Atlantis Exp., Inc. v. Standard Transp. Services, Inc.

• Decision Date: 28 January 1992
• Docket Number: No. 91-1982,91-1982
• Citation: 955 F.2d 529
• Parties: ATLANTIS EXPRESS, INC., Appellee, v. STANDARD TRANSPORTATION SERVICES, INC., Appellant.
• Court: U.S. Court of Appeals — Eighth Circuit

Page 529

955 F.2d 529

ATLANTIS EXPRESS, INC., Appellee, v. STANDARD TRANSPORTATION SERVICES, INC., Appellant.

No. 91-1982.

United States Court of Appeals Eighth Circuit.

Submitted Nov. 14, 1991.

Decided Jan. 28, 1992.

Barbara Kueppers, Minneapolis, Minn., argued, for appellant.

Thomas Wolff of Edina, Minn., argued, for appellee.

Paul H. Lamboley and Alfred S. Irving, Washington, D.C., appearing on the brief of amicus curiae Transportation Brokers Conference of America.

Before FAGG, Circuit Judge, TIMBERS, ^* Senior Circuit Judge, and MAGILL, Circuit Judge.

MAGILL, Circuit Judge.

Standard Transportation Services, Inc., (Standard) appeals from a judgment in favor of Atlantis Express, Inc., (Atlantis) for freight undercharges. We reverse and remand to the district court with directions to refer this matter to the Interstate Commerce Commission (ICC) pursuant to the doctrine of primary jurisdiction.

I.

Atlantis is an ICC-licensed common and contract carrier. Standard is an ICC-licensed broker that arranges transportation services on behalf of shippers and carriers, including Atlantis. Atlantis and Standard orally agreed that for each shipment Standard arranged on behalf of Atlantis, Standard would bill the shipper for the transportation services and then would transmit to Atlantis the rate previously negotiated between Standard and Atlantis. The difference between these amounts constituted Standard's compensation for its services. Pursuant to this arrangement, Atlantis issued a freight invoice following each shipment that listed the shipper (consignor), the party receiving the goods (consignee), the rate agreed to between Standard and Atlantis, and the "bill to" party which was always Standard. Neither these freight invoices nor the bills of lading ¹ ever listed Standard as the shipper or the consignee.

Between March 1987 and October 1988, Standard arranged for Atlantis to transport the goods of approximately twenty different shippers. As agreed, Standard paid Atlantis the negotiated rates for each shipment. When Atlantis later liquidated, however, an audit of the company revealed that the negotiated rate payments that Standard had transmitted to Atlantis were below the payments required by Atlantis' filed rates. Filed rates are the rates for transportation that motor common carriers publish and file with the ICC. 49 U.S.C. § 10762(a)(1) (1988). Following this audit, Atlantis sued Standard for the difference between the filed rates and the negotiated rates, known as "freight undercharges." ²

Atlantis argues that, pursuant to 49 U.S.C. § 10761(a) (1988), Standard must pay the filed rates for the transportation services provided regardless of the fact that they negotiated lower rates. This statute provides, in part:

Except as provided in this subtitle, a [common] carrier providing transportation or service ... shall provide that transportation or service only if the rate for the transportation or service is contained in a tariff that is in effect under this subchapter. That [common] carrier may not charge or receive a different compensation for that transportation or service than the rate specified in the tariff whether by returning a part of that rate to a person, giving a person a privilege, allowing the use of a facility that affects the value of that transportation or service, or another device.

49 U.S.C. § 10761(a) (1988). The ICC and the courts historically have interpreted this statute as not permitting either a shipper's ignorance or a carrier's misquotation of the applicable rate to serve as a defense to a common carrier's collection of the filed rate. This practice has become commonly known as the "filed rate doctrine." The Supreme Court recently reinvigorated this doctrine by overturning the ICC's Negotiated Rates policy of relieving the shipper of the obligation to pay the filed rate when the shipper and the common carrier had negotiated a lower rate. Maislin Indus., U.S. v. Primary Steel, Inc., --- U.S. ----, 110 S.Ct. 2759, 111 L.Ed.2d 94 (1990). The Court reasoned that the ICC's practice of allowing shippers to avoid the filed rate whenever they had negotiated another rate was flatly inconsistent with the purpose of the Interstate Commerce Act ³ to forbid as discriminatory the secret negotiation and collection of rates lower than the filed rate. ⁴ Id., 110 S.Ct. at 2768; see also 49 U.S.C. § 10101(a)(1)(D) (1988). According to Atlantis, the "filed rate doctrine," as reaffirmed in Maislin, requires Standard to pay the filed rate.

