In re Total Transp., Inc.
| Decision Date | 20 May 1988 |
| Docket Number | Bankruptcy No. 4-85-1909,Adv. No. 4-87-269.,CV. 4-88-408 |
| Parties | In re TOTAL TRANSPORTATION, INC., Debtor. Thomas F. MILLER, Trustee, Plaintiff, v. BTS TRANSPORT SERVICES, Defendant. |
| Court | U.S. District Court — District of Minnesota |
Paul O. Taylor, Minneapolis, Minn., for plaintiff.
Thomas J. Lallier, Minneapolis, Minn., for defendant.
Based on the Report and Recommendation to the District Court of Bankruptcy Judge Nancy C. Dreher dated April 28, 1988, no objections having been filed pursuant to Bankruptcy Rule 5011(b),
IT IS HEREBY ORDERED that:
Defendant's motion for an order that this court abstain from exercising jurisdiction pursuant to 28 U.S.C. § 1334(c) is denied.
The above-entitled matter came on for hearing before the undersigned on the 16th day of March, 1988, on defendant's motion, in the alternative, for an order abstaining or referring this matter to the Interstate Commerce Commission, and for an order determining whether this is a core proceeding. Paul O. Taylor appeared on behalf of plaintiff; Thomas J. Lallier appeared on behalf of defendant. This court has jurisdiction, pursuant to 28 U.S.C. §§ 157 and 1334 and Local Rules 103(c) and 106(h) to initially evaluate the grounds for abstention in accordance with Bankruptcy Rule 5011(b) and to finally decide the defendant's other two requests for relief. Based on the arguments of counsel, the memoranda submitted, and all the files, records and proceedings herein, the court makes the following Memorandum Order and, in the case of abstention, Report and Recommendation pursuant to Bankruptcy Rule 5011(b). I have determined that the request for referral to the Interstate Commerce Commission should be denied and I have further determined that this is a core proceeding. I am issuing this Memorandum Order to that effect. I have also determined that abstention is not appropriate and am respectfully recommending that the district court, after appropriate review of this report and any objection filed by either party under Bankruptcy Rule 9033, deny the motion to abstain.
Plaintiff, Total Transportation, Inc. ("TTI") was a motor common carrier pursuant to a Certificate of Public Convenience and Necessity issued by the Interstate Commerce Commission ("ICC"). It was engaged in the trucking business on a nationwide basis. As required by the ICC, TTI filed published rates to be charged its customers. In late 1985, TTI ceased operations after an involuntary petition in bankruptcy was filed against it. In August of 1987, an audit of TTI's freight bills was conducted to determine whether additional charges were owed TTI based on proper application of TTI's tariffs.
This adversary proceeding is one of over 50 similar proceedings ("the adversary proceedings") commenced by the trustee for TTI against former customers which were brought as a result of that audit. In all cases, the trustee for TTI claims that the customers owe undercharges for pre-petition transportation services performed by TTI. Based on the "filed rate doctrine", TTI claims that the published rates must be substituted for the rates TTI actually quoted, billed and accepted in full payment for such services, and that the customers owe the account balance due for the differential. It relies on 49 U.S.C. § 10761(a) which, in essence, provides that deviation from lawful rates in charges and tariffs which motor common carriers such as TTI have filed with the ICC is absolutely prohibited. The customers, including defendant BTS Transport Services, assert that TTI is confined to collection of the invoiced rates.
The amounts involved in the proceedings vary widely, but are in several instances, very substantial. The customers range in geographic location. This proceeding is one of several still pending where the amount involved is less than $10,000.00.
Defendant asserts the court should abstain from deciding this case because the amount involved (approximately $2,700.00) is less than $10,000.00. Defendant relies on Local Rule 106(h) which provides, in pertinent part:
Unless the court orders otherwise, the court shall abstain from and dismiss a complaint for collection of a debt under § 542(b) of the Code if the amount in controversy is less than $10,000.00.
Plaintiff asserts that Rule 106(h) specifically allows the court discretion to hear and decide proceedings even where the amount is less than $10,000.00, and further asserts that in this case the court should exercise its discretion not to abstain.
