McCarty Farms, Inc. v. Burlington Northern, Inc.

• Decision Date: 24 March 1992
• Docket Number: No. CV-80-103-GF.,CV-80-103-GF.
• Citation: 787 F. Supp. 937
• Parties: McCARTY FARMS, INC., Alan Larson, Dale Skaalure, Viggo Anderson, Rasmussen Farming Corporation, et al., Plaintiffs, v. BURLINGTON NORTHERN, INC., a corporation, Defendant.
• Court: U.S. District Court — District of Montana

787 F. Supp. 937

McCARTY FARMS, INC., Alan Larson, Dale Skaalure, Viggo Anderson, Rasmussen Farming Corporation, et al., Plaintiffs, v. BURLINGTON NORTHERN, INC., a corporation, Defendant.

No. CV-80-103-GF.

United States District Court, D. Montana, Great Falls Division.

March 24, 1992.

Michael J. Ogborn, Murray Ogborn, Harding & Ogborn, Denver, Colo., Stephen D. Bell, Dorsey & Whitney, Billings, Mont., John W. Manning, Dorsey & Whitney, Great Falls, Mont., for plaintiffs.

Douglas J. Babb, Burlington No. R. Co., Fort Worth, Tex., Charles Dearden, Burlington Northern Law Offices, Bruce R. Toole, Crowley, Haughey, Hanson, Toole & Deitrich, Billings, Mont., Betty Jo Christian, Samuel M. Sipe, Jr., Janice Barber, Steptoe & Johnson, Washington, D.C., for defendant.

Thodore Hirt, W. Scott Simpson, Dept. of Justice, Civil Div., Federal Programs Branch, Washington, D.C., for defendants/intervenors ICC & USA.

MEMORANDUM AND ORDER

HATFIELD, Chief Judge.

The present action is a class action prosecuted pursuant to section 10701(a) of Title 49 of the United States Code and former section 1(5) of the Interstate Commerce Act (49 U.S.C. § 1(5)). The class which the plaintiffs represent consists of all persons, partnerships or entities who, during the two-year period from September 12, 1978, to September 12, 1980, "grew, sold and shipped, or caused to be shipped by the defendant, Burlington Northern, Inc. ("Burlington Northern"), wheat in and from the State of Montana to Pacific Northwest coast terminals in the States of Oregon and Washington."¹ The plaintiffs seek monetary compensation, on their own behalf and in their representative capacity, from the Burlington Northern, alleging that entity charged them rates on freight shipments during the referenced two-year period that were unreasonably high, in violation of 49 U.S.C. § 10701(a). The plaintiffs invoke the jurisdiction of the court pursuant to 49 U.S.C. § 11705(c)(1) and 28 U.S.C. § 1337.

I.

On March 16, 1981, the parties advised the court that they agreed the Interstate Commerce Commission possessed exclusive jurisdiction to determine the reasonableness of the freight charges placed in issue by the plaintiffs' complaint, as amended. Accordingly, the parties requested the court to refer the issue of the reasonableness of the freight charges to the Interstate Commerce Commission for determination. Because the reasonableness of the freight charges at issue presented a matter properly referred to the Interstate Commerce Commission under the doctrine of primary jurisdiction, the court granted the parties' request, and directed the plaintiffs to institute appropriate proceedings before the Interstate Commerce Commission. Pursuant to the court's directive, the plaintiffs filed an administrative complaint with the Interstate Commerce Commission on March 26, 1981. The plaintiffs' administrative complaint described the plaintiffs as persons or entities who "grow and sell grain and ship or cause to be shipped carload quantities of wheat and other grains over the line of the Burlington Northern from stations in Montana, of which Plentywood, Big Sandy, Great Falls, Hogeland, Chester and Reserve are representative, to Pacific Coast terminals in the States of Oregon and Washington."

The Interstate Commerce Commission issued a series of decisions in the administrative proceedings. In a May 22, 1987, decision, the Interstate Commerce Commission found that the Burlington Northern had possessed market dominance over the movement of wheat and barley from Montana to Pacific Northwest ports. McCarty Farms v. Burlington Northern, 3 I.C.C.2d 822 (1987). In a February 5, 1988, decision, the Commission determined the methodology to be used to assess the reasonableness of the rates for this traffic, and held that certain of the rates were unreasonable. 4 I.C.C.2d 262 (1988). On February 3, 1989, the Commission entered a decision for the declared purpose of providing the data and guidance necessary for the parties to determine the reasonableness of the challenged rates, to compute reparations, and to determine the maximum allowable rate level for the future. McCarty Farms, Inc., et al., v. Burlington Northern, Inc., Docket Nos. 37809, 37809 (Sub-No. 1), Montana Dept. of Commerce v. Burlington Northern, Inc., Docket No. 37815S.² On March 20, 1991, a decision was again entered wherein the Commission adopted the methodology utilized by Burlington Northern to calculate the amount of reparations and interest due the complainants, and determined future rate prescriptions.³ Finally, on November 20, 1991, the Interstate Commerce Commission entered a decision confirming that the reparations and interest owed the complainants through July 1, 1991, totalled $16,559,012. In this latest decision, the Interstate Commerce Commission also vacated the rate prescription aspect of the March 20, 1991, decision.⁴

