Sea-Land Service, Inc. v. Murrey & Son's Co. Inc.

• Decision Date: 10 August 1987
• Docket Number: No. 86-5670,SEA-LAND,86-5670
• Citation: 824 F.2d 740
• Parties: SERVICE, INC., Plaintiff-Appellee, v. MURREY & SON'S CO. INC., Defendant-Appellant.
• Court: U.S. Court of Appeals — Ninth Circuit

Page 740

824 F.2d 740

1988 A.M.C. 1

SEA-LAND SERVICE, INC., Plaintiff-Appellee, v. MURREY & SON'S CO. INC., Defendant-Appellant.

No. 86-5670.

United States Court of Appeals Ninth Circuit.

Argued and Submitted May 6, 1987.

Decided Aug. 10, 1987.

George McGill, Solana Beach, Cal., for defendant-appellant.

Thomas Russell, Long Beach, Cal., for plaintiff-appellee.

Appeal from the United States District Court for the Central District of California.

Before PREGERSON, NELSON and WIGGINS, Circuit Judges.

PREGERSON, Circuit Judge:

The district court granted summary judgment for Appellee Sea-Land Service, Inc. The court held that the Shipping Act of 1916, 46 U.S.C. Secs. 801-42, amended by 46 U.S.C. Secs. 1701-20 (Supp.1987), provides carriers with a private cause of action to collect freight charges imposed by a tariff. The district court also awarded attorneys' fees to Sea-Land. Murrey and Son's timely appeals. We affirm.

BACKGROUND

Statutory Background

The Shipping Act of 1916 (the "Shipping Act"), 46 U.S.C. Secs. 801-42, amended by 46 U.S.C. Secs. 1701-1720 (Supp.1987) (the "Shipping Act of 1984") regulates the common carriage of goods by water in interstate and foreign commerce. The Shipping Act's primary purpose is to eliminate discriminatory treatment of shippers and carriers. See Consolo v. Federal Maritime Comm'n, 383 U.S. 607, 622-23, 86 S.Ct. 1018, 1027-28, 16 L.Ed.2d 131 (1966); Nepera Chem., Inc. v. Sea-Land Serv., Inc., 794 F.2d 688, 693 n. 34 (D.C.Cir.1986). Section 18(a) of the Shipping Act, 46 U.S.C. Sec. 817(a), requires common carriers by water in interstate commerce to "establish, observe, and enforce just and reasonable rates, fares, charges, classifications, and tariffs," and to file tariffs showing all rates and charges with the Federal Maritime Commission. Carriers are strictly prohibited from collecting charges different from those established in their tariffs. 46 U.S.C. Sec. 817(b)(3), amended by 46 U.S.C. Sec. 1709(b) (Supp.1987). ¹

Facts

In May 1983, Appellee Sea-Land transported for Appellant Murrey and Son's a thirty-five foot shipping container containing billiard tables from Long Beach, California to Saudi Arabia. The shipment was performed pursuant to the Sea-Land Eastbound Pacific Coast-Persian Gulf Freight Tariff F.M.C. No. 126. Under the tariff, the applicable lump sum rate for the shipment was $5,820, and the applicable insurance surcharge was $200. Sea-Land billed Murrey for $6,020. Murrey paid $3,010 and refused to pay the balance, alleging that Sea-Land had agreed to ship the tables for $3,010. Sea-Land brought this action to recover the amount remaining under the tariff.

In entering summary judgment for Sea-Land, the district court found that Murrey owed Sea-Land the balance of the $6,020 tariff charge and that the Shipping Act of 1916, 46 U.S.C. Secs. 801-842, provides an ocean carrier a private cause of action to collect freight charges required by a tariff.

The bill of lading provided that reasonable attorneys' fees would be awarded to Sea-Land in the event it had to go to court to collect freight charges. The district court awarded attorneys' fees to Sea-Land.

On January 16, 1987, Sea-Land served its proposed Findings of Fact and Conclusions of Law upon Murrey. Central District of California Local Rule 14.6, in conjunction with Fed.R.Civ.P. 6(a) and 6(e), gave Murrey until January 27 to file objections to the proposed Findings and Conclusions. However, on January 21, the district court approved and signed the findings and conclusions. Murrey contends that it was prejudiced by this premature signing.

DISCUSSION

I. Private Cause of Action

A ruling whether Congress implicitly intended to allow a statute to be enforced by a private cause of action is a question of law reviewed de novo. See United States v. McConney, 728 F.2d 1195, 1201 (9th Cir.) (en banc), cert. denied, 469 U.S. 824, 105 S.Ct. 101, 83 L.Ed.2d 46 (1984).

Whether the Shipping Act of 1916 allows a carrier to assert a private cause of action against a shipper to collect charges specified in a tariff filed with the Federal Maritime Commission is a question of first impression in the Ninth Circuit. The First, Second, and Fifth Circuits have held that the Shipping Act allows carriers to enforce tariff provisions through an implicit private cause of action. Maritime Serv. Corp. v. Sweet Brokerage De Puerto Rico, Inc., 537 F.2d 560, 562 (1st Cir.1976); Prince Line, Ltd. v. American Paper Exports, Inc., 55 F.2d 1053, 1055-56 (2d Cir.1932); Gilbert Imported Hardwoods, Inc. v. 245 Packages of Guatambu Squares, 508 F.2d 1116, 1121 (5th Cir.1975). To the contrary, the Fourth Circuit, in Roco Worldwide, Inc. v. Constellation Navigation, 660 F.2d 992, 995 (4th Cir.1981), held that Congress did not intend to allow carriers to bring private actions under the Shipping Act to remedy deviations from published tariff rates.

