Aluminum Co. of Amer. v. Admiral Merchants M. Frgt., Inc.

• Decision Date: 12 July 1973
• Docket Number: No. 72-1264 thru 72-1266,72-1505 thru 72-1512.,72-1264 thru 72-1266
• Citation: 486 F.2d 717
• Parties: ALUMINUM COMPANY OF AMERICA, Plaintiff-Appellee, v. ADMIRAL MERCHANTS MOTOR FREIGHT, INC., et al., Defendants-Appellants.
• Court: U.S. Court of Appeals — Seventh Circuit

486 F.2d 717 (1973)

ALUMINUM COMPANY OF AMERICA, Plaintiff-Appellee, v. ADMIRAL MERCHANTS MOTOR FREIGHT, INC., et al., Defendants-Appellants.

Nos. 72-1264 thru 72-1266, 72-1505 thru 72-1512.

United States Court of Appeals, Seventh Circuit.

Argued October 17, 1972.

Decided July 12, 1973.

Certiorari Denied December 17, 1973.

Alvin J. Meiklejohn, Jr., Denver, Colo., Donald B. Levine, Chicago, Ill., for defendants-appellants.

Ellis A. Ballard, Chicago, Ill., for plaintiff-appellee.

Daniel J. Sweeney, Chicago, Ill., amici curiae.

Before DUFFY, Senior Circuit Judge, FAIRCHILD, Circuit Judge, and GRANT,^* Senior District Judge.

Certiorari Denied December 17, 1973. See 94 S.Ct. 843.

GRANT, District Judge.

These are consolidated appeals by various defendant motor carriers from summary judgments entered in favor of the plaintiff-shipper, Aluminum Company of America, in separate enforcement proceedings brought by the shipper to obtain refunds of excess freight charges. The Interstate Commerce Commission had previously ordered the refunds to be paid by the defendant motor carriers to shippers such as the plaintiff and that refund order had been upheld by a three-judge court in Colorado and subsequently upheld by the United States Supreme Court on appeal per curiam. Admiral-Merchants Motor Freight, Inc. v. United States, 321 F.Supp. 353 (D.Colo. 1971), aff'd, 404 U.S. 802, 92 S.Ct. 51, 30 L.Ed.2d 37 (1971).

In the spring of 1968, Middlewest Motor Freight Bureau, on behalf of its members, including the appellant carriers, filed and published proposed rate increases to take effect on 1 April 1968. The I.C.C. had allowed the rates to go into effect on this date but, because of protests by various shippers that the increased rates would be unjust and unreasonable, had instituted an investigation, without suspension, of the lawfulness of the increased rates. The Commission ordered evidence to be filed and set the matter for hearing on 20 May 1968. Two government agencies and the appellants requested a continuance of the evidence filing date and the hearing date on the grounds that the evidence could not be prepared in time. The I.C. C. granted the carriers' request for a continuance and rescheduled the hearing for 19 August 1968. This continuance, however, was subject to the express condition that in the event that any of the increased rates were not ultimately approved by the Commission,¹ the carriers would then be required to make refunds of all such increases collected on shipments moving after 20 May 1968. The appellant carriers had originally objected to the conditional refund provision but withdrew the objection after realizing that the Commission had, in similar cases, when confronted with a refusal of carriers to comply with a refund condition, denied the carriers' requested continuance of the hearing. On 5 June 1969 the Commission found that the increased rates and charges had not been shown by the carriers to be just and reasonable, ordered them cancelled, and reiterated the refund language of its original order granting the continuance of the hearing:

It is further ordered, That, in accordance with the order entered herein on April 25, 1968, the respondents be, and they are hereby, required to refund to shippers the charges on shipments moving after May 20, 1968, to the extent that such charges included the increases found not shown to be just and reasonable. Increased Rates and Charges, From, To and Between Middlewest Territory, 335 I.C.C. 142 (June 5, 1969).

The appellants subsequently petitioned the Commission to reconsider and vacate the refund order. On 29 August, 1969, the Commission entered its final order denying the petition and further ordered the carriers, in accordance with the Commission's decision of 5 June 1969, to "make refund to shippers presenting their claims to the carriers supported by paid freight bills or other appropriate evidence."²

Plaintiff filed its complaint in the district court originally alleging claims for statutory reparations arising under 49 U.S.C. § 304a, with jurisdiction asserted under 28 U.S.C. § 1337. However, on 7 May 1971, the plaintiff moved for summary judgment asserting new claims for enforcement of the Commission's refund order pursuant to Section 16(2) of the Interstate Commerce Act, 49 U.S.C. § 16(2).³ Plaintiff had alleged in its motion for summary judgment that the refund order of the Commission was a final administrative order subject to the provisions of Section 205(g) of Part II of the Interstate Commerce Act, 49 U.S. C. § 305(g), which provides in pertinent part as follows:

Any final order made under this chapter shall be subject to the same right of relief in court by any party in interest as is now provided in respect to orders of the Commission under chapter 1. . . .⁴

In effect, plaintiff argued, and the district court held, that Section 16(2) of Part I of the Interstate Commerce Act was incorporated into Section 205(g) of Part II of the Act, thereby providing plaintiff with a statutory remedy for enforcement of the Commission refund order.

