporting the shipper's goods from Buffalo, N.Y., to New York City, over its low-rated intrastate route, the carrier transported them over its higher rated interstate route. The district court held the case in abeyance while the parties sought an Interstate Commerce Commission ruling on the reasonableness of the practice; the Commission held it to be unreasonable, but by the time the case was reached again in the district court, T.I.M.E. had been decided, and the district court dismissed the complaint. The Court of Appeals agreed, and the shipper took his case to the Supreme Court.

The Supreme Court concluded that T.I.M.E. did not control and reversed, thus in effect upholding an Interstate Commerce Commission determination of an unreasonable practice (carrier misrouting) resulting in damages recoverable by the shipper. The Court held that whether a common law remedy survived enactment of the Motor Carrier Act depends on the effect of the exercise of the remedy upon the statutory scheme of regulation; that even though the carrier misrouting resulted in the exaction of excess charges, it raised not a question of rates, but one of routes; that a remedy for misrouting was not inconsistent with the statutory scheme of regulation and that such a remedy, therefore, survived the passage of the act. The Court "put no significance in whether one tags the claim as ‘overcharges,'" or "whether it is a proceeding involving the 'reasonableness' of routing practices."

The Hewitt-Robins decision tends to introduce an element of confusion in considering the availability of a shipper's postshipment remedy for the recovery of damages under the Motor Carrier Act in that an unreasonable practice caused by a carrier's misrouting, as in Hewitt-Robins, is treated as being distinguishable from the unreasonable charge situation in T.I.M.E. Other distinguishable unlawful situations may exist and might be recognized and identified as furnishing grounds for the recovery of damages, but only after protracted and costly litigation.

Provisions for the recovery of unlawful charges have been in effect since 1906 (Hepburn Act) insofar as rail carriers are concerned, and it is difficult to rationalize the continued omission of similar provisions from the motor carrier and freight forwarder parts of the Interstate Commerce Act. According to the 78th annual report (p. 34) of the Interstate Commerce Commission, the regulated railroad operating revenues for the fiscal year ended June 30, 1963, were in excess of $10 billion, while those of the motor carriers of passengers and property were about $9,694 million. These figures suggest that the existing immunity of motor carriers from actions for the recovery of unlawful charges cannot be defended solely on financial or economic grounds. If such special treatment for motor carriers can be justified. question arises as to whether, for the purpose of uniformity in the applicability of statutory provisions controlling unlawful carrier rates and charges, rail carriers should not be relieved from an obligation to pay damages on past shipments in unlawful charge situations. We believe that the statutory remedies against railroads should be retained and that the discrimina

tion against railroads in this respect (and the denial of an appropriate remedy to shippers) should be removed by equalizing the respective positions of the rail and motor carriers.

We have consistently recommended enactment of legislation to overcome the T.I.M.E. decision in order to promote uniformity of treatment of both carriers and shippers. We believe that the present state of the law, as a result of the Hewitt-Robins decision, makes enactment of such legislation even more desirable. We strongly urge that your committee give early and favorable consideration to S. 1732.

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DEAR MR. CHAIRMAN: We refer to your letter of April 7, 1965, in which you request our comments on S. 1733, introduced by you at the request of the Interstate Commerce Commission.

S. 1733 would extend the civil forfeiture provisions in section 222 (h) of the Interstate Commerce Act, 49 U.S.C. 322 (h), to unlawful motor carrier operations and safety violations, permit the Interstate Commerce Commission to institute forfeiture actions directly in the courts, and increase by 100 percent the amount of the prescribed forfeitures. This kind of proposal has been recommended by the Commission for several years, the latest being legislative recommendation No. 22 in its 78th annual report, page 75.

S. 1733 is designed to give the Commission additional authority to control illegal interstate transportation on highways, the so-called "gray-area" operations. One method used to deal with these problems-by criminal proceedings prosecuted through the Department of Justice-reportedly does not have a sufficient deterrent effect because the mechanics of bringing a criminal charge and the proof needed to sustain it complicate and retard prosecution.

S. 1733 would not affect the functions and operations of the General Accounting Office, nor would it directly affect the interests of the United States as a purchaser of transportation. However, it seems to be in the public interest and we have no objections to its favorable consideration by your committee.

Sincerely yours,

JOSEPH CAMPBELL, Comptroller General of the United States.

COMPTROLLER GENERAL OF THE UNITED STATES,
Washington, D.C., May 18, 1965.

Hon. WARREN G. MAGNUSON,
Chairman, Committee on Commerce,
U.S. Senate.

