Appeals Court says U.S. can recover cost of undelivered food
The U.S. Court of Appeals for the Fifth Circuit has ruled that the United States is entitled to recover the full cost of foodstuffs it bought for humanitarian relief when a carrier failed to deliver the shipments.
The United States may also recover the cost of land and sea transportation in such circumstances, the appellate panel said.
Defendants in the case, “U.S. v. Ocean Bulk Ships Inc.,” had argued the government should be allowed to recover because it had transferred ownership of the foodstuffs to a private voluntary organization (PVO) that, by definition, cannot suffer financial losses.
The appeals court found that line of reasoning “legally irrelevant.” The government’s purposes “in participating in the Food for Peace Program, whatever they might be, were not met when the defendants failed to deliver the food to the intended beneficiaries,” the appellate panel noted.