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Norfolk Southern Railway Co. v. G.W.S.I., Inc.

United States District Court, E.D. Pennsylvania

August 22, 2017

NORFOLK SOUTHERN RAILWAY COMPANY
v.
G.W.S.I., INC.

          MEMORANDUM OPINION

          Savage, J.

         A railroad's assessment of demurrage charges affects the relationships among the railroad, the shipper, the receiver, and the consignee. The shipper decides what mode of transportation to use, what carrier to use, and what quantity to ship. The railroad determines when demurrage starts to accrue. In other words, it sets the time limit the receiver has to unload cars. The receiver, who is hired by the shipper, has no control of those decisions. Yet, it is the receiver who is responsible for any delay in unloading the goods within the railroad's deadline.

         This arrangement demands cooperation between the shipper, the carrier, and the receiver. Of the three participants in the delivery system, the receiver has little, if any, leverage. Consequently, the receiver often operates under terms fixed by others.

         It is against this backdrop that Norfolk Southern Railway Company's claim against G.W.S.I., Inc for demurrage arises. The pertinent facts are set forth in the Findings of Fact. This memorandum opinion explicates the conclusions of law in support of the judgment.

         Analysis

         Interstate rail carriers “shall compute demurrage charges, and establish rules related to those charges.” 49 U.S.C. § 10746. Any person receiving “rail cars from a rail carrier for . . . unloading who details the cars beyond the period of free time set forth in the governing demurrage tariff may be held liable for demurrage, ” as long as the carrier has provided the receiver with actual notice of its tariff before placing the railcars. 49 C.F.R. § 1333.3.

         A rail carrier and a receiver may enter into a private contract governing demurrage. Id. § 1333.2. In the absence of an agreement, demurrage is governed by the rail carrier's tariff. Id.

         The parties agree that Norfolk Southern's Tariff NS 6004-D governs their relationship. Norfolk Southern provided notice of the tariff on June 15, 2014, prior to the period during which the demurrage charges at issue accrued.[1] There was no written demurrage agreement.

         GWSI contends that it is not liable for the charges despite the absence of an agreement varying the tariff. It asserts defenses of waiver and estoppel. It argues that Norfolk Southern impliedly waived its right to recover demurrage as a result of its conduct and representations. It also contends that Norfolk Southern is estopped from collecting demurrage because it continued to accept railcars in reliance upon Norfolk Southern's conduct and statements which led it to believe that demurrage would not be charged.

         Waiver and estoppel are often used interchangeably, sometimes incorrectly. Brown v. City of Pittsburgh, 186 A.2d 399, 401 n.3 (Pa. 1962). Waiver turns on the conduct and the intent of the party against whom waiver is asserted. The waiving party's intent is controlling. Id. Estoppel focuses on the conduct of both parties. Id.

         In this case, the distinction makes a difference. Norfolk Southern never intended to waive demurrage, but it acted like it did. Hence, the inquiry is on what Norfolk Southern and GWSI did.

         Waiver

         Waiver is the intentional relinquishment or abandonment of a known right, claim, or privilege. Id. at 401. Central to waiver is the waiving party's intent and conduct. Waiver requires that the other party knowingly gave up the right and acted clearly, unequivocally, and decisively to relinquish it. Commonwealth ex rel. Corbett v. Griffin, 946 A.2d 668, 679 (Pa. 2008) (quoting Brown, 186 A.2d at 401); see also Kamco Indus. Sales, Inc. v. Lovejoy, Inc., 779 F.Supp.2d 416, 424 (E.D. Pa. 2011) (quoting Griffin, 946 A.2d at 678).

         Waiver may be express or implied. Brown, 186 A.2d at 401. An implied waiver arises when undisputed acts or language mislead the other party into reasonably believing that the waiving party will not seek to enforce compliance with the contract provision. Samuel J. Marranca Gen. Contracting Co. v. Amerimar Cherry Hill Assocs., L.P., 610 A.2d 499, ...


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