Comsource Independent Foodservice Companies, Inc. v. Union Pacific R. Co., 95-15826

• Decision Date: 16 December 1996
• Docket Number: No. 95-15826,95-15826
• Citation: 102 F.3d 438
• Parties: 96 Cal. Daily Op. Serv. 9041, 96 Daily Journal D.A.R. 14,994 COMSOURCE INDEPENDENT FOODSERVICE COMPANIES, INC., a Georgia corporation, Plaintiff-Appellee, v. UNION PACIFIC RAILROAD COMPANY, a Utah corporation, Defendant-Appellant.
• Court: U.S. Court of Appeals — Ninth Circuit

Page 438

102 F.3d 438

96 Cal. Daily Op. Serv. 9041, 96 Daily Journal

D.A.R. 14,994

COMSOURCE INDEPENDENT FOODSERVICE COMPANIES, INC., a Georgia

corporation, Plaintiff-Appellee, v. UNION PACIFIC RAILROAD COMPANY, a Utah corporation,

Defendant-Appellant.

No. 95-15826.

United States Court of Appeals, Ninth Circuit.

Argued and Submitted Aug. 15, 1996.

Decided Dec. 16, 1996.

Scott R. Baugh, Union Pacific Law Department, Los Angeles, CA, and Barry N. Gutterman, Barry N. Gutterman & Associates, New York City, for appellant.

Andrew J. Skaff, Karen L. Peterson, Knox Ricksen, Oakland, CA, and William J. Augello, Augello, Pezold & Hirschmann, Huntington, NY, for appellee.

Appeal from the United States District Court for the Northern District of California; D.C. No. CV-92-04914-CAL. Charles A. Legge, District Judge, Presiding.

Before: WIGGINS and TROTT, Circuit Judges, and VANCE, ^* District Judge.

WIGGINS, Circuit Judge:

Union Pacific Railroad Company (UP), carrier for Comsource Independent Food Service Companies, Inc. (Comsource), appeals the district court's denial of its motion for summary judgment. UP claims that the one year statute of limitations contained in a document titled UP EXEMPT 1-F (the "Tariff") bars this suit brought by Comsource approximately fourteen months after UP rejected Comsource's claim that a shipment of frozen vegetables were damaged while in UP's possession. We AFFIRM.

I.

Comsource is a member-owned cooperative, comprised of independently owned and operated food service and non-food distributors. Comsource frequently used UP for its shipment of food products. As part of their ongoing business relationship, on September 25, 1990, UP had sent Comsource a copy of the Tariff, which is on file with the Interstate Commerce Commission. ¹ According to Item 7, Section 3(b) of the Tariff, the statute of limitations within which a shipper may file suit against the carrier is one year from the day the carrier gives notice in writing to the shipper of its denial of shipper's loss and damage claim. ² Item 8 of the Tariff provides that a shipper may select terms set forth in 49 U.S.C. § 11707 (the "Carmack Amendment"), including the two year statute of limitations, for an additional charge. The amount of this additional charge is not specified in the Tariff and a shipper must call a toll free phone number to find out the amount. ³ UP also provided Comsource with a document entitled "UP-EBFF-3" (the "rate sheet") in January, 1991. The rate sheet incorporates the terms provided in the Tariff. ⁴

On July 12, 1991, Comsource shipped a railcar of frozen vegetables from the warehouse of Christian Salvesen, Inc. ("Salvesen") in Modesto, California, to a warehouse facility in Independence, Missouri. To commence this shipment, Salvesen, acting as Comsource's agent, ⁵ first called Modesto and Empire Traction Company ("M & ET"), the short-line service provider, and asked them to send over a railcar. Salvesen loaded the railcar and faxed a bill of lading to M & ET. ⁶ On the bill of lading, Salvesen had typed the words "Letter Quote UP-EBFF-3 $3000.00[,]" which referred to the rate quoted on the rate sheet for shipments from California to the Kansas City area. A "Straight Bill of Lading" was also prepared by Salvesen for the same shipment. ⁷ The Straight Bill of Lading contains a detailed list of the shipment's content. The reason for having two types of bill of lading is not mentioned in the record. After examining the faxed bill of lading, M & ET shipped the railcar from Modesto to Stockton, where UP, the interstate carrier, took over the railcar and delivered it to its destination in Missouri. When the shipment arrived in Missouri, the vegetables were in damaged condition indicating that they had thawed and refrozen.

