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Senator REED. There are some_gentlemen here from out of town. Mr. LaFrance, from Providence, R. I., is next.
STATEMENTS OF FRANCIS X. LaFRANCE, OF SWAN, KEENEY & SMITH, PROVIDENCE, R. I., REPRESENTING THE NARRAGANSET BREWERY CO.; AND FRANK LICHT, OF LETTS & QUINN, PROVIDENCE, R. I., REPRESENTING THE JAMES HANLEY CO.
Mr. LAFRANCE. My name is Francis X. LaFrance, Providence, R. I., representing Narraganset Brewery Co.
Mr. LICHT. My name is Frank Licht, representing the James Hanley Co., another brewery in Providence.
Mr. LAFRANCE. I want to thank you, Senator, for your kind services in letting us know about this and allowing us to appear.
Senator REED. We did not do you any special favor.
Mr. LAFRANCE. I understand that, but on short notice it was well done. We are in full accord with the provisions in H. R. 2759. The only thing we have in mind is that the distributors of the Narraganset Brewery at the moment, if this bill passes as is, will be threatened with suits which are now barred under the present law which provides a 6-year limitation.
Of course, the 6-year limitation is due to the State laws, as you all know. The distributors in these cases pay the charges assessed against them in good faith. To make them liable under this bill for a period of 6 years would seem rather inequitable and not on a parity with the railroads.
This bill, as we understand it-and we stand to be corrected, because frankly we are amateurs here-would create a parity after the passage of the act between the motor carrier and the railroads; but what happens to undercharges which have been incurred prior to the passage of this act? The result would be that the shippers would be subject to a charge which in many cases would put some of them out of business, particularly in a small State.
Take a town of 1,000 or 1,500 population, a small shipper. He is now sued for undercharges and at the time he paid the charges he paid them in good faith, and the motor operator at that time did it on a profitable basis, but there was an undercharge through some ignorance by the trucker. Most of these small truckers, of course, cannot hire the services of big companies to certify what the tariffs are and they try to interpret the acts as best they can.
We would like, if possible, to ask the Senate if an amendment could be put in this bill whereby a limitation of time would be placed within which a claim must be filed. In other words, as Mr. Licht probably will bring out, it would be along the Portal-to-Portal Act idea, where after the 2 years as to the claims that have accrued prior to the passage of the act, a limitation would be placed within which the charges may be brought.
If a shipper yesterday shipped something and there was an undercharge, even after the passage of this act he would still be liable under the State statute of limitations. We are asking you if it is possible to add an amendment whereby for a period of say 2 years after the passage of the act these claims will be barred unless suit is brought within 2 years or within 2 years and 90 days.
Senator HAWKES. You are asking us if the Federal law can control the State law.
Mr. LAFRANCE. No; not necessarily, Senator. Under this act where at the moment the State law will be subservient to this act, naturally. I am not talking about intrastate. I am talking about interstate shipments only. This act says that the actions shall be commenced within 2 years after the passage of the act for undercharges or overcharges, whatever the case may be.
We are asking that the Senate by an amendment to this act limit the time within which the action may be brought on all claims accruing prior to the passage of this act.
Senator HAWKES. Have you not done that, Mr. Chairman? I do not quite get this.
Mr. LICHT. If I may clarify it, as it stands now, ferring now to H. R. 2759
this act-we are re
Senator REED. You are not referring to railroads and part I?
Senator REED. You are talking about motor carriers, and as I recall
it there is nothing in part II, which is the Motor Carrier Act, that deals with reparations or overcharges and undercharges.
This is the first time there has been legislation on that point.
Mr. LAFRANCE. Exactly, Senator.
Senator REED. Does that clear it up for you?
Senator HAWKES. No; it does not quite clear it up. I have gone over this hastily, but I do not understand what he wants done differently from what you have in here.
Mr. LICHT. May I try to explain that, Senator. The act as it reads now states specifically, referring now to the motor carrier, 204a (1)– we are primarily interested in that proposition—in paragraph 6.
The provision of this section shall apply only to cases in which the cause of action may accrue after the date of the enactment of this section. That means that it is entirely prospective. Our problem arises in this manner. For example, we represent breweries that have distributors in various parts of New England. The breweries are not responsible for the shipment of their products, but they are shipped by the distributors through carriers in interstate commerce. As Mr. La France pointed out, these carriers, small carriers, particularly in our communities, charged a rate which was not as high as the tariff which was on file. As it stands now under the law, these carriers are required to proceed against the shippers, and the period of limitations is the state statute of limitations, which is a 6-year period. _That means that potentially the liability of our support is 6 years. We say that we have a belief that H. R. 2759, which limits the statute of limitations to 2 years, is good legislation, and I think it brings the motor carriers in parity with the railroads.
