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Puerto Rico Maritime Shipping Authority v. Valley Freight Systems Inc.

argued: March 3, 1988.


Appeal from the United States District Court for the District of New Jersey, D.C. Civ. No. 84-4771.

Seitz, Higginbotham, and Cowen, Circuit Judges.

Author: Seitz


SEITZ, Circuit Judge.

Defendant Valley Freight Systems, Inc. ("Valley") appeals the order of the district court granting judgment in favor of plaintiff Puerto Rico Maritime Shipping Authority ("Authority") after a non-jury trial. This court has jurisdiction under 28 U.S.C. § 1291 (1982).

I. Factual Background

The following are the relevant facts as found by the district court. Authority is a vessel-operating common carrier that transports freight between, among other points, Puerto Rico and the mainland United States. In 1982, PRMMI Trucking, Inc. ("Trucking") was created as a wholly-owned subsidiary of Puerto Rico Maritime Management, Inc., which in turn was a wholly-owned subsidiary of Authority. Soon thereafter, Trucking obtained from the Interstate Commerce Commission ("ICC" or "Commission") a certificate of public convenience and necessity authorizing it to provide motor carrier transportation at, among, other places, Elizabeth, New Jersey, and Miami, Florida.

Also in 1982, Authority filed its Tariff 205 with the ICC. This tariff set forth joint through rates for the transportation of freight between San Juan, Puerto Rico and various points in the mainland United States, including Elizabeth and Miami. The joint service governed by the tariff was to consist of motor carrier service by Trucking in conjunction with water carriage by Authority. Trucking concurred in the tariff pursuant to 49 U.S.C. § 10762(b)(2) (1982). In 1983, Trucking executed an agreement with Authority that specified the division of revenues between the two entities on joint routes. During the time period relevant here, Authority and Trucking conducted operations at Elizabeth and Miami and shared terminal facilities*fn1 at those ports.

Valley is a non-vessel-operating common carrier and stood as a shipper in relation to Authority in the transactions at issue here. Between January 1, 1984, and September 30, 1984, Valley tendered fifty-seven containers or trailers (hereinafter simply "containers") for shipment between San Juan and either Elizabeth and Miami. Some of these shipments were northbound (San Juan to Elizabeth or Miami) and others southbound (Elizabeth or Miami to San Juan).

On the southbound shipments, Valley or its agent delivered the freight to the Authority/Trucking terminal. Trucking then transported each container to Authority's vessel from the point of rest in the terminal to which it had been delivered. Trucking vehicles either drove the freight beneath a crane that lifted it aboard the vessel or, in the case of suitably equipped vessels, drove the freight directly aboard the vessel. On the northbound shipments, Trucking transported the containers from Authority's vessel or a point beside it to a point of rest within the terminal. Valley or its agent then picked up the freight from that point and transported it away from the terminal. All of the shipments arrived at their destination undamaged and in a timely fashion.

For each of the fifty-seven shipments, Valley presented Authority with a bill of lading describing the commodities purportedly being shipped in the containers. Authority applied the provisions of Tariff 205 to determine the appropriate freight charges for each shipment. The shipments were not covered by any other Authority tariff on file with the ICC or any other agency. Under Tariff 205, the price charged for transportation depended on, among other factors, the nature of the commodity being shipped. Authority initially billed Valley for each shipment at the tariff rates applicable to the commodities described in the bills of lading. Valley paid those bills.

In each case, after the bill was prepared, agents of Authority inspected Valley's containers and found items of freight other than those described in Valley's bill of lading. Applying the provisions of Tariff 205 to the items actually shipped, Authority determined that Valley owed additional freight charges totaling $71,705.62. Authority billed Valley for that amount, but Valley refused to pay, now maintaining that Tariff 205 was inapplicable to its shipments. Authority then commenced this action to recover the undercharge.

Authority filed its complaint in the district court in November 1984. On February 2, 1987, after the entry of the pretrial order and less than one month before the scheduled trial date, Valley for the first time moved the court to stay the proceedings and refer the question of the applicability of Tariff 205 to the ICC pursuant to the doctrine of primary jurisdiction. The court took no action on that motion, and the case proceeded to trial.

The parties stipulated that Valley had misdeclared the contents of its shipments and that it owed the amount of the claimed undercharge if Tariff 205 was applicable. After trial, the court held that Tariff 205 was applicable to Valley's shipments and that Authority was entitled to collect the undercharge. In the alternative, the court held that even if the tariff were inapplicable, Authority would be entitled to collect under contract principles because Valley had agreed to pay the amounts set forth in the tariff. Accordingly, the court entered judgment for Authority in the stipulated amount and awarded pre- and post-judgment Interest. At that time the court also formally denied Valley's motion for referral to the ICC.

Valley moved for a new trial. The basis of that motion was the allegation that Authority's witness had not been truthful in his testimony at trial. The court ...

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