Americana Expressways, Inc., In re

• Decision Date: 31 December 1997
• Docket Number: No. 96-4055,96-4055
• Citation: 133 F.3d 752
• Parties: Fed. Carr. Cas. P 84,058, 15 Colo. Bankr. Ct. Rep. 14 In re: AMERICANA EXPRESSWAYS, INC., Debtor. Kenneth A. RUSHTON, Trustee, Plaintiff-Appellant, v. AMERICAN PACIFIC WOOD PRODUCTS, INC.; United States Gypsum Company, Defendants-Appellees, United States of America and the Surface Transportation Board, Intervenors.
• Court: U.S. Court of Appeals — Tenth Circuit

Page 752

133 F.3d 752

Fed. Carr. Cas. P 84,058, 15 Colo. Bankr. Ct. Rep. 14

In re: AMERICANA EXPRESSWAYS, INC., Debtor.

Kenneth A. RUSHTON, Trustee, Plaintiff-Appellant, v. AMERICAN PACIFIC WOOD PRODUCTS, INC.; United States Gypsum

Company, Defendants-Appellees,

United States of America and the Surface Transportation

Board, Intervenors.

No. 96-4055.

United States Court of Appeals, Tenth Circuit.

Dec. 31, 1997.

Michael N. Zundel (Jeffery J. Devashrayee, also of Jardine Linebaugh & Dunn, Salt Lake City, UT; Professor Richard G. Wilkins, Provo, UT; and Robert B. Walker, Herndon, VA, with him on the briefs), for Plaintiff-Appellant.

Lon Rodney Kump of Richards, Bird & Kump, Salt Lake City, UT (George Carl Pezold and Raymond A. Selvaggio of Augello, Pezold & Hirschmann, Huntington, NY, with him in the brief), for Defendant-Appellee American Pacific Wood Products, Inc.

Brendan Collins (J. Christopher Kohn and Tracy J. Whitaker, also of the Civil Division, Department of Justice, Washington, DC; Henri F. Rush, General Counsel, Ellen D. Hanson, Deputy General Counsel, and Theodore Kalick, Attorney, The Surface Transportation Board, Washington, DC; and Scott M. Matheson, Jr., United States Attorney, Salt Lake City, UT, with him on the brief), for Intervenors the United States of America and The Surface Transportation Board.

Before MURPHY and LOGAN, Circuit Judges, and MILES-LaGRANGE, District Judge. ^*

LOGAN, Circuit Judge.

Plaintiff Kenneth A. Rushton, Chapter 7 bankruptcy trustee (trustee) for debtor Americana Expressways, Inc. (Americana), appeals the district court's grant of summary judgment for defendant American Pacific Wood Products, Inc. (defendant) in the trustee's suit to recover alleged undercharges on shipments Americana made for defendant. See Rushton v. American Pacific Wood Products, Inc. (In re Americana Expressways, Inc.), 192 B.R. 763 (D.Utah 1996). The trustee asserts that the district court erred in determining that Americana did not have a valid tariff to support the undercharge claim. The trustee also argues that application of the Negotiated Rates Act to preclude his claim would be unconstitutional. We affirm the district court's decision that there was no valid tariff and thus do not reach the trustee's challenges to the Negotiated Rates Act.

I

Before addressing the issues presented in this appeal, an overview of the regulation of common carriers is helpful.

As a common carrier, Americana was regulated by the ICC which administers the Interstate Commerce Act ("Act"), 49 U.S.C. § 10101, et seq. Under the Act common carriers are required to charge shippers the tariff rates which the carriers file with the ICC. Under this "filed rate" doctrine, a shipper is liable to pay the filed rate, unless the ICC determines it to be unreasonable.

With passage of the Motor Carrier Act of 1980, Congress significantly deregulated the trucking industry. Carriers negotiated lower rates with shippers. In instances when some such carriers filed for bankruptcy, Trustees in bankruptcy typically would seek to recover "undercharges" (the difference between the filed rate and the negotiated rate) as part of the bankruptcy estate. Shippers claimed this practice was unreasonable. The ICC declared that it was unreasonable in view of the negotiated lower rates. However, the Supreme Court, in Maislin Industries, U.S., Inc. v. Primary Steel, Inc., struck down the ICC's policy on the ground that it violated the statutory duty created by the Act to charge the applicable tariff rates.

Id. at 764-65 (citations and footnote omitted).

