Delta Traffic Service, Inc. v. Transtop, Inc.

Decision Date07 November 1989
Docket NumberNo. 89-1662,89-1662
Citation902 F.2d 101
PartiesDELTA TRAFFIC SERVICE, INC. et al, Plaintiffs, Appellees, v. TRANSTOP, INCORPORATED, Defendant, Appellant. . Heard
CourtU.S. Court of Appeals — First Circuit

Robert J. Gallagher, Northampton, Mass., for defendant, appellant.

William J. Augello, Augello, Pezold & Hirschmann, P.C., Huntington, N.Y., Leonard M. Singer, Csaplar & Bok, Boston, Mass., Netti C. Vogel, Kiernan & Plunkett, Providence, R.I., James W. Muldoon, Muldoon, Pemberton & Ferris, Raymond Randall and Lyon, Scully, Fitzpatrick, Rohan, Randall & Connor, Holyoke, Mass., on brief, for Ampad, Inc., Curriculum Associates, Inc., Ferguson Perforated Wire and Co., and Taco, Inc., amici curiae.

Joseph L. Steinfeld, Jr., with whom Robert B. Walker, John T. Siegler, Sims, Walker & Steinfeld, P.C., Washington, D.C., Wesley S. Chused, Frank J. Weiner, and Kroll & Tract, Boston, Mass., were on brief, for plaintiffs, appellees.

Robert S. Burk, Ellen D. Hanson and Cecelia E. Higgins, Washington, D.C., on brief, for Interstate Commerce Com'n, amicus curiae.

Before BOWNES, BREYER, and SELYA, Circuit Judges.

BREYER, Chief Judge.

Assume that a federally regulated motor carrier files, with the Interstate Commerce Commission, a tariff that contains a rate of, say, $10 per ton. Assume further that the carrier tells a shipper that its rate is only $8 per ton, and it falsely adds that it has recently filed a new tariff containing the $8 rate. The carrier charges $8, the shipper pays it, and later, perhaps years later, the carrier sues the shipper for an additional $2; the shipper responds (1) that the $10 rate is unreasonably high and (2) regardless, the carrier's attempt to collect it, under the circumstances, is unfair. See 49 U.S.C. Sec. 10701(a) (stating that a carrier's "rate[s]" and "practice[s]" must be "reasonable"). Who should decide, in such circumstances, whether the rate, and the carrier's collection practice, are "reasonable"? The issue in this case is whether the Interstate Commerce Commission should decide those questions or whether the court in which the carrier brought suit should decide them.

In our view, Congress intended the Commission to answer questions of this sort. Where, as here, the Commission's answers will likely determine the outcome of the legal action, and particularly where, as here, the Commission itself has asked this (appellate) court to refer these issues to it for determination, we believe the doctrine of "primary jurisdiction" requires such referral. See generally United States v. Western Pac. R.R. Co., 352 U.S. 59, 62-70, 77 S.Ct. 161, 164-68, 1 L.Ed.2d 126 (1956) (describing the doctrine of "primary jurisdiction"). We set aside the district court's judgment to the contrary.

I Background

The relevant facts are undisputed: Between February 1984 and September 1985 a shipper, Transtop, hired a federally regulated motor carrier, Oneida, to carry goods. The shipper and carrier agreed on certain rates; the shipper paid those rates; the carrier's employees told the shipper that the carrier had filed tariffs with the ICC embodying those rates. In fact, however, the carrier had not filed those tariffs; instead, it had filed tariffs with higher rates. The carrier declared bankruptcy; it appointed Delta (a freight-bill-auditing company) to collect any debts it could find; Delta discovered that the shipper had paid less than the tariff rate for various shipments; consequently, Delta sued the shipper for the difference (about $54,000).

Delta's argument to the district court was simple: The undisputed facts entitled it to judgment. The Interstate Commerce Act ("ICA" or the "Act"), 49 U.S.C. Secs. 10101-11917, like many regulatory statutes, says that a regulated firm must "publish and file with the Commission tariffs containing [its] ... rates," id. Sec. 10762(a)(1). The Act also provides that a

carrier may not charge or receive a different compensation for ... transportation ... 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 another device.

