Logistics and the Law: Remembering Bill Augello

The late William J. Augello devoted his legal career to representing the interests of shippers. A colleague outlines Augello's many important contributions.

By Brent WM. Primus, J.D. -- Logistics Management, 2/1/2007

For many years, William J. Augello's regular column and occasional articles in Logistics Management were among readers' favorite features. With Bill’s passing in November of 2006, he will no longer be able to share his views on trends and issues facing the transportation community. Fortunately, Bill left a legacy of knowledge and insight that will benefit transportation professionals—and shippers in particular—far into the future.

The purpose of this article is to touch upon Bill's accomplishments and explain the significance of his work. It's a subject I know well; as a transportation attorney, I had the privilege of being Bill Augello's friend and professional colleague from the time we first met in 1989 until the time of his passing. In preparing this article, I have also drawn upon the experiences and knowledge of other friends and colleagues of Bill who knew him longer or in a different way.

Bill could count many accomplishments during his 50-plus-year career in transportation law. Of these, three in particular stand out: his leadership of the Shippers National Freight Claim Council (now named the Transportation Logistics Council); his role in the resolution of the "undercharge" crisis; and his educational mission and legacy.

In 1974 Bill was one of the founders of the Shippers National Freight Claim Council. He served as General Counsel and Executive Director until a few years ago. The impetus for establishing the group was the existence of the Carriers National Freight Claim Council, which educated carriers and advocated for them in the area of freight claims. At that time there was no similar organization representing shippers' interests.

Since its inception, the Council has exclusively advocated for shippers. It also sponsored Bill's educational seminars and published many of his texts. More information about the Council can be found at www.transportlaw.com.

The Undercharge Crisis

Back when interstate transportation was strictly regulated, common carriers were required to file their rate schedules (tariffs) with the Interstate Commerce Commission (ICC). By law they could collect no more or less than the rates they had filed. The relevant statutes and the court cases that interpreted those statutes are collectively known as the "filed-rate doctrine."

The original intention of the filed-rate doctrine was to prevent railroads (and later motor carriers) from discriminating among customers by offering favorable or unfavorable rates. Eventually, however, the doctrine's effect changed from being a shield for shippers to being a sword for bankrupt motor carriers’ trustees and collection agencies.

The problem arose after the Motor Carrier Act of 1980 partially deregulated trucking. Market-entry requirements were relaxed so that anyone could become a carrier. In the ensuing frenzy of competition, shippers and carriers forgot, overlooked, or didn’t realize that the laws requiring carriers to file their tariffs and charge only the tariff rates were still in full force and effect.

Competition led to a wave of carrier bankruptcies in the mid-1980s. The carriers’ bankruptcy trustees then began to audit freight bills to determine whether the carriers had charged and received payment for “filed rates” or for lower, “negotiated rates” that were never properly filed with the ICC.

At that time, the Shippers National Freight Claim Council began to receive inquiries about the "balance-due bills" shippers were receiving for shipments they had made up to five years prior! These bills were issued by bankruptcy trustees, who said that the unfiled, negotiated rates were inapplicable and demanded that shippers pay the difference between the negotiated and tariff rates. These additional amounts were also known as "undercharges." Collectively, the problem was staggering: The ICC once estimated the total amount of undercharges at $27 billion.

Bill recognized that the main advantage the bankruptcy trustees had over shippers was that undercharge claims usually amounted to a few thousand dollars or less—not enough to warrant hiring a lawyer to defend a case in a bankruptcy court that often was located in another state. The solution Bill devised was the formation of “joint defense groups” that allowed shippers to band together and defend themselves in an economically feasible way.

The pinnacle of Bill’s litigation efforts was his representation of the shipper before the United States Supreme Court in Riss v. K-mart. He also spearheaded the lobbying effort that led to the passage of the Negotiated Rates Act of 1993, which exempted small businesses from liability; provided a settlement option for large shippers; and put into law a defense based on the bankrupt carriers’ conduct being an “unreasonable practice.” Bill devoted enormous energy to this cause: He once told me that he’d personally called the offices of all 535 U.S. senators and representatives!

Author and Educator

Bill believed that transportation professionals should be thoroughly versed in the laws governing transportation and logistics. By learning about the law, they could help to maximize revenues and minimize risks for their companies. He also believed that knowledge of transportation law would help individuals achieve professional and financial betterment. Bill once said in an interview that his goal was "to help each transportation professional move one rung up the corporate ladder."

Perhaps Bill’s greatest legacy is his empowerment of transportation professionals to further their careers through knowledge. It’s estimated that over the course of his career, he presented more than 300 seminars that were attended by some 9,000 transportation professionals. One reason his classes were so well received was the way he treated attendees. As one lawyer told me, "Bill never talked down to them. He extended the same courtesies and respect to the backroom personnel as he would if he were addressing their companies’ General Counsel."

Bill also was a prolific author. In 1979, he and longtime law partner George Pezold wrote Freight Claims in Plain English, published by the Shippers National Freight Claims Council. It is now in its third edition, and a fourth edition will be published this year. The book was unique in that it was written for both shippers and transportation attorneys. It was followed by Transportation Insurance in Plain English and many other practical handbooks. (For a partial list, see the sidebar.)

Bill’s magnum opus undoubtedly is Transportation, Logistics and the Law, a comprehensive overview of the laws governing transportation and logistics. The first edition sold out in just over a year, and in 2004 Bill published an expanded second edition. More information about the book can be found at www.transportlawtexts.com.

Unfortunately, Bill did not live to see the publication this year of his last book, Legal Issues Affecting Shippers, Carriers and Intermediaries, a compilation of his articles, with additional commentary.

Even after “retiring” to Tucson, Ariz., Bill continued his educational mission. He contacted the University of Arizona Law School and suggested that the school offer a course in transportation law. This led to an appointment as Adjunct Professor of Transportation Law, which he considered to be among his most rewarding experiences.

His legacy as an educator will continue. In recognition of his contributions, the University of Arizona has created the William J. Augello Scholarship for Transportation and Commercial Law Studies. Inquiries and donations may be made to the James E. Rogers College of Law, University of Arizona, P.O. Box 210176, Tucson, AZ 85721-0176.

Author Information

Brent Wm. Primus, J.D., is co-author of U.S. Domestic Terms of Sales and Incoterms 2000. A recipient of the Transportation Logistics Council’s Transportation Lawyer of the Year Award, he is General Counsel to the Freight Transportation Consultants Association and CEO of Transportlawtexts Inc. He can be reached at brent@primuslawoffice.com.

Logistics Management Magazine is the co-sponsor of the On-line!, On-demand!! version of the seminar based on William Augello’s landmark text “Transportation, Logistics and the Law”