C.A.R. Transportation v. Darden

• Decision Date: 22 May 2000
• Docket Number: No. 98-56122,TRANS-PAC,98-56122
• Citation: 213 F.3d 474
• Parties: (9th Cir. 2000) C.A.R. TRANSPORTATION BROKERAGE COMPANY, INC.,Plaintiff-Appellant, v. DARDEN RESTAURANTS, INC.; GULF, ATLANTIC & PACIFIC SHIPPER SERVICES, INC.;FOODS, LTD., Defendants-Appellees
• Court: U.S. Court of Appeals — Ninth Circuit

Page 474

213 F.3d 474 (9th Cir. 2000)

C.A.R. TRANSPORTATION BROKERAGE COMPANY, INC.,Plaintiff-Appellant, v. DARDEN RESTAURANTS, INC.; GULF, ATLANTIC & PACIFIC SHIPPER SERVICES, INC.; TRANS-PAC FOODS, LTD., Defendants-Appellees.

No. 98-56122

UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT

Argued and Submitted February 7, 2000

Filed May 22, 2000

[Copyrighted Material Omitted] William J. Sarrus, Tustin, California; and Joseph T. Bambrick, Jr., Joseph T. Bambrick & Associates, West Reading, Pennsylvania, for the plaintiff-appellant.

Lisa Ann Cohen, Frank E. Merideth, Jr., and Edward Gerard Becker, Bryan Cave, Santa Monica, California, for the defendants-appellees.

Appeal from the United States District Court for the Central District of California

Before: Harry Pregerson, Frank Magill,^* and Sidney R. Thomas, Circuit Judges.

MAGILL, Senior Circuit Judge:

This case arises out of a dispute concerning the payment of $5,750.00 in freight charges incurred when Trans-Pac Foods, Ltd. (Trans-Pac) arranged to send three truckloads of shrimp to Darden Restaurants, Inc. (Darden). The plaintiff in this case, C.A.R. Transportation Brokerage Company, Inc. (CAR), filed suit against Darden and Trans-Pac claiming that, under 49 U.S.C. S 13706, Darden and/or Trans-Pac (collectively, Appellees) must pay it for the freight charges generated by the three shipments. CAR appeals the district court's grant of summary judgment holding that "Waiver of Claim by Subcontractor" forms signed by truck drivers for the carriers of the shrimp shipments lawfully allocated liability for the freight charges under the Interstate Commerce Act (ICA). CAR also appeals the court's holding that the drivers had ostensible authority to sign the waivers on behalf of their principals. We affirm the judgment of the district court.

I. BACKGROUND

In January 1997, Darden purchased frozen shrimp from Trans-Pac in Los Angeles for delivery to Darden's warehouse in Indianapolis, Indiana. Darden's purchase price for the shrimp included freight charges from Trans-Pac's facilities in Los Angeles to Indianapolis. Trans-Pac arranged for the transportation of the shrimp, apparently no small matter, through Gulf Atlantic & Pacific Shipper (GAP), a transportation broker.¹ GAP, in turn, contracted with CAR, also a transportation broker, and CAR arranged to have three different motor carriers transport the shrimp to Indiana.

The three shrimp shipments were tendered to Potts Transport, All American Transport, and Don Senske Trucking, Inc. (collectively, Carriers) at Trans-Pac's facilities on January 3, January 27, and January 28, 1997, respectively. The invoices and bills of lading for all three shipments designated TransPac as the shipper/consignor and Darden as the consignee. The drivers, as "Authorized Representatives" for the Carriers, each signed a "Waiver of Claim by Subcontractor, " waiving any claim the Carriers had against Appellees for the payment of shipping charges.² In addition, Trans-Pac initialed a nonrecourse clause on the bill of lading for the shipment delivered by Don Senske Trucking, Inc., releasing itself from any liability for the freight charges associated with the shipment.

The shipments were transported with reasonable dispatch and delivered in good order. On February 27, 1997, Trans-Pac paid GAP for the shipping charges. CAR billed GAP for the freight charges, but GAP never paid and on July 28, 1997, filed a Chapter 11 bankruptcy proceeding.

On May 20, 1997, CAR filed a lawsuit against Darden alleging that Darden, as consignee, was liable for the freight charges under 49 U.S.C. S 13706.³ In response to concerns that it did not have standing to bring suit because it had no contractual relationship with either defendant, did not trans port the shrimp itself, and did not establish that it is a "carrier" within the meaning of the ICA, CAR amended its complaint and, eventually, alleged that it had an assignment of rights from the Carriers. CAR also named Trans-Pac as a defendant. However, after CAR was unable to show that it had an assignment of rights from Potts Transport, it dropped its claim against Appellees for the freight charges associated with that shipment. CAR also acknowledged that it had signed a nonrecourse provision on the bill of lading for the shipment transported by Don Senske Trucking, Inc. and withdrew its claim against Trans-Pac for the Senske shipment.