Standard, on the other hand, argues that the filed rate doctrine does not control the issue before this court. Specifically, Standard argues that: (1) the filed rate doctrine does not apply because Atlantis transported the shipments as a contract carrier rather than as a common carrier; (2) a broker, as opposed to a shipper, is not liable for freight undercharges; and (3) assuming Standard is liable for the freight undercharges, the issue of whether the filed rates were reasonable should be referred to the ICC for determination.

The district court rejected all of Standard's arguments. Atlantis Express, Inc. v. Unicorn Transp. Sys., 764 F.Supp. 135 (D.Minn.1991). The court found that Atlantis could not have been acting as a contract carrier because Standard and Atlantis had not entered into a written agreement as required by ICC regulations. Id. at 138 n. 3. The court also found that, although Standard was a broker, it assumed the shippers' primary liability for the filed rates by billing and collecting freight charges. Additionally, the court held that Standard could not avoid the filed rate doctrine by claiming that the undercharges were compensation for its services. Id. at 138. Finally, the court refused to refer the issue of rate reasonableness to the ICC because the request for referral was untimely and supported by insufficient evidence. Id. at 139. Accordingly, the court granted Atlantis summary judgment for the amount of the undercharges plus prejudgment interest.

We review a grant of summary judgment de novo. Summary judgment is proper only when there are no genuine issues of material fact and the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c); see, e.g., Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 2552, 91 L.Ed.2d 265 (1986). Because we find the relevant law and how that law applies to the facts of this case unclear, we cannot conclude that Standard is entitled to judgment as a matter of law or that there are no genuine issues of fact. ⁵ Rather, we believe that, under the doctrine of primary jurisdiction, this matter should be referred to the ICC. Although the parties did not request that we refer all the issues involved in this dispute to the ICC, it is well established that the doctrine of primary jurisdiction is not waived by the failure of the parties to present it in the trial court or on appeal. E.g., Red Lake Band of Chippewa Indians v. Barlow, 846 F.2d 474, 476 (8th Cir.1988).

"Primary jurisdiction ... applies where a claim is originally cognizable in the courts, and comes into play whenever enforcement of the claim requires the resolution of issues which, under a regulatory scheme, have been placed within the special competence of an administrative body...." United States v. Western Pac. R.R., 352 U.S. 59, 63-64, 77 S.Ct. 161, 164-165, 1 L.Ed.2d 126 (1956). There is no fixed formula for applying the doctrine of primary jurisdiction. "In every case the question is whether the reasons for the existence of the doctrine are present...." Id. at 64, 77 S.Ct. at 165. These reasons include promotion of uniformity in statutory and regulatory construction, and utilization of the agency's specialized knowledge. E.g., id. Additionally, application of the doctrine is appropriate when policy considerations are at issue. Clark Oil Co. v. Texaco Inc., 609 F.Supp. 1373, 1381 (D.Del.1985). Because this case raises many issues, we set out below the issues we are referring to the ICC and why we believe it is proper for the ICC to address them first.

II.

A. Common Carrier versus Contract Carrier

The ICC, through exercise of its statutory authority, ⁶ has exempted motor contract carriers from the requirements of the filed rate doctrine. Exemption of Motor Contract Carriers from Tariff Filing Requirements, 133 M.C.C. 150 (1983), aff'd sub nom. Central & S. Motor Freight Tariff Ass'n v. United States, 757 F.2d 301 (D.C.Cir.), cert. denied, 474 U.S. 1019, 106 S.Ct. 568, 88 L.Ed.2d 553 (1985). Accordingly, if Atlantis provided the transportation services arranged by Standard pursuant to its contract carrier authority rather than its common carrier authority, ⁷ it is not entitled to its filed rates.

The Act defines "motor contract carrier" as:

a person providing motor vehicle transportation of property for compensation under continuing agreements with one or more persons--

(i) by assigning motor vehicles for a continuing period of time for the exclusive use of each such person; or

(ii) designed to meet the distinct needs of each such person.

49 U.S.C. § 10102(15)(B) (1988) (emphasis added). The ICC has enacted a regulation defining "continuing agreements:"

No contract carrier by motor vehicle, as defined in 49 U.S.C. [s] 10102(15) shall transport property for hire ... except under special and individual contracts or agreements which shall be in writing, shall provide for transportation for a particular shipper or shippers, shall be bilateral and impose specific obligations upon both carrier and shipper or shippers, shall cover a series of shipments during a stated period of time in contrast to contracts of carriage governing individual shipments....

49 C.F.R. § 1053.1 (1990) (emphasis added). The ICC permit granting Atlantis contract carrier authority provides that "[t]his authority will be effective as long as the carrier maintains compliance with the requirements pertaining to ... the execution of contracts ...