But it does not meet the particular case in which we are interested for this reason: The legislation still keeps this liability outstanding against the shippers for the full 6-year period on past shipments and still permits stale claims to be brought within that period. It was our suggestion that in order to meet that situation
Senator MYERS. You want this act to cover all claims whether they have already accrued or accrue after the passage of the act?
Mr. LICHT. Precisely, Senator, and we feel the way to do it is similar to the Portal-to-Portal Act. In other words, I might read you something that we suggest.
Senator MYERS. That is the way to do it, but that is your problem. You think the statute should be amended to apply to all actions which already have accrued and not only to actions which accrue after the passage of the act.
Mr. LICHT. You have the idea exactly.
Senator HAWKES. In other words, if a cause of action accrued today, and this act is not yet a law, then your contention is the way this bill is drawn that cause of action would have 6 years in your State.
Mr. LICHT. Precisely.
Senator HAWKES. And everything that happened the day after this thing would only have 2 years.
Mr. LICHT. That is right.
Senator HAWKES. You would like to bring a fair balance and equity in that situation.
Mr. LICHT. That is right.
Mr. LAFRANCE. Let me give you this example, Senator.
Take, for instance, the case of the Twin State Fruit Co., which is a distributor in White River Junction, Vt. The White Fruit Co., we will say, receives its goods at the moment by railroad. The limitation there is 2 years already. But its competitor in the next town receives it by truck. He is subject to a liability for 6 years. As you can see, there is a great disparity and difference there. They are both within the interstate commerce. One is motor and one is railroad. thought with an amendment it would balance things so as to put the competitors on an equal footing as to future liability or past liability. This bill will take care and put them on an even basis as far as the future claims are concerned, but as far as the past claims are concerned, there certainly is no parity or justice.
Senator MYERS. Have you any law as to the authority of the Congress to enact such legislation?
Mr. LICHT. Yes. I referred to the portal-to-portal legislation. If you read the statute of limitations in the portal-to-portal legislation, section 255, it says:
Any action commenced on or after May 14, 1947, to enforce any cause of action for unpaid minimum wages, unpaid overtime, compensation or liquidated damages under the Fair Labor Standards Act of 1938 as amended, the Walsh-Healey Act, or the Bacon-Davis Act; (a) if the cause of action accrues on or after May 14, 1947, may be commenced within two years after the cause of action accrued, and every such action shall be forever barred unless commenced within two years after the cause of action;
(b) If the cause of action accrued prior to May 14, 1947, may be commenced within whichever of the following periods is shorter: (1) Two years after the cause of action accrued, or (2) the period prescribed by the applicable State statute of limitations, and, except as provided in paragraph (c), every such action shall be forever barred unless commenced within the shorter of such two periods.
(c) If the cause of action accrued prior to May 14, 1947, the action shall not be barred by paragraph (b) if it is commenced within 120 days after May 14, 1947, unless at the time commenced it is barred by an applicable State statute of limitations.
We have some cases which have been decided which have sustained the provision of the Portal-to-Portal Act with respect to the limitation. We have a rough draft of a proposed change which I would
like just to read to the committee. This is our own idea. We realized that it would have to be written by your legislative counsel or by the committee. This is merely the idea and it would have to be made consistent throughout the act, we appreciate:
If the cause of action shall have accrued for more than two years prior to the date of the enactment of this Act, the action on that portion of the accrued action over two years shall be barred unless action is commenced within 90 days after the date of the enactment of Act, unless at thetime commenced it is barred by an applicable State statute of limitations.
We would like just to point out one other thing to the committee. We know that during the period involved in the particular facts of our case, the small carriers were not fully informed as to the proper rate, and as Mr. LaFrance stated, they charged the rate and were paid the rate by the shippers in good faith. If they are forced, as they are under the present statutory set-up, to proceed against us for the full 6-year period, the amount which through inadvertence was not collected and on which our distributors base their business operations, would in all likelihood, if collected now, force them out of business, whereas if it were collected then it would have been part of the ceiling price of their product or taken into consideration in their other operations.
