Western Elec. Co., Inc. v. Burlington Truck Lines, Inc.

• Decision Date: 29 July 1974
• Docket Number: Nos. 73-1200,s. 73-1200
• Citation: 501 F.2d 928
• Parties: WESTERN ELECTRIC COMPANY, INC., Appellee, v. BURLINGTON TRUCK LINES, INC., et al., Appellants. The PROCTOR & GAMBLE DISTRIBUTING CO. et al., Appellees, v. IDEAL TRUCK LINES, INC., et al., Appellants. UNITED STATES of America, Appellee, v. BURLINGTON TRUCK LINE, INC., et al., Appellants. to 73-1202.
• Court: U.S. Court of Appeals — Eighth Circuit

Page 928

501 F.2d 928

WESTERN ELECTRIC COMPANY, INC., Appellee, v. BURLINGTON TRUCK LINES, INC., et al., Appellants.

The PROCTOR & GAMBLE DISTRIBUTING CO. et al., Appellees, v. IDEAL TRUCK LINES, INC., et al., Appellants.

UNITED STATES of America, Appellee, v. BURLINGTON TRUCK LINE, INC., et al., Appellants.

Nos. 73-1200 to 73-1202.

United States Court of Appeals, Eighth Circuit.

Submitted Feb. 11, 1974.

Decided July 29, 1974.

Arthur R. Hauver, Denver, Colo., for appellants.

Edwin E. Huddleson, Atty., Dept. of Justice, Appellate Section, Washington, D.C., for United States.

Robert B. Ward, Cedar Rapids, Iowa, for Amana.

John C. Noonan, Kansas City, Mo., for Western Electric.

James F. McGovern, St. Paul, Minn., for Land O'Lakes.

Don M. Jackson, Kansas City, Mo., for Proctor & Gamble.

Before HEANEY and BRIGHT, Circuit Judges, and WANGELIN, District judge. ^*

HEANEY, Circuit Judge.

These are consolidated appeals by the defendant motor carriers from judgments entered after trial in favor of the plaintiff shippers. The actions filed by the shippers in the District Court were maintained to enforce an Interstate Commerce Commission refund order. ¹

In March of 1968, the Middlewest Motor Freight Bureau, a tariff publishing agent for motor carriers in the middlewest territory, filed a schedule of rate increases with the I.C.C. These rate increases were to take effect on April 1, 1968. Although the I.C.C. did not suspend the operation of the schedule, it instituted an investigation of the lawfulness of the rates because of protests by various parties.

The Commission ordered that certain evidence be filed, and set a hearing date of May 20, 1968. On April 12, 1968, the General Services Administration and the Department of Transportation requested a 90-day extension for submission of the required evidence. On April 22, 1968, the Middlewest Bureau sought a like postponement for 'the reason . . . that it (was) a physical impossibility for the respondents to compile the required data within the time allowed by the order . . .'. On April 25, 1968, the Commission granted the extension in an order which read in part:

It is further ordered, That the time for filing the requested information and supporting data be, and, it is hereby extended to August 5, 1968; that the hearing be, and it is hereby postponed to August 19, 1968, conditioned upon respondents' compliance with the refund provision ordered below * * *.

And it is further ordered, That respondents be, and they are hereby, ordered to make refunds to the shippers on any shipment moving after May 20, 1968, to the extent that the increases or any portion thereof under investigation herein are not approved by the Commission.

Increased Rates and Charges, From, To and Between Middlewest Territory, I.C.C. No. 34971 (Order of April 25, 1968). The Bureau petitioned for reconsideration of the refund requirement. It withdrew the petition when it learned that in other similar proceedings the Commission had, at the request of other carriers, vacated a refund order but reinstated the original hearing date.

The hearing was held on August 19, 1968. The Commission found, on June 5, 1969, that the proposed increases had not been shown to be just and reasonable, ² and it ordered:

* * * That, in accordance with the order entered herein on April 25, 1968, the respondents be, and they are hereby, required to refund to shippers the charges on shipments moving after May 20, 1968, to the extent that such charges included the increases herein found not shown to be just and reasonable.

Increased Rates and Charges, From, To and Between Middlewest Territory, No. 34971, 335 I.C.C. 142, 151 (June 5, 1969).

The carriers petitioned the Commission to reconsider the refund order or reopen the proceedings for further hearing. They also cancelled the disputed increases on statutory notice, effective August 31, 1969, and filed new rate schedules to become effective September 1, 1969. The schedules filed called for rates higher than those filed in March, 1968. The Commission entered an order on August 29, 1969, declining to suspend or investigate the new increases. It also denied the carriers' petition to reconsider the refund order. It ordered the carriers, in accordance with its decision of June 5, 1969, to:

* * * make refunds to the shippers presenting their claims to the carriers supported by paid freight bills or other appropriate evidence.

