Fulfillment Services v. United Parcel Service

• Citation: 528 F.3d 614
• Decision Date: 09 June 2008
• Docket Number: No. 06-15970.,No. 07-15006.,06-15970.,07-15006.
• Parties: FULFILLMENT SERVICES INC., Plaintiff-Appellant, v. UNITED PARCEL SERVICE, INC. (UPS-Parent); United Parcel Service, Inc. (UPS-NY); and United Parcel Service, Inc. (UPS-OH), Defendants-Appellees. Fulfillment Services Inc., Plaintiff-Appellee, v. United Parcel Service, Inc. (UPS-Parent); United Parcel Service, Inc. (UPS-NY); and United Parcel Service, Inc. (UPS-OH), Defendants-Appellants.
• Court: United States Courts of Appeals. United States Court of Appeals (9th Circuit)

528 F.3d 614

FULFILLMENT SERVICES INC., Plaintiff-Appellant, v. UNITED PARCEL SERVICE, INC. (UPS-Parent); United Parcel Service, Inc. (UPS-NY); and United Parcel Service, Inc. (UPS-OH), Defendants-Appellees.

Fulfillment Services Inc., Plaintiff-Appellee, v. United Parcel Service, Inc. (UPS-Parent); United Parcel Service, Inc. (UPS-NY); and United Parcel Service, Inc. (UPS-OH), Defendants-Appellants.

No. 06-15970.

No. 07-15006.

United States Court of Appeals, Ninth Circuit.

Argued and Submitted February 13, 2008.

Filed June 9, 2008.

Paul D. Cullen, Sr., The Cullen Law Firm, Washington, DC, for the plaintiff-appellant-cross-appellee.

Gregory B. Koltun, Morrison & Foerster LLP, Los Angeles, CA, for the defendants-appellees-cross-appellants.

Appeal from the United States District Court for the District of Arizona; David C. Bury, District Judge, Presiding. D.C. No. 07-15006.

Before: BARRY G. SILVERMAN, M. MARGARET McKEOWN, and RICHARD C. TALLMAN, Circuit Judges.

McKEOWN, Circuit Judge:

The Interstate Commerce Act ("ICA") was adopted to bring uniformity to shipping regulations previously governed by inconsistent state laws. George W. Wright, Slouching Toward a Morass: The Case For Preserving Complete Carmack Pre-emption, 1 DePaul Bus. & Com. L.J. 177 (2003). Historically, the Interstate Commerce Commission had responsibility for enforcing the ICA. Continuing the deregulation initiatives begun in the 1970s and early 1980s, in 1995 Congress passed the Interstate Commerce Termination Act ("Termination Act"), which abolished the Interstate Commerce Commission and transferred primary responsibility for enforcement of the ICA to the Surface Transportation Board (the "Board"). The Motor Carrier Act ("MCA") is among the ICA provisions whose enforcement was transferred under the Termination Act.

This case concerns the availability of a private civil remedy for violations of the MCA, specifically establishment of shipping rates in the trucking industry. In particular, we consider whether, under § 14704(a)(2), a private party can sue for violations of § 13703. See 49 U.S.C. § 14704(a)(2); 49 U.S.C. § 13703. We hold that § 14704(a)(2) provides for a private cause of action, but that a plaintiff must allege actual damages arising from the violation in order to state a claim successfully.

BACKGROUND

United Parcel Service ("UPS") describes itself as "the world's largest package delivery company." As a motor carrier transporting goods interstate, UPS is subject to the jurisdiction of the Secretary of Transportation and the Board and is governed by certain substantive provisions of the MCA. See 49 U.S.C. § 13501. Fulfillment Services, Inc., a freight shipping company, alleges that UPS violated one of these provisions, namely 49 U.S.C. § 13703.

Section 13703 provides that a motor carrier "may enter into an agreement with one or more [other] carriers to establish ... joint rates," and that such agreements "may be made and carried out ... and the antitrust laws ... do not apply to parties or other persons with respect to making or carrying out the agreement." 49 U.S.C. § 13703(a)(1), (6). Subsection (f) requires that "[a] motor carrier ... whose ... rates [or] classifications ... are determined or governed by publications established under agreements approved under this section must participate in the determining or governing publication for such provisions to apply." 49 U.S.C. § 13703(f) (emphasis added). In other words, § 13703 provides an exception from antitrust liability to carriers for collective rate and classification setting, provided they meet certain conditions. The subject of this appeal is UPS's "Hundredweight Service," which Fulfillment alleges runs afoul of § 13703(f).

According to UPS, its Hundredweight Service entitles shippers to lower rates if they send multiple packages to the same location on the same day. At the time UPS introduced its Hundredweight Service in 1988, it participated in the National Motor Freight Classification ("NMFC"), a collectively compiled rate classification publication covered by § 13703. Through item 2000 of its General Tariff, UPS incorporated the NMCF's 100 Series ("NMCF Classification") as part of its pricing mechanism, and referenced the NMCF Classification in the published rates for its Hundredweight Service. In October 2000, UPS ceased participating in the NMCF, and stopped listing NMCF as a "governing publication." Notwithstanding these changes, UPS's Hundredweight Service tariffs continued to refer to the NMCF Classification until mid-2004.

