3. Whether, in light of the evidence, adduced pursuant to the foregoing issues, together with any other evidence adduced, Leonard T. Butler d/b/a Manufacturers Forwarding possesses the requisite fitness, within the meaning of section 44(b), Shipping Act, 1916, to properly carry on the business of forwarding and to conform to the provisions of the Shipping Act, 1916, and the requirements, rules and regulations of the Commission issued thereunder.

The named respondents herein are (1) Leonard T. Butler d/b/a Manufacturers Forwarding and (2) Intermodal Sales, Inc.

By notice served January 30, 1979, a prehearing conference was scheduled for Thursday, February 22, 1979. Counsel for respondent telephoned the Presiding Administrative Law Judge on February 16, 1979, pleading he was on call for cases in his own jurisdiction and requested a postponement. By notice served the former date, which was preceded by telephone notice to all parties on February 16, 1979, of the change, the prehearing conference was rescheduled and held on Monday, February 26, 1979. The official stenographic transcript thereof consists of 12 pages. Hearings began and concluded on Monday, March 12, 1979. The transcript of the hearing consists of 50 pages. The total pages of transcipt are 62. Two (2) exhibits were introduced and received into evidence. The briefing schedule developed was: (1) opening brief of respondent-applicant to be filed on April 9, 1979 (Tr. of Hearing, at 48, line 25, change 1978 to 1979); (2) Hearing Counsel's reply brief to be filed on April 23, 1979; and (3) the closing brief of respondent-applicant to be filed on May 7, 1979 (Tr. 49).

The opening brief of respondent-applicant was received in the Commission on April 11, 1979; it had been mailed by Registered Mail No. 854603 from Newark, New Jersey, on April 6, 1979. Hearing Counsel's Reply Brief was received in the Commission on April 23, 1979. On May 10, 1979, the Presiding Administrative Law Judge received from counsel for the respondent-applicant a letter dated May 8, 1979, stating, inter alia, “I acknowledge receipt of the Brief of Hearing Counsel, and I would respectfully advise that I do not see the need for any further submissions."

Hearing Counsel in its brief proposed 18 findings of fact (Brief, at 3 to 5). The respondent-applicant's brief proposed no findings of fact. Hearing Counsel's requests upon consideration are granted in substance or denied as shown in the following section entitled "Facts."

The transcript of testimony and exhibits, together with all papers and requests filed in this proceeding, constitutes the exclusive record for the finding of facts and for decision (Rule 169, 46 C.F.R. §502.169).

FACTS

1. Intermodal Sales, Inc., a sales agency and marketing arm for various carriers (Tr. 36) does business as Intermodal Services, Inc. It was founded in 1971-72 by Leonard T. Butler. Intermodal Services, Inc., has on file with this Commission NVOCC Freight Tariff No. 1 (the original effective date of the tariff was October 2, 1976) between United States Atlantic, Gulf and Pacific

Coasts, Puerto Rico, Hawaiian and Alaskan Ports. The tariff is worldwide. The Issuing Officer of the tariff of Intermodal Sales, Inc. is Leonard T. Butler (1st Revised Title Page, effective November 21, 1978).

2. Intermodal Sales, Inc., a corporation of the State of New Jersey (Exh. 1, Attachment A, page 1) admitted (it is stipulated all demands for admission of Exh. 1 are acknowledged in the affirmative (Tr. 4)) its officers are:

Leonard T. Butler
Reuben Klein

Marilyn T. Butler

President and 52% shareholder of the company.

Executive Vice President and 48% shareholder of the company.

Secretary and holder of no stock interest therein.

3. Intermodal Services, Inc., issued the following bills of lading under which shipments were carried at rates other than those in its NVOCC tariff:

The filing of the tariffs and tariff changes pertaining to the rates assessed the above shipments was delegated to a company in that business (Tr. 13) and to Reuben Klein (Tr. 37).

4. Under date of September 24, 1976, Intermodal Sales, Inc., entered into a Sales Agency Agreement with Klevan Associates Incorporated, a corporation of the State of Pennsylvania. Klevan is the owner and operator of a certain container service more commonly known and referred to as Seaway Express Lines, a Panamanian Corporation. Under the terms of the said agreement, Intermodal Sales, Inc., is to act as Seaway's exclusive sales and marketing agent in the United States for those services rendered by Seaway in its container services between the United States, Taiwan and Korea; a noncompetitive clause in the agreement provides that during the term thereof, Intermodal will not represent any carrier or carriers who offer similar container services between the United States and Taiwan and Korea. Exh. 1 At 1, and Attachment A; Tr. 36. The term of the agreement was for a two-year period and was to renew itself for a period of two years. The agreement was signed for Intermodal Sales, Inc., by Leonard T. Butler, President. Mr. Butler testified the relationship with Seaway was terminated in September of 1978 (Tr. 40).

