Transcon Lines, In re, s. 94-55668
| Decision Date | 03 July 1996 |
| Docket Number | 94-55674,94-55673,94-56009,94-56008,Nos. 94-55668,s. 94-55668 |
| Citation | 89 F.3d 559 |
| Parties | Fed. Carr. Cas. P 84,018, 96 Cal. Daily Op. Serv. 5003, 96 Daily Journal D.A.R. 8071 In re TRANSCON LINES, Debtor. Leonard L. GUMPORT, Plaintiff-Appellant, v. AT & T TECHNOLOGIES, INC., Defendant-Appellee. Leonard L. GUMPORT, Plaintiff-Appellant, v. ACF INDUSTRIES, INC., Defendant-Appellee. Leonard L. GUMPORT, Plaintiff-Appellant, v. A.O. SMITH CORP., Defendant-Appellee. Leonard L. GUMPORT, Plaintiff-Appellant, v. AMERICAN STANDARD, INC., Defendant-Appellee, Surface Transportation Board, 1 Defendant-Intervenor/Appellee. Leonard L. GUMPORT, Plaintiff-Appellant, v. INTERNATIONAL BUSINESS MACHINES CORPORATION, Defendant-Appellee. Leonard L. GUMPORT, Plaintiff-Appellant-Cross-Appellee, v. EASTMAN KODAK CO., Defendant-Appellee-Cross-Appellant. , 94-56026 and 94-56027. |
| Court | U.S. Court of Appeals — Ninth Circuit |
Joseph L. Steinfeld, Jr., Shawn, Mann & Niedermayer, Washington, DC, for plaintiff-appellant.
Mary Kay Reynolds, Seider & Reynolds, Los Angeles, CA, for AT&T Technologies, Inc. and A.O. Smith Corporation.
Mary Kay Reynolds, Seider & Reynolds, Los Angeles, CA, William J. Augello, Augello, Pezold & Hirshmann, Huntington, NY, for ACF Industries, Inc.
Keith G. O'Brien, Rea, Cross & Auchincloss, Washington, DC, for American Standard, Inc.
Paul R. Duke (argued), Adam M. Cole, Covington & Burling, Washington, DC, for International Business Machines Corporation.
Barbara R. Kueppers (argued), Minneapolis, MN, for Eastman-Kodak Company d/b/a Texas Eastman Company.
Appeals from the United States District Court for the Central District of California, Gary L. Taylor, District Judge, Presiding. D.C. Nos. MISC-29990-GLT, MISC-29991-GLT, MISC-29992-GLT, CV-94-00417-GLT, CV-94-00422-GLT and CV-94-00428-GLT.
Before SCHROEDER, FERGUSON and O'SCANNLAIN, Circuit Judges.
In this bankruptcy proceeding, we must decide whether, under the Interstate Commerce Act, a motor carrier transported shipments as a contract carrier or as a common carrier.
Leonard Gumport, as Chapter 7 Trustee ("Trustee") for debtor Transcon Lines, a motor carrier, appeals the district court's and bankruptcy court's orders upholding the determinations of the Interstate Commerce Commission ("ICC"), 2 which rejected the Trustee's claims under the Interstate Commerce Act ("ICA"), 49 U.S.C. § 10101 et seq., against six of Transcon's former customers who were allegedly undercharged on numerous freight shipments. The Trustee sought to collect interstate motor common carrier freight charges. The ICC determined that the shipments were transported in contract, rather than common, carriage. The Appellees, former shipping customers of Transcon, are ACF Industries, Inc., American Standard, Inc., A.O. Smith Corporation, AT & T Technologies, Inc., Eastman Kodak Company d/b/a Texas Eastman Company, and International Business Machines Corporation (collectively "Shippers"). The ICC intervened on behalf of the Shippers.
Chapter 7 debtor Transcon was once the twelfth largest motor carrier in the United States. It engaged in transport as a common and contract carrier in interstate commerce pursuant to authority issued to it by the ICC. The Chapter 7 Trustee for Transcon initiated these proceedings in bankruptcy court against each of the Shippers in order to collect freight undercharges allegedly due on shipments Transcon transported for each Shipper.
Relying on provisions of the ICA, 49 U.S.C. §§ 10741(a), 10761-10762, the Trustee seeks to repudiate Agreements that Transcon had with each Shipper for the transportation of shipments at agreed contract prices, and to substitute the higher common carrier rates that Transcon had on file in tariffs at the ICC.
The Agreements were entered into between 1985 and 1990. The Trustee claims that the Agreements are "shams" that fail to comply with the statutory and regulatory requirements for contract carriage. The Trustee seeks to recover undercharges totalling more than $60 million from all six Shippers combined.
Since the determination of whether shipments constituted contract carriage is a matter within the primary jurisdiction of the ICC, 3 the bankruptcy court referred the cases to the ICC, which rejected the Trustee's claims of undercharges. 4 The ICC found that the shipments moved as contract carriage subject to rates contained in the Agreements between Transcon and each of the Shippers; accordingly, the ICC concluded that the Trustee had no basis to collect from the Shippers the higher amounts contained in Transcon's common carrier tariffs.
On return to the bankruptcy court, the Shippers moved for summary judgment based on the ICC decisions and the Trustee moved to set aside the decisions. Deferring to and giving effect to the ICC decisions, the bankruptcy court and then the district court granted summary judgments for each of the Shippers. The Trustee filed timely notices of appeal to this court.
Since we are reviewing the judgment of a district court affirming a bankruptcy court decision giving effect to a decision of the ICC, we are effectively reviewing the decision of an administrative agency. See Bankruptcy Estate of United Shipping Company v. General Mills, Inc., 34 F.3d 1383, 1390 (8th Cir.1994) (). Accordingly, rather than the de novo standard of review for summary judgment, we apply the standard of review for agency decisions. Id.