In response to Maislin Industries, U.S., Inc. v. Primary Steel, Inc., 497 U.S. 116, 110 S.Ct. 2759, 111 L.Ed.2d 94 (1990), Congress passed the Negotiated Rates Act of 1993 (NRA). The NRA allows a shipper to seek the ICC's determination that a rate is not reasonable, or to satisfy some claims by paying a small percentage of the undercharge. See 192 B.R. at 765 & n. 3 (citing 49 U.S.C. § 10701(d) & (f) (1993)) (recodified at 49 U.S.C. §§ 13701, 13709, 15501). The NRA also exempts small businesses, charities, and shippers of recyclable materials from undercharge suits. 49 U.S.C. § 10701(f)(9) (1993) (recodified at 49 U.S.C. § 13709). Many trustees in undercharge suits arising after enactment of the NRA have asserted that "Congress did not intend the NRA to apply to bankrupt carriers, that the Bankruptcy Code precludes nonbankruptcy statutes from affecting the value of property in the estate, and that application of the NRA to [the estate] would result in an unconstitutional taking." See, e.g., Jones Truck Lines, Inc. v. Whittier Wood Prods Co. (In re Jones Truck Lines), 57 F.3d 642, 645 & n. 3 (8th Cir.1995). As the district court in the instant case noted, "[i]f the NRA is applicable to bankrupt carriers, it would greatly affect the amount of charges recoverable from shippers who had negotiated lower rates but who otherwise might be charged with liability for the filed tariff rate." 192 B.R. at 765.

After Americana filed a voluntary petition for reorganization under Chapter 11 of the Bankruptcy Code on August 9, 1991, it became a debtor in possession. Americana's Chapter 11 bankruptcy proceeding was converted to a Chapter 7 liquidation on February 18, 1993, and Kenneth A. Rushton was appointed as trustee for the bankruptcy estate. As trustee he sought to recover freight undercharges from defendant for eighty-two shipments that Americana had transported for defendant between November 4, 1991, and January 13, 1993, under negotiated rates.

The district court ¹ found that after filing a Chapter 11 petition Americana, as debtor in possession, was required to file an adoption notice pursuant to 49 C.F.R. § 1312.20 in order to maintain effective filed rates. Because Americana failed to do so it did not have an effective filed tariff and could not recover for the alleged undercharges. See 49 U.S.C. § 13702(a); cf. Security Servs. Inc. v. K Mart Corp., 511 U.S. 431, 444, 114 S.Ct. 1702, 1710, 128 L.Ed.2d 433 (1994) (trustee in bankruptcy "may not collect for undercharges based on filed, but void, rates"). The district court thus granted defendant summary judgment. ²

II

We review a grant of summary judgment de novo, applying the legal standard used by the district court under Fed.R.Civ.P. 56(c). "Summary judgment is appropriate if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Kaul v. Stephan, 83 F.3d 1208, 1212 (10th Cir.1996) (quotations omitted).

No statutory provision applicable to carriers' filed rates determines the precise issue before us. But 49 U.S.C. § 13702(b)(1) states that the Surface Transportation "Board shall prescribe the form and manner of publishing, filing, and keeping tariffs." See also id. §§ 721(a) and 13301(a) and (f) (Board's general power to promulgate regulations). The Board's regulation treating the duty to refile provides in relevant part:

§ 1312.20 Transfer of operations--change in name and control.

(a) General. (1) As used in this section--

(i) Old carrier refers to the carrier or party whose name is changed or whose operating authority is transferred;

(ii) New carrier refers to the new name of the old carrier or to the party to which the operating authority is transferred; and

(iii) Adoption publications refers to adoption notices, and combination adoption notices and adoption supplements.

(2) When a carrier's name is lawfully changed or its operating authority transferred, tariff adjustments must be made. The procedure to be followed depends on the particular circumstances.

(b) Purpose of adoption notices. (1) Adoption notices shall be filed to reflect new ownership or control when--

(i) A carrier's name is lawfully changed;

(ii) A carrier's operating authority is transferred, entirely or partially; or

(iii) A fiduciary (receiver, trustee, etc.) assumes possession and control of a carrier's property; and when the carrier wishes (for whatever period) to use the old carrier's tariffs.

49 C.F.R. § 1312.20.

The district court reasoned that when Americana became a debtor in possession it became a "fiduciary" that assumed "possession and control" of its property and thus under § 1312.20 was required to amend or adopt the old rates. ³ The trustee asserts that although Americana had additional fiduciary duties upon filing its Chapter 11 petition, it was not a "fiduciary" within the contemplation of the regulation.

There is no definition of fiduciary in the applicable regulations other than the parenthetical "(receiver, trustee, etc.)" in § 1312.20(b)(1)(iii). There is a definition of fiduciary in the Board's regulations dealing with surety bonds and insurance, see 49 C.F.R. § 1043.10: "The term 'fiduciary' means any person authorized by law to collect and preserve property of any incapacitated, financially disabled, bankrupt, or deceased holders of operating rights, and assignees of such holders." The trustee asserts that the debtor in possession does not fit this definition because it remained the same entity before and after filing its petition. Under this definition, however, Americana certainly is authorized "to collect and preserve" its own property and because it sought protection of the bankruptcy court is "bankrupt" or at least "financially disabled."

The regulations dealing with mergers or transfers of operating rights define person as "[a]n individual, partnership, corporation, company, association, or other form of business, or a trustee, receiver, assignee, or personal representative of any of these." 49 C.F.R. § 1181.1(d). The Motor Carriers Act, in its definition section, states that the term person "includes a trustee, receiver, assignee, or personal representative of a person." 49 U.S.C. § 13102(16). These definitions provide no conclusive...