Jones Truck Lines, Inc. v. Iversen Baking Co., Civ. No. 93-5104.

• Decision Date: 13 October 1993
• Docket Number: Civ. No. 93-5104.
• Citation: 837 F. Supp. 290
• Parties: JONES TRUCK LINES, INC., Debtor In Possession, Plaintiff, v. IVERSEN BAKING COMPANY, Defendant.
• Court: U.S. District Court — Western District of Arkansas

837 F. Supp. 290

JONES TRUCK LINES, INC., Debtor In Possession, Plaintiff, v. IVERSEN BAKING COMPANY, Defendant.

Civ. No. 93-5104.

United States District Court, W.D. Arkansas, Fayetteville Division.

October 13, 1993.

COPYRIGHT MATERIAL OMITTED

Charles T. Coleman, Wright, Lindsey & Jennings, Little Rock, AR, David G. Sperry, Independence, MO, for plaintiff.

Robert Beckman, Bogatin, Lawson & Chiapella, Memphis, TN, for defendant.

MEMORANDUM OPINION

H. FRANKLIN WATERS, Chief Judge.

Presently pending for disposition in the above styled matter is a motion for order of reference¹ to the Interstate Commerce Commission filed by the defendant, Iversen Baking Company. The plaintiff, Jones Truck Lines, Inc. (Jones), has responded and the court is now ready to rule on the motion. For the reasons set forth below, the court finds that the motion for order of reference to the Interstate Commerce Commission should be and hereby is denied.

This action was filed on June 14, 1993, one of numerous cases on the court's docket filed by Jones against shippers in an attempt to recover uncollected undercharges for freight carried by Jones. Jones, a Northwest Arkansas transportation company currently in Chapter 11 bankruptcy proceedings, contends that the defendant, Iversen Baking Co., tendered freight to Jones for transportation in interstate and/or intrastate commerce and thereafter Jones performed services for the defendant pursuant to authority issued it by the Interstate Commerce Commission (ICC). Jones contends that all of defendant's shipments now have been audited by comparing the commodities, weights, points or origin and destination, and declared value of each shipment to the applicable tariff rate and rules provisions on file with the ICC and/or applicable intrastate law provisions which were effective on the date of the shipment. As a result of the audit, Jones seeks to recover $1,688.29 in freight undercharges which previously have been demanded and refused.

Defendant's answer asserts, inter alia, the following affirmative defenses: (1) this case should be referred to the ICC under the "primary jurisdiction" doctrine, (2) the plaintiff may not recover undercharges as it carried defendant's freight as a motor contract carrier rather than a motor common carrier, and (3) the plaintiff's tariff rates for freight are unreasonable. Although not presently ripe for adjudication, plaintiff has filed a motion to strike defendant's affirmative defenses, alleging them to be without merit. Disposition of the matter currently before the court, however, has the effect of rendering plaintiff's motion to strike moot.

These affirmative defenses form the basis for defendant's motion for order of reference. Defendant contends that the transportation services provided by the plaintiff were pursuant to contract carrier requirements and are therefore exempt from the "filed rate" doctrine under which plaintiff now seeks to collect undercharges. Defendant maintains that a transportation agreement between the parties, effective on February 15, 1988, supports the conclusion that shipments were moved pursuant to contract carrier authority rather than common carrier requirements as plaintiff argues. Defendant argues, therefore, that the contractual rate governs the shipping charges rather than the published tariffs rates. Thus, defendant asserts that the contract versus common carriage issue should be decided by the ICC under the "primary jurisdiction" doctrine. Defendant also contests the reasonableness of the rates charged by the plaintiff, contending that application of the unreasonable rate defense also falls within the ICC's primary jurisdiction.

Plaintiff's position in response to the motion is that the alleged contract between Jones and the defendant is wholly insufficient to establish contract carriage and as a result, common carriage tariffs and the fixed rate doctrine are applicable. Framing the sole issue as one whether plaintiff acted as a common carrier or a contract carrier on behalf of the defendant, plaintiff maintains that the agreement proffered by the defendant does not meet the statutory requirements for contract carriage. Arguing that the alleged contract provides for neither the dedication of equipment for defendant's continuing and exclusive use nor the furnishing of service designed to meet defendant's distinct needs, plaintiff contends that the agreement was no more than a negotiated common carrier rate.

With respect to defendant's argument that the rates are unreasonable, plaintiff first asserts that the unreasonableness of shipping rates is not a legal defense to freight undercharges. Alternatively, plaintiff asserts that the defendant has failed to specify which of plaintiff's rates and practices are unreasonable, instead making conclusory allegations of unreasonableness which are insufficient to the defense. Plaintiff requests that the court adjudicate immediately the claim against the defendant without reference of this matter to the ICC and without a stay of this action.

