North Penn Transfer, Inc. v. Maple Press Co.

176 B.R. 372, 1995 U.S. Dist. LEXIS 318, 1995 WL 13505
CourtDistrict Court, M.D. Pennsylvania
DecidedJanuary 12, 1995
DocketNo. 4:CV-94-0178
StatusPublished
Cited by1 cases

This text of 176 B.R. 372 (North Penn Transfer, Inc. v. Maple Press Co.) is published on Counsel Stack Legal Research, covering District Court, M.D. Pennsylvania primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
North Penn Transfer, Inc. v. Maple Press Co., 176 B.R. 372, 1995 U.S. Dist. LEXIS 318, 1995 WL 13505 (M.D. Pa. 1995).

Opinion

MEMORANDUM

McCLURE, District Judge.

BACKGROUND

Plaintiff North Penn Transfer, Inc. (North Penn) filed this action pursuant to 49 U.S.C. §§ 10741 and 10762 to recover freight charges allegedly owed by the defendant, The Maple Press Company (Maple Press). North Penn is a freight carrier presently operating as a debtor in possession under Chapter 11 bankruptcy, administered before the United States Bankruptcy Court for the Eastern District of Pennsylvania, Case No. 92-10776F. It sues to recover on freight charges at the rate filed by it with the Interstate Commerce Commission (ICC).

North Penn alleges that during the period from February, 1989 through February, 1992, it transported 1,798 shipments for the defendant, but was not compensated at the rates published with the ICC, in violation of federal and state law. It contends that it is owed an additional $49,106.081 in freight hauling fees, plus pre-judgment and post-judgment interest at the legal rate.

Defendant asserts a counterclaim2 for re-coupment grounded in section 11705(b)(3)3 of the Interstate Commerce Act (the act or ICA) against its alleged liability for charges at the published rate. Section 11705(b)(3) imposes liability on carriers who charge rates found to be unreasonably high — an issue decided by the ICC, not this court. Defendant asks that this action be stayed pending referral4 of the unreasonable-rate issue to the ICC (record document no. 3, ¶ 16 and record document no. 18).

Before the court is a motion for summary judgment filed by the plaintiff (record document no. 5). The essential facts are not in dispute. The parties agree on the amounts previously invoiced and paid and on the amount of the ICC published rates. They disagree only on the application of the law to the facts. Defendant has filed a motion to stay these proceedings pending a decision by the ICC on a yet-to-be-filed administrative complaint.5

For the reasons which follow, we will grant plaintiffs motion in part. Judgment will be entered in favor of the plaintiff for the additional invoiced rates, but execution on the judgment will be barred pending further order of court to allow defendant an opportunity to challenge the reasonableness of the published rates before the ICC.

The court expressly determines, under Fed.R.Civ.P. 54(b), that there is no just reason for delay of entry of final judgment in favor of plaintiff on its complaint, and will direct entry of judgment upon receipt of plaintiffs calculation of pre-judgment inter[374]*374est consistent with the remainder of this memorandum and the accompanying order.

DISCUSSION

Reiter v. Cooper

Both sides rely on the United States Supreme Court decision in Reiter v. Cooper, - U.S. -, 113 S.Ct. 1213, 122 L.Ed.2d 604 (1993), but draw different conclusions from its holding. In Reiter, the Court recognized that the ICC statutory requirement that carriers’ rates be “reasonable,” 49 U.S.C. § 10701(a), “gives shippers an express cause of action against carriers for damages ... [or] reparations ...” Id. at -, 113 S.Ct. at 1217, 122 L.Ed.2d at 614. Section 11705(b)(3) provides, the Court held, a cause of action for unreasonable rates which may be asserted as a counterclaim against the carrier in a rate recovery case. Although section 11705(b)(3) claims are generally subject to a two-year statute of limitations running from the date of “delivery or tender of delivery by the carrier,” section 11706(g), that limitation does not apply if such claims are asserted as counterclaims in response to the carrier’s suit. Id. at -, 113 S.Ct. at 1218, 122 L.Ed.2d at 614-15. “Recoupment claims are generally not barred by a statute of limitations so long as the main action is timely.” Id. at -, 113 S.Ct. at 1218, 122 L.Ed.2d at 615.

Because section 11705(b)(3) claims are counterclaims, not defenses,6 the Court held, Rule 54(b) “permits a district court to enter separate final judgment on any claim or counterclaim, after making ‘an express determination that there is no just reason for delay.’ ” Id. The power to enter judgment separately is, the Court further held, “largely discretionary” and “to be exercised in light of ‘judicial administrative interests as well as the equities involved’.giving due weight to ‘the historic federal policy against piecemeal appeals,’ ...” Id. The district court may, but is not required to, stay the collection proceeding until the ICC has ruled on the shipper’s rate reasonableness challenge. Id. at -, 113 S.Ct. at 1219, 122 L.Ed.2d at 616-17.

The Supreme Court specifically disavowed a “pay first” rule, stating that payment of the tariff rate is not a “prerequisite to litigating the rate reasonableness issue.” Id. at -, 113 S.Ct. at 1219, 122 L.Ed.2d at 617, relying upon 49 U.S.C. § 11706(g). Under this section, the court held, shippers can assert a section 11705(b)(3) claim before payment and any time after the accrual date (the date of tender or delivery by the carrier). Id.

The Court went on to state that under the doctrine of primary jurisdiction, courts may “enable” a referral to an administrative agency, “staying further proceedings so as to give the parties reasonable opportunity to seek an administrative ruling.” Id. “Referral of the issue to the administrative agency does not deprive the court of jurisdiction,” the Court made clear. Id. at -, 113 S.Ct. at 1220, 122 L.Ed.2d at 618. The court “has discretion either to retain jurisdiction or, if the parties would not be unfairly disadvantaged, to dismiss the case without prejudice.” Id. If the issue is “referred” to the ICC, the latter determines only the question of the reasonableness of the filed rates; it does not grant reparations relief, since it lacks the authority to do so.7 Id.

In determining whether to enter separate judgment, district courts are required to make the “express determination” re[375]*375quired under Fed.R.Civ.P. 54(b). Id. at -, 113 S.Ct. at 1221, 122 L.Ed.2d at 619. The considerations which factor into that determination are, the Court held:

In the ordinary case, where a carrier is solvent and has promptly initiated suit, the equities favor separate judgment on the principal claim; referral of the unreasonable-rate issue could produce substantial delay, and tariff rates not disapproved by the ICC are legal rates, binding on both the shipper and the carrier ... The equities change, however, when the suing carrier is in bankruptcy. Indeed, we have previously held that even a “threat of insolvency” of the party seeking separate judgment is a factor weighing against it.... Even so, we cannot say that insolvency is an absolute bar.

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176 B.R. 372, 1995 U.S. Dist. LEXIS 318, 1995 WL 13505, Counsel Stack Legal Research, https://law.counselstack.com/opinion/north-penn-transfer-inc-v-maple-press-co-pamd-1995.