Under the NMFC Classification, commodities carried by truck have a "classification rating" ranging from class 50 to class 500, based primarily on their density. Articles with the heaviest density, such as books and ingots, fall in Class 50, whereas the lightest items, such as ping pong balls, are assigned Class 500. Fulfillment claims that UPS's tariff, even after it withdrew from NMFC publication, continued to refer to classes 50-125 and that UPS restricted its Hundredweight Service to commodities in those classes.¹

Fulfillment filed this putative class action on behalf of itself and others who shipped parcels using UPS's Hundredweight Service between October 28, 2000, and July 14, 2004, claiming that UPS's continued reference to the NMCF Classification violated § 13703(f). The suit asked for a declaratory judgment that Item 2000 of UPS's tariff became void and unenforceable when UPS withdrew from participation in NMCF. Fulfillment also sought relief under 49 U.S.C. § 14704(a)(2), alleging that this provision allows private parties to sue for violations of the MCA, including violations of § 13703.

The district court granted UPS's motion to dismiss because "liability under § 13703 does not extend beyond antitrust violations." The district court denied UPS's motion for attorney's fees under 49 U.S.C. § 14707(e), holding both that it lacked jurisdiction to award fees, because it had dismissed the underlying suit for lack of standing, and that § 14707(e) requires only that attorney's fees be awarded to prevailing plaintiffs, not defendants such as UPS. Fulfillment now appeals the dismissal of its suit, and UPS cross appeals the denial of attorney's fees. We affirm the district court, although we differ in our analysis.

ANALYSIS

I. STANDING

This case was briefed to us as presenting the question whether Fulfillment stated a claim under § 13703. Only in a supplemental submission just before oral argument did UPS shift ground and seek to cast its argument in terms of standing. Of course, we do not rely on the parties to raise an issue of standing. See Bates v. United Parcel Service, Inc., 511 F.3d 974, 985 (9th Cir.2007) (en banc) ("Standing is a threshold matter central to our subject matter jurisdiction. We must assure ourselves that the constitutional standing requirements are satisfied before proceeding to the merits.").

The question of Article III standing "is related only to whether the dispute sought to be adjudicated will be presented in an adversary context and in a form historically viewed as capable of judicial resolution." Ass'n of Data Processing Serv. Orgs. v. Camp, 397 U.S. 150, 151-52, 90 S.Ct. 827, 25 L.Ed.2d 184 (1970) (quoting Flast v. Cohen, 392 U.S. 83, 101, 88 S.Ct. 1942, 20 L.Ed.2d 947 (1968)). Although there are three requirements for Article III standing — injury, causation, and redressability — only the injury component is in serious contention here. Vt. Agency of Natural Res. v. United States ex rel Stevens, 529 U.S. 765, 771, 120 S.Ct. 1858, 146 L.Ed.2d 836 (2000).

To suffice for Article III standing, an injury must be "a harm that is both `concrete' and `actual or imminent, not conjectural or hypothetical.'" Id. (quoting Whitmore v. Arkansas, 495 U.S. 149, 155, 110 S.Ct. 1717, 109 L.Ed.2d 135 (1990)). The injury required by Article III can exist solely by virtue of "statutes creating legal rights, the invasion of which creates standing." Warth v. Seldin, 422 U.S. 490, 500, 95 S.Ct. 2197, 45 L.Ed.2d 343 (1975) (quoting Linda R.S. v. Richard D., 410 U.S. 614, 617, n. 3, 93 S.Ct. 1146, 35 L.Ed.2d 536 (1973)). "Essentially, the standing question in such cases is whether the constitutional or statutory provision on which the claim rests properly can be understood as granting persons in the plaintiff's position a right to judicial relief." Id.

Although in some cases, it may seem difficult to separate where standing ends and analysis of the cause of action begins, the Supreme Court has provided guidance on this point: "It is firmly established in our cases that the absence of a valid (as opposed to arguable) cause of action does not implicate subject-matter jurisdiction, i.e., the court's statutory or constitutional power to adjudicate the case." Steel Co. v. Citizens for a Better Env't, 523 U.S. 83, 89, 118 S.Ct. 1003, 140 L.Ed.2d 210 (1998). The Court went on to note that the scope of a statutory right of action "goes to the merits and not to statutory standing." Id. at 92, 118 S.Ct. 1003.

Stripped to its essence, Fulfillment's claim is that UPS violated § 13703 by charging an unlawful rate and Fulfillment is entitled to an award of damages, including disgorgement.² Fulfillment's claim is founded on a colorable construction of the related statutes. Its alleged injury is being subjected to an unlawful tariff and, as in Citizens for a Better Environment, "[i]t would have been a different matter if the relief requested ... would not have remedied their injury in fact; but it of course would." 523 U.S. at 96, 118 S.Ct. 1003.

To be certain, not all statutes endow rights on a given plaintiff, the infringement of which is sufficient to support standing. See Fernandez v. Brock, 840 F.2d 622, 630 (9th Cir.1988) (stating that "a plaintiff who merely claims that a defendant violated a statutory duty does not necessarily satisfy the requirement of injury in fact in article III"). Nevertheless, as we explain below,...