Interstate Commerce Comm'n v. Transcon Lines, et al.

• Decision Date: 10 January 1995
• Docket Number: 931318
• Citation: 115 S.Ct. 689,130 L.Ed.2d 562,513 U.S. 138
• Parties: INTERSTATE COMMERCE COMMISSION, Petitioner v. TRANSCON LINES et al
• Court: U.S. Supreme Court

513 U.S. 138

115 S.Ct. 689

130 L.Ed.2d 562

INTERSTATE COMMERCE COMMISSION, Petitioner

v TRANSCON LINES et al.

No. 93-1318.

Supreme Court of the United States

Argued Nov. 1, 1994.

Decided Jan. 10, 1995.

Syllabus ^*

Co., 456 U.S. 336, 352, 349, 102 S.Ct. 1815, 1825, 1823, 72 L.Ed.2d 114. Although not without limits, the ICC's judgment that a particular remedy is an appropriate exercise of its enforcement authority is entitled to some deference. Two substantial reasons support the conclusion that the remedy chosen in this case is appropriate. First, it is necessary to the effective enforcement of the ICC's regulations. Should the injunction be disallowed, trustees of bankrupt carriers would be immune, in effect, from enforcement of the credit regulations. Second, the remedy serves the intended beneficiaries of the violated regulations: shippers, whom the regulations protect from the imposition of penalties without warning. Id., at 345-346, 102 S.Ct. at 1821-1822, distinguished. Neither Maislin nor this Court's other filed rate cases suggest that the doctrine prohibits the ICC from requiring departure from a filed rate when necessary to enforce other specific and valid regulations adopted under the Act. Contrary to respondents' contention, the ICC is not seeking to enforce a secret, unfiled rate in place of a filed rate, but is seeking to enforce the rate for shipping over the rate for shipping plus collection efforts. Pp. 6-11.

9 F.3d 64, (CA 9 1993) reversed and remanded.

KENNEDY, J., delivered the opinion for a unanimous Court.

The Interstate Commerce Act grants petitioner Interstate Commerce Commission (ICC) authority to set the exclusive means by which common carriers extend credit to shippers. Under the ICC's regulations, credit may be extended for periods of up to 30 days, and, if shippers fail to pay, carriers may assess interest charges and liquidated damages to cover collection costs. In this suit to enjoin the trustee in bankruptcy appointed for respondent motor carrier, Transcon Lines, from collecting liquidated damages from Transcon's former customers, the ICC asserted that Transcon had violated three of the credit regulations' procedural requirements: its bills did not advise shippers of the consequences of late payment; revised bills were not issued within 90 days after the expiration of the authorized credit period; and damages were applied by a bankruptcy trustee on an aggregate basis. The District Court granted summary judgment for respondents, and the Court of Appeals affirmed in relevant part, holding that the filed rate doctrine and this Court's decision in Maislin Industries, U.S., Inc. v. Primary Steel, Inc., 497 U.S. 116, 110 S.Ct. 2759, 111 L.Ed.2d 94, barred the ICC from enforcing its credit regulations in a manner that would prevent collection of a filed rate. On remand from this Court, the Court of Appeals adhered to that determination.

Held: The filed rate doctrine does not bar the injunction the ICC seeks. The Act grants the ICC broad authority to bring civil actions to enforce the statute and regulations or orders issued under it. This Court has specified that seeking a federal-court injunction to require a carrier to comply with the regulations is such an enforcement power. Southern Pacific Transp. Co. v. Commercial Metals Co., 456 U.S. 336, 352, 349, 102 S.Ct. 1815, 1825, 1823, 72 L.Ed.2d 114. Although not without limits, the ICC's judgment that a particular remedy is an appropriate exercise of its enforcement authority is entitled to some deference. Two substantial reasons support the conclusion that the remedy chosen in this case is appropriate. First, it is necessary to the effective enforcement of the ICC's regulations. Should the injunction be disallowed, trustees of bankrupt carriers would be immune, in effect, from enforcement of the credit regulations. Second, the remedy serves the intended beneficiaries of the violated regulations: shippers, whom the regulations protect from the imposition of penalties without warning. Id., at 345-346, 102 S.Ct. at 1821-1822, distinguished. Neither Maislin nor this Court's other filed rate cases suggest that the doctrine prohibits the ICC from requiring departure from a filed rate when necessary to enforce other specific and valid regulations adopted under the Act. Contrary to respondents' contention, the ICC is not seeking to enforce a secret, unfiled rate in place of a filed rate, but is seeking to enforce the rate for shipping over the rate for shipping plus collection efforts. Pp. __.

9 F.3d 64, (CA 9 1993) reversed and remanded.

KENNEDY, J., delivered the opinion for a unanimous Court.