On April 17, 1998, Appellees moved for summary judgment on the only claims left: the All American Transport shipment for $1,925.00 against both Trans-Pac and Darden, and the Don Senske Truck, Inc. shipment for $1,925.00 against Darden. On May 20, 1998, after reviewing the evidence and arguments of the parties, the district court held that the waivers signed by the Carriers' drivers could lawfully allocate liability for freight charges under the ICA and that the drivers had ostensible authority to sign the waivers on behalf of their principals. Subsequently, CAR brought the present appeal.

II. ANALYSIS

A. Jurisdiction

The ICA requires motor common carriers to publish their rates in tariffs filed with the Surface Transportation Board (Board),⁴ and carriers are prohibited from charging or receiving a different compensation for the transportation than the rate specified in the tariff. 49 U.S.C. S 13702. The ICA "requires carrier to collect and consignee to pay all lawful charges duly prescribed by the tariff in respect of every shipment. Their duty and obligation grow out of and depend upon that act." Louisville & Nashville R.R. v. Rice, 247 U.S. 201, 202 (1918). The historical purpose of the ICA was "to achieve uniformity in freight transportation charges, and thereby to eliminate the discrimination and favoritism that had plagued the railroad industry in the late 19th century." Southern Pac. Transp. Co. v. Commercial Metals Co., 456 U.S. 336, 344 (1982) (citations omitted). Although there is no charge of discrimination or favoritism in this case, there is federal jurisdiction because any action between carriers and shippers arising from the filed rate presents a federal question supporting jurisdiction under 28 U.S.C. S 1337. See Thurston Motor Lines, Inc. v. Jordan K. Rand, Ltd., 460 U.S. 533, 535 (1983).

B. Validity of the Waivers in Allocating Liability for the Freight Charges

CAR argues that the district court erred in granting summary judgment and holding that the ICA does not bar the parties' allocation of liability for the freight charges through use of the waivers and that the Carriers' drivers had ostensible authority to sign the waivers. In CAR's view, the provisions of the bills of lading used for the transportation of the shrimp either confer absolute liability on Appellees for the freight charges or are in conflict with the provisions of the waivers, thus producing ambiguity in the contract for transportation that should be interpreted in favor of CAR as the nondrafting party. CAR also argues that the drivers did not have ostensible authority to sign the waivers because the Carriers did not know about the waivers and did not explicitly make representations to Appellees concerning the scope of the drivers' authority. The district court's grant of summary judgment is reviewed de novo. See Sameena Inc. v. United States Air Force, 147 F.3d 1148, 1151 (9th Cir. 1998).

1. Bill of Lading Issue

The Board requires the issuance of a receipt or bill of lading containing certain information for all interstate or foreign shipments by motor carrier. See 49 C.F.R. S 373.101. Although motor carriers are not required to use the Uniform Straight Bill of Lading prescribed for rail and water common carriers, see 49 C.F.R. S 1035.1(a), the parties here have adapted it for their purposes, see 49 C.F.R.S 1035 apps. A & B. "The bill of lading is the basic transportation contract between the shipper-consignor and the carrier; its terms and conditions bind the shipper and all connecting carriers." See Southern Pac., 456 U.S. at 342 (citation omitted).⁵ The bill of lading provides that the owner or consignee shall pay the freight and all other lawful charges upon the transported property and that the consignor remains liable to the carrier for all lawful charges.⁶ See Illinois Steel Co. v Baltimore & Ohio R.R., 320 U.S. 508, 512-13 (1944). The bill of lading, however, also contains "nonrecourse" and "prepaid" provisions that, if marked by the parties, release the consignor and consignee from liability for the freight charges. If the nonrecourse clause is signed by the consignor and no provision is made for the payment of freight, delivery of the shipment to the consignee relieves the consignor of liability. See id. at 513, 64 S.Ct.322. Similarly, when the prepaid provision on the bill of lading has been marked and the consignee has already paid its bill to the consignor, the consignee is not liable to the carrier for payment of the freight charges. See Missouri Pac. R.R. Co. v. National Milling Co., 409 F.2d 882, 883-84 (3d Cir. 1969); In re Penn-Dixie Steel Corp., 6 B.R. 817, 822 (Bankr. S.D.N.Y. 1980), aff'd 10 B.R. 878 (S.D.N.Y. 1981).

Although the bill of lading contains default terms allocating liability for freight charges, the Supreme Court's description of the bill of lading as "the basic transportation contract between the shipper-consignor and the carrier," Southern Pacific, 456 U.S. at 342, "did not purport to characterize the bill of lading as the exclusive means of creating a contract." A-Transport Northwest Co. v. United States, 36 F.3d 1576, 1583 (Fed. Cir. 1994). Subject to the rule that prohibits discrimination, the parties are free to contract when or by whom the freight charges should be paid. See Louisville & Nashville R.R. v. Central Iron & Coal Co., 265 U.S. 59, 66 (1924); Illinois Steel Co. v. Baltimore & Ohio R.R., 320 U.S. 508, 512 (1944). It is only where the parties fail to agree or where discriminatory practices are present that the ICA's...