Primary Jurisdiction

Defendant's motion is one for order of reference to the Interstate Commerce Commission based upon the general division of initial jurisdiction between the courts and the ICC known as the "primary jurisdiction" doctrine. The doctrine requires that

"issues of transportation policy which ought to be considered by the Commission in the interests of a uniform and expert administration of the regulatory scheme laid down by the act" be submitted initially to the Commission for determination. Therefore, a district court trying a case under the Interstate Commerce Act must, if presented with such an issue, stay its proceedings and refer the case to the Commission.

Advance United Expressways, Inc. v. Eastman Kodak Co., 965 F.2d 1347, 1353 (5th Cir.1992), quoting ICC v. Atlantic Coast R., 383 U.S. 576, 579, 86 S.Ct. 1000, 1003, 16 L.Ed.2d 109 (1966). Thus, "matters in which the facts `raise technical or complex issues, regarding appropriate rates, that require the expert administration of the Commission' are, ..., within the primary jurisdiction of the Commission." In re Caravan Refrigerated Cargo, Inc., 864 F.2d 388, 389 (5th Cir. 1989), cert. denied, 497 U.S. 1010, 110 S.Ct. 3254, 111 L.Ed.2d 763 (1990).

The doctrine of primary jurisdiction is "concerned with promoting proper relationships between the courts and administrative agencies charged with particular duties." United States v. Western Pacific R. Co., 352 U.S. 59, 63, 77 S.Ct. 161, 164, 1 L.Ed.2d 126 (1956). The Court of Appeals for the Sixth Circuit has stated that "the principle reasons for the doctrine of primary jurisdiction are to obtain the benefit of the expertise and experience of the administrative agencies and the desirable uniformity which occurs when a specialized agency decides certain administrative questions." Alltel Tennessee, Inc. v. Tennessee Public Service Com'n, 913 F.2d 305, 309 (6th Cir.1990), citing In re Long Distance Tele. Litigation, 831 F.2d 627, 630 (6th Cir.1987). The doctrine applies, therefore, when an issue arises in the course of litigation which, pursuant to a regulatory scheme, is within the special competence of an administrative agency. Lifschultz Fast Freight, Inc. v. Rainbow Shops, Inc., 784 F.Supp. 89, 90 (S.D.N.Y.1992).

In such instances, the litigation is stayed pending resolution of the issues by the appropriate administrative body. United States v. Western Pacific R. Co., 352 U.S. at 64, 77 S.Ct. at 165. Thus, the district court should

initially determine whether a given issue involves reasonableness, complicated or specialized issues of construction, cost allocation, or other bases of primary jurisdiction. If the district court finds that the issue is within the primary jurisdiction of the ICC, the issue must be referred to the Commission. Only if the district court finds that it can resolve the issues before it, using the plain language of the tariffs and the ordinary rules of construction, should the court then proceed to resolve the issues without referral to the Commission.

Advance United Expressways, 965 F.2d at 1353. "In making such a determination, the district court should be mindful of the economy of maintaining only one action ... a pending ICC petition.... would militate in favor of referral of any issues related to the pending ICC petition." Advance United Expressways, 965 F.2d at 1353, n. 5. A court must, however, apply the doctrine of primary jurisdiction on a case-by-case basis, deferring to an administrative agency only when the reasons for the existence of the doctrine are present. Id. Otherwise, courts are as competent as the Commission to determine the issue. Coca-Cola, Co. v. Atchison, Topeka, and Sante Fe R. Co., 608 F.2d 213, 220 (5th Cir.1979). The court must, therefore, proceed to determine whether the two primary issues in this case should be referred to the ICC.

The ICC and the "Filed Rate" Doctrine

Under the Interstate Commerce Act, 49 U.S.C. § 10101 et seq. (1993 Supp.), carriers must file and publish tariffs containing the rates for transportation service it may provide in interstate commerce. 49 U.S.C. § 10762(a)(1) (Supp.1993). This concept is commonly referred to as the "filed rate" doctrine, dating back to an attempt made in the 19th century to regulate the "ruthless exercise of monopoly power by the nation's railroads." Maislin Industries, Inc. v. Primary Steel, Inc., 497 U.S. 116, 138, 110 S.Ct. 2759, 2772, 111 L.Ed.2d 94 (1990) (Stevens, J., dissenting). The doctrine was codified by the Act's provision that "a carrier ... shall provide transportation or service only if the rate for the transportation of service is contained in the tariff." 49 U.S.C. § 10761 (Supp.1993). The statutory requirements are designed to prevent carrier discrimination among shippers:

That carrier may not charge or receive a different compensation for that transportation or service rather than the rate

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