Rebel Motor Freight, Inc. v. I.C.C.

• Decision Date: 11 August 1992
• Docket Number: No. 91-6091,91-6091
• Citation: 971 F.2d 1288
• Parties: REBEL MOTOR FREIGHT, INC., Plaintiff-Appellant, v. INTERSTATE COMMERCE COMMISSION and Diamond-Bathurst, Inc., Defendants-Appellees.
• Court: U.S. Court of Appeals — Sixth Circuit

Page 1288

971 F.2d 1288

REBEL MOTOR FREIGHT, INC., Plaintiff-Appellant, v. INTERSTATE COMMERCE COMMISSION and Diamond-Bathurst, Inc.,

Defendants-Appellees.

No. 91-6091.

United States Court of Appeals, Sixth Circuit.

Submitted April 14, 1992.

Decided Aug. 11, 1992.

James N. Clay, III (briefed), Memphis, Tenn., for plaintiff-appellant.

Robert F. Miller, McDonnell & Boyd, Memphis, Tenn., Richard A. Ifft (briefed), Henry Roemer McPhee, Hopkins, Sutter, Hamel & Park, Washington, D.C., for defendant-appellee Diamond-Bathurst, Inc.

Ed Bryant, U.S. Atty., Memphis, Tenn., Cecilia E. Higgins, Judith A. Albert (briefed), Office of the Gen. Counsel, Washington, D.C., for defendant-appellee I.C.C.

Before: MERRITT, Chief Judge; MILBURN, Circuit Judge; and BROWN, Senior Circuit Judge.

MILBURN, Circuit Judge.

Plaintiff-appellant Rebel Motor Freight, Inc. ("Rebel") appeals the summary judgment granted by the district court to defendant Diamond-Bathurst, Inc., affirming the Interstate Commerce Commission ("ICC") and dismissing Rebel's petition for review. On appeal, the sole issue is whether plaintiff Rebel's tariff publication practices, found to be unreasonable by the ICC, can abrogate the plain language of its published tariff which requires a higher tariff than was collected from defendant Diamond-Bathurst, Inc., thereby preventing Rebel from collecting alleged undercharges for shipments of defendant's glassware. For the reasons that follow, we affirm.

I.

A.

This action was commenced by plaintiff Rebel in Tennessee state court and removed to the district court on August 26, 1986. Rebel brought this action against defendant Diamond-Bathurst, Inc. to recover $137,823.03 in alleged tariff undercharges for shipments of glassware that it carried on behalf of Diamond-Bathurst, Inc. from Jackson, Mississippi to Memphis, Tennessee, between 1983 and 1984.

The district court referred the matter to the ICC which released its decision on February 3, 1989. The ICC found in favor of Diamond-Bathurst, Inc. ¹ ("Diamond") on two grounds. First, the ICC determined that pursuant to its negotiated rates policy, Rebel and Diamond had negotiated a lower rate, and thus Rebel could not seek undercharges based upon another higher rate. Second, the ICC determined that Rebel's tariff publication practices were so confusing and ambiguous that they constituted an unreasonable practice, and collection of undercharges was inappropriate. The case was then remanded to the district court for further proceedings.

Both parties made motions for summary judgment, and Rebel sought review of the ICC's decision. Subsequent to the ICC's decision, but before the district court reached a decision, the Supreme Court in Maislin Industries, U.S., Inc. v. Primary Steel, Inc., 497 U.S. 116, 110 S.Ct. 2759, 111 L.Ed.2d 94 (1990), determined that the ICC's negotiated rates policy was inconsistent with the "filed rate doctrine" and thus was unlawful. Accordingly, the district court in its opinion acknowledged that the ICC could not be affirmed on the basis of the negotiated rates policy. However, the district court affirmed the ICC on the ground that Rebel's tariff publication practices were, in fact, confusing and ambiguous, and, therefore, Rebel was not entitled to collect the alleged undercharges. Judgment was entered in favor of Diamond on August 27, 1991. This timely appeal followed.

B.

Diamond ² was a manufacturer and distributor of glass containers. Rebel is a motor common carrier operating in interstate commerce with its principal place of business in Memphis, Tennessee. Rebel ceased active operations as a common carrier in early 1986 and is now leasing its equipment.

From July 1983 to February 1984, Rebel made 666 shipments of Diamond's glass containers from Diamond's plant in Jackson, Mississippi, to Memphis, Tennessee. Rebel billed Diamond $243.05 for each of the shipments pursuant to Item 400 in its own, private tariff, ICC REBL 332-B ³ which was in effect on March 10, 1983, and was cancelled on February 6, 1984. The freight bills for the shipments contained Rebel's stamp indicating the shipments moved under tariff ICC REBL 332-B, and Diamond paid the billed amount for each shipment.

The ICC found that the rate was published specifically to accommodate Diamond's shipments from Jackson, Mississippi, to Memphis, Tennessee. However, sometime later, Rebel claimed that under Item 110 of tariff ICC REBL 332-B, the $243.05 per trailer rate did not apply, and instead a higher rate contained in tariff ICC SMC 214-C was due. Tariff ICC SMC 214-C (Supplements 11 and 18, effective April 25, 1983, and August 8, 1983, respectively) was a group tariff published by the Southern Motor Carrier Rate Conference ("SMC") to establish rates for a large number of motor carriers. This tariff was in effect during the time that Rebel transported Diamond's glassware.