Section 205(g) of Part II of the Interstate Commerce Commission Act, 49 U.S.C. § 305(g), provides that any final order made under Part II, which deals with motor carriers, "shall be subject to the same right of relief in court by any party in interest as is now provided in respect to orders of the Commission made under Chapter I (which deals with railroads)." Because no doubt exists that we are dealing with a final order made under Part II of the Interstate Commerce Act and because we have concluded above that the plaintiff is a party in interest to such order, we must, therefore, look to Part I of the Act to determine the scope of the plaintiff\'s rights.

* * * * * *

While no doubt exists that . . . Section 16 was designed originally to cover orders by the Commission in reparations situations, no reason appears why the valid order of the I.C.C. involved herein for the payment of money, which order clearly is covered under the language of the statute quoted above, should not also be deemed within the purview of this section. Aluminum Co. of Amer. v. Admiral Merch. Motor Frgt., Inc., 337 F.Supp. 674, 681 (N.D.Ill.1972).

The defendants, though denying any liability for a refund, stipulated the amount of refund of freight charges to which the plaintiff would be entitled in each case should the district court conclude that plaintiff was entitled to a refund under the order of the Commission. With this underlying factual stipulation, the district court proceeded to find the legal issues against the carrier and granted plaintiff's motion for summary judgment. 337 F.Supp. at 682.

Appellants assert numerous arguments on appeal, many of which were presented to and effectively disposed of by the district court. We shall only treat those arguments which we consider as having some residual merit.

Defendants contend, inter alia, that the Commission's refund language was entered in excess of its jurisdiction and, therefore, is unenforceable. Though recognizing the existence of the holding of the court below that the Colorado three-judge court had conclusively determined the validity of the refund order, thereby precluding all argument on that issue, defendants argue that "the defense of invalidity of an order in an enforcement action is one which must be considered by the enforcement Court," citing United States v. Southern Ry., 250 F.Supp. 759, 767 (D.S.C.1966). However, as correctly noted by plaintiff-appellee, in the Southern Ry. case there had been no prior proceedings to review the order of the Commission sought to be enforced by the United States. In the instant case, the refund order has been subjected to review and its validity established by the Colorado three-judge court.

Defendants half-heartedly argue that the refusal of the three-judge panel to enjoin the Commission's refund order did not constitute a finding that the order was valid. The assertion of this argument requires, as the court below concluded, a "myopic reading of the opinion" of the Colorado three-judge court. 337 F.Supp. at 678. The statement of issues given by the three-judge panel negates any argument that the court was not concerned with the validity of the Commission's refund order:

We must decide whether an order of the Commission in which a rate increase is denied, which order directs repayment of interim rates, if determined to be invalid, and which refund order was entered by the Commission as a condition of granting an extension of time to the carriers at their request, is invalid and subject to a judgment annulling the same. . . . We are limited to the propriety and validity of a conditioned rate refund order, which order was tacitly or impliedly (by withdrawal of objection) accepted by the carriers, plaintiffs herein. (Our emphasis.) Admiral-Merchants Motor Freight, Inc., supra, 321 F.Supp. at 358.

Admittedly, some of the defendant-carriers whose appeals have been consolidated with the instant appeal were not named plaintiffs in the Colorado action and thus an argument might be made that, as to them, res judicata does not apply. However, as argued by the plaintiff-appellee, those defendant-carriers who were not named plaintiffs in the Colorado proceedings were undoubtedly in privity with the 60 named carrier-plaintiffs, particularly since all of the carriers involved were members of the Middlewest Motor Freight Bureau, Inc., and therefore are still bound under the doctrine of res judicata.⁵ Moreover, we are persuaded that the doctrine of stare decisis would also be applicable. We need only cite and adopt the following language of the district court:

The Supreme Court of the United States, however, has affirmed a decision which states that all carriers who were represented by the Middlewest Motor Freight Bureau, Inc., who were involved with the rate increase involved in ICC Docket No. 34971, and who withdrew their objections to

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