502 F.2d 627 (9th Cir. 1974), 72-3042, Garrett v. Time-D.C., Inc.

Docket Nº:72-3042.
Citation:502 F.2d 627
Party Name:Paul M. GARRETT, Trustee in Bankruptcy for Metropolitan Shippers' Clearings Corp. of Washington, Appellant, v. TIME-D.C., INC., Appellee.
Case Date:August 14, 1974
Court:United States Courts of Appeals, Court of Appeals for the Ninth Circuit

Page 627

502 F.2d 627 (9th Cir. 1974)

Paul M. GARRETT, Trustee in Bankruptcy for Metropolitan

Shippers' Clearings Corp. of Washington, Appellant,


TIME-D.C., INC., Appellee.

No. 72-3042.

United States Court of Appeals, Ninth Circuit

August 14, 1974

Page 628

Nicholas F. Corning, Bellevue, Wash., for appellant.

Boyd Hartman (argued), of Hartman & McGuire, Seattle, Wash., for appellee.


Before KILKENNY, TRASK and CHOY, Circuit Judges.

CHOY, Circuit Judge:

This appeal presents the issue whether a claim that a motor carrier must pay pre-judgment interest on shipping charges that exceed Interstate Commerce Act limits is one 'arising under an Act of Congress regulating commerce' so as to be within the jurisdiction of a federal district court under 28 U.S.C. 1337. 1 The district court held it was not. We reverse and remand.

Paul M. Garrett, the trustee for the bankrupt Metropolitan Shippers' Clearings Corporation (MSCC), seeks a declaratory judgment that interest must be paid on shipping overcharges. The overcharges occurred when TIME-DC, a motor carrier, charged its customers, whether inadvertently or not, more than was specified in tariffs filed with the Interstate Commerce Commission (I.C.C.).

MSCC's business consisted of purchasing shipper's rights to collect overcharges, performing audits to determine if the motor carriers had charged more than permitted in the applicable tariffs, and then collecting the overcharges. 2

Normally, collecting overpayments has occasioned no difficulty. When it has been the subject of repayment demands, TIME-DC, like other carriers obliged to remit overcharges under 317(b) of the Interstate Commerce Act, 49 U.S.C. 317(b), has refunded such charges routinely. However, it, as well as other carriers, has refused to pay any interest to compensate the shipper for retention of the monies during the period between the overpayments and the remittance of the excessive charges.

Garrett contends that the Interstate Commerce Act requires payment of interest because uncompensated retention of an overpayment is part and parcel of an overcharge. In support of his contention, he points to certain provisions in Part II of the Act, 49 U.S.C. 301-327, governing interstate motor carriers. Under that Part a carrier is prohibited from collecting 'a greater or less or different compensation for transportation' than set forth in its tariffs. 49 U.S.C. 317(b). A shipper may pursue a judicial action for 'overcharges' (or a carrier an action for 'undercharges' if less than the tariff has been collected). See 49 U.S.C. 304a. 'Overcharges' are defined as charges

Page 629

'in excess of those (provided) under the tariffs . . ..' 49 U.S.C. 304a(6). garrett argues that the carrier's 'overcharge' or 'compensation' is increased by the interest benefit inhering in retention of the overpayment until it is refunded. Thus, he concludes, the statute affords him a right to the preremittance interest.

The issue before us relates only to the presence of jurisdiction under 1337. Since $10,000 is admittedly not in controversy, 1331's parallel jurisdictional grant for cases 'arising under the Constitution, treaties, or laws of the United States' is unavailable. Nonetheless, 1331 does serve as a starting point since the 'arising under' language in 1337 is...

To continue reading