No. 78-22 I. CHARLES LUCIDI, D/B/A LUCIDI PACKING COMPANY V. THE STOCKTON PORT DISTRICT, KILL-PEST, INC., Finalized July 17, 1979 Respondent, Port of Stockton, is not in violation of section 16, First, in that it does not give any undue or unreasonable preference or advantage to any particular person, locality or description of traffic. Respondent, Port of Stockton, is not in violation of section 16, First, in that it does not subject complainant to any undue or unreasonable prejudice or disadvantage. Respondent, Port of Stockton, is in violation of section 17 in that Item 85 of its Terminal Tariff No. 4 constitutes an unjust or unreasonable regulation and practice related to or connected with receiving, handling, storing or delivering property. C. Richard Walters for complainant, I. Charles Lucidi d/b/a Lucidi Packing Company. Frank Wagner for intervenor, Port of Los Angeles, California. John Robert Ewers, Aaron W. Reese and Bruce Love, Hearing Counsel. INITIAL DECISION OF STANLEY M. LEVY, Charles Lucidi, d/b/a Lucidi Packing Company (Lucidi), complainant herein, filed a civil action in the Supreme Court of California against the Stockton Port District (Stockton or Port), respondent herein, seeking recovery for alleged damage to property of Lucidi while on the terminal facilities of Stockton. It was alleged that 25,710 bags of sesame seeds became infested with rodent and bird droppings while being stored on Stockton's terminal facilities. 'This decision will become the decision of the Commission in the absence of review thereof by the Commission. Rule 227, Rules of Practice and Procedure, 46 C.F.R. §502.227. Stockton pleaded as an affirmative defense the provisions of item 85 of its Terminal Tariff No. 4. Item 85 provides: The Port of Stockton shall not be responsible for any injury to freight on or in its facilities, by fire, leakage, evaporation, natural shrinkage, wastage, decay, animals, rats, mice, other rodents, moths, weevils, other insects, weather conditions, sweat moisture, the elements or discharge of water from breakdown of plant, machinery, other equipment, collapse of building or structure, insurrection, war, or shortage of labor, for delay, loss or damage arising from riots, strikes, labor or other disturbances of any persons or of any character beyond the control of the Port of Stockton. The California Court, recognizing the Commission's primary jurisdiction, granted the port's motion to stay the trial of the civil action pending a determination by the Commission as to the validity of Item 85. Thereupon, in compliance with the order of the California Court, this complaint was filed naming the Stockton Port District, Kill-Pest, Inc., Delk Terminex Pest Control, Terminex International, Inc., and Cook Industries, Inc., respondents. The complaint does not identify any of the named respondents other than Stockton, nor does it make any allegations concerning them. The record contains nothing to show that the named respondents, other than the Stockton Port District, are other persons subject to the Shipping Act and, therefore, they are dismissed as parties in this proceeding. Complainant contends that Item 85 is unjust, unreasonable and void on its face as against public policy as it purports to exculpate the Port from the consequences of its own fault or negligence. Complainant further contends that the tariff item is unlawfully discriminatory against complainant. The Port of Los Angeles, California (Los Angeles), having shown an interest in this proceeding, was permitted to intervene. Discovery having been completed, all counsel agreed that the documents developed during discovery provide an adequate record for disposition of this proceeding and that there remain no genuine issues of material fact which require oral testimony and cross-examination. Accordingly, seven documents were admitted as exhibits in evidence and, with the brief filed herein, constitute the complete record in this proceeding as follows: Ex. 1 Respondent's first set of answers to Hearing Counsels Interrogatories; Ex. 2 Respondent's second set of answers to Hearing Counsel's Interrogatories; Ex. 3 Respondent's answers to Complainant's Interrogatories; Ex. 4 Deposition of Walter H. Meryman; Ex. 5 Deposition of Owen E. Block; Ex. 6 Further Responses of Walter Meryman to Interrogatories and Deposition Questions; and Ex. 7 Central National Insurance Company policy insuring the Port of Stockton for the period December 9, 1975 to December 9, 1978. An opening brief was filed by Hearing Counsel, and Lucidi adopted as its own opening brief the opening brief of Hearing Counsel. Reply briefs were filed by Stockton and by Los Angeles. ISSUES The issues to be resolved in this proceeding are whether the tariff provision of the Port of Stockton which has been challenged by complainant (1) results in undue or unreasonable preference or advantage or in any undue or unreasonable prejudice or disadvantage in any respect whatsoever within the meaning of section 16, First,2 or (2) constitutes an unjust or unreasonable regulation and practice related to or connected with receiving, handling, storing, or delivering property within the meaning of section 17, Second Paragraph. FINDINGS OF FACT 1. Respondent, the Stockton Port District, was created pursuant to the provisions of the Harbors and Navigation Code of the State of California. 