Lawrence G. Wallace, Washington, DC, argued for petitioner.

Leonard L. Gumport, South Pasadena, argued for respondents.

Justice KENNEDY delivered the opinion of the Court.

Though recent Acts of Congress have made substantial changes in the regulation of interstate motor carriers, see Negotiated Rates Act of 1993, Pub.L. 103-180, 107 Stat. 2044; Trucking Industry Regulatory Reform Act of 1994, Pub.L. 103-311, 108 Stat. 1683, this case arises under the law in effect before those enactments. We address once again the Interstate Commerce Act's filed rate requirements, 49 U.S.C. §§ 10761(a), 10762(a)(1), and their bearing on the authority of the Interstate Commerce Commission (ICC) to enforce related provisions of the Act and regulations adopted under it. Under the filed rate doctrine applicable to the transactions here in question, motor carriers were required to publish their shipping rates in tariffs filed with the ICC and to receive only the published rates. Ibid. Our cases have taught the necessity of strict compliance with this scheme. E.g., Maislin Industries, U.S., Inc. v. Primary Steel, Inc., 497 U.S. 116, 110 S.Ct. 2759, 111 L.Ed.2d 94 (1990); Louisville & Nashville R. Co. v. Maxwell, 237 U.S. 94, 97, 35 S.Ct. 494, 495, 59 L.Ed. 853 (1915). The question now presented is whether the filed rate doctrine bars the ICC from obtaining injunctive relief to enforce its credit regulations in a manner that would prevent collection of a rate filed in a published tariff. We hold that the filed rate doctrine does not bar the injunction the ICC seeks.

I

Transcon Lines (Transcon) was once the 12th largest motor carrier in the United States, operating under authorization from the ICC. Like many other carriers, Transcon became a victim of the heightened competition resulting from Congress' partial deregulation of the motor carrier industry in 1980. See Motor Carrier Act of 1980, 94 Stat. 793. In May 1990, Transcon consented to an order for relief pursuant to an involuntary bankruptcy petition filed against it under Chapter 11. The trustee appointed by the Bankruptcy Court followed the practice of some other trustees for the estates of bankrupt carriers and sought to collect undercharges from Transcon's former customers. The trustee sought not only to collect unpaid freight charges but also to collect liquidated damages for late payment. Some 3,000 adversary proceedings brought by the trustee against Transcon's former customers are pending, and the Commission estimates the liquidated damages in question total about $15 million.

The Act bars common carriers subject to the ICC's jurisdiction from extending credit for their services except "[u]nder regulations of the [ICC] governing the payment for transportation and service and preventing discrimination." 49 U.S.C. §§ 10743(b)(1), 10743(a). By regulations under this express statutory delegation, the ICC has set out in detail the exclusive means by which common carriers can extend credit to shippers. See 49 C.F.R. pt. 1320 (1992). Under the regulations, carriers are authorized to establish credit periods of up to 30 calendar days, §§ 1320.2(c), (d), and, if shippers fail to pay their charges within the established credit period, to assess service (or interest) charges, § 1320.2(e). Carriers also may assess liquidated damages to cover collection costs, either by a tariff rule or through contract terms in their bills of lading. § 1320.2(g)(1), (3). Before collecting liquidated damages by tariff rule, however, a carrier must follow specified procedural requirements.

First, the timing and conditions of any potential liquidated damages must be described clearly in the carrier's filed tariff. § 1320.2(g)(2)(i). Second, the original bill sent to the shipper must set forth any liquidated damages that would be assessed for failure to make timely payment of the freight charges. § 1320.3(c). Third, within 90 days after expiration of the authorized credit period the carrier must "issu[e] a revised freight bill or notice of imposition of collection expense charges for late payment." § 1320.2(g)(2)(vi). Finally, liquidated damages "[s]hall be applied only to the nonpayment of original, separate and independent freight bills and shall not apply to aggregate balance-due claims sought for collection on past shipments by a bankruptcy trustee, or any other person or agent. . . ." § 1320.2(g)(2)(iii).

Upon satisfying these requirements, carriers may assess liquidated damages through a tariff rule by one of two methods. The first is "to assess liquidated damages as a separate additional charge to the unpaid freight bill." § 1320.2(g)(1)(i). The second is to charge the shipper a "full, nondiscounted rate instead of the discounted rate [that might otherwise be] applicable." § 1320.2(g)(1)(ii). Transcon used the second, so-called loss-of-discount method to assess liquidated damages. The measure of liquidated damages under this method is prescribed by an ICC regulation. It provides that:

"The difference between the discount and the full rate constitutes a carrier's liquidated damages for its collection effort. Under this method the tariff shall identify the discount rates that are subject to the condition precedent and which require the shipper to make payment by a date certain." Ibid. Transcon's customers had been...