DEAR MR. CHAIRMAN: We have your letter of May 10, 1965, asking for our comments on H.R. 5401, which passed the House of Representatives on May 6. H.R. 5401 is similar in part to S. 1727, on which we furnished you our comments in our letter of May 6, 1965, B-104930. It aims at improving safety on the highways and reducing illegal carriage by making provision for Federal-State cooperation in the enforcement of safety and economic regulations; by extending the civil forfeiture provisions of the Interstate Commerce Act, 49 U.S.C. 322(b); by increasing the maximum penalties. 49 U.S.C. 322 (h); by amending parts II and IV, 49 U.S.C. 322 (b), 1017 (b), to permit parties injured by certain violations to apply for injunctive relief; and by broadening the authority of the Interstate Commerce Commission in the area of enforcement.

The bill would also amend part II of the act to restore the procedure for the recovery of reparations from motor common carriers which existed prior to the decision in T.I.M.E., Inc. v. United States, 359 U.S. 469 (1959), and would amend part IV to extend this remedy to shippers via freight forwarder. In addition, the bill contains in section 8 provisions for the suspension, change, or revocation of dormant water carrier certificates and for the free entry of uncertificated

water carriers into water transportation between ports via routes over which no certificates are in effect.

As we said in our letter of May 6, 1965, concerning S. 1727, the provisions designed to promote safety and to combat illegal transportation, would not, if enacted, materially affect the functions and operations of our Office. We have no objection to their receiving favorable consideration from your committee, since they seem to be in the public interest. The same is true of the provisions in section 8 concerning water transportation.

The provisions in sections 6 and 7 of H.R. 5401 concerning motor carrier and freight forwarder reparations are of particular interest to us. Since the Supreme Court in the T.I.M.E. case, above, invalidated the procedure for obtaining reparations from motor carriers, upon a determination of unreasonableness by the Interstate Commerce Commission in a proceeding ancillary to a court action for their recovery, we have consistently recommended amendment of the Interstate Commerce Act to give shippers the same rights against motor common carriers and freight forwarders which the act affords against rail carriers subject to part I. S. 1732, on which we reported to you in our letter of April 22, 1965, B-120670, proposes detailed and specific provisions to permit the recovery of damages for violations of parts II and IV; the companion bill, H.R. 5869, contains similar provisions. Our report to the House Committee on Interstate and Foreign Commerce on H.R. 5869 is included in the committee report accompanying H.R. 5401, report No. 253, on page 17. The provisions of S. 1732 and H.R. 5869 would subject motor cominon carriers and freight forwarders to the same liabilities for violations of the act and give shippers the same rights against these carriers as are contained in parts I and III, relating to rail carriers and water carriers. H.R. 5401 defines "reparations" and authorizes recovery only for such reparations, rather than for "damages" for violations. In other words, H.R. 5401, like S. 1727, would simply restore the procedure which prevailed prior to the T.I.M.E. decision. The more detailed provisions contained in S. 1732 and H.R. 5869 are like those which have been in effect for many years as to railroads; they are thus subject to established legal principles. The method for obtaining reparations provided in H.R. 5401 is not objectionable since it does reinstate the practice which prevailed before the T.I.M.E. case. However, we suggest that that practice does not seem as economical or as expeditious as the procedure proposed in S. 1732. If S. 1732 is not to be enacted, then we feel that passage of H.R. 5401, as far as the reparations provisions are concerned, would represent a significant achievement in giving shippers a basis for needed relief and in equalizing remedies against the several types of interstate carriers for the recovery of unreasonable or otherwise unlawful charges.

Sincerely yours,

JOSEPH CAMPBELL, Comptroller General of the United States.

Senator LAUSCHE. Our first witness is Charles A. Webb, Chairman of the Interstate Commerce Commission. Mr. Webb, would you step forward?

STATEMENT OF CHARLES A. WEBB, CHAIRMAN, INTERSTATE COMMERCE COMMISSION; ACCOMPANIED BY LAURENCE K. WALRATH, COMMISSIONER; RUPERT L. MURPHY, COMMISSIONER; PAUL J. TIERNEY, COMMISSIONER; HERBERT QUALLS, DIRECTOR, BUREAU OF MOTOR CARRIERS; THADDEUS W. FORBES, DIRECTOR, BUREAU OF FINANCE; AND MATTHEW PAOLO, DIRECTOR, BUREAU OF ACCOUNTS

Mr. WEBB. Thank you, Mr. Chairman.

I have on my right Commissioner Laurence K. Walrath, a member of our legislative committee, and we also have with us Commissioner Rupert L. Murphy and Commissioner Paul J. Tierney.

My name is Charles Webb. I am the chairman of the Interstate Commerce Commission, and I have served in that capacity since January 1, 1965.

Mr. Chairman, on behalf of the Commission, I want to thank you and the members of the committee for this opportunity to express our views on S. 1727 and various bills to implement legislative recommendations of the Commission.