5. Intermodal Sales, Inc., operated under the terms and tenure of the said Sales Agency Agreement with Klevan. However, Intermodal Sales, Inc., did

not file that agreement with this Commission (Tr. 36) for approval pursuant to section 15, Shipping Act, 1916.

6. Applicant Leonard T. Butler, asked to outline his activities over the last ten or fifteen years, particularly within the ambit of the shipping industry (Tr. 35), testified he held marketing and agent positions as follows:

1964 to 1968 with Sea-Land (Tr. 35)

1968 to 1972 with Seatrain

1972 started his own business-Intermodal Sales

After founding of his own business, the agreements or associations are between his company, Intermodal Sales, and others (Tr. 43):

1973 to 1975-agent for Zim Container Services (Tr. 44)

1974 to 1975-agent for Medspan Shipping

1976 to 1977-agent for Mercantile Marine, a vessel operating carrier (Tr. 44) 1976 to 1977-agent for Iran Overland (Tr. 44)

1976 to 1978-Sales Agency Agreement with Kleven Associates

1978-Sales Agency Agreement with Oceans International, agent for Lignes Centre Africaine

DISCUSSION, REASONS, FINDINGS AND CONCLUSIONS

Leonard T. Butler testified that he did not file the September 24, 1976, Seaway and Intermodal agreement with the Commission (Tr. 36). Asked, “Is there a reason why you didn't so file, if in fact you were required to file?" he answered:

I had a previous contract, the contract that is mentioned here is subsequent to a previous contract with Seaway as sales agent. Because in the services I performed for Seaway, sales, I did not know that there was anything else required. At the time I entered into that contract I did not even have a tariff as an NVO.

The applicant in his brief at page 3 argues that:

Acknowledging fully that the responsibility to so file may not be necessarily excused by any such claim, the "seriousness' of such failure may be, however, ameliorated if such an explanation is believed.

Hearing Counsel in its Reply Brief at 2 states:

By stipulation, respondents affirmatively admitted all facts contained in Hearing Counsel's "Request for Admissions" (Exhibit 1), thereby admitting the facts pertinent to the sections 18(b)(3) and 15 issues.

The circumstances of this case demand that the Presiding Administrative Law Judge agree with Hearing Counsel that the respondent has admitted the facts pertinent to the sections 18(b)(3) and 15 issues. Therefore he finds and concludes that Intermodal Sales, Inc. d/b/a Intermodal Services, Inc., has violated section 15, Shipping Act, 1916, by entering into an exclusive noncompetitive cooperative working agreement with Seaway Express Lines without the prerequisite Commission approval and has violated section 18(b)(3), Shipping Act, 1916, by transporting property at rates and charges other than those specified in its tariff on file with the Commission.

It is to amelioration, if any, as to the violations of sections 15 and 18(b)(3) of the Shipping Act, 1916, that attention is directed. The applicant, as indicated above, testified he was unaware of the filing requirements under section 15 to which Hearing Counsel counters (Brief for Hearing Counsel at 7) ignorance of the law is no excuse; nor is inadvertence, citing Investigation of Rates in the Hong Kong-United States Atlantic and Gulf Trade, Docket No. 1083, 11 F.M.C. 168, 178 (1967). The latter citation points to section 18(b)(3) violations. The Commission wrote:

We have no authority under section 18(b)(3) to dismiss a charge simply because it may have been an isolated violation or an honest mistake though we may couple our finding of violation with such other factual determinations as may tend to mitigate the seriousness of the offense. Investigation of Rates in the Hong Kong-United States Atlantic and Gulf Trade, 11 F.M.C. at 178. The parties do not dispute the facts as to allegations of violations of section 15 and section 18(b)(3) as is evidenced by Exhibits 1 and 2.

The only lawful rate which a carrier may charge is that rate appearing in the carrier's filed tariff. This rate must be charged and paid regardless of seemingly innocent justification for departure such as mistake, inadvertence, or contrary intention of the parties. United States v. Pan American Mail Lines, Inc., 359 F. Supp. 728, 733 (S.D.N.Y. 1972).