I previously addressed this same issue in two TTI adversary proceedings. See Miller v. M.L. Sales, Inc. (In re Total Transportation, Inc.), Bky. No. 4-85-1909, Adv. No. 4-87-230 (Bktcy.D.Minn. Feb. 29, 1988) available on WESTLAW, 1988 WL 68043; Miller v. Oh Boy! Corp. (In re Total Transportation, Inc.), Bky. No. 4-85-1909, Adv. No. 4-87-252 (Bktcy.D.Minn. Feb. 29, 1988) available on WESTLAW, 1988 WL 68045. For the reasons set forth in my Report and Recommendation made to the district court in each of those proceedings,1 I recommend that the motion to abstain should be denied.
My decision to recommend against abstention is governed by 28 U.S.C. § 1334(c)(1)2 which allows for discretionary abstention "in the interest of justice, or in the interest of comity with state courts or respect for state law." The factors I have considered in recommending against abstention are as follows.
First, while the claims asserted by the trustee raise questions of state common law, those questions are neither unsettled nor complex. Thus, there are no special reasons here for being concerned about comity with state courts or respect for state law. See Minstar, Inc. v. Plastech Research, Inc. (In re Arctic Enterprises, Inc.), 68 B.R. 71, 78 (D.Minn.1986). See also Allegheny, Inc. v. Laniado Wholesale Co. (In re Allegheny, Inc.), 68 B.R. 183, 192 (Bktcy.W.D.Pa.1986) (action on account receivable which involves no unique issues of state law inappropriate for abstention under 28 U.S.C. § 1334(c)(1)).
Second, it is clear that the procedural posture of these proceedings renders them susceptible to expeditious resolution in this court, while relegating them to one or more state courts will almost certainly delay the administration of the estate and complicate this bankruptcy case. I recently spent one day conducting scheduling conferences on nearly all of the pending TTI adversary proceedings, as a result of which a large number of the proceedings settled, were dismissed, or were resolved by default judgments in TTI's favor. The remaining proceedings have been set for trial during the summer or early fall of 1988. In recommending against abstention, I am guided by what will most reasonably provide for efficient and expeditious administration of the estate. See Allegheny, 68 B.R. at 192. See also World Solar Corp. v. Steinbaum (In re World Solar Corp.), 81 B.R. 603, 612-13 (Bktcy.S.D.Cal.1988) (abstention inappropriate where debtor attempting to collect from a number of account debtors and state court actions will take substantially longer than adjudication in bankruptcy court). In this case, that means trying all the cases in this court.
Third, the trustee's argument that it will face statute of limitations bars if it must recommence its actions in other forums is compelling. Abstention is not appropriate where such action would leave the litigant with no other forum for proceeding. See Arctic Enterprises, 68 B.R. at 78.
As plaintiff points out, Local Rule 106(h) does not require abstention in all cases where less than $10,000.00 is involved. Rather it leaves the issue to the court in the exercise of its discretion. In this case, there are a series of collections on accounts receivable, all raising essentially the same defenses, and all now, in my opinion, governed with respect to these defenses by a decision in this district court. It will be much more efficient to deal with these collections here, rather than in a series of scattered state court actions. For the reasons stated above, I am respectfully recommending that the district court decline to abstain from this proceeding.
Defendant next asserts that this matter should be referred to the ICC based on the doctrine of primary jurisdiction. In a related TTI proceeding, Miller v. Armour & Co. (In re Total Transportation, Inc.), 84 B.R. 590 (Bktcy.D.Minn.1987), Judge Kressel denied Armour's motion for reference to the ICC. At the time of hearing on defendant's motion in this case, Armour was on appeal to the district court. Judge MacLaughlin has now issued an opinion, Miller v. Armour & Co. (In re Total Transportation, Inc.), 84 B.R. 590 (D.Minn.1988) in which he affirmed Judge Kressel's decision. See also Cooper v. California Consol. Enters., Inc. (In re Carolina Motor Express, Inc.), 84 B.R. 979 (Bktcy.W.D.N.C.1988) (if no dispute as to what the correct rates are, the bankruptcy court is fully capable of reviewing the application of the involved rates and deciding the amount owed by each defendant). Judge MacLaughlin's decision also held that there can be no deviation from filed rates; thus, the several equitable defenses raised by Armour (and raised by numerous other defendants in the other TTI adversary proceedings) are not available to the defendants.
I agree with the reasoning of Judge Kressel, affirmed by Judge MacLaughlin, that referral was inappropriate in Armour. This case parallels Armour in all respects, and likewise should not be referred to the ICC.
Finally, defendant seeks a determination that this action is a non-core proceeding under 28 U.S.C. § 157(b)(2). Defendant's motion places the court in the midst of a maelstrom...
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