Jones Truck Lines, Inc. v. Scott Fetzer Co.

• Decision Date: 08 August 1994
• Docket Number: No. J-C-93-196.,J-C-93-196.
• Citation: 860 F. Supp. 1370
• Parties: JONES TRUCK LINES, INC., Debtor-In-Possession, Plaintiff, v. The SCOTT FETZER COMPANY d/b/a Quikut, a Scott Fetzer Company d/b/a Douglas, a Scott Fetzer Company, Defendant.
• Court: U.S. District Court — Eastern District of Arkansas

860 F. Supp. 1370

JONES TRUCK LINES, INC., Debtor-In-Possession, Plaintiff, v. The SCOTT FETZER COMPANY d/b/a Quikut, a Scott Fetzer Company d/b/a Douglas, a Scott Fetzer Company, Defendant.

No. J-C-93-196.

United States District Court, E.D. Arkansas, Jonesboro Division.

August 8, 1994.

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

Stanley R. Langley, Jonesboro, AK, for defendant.

AMENDED ORDER

STEPHEN M. REASONER, Chief Judge.

Presently pending before the Court are Plaintiff's Motion for Summary Judgment (Doc. # 8), and Defendants Motion and Amended Motion for Stay and Referral of this Action to the Interstate Commerce Commission ("ICC") (Docs. # 11 & # 14).

I. Background and Positions of the Parties

Plaintiff, A Northwest Arkansas transportation company currently in Chapter 11 bankruptcy proceedings, brought this action pursuant to the Interstate Commerce Act 49 U.S.C. § 10101 et seq. (1994) ("ICA") to collect $8,128.78 which it asserts represents the difference between the filed tariff rate for common carriage and the negotiated rate actually billed and paid for freight shipments made during 1988 through 1991. This action is one of numerous cases filed by plaintiff against shippers in an attempt to recover uncollected undercharges. Plaintiff contends it acted as a motor common carrier when it transported the freight tendered by defendant and is, therefore, entitled to the filed tariff rate under the filed rate doctrine.¹

Defendant denies the allegations in plaintiff's Complaint. In its Motion for Stay and Referral to the ICC, defendant contends that plaintiff transported the shipments as a contract carrier and thus is not entitled to the filed tariff rate. The defendant also asserts that even if plaintiff was acting as a motor common carrier, the tariff rates and plaintiff's practices were unreasonable and hence unenforceable. Therefore, the defendant argues that the matter should be referred to the ICC as the issues of (i) contract versus common carriage and (ii) the reasonableness of rates and practices are within the sole and primary jurisdiction of the ICC.²

Plaintiff asserts that the determination of defendants status as a contract or common carrier is a matter of law and properly determined by summary judgment. Furthermore, Plaintiff asserts that the Negotiated Rates Act ("NRA") of 1993, Publ. 103-180, 107 Stat. 2044, upon which defendant's Motion for Stay and Referral of the Issues to the ICC is partially based, does not apply to claims of bankrupts.

The threshold issues in this cause of action is whether the subject transportation was contract or common carriage and whether this Court or the ICC has primary jurisdiction to make the determination. If the transportation is held to be common carriage, then the issue of the reasonableness of the tariff rates and practices must be addressed. Again, this Court must determine whether it or the ICC has primary jurisdiction to then rule on these two reasonableness issues.

II. Filed Rate Doctrine and Contract Carriage

A motor carrier acts either as a "motor common carrier" (49 U.S.C. § 10102(14) (1994)) or as a "motor contract carrier" (49 U.S.C. § 10102(15) (1994)). 49 U.S.C. § 10761(a) (1994) provides that a "motor common carrier" shall not charge or receive different compensation for transportation than the tariff filed with the ICC. This practice has commonly become known as the filed rate doctrine. Maislin Industries, U.S., Inc. v. Primary Steel, Inc., 497 U.S. 116, 127, 110 S.Ct. 2759, 2766, 111 L.Ed.2d 94 (1990).

A "motor contract carrier" is exempt from the filed rate doctrine. Exemption of Motor Contract Carriers from Tariff Filing Requirements, 133 M.C.C. 150 (1983), aff'd sub nom. Central & Southern Motor Freight Tariff Ass'n v. U.S., 757 F.2d 301 (D.C.Cir. 1985), cert. denied, 474 U.S. 1019, 106 S.Ct. 568, 88 L.Ed.2d 553 (1985). A "motor contract carrier" is:

a person providing motor vehicle transportation of property for compensation under continuing agreements with one or more persons —

(i) by assigning motor vehicles for a continuing period of time for the exclusive use of each such person; or

(ii) designed to meet the distinct needs of each such person.

49 U.S.C. § 10102(15)(B) (1994). Therefore, contract carriage is for the exclusive use of the subscriber or designed to meet its distinct needs. The ICC applies a "totality of circumstances" test in determining the type of carriage. "It is the totality of the circumstances surrounding any particular movement, not the presence or absence of a written contract, that determines whether the transportation is contract carriage." Contracts for Transportation of Property, 8 I.C.C.2d 520 (1992). "The ICC has stated repeatedly that it has primary jurisdiction to determine whether transportation subject to its regulation is contract carriage or common carriage." F.P. Corp. v. Ken Way Transp., Inc., 821 F.Supp. 1032, 1035 (E.D.Pa.1993).