On the occasion of each referenced decision, both the plaintiffs and Burlington Northern have petitioned the court to review, pursuant to 28 U.S.C. § 1336(b), the Interstate Commerce Commission's decision resolving any rate issue which was the subject of this court's order of referral of March 16, 1981. The parties agree this court has exclusive jurisdiction, pursuant to 28 U.S.C. § 1336(b), to review those aspects of the decisions which pertain to the reasonableness of the "referred" rates. However, the parties do not agree upon the scope of the court's referral order and, accordingly, the scope of this court's review of the referenced decisions entered by the Interstate Commerce Commission in McCarty Farms, Inc., et al. v. Burlington Northern, Inc., Dockets Nos. 37809, 37809 (Sub-No. 1), and Montana Dept. of Commerce v. Burlington Northern, Inc., No. 37815S (1989).

The Burlington Northern resists what it characterizes as an attempt by plaintiffs to obtain review in this court of those rate issues resolved by the Interstate Commerce Commission in the referenced decisions, which were not encompassed by the complaint in this action. The Burlington Northern asserts, in essence, that the jurisdiction of this court to review the decision of the Interstate Commerce Commission, under 28 U.S.C. § 1336(b), is limited to the specific rate reasonableness issues referred to the Interstate Commerce Commission by the order of referral entered in 1981. Jurisdiction to review all other aspects of those decisions to the extent they address rate reasonableness issues which were not the subject of the plaintiffs' amended complaint, Burlington Northern submits, lies exclusively in the court of appeals pursuant to 28 U.S.C. §§ 2321(a) and 2342(5).⁵ Accordingly, the Burlington Northern moves the court to dismiss those aspects of plaintiffs' petition for review which go to issues beyond the scope of the plaintiffs' complaint and, necessarily, the scope of the court's order of referral.⁶

In pressing the court to reject plaintiffs' attempt to expand the court's post-referral review to issues which were not embodied in the court's 1981 referral order, Burlington Northern emphasizes the result is dictated by the "arising out of" provision of 28 U.S.C. § 1336(b). The same result is also compelled, Burlington Northern submits, by section 214(c)(5), of the Staggers Rail Act, P.L. 96-448, 94 Stat. 1915 (1980) (codified at 49 U.S.C. § 10501(d)), which, in the opinion of Burlington Northern, grants the Interstate Commerce Commission exclusive jurisdiction over complaints challenging the reasonableness of rail rates in effect after October 1, 1980. Viewing the court's 1981 order of referral as limited to the reasonableness of single-car wheat rates on movements from September 12, 1978, through September 12, 1980, the Burlington Northern asks the court to dismiss all aspects of the plaintiffs' petitions for review which exceed the scope of the referral order. Specifically, the Burlington Northern seeks to preclude review of the Interstate Commerce Commission's determinations as to the reasonableness of: (1) single-car, multiple-car, and trainload rates on wheat from September 12, 1980 forward and for the future; and (2) single-car, multiple-car, and trainload rates on barley from the date the plaintiffs filed their administrative complaint before the Interstate Commerce Commission forward and for the future.⁷

In response to Burlington Northern's motion to dismiss, the plaintiffs argue that this court is the only court which has jurisdiction to review all aspects of the Interstate Commerce Commission's decisions. In the opinion of the plaintiffs, the decisions of the Interstate Commerce Commission, in their entirety, "arose out of" the 1981 referral order. The plaintiffs claim Burlington Northern's interpretation of the scope of the referral order blatantly disregards the actual intent of both this court and the parties in referring the case to the Interstate Commerce Commission. As to Burlington Northern's argument that the Staggers Rail Act of 1980 was intended by Congress to eliminate concurrent jurisdiction for a challenge to the reasonableness of the rail rates under 49 U.S.C. § 11705(c)(1), plaintiffs assert the argument is "patently" without merit, having no support in the federal decisional law.⁸

The determinative issue presented is whether or not this court has jurisdiction, under 28 U.S.C. § 1336(b), to review the Interstate Commerce Commission's decision of February 21, 1989, and subsequent related decisions, in their entirety. Resolution of this jurisdictional issue requires the court to address the correlative issue of whether the Staggers Rail Act, specifically section 214(c) (49 U.S.C. § 10501(d)), was intended by Congress to eliminate the concurrent jurisdiction vested in federal district courts under 49 U.S.C. § 11705(c)(1) to entertain challenges to the reasonableness of rail rates.

II.

The decisions of the Interstate Commerce Commission at issue involved rulings on the reasonableness of rates charged...