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Part IV of the act covering freight forwarders, like part II, contains no statutory period, nor any provision for reparations.
The reasons why the league favors this remedial legislation, while not numerous, are most important and of far-reaching effect on shippers and receivers of freight. For example, in the absence of a definite provision in the Interstate Commerce Act for a statutory period with respect to, let us say, motor carriers, it is not uncommon for a shipper of freight via a motor carrier to be confronted with a bill for undercharges some 3 or 4 years, or even longer, after the shipment is made, depending upon the State laws covering the particular shipment, because in the absence of any Federal statutory period, the State laws, of course, apply.
This means that a.shipper under such conditions is required for his own insurance to maintain shipping records far beyond any reasonable period of time and after the transaction has long been forgotten and even after the parties who were involved in the transaction may have gone out of business.
Further to complicate the situation, there is wide difference in the statutory period in the various States, varying all the way from 2 to 10 years. There frequently is difference of opinion as to the statute of which particular State will apply; that is, as to whether a statute of the State in which the shipment originates applies, or whether a statute of the State in which the shipment terminates applies.
It is, of course, true that a statutory period, whether it be federally prescribed or a State statute, applies with similar force with respect to overcharges as well as to undercharges. However, we have had long experience insofar as the rail carriers are concerned, with respect to the 2 year statutory period provided for in part I of the act, and it has operated most satisfactorily both so far as the railroads and the shippers are concerned.
Several bills have been introduced, both in the House and in the Senate, providing for a 3 year statutory period so far as motor carriers are concerned; and while the shippers are appreciative of the intent of the sponsors of that legislation, it is the considered judgment of the shippers as represented in the league that the 2-year period as tested in part I of the act is air and reasonable to the carrier and shipper alike.
We believe that your committee and the Congress will agree with our position that a shipper using more than one type of transportation agency or different shippers using different types of transportation agencies should enjoy the same and a uniform statutory period in which to file claims; and at the same time the respective transportation agencies which they use should enjoy the same statutory period to file their claims for undercharges. Particularly is that true where the governmental agency administering the Federal regulatory statutes is the same, namely, the Interstate Commerce Commission.
Part I of the Interstate Commerce Act, which regulates rail carriers, has been progressed to its present state of reasonable perfection by the process of trial and error ever since 1887. It has been amended in many respects as experience has warranted. When part II of the act was enacted into law in 1935, which deals with motor carriers, there was purposely omitted from its provisions any statutory period of limitations for the reasons that such regulation was new to a then
budding industry and there was disposition to enact only such legislation as was absolutely essential and which would not tend to place too great an initial burden upon a newer form of transportation. Since 1935 the motor carrier industry has blossomed into a full-fledged transportation instrumentality.
This is demonstrated by the large volume of freight now being handled by motor highway carriers. Therefore, an industry which was new in 1935 has now established itself in the transportation field and must, therefore, assume its share of responsibility and necessary regulation, from which it was relieved in its infancy in 1935, so as to afford shippers and receivers of freight the protection to which they are rightfully entitled.
While we have given emphasis to motor highway carriers, the same principle applies with equal force to water carriers and frieght forwarders.
We appreciate that there may be honest difference of opinion even among those who favor a uniform statutory period as to whether that period should be 2 years or longer.
However, in view of the serious consideration and study that the league has given to this entire matter over a period of years and the preponderance of sentiment that has been expressed for the 2-year period, our recommendation for that period, and as provided for in H. R. 2324, should, we feel, be given most serious consideration.
We, therefore, respectfully urge that your committee favorably report H. R. 2324.
Mr. Chairman, there has been prepared for the league, a two-page statement showing the State statute of limitations, both for oral contracts and written contracts. As I pointed out, those are the statutes that govern shipments where there is no provision in the Federal statute, the Interstate Commerce Act, for any statutory period. We would like to have that statement, if we may, included in the record, Mr. Chairman. This concludes my statement. Mr. CHAIRMAN. If there is no objection, it is so ordered. (The State statute of limitations are as follows:)
The CHAIRMAN. Are there any questions, gentlemen?
Mr. LEA. I believe I notice in the bill a provision about attorney's fees in these suits.
Mr. Estes. Yes, sir.
Mr. LEA. And it is made applicable to the different agencies included in this bill?
Mr. Estes. That is true.
Mr. LEA. Have you any particular experiences as to the operation of that law granting attorney's fees in these cases?
Mr. Estes. No, I have not, Congressman Lea. As I say, I am not a lawyer, and I have had no experience with it. Provision is made in part I of the act, as now written, of course, for attorney's fees. It seems to have worked satisfactorily. At least I have heard no complaint about it.
Mr. LEA. The only possible objection to that is that it tends to promote litigation. I was wondering if there was any experience on which we could from an opinion as to the correctness of that ide:1.
