Served August 11, 1999

FEDERAL MARITIME COMMISSION

SPECIAL DOCKET NO. 3103

APPLICATION OF STAR SHIPPING A/S
(D.B.A. ATLANTICARGO)
FOR THE BENEFIT OF LYNDEN INTERNATIONAL

ORDER

BACKGROUND

This proceeding was initiated by an application filed by Star Shipping A/S, d.b.a. Atlanticargo, for the benefit of Lynden International, seeking to waive $9,709.20 in freight charges pursuant to section 8(e) of the Shipping Act of 1984 ("1984 Act"), 46 U.S.C. app. § 1707(e), and then Rule 92 of the Federal Maritime Commission's Rules of Practice and Procedure, 46 C.F.R. § 502.92.⁽¹⁾ The shipment in question involved the carriage of one 20-foot container of wearing apparel (ties) from Port Everglades, Florida to Tilbury, England.

Atlanticargo explained in its application that its tariff contained a 20-foot per container rate for wearing apparel only to continental ports. The only rate for wearing apparel to U.K. ports was for a 40-foot container. When quoting a rate for a 20-foot container to England for Lynden, Atlanticargo's rate clerk quoted the 20-foot rate applicable to the continent. Upon discovery of the error, a 20-foot rate for Tilbury was filed. Atlanticargo thus sought relief to assess the agreed and intended rate and waive collection of freight charges based on the general cargo N.O.S. rate.

Administrative Law Judge Frederick M. Dolan, Jr. ("ALJ") issued a decision denying Atlanticargo's application for relief. He found that section 8(e) of the 1984 Act does not authorize relief from the misquotation of a rate where there has been no error in the tariff itself.⁽²⁾ He further found that the tariff clerk simply quoted the wrong rate and when the error was discovered the carrier established the quoted rate in its tariff. The ALJ noted that the Commission has consistently held that it cannot grant special docket relief where the error is a rate misquotation without any actual error in the tariff itself, since it does not constitute an error in a filed tariff of a clerical or administrative nature or an inadvertent failure to file a new rate in a tariff, citing Farr Co. v. Seatrain Lines, 20 F.M.C. 412 (1978), Order on Reconsideration, 20 F.M.C. 663 (1978); Gulf European Freight Association, 20 F.M.C. 401, 403 (I.D. 1985), adopted in part, 23 S.R.R. 786 (1986); and Special Docket No. 2208, Application of Lykes Bros. Steamship Co., Inc. for the Benefit of Cabot Corporation (I.D. 1993). The ALJ also noted a similar case involving the same carrier, moving cargo to the same destination, which was also denied. Application of Star Shipping A/S (d.b.a. Atlanticargo for the Benefit of Economy Freight Services Ltd., 26 S.R.R. 660 (I.D. 1992) (adopted in part, 26 S.R.R. 734 (1993)).

The ALJ concluded by contending that section 8(e) was designed to remedy errors in the tariff filing process, and to obtain relief there must be a bona fide tariff filing mistake, either in a failure to file an intended tariff or an error in the tariff of a clerical or administrative error. He states that the carrier must show that it intended to file the sought rate before the date of shipment but failed to do so because of an inadvertent error. In the instant case, he finds the error was one of misreading the tariff and misquoting the rate and there was never an intent to file a different rate. He denied the application, recognizing that the result may be harsh on the shipper.

Atlanticargo subsequently sent a letter to the Commission appealing the decision. It claims that its initial application was made without speaking with the person responsible for the error, who had resigned and relocated to another state. It thus resubmitted its application for waiver in full, with an additional explanation. The Commission's Secretary responded by noting that the "appeal" was beyond the time allowed for the filing of exceptions to a decision. However, the Secretary extended that period and stated that Atlanticargo's letter would be treated as an exception to the ALJ's decision.

DISCUSSION

Although the Commission's Secretary treated Atlanticargo's late-filed "appeal" as an exception to the ALJ's decision,⁽³⁾ it is not truly an exception as contemplated by the Commission's rules. Rule 227 of the Commission's Rules of Practice and Procedure states, in part:

(a)(1) . . . any party may file a memorandum excepting to any conclusions, findings, or statements contained in such decision, and a brief in support of such memorandum. Such exceptions and brief shall constitute one document, shall indicate with particularity alleged errors, shall indicate transcript page and exhibit number when referring to the record, and shall be served on all parties . . . .

46 C.F.R. § 502.227(a)(1). Atlanticargo's exceptions do not allege any error in the ALJ's decision. Instead, it is seeking the initial relief requested by it by submitting new information not previously available.

As a result, its "appeal" should more properly be treated as a motion to reopen the proceeding. Rule 230 of the Commission's Rules of Practice and Procedure permits the Commission to reopen proceedings and states in part:

where a decision has been issued by the presiding officer . . . but before issuance of a Commission decision, the Commission may, after petition and reply in conformity with paragraphs (a) and (b) of this section, or upon its own motion, reopen a proceeding for the purpose of taking further evidence.

46 C.F.R. § 502.230(d). The Commission is thus reopening this proceeding pursuant to this provision and considering the additional evidence proffered by Atlanticargo.

Atlanticargo's second application states that the clerk involved in the error left its Port Everglades office before the filing error was discovered. It subsequently contacted the former clerk and learned more about how the error occurred.⁽⁴⁾ The clerk advised that when he attempted to quote a 20-foot container rate for wearing apparel to the U.K., he noticed that the tariff item only listed a 40-foot container rate to the U.K. The clerk then contacted the pricing department and requested a 20-foot container rate for wearing apparel to the U.K. The pricing department instructed the clerk to quote the same 20-foot container rate to the U.K. as already existed for a 20-foot container of wearing apparel to the continent. The clerk was also instructed to file the new rate in the tariff. The clerk quoted the new 20-foot rate to the shipper but failed to file the new rate in the tariff. When an audit discovered the error, a 20-foot container rate was filed immediately.

The ALJ's initial decision was entirely correct and would have been adopted by us absent our reopening of this proceeding. However, based on the additional information supplied by Atlanticargo, we conclude that the statutory requirements for granting a waiver under section 8(e) of the 1984 Act have been met. Accordingly, the application is granted and Atlanticargo shall waive collection of freight charges of $9,709.20 from the shipper, Lynden International. In addition, pursuant to section 8(e)(3) of the 1984 Act, applicant is directed to ensure that any other shipper that may have been affected by this error be notified of the rate authorized by this decision, and to make the rate available to any such shipper.

By the Commission.

Ronald D. Murphy
Assistant Secretary

ENDNOTES

1. Effective May 1, 1999, Rule 92 was recodified as Rule 271, 46 C.F.R. § 502.271, and amended.

2. At the time of the shipment, section 8(e) permitted relief for "an error in a tariff of a clerical or administrative nature or an error due to inadvertence in failing to file a new tariff." The Ocean Shipping Reform Act of 1998, P.L. 105-258, 112 stat. 1902, amended section 8(e) to now permit relief for "an error in quoting a tariff." This proceeding must be governed by the former provision.

3. Because Atlanticargo's appeal was treated as an exception, the ALJ's decision became inoperative until such time as the Commission determines the matter. 46 C.F.R. 502.227(a)(4).

4. We are somewhat troubled by Atlanticargo's statement that "the original application was made without full knowledge of the facts." However, we are also mindful of the remedial purposes of section 8(e) of the 1984 Act and do not wish to harm the shipper involved in this situation.