Server: Netscape-Enterprise/2.01 Date: Wed, 31 Dec 1997 20:56:09 GMT Content-type: text/html Legal Transportation News Vol. 3

Legal Transportation News Vol. 3

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Compliments of the Law Offices of Brusanowski & Veigel Vol. 3 issue 1
Copyright © 1996, Charles H. Veigel, All Rights Reserved Late Spring 1996

IN THIS QUARTER'S ISSUE:

THE I.C.C. TERMINATION ACT - 109 STAT. 803

WHO IS REGULATED AND WHO IS NOT? PUBLIC LAW 104-88 [H.R. 2539]; DEC. 29. 1995

The I.C.C. Termination Act, ICCTA, suddenly thrust the surface transportation industry into confusion. With little warning and almost no transition period, the Interstate Commerce Commission closed its doors, laid off employees and the Department of Transportation took over. Third parties - those that are surface freight forwarders and brokers and all others who believe that their duties or services fall outside of ICCTA - should understand that their roles will be carefully scrutinized and in many cases regulated. Incidentally, those people that dealt with the I.C.C. in the past remarked that the transition from the I.C.C. to D.O.T. went quite smoothly.

ICCTA is designed to abolish the Interstate Commerce Commission, amend Subtitle IV of Title 49 of the United States Code, and reform the economic regulation of the transportation industry. There are three general parts to ICCTA. Part A deals with Rail; Part B with Motor Carriers, Water Carriers, Brokers and Freight Forwarders and Part C with Pipeline Carriers.

The discussion in this particular edition of the Legal Transportation News will be limited to Part B: Motor Carriers, Water Carriers, Brokers and Freight Forwarders. Future editions of this Newsletter will discuss the other parts. The intent of this article is to provide only a general overview of the contents of Part B of the I.C.C. Termination Act.

Instead of the Interstate Commerce Commission, the Secretary of Transportation and the Surface Transportation Board now have jurisdiction over motor carriers, surface freight forwarders, brokers and water carriers. At the outset, it is important to determine whether your business is regulated or exempt. If your business does fall under one of the above services, you may be required to register your business:

ICC Termination Act

Motor carriers must be registered. To register a motor carrier must:

Surface Freight Forwarders must register:

As many of may remember, surface freight forwarders were deregulated in 1986. It is unclear whether a surface freight forwarder who received a surface freight forwarder's number prior to 1986 can now use that number and be exempt from registering. If any of you are confronting this issue, please contact us.

Transportation brokers must register:

In summary, the third parties, such as the freight forwarder and broker, are clearly held more accountable. This is largely due to recent lawsuits against third parties for negligent activity. Consequently, the third party went bankrupt and did not have any funds to satisfy the judgment.

PRIVATE ENFORCEMENT OF REGISTRATION REQUIREMENTS

If a person provides transportation by motor vehicle or service in violation of the Act, a person injured by the motor vehicle or service may bring a civil action to enforce the provision the ICCTA. The court may award reasonable attorney's fees in the event the injured party prevails.

CONTRACTS WITH CARRIERS

ICCTA also provides that a motor carrier can enter into an agreement with a shipper to provide specified services under specified rates and conditions. The shipper and carrier can expressly waive, in writing, any or all rights and remedies provided under the ICCTA. The Act further states that a contract cannot be challenged on the ground that those rights and remedies are waived. This section has far-reaching implications. I would assume that most carriers will now draft agreements that waive the rights and remedies afforded by the ICCTA. Moreover, without skilled legal counsel in reviewing these contracts on behalf of the shipper, an unwary shipper will likely waive any rights and remedies afforded by the ICC Termination Act.

This also means that motor carrier transportation will largely be governed by transportation agreements, at least for the term of the ICCTA. ICCTA should also take care of undercharge claims. However, plaintiff's counsel may well devise various ways to collect undercharges in the future.

Superior Fast Freight

As many of you know, Superior Fast Freight's trustee and attorneys filed approximately 182 lawsuit in the United States District Court for Western District of Washington to secure freight undercharges. On February 26, 1996, the United States Supreme Court denied review of a case entitled Gumport, Trustee of the bankrupt Transcon Lines v. Sterling Press, Inc. Gumport, a trustee for Transcon Lines, hoped to challenged the constitutionality of the Negotiated Rates Act. The Court of Appeals for the 9th Circuit upheld the Negotiated Rates Act, holding that it was not in contravention of the Bankruptcy Code. Gumport appealed that decision to the U.S. Supreme Court. As a consequence of this decision, the trustee for Superior Fast Freight must operate within the confines of the Negotiated Rates Act. If any of you have any questions regarding this decision, please do not hesitate to call me.

Charles H. Veigel

Harbor Maintenance Fee: Last October, a three-judge panel of the Court of International Trade held the Harbor Maintenance Fee assessed on exports from the United States is unconstitutional. BRUSANOWSKI & VEIGEL prepared a news bulletin providing suggestions on how to collect a refund and preserve your rights to a refund. The Government appealed the decision. If any of you did not receive a news bulletin on the Harbor Maintenance Fee, we have a few copies remaining. Please give us a call or send an email and we will send you one.

On February 7, 1996 Judge Restani of the Court of International Trade ruled that those who challenge the constitutionality of the Harbor Maintenance Fee could recover interest.

Charles H. Veigel

UPDATE: U.S. Customs Law

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Proposed Amendments to Part 163 of the Code of Federal Regulations - 19 CFR PARTS 24, 111, 143, 162 and 163

Proposed § 163.2 (a) of the Code of Federal Regulations provides that more parties will be required to abide by U.S. Customs' record keeping requirements. The proposed section expands the number of parties to include carriers, cartmen, bonded warehouses, free trade zone operators, and drawback claimants.

Proposed § 163.4 provides that records, except for packing lists, that relate to filing or an entry or declaration, transporting or storing merchandise carried or held under bond, or causing an importation, transportation or storage or merchandise carried or held under bond into or from - Continued on page 4

the Custom's territory of the U.S. are required to be kept for a five (5) year period. Drawbacks records even longer.

The list of documents that must be kept are commonly referred to as the A1A list. If any of you want a copy of this list, please call or send an email.

NVOCC Case Update

Intercargo Insurance Company v. United States of America, U.S. District Court for the Northern District of Illinois, January 10, 1996, No. 95 C3158.

The surety on an NVOCC bond faced claims exceeding the amount of the bond. The surety sent a check for $50,000 to the FMC to determine the validity of the claims and administer the claims against the bond.

A declaratory action was sought by the surety to compel the FMC to assume responsibility for administering the claims. The case was dismissed for lack of jurisdiction because the surety did not pursue and exhaust administrative remedies. The surety could have asked the FMC to promulgate a rule regarding the administration of claims.

FIRM'S SERVICES:

BRUSANOWSKI & VEIGEL is a client-centered law firm that provides individualized service to small and medium sized companies. We strive to provide our clients the utmost in competency, communication and common sense to help them avoid legal trouble in both daily management and expansion plans.

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BRUSANOWSKI & VEIGEL
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