Mr. Estes. I feel, of course, that while that observation might have been good at one time, I doubt very much if it would be at the present time. I believe that shippers and receivers of freight have become more enlightened as to what their chances either before the Commission or the courts might be, and that they are not needlessly going to employ attorneys unless they believe that they have some reasonable chance of getting it through.
Mr. LEA. Have you any experience as to the average amount involved in these claims?
Mr. Estes. For reparation?
Mr. Estes. Of course, there have been some very high reparation cases in the past, although I think the present trend on the part of the Interstate Commerce Commission is to look with some disfavor as to granting of reparations on the basis of a rate found unreasonable in the past.
The CHAIRMAN. Are there any further questions, gentlemen?
Mr. O'HARA. As I understand your bill, 2324, it makes the statute apply to both the shipper and the carrier as to placing a statute of limitation of 2 years.
Mr. Estes. Yes, sir.
Mr. O'Hara. Do you feel that the imposition of an allowance for attorney's fees might make carriers a little more careful about their fixing of rates and their charges due the shipper if such provision was there.
Mr. Estes. You mean the provision with respect to the 2-year period?
Mr. O'Hara. No. With reference to the allowance of attorney's fees. Do you feel that that might cause the carrier to also be a little more careful in computing the freight bill and the shipper's bill.
Mr. Estes. I think it would have a very definite tendency in that direction, Congressman O'Hara.
Mr. O'Hara. And in some of these claims, of course, many attorneys would not want to handle them unless they were allowed some reasonable fee.
Mr. Estes. That is right.
Mr. O'Hara. What has been your experience? You say it is the existing law, as I understood you.
Mr. Estes. In part I of the bill, there is a provision for attorney's fees.
Mr. O'HARA. What has been your experience as to the recovery of those fees by the shipper? Are the allowances fair or niggardly?
Mr. Estes. The attorney, of course, would probably think so, Congressman. There have been some rather low fees set, in my opinion.
I am not intimately familiar with it, although I have seen some of the fees that have been prescribed by the Commission, and they have been rather low, according to what we consider attorney's fees to be, to be reasonable.
Mr. Lacey tells me that the attorney's fees. only apply when the shipper has to sue, after the reparation has been awarded but not paid by the railroad.
Mr. O'HARA. In the event of suit. Would that apply also to the carrier is a carrier made a mistake and underestimated tlie amount of the freight bill? Would be be entitled to recover fees under this bill?
Mr. Estes. No, sir.
Mr. HARRIS. I just wanted to call the attention of my colleague that the language in the bill refers to the fact that the attorney's fees be fixed by the court in every case. It seems to me it would not give the Commission any jurisdiction with reference to fixing attorney's fees.
Mr. O'Hara. Apparently that is true, Mr. Harris.
Mr. HARRIS. I wanted to ask, if I understand correctly, that this bill proposes to bring parts 2, 3, and 4 of the Interstate Act in line with part I with reference to limitation on claims. Is that simply what it proposes to do?
Mr. Estes. Both with respect to overcharges and undercharges and also with respect to reparation.
Mr. HARRIS. What is your definition or interpretation of the meaning of the term “reparation” in connection with this bill?
Mr. Estes. Reparation can take various forms. In the first place, if a rate is complained of and found by the Commission to be unreasonable then the Commission if it so decides can find that rate to have been unfair. That is one form of reparation, possibly the most common form of reparation.
Or, there can be an error in tariff publication. There can be an error in routing of freight; there could be various errors that would involve a finding by the Commission that the shipper had been discriminated against, and to his own financial loss, and reparations could then be awarded by the Commission.
Mr. HARRIS. And that has a different interpretation and meaning from the word "claims''?
Mr. Estes. Yes, sir.
Mr. HINSHAW. I note that in the amending of the three parts of the act to make them conform to part I of the first section of the bill, it refers to part II of the Interstate Commerce Act, as amended, but thereafter in referring to parts of part III and part IV, that reference to the part is not given. I presume it is not necessary, but on the other hand I wonder about the conformation in language.
Mr. Estes. That is true, Congressman. In other words, section 2 on page 6 of the bill simply starts off by amending certain subsections of section 308 of the Interstate Commerce Act, which section 308 is, of course, a part of part III of the act. It might be clarified if the committee so desires to make the reading of the bill the same as with respect to parts III and IV, as referred to on page 1, with respect to part II. I think that might clarify it.
Mr. HINSHAW. May I ask, Is the language of parts II, III, and IV by this bill made to conform to the language of the part I, or is there going to be a difference? A difference in the other three parts?
Mr. Estes. Starting off, Congressman, with part II—that is, section 204 (a), on page 1--the language contained in those paragraphs down through section 2 on page 6 is all together in this bill, but is patterned after various sections of part I of the bill.