Item 110 of Rebel's private tariff, ICC REBL 332-B, provides in relevant part that

[s]pecific commodity rates named in this tariff may be used only when no truckload commodity rates are published in ... ICC SMC ... tariffs to apply on the same commodity from and to the same point.

J.A. 23. Tariff ICC SMC 214-C provides for a rate of $1.45 per 100 pounds with a minimum weight of 30,000 pounds for the movement of glassware from Jackson, Mississippi, to Memphis, Tennessee, almost twice as much as the rate under ICC REBL 332-B.

II.

A.

In this case, each of the parties asserts a different standard of review. Rebel argues that tariff interpretation is the primary focus of this case and that the ICC interpretation of the tariffs at issue should be reviewed de novo because tariff interpretation is a pure question of law, and the ICC's interpretation is clearly erroneous. Diamond agrees that tariff interpretation is a question of law to be reviewed de novo; however, it argues that the real issue in this case concerns the ICC's finding of unreasonable tariff publication practices which is subject to limited review under the Administrative Procedure Act, 5 U.S.C. § 706. In its review of the ICC's decision, the district court focused primarily on tariff construction and concluded that while tariff construction constitutes a question of law, the ICC's interpretation is entitled to deference even though that interpretation is not conclusive.

In fact, the district court applied the proper standard of review as it relates to tariff construction. The interpretation of a tariff is a question of law. W.P. Brown & Sons Lumber Co. v. Louisville & N.R. Co., 82 F.2d 94, 95 (6th Cir.1936), aff'd, 299 U.S. 393, 57 S.Ct. 265, 81 L.Ed. 301 (1937); Dunlop Tire & Rubber Corp. v. ICC, 724 F.2d 349, 350 (2d Cir.1983) (per curiam); Missouri Pac. R.R. v. Independent Mills, Inc., 706 F.2d 1080, 1083 (10th Cir.1983) (per curiam); see also Coca-Cola Co. v. Atchison, T. & S.F. Ry. Co., 608 F.2d 213, 219 (5th Cir.1979). ⁴ Thus, a court may "freely review" the ICC's construction of a tariff. Cleveland Elec. Illuminating Co. v. ICC, 685 F.2d 170, 173 (6th Cir.1982) (per curiam); Missouri Pac. R.R., 706 F.2d at 1083; Dunlop Tire & Rubber Corp., 724 F.2d at 350; Coca-Cola Co., 608 F.2d at 218. Nevertheless, while we may freely review the ICC's interpretation of a tariff, the agency's interpretation may be accorded deference due to the agency's expertise in the industry. Dunlop Tire & Rubber Corp., 724 F.2d at 350-51; Coca-Cola Co., 608 F.2d at 222. However, while an agency's interpretation is entitled to deference, it is not necessarily conclusive. W.P. Brown & Sons Lumber Co., 82 F.2d at 95; Missouri Pac. R.R., 706 F.2d at 1083; Coca-Cola Co., 608 F.2d at 222.

However, as will be discussed, statutory construction, as well as tariff construction, is relevant to an analysis of this case. An agency's statutory interpretation is properly reviewed pursuant to 5 U.S.C. § 706(2)(C). ⁵ When reviewing an agency's construction of a statute which it administers, we must first consider whether Congress has directly addressed the precise question at issue. Railway Labor Executives' Ass'n v. ICC, 930 F.2d 511, 514 (6th Cir.1991), citing Chevron, USA, Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 842-43, 104 S.Ct. 2778, 2781-82, 81 L.Ed.2d 694 (1984). If so, then the agency's interpretation is accorded no deference. Id.; see also Maislin Indus. U.S. v. Primary Steel, Inc., 497 U.S. 116, 110 S.Ct. 2759, 111 L.Ed.2d 94 (1990) ("Once we have determined the statute's clear meaning, we adhere to that determination under the doctrine of stare decisis, and we judge an agency's later interpretation of the statute against our prior determination of the statute's meaning."). However, where interpretation of the statute is not clear, the agency's interpretation is accorded special deference. Railway Labor Executives Association, 930 F.2d at 514. Rather than impose our own construction on the statute, we must consider whether the agency's interpretation is based on a permissible construction of the statute. Id. As we stated in Central and Southern Motor Freight Tariff Ass'n v. United States, 843 F.2d 886, 891 (6th Cir.1988), "[o]ur task ... is not to determine whether we think the [agency's] construction is the best construction, but only to determine whether the [agency's] construction was 'sufficiently reasonable.' " (citation omitted).

Finally, when considering the ICC's decision regarding an alleged unreasonable practice, an issue of fact, we must review the decision pursuant to 5 U.S.C. § 706 of the Administrative Procedure Act. Accordingly, we must set aside a finding by the ICC which is arbitrary and capricious or unsupported by substantial evidence. 5 U.S.C. § 706(2)(A) and (E).

B.

As previously discussed, Item 110 of Rebel's private tariff, ICC REBL 331-B, states in relevant part:

[s]pecific commodity rates named in the tariff may be used only when no truckload commodity rates are published in ... ICC SMC ... tariffs to apply on the same...