The question has been raised as to whether the granting of attorney's fees should be on a reciprocal basis so that if carriers were successful they would also be granted attorneys' fees. While we strongly support S. 1653 in its present form, we would be opposed to granting attorneys' fees to railroads. We feel that such a change would be out of harmony with the broad remedial purposes of the Carmack Act and its amendments (49 U.S.C. 20(11)), would overlook the carrier abuses which gave rise to the introduction by Senator Magnuson of S. 1653 in its present form, and might compound the shippers' difficulties by placing in the hands of some carriers a weapon which they do not require and which they might use for oppressive purposes.

Among the reasons why no reciprocal fees are required by the railroads are:

1. Fees to the shippers are required to remedy carrier abuses and arbitrary carrier conduct which have visited hardship upon members of the shipping public throughout the country.

2. No reciprocal abuses have been shown by shippers nor has it been shown that the carriers are in need of some additional reciprocal protection. Section 20(11) would appear to mandate the payment by the carrier of the shipper's full loss. It provides that the carrier "shall be liable *** for any loss, damage or injury caused by it *** and no contract, receipt, rule, regulation, or limitation of any character whatsoever shall exempt such common carrier, railroad, or transportation company from the liability imposed; ** *" It provides specifically for liability "for the full, actual loss, damage or injury. However, if the carrier refuses to recognize this liability and arbitrarily refuses to make payment or to deal justly with the claim, at present the statutes impose no sanction. Where, on the other hand, the shipper seeks to collect an unjust claim, the carrier is adequately protected by the sanctions of the Elkins Act (49 U.S.C. 41), which makes unlawful unjust claims. Further, as I have stated before, where the carrier, arbitrarily or otherwise, defends against a claim and loses the lawsuit (under sec. 20(12)) it can recover against the other participating carrier in the line haul not only their proportion of the recovery by the plaintiff, but also the legal fees and the expenses of defending.

3. In claims litigation the parties do not stand on an equal footing: (a) The carrier is in possession of the records of transportation and is, or should be, aware of its own conduct which gives rise to the claim. The shipper, on the other hand, is not, and in normal cases cannot be aware of these facts.

(b) The carrier is normally defended by counsel who are usually members of its own legal staff and who are expert in transportation matters. Its employee witnesses normally travel by railroad pass and are usually available at the carrier's pleasure. Shippers, on the other hand, must rely on independent attorneys who are not payroll employees. Witnesses must be sought from distant points from consignees or other persons having a more or less tenuous association with the transaction. These witnesses, if brought to the trial, do not travel by railroad pass and are not as readily available to the plaintiff.

(c) To prevail in litigation the plaintiff must affirmatively establish his cause of action by a preponderance of the evidence. However, he may lose for many reasons, even though he has a just claim. The death or unavailability of a material witness, the absence of an essen

tial document or failure to prove an essential fact, a mistake in his remedy, a suit in the wrong forum, and many other factors may result in the nonsuccess of the plaintiff.

(d) The carrier need do nothing until the plaintiff has affirmatively met his burden of proof in the case. It can then, as it often does, make a settlement on the courthouse steps. The shipper, having gone to the expense of preparing has no alternative but to then accept a payment which is noncompensatory and does not, in any event, compensate him for the loss of time of himself, his witnesses, and the other expenses incurred. S. 1653, as proposed, would not, in any event, compensate a shipper for the expense of preparing for trial, the loss of time of key employees, and other similar costs. It is only designed to deal with one aspect of that litigation; that is, a reasonable attorney's fee, and that only if the plaintiff wins.

4. The Carmack Act, the Hepburn amendment, and the various amendments to section 20 (11) are remedial legislation intended to aid the shipping public and to help redress the economic and legal disadvantage of the public in dealing with the railroads to dispose of claims in their claim departments. The need for the amendment sought now-S. 1653-arises from the arbitrary action by the carriers. It is succinctly set forth in Senator Magnuson's statement in introducing this bill. Since the necessity for this legislation arises from the conduct of the carriers, it does not seem appropriate that in dealing with the problem created by them that Congress should grant to them reciprocal rights of fees. As Senator Magnuson said, "In addition, in my opinion, the measure will provide an economic incentive to the carriers to offer just settlements and fair claim handling practices to the public." The granting of legal fees to a carrier who succeeded in defeating a claimant in court would, on the other hand, be a retrogressive step and could in some instances, be an oppressive weapon in the hands of the party to the litigation with the greatest economic power.