2. The Port is an operating port as distinguished from a non-operating or landlord port. 3. The Port operates marine terminal facilities, providing various terminal services with its own employees. The Port provides terminal services and facilities to break-bulk vessels, bulk carriers and a combination of break/bulk and container vessels. The terminal services furnished by the Port include dockage, wharfage, free time, wharf demurrage, terminal storage and cargo handling." As such, the Port is a person subject to the Shipping Act, 1916, as defined in section 1 thereof. 4. The Port has published and filed with the Commission a tariff, effective November 1, 1977, relating to its terminal services which is designated Terminal Tariff No. 4. The Port also publishes a tariff designated General Tariff No. 1. 5. When outbound cargo arrives at Port facilities, the Port issues a dock receipt. When inbound cargo is delivered to a place of rest on its facilities by independent stevedoring companies, the Port takes custody of the cargo until it is delivered to trucks or rails cars. 6. The Port participates in the activities of the California Association of Port Authorities (CAPA). The Committee on Tariffs and Practices of CAPA meets from time to time to discuss and agree upon rates and charges for wharfage, dockage and related port services. The Committee and the full Association 'Section 16, First, of the Shipping Act, 1916 (46 U.S.C. §815) declares it unlawful for any common carrier by water or other person subject to the Act: To make or give any undue or unreasonable preference or advantage to any particular person, locality, or description of traffic in any respect whatsoever, or to subject any particular person, locality, or description of traffic to any undue or unreasonable prejudice or disadvantage in any respect whatsoever.... 'Section 17, Second Paragraph, of the Shipping Act, 1916 (46 U.S.C. §816) provides: Every such carrier and every other person subject to this act shall establish, observe, and enforce just and reasonable regulations and practices relating to or connected with the receiving, handling, storing, or delivering of property. Whenever the Commission finds that any such regulation or practice is unjust or unreasonable it may determine, prescribe, and order enforced a just and reasonable regulation or practice. The Commission, in order to discharge its responsibilities under section 17 of the Shipping Act, adopted General Order 15, 46 C.F.R. §533, which requires every terminal operator to file with the Commission a tariff showing all its rates, charges, rules and regulations relating to or connected with the receiving, handling, storing and/or delivering of property at its terminal facilities. 'See 46 C.F.R. §533.6 (d). discussed and agreed to wharfage increases which were adopted and placed into effect by the Port in 1974, 1975, 1976, 1977 and 1978. 7. There has been no consideration of the provisions of Item 85 of Stockton's tariff or of similar provisions in the tariffs of any other ports (Ex. 4). 8. The Port does not solicit bids for its liability insurance nor are specifications written for the procurement of insurance. Liability insurance is obtained through independent brokers who are given a copy of existing policies and instructed to obtain the same coverage as provided by the policies which are expiring (Ex. 5). 9. At the time of the alleged damage to complainant's property which was the basis of the civil action filed in the Superior Court of California, May 14, 1974, the Port has property damage insurance with total liability limits of $16,000,000, with a $1,000 deductible clause. 