RESPONDENT:Commercial Metals Company
LOCATION:José Aponte de la Torre Airport, formerly Roosevelt Roads Naval Station
DOCKET NO.: 81-622
DECIDED BY: Burger Court (1981-1986)
LOWER COURT: United States Court of Appeals for the Fifth Circuit
CITATION: 456 US 336 (1982)
ARGUED: Mar 31, 1982
DECIDED: Apr 27, 1982
David H. Sudbury – on behalf of the Respondent
James H. Pipkin, Jr. – on behalf of the Petitioner
Media for Southern Pacific Transportation Company v. Commercial Metals Company
Audio Transcription for Opinion Announcement – April 27, 1982 in Southern Pacific Transportation Company v. Commercial Metals Company
Warren E. Burger:
The judgment and opinion of the Court in Southern Pacific Transportation against Commercial Metals will be announced by Justice Blackmun.
Harry A. Blackmun:
This case argued last session comes to us by writ of certiorari to the United States Court of Appeals for the Fifth Circuit.
It’s not a case that lands to easy description but it seems to be fairly important in the transportation industry.
It centers in the use of uniforms straight bills of lading prescribed by the Interstate Commerce Commission.
In these bills contained a provision that the shipper is liable for freight charges unless it signs a nonrecourse clause contained in the bill of lading.
In this case, the cause was not signed and three shipments were delivered by the Railroad to the consignee without the collection of freight charges.
The issue was whether when the Railroad seeks payment of these charges from the shipper, the latter may defeat the Railroad’s claim with an equitable defense by showing that the carrier had failed to comply with the Interstate Commerce Commission’s credit regulations.
The Fifth Circuit held that such a defense could be asserted and in this case was valid.
In an opinion filed today with the clerk, we unanimously hold that that ruling was error and we reverse the judgment of the Court of Appeals.
Violation of a credit regulations does not bar the Railroad’s collections of lawful freight charges from a shipper who has not signed the nonrecourse clause in the bill of lading.
Warren E. Burger:
Thank you, Justice Blackmun.