We seek to give them that parity with the railroads that they would have if the act originally had provided for the 2-year limitation. However, we save the right to any claimant to proceed within either 90 or 120 days in order to save the full statute of limitations period.
Mr. LAFRANCE. This is merely legislation for the small-business man, Senator Hawkes. That is really what it amounts to. We can talk about a quarter of a billion dollars here, but to a small country businessman in our town or in Vermont, his thousand dollars or two thousand or three thousand dollars charge at the moment would probably put him out of business.
Take a shipper or trucker in a small town of 1,000 or 1,500. He certainly cannot hire the service of a big tariff crowd in Boston or New York to tell him what he is going to charge. He tries in his own Yankee way to figure out "what does this tariff mean?" When he sees it, we have tried to instruct him, and frankly, many times we could not understand the tariffs ourselves.
Senator REED. May we have that suggestion?
Mr. LAFRANCE. Yes.
Mr. LICHT. We are not proposing any particular section.
Mr. LAFRANCE. Yes, sir. We really are here to protect the small man by adding an amendment which will protect him in claims that have accrued prior to the passage of this act, when it shall pass, by limiting the time within which an action may be brought.
As you stated yourself, Senator Hawkes, that if an action accrued today and the act passed tomorrow, someone would be liable for 6 years. We say, can we limit that action? I maintain that we can,
due to the decisions under the Portal Act. You could limit that action, allowing a man 2 years limitation plus 90 or 120 days more to bring this action,
As has been stated here, if you don't limit it, there will be this period of something hanging over the small-business man's head for the next 6 years. We thought if there was some way by amendment
of cutting that time down to a period of 2 years, then the truckers and the railroads will be on parity, and there won't be any distinction. Senator REED. This bill does not do anything to the little shipper that present law does not do.
Mr. LAFRANCE. That is correct.
Senator REED. Or the absence of this bill.
Mr. LAFRANCE. The absence of this bill. If we cannot get the amendment for the protection of him, we would rather see this go through as is, without the amendment. But we would urge an amendment.
Senator REED. The committee will give it consideration, Mr. La France.
Mr. LICHT. We had not prepared a statement of our position, and I was wondering if we might, with your permission, prepare such a statement and submit it at a later date to the committee for their consideration.
Senator REED. How soon?
Mr. LICHT. Within the next 2 days.
Senator REED. The clerk will take it if it comes in within the next 2 days.
Mr. LICHT. Thank you.
(The statement is as follows:)
Hon. CLYDE M. REED,
Chairman, Subcommittee of the Committee of
Interstate and Foreign Commerce
MARCH 30, 1948.
We desire to take this opportunity to thank the chairman and the members of the committee for permitting us to file this memorandum in addition to having permitted us to offer oral testimony. We understand that the committee has before it for consideration H. R. 2759, S. 571, S. 935 and S. 1194. All of the proposed bills seek to amend the Interstate Commerce Act so as to provide limitations on the time within which actions may be brought by or against common carriers for the recovery of undercharges and overcharges by or against common carriers by motor vehicles, freight forwarders and carriers by water. The several acts, of course, differ, but our sole interest is in the matter of the limitation of actions.
At the outset, we wish to make it clear that we are wholeheartedly in favor of the foregoing bills insofar as they seek to limit the time within which actions may be brought.
Part I of the Interstate Commerce Act which deals with common carriers by rail already provides such a limitation, and the present proposals seek to incorporate this principle into part II of the act.
It is our contention that the foregoing proposals do not adequately cover the problem. We shall discuss only H. R. 2759, and what is said with respect to this bill is applicable to the others. Section 204a (1) and (6) of H. R. 2759 respectively provides:
"(1) All actions at law by common carriers by motor vehicle subject to this part for the recovery of their charges, or any part thereof, shall be begun within 2 years from the time the cause of action accrues, and not after
"(6) The provisions of this section shall apply only to cases in which the cause of action may accrue after the date of the enactment of this section."
It will be observed from a reading of the quoted sections that the proposed bill as presently written is wholly prospective in its application. If the purpose of the proposed bill is to outlaw stale claims, it does not wholly succeed.
As part II, of the Interstate Commerce Act now stands the period of limitations is governed by local law. The statute of limitations, for example, in Rhode Island is 6 years, and we believe this is generally true. Thus if an action should accrue one day prior to the passage of the proposed bill that cause of action would remain alive for the full period of 6 years, whereas, if a cause of action accrues im