The arbitrary and adamant position of the eastern carriers in the settlement of claims falls heavily on the small shipper and receiver who cannot afford to litigate his claims because it is economically not feasible to do so. The passage of S. 1653 would provide a measure of relief and would reduce the necessity for litigation. We wholeheartedly endorse and support S. 1653 and respectfully urge your approval of this bill.

Mr. Chairman, we appreciate the opportunity afforded us to present our views on this bill. Thank you, Mr. Chairman, for permitting us to come here.

Senator HARTKE. Senator Cannon.

Senator CANNON. Thank you, Mr. Chairman.

Do you believe that a plaintiff should be allowed to recover attorney's fees in the action, let's say in the event he recovered less than the amount the carrier had offered in settlement?

Mr. SEALS. I think I would go along with Mr. Kober's statement on that. I doubt if it is necessary. If it were in there, we wouldn't oppose it, put it that way.

Senator CANNON. In the bill as it was reported last year it said:

The court in its discretion may allow a reasonable attorney's fee to the plaintiff in any action to be taxed and collected as part of the suit, but, (a), no such fees shall be allowed to the plaintiff except upon a showing that the plaintiff has filed a claim with the carrier or carriers against whom the action has

been brought, and that such claim has not been paid within 90 days after the receipt of the claim by the carrier or its agent; (b), no such fees shall be allowed to the plaintiff unless the judgment rendered in his favor is greater than the amount offered in settlement by the carrier prior to the institution of the suit. (c), no such fees shall be allowed to the plaintiff which exceed the amount of the judgment obtained.

Those were the three conditions upon which the fees would be allowed.

Mr. SEALS. We would support the first one, the 90 days. Paragraph (b), we think that is probably already taken into consideration by the court, we would have no objection to it. We would be opposed to number (c).

Senator CANNON. So, you would have no objection to this bill being amended to read as S. 858 read last year as reported by the committee provided that subsection (c) were eliminated.

Mr. SEALS. That is correct.

Senator CANNON. Thank you, Mr. Chairman.

Senator HARTKE. Senator Pearson?

Senator PEARSON. Now, the problem with the grain shippers is they have a large number of small claims. Is that the case with the fruit and vegetable shippers?

Mr. SEALS. That is correct. While we have a number of large organizations, particularly shipping organizations and some receivers, the claims are filed by a number of individual shipping and receiving organizations. It would be very difficult, I think, to bring them together into one central point.

Senator PEARSON. To repeat, the problem is that you have in many cases small operators, small claims, versus a carrier that they must use with extensive liability pursuant to law and they are just met with a schedule. Are your fruit and vegetable people met with a set schedule of so much percent in certain circumstances, certain conditions of cars and so forth?

Mr. SEALS. We have a little more latitude than the grain shippers, I think. But there again we ship from many areas, and as far as the routing is concerned, it might consist of two carriers, it might be five carriers or more involved. So, we have the same problem. The difference between us and the grain people is the grain shippers have claims primarily for loss of the lading, whereas ours are primarily market decline claims. That is what we complain about here.

Senator PEARSON. By that you mean late delivery?

Mr. SEALS. Failure to make schedule; yes, sir.

Senator PEARSON. They used to guarantee your strawberries would be at a given point at a given time, is that right?

Mr. SEALS. That is correct.

Senator PEARSON. Now you have no guarantee at all?

Mr. SEALS. Not on behalf of the eastern rail carriers. We still have it with the western and southwestern carriers up to the gateways, St. Louis, Decatur, Chicago, for example.

Senator PEARSON. Why aren't the grain operators and the fresh fruit. and vegetable people just using trucks instead of the railroads? Is the rate difference so great?

Mr. SEALS. We use all types of transportation speaking of fresh fruits and vegetables. But in many cases, for one thing, we don't have enough trucks to haul all of the fresh fruits and vegetables that we ship. Many

of our shippers are located on rail lines, they are oriented to rail transportation.

This is particularly true with receivers in the eastern territory. The produce terminals have been constructed by the eastern railroads and for the most part we are tied to the carriers that serve those terminals. Senator PEARSON. Thank you, Mr. Chairman.

Senator HARTKE. I have no questions on this. I just have a comment to make.

