Allen ex rel. Bankruptcy Estate of TSC Express Co. v. Limited Distribution Services, Inc. (In re TSC Express Co.)

159 B.R. 1010, 1993 Bankr. LEXIS 1430
CourtDistrict Court, D. Georgia
DecidedOctober 1, 1993
DocketBankruptcy No. A91-69474-ADK; Adv. No. 93-6291
StatusPublished
Cited by1 cases

This text of 159 B.R. 1010 (Allen ex rel. Bankruptcy Estate of TSC Express Co. v. Limited Distribution Services, Inc. (In re TSC Express Co.)) is published on Counsel Stack Legal Research, covering District Court, D. Georgia primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Allen ex rel. Bankruptcy Estate of TSC Express Co. v. Limited Distribution Services, Inc. (In re TSC Express Co.), 159 B.R. 1010, 1993 Bankr. LEXIS 1430 (gad 1993).

Opinion

MEMORANDUM OF OPINION

A. DAVID KAHN, Chief Judge.

The Plaintiff-Trustee filed the above-styled adversary complaint for turnover of property and money judgment. This is a core proceeding over which the Court has jurisdiction pursuant to 28 U.S.C. § 157(b)(2)(A). The Defendant has moved for an order staying proceedings in the case. The Defendant has also requested that the Court refer the issues of rate reasonableness and rate applicability to the Interstate Commerce Commission (“ICC”) for determination. Plaintiff-Trustee did not respond to the Motion, and as a result, the Motion was deemed unopposed. LR 220-l(b)(l)(NDGa). The following facts are uncontroverted.

On May 14, 1991, an involuntary case under Chapter 7 of the Bankruptcy Code was filed against TSC Express Co. (“TSC”) in the United States Bankruptcy Court for the Northern District of Georgia, Atlanta Division. On July 18, 1991, an Order for Relief was entered. On July 25, 1991, the Plaintiff herein was appointed as Trustee in Bankruptcy (“Plaintiff-Trustee”). Prior to the bankruptcy petition, TSC operated a trucking company authorized to do interstate commerce business as provided for by the rules and regulations of the ICC.

On various dates, Defendant requested and received services from TSC in the form of transportation in intrastate, interstate or foreign commerce of products, goods or merchandise from and to points designated by or for, the account of Defendant. On May 12, 1993, Plaintiff-Trustee filed the instant Complaint for Turnover of Property and for Money Judgment. The claim arose from transportation services performed by TSC for Defendant. This claim is subject to the provisions of the Interstate Commerce Act. 49 U.S.C. § 10101, et seq.

Plaintiff-Trustee seeks to recover alleged undercharges owed by the Defendant for transportation services provided by TSC. The undercharges sought are the difference between its tariff rates filed with the ICC and lower rates, upon which TSC and the Defendant had originally agreed. 49 U.S.C. §§ 10761(a) & 10762. TSC billed, and Defendant paid, the price agreed upon by the parties at the time of shipping. These prices were below the rates contained in the tariff that the Interstate Commerce Act (“ICA”) requires the carrier to publish and file. 49 U.S.C. § 10762. The tariff rate required by §§ 10761(a) & 10762 is frequently referred to as the “filed rate.”

PRIMARY JURISDICTION

Defendant asks that the Court stay its proceedings and refer the issue of rate reasonableness to the ICC. The Court, thus, must be concerned with the doctrine of primary jurisdiction. The Supreme Court has explained primary jurisdiction as

“applying] where a claim is originally cognizable in the courts, and comes into play whenever enforcement of the claim requires the resolution of issue which, under a regulatory scheme, have been placed within the special competence of an administrative body; in such a case, [1012]*1012the judicial process is suspended ending referral of such issues to the administrative body for its views.”

United States v. Western Pac. R.R. Co., 352 U.S. 59, 64, 77 S.Ct. 161, 165, 1 L.Ed.2d 126 (1956). There is no set formula by which a court is to make a determination of when to invoke the doctrine of primary jurisdiction. Rather, the court must make its decision to stay on an ad hoc basis.

The ICC was established with the enactment of the ICA. The ICC is the administrative agency charged with the special competence within the transportation industry and has a vast range of investigative, regulatory, adjudicatory and enforcement powers. 49 U.S.C. §§ 10301-10388. The ICA is a comprehensive scheme of federal law governing charges, practices, duties and liabilities of interstate transport carriers. F.P. Corp. v. Kenway Trans., Inc., 821 P.Supp. 1032 (E.D.Pa.1993).

RATE REASONABLENESS

Defendant contends that Plaintiff-Trustee may not enforce its higher filed tariff rates because they are unreasonable. Defendant further contends the issue of whether filed tariff rates are unreasonable is one within the primary jurisdiction of the ICC.

The Supreme Court has acknowledged that “the filed rate is not enforceable if the ICC finds the rate to be unreasonable.” Maislin Industries, U.S. v. Primary Steel, 497 U.S. 116, 128, 110 S.Ct. 2759, 2767, 111 L.Ed.2d 94. The Court also explained that primary jurisdiction to determine rate reasonableness in an interstate transportation case is fixed in the ICC. The Supreme Court has long recognized this rule. See Thompson v. Texas Mexican Ry., 328 U.S. 134, 147, 66 S.Ct. 937, 945, 90 L.Ed. 1132 (1946) (“[I]n a long line of cases ... it has been held that where the reasonableness or legality of the practices of the parties was subject to the administrative authority of the Interstate Commerce Commission, the court should stay its hand until the Commission has passed on the matter.”). See also, Arizona Grocery Co. v. Atchison, T. & S.F.R. Co., 284 U.S. 370, 52 S.Ct. 183, 76 L.Ed. 348 (1932); Great Northern Ry. v. Merchants Elevator Co., 259 U.S. 285, 42 S.Ct. 477, 66 L.Ed. 943 (1922); Atlantis Express, Inc. v. Standard Transp. Servs., 955 F.2d 529 (8th Cir.1992); Pennsylvania R.R. v. United States, 315 F.2d 460 (3d Cir.1963).

That being the case, the issue of rate reasonableness should appropriately be decided by the ICC. It is the Defendant’s contention that since the issue of rate reasonableness is within the primary jurisdiction of the ICC, it must be referred to that commission. The question, thus, is when should the ICC decide the issue of rate reasonableness. The courts of appeals had, until recently, split on this issue, with a majority holding that a shipper may assert unreasonableness as a defense in an undercharge action brought by the carrier. See Delta Traffic Serv. v. Transtop, Inc., 902 F.2d 101 (1st Cir.1990); Duffy v. BMC Indus., 938 F.2d 353 (2d Cir.1991); Advance United Expressway v. Eastman Kodak,

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159 B.R. 1010, 1993 Bankr. LEXIS 1430, Counsel Stack Legal Research, https://law.counselstack.com/opinion/allen-ex-rel-bankruptcy-estate-of-tsc-express-co-v-limited-distribution-gad-1993.