Reiter v. Cooper

Decision Date08 March 1993
Docket NumberNo. 91-1496,91-1496
PartiesPeter C. REITER, et al., Petitioners v. Langdon M. COOPER, Trustee for Carolina Motor Express, Inc., et al
CourtU.S. Supreme Court
Syllabus *

The Interstate Commerce Act (ICA) requires that motor common carriers charge the tariff rates they file with the Interstate Commerce Commission (ICC), 49 U.S.C. § 10762, and that such rates be "reasonable," § 10701(a). Between 1984 and 1986, petitioner shippers tendered shipments to Carolina Motor Express, a motor carrier subject to ICC regulation, at negotiated rates that were lower than the applicable tariff rates on file with the ICC. When Carolina filed for bankruptcy, respondents, the trustee in bankruptcy and a rate auditing firm, brought adversary proceedings against petitioners in the Bankruptcy Court to recover the difference between the negotiated and tariff rates. Petitioners responded, inter alia, that the tariff rates were unlawful because they were unreasonably high. The Bankruptcy Court entered judgment for respondents based on the tariff rates, but the District Court reversed and referred petitioners' defenses to the ICC. The Court of Appeals reversed, holding the petitioners' "unreasonable-rate" claims were no obstacle to respondents' actions because, even if the tariff rates were unreasonable, the "filed rate doctrine" required petitioners to pay those rates first and then seek relief in a separate action under § 11705(b)(3), which gives shippers an express cause of action against carriers for damages (reparations) in the amount of the difference between the tariff rate and the rate determined by the ICC to be reasonable.

Held:

1. Petitioners' unreasonable-rate claims under § 11705(b)(3) are subject to the ordinary rules governing counterclaims. Pp. ____.

(a) While respondents are technically correct that the unreasonable-rate issue cannot be asserted as a defense, petitioners' § 11705(b)(3) claims relate to the same shipments for which respondents seek to collect and, thus, are properly raised here as counterclaims. It makes no difference that the counterclaims may have been mistakenly designated as defenses. See Fed.Rule Civ.Proc. 8(c). P. ____.

(b) The 2-year limitation for bringing a civil action under § 11705(b)(3) is not applicable here since petitioners' claims seek merely recoupment. See United States v. Western Pacific R. Co., 352 U.S. 59, 71, 77 S.Ct. 161, 169, 1 L.Ed.2d 126. Pp. ____.

(c) Nothing in the ICA provides that, in a carrier's undercharge collection action, a § 11705(b)(3) counterclaim is not subject to the normally applicable provisions of the Federal Rules of Civil Procedure, including Rule 54(b). That Rule permits a district court to enter separate final judgment on any claim or counterclaim after making "an express determination that there is no just reason for delay." The "filed rate doctrine"—which embodies the principle that a shipper cannot avoid paying the tariff rate by invoking common-law claims and defenses—does not preclude avoidance of the tariff rate through claims and defenses that are specifically accorded by the ICA itself. Crancer v. Lowden, 315 U.S. 631, 62 S.Ct. 763, 86 L.Ed. 1077, distinguished. Pp. ____.

2. Respondents' arguments that petitioners' counterclaims are not yet cognizable in court are rejected. Pp. ____.

(a) The contention that paying the tariff rate is a prerequisite for litigating the reasonableness issue finds no support in the ICA. Rather, the ICA provides that a claim related to shipment of property accrues on delivery or tender of delivery, § 11706(g). Pp. ____.

(b) Nor are petitioners required initially to present their claims to the ICC. The doctrine of primary jurisdiction requires only that a court enable "referral" to an administrative agency of a claim containing an issue within the agency's special competence, but does not deprive the court of jurisdiction. And the doctrine of exhaustion of administrative remedies—which would deprive the court of jurisdiction—is inapplicable here, both because the ICC has long interpreted the ICA as giving it no power to decree reparations itself, and because the Court can discern within the ICA no intent that ICC determination of the reasonable-rate issue must be obtained before filing the civil action. Pp. 1220-1221.

3. The courts below made no "express determination" required under Rule 54(b) for entry of a separate judgment on respondents' claims, and it cannot be said categorically that it would be an abuse of discretion either to grant or to deny such judgment. Although insolvency of the claimant is a factor weighing against separate judgment in that claimant's favor, this Court cannot say that insolvency is an absolute bar. Curtiss-Wright Corp. v. General Electric Co., 446 U.S. 1, 100 S.Ct. 1460, 64 L.Ed.2d 1, followed. P. 1221.

949 F.2d 107 (CA4 1991), reversed and remanded.

SCALIA, J., delivered the opinion of the Court, in which REHNQUIST, C.J., and WHITE, STEVENS, O'CONNOR, KENNEDY, SOUTER, and THOMAS, JJ., joined. BLACKMUN, J., dissented.