We are going to hold hearings on the ICC at which time I intend to bring up many of these questions. I would hope that any person who has any information would present it to the committee. So you can anticipate what I am planning to do, let me say I intend to explore this whole question of whether or not the ICC has authority, and if it has authority, whether it is exercising that authority properly to make sure that shipments are handled in the public interest. That is authority over whether or not shipments are handled in a fashion requiring, for example, delivery in good condition at a specified date. This to me would seem to be in the public interest.

I have an idea that part of the difficulty that you are experiencing here, frankly, is due to the fact that we have an Interstate Commerce Commission which is still operating under 19th century procedures in the 20th century and we are heading for the 21st century. I think it is about time we do something before we destroy the whole transportation system of the United States.

We have seen passenger service practically eliminated. This is one thing which I notice. I also notice a tendency by the airlines to follow the procedures of the railroads. Quite frankly they prefer to handle freight to passengers. Pretty soon we will have a situation where, as Ralph Waldo Emerson said, people will no longer be important. I have no other questions.

The next witness is Mr. Fred Burrows, executive vice president, International Apple Association, Washington, D.C.

STATEMENT OF FRED BURROWS, EXECUTIVE VICE PRESIDENT, INTERNATIONAL APPLE ASSOCIATION, WASHINGTON, D.C.

Mr. BURROWS. Thank you, Mr. Chairman and Senators, my name is Fred W. Burrows, and I am executive vice president of the International Apple Association, Inc., with offices at 1302 18th Street NW., Washington, D.C.

The International Apple Association is a nonprofit membership organization serving the fruit industry, with emphasis on apples and winter pears. Our membership encompasses every segment of the industry from the producer through the retailer, and our members. produce, handle and/or distribute in excess of 75 percent of the United States commercial apple and winter pear crop.

Our members are directly concerned and involved in all modes of transportation and in the orderly marketing of their perishable commodities. Therefore, they are vitally concerned with the outcome of S. 1653.

The extensive hearings in 1967 on an identical bill, S. 858, and the statements by Senator Magnuson in the Congressional Records

of February 6, 1967, and March 24, 1969, when he introduced the identical bills, S. 858 and the present S. 1653, very clearly outline the background, the problem, and the vital and increased need for the legislation for our industry.

Since, as we understand it, the subcommittee will give full consideration to the 1967 hearing record on S. 858, we wish to only reaffirm and reemphasize the following few points:

(1) Our membership wholeheartedly supports S. 1653.

(2) Perishable commodities demand "orderly marketing," and this can only be achieved when deliveries are made as planned (and as proposed by carrier schedules); that our shippers and distributors are not in the "claim business," and that claims mean "disorderly marketing" and red ink to all concerned.

(3) Eastern Carriers have continued their 5-year-old arbitrary position not to pay decline in market claims due to delay, regardless of the length of the delay, unless carrier negligence is proven in court.

(4) Since the establishment of this arbitrary position, the service of the Eastern Carriers has continued to deteriorate with a resulting substantial disruption of "orderly marketing" in our industry.

In closing, we also recommend that Congress give serious consideration to amending the Interstate Commerce Act to require carriers to file reasonable schedules for perishables with the Commission, and that failure to meet these schedules would be prima facie evidence in collecting proven damage claims, unless the carrier can prove nonnegligence; that is, act of God, act of the public enemy, or act or fault of the shipper or owner.

In line with your comments concerning your meeting with the Interstate Commerce Commission, Mr. Chairman, we would suggest that the Commission does have jurisdiction over carrier practices and the practices that we are experiencing with carriers today in long delays should be looked into by the Commission.

Senator HARTKE. Oversight hearings are scheduled for the 24th and 25th of June. I would suggest then if you have any comments that you get them in to the staff before that time and that you present them in a form in which it doesn't require the Legislative Reference Service to decipher.

Thank you.

The next witness is Mr. Matt Triggs, assistant legislative director, American Farm Bureau Federation, Washington, D.C.

STATEMENT OF MATT TRIGGS, ASSISTANT LEGISLATIVE DIRECTOR, AMERICAN FARM BUREAU FEDERATION, WASHINGTON, D.C.

Mr. TRIGGS. Good morning, Mr. Chairman. We welcome the opportunity to present our views. There is no point in our taking the time of the committee with duplication of testimony; therefore our statement is exceedingly brief.

We support the principle that shippers who have been successful in legal action to recover indemnity for loss or damage of goods sustained in the course of transportation should also receive reasonable attorney's fees, and therefore recommend the enactment of S.1653.

Section 20(11) of the Interstate Commerce Act affirms the common law rule that a carrier has, with a few prescribed exceptions, an abso