III. Primary Jurisdiction

The Supreme Court has explained the doctrine of primary jurisdiction as follows:

The doctrine of primary jurisdiction, like the rule requiring exhaustion of administrative remedies, is concerned with promoting proper relationships between the courts and administrative agencies charged with particular regulatory duties. `Exhaustion' applies where a claim is cognizable in the first instance by an administrative agency alone; judicial interference is withheld until the administrative process has run its course. `Primary jurisdiction,' on the other hand, applies where a claim is originally cognizable in the courts, and comes into play whenever enforcement of the claim requires the resolution of issues which, under a regulatory scheme, have been placed within the special competence of an administrative body; in such a case the judicial process is suspended pending the referral of such issues to the administrative body for its views.

No fixed formula exits for applying the doctrine of primary jurisdiction. In every case the question is whether the reasons for the existence of the doctrine are present and whether the purposes it serves will be aided by its application in the particular litigation. These reasons and purposes have often been given expression by this Court. In the earlier cases emphasis was laid on the desirable uniformity which would be obtained if initially a specialized agency passed on certain types of administrative question. More recently the expert and specialized knowledge of the agencies involved has been particularly stressed.

U.S. v. Western Pacific R. Co., 352 U.S. 59, 63-64, 77 S.Ct. 161, 165, 1 L.Ed.2d 126 (1956) (citations omitted).

Under the doctrine of primary jurisdiction, the court has discretion to retain jurisdiction or, if the parties would not be unfairly disadvantaged, to dismiss the case without prejudice. Reiter v. Cooper, 507 U.S. ___, ___, 113 S.Ct. 1213, 1220, 122 L.Ed.2d 604 (1993). The doctrine applies to claims properly cognizable in federal court that contain an issue or issues within the special competence of an administrative agency. It enables a referral to the agency, staying further proceedings so as to give the parties reasonable opportunity to seek an administrative ruling. Referral of issues to an administrative agency does not deprive the court of jurisdiction; the court has discretion either to retain jurisdiction or, if the parties would not be unfairly disadvantaged, to dismiss the case without prejudice. Id.

Several courts have determined that the ICC has primary jurisdiction of the common versus contract carriage issue. Atlantis Exp., Inc. v. Standard Transp. Services, Inc., 955 F.2d 529 (8th Cir.1992); Jones Truck Lines, Inc. v. Ardco, Inc., No. 93-2265, 1993 WL 339096 (N.D.Ill August 30, 1993); Jones Truck Lines, Inc. v. Water Treatment Services, Ltd., 839 F.Supp. 548 (N.D.Ill.1993); Brizendine v. Baldwin Hardware Corporation, No. 91-6800, 1992 WL 209980 (E.D.Pa. August 24, 1992); and F.P. Corp. v. Ken Way Transportation, Inc., 821 F.Supp. 1032 (E.D.Pa.1993); Jones Truck Lines, Inc. v. Asco Hardware, Inc., No. LR-C-93-459, 1994 WL 261005 (E.D.Ark. March 8, 1994). However, the Court recognizes that there is a split among courts regarding the application of the doctrine of primary jurisdiction in determining contract versus common carriage. Reported cases taking the opposite position include: Jones Truck Lines, Inc. v. Iversen Baking Co., 837 F.Supp. 290 (W.D.Ark.1993); Brizendine v. Reliable Corp., 152 B.R. 224 (N.D.Ill.1993); and Security Serv., Inc. v. Johnson Matthey, Inc., No. 91-6699, 1992 WL 176497 (E.D.Pa. July 15, 1992) (holding that the general jurisdiction of the ICC does not bar the court from determining whether the parties operated pursuant to contract or common carriage).

This Court agrees with those courts holding that the purposes of the doctrine of primary jurisdiction will be served through referral of the contract carriage issue to the ICC as it will promote uniformity in the application of the statutory scheme in the numerous Jones Truck Lines, Inc., Debtor-in-Possession cases filed. Furthermore, the agency's expert and specialized knowledge will aid in the resolution of this issue. See F.P. Corp., 821 F.Supp. at 1036; I.C.C. v. J-T Transport Co., 368 U.S. 81, 94, 82 S.Ct. 204, 216, 7 L.Ed.2d 147 (1961); Service Storage & Transfer Co. v. Com. of Virginia, 359 U.S. 171, 177, 79 S.Ct. 714, 718, 3 L.Ed.2d 717 (1959). Finally, referral of this case to the ICC is particularly appropriate because if the ICC determines the carriage to be common then it also has primary jurisdiction to decide whether the rates charged and practices used to collect the charges for said carriage are reasonable.

IV. Unreasonable Practice

The facts and issues involved in this case follow a pattern of cases which both the ICC³ and the U.S. Supreme Court have noted to be frequently repeated:

The facts of

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