Circuits that have found an implied private cause of action for carriers to enforce tariffs under the Shipping Act have relied on case law decided under the Interstate Commerce Act. The Shipping Act was modeled on the Interstate Commerce Act and the Supreme Court has said that Congress intended that the two Acts "have like interpretation, application, and effect." United States Navigation Co. v. Cunard S.S. Co., 284 U.S. 474, 481, 52 S.Ct. 247, 249, 76 L.Ed. 408 (1932).

Courts have traditionally construed the Interstate Commerce Act to allow carriers to bring private suits to recover tariff charges. See Thurston Motor Lines, Inc. v. Jordan K. Rand, Ltd., 460 U.S. 533, 103 S.Ct. 1343, 75 L.Ed.2d 260 (1983); Louisville & N.R.R. v. Maxwell, 237 U.S. 94, 35 S.Ct. 494, 59 L.Ed. 853 (1915). Under the Interstate Commerce Act, a carrier can sue to recover charges listed in the tariff regardless of an agreement to accept a lesser rate. Louisville & N. R.R., 237 U.S. at 98, 35 S.Ct. at 495; see also Farley Transp. Co. v. Santa Fe Trail Transp. Co., 778 F.2d 1365, 1372 (9th Cir.1985).

The tariff rate is the "only lawful rate" that can be charged, and the shipper's knowledge of that rate is conclusively presumed. Louisville & N. R.R., 237 U.S. at 98, 35 S.Ct. at 495; Farley Terminal Co., Inc. v. Atchison, T. & S.F. Ry. Co., 522 F.2d 1095, 1098-1099 (9th Cir.), cert. denied, 423 U.S. 996, 96 S.Ct. 423, 46 L.Ed.2d 370 (1975). The Supreme Court has explained that although "this rule is undeniably strict, and it obviously may work hardship in some cases ... it embodies the policy which has been adopted by Congress ... to prevent unjust discrimination." Louisville & N. R.R., 237 U.S. at 97, 35 S.Ct. at 495.

In Maritime Serv. Corp. v. Sweet Brokerage De Puerto Rico Inc., 537 F.2d 560, 562 (1st Cir.1976), the First Circuit found that the close parallels between the tariff provisions of the Shipping Act and the Interstate Commerce Act support the implication of a private cause of action for carriers under the Shipping Act. The First Circuit in Maritime Service refused to make any distinction between the two Acts merely because the Interstate Commerce Act, unlike the Shipping Act, contains explicit provisions allowing carriers to recover tariff charges. Maritime Serv., 537 F.2d at 563; see 49 U.S.C. Secs. 3(2), 3(3), amended by 49 U.S.C. Sec. 10744(c) (Supp.1987). The court noted that the Supreme Court had found an implied private cause of action in carriers under the Interstate Commerce Act long before Congress enacted these explicit provisions. Maritime Serv., 537 F.2d at 563. Before the enactment of the explicit provisions, the only basis for construing a private cause of action under the Interstate Commerce Act was statutory language similar to that found in the present Shipping Act. Id.

In Roco Worldwide, Inc. v. Constellation Navigation, 660 F.2d 992 (4th Cir.1981), the Fourth Circuit declined to follow the First Circuit's Maritime Service holding. The Fourth Circuit found that Cort v. Ash, 422 U.S. 66, 95 S.Ct. 2080, 45 L.Ed.2d 26 (1975), and its progeny do not support the implication of a private cause of action for carriers to enforce tariffs under the Shipping Act. Generally, to establish an implied private cause of action under Cort, a plaintiff must be "one of the class for whose especial benefit the statute was enacted." Cort, 422 U.S. at 78, 95 S.Ct. at 2088 (quoting Texas & Pacific R. Co. v. Rigsby, 241 U.S. 33, 39, 36 S.Ct. 482, 484, 60 L.Ed. 874 (1916)) (emphasis supplied in Texas & Pacific R. Co.). In Roco, the Fourth Circuit refused to imply a private cause of action because it found that carriers were not special beneficiaries of the Act, but were instead the class "whose previously unregulated conduct was purposefully brought under federal control by the statute." Roco, 660 F.2d at 994 (quoting Piper v. Chris-Craft Indus. Inc., 430 U.S. 1, 37, 97 S.Ct. 926, 51 L.Ed.2d 124 (1977)).

We do not find the Fourth Circuit's reasoning persuasive. Roco's argument that carriers are not "special beneficiaries" of the Shipping Act could be applied as easily to carriers operating under the Interstate Commerce Act. Although the provisions of the Interstate Commerce Act appear to be designed to run against carriers, courts have traditionally construed that Act to allow carriers to sue shippers to recover the charges established in the tariffs. Thurston Motor Lines, 460 U.S. at 533, 103 S.Ct. 1343. Moreover, carriers do benefit from the Shipping Act. The requirement that carriers place their tariffs on file with the Federal Maritime Commission prevents one carrier from luring away another carrier's customers by using surreptitious fee arrangements.

Roco also concluded that the analogy between the Shipping Act and the Interstate Commerce Act was inappropriate because of the practice within the shipping industry of modifying freight charges through post-shipment tariff amendments. The Shipping Act at 46 U.S.C. Sec. 817(b)(3) provides that if a carrier makes an agreement with a shipper for a charge...