10. The Port's liability insurance is issued by the Central National Insurance Company of Omaha, Nebraska, for a three-year term commencing December 9, 1975. That policy covers the liability of the Port for physical loss or damage to property of customers of the Port. The policy does not, inter alia, cover liability of the assured Port: (a) For property held as "storage in transit" under the terms of an applicable bill of lading issued by the assured; (b) For loss or damage caused by or arising out of ordinary wear and tear, gradual deterioration, dampness or atmosphere, extremes of temperature, inherent vice or latent defect; (c) For damage sustained due to and resulting from any repairing, restoration or retouching process, unless caused by fire; (d) For loss due to delay, loss of use or loss of market; 11. Lucidi's cargo of sesame seeds of some 25,710 bags was received at the Port's Dock 9; unloading commenced on February 2, 1974, and was concluded by February 4, 1974. 12. Employees of the Federal Department of Agriculture inspected the seed in transit shed 9 where it had been deposited, on or about May 2, 3, 4 and 6, 1974, and Lucidi received notice of the contamination found by them on May 14, 1974. 13. The sesame seed was being held on the dock for instructions from Lucidi because complainant did not have the facilities available at its Fresno plant to process the seed at that time. 14. There are thirteen wharves at the Port, and only seven of them have transit sheds on them. The Port also has long-term storage facilities. When the free time expires for ingoing cargo, the shipper has his choice of whether it will be placed on wharf demurrage or wharf storage. It may be transferred from the transit shed into the warehouses where it comes under the regulations of General Tariff No. 1. DISCUSSION Complainant alleges that Item 85 of Stockton's Terminal Tariff No. 4 is unlawfully discriminatory against complainant "as applied under the circum stances." Complainant has not specifically alleged a violation of section 16, First, but the complaint in a "shotgun" allegation embraces several sections of the Act by contending: Is unlawful and invalid as violative of the Shipping Act of 1916, Title 46 U.S.C. §§814-817; The record contains nothing to indicate that respondent makes or gives any undue or unreasonable preference or advantage to any particular person, locality, or description or traffic. The record is also lacking any evidence to support a finding that Item 85 of the Port's tariff subjects complainant to any undue or unreasonable prejudice or disadvantage. To the contrary, the record establishes that the Port invokes the exculpatory provision of Item 85 as to all users of its facilities who suffer damage or loss from any of the causes set forth therein. The record is clearly without any evidence to support a finding of a violation of section 16, First. Accordingly, we now consider whether the regulation or practice established by Item 85 is unjust and unreasonable within the meaning of section 17, Second Paragraph. The Commission in Investigation of Free Time Practices-Port of San Diego, 9 F.M.C. 525, 547 (1966), stated that: As used in section 17 and as applied to terminal practices, we think that "just and reasonable practice" most appropriately means a practice, otherwise lawful but not excessive and which is fit and appropriate to the end in view. The justness or reasonableness of a practice is not necessarily dependent upon the existence of actual preference, prejudice or discrimination. It may cause none of these but still be unreasonable. Item 85 of Stockton's tariff proclaims that the Port will not be responsible for any injury to freight in or on its facilities resulting from various specified In addition to its Terminal Tariff No. 4, Stockton also publishes a tariff entitled General Tariff No. 1, a copy of which is on file with the Commission. Section 2 of that tariff establishes warehouse rules and regulations. Item 114(c) of its General Tariff No. 1 contains an exculpatory clause similar to Item 85 of Terminal Tariff No. 4 except for the following language: unless such loss or damage be caused by failure of the warehousemen to exercise the ordinary care and diligence required of them by law. Exculpatory clauses in the water transportation industry appears to have been first considered by the U.S. Supreme Court in The Steamer Syracuse, 12 Wall. 167 (1870), where it was held that, notwithstanding a contractual agreement that "the canal boat was being towed at her own risk," the towing boat "must be visited with the consequences" of its negligence. 12 Wall. at 171. The Supreme Court, in United States v. Atlantic Mutual Insurance Co., et al., 343 U.S. 236 (1952), stated that there is a controlling rule of law that, without Congressional authority, common carriers cannot stipulate against their own negligence or that of their agents or servants. "The Port pleaded this provision as an affirmative defense in a civil action for damages brought by complainant, which action was based upon the alleged negligence of the Port |