Kenneth L. Fisher, Robert Wofford and Fred L. Fisher v. Fleming-Babcock, Inc.

745 F.2d 513, 1984 U.S. App. LEXIS 17924
CourtCourt of Appeals for the Eighth Circuit
DecidedOctober 5, 1984
Docket83-1698
StatusPublished

This text of 745 F.2d 513 (Kenneth L. Fisher, Robert Wofford and Fred L. Fisher v. Fleming-Babcock, Inc.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Eighth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Kenneth L. Fisher, Robert Wofford and Fred L. Fisher v. Fleming-Babcock, Inc., 745 F.2d 513, 1984 U.S. App. LEXIS 17924 (8th Cir. 1984).

Opinion

MeMILLIAN, Circuit Judge.

Fleming-Babcock, Inc., an interstate motor common carrier, appeals from a final judgment entered in the District Court for the Western District of Missouri in favor of appellees, independent truck owner-operators, in an action brought by appellees to recover damages for appellant’s failure to comply with fuel surcharge orders of the Interstate Commerce Commission (ICC) and the State Corporation Commission of the State of Kansas (KCC). For reversal appellant argues that (1) the district court lacked subject matter jurisdiction under 28 U.S.C. § 1336(a) (1976), (2) the ICC exceeded its statutory authority in enacting the fuel surcharge order, and (3) the ICC and KCC orders did not apply to shipments of exempt commodities or within exempt territories. For the reasons discussed below, we reverse the judgment of the district court and remand for further proceedings consistent with this opinion.

Appellant is a motor common carrier certified by the ICC to operate in interstate commerce and by the KCC to operate within the state of Kansas. In July 1979 appellant entered into lease agreements with appellee Robert Wofford, an individual truck owner-operator, and Kenfre Trucking Co., a partnership truck fleet owned and operated by appellees Kenneth L. Fisher and Fred L. Fisher, whereby appellant leased appellees’ equipment and hired ap-pellees as drivers of said equipment in return for 88% of the gross revenue from truckloads transported by appellees. Ap-pellees were responsible to pay all fuel costs of these hauls. Such lease arrangements are common in the motor carrier industry. 1

The fuel surcharge regulations

In late spring 1979, in response to rapidly escalating fuel costs which cut heavily into the income of owner-operators and led to the disruption of the trucking industry by owner-operators, the ICC implemented expedited procedures, known as Ex Parte 311, for the recovery by owner-operators of their increased fuel costs. On June 1, 1979, the Commission adopted Special Permission No. 79-2620, which authorized regulated carriers employing owner-operators to file for fuel-based increases in freight charges, by means of a percentage surcharge, on ten days’ notice. A carrier was required to pass the surcharge on to those parties actually responsible for the payment of fuel costs, i.e., the owner-operators. No specific method of calculating the percentage surcharge was adopted. 44 Fed.Reg. 33232 (1979). 2

Two weeks later, on June 15, 1979, the ICC issued Special Permission No. 79-2800, the order which is involved in the present case. This order modified the June 1 surcharge order by requiring only one day’s notice for fuel-based rate increases, by providing a specific- method to be used by the ICC for calculating the allowable surcharge on a weekly basis, and by adding a mandatory component to the surcharge mechanism requiring that all regulated carriers employing owner-operators compensate their respective owner-operators for increased fuel costs at the prescribed surcharge rate from June 15, 1979, forward, whether or not the carriers actually filed for and received such surcharges from their shippers. Unpublished ICC slip order served June 15, 1979 (see Appendix).

These modifications were adopted because the prior procedures did not provide relief to owner-operators to the extent desired. One of the major problems was that carriers often elected not to charge their shippers the extra amount allowed and did not file for Ex Parte 311 surcharges. The ICC believed that the “alarming” rate of fuel price increases created a “situation, especially with regard to owner-operators, *515 of extreme urgency requiring immediate further Commission action to alleviate the impending emergency involving an important segment of the transportation industry and to avoid the possibility of the curtailment of services.” Id.

The ICC adopted a percent-of-revenue method for determining the allowable fuel surcharge. Each we°k the ICC developed a national average percentage increase in fuel prices based on prices as of January 1, 1979 (fuel index), and a national average percentage of fuel expenses over total revenue from transportation performed by owner-operators. By multiplying these two percentages the ICC derived that week’s surcharge percent. Id.

On June 19,1979, Special Permission No. 79-2800 was amended to extend coverage to carriers not using owner-operators. The owner-operator surcharge figure applied to such carriers for traffic moving at truckload (10,000 lbs. or more) rates, while a second and lower percent surcharge applied to such carriers for traffic moving at less-than-truckload rates. 44 Fed.Reg. 37427 (1979). Thereafter, the ICC continued to publish, on a weekly basis, the two surcharge figures.

On June 22,1979, the KCC issued Docket No. 15,600 which, with some reporting and recordkeeping modifications, adopted the ICC fuel surcharge plan for use by KCC regulated carriers.

The present lawsuit

On April 16, 1980, appellees filed their two-count complaint in federal district court alleging that they transported, under lease with appellant, commodities between June 1, 1979, and February 1980, and that appellant failed and refused to comply with the applicable ICC and KCC fuel surcharge regulations. In Count I each appellee sought damages in the amount of the unpaid fuel costs. In Count II Kenfre Trucking Co. sought damages for its net loss in the forced liquidation of its business caused by appellant’s failure to pay the allegedly due fuel costs.

Appellant’s answer denied that the majority of the traffic involved, if any, fell under the jurisdiction and regulation of the ICC or KCC. Appellant moved for summary judgment against both appellees for those shipments of commodities exempt from ICC or KCC regulation and for those shipments in territories exempt from such regulation, because the surcharges did not apply to exempt traffic. Attached to the motion for summary judgment was a list of the loads on which appellees alleged appellant failed to pay for fuel cost increases. The list indicated the place of origin, the destination, the commodity of each load, and the amount allegedly owed based on the prescribed surcharge percentage.

Following trial the district court found that appellees made the hauls in question and that the payments they requested for fuel cost increases were accurately calculated based on the weekly ICC percentages. The district court found that, with the exception of one payment in the amount of $65.57 claimed by Wofford, the fuel costs claimed were not paid by appellant. The district court also found that the business losses sustained by Kenfre Trucking Co. were in the amount claimed.

The district court then concluded as a matter of law that the orders of the ICC and KCC applied to appellant as a regulated carrier whether individual shipments were regulated or exempt. This conclusion was based on the language of the orders directing “all regulated carriers” to compensate their owner-operators for increased fuel costs at the prescribed surcharge percentage, without making a distinction between regulated and exempt shipments.

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745 F.2d 513, 1984 U.S. App. LEXIS 17924, Counsel Stack Legal Research, https://law.counselstack.com/opinion/kenneth-l-fisher-robert-wofford-and-fred-l-fisher-v-fleming-babcock-ca8-1984.