Carter G. Phillips, for petitioners.

Michael R. Dreeben, for U.S. as amicus curiae by special leave of the Court.

Joseph L. Steinfeld, Jr., for respondents.

Justice SCALIA delivered the opinion of the Court.

This case presents the question whether, when a shipper defends against a motor common carrier's suit to collect tariff rates with the claim that the tariff rates were unreasonable, the court should proceed immediately to judgment on the carrier's complaint without waiting for the Interstate Commerce Commission (ICC) to rule on the reasonableness issue.

I

In many ways, this is a sequel to our decision in Maislin Industries, U.S., Inc. v. Primary Steel, Inc., 497 U.S. 116, 110 S.Ct. 2759, 111 L.Ed.2d 94 (1990). The facts of the two cases follow a pattern that has been replicated many times in the era of "deregulation" following enactment of the Motor Carrier Act of 1980, 94 Stat. 793: A motor carrier negotiates with a shipper rates less than the tariff rates that the Interstate Commerce Act (ICA), 49 U.S.C. § 10701 et seq., requires the carrier to "publish and file" with the ICC, 49 U.S.C. § 10762. After the shipments are delivered and paid for (sometimes years after), the carrier goes bankrupt and its trustee in bankruptcy sues the shipper to recover the difference between the negotiated rates and the tariff rates. Shippers' standard defenses against such "undercharge" actions have been (1) that the carrier's attempt to collect more than the agreed-upon rates is an "unreasonable practice" proscribed by the Act, see § 10701(a), and (2) that the tariff rates were unlawful because they were unreasonably high, see ibid. In 1989, the ICC announced a policy approving the first of these defenses. See NITL-Petition to Institute Rulemaking on Negotiated Motor Common Carrier Rates, 5 I.C.C.2d 623 (1989); see also NITL-Petition to Institute Rulemaking on Negotiated Motor Common Carrier Rates, 3 I.C.C.2d 99 (1986); Maislin, 497 U.S., at 121-122, 110 S.Ct., at 2763-2764. Our decision in Maislin held that policy invalid under the ICA, because it would "rende[r] nugatory" the specific command of § 10761 that the carrier charge the filed rate. Id., at 133, 110 S.Ct., at 2769. While Maislin thus eliminated the shippers' "unreasonable-practice" defense, it expressly noted that "[t]he issue of the reasonableness of the tariff rates is open for exploration on remand." Id., at 129, n. 10, 110 S.Ct., at 2767, n. 10. The present case presents a problem of timing that has arisen out of that issue.

The shippers here are petitioners California Consolidated Enterprises (CCE) and Peter Reiter. Between 1984 and 1986, they were engaged in the business of brokering motor carrier transportation, which essentially involves serving as a middleman between motor carriers and the shipping public. During that period, petitioners tendered shipments to Carolina Motor Express, which was operating as a certified motor carrier in interstate commerce subject to regulation by the ICC. Carolina and petitioners negotiated rates for several shipments that were lower than the applicable tariff rates on file with the ICC. (Petitioners believed that Carolina would publish these negotiated rates in its tariffs, but Carolina never did so.)

In 1986, Carolina filed for bankruptcy and respondent Langdon Cooper was appointed trustee. Respondent Mark & Associates of North Carolina was retained to conduct an audit of Carolina's shipping bills, which revealed undercharges (below applicable tariff rates) in the amount of $58,793.03 on shipments made by CCE and $13,795.73 on shipments made by Reiter. Respondents brought adversary proceedings against petitioners in Bankruptcy Court to collect those amounts. Petitioners raised the standard "unreasonable-practice" and "unreasonable-rate" claims, and moved the Bankruptcy Court to stay proceedings and to refer those claims to the ICC. The Bankruptcy Court refused to do so and entered judgment for respondents. In re Carolina Motor Express, 84 B.R. 979 (WDNC 1988). In 1989 (prior to our decision in Maislin ), the District Court reversed and held that the "unreasonable-practice" defense should be referred to the ICC. The Court of Appeals, after holding respondents' appeal in abeyance until our decision in Maislin, reversed the District Court. In re Carolina Motor Express, Inc., 949 F.2d 107 (CA4 1991). It held that, in light of Maislin, there was no need to refer the "unreasonable-practice" issue to the ICC, 949 F.2d, at 109; and that the "unreasonable-rate" claim was no obstacle to the carrier's action, since even if the tariff rates were unreasonable the "filed rate" doctrine requires the shipper to pay them first and then seek relief in a separate action for damages under § 11705(b)(3). Id., at 110-111. We granted certiorari. 504 U.S. ----, 112 S.Ct. 1934, 118 L.Ed.2d 541 (1992).

II

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