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liability for declared value in excess of $100. In order to
evaluate this alleged business purpose, we will look to whether
petitioner actually transferred or reduced its liability to
shippers in any meaningful sense. In other words, did the
rearranged EVC activity have any real economic impact on
petitioner?
In 1983, petitioner supplemented tariffs filed with the ICC
on behalf of UPS-New York and UPS-Ohio. Supplement provision
540-A to the tariffs provided that petitioner "may" remit excess
valuation charges to an insurance company as a premium for excess
valuation cargo insurance on the shipper's behalf. However,
supplement provision 540-A also stated that in the event that the
insurance company failed to pay any claim for loss or damage to
the shipper's property under the policy, petitioner would remain
liable for any loss or damage within the limits declared and paid
for.41
41Petitioner's service explanation also states that if NUF
fails to pay any claim for loss of or damage to the shipper's
property, petitioner will remain liable for loss or damage within
the declared limits of the Shippers Interest contract.
The Shippers Interest contract document specifically lists
the shippers under the "name and address of insured". However,
the contract document also lists the address of the insured to be
that of petitioner's world headquarters. Under the cancellation
provision of the Shippers Interest contract, either petitioner or
the "Named Insured" could terminate the contract. Thus,
petitioner had the power to cancel the insurance policy that
petitioner alleges was between its shippers and NUF. Of course,
(continued...)
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