Delta Traffic Service, Inc., and Oneida Motor Freight, Inc. v. Appco Paper & Plastics Corporation

893 F.2d 472, 1990 U.S. App. LEXIS 265, 1990 WL 996
CourtCourt of Appeals for the Second Circuit
DecidedJanuary 4, 1990
Docket1268, Docket 88-9057
StatusPublished
Cited by16 cases

This text of 893 F.2d 472 (Delta Traffic Service, Inc., and Oneida Motor Freight, Inc. v. Appco Paper & Plastics Corporation) is published on Counsel Stack Legal Research, covering Court of Appeals for the Second Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Delta Traffic Service, Inc., and Oneida Motor Freight, Inc. v. Appco Paper & Plastics Corporation, 893 F.2d 472, 1990 U.S. App. LEXIS 265, 1990 WL 996 (2d Cir. 1990).

Opinion

ALTIMARI, Circuit Judge:

In this case, we consider the “filed rate doctrine,” which requires a motor carrier to collect the rate published in a tariff filed with the Interstate Commerce Commission (“ICC”), and we examine the court’s role in an action to collect undercharges to the filed rate. Defendant-appellant Appco Paper and Plasties Corporation (“Appco”) appeals from a judgment of the United States District Court for the Eastern District of New York (Sifton, Judge) which denied its motion to stay the court proceedings and refer the matter to the ICC, and granted plaintiffs-appellees Delta Traffic Service, Inc. (“Delta”) and Oneida Motor Freight, Inc.’s (“Oneida”) cross-motion for summary judgment under Fed.R.Civ.P. 56. Plaintiffs sought to recover the difference between the rate Oneida negotiated with, charged to, and collected from Appco for 420 shipments moved in interstate commerce by Oneida and the rate filed with the ICC. Appco argued, inter alia, that under the circumstances, collection of undercharges would constitute an unreasonable practice, and that the ICC has primary jurisdiction over the issue of the reasonableness of carrier rates and practices. The district court determined that referral to the ICC was precluded by longstanding precedent holding that courts may not consider equitable defenses to actions seeking collection of undercharges. Judgment was entered against Appco in the total amount of $26,597.27, including prejudgment interest. Since we find that Appco was entitled to a determination by the ICC as to the reasonableness of plaintiffs’ practices, we reverse and remand for further proceedings.

BACKGROUND

In an effort to solicit shipping business, Oneida entered into negotiations over its transportation rates with Appco. Ultimately, Oneida agreed that it would charge Appco a discounted rate for the transportation of its products. Oneida represented to Appco that the rate negotiated between them would be published in a tariff filed with the ICC. Between January 1983 and July 1985, Oneida made 420 shipments of paper goods for Appco. Oneida billed Appco for these shipments at the negotiated rate and Appco paid each invoice in full.

Subsequently, pursuant to a freight audit contract approved by the United States Bankruptcy Court for the District of New Jersey, Delta audited Oneida’s freight bills. Delta determined that the rates paid by Appco for Oneida’s transportation services were less than the rates Oneida filed with the ICC. As a result, Delta created additional invoices in the total amount of $19,-322.42. Thereafter, plaintiffs initiated the present action to recover the undercharges and interest.

In its answer, Appco raised estoppel, waiver, and other affirmative defenses grounded in the equitable maxim that a party ought not to profit from his own wrongdoing. In addition, Appco asserted that “the collection of undercharges based on the rate contained in the filed tariff would constitute an unreasonable practice in light of the negotiated rate.” Thereafter, Appco moved for a stay of proceedings and referral of the matter to the ICC for a determination as to whether collection of undercharges would be an unreasonable practice.

*474 The district court found that the long line of authority which precludes equitable defenses to undercharge claims, see, e.g., Louisville & Nashville R.R. Co. v. Maxwell, 237 U.S. 94, 97, 35 S.Ct. 494, 495, 59 L.Ed. 853 (1915); Nyad Motor Freight, Inc. v. W.T. Grant Co., 486 F.2d 1112, 1114 (2d Cir.1973), also precluded referral of this matter to the ICC. Accordingly, the district court denied Appco’s motion, and granted summary judgment in favor of plaintiffs.

DISCUSSION

Appco contends that issues concerning the reasonableness of Oneida’s practices fall within the primary jurisdiction of the ICC and that the filed rate doctrine does not preclude referral to the ICC for resolution of those issues. We agree.

The doctrine of primary jurisdiction applies when enforcement of a claim originally cognizable in the courts “requires the resolution of issues which, under a regulatory scheme, have been placed within the special competence of an administrative body.” United States v. Western Pacific R.R. Co., 352 U.S. 59, 64, 77 S.Ct. 161, 165, 1 L.Ed.2d 126 (1956). Issues which involve the evaluation of the economics of a regulated industry, see Nader v. Allegheny Airlines, Inc., 426 U.S. 290, 305, 96 S.Ct. 1978, 1987, 48 L.Ed.2d 643 (1976), consideration of factual disputes uniquely within the specialized knowledge of an agency, see Western Pacific R.R., 352 U.S. at 64, 77 S.Ct. at 165, or which require uniformity in the regulation of business entrusted to a particular agency, see Far East Conference v. United States, 342 U.S. 570, 574-75, 72 S.Ct. 492, 494, 96 L.Ed. 576 (1952), properly fall within the primary jurisdiction of an agency. When a court is faced with such an issue, it must suspend judicial process pending referral of that issue to the proper administrative body. See Western Pacific R.R., 352 U.S. at 64, 77 S.Ct. at 165; General American Tank Car Corp. v. El Dorado Terminal Co., 308 U.S. 422, 433, 60 S.Ct. 325, 331, 84 L.Ed. 361 (1940).

The Interstate Commerce Act (“ICA”) provides that “[a] rate ..., classification, rule, or practice related to transportation or service provided by a carrier ... must be reasonable.” 49 U.S.C.A. § 10701(a) (1982) (emphasis added). The Supreme Court long ago declared that “[wjhenever a rate, rule or practice is attacked as unreasonable or as unjustly discriminatory, there must be preliminary resort to the Commission.” Great Northern Ry. Co. v. Merchants Elevator Co., 259 U.S. 285, 291, 42 S.Ct. 477, 479, 66 L.Ed. 943 (1922). A dispute concerning whether particular collection practices are reasonable “raises issues of transportation policy which ought to be considered by the Commission in the interests of a uniform and expert administration of the regulatory scheme laid down by [the ICA],” Western Pacific R.R., 352 U.S. at 65, 77 S.Ct. at 166, and thus falls within the ICC’s primary jurisdiction. See INF, Ltd. v. Spectro Alloys Corp., 881 F.2d 546, 548 (8th Cir.1989); Maislin Indus. v. Primary Steel, Inc., 879 F.2d 400, 403 (8th Cir.1989); Seaboard Sys. R.R., Inc. v. United States,

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893 F.2d 472, 1990 U.S. App. LEXIS 265, 1990 WL 996, Counsel Stack Legal Research, https://law.counselstack.com/opinion/delta-traffic-service-inc-and-oneida-motor-freight-inc-v-appco-paper-ca2-1990.