In re United Shipping Co.
| Decision Date | 12 November 1991 |
| Docket Number | Bankruptcy No. 4-88-533,Adv. No. 4-89-468. |
| Citation | 134 BR 359 |
| Parties | In re UNITED SHIPPING COMPANY, Debtor. GLOBAL TRANSPORTATION SERVICES, INC., Plaintiff, v. UNITED SHIPPING COMPANY, Defendant. |
| Court | U.S. Bankruptcy Court — District of Minnesota |
John R. Stoebner, Steven Weiss, Lapp, Laurie, Libra, Abramson & Thomson, Minneapolis, Minn., for plaintiff.
Thomas E. Wolff, Minneapolis, Minn., for defendant.
MEMORANDUM ORDER WITHDRAWING REFERRAL TO THE INTERSTATE COMMERCE COMMISSION, DENYING MOTION TO DISMISS AND GRANTING MOTION FOR SUMMARY JUDGMENT
The above-entitled matter came on for hearing before the undersigned on the 17th day of September, 1991, on the plaintiff's motion for lift of stay and for entry of summary judgment, and on the defendant's motion for withdrawal of referral to the Interstate Commerce Commission and for dismissal. Appearances were as follows: John Stoebner and Steven Weiss on behalf of the plaintiff, and Thomas Wolff on behalf of the defendant.
The plaintiff, Global Transportation, Inc. ("Global"), is a Washington corporation registered to do business in Minnesota. Defendant, United Shipping Company ("United"), was at all relevant times hereto a Minnesota corporation with its principal place of business in Minnesota. United operated as both a motor common carrier and a motor contract carrier pursuant to authority issued by the Interstate Commerce Commission ("ICC").
In late 1986 and early 1987, United solicited Global for the purpose of carrying Global's commercial traffic moving from the State of Washington to various points throughout the midwest, southeast and eastern United States. On January 4, 1987, after discussing various services, rates and destinations, representatives of Global and United signed a written document entitled "Transportation Contract." The Transportation Contract read as follows:
Two days later, on January 6, 1987, United's representative sent a letter to Global's representative stating, The letter then listed a schedule of rates for carriage to various destinations. On June 18, 1987, United notified Global that it was reducing its rates for several of the destinations listed in the January 6 letter, and sent Global a new rate schedule. On two subsequent occasions, representatives of the two companies discussed rates for cities which were not listed in the January 6 letter, and these discussions were confirmed in writing.
During 1987, Global tendered numerous shipments to United. United made delivery of all shipments and issued freight bills to Global based on the scheduled rates. Global paid all such freight bills in full.
United filed a petition under chapter 11 of the Bankruptcy Code on February 28, 1988. United has now asserted a right to recover an additional $12,241 from Global for the services performed. The basis of United's claim is that when it performed services for Global, it did so under its common carrier authority, rather than its contract carrier authority, and therefore the proper rates for carriage were its common carrier tariffs filed with the Interstate Commerce Commission rather than the rates listed in the schedules sent to Global. The $12,241 figure therefore represents the difference between the amount United asserts is due for the carriage based on the tariffs and the amount it received based on the rate schedules.
Global filed this adversary proceeding on November 16, 1989, praying for a declaratory judgment that the rates listed in the schedules it received were the proper rates or in the alternative that United's practice of negotiating a rate and then demanding payment of the higher tariff is an unreasonable practice. United subsequently filed its own lawsuit to recover the $12,241 in the King County Superior Court in Washington state (Case No. 90-2-011607) which was removed to the United States District Court for the Western District of Washington (Case No. C90-216D) on February 9, 1990. The Washington District Court entered an order dated June 8, 1990, staying the proceedings before it, pending the Supreme Court's decision in Maislin Industries, U.S., Inc., v. Primary Steel, Inc., ___ U.S. ___, 110 S.Ct. 2759, 111 L.Ed.2d 94 (1990).
On April 5, 1990, I referred the issues in this declaratory judgment action to the Interstate Commerce Commission and stayed the present proceedings. Rather than proceed immediately before the ICC, Global and United agreed to defer filing the ICC petition until after the Maislin case was decided, since the resolution of Maislin could well have dispensed with the "unreasonable practice" issue in the present case.
Maislin was decided in June of 1990, and later that month, Global underwent a change of counsel. Global's new counsel contacted counsel for United and discussed settlement in October and November of 1990, but no agreement could be reached. Counsel for Global continued to defer filing the ICC petition through the end of 1990 due to decisions on identical issues that were being rendered against United and another carrier by the Fourth Judicial District Court for the State of Minnesota (Case Nos. 90-16136, 90-10274). On February 28, 1991, the ICC published an Advance Notice of Proposed Rulemaking ("Ex Parte No. MC-198") in which it proposed to revise or repeal its contract carrier regulations at 49 C.F.R. 1053, and wherein it stated, "the Commission has no intention of engaging in a wholesale examination of the contracts of contract carriers, either within or outside of the context of undercharge claims." In light of this statement, counsel for Global again chose to defer filing the ICC petition pending resolution of Ex Parte No. MC-198. On August 27, 1991, after public comment on the Advance Notice of Proposed Rulemaking, the ICC proposed to entirely revoke the contract carrier regulations at 49 C.F.R. § 1053.
In August of 1991, counsel for United sent a letter to counsel for Global requesting that Global proceed with its case before the ICC. On August 29, 1991, Global filed its present motion to lift the stay of these proceedings and for summary judgment. Global chose to proceed before the Bankruptcy Court rather than the ICC because it felt that Maislin had foreclosed its arguments on the "unreasonable practice" issue, and because the ICC stated in Ex Parte No. MC-198 that it had no intention of engaging in a wholesale examination of contracts for carriage.
The parties agree that in light of Maislin the only issue before me is whether United provided carriage to Global pursuant to its common carrier authority or its contract carrier authority.1 Global takes the position that the Transportation Contract signed by the parties satisfies the statutory requirements and ICC regulations governing contract carriage. It asserts, therefore, that the proper rate of carriage is the rate agreed to in the schedules sent to Global, and that it is entitled to summary judgment.
United argues that there was no contract that satisfied the statute and regulation, and that therefore carriage was provided under its common carrier authority. That being the case, United asserts that the only lawful rate is the tariff rate filed with the ICC, and that this proceeding should therefore be dismissed because Global has shown no right to relief.
Both parties have moved the Court to reopen the case and hear the issue, rather than leave resolution of the matter with the ICC. Global has done so by way of a motion to lift the stay that I ordered on April 5, 1990, while United has moved that I withdraw the referral to the ICC that was contained in the same order. This declaratory judgment action has been pending for two years now, and was stayed over a year and a half ago for the parties to proceed before the ICC. There is still no petition pending before the ICC. A continued referral would only cause further delay and would not be in the interest of judicial economy. Cf. In re Sharm Express, Inc., 127 B.R. 620, 622, 624 n. 4 (D.Minn.1991) (). Therefore, to the extent that my April 5, 1990 referral order has any continuing viability, the referral should be withdrawn and the stay of these proceedings should be lifted so that this matter may be resolved expeditiously in the bankruptcy court.2
United asserts two separate grounds on which Global's complaint...
To continue reading
Request your trial