Increased Rates and Charges, From, To and Between Middlewest Territory, I.C.C. No. 34971 (Order of August 29, 1969).

On October 27, 1969, the Commission denied an October 9, 1969, petition for reconsideration of the June 5, 1969, decision as affirmed on August 29, 1969.

On January 26, 1970, sixty of the approximately 1,100 carriers filed a complaint in the United States District Court for the District of Colorado. They asked that a three-judge court be convened pursuant to 28 U.S.C. 2284 and 2321-2325. They sought a declaration that the Commission's refund orders were beyond the statutory authority and jurisdiction of the Commission and an injunction against enforcement of the refund requirement. On June 19, 1970, the Colorado District Court issued an order temporarily restraining the I.C.C. from effectuating its refund order. On November 6, 1970, the three-judge court issued a preliminary injunction to the same effect.

In a memorandum opinion and order filed on January 14, 1971, the three-judge court dismissed the carriers' complaint finding that:

We are unable in good conscience, in view of the circumstances presented, to annul the order of the Commission. The Commission was acting in good faith in granting the extension, and the carriers were at the time agreeable to acceptance of the benefits of such an extension order. Their present posture appears to us to be grossly inequitable and not deserving of court intervention. While we do not commend the procedure as one which should be or could be practiced, we do hold that the peculiar facts of this case, arising as they did, are such as to not justify the granting of the relief requested, namely annulment of the Commission's order and approval of the carriers' conduct.

Admiral-Merchants Motor Freight, Inc. v. United States, 321 F.Supp. 353, 360 (D.Colo.1971).

The three-judge court entered judgment against the carriers on February 4, 1971, and vacated the injunction. The United States Supreme Court affirmed the judgment without an opinion on October 12, 1971, 404 U.S. 802, 92 S.Ct. 51, 30 L.Ed.2d 37.

The appellee-shippers then filed suit in the District Court for the Western District of Missouri seeking enforcement of the Commission's refund order. The District Court entered judgment for the shippers in each case before it. It wrote its principal opinion in case No. 73-1201, Proctor and Gamble Co. v. Byers Transportation Co., Inc., 355 F.Supp. 547 (W.D.Mo.1973). It held: (1) that the carriers were precluded because of the decision in Admiral-Merchants from challenging the validity of the refund order under the principle of res judicata and its related concepts; (2) that the Commission's order was an order for the payment of money and, thus, enforceable under 49 U.S.C. 16(2); (3) that the shippers were not barred from recovering damages because of the applicable statute of limitations; and (4) that the shippers were entitled to damages, interest and attorneys' fees. The carriers question the court's decision on each point.

EFFECT OF ADMIRAL-MERCHANTS

The District Court found that all carriers before it were either parties to or privy to parties in the three-judge court action and were bound by the latter court's decision. The carriers do not challenge the court's finding on privity. They do contend, however: (1) that the validity of the Commission's order was not decided by the three-judge court and was subject to attack in the court below; and (2) that the Commission's order is confiscatory and should not be enforced for that reason.

The Seventh Circuit, in discussing the first issue in a case similar to this one stated:

* * * The assertion of this argument requires, as the court below concluded, a 'myopic reading of the opinion' of the Colorado three-judge court. * * * The statement of issues given by the three-judge panel negates any argument that the court was not concerned with the validity of the Commission's refund order: * * *

Aluminum Co. of Amer. v. Admiral Merchants M. Frgt., Inc., 486 F.2d 717, 720 (7th Cir.), cert. denied, 414 U.S. 1113, 94 S.Ct. 843, 38 L.Ed.2d 739 (1973).

An examination of the three-judge court's statement of the issues before it leads us to agree with the Seventh Circuit:

We must decide whether an order of the Commission in which a rate increase is denied, which order directs repayment of interim rates, if determined to be invalid, and which refund order was entered by the Commission as a condition of granting an extension of time to the carriers at their request, is invalid and subject to a judgment annulling the same. We are not involved with the Commission's order denying the increase. We are limited to the propriety and validity of a conditional rate refund order, which order was tacitly or impliedly (by withdrawals of objection) accepted by the carriers, plaintiffs herein.

Admiral-Merchants Motor Freight, Inc. v. United States, supra, 321 F.Supp. at 358.

As the validity of the Commission's order was determined by the three-judge court, the doctrine of collateral estoppel was applicable and the appellees could not reassert its invalidity in the court below. See, 1B J. Moore, Federal Practice PP0.410, 0.441 and 0.443 (2d ed. 1965). Accord, S. S. Kresge Company v. A & B Transfer, Inc., 488 F.2d 894 (6th Cir. 1973), cert. denied, 415 U.S. 960, 94 S.Ct. 1491, 39 L.Ed.2d 575 (1974); Aluminum Co. of Amer. v. Admiral Merchants M. Frgt., Inc., supra.

The carriers' second contention is that enforcement of the refund order will result in the...