On September 3, 1991, Comsource filed a claim with UP regarding the damaged shipment but UP denied this claim in a letter dated October 30, 1991. ⁸ On December 18, 1992, fourteen months after the denial letter, Comsource filed suit against UP and Salvesen for damage to the shipment. On May 18, 1993, M & ET was added as a defendant. After judicial arbitration in October, 1993, in which Comsource was awarded $25,928, UP requested a trial. Prior to trial, UP and M & ET (collectively "UP" hereafter) filed a Motion for Summary Judgment. The motion was based on Comsource's filing suit fourteen months after the original denial of Comsource's loss and damage claim. UP claimed that the one year statute of limitations period provided for in the Tariff barred the suit. The district court denied the motion in an order dated May 10, 1994. The court held that the Staggers Amendment to the Interstate Commerce Act required a carrier to first offer the two year statute of limitations period specified in the Carmack Amendment of the Interstate Commerce Act and then offer the shipper an opportunity to select other terms; here, however, UP offered non-Carmack terms first and then offered Carmack terms as an option. Jury trial commenced on January 31, 1995, but on the second day of trial, the district court declared a mistrial and the parties agreed to a stipulated judgment entered on March 23, 1995. ⁹ As part of the stipulated judgment, UP reserved its right to challenge and appeal the court's pre-trial ruling on UP's Motion for Summary Judgment. This appeal followed.

II.

A denial of motion for summary judgment is generally not a final order, and is therefore not ordinarily appealable. Jones-Hamilton Co. v. Beazer Materials & Servs., Inc., 973 F.2d 688, 693-94 (9th Cir.1992). However, a denial of a summary judgment order is appealable after the entry of a final judgment. Moran v. Aetna Life Ins. Co., 872 F.2d 296, 301 (9th Cir.1989). The denial of summary judgment in this case is reviewable. See Smigiel v. Aetna Casualty and Surety Co., 785 F.2d 922 (11th Cir.1986) (reviewing denial of summary judgment where parties entered a stipulated judgment before trial in which the defendant reserved the right to appeal the denial of summary judgment).

In reviewing summary judgment, we "must determine whether the evidence, viewed in a light most favorable to the nonmoving party, presents any genuine issues of material fact and whether the district court correctly applied the law." Warren v. City of Carlsbad, 58 F.3d 439, 441 (9th Cir.1995), cert. denied, --- U.S. ----, 116 S.Ct. 1261, 134 L.Ed.2d 209 (1996); see also Pomerantz v. County of Los Angeles, 674 F.2d 1288, 1290 (9th Cir.1982) (same standard applies for review of denial of summary judgment). An issue is genuine "if the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 2510, 91 L.Ed.2d 202 (1986).

III.

UP contends that the district court erred in interpreting the Staggers Amendment to require a carrier first to offer terms consistent with the Carmack Amendment and then to offer non-Carmack terms as an option. The district court held that UP first offered the one year non-Carmack statute of limitations and then gave Comsource the option to choose the Carmack term (two year limitations period) through provisions in the Tariff. Thus the court refused to apply the one year limitations period and denied UP's motion for summary judgment.

Before we consider the interpretation of the Staggers Amendment, however, we must first determine whether UP did in fact offer the one year statute of limitations to Comsource. Here, Section 3(b) of the Tariff is the only provision among the documents exchanged between UP and Comsource which provides for a one year statute of limitations, and so the provisions in the Tariff must govern the shipment in question for the one year statute of limitations to apply. Although tariff provisions required by law to be in the tariff ("mandatory" provisions) give constructive notice to the shipper, tariff provisions not required by law to be in the tariff ("non-mandatory" provisions), such as statute of limitations provisions, do not have this effect. The issue of what conditions need to be met for a statute of limitations provision in the tariff to bind the shipper is one of first impression. We hold that the shipper must have reasonable notice of a statute of limitations tariff provision because it is a non-mandatory provision. UP failed to set forth undisputed material facts that demonstrate that Comsource had reasonable notice of the two year statute of limitations.

Under the Interstate Commerce Act, a carrier subject to the jurisdiction of the Interstate Commerce Commission (ICC) must file with the Commission tariffs containing rates and other information related to those rates. 49 U.S.C. § 10762(a)(1) (1994). ¹⁰ The Carmack Amendment states, inter alia, that a carrier may not provide for a period of less than two years for bringing a civil action in the tariff or by contract. 49 U.S.C. § 11707(e) (1994). ¹¹ However, the Staggers Amendment allows rail carriers to offer "alternative terms" and thus frees rail carriers from the strict application of the Carmack Amendment. 49 U.S.C. § 10505(e) (1994). ¹²

Historically, a tariff on file with the ICC was construed to have the effect of a statute and give the shipper constructive notice of its terms. See, e.g., Western Transit Co. v. A.C. Leslie & Co., 242 U.S. 448, 37 S.Ct. 133, 61 L.Ed. 423 (1917). This prompted carriers to bury various limitations of liability provisions and other burdensome non-mandatory provisions in the tariff and to incorporate those provisions into the bill of lading by referring to the entire tariff, knowing that shippers rarely scrutinize all the terms in the tariff. Swift Textiles, Inc. v. Watkins Motor Lines, Inc., 799 F.2d 697, 701 (11th Cir.1986), cert. denied, 480 U.S. 935, 107 S.Ct. 1577, 94 L.Ed.2d 768 (1987). Courts have since stepped in to limit the effect of such tariff provisions in certain circumstances.

Accordingly, we have held that the "filing...