West Coast Truck Lines, Inc. v. American Industries, Inc.

• Decision Date: 08 January 1990
• Docket Number: No. 88-15518,88-15518
• Citation: 893 F.2d 229
• Parties: WEST COAST TRUCK LINES, INC., an Oregon Corporation, Plaintiff-Appellant, v. AMERICAN INDUSTRIES, INC., dba American Steel, an Oregon Corporation, Defendant-Appellee.
• Court: U.S. Court of Appeals — Ninth Circuit

Page 229

893 F.2d 229

WEST COAST TRUCK LINES, INC., an Oregon Corporation Plaintiff-Appellant, v. AMERICAN INDUSTRIES, INC., dba American Steel, an Oregon Corporation, Defendant-Appellee.

No. 88-15518.

United States Court of Appeals, Ninth Circuit.

Argued and Submitted Oct. 3, 1989.

Decided Jan. 8, 1990.

Miles L. Kavaller, Beverly Hills, Cal., for plaintiff-appellant, West Coast Truck Lines, Inc.

Gary C. Borchard, Redding, Cal., for defendant-appellee, American Industries, Inc.

Appeal from the United States District Court for Eastern California.

Before WALLACE, PREGERSON and ALARCON, Circuit Judges.

ALARCON, Circuit Judge:

West Coast Truck Lines, Inc., (West Coast) appeals from the judgment dismissing without prejudice its action against American Industries, Inc. (American Industries) to collect undercharges. The district court based its dismissal on the lack of subject matter jurisdiction to review a ruling by the Interstate Commerce Commission (ICC). The ICC ruled that the collection of undercharges that are the subject of the controversy alleged in the complaint would be an unreasonable practice in violation of 49 U.S.C. Sec. 10701(a).

We must decide whether the ICC's ruling was a final, appealable order and, if so, whether West Coast lost its right to a review of the merits of the ICC's declaration because of its failure to file a timely, direct appeal of that ruling to this court. We conclude that the ruling by the ICC was a final and appealable order that resolved the merits of the controversy before the district court. We reverse the dismissal of the action and instruct the district court to enter summary judgment on the merits for American Industries because the ICC ruling has provided American Industries with an unassailable defense to the issues raised in West Coast's complaint.

PROCEDURAL POSTURE

West Coast, formerly an interstate motor carrier, initiated this action by filing a complaint on January 26, 1987, to collect undercharges for the transportation of steel in 1984. West Coast sought to recover, as damages, the difference between the rate it filed with the ICC and the lower figure it negotiated with and collected from American Industries. The complaint alleges that the undercharges total $5,328.90.

In its responsive pleadings, American Industries denied that any additional charges were owed to West Coast. American Industries also asserted that, because collection of undercharges constituted an unreasonable practice under 49 U.S.C. Sec. 10701, West Coast should be equitably estopped from collecting them.

On June 17, 1987, American Industries filed a motion to stay the district court On August 26, 1987, American Industries filed a petition for a declaratory order with the ICC. American Industries requested that the ICC determine whether West Coast's attempt to collect undercharges constituted an unreasonable practice.

proceedings and to refer the issue of unreasonable practice to the ICC. The district court declined to use the formal referral process, but instead issued an order on July 17 staying the proceedings to permit American Industries to file a petition for a declaratory order before the ICC.

The ICC issued its ruling on the petition on April 25, 1988. The ICC declared that, based on the facts in the record before it, it would be an unreasonable practice to permit West Coast to collect undercharges four years after the shipments. On July 5, 1988, the district court issued an order vacating the stay and dismissing the action without prejudice on the ground that it lacked subject matter jurisdiction to review the ICC's order.

West Coast filed a motion in the district court to alter, amend, or vacate the order dismissing this action. West Coast contended that the order staying the proceedings constituted a referral to the ICC. West Coast argued that the district court had jurisdiction to review the ruling under 28 U.S.C. Sec. 1336(b). The district court rejected this argument and denied the motion. West Coast filed this timely appeal from the judgment of the district court.

DISCUSSION

I. Jurisdiction

We review the dismissal of an action for lack of subject matter jurisdiction de novo without deference to the district court's rulings on questions of law. Kruso v. International Tel. & Tel. Corp., 872 F.2d 1416, 1421 (9th Cir.1989). We must accept the district court's factual findings on jurisdictional issues unless they are clearly erroneous. Stock West, Inc. v. Confederated Tribes of the Colville Reservation, 873 F.2d 1221, 1225 (9th Cir.1989).