Agency decisions may be set aside only if "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law." Administrative Procedure Act, 5 U.S.C. § 706(2)(A); Idaho Farm Bureau Federation v. Babbitt, 58 F.3d 1392, 1401 (9th Cir.1995). Review under the arbitrary and capricious standard is narrow, and the reviewing court may not substitute its judgment for that of the agency. Marsh v. Oregon Natural Resources Council, 490 U.S. 360, 376, 109 S.Ct. 1851, 1860, 104 L.Ed.2d 377 (1989). However, the agency must articulate a rational connection between the facts found and the conclusions made. United States v. Louisiana-Pacific Corp., 967 F.2d 1372, 1376 (9th Cir.1992). This court may reverse under the arbitrary and capricious standard only if the agency has relied on factors that Congress has not intended it to consider, entirely failed to consider an important aspect of the problem, offered an explanation for its decision that runs counter to the evidence before the agency, or is so implausible that it could not be ascribed to a difference in view or the product of agency expertise. Dioxin/Organochlorine Center v. Clarke, 57 F.3d 1517, 1521 (9th Cir.1995).
An agency's fact findings must be upheld if supported by substantial evidence in the record. See Diamond Walnut Growers v. NLRB, 53 F.3d 1085, 1087 (9th Cir.1995). Substantial evidence means more than a mere scintilla but less than a preponderance; it means such relevant evidence as a reasonable mind might accept as adequate to support a conclusion. Andrews v. Shalala, 53 F.3d 1035, 1039 (9th Cir.1995).
As a threshold matter, we address Cross-Appellant Kodak's affirmative defense that the Trustee lacks standing to bring these undercharge actions.
Kodak bases its standing argument on this court's analysis in ICC v. Transcon Lines, 990 F.2d 1503 (9th Cir.1992), cert. denied sub nom. Gumport v. ICC, 508 U.S. 981, 113 S.Ct. 2987, 125 L.Ed.2d 683 (1993) (). 5 As the bankruptcy court correctly concluded, rather than supporting Kodak's standing challenge, this court's decision in Transcon Lines actually confirms that the Trustee has standing to challenge the Agreements.
Although Transcon Lines involves the same Trustee and debtor carrier present here, the case is clearly distinguishable. Unlike here, where the Trustee is suing the Shippers to collect undercharges based on allegedly flawed Agreements for contract carriage, in Transcon Lines, the Trustee challenged the lawfulness of Transcon's filed "coded discount rate" in an effort to collect the higher, filed "bureau rate" for common carriage. 6 Transcon Lines, 990 F.2d at 1515.
The court in Transcon Lines held that, under the provisions of the ICA for common carriers, the Trustee lacked standing to challenge the lawfulness of Transcon's filed rates. The court stated:
In the technical language of the Act, an attack on the 'legality' of a rate means an allegation that the rate is not a filed rate. As Maislin proves, a carrier has standing to challenge the legality of its own rates.
But it is another matter for a carrier to challenge the lawfulness of its own filed rates.
Id. at 1515-16. In other words, a carrier's bankruptcy trustee may claim that a given rate was illegal because it was not filed (as the Trustee here claims), but the trustee may not claim that a properly filed rate is unlawful.
The court concluded in Transcon Lines that the Trustee lacked standing to challenge Transcon's filed "coded discount rate" in an effort to collect the higher, filed "bureau rate" in common (not contract) carriage because "[a] court has no power to declare a filed rate unlawful and award damages to a carrier for the past application of the rate by the carrier." Id. at 1516. Here, the Trustee is not challenging Transcon's filed rates; quite to the contrary, the Trustee seeks to enforce Transcon's filed rates by challenging the Agreements entered into between the Shippers and Transcon (as a contract carrier), pursuant to which the Shippers paid rates lower than the filed rates.
As alluded to by this court in Transcon Lines, id. at 1515, support for the Trustee's standing here can be found in Maislin Industries, U.S. v. Primary Steel, Inc., 497 U.S. 116, 110 S.Ct. 2759, 111 L.Ed.2d 94 (1990). In Maislin, the parent (Maislin) of a bankrupt subsidiary (a motor carrier, Quinn) sued a shipper (Pr...
To continue reading
Request your trial
-
City of Lincoln City v. U.S. Department of Int.
...is "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law." 5 U.S.C. § 706(2); see In re Transcon Lines, 89 F.3d 559, 563 (9th Cir.1996). This standard also applies to an agency's interpretations of its own regulations. Neighbors of Cuddy Mountain v. USFS, 1......
-
Northern Plains Res. Council, Inc. v. Surface Transp. Bd.
...5 U.S.C. § 706(2)(A). The Board's factual findings must be upheld if they are supported by substantial evidence. In re Transcon Lines, 89 F.3d 559, 564 (9th Cir.1996).III. Jurisdiction. We have jurisdiction under 28 U.S.C. §§ 2321(a), 2342(5), and 2344.DISCUSSIONI. Environmental ClaimsA. Cu......
-
Survival v. Surface Transp. Bd.
...See Coal Exps., 745 F.2d at 94 n. 22. We conclude that substantial evidence supports the agency's findings. See In re Transcon Lines, 89 F.3d 559, 564 (9th Cir.1996) (describing the substantial evidence standard).B. NEPA Petitioners raise a second issue of whether the STB's EIS complied wit......
-
Oregon Natural Desert Ass'n v. Singleton
...of a final agency action is governed by the standard articulated in section 10(e) of the APA, 5 U.S.C. § 706(2)(A); In re Transcon Lines, 89 F.3d 559, 563 (9th Cir.1996). Section 10(e) provides that the reviewing court shall "hold unlawful and set aside agency action ... found to be arbitra......