My testimony is directed first to the provisions in S. 1727. In my comments on S. 1727, I will refer to several bills which contain similar provisions and which are designed to implement certain legislative recommendations of the Commission. Following my comments on S. 1727, I will discuss briefly the remaining bills to effectuate other legislative recommendations of the Commission.

Turning first to S. 1727 and the first section, dealing with enforcement agreements with the States, under section 205 (f) of the Interstate Commerce Act the Commission is authorized to avail itself of the cooperation, services, records, and facilities of State authorities in the enforcement of part II of the act. On the other hand, section 222(d) of the Interstate Commerce Act prohibits the disclosure by any special agent, examiner, or accountant of any information coming to his knowledge during the course of any examination or inspection of a motor carrier's property, equipment, or records, except as he may be directed by the Commission or by a court of competent jurisdiction.

Section 1 of S. 1727 would specifically authorize the Commission to reciprocate by entering into cooperative agreements with the States to enforce Federal and State economic and safety laws and regulations concerning highway transportation.

Section 1, thus, would facilitate Commission cooperation with the States in these areas. We recommend its enactment.

Senator LAUSCHE. Before you proceed to the next subject, I would like to ask you a question or two.

Section I contemplates giving the Commission the authority to enter into agreements with State enforcement agencies to better enforce the general act?

Mr. WEBB. That is correct, Mr. Chairman; part II of the act. It would facilitate our enforcement by removing any inhibitions on our ability to exchange information with the States.

Senator LAUSCHE. Under the existing law, information which you have is supposed to be confidential and not subject to revelation?

Mr. WEBB. That is true, Mr. Chairman, except with the express permission of the Commission or as directed by a court.

Senator LAUSCHE. Now, then, if this section 1 of part II is adopted, this latter requirement that either the Commission approve or the court approve will be removed?

Mr. WEBB. Yes; it would enable the Commission to enter into an agreement which would provide for the exchange of information. under certain safeguards, so that each exchange would not be subject to separate action of approval by the Commission. It would, in other words, facilitate the exchange of information with the States.

Senator LAUSCHE. Why primarily do you feel that this is in the interest of the general citizenry and the strengthening of our transportation system?

Mr. WEBB. Well, that is because the States and the Federal Government have a common interest in highway transportation and in its legality. They have been very willing to cooperate with us, and we have been somewhat embarrassed by the fact that we cannot cooperate as fully with them as we would like to.

Senator LAUSCHE. Has there been any opposition expressed to you concerning your stand with regard to this particular item?

Mr. WEBB. No, sir; I am not aware of any opposition to section 1 of the bill.

Senator LAUSCHE. All right. You may proceed now to the next section.

Mr. WEBB. Section 2 of the bill would amend section 202(b) of the Interstate Commerce Act to provide for the establishment of standards for the registration within the several States of certificates and permits issued to motor carriers by the Commission. Five years after the promulgation of such standards, the imposition of more onerous registration requirements by the States would be deemed to constitute an undue burden on interstate commerce.

The National Association of Railroad & Utilities Commissioners (NARUC) would have the primary and exclusive right to determine the standards. The Commission's function would be purely ministerial that is, to "promulgate forthwith" standards determined by NARUC. Precedent for this approach is found in section 5 of the Safety Appliance Act (45 U.S.C. 5) as interpreted by the Supreme Court in St. Louis & Iron Mt. Ry. v. Taylor, 210 U.S. 281 (1907).

Section 2 of S. 1727 also provides that if NARUC fails to certify registration standards to the Commission within 18 months, then the Commission shall prescribe the standards.

At the present time, registration requirements differ widely among the States. Relief from this multiplicity of State registration requirements is desirable. Therefore, we recommend the enactment of section 2.

Senator LAUSCHE. On this item, will you illustrate for the record just what the word "standards" comprehends within the meaning of the inclusion in this bill?

Mr. WEBB. "Standards" relates to the requirements for the registration of certificates and permits-that is, operating authority. It relates to what the carriers must do in the various States in the way of evidencing within the States their Federal operating authorities.

Senator LAUSCHE. In other words, the States would adopt certain standards of what has to be done with respect to registration within the State?

Mr. WEBB. Yes.

Senator LAUSCHE. To show what its authority is? How many vehicles it has? Would that be within it?

Mr. WEBB. Yes, that is correct. The State legislation often provides that it shall be unlawful for a carrier to operate within the State if it is not authorized to do so by the Interstate Commerce Commission. At the present time, the requirements of the States vary widely, and this provides simply for a uniform State registration to be determined by the State commissioners.

Senator LAUSCHE. That is, each State then would have a registry showing the authority of public carriers as granted by the Commission? In substance, is that correct?

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