West Coast relied on 49 U.S.C. Secs. 10701, 10741, 10761 and 10762 and 28 U.S.C. Sec. 1337, in support of its claim for the collection of the difference between the amount it had previously collected and the interstate motor carrier freight charges required by its tariff on file with the ICC. The district court had jurisdiction over West Coast's complaint at the time it was filed because a claim for undercharges arises under federal law. See 28 U.S.C. Sec. 1331 (1982); Thurston Motor Lines, Inc. v. Jordan K. Rand, Ltd., 460 U.S. 533, 533-34, 103 S.Ct. 1343, 1343-44, 75 L.Ed.2d 260 (1983) (per curiam) (upholding jurisdiction over an action to collect a filed rate). Because dismissal of the action was a final order, we have jurisdiction over this appeal pursuant to 28 U.S.C. Sec. 1291.

A. Referral

West Coast contends that the district court had jurisdiction to either accept or reject the ICC's ruling because the parties and the ICC treated the district court's stay of the proceedings as a referral. Because referral to the ICC has significant procedural consequences, a district court's stay of an action to allow a parallel ICC action to proceed will not be treated as a referral under 28 U.S.C. Sec. 1336(b) unless the district court clearly implies or explicitly states that it is referring the case to the ICC. Seaboard System R.R. v. United States, 794 F.2d 635, 639 (11th Cir.1986); City of New Orleans v. Southern Scrap Material Co., 704 F.2d 755, 759 (5th Cir.1983). A referral gives the district court exclusive jurisdiction "to enforce, enjoin, set aside, annul, or suspend" the resulting ICC order. 28 U.S.C. Sec. 1336(b) (1982). In the instant matter, the district court explicitly stated that it "declined to use the formal referral procedure but rather required defendant to file its petition directly before the ICC." The record is quite clear that there was no referral to the ICC of the issue of unreasonable practices.

B. Primary Jurisdiction of the ICC over Unreasonable Practice Claims

Although it declined to use the referral process, the district court properly stayed West Coast's action provided that the ICC

had primary jurisdiction to determine whether West Coast's collection of undercharges would be an unreasonable practice. The doctrine of primary jurisdiction provides that courts should refer certain claims to administrative agencies for initial determination. United States v. Western Pac. Ry. Co., 352 U.S. 59, 63-64, 77 S.Ct. 161, 164-65, 1 L.Ed.2d 126 (1956) (when a claim requires resolution of issues within the special competence of an administrative body, "the judicial process is suspended pending referral of such issues to the administrative body for its views"). West Coast does not dispute that the ICC has primary jurisdiction to determine issues of rate reasonableness. See Nader v. Allegheny Airlines, Inc., 426 U.S. 290, 304, 96 S.Ct. 1978, 1987, 48 L.Ed.2d 643 (1976) (primary jurisdiction has been applied when an action questions the validity of a rate or practice included in a tariff filed with the Civil Aeronautics Board); United States v. Western Pac. R.R. Co., 352 U.S. 59, 62-70, 77 S.Ct. 161, 164-68, 1 L.Ed.2d 126 (1956) (issues of tariff construction and tariff reasonableness are initially matters for ICC determination); Great N. Ry. Co. v. Merchants Elevator Co., 259 U.S. 285, 291, 42 S.Ct. 477, 479, 66 L.Ed. 943 (1922) ("Whenever a rate, rule, or practice is attacked as unreasonable ..., there must be preliminary resort to the Commission.").

C. Statute of Limitations

West Coast argues that, in the absence of a referral, the ICC's authority to determine issues of rate reasonableness must derive from 49 U.S.C. Sec. 11705(b)(3). Section 11705(b)(3) provides that "[a] common carrier providing transportation or service subject to the jurisdiction of the Commission ... is liable for damages resulting from the imposition of rates for transportation or service the Commission finds to be in violation of this subtitle." 49 U.S.C. Sec. 11705(b)(3) (1982). West Coast argues that the petition American Industries filed with the ICC fails to meet the requirements of 49 U.S.C. Sec. 11705(c), which permits the filing of complaints with the ICC to enforce liability against common carriers. Complaints under Sec. 11705(c) must be filed within two years after the claim accrues, 49 U.S.C. Sec. 11706(c)(2) (1982), and West Coast argues that the statute of limitations has run.

West Coast bases its statute of limitations claim on 49 U.S.C. Sec. 11706(g), which states that "[a] claim [filed pursuant to Sec. 11705(b)(3) ] related to a shipment of property accrues ... on delivery or tender of delivery by the carrier." 49 U.S.C. Sec. 11706(g) (1982). Because all of the shipments at issue in American Industries' petition were delivered at least two years before the petition was filed, West Coast reasons, these shipments are time-barred from ICC consideration.

West Coast's reliance on the statute of limitations is misguided. "The statute of limitations in the Interstate Commerce Act, 49 U.S.C. Sec. 11706, refers only to actions seeking payment of money, which [a request for a declaration of unreasonableness] would not, technically anyway, be." Western Transp. Co. v. Wilson & Co., 682 F.2d 1227, 1232 (7th Cir.1982). It has long been established that, in the referral context, the statute of limitations does not "bar reference...