The applicant argues in his brief at page 5 that the involved tariff was filed so as to become effective October 2, 1976. He says (Brief for Applicant at 6) that the tariff, when effective, concerning rates or charges, contained only a single factor cargo N.O.S. (not otherwise specified), WM $295; that this rate "of course, and as is usual, was never intended to be utilized commercially, but was, in fact, established so as to be in compliance with the requirements of a tariff filing." However, it is argued by the applicant (Brief for Applicant at 7) (speaking of the 11 Bills of Lading in Exhibit 1, Attachment B), that no potential shippers received any advantage nor were they disadvantaged by any rate quoted to any of the involved shippers in the instances here illustrated. Then the applicant poses the question:

Isn't this aspect of the Commission's case at very best extremely technical and ministerial and is it not clearly distinguishable from the usual and ordinary tariff violation?

Brief for Applicant at p. 8.

Hearing Counsel assert, at page ten of his brief, that the applicant argues without record support that no shipper was advantaged or disadvantaged by the admitted improper tariff assessments.

The Presiding Administrative Law Judge is not persuaded by the questions asked by the repondent-applicant that mitigation is found in them, because the arguments and the law presented by Hearing Counsel is more persuasive that the situation is proved by a preponderance of the evidence that the Presiding Administrative Law Judge must and does find and conclude that violations of sections 15 and 18(b)(3) have been committed by the respondent and that no mitigating circumstances have been shown in these areas.

Now as to whether Leonard T. Butler d/b/a Manufacturers Forwarding possesses the requisite fitness, within the meaning of section 44(b), Shipping

Act, 1916, to properly carry on the business of forwarding and to conform to those provisions of the Shipping Act, 1916, and the requirements, rules and regulations of the Commission issued thereunder. The applicant argues (Brief for Applicant at 2) that he, individually, must be deemed to be fit, willing and able to properly carry out the business and functions of a forwarder; that it must be accepted as irrefutable fact that there is no issue nor is there controversy as to the moral characteristics or reputation of the applicant (Id.). He concludes (Id. at 10) the applicant possesses all of these moral traits and characteristics required and desired of an applicant.

Hearing Counsel contends that Leonard T. Butler d/b/a Manufacturers Forwarding does not possess the requisite fitness to be licensed as an independent ocean freight forwarder (Brief for Hearing Counsel at 11). Counsel cites Harry Kaufman, Independent Ocean Freight Forwarder, Docket No. 71-47, 16 F.M.C. 256, 271 (1973) for the Commission enunciated standard of conduct required of an applicant seeking a license:

It is crucial to his "fitness" that it appear that the applicant intends to and will in good faith adhere to such "high standard” of conduct and that he intends to and will obey the Commission's rules and policies for the conduct of licensed freight forwarders.

The Hearing Counsel argues that the existence of past Shipping Act violations by an applicant for a freight forwarder's license is highly pertinent to the issue of whether the applicant "intends to or will obey" the U.S. shipping laws (Brief for Hearing Counsel at 11). Hearing Counsel points out that the Commission recently denied a freight forwarder application in Concordia International Forwarding Corporation-Independent Ocean Freight Forwarder Application and Possible Violation of Section 44, Shipping Act, 1916, Docket No. 78-34, 18 SRR 1364, 1371 (FMC 1978), exhorting that disregard of the shipping statutes would not be tolerated. The Commission said: "In determining whether an applicant possesses the requisitness fitness, a past violation of the Shipping Act militates against the issuance of a license." Brief for Hearing Counsel at 12. Hearing Counsel contends that the activities of Leonard T. Butler, President of Intermodal Sales, Inc. d/b/a Intermodal Services, do not constitute the standard of conduct the law imposes upon those seeking to be licensed as an ocean freight forwarder (Id., at 15); that the applicant has failed to meet his burden of demonstrating his character qualifications and fitness to operate as a freight forwarder and to conform to the provisions of the Shipping Act and that the Commission should deny his application.

As has been indicated above, the applicant made no reply to Hearing Counsel's Reply Brief other than to submit a letter, repeated now: "I acknowledge receipt of the Brief of Hearing Counsel and I would respectfully advise that I do not see the need for any further submissions."

The parties do not dispute certain facts in this case. The undisputed facts are deemed by the Presiding Administrative Law Judge to support the position of Hearing Counsel against the applicant. The applicant's attempt to show mitigation of circumstances so as to warrant granting of the license as an independent ocean freight forwarder is unpersuasive and falls short of showing such mitigation.