Id. Sec. 10761(a). The Supreme Court, over the years, has held that these words mean what they say. "Deviation from [the filed rate] is not permitted upon any pretext.... Ignorance or misquotation of rates is not an excuse for paying or charging either less or more than the rate filed." Louisville & Nashville R.R. Co. v. Maxwell, 237 U.S. 94, 97, 35 S.Ct. 494, 495, 59 L.Ed. 853 (1915); accord Louisville & Nashville R.R. Co. v. Central Iron & Coal Co., 265 U.S. 59, 65, 44 S.Ct. 441, 442, 68 L.Ed. 900 (1924) (No "act or omission of the carrier (except the running of the statute of limitations) [can] estop or preclude it from enforcing payment of the full amount by a person liable therefor."); Western Transp. Co. v. Wilson & Co., 682 F.2d 1227, 1231 (7th Cir.1982) ("Congress did not create a flexible standard for the courts to apply in accordance with the facts, equities, and economic realities of the particular case. It forbade carriers to receive any different compensation from the rate in the applicable tariff.") If Delta does not win this suit, the carrier (Oneida) will have received a "compensation for ... transportation" that is lower than, and therefore "different" from, the compensation "specified in" its filed "tariff." And that, says Delta, is why the law requires that it prevail.

The shipper, Transtop, responded by pointing to a different section of the Act, a section that says,

A rate, ... classification, rule, or practice related to transportation ... provided by a carrier ... must be reasonable....

42 U.S.C. Sec. 10701(a). It argued that the rate contained in the carrier's filed tariff was not a "reasonable" "rate," and that the carrier's attempt to collect it, given the (unfair) circumstances, was not a "reasonable" "practice." It pointed to Supreme Court cases which say that "[w]henever a rate, rule, or practice is attacked as unreasonable or as unjustly discriminatory, there must be preliminary resort to the Commission." Great Northern Ry. v. Merchants Elev. Co., 259 U.S. 285, 291, 42 S.Ct. 477, 479, 66 L.Ed. 943 (1922); see Nader v. Allegheny Airlines, Inc., 426 U.S. 290, 303-04, 96 S.Ct. 1978, 1986-87, 48 L.Ed.2d 643 (1976). And it asked the court to refer this matter to the ICC.

The district court decided not to send the case to the ICC for two reasons. First, based on evidence in the record, it doubted that the reasonableness of the filed tariff rate itself was really an issue. Second, it believed that the law, in particular the "filed tariff" language we have quoted above, prevented the Commission from deeming the carrier's efforts to collect the extra money amount an "[un]reasonable" "practice," 49 U.S.C. Sec. 10701(a). Assuming this were so, referral to the Commission would serve no purpose, for, irrespective of the Commission's decision, the court would have to award Delta the money it sought.

We have reviewed the record and the briefs, in particular the ICC's amicus brief, and we reach a different conclusion about the usefulness of referral. We believe that the doctrine of "primary jurisdiction" requires the district court to refer this matter to the ICC for a determination of the "reasonableness" questions.

II The Legal Merits

The doctrine of "primary jurisdiction" requires a court to "suspend[ ]" its "process" and refer a matter to an "administrative body" whenever "enforcement of" a judicial claim "requires the resolution of issues which, under a regulatory scheme, have been placed within the special competence of [that] administrative body." Western Pacific, 352 U.S. at 63-64, 77 S.Ct. at 164-65. Western Pacific itself involved a typical application of the doctrine. A carrier filed a tariff containing its rates for various types of cargo; the shipper believed that a low rate applied to a particular shipment; the carrier thought a higher rate applied and sued for the difference. The shipper argued that (1) the tariff, properly construed, imposed the lower, not the higher, rate, and (2) if not, the tariff's high rate was not "reasonable" as applied to the shipment in question. The Supreme Court held that the district court could not find Applying the Western Pacific principle to the case before us, we shall explain why we think it requires referral of both the "rate reasonableness" and the "practice reasonableness" questions to the ICC.

                either for the carrier or shipper until the ICC determined both questions.  In the Court's view, the ICC, an expert and experienced body, was better equipped to answer such questions;  Congress wanted the ICC to answer questions of this sort;  and to permit courts to answer these questions independently would threaten the nationwide uniformity of rate that the Interstate Commerce Act sought.  See Western Pac., 352 U.S. at 62-70, 77 S.Ct. at 164-68;  Great Northern Ry. Co., 259 U.S. at 291-92, 42 S.Ct. at 479 (1922) (Brandeis, J.);    Texas & Pac.  Ry. Co. v. Abilene Cotton Oil Co., 204 U.S. 426, 435-48, 27 S.Ct. 350, 353-58, 51 L.Ed. 553 (1907).  After the ICC acted, the district court could review the result, applying ordinary principles of administrative law.  See 28 U.S.C. Sec. 1336(b) (referring court has exclusive jurisdiction to review ICC order arising from referral);  ICC v. Atlantic Coast Line R.R. Co. 383 U.S. 576, 580, 86 S.Ct. 1000, 1004, 16 L.Ed.2d 109 (1966) (dicta).  But assuming the ICC's determinations survived that review, the court would have to abide by those determinations when it returned to, and decided, the remaining issues before it.  See id. at 594, 86 S.Ct. at 1011 ("Commission findings on questions required under the primary jurisdiction doctrine to be determined first by the Commission are conclusive in the same sense that such
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