Orr v. Interstate Commerce Commission

912 F.2d 119, 1990 WL 120313
CourtCourt of Appeals for the Sixth Circuit
DecidedAugust 22, 1990
DocketNos. 89-5108, 89-5110
StatusPublished
Cited by2 cases

This text of 912 F.2d 119 (Orr v. Interstate Commerce Commission) is published on Counsel Stack Legal Research, covering Court of Appeals for the Sixth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Orr v. Interstate Commerce Commission, 912 F.2d 119, 1990 WL 120313 (6th Cir. 1990).

Opinion

RYAN, Circuit Judge.

Plaintiffs Highway Express, Inc. and James Orr appeal two orders of the district court: 1) a 1988 order affirming the Interstate Commerce Commission (“ICC”) determination and granting partial summary judgment on the interstate claims, and 2) a 1989 order granting summary judgment on the intrastate claims.

The issues we address are:

1. Whether the district court erred in affirming and adopting the ICC’s decision that Highway Express’ attempt to retroactively collect higher rates than those negotiated and paid by Sewell constituted an unreasonable practice under 49 U.S.C. § 10701(a).
2. Whether the district court erred in determining that collecting the intrastate undercharges in question here constituted an unreasonable practice under Mississippi law.

The Supreme Court recently rejected the ICC’s Negotiated Rates doctrine that found actions such as plaintiffs’ to be an unreasonable practice. Thus, we reverse the district court’s adoption of the ICC determination on the interstate claims and the court’s summary judgment for defendant on the intrastate claims. We remand for further proceedings on both issues.

I.

Plaintiff Highway Express, Inc. (“Highway Express”), a motor common carrier, contracted with defendant Sewell Plastics, Inc. (“Sewell”) to transport both interstate and intrastate products manufactured by Sewell. Highway Express negotiated rates with Sewell that were lower than the rates, or “tariffs” as they are known, that were filed with the ICC. The negotiated rates were the amounts used in billing Sewell, and the amounts ultimately paid for the transportation services.

Highway Express ceased operations in 1986. That spring, plaintiff James B. Orr audited Highway Express’ freight bills and later acquired ownership of the bills and the right to collect all balances due. In October 1986, Orr and Highway Express sued defendant Sewell for “undercharges,” or the difference between the filed tariffs and the lower negotiated rates, on shipments made between September 1983 and May 1985, basing their claims on the Interstate Commerce Act, 49 U.S.C. § 10744 et seq., and Miss.Code Ann. § 77-7-213.

After removing the case to federal district court, Sewell requested the court in December 1986, pursuant to the doctrine of primary jurisdiction, to issue an order of reference to the Interstate Commerce Commission. The district court granted Se-well’s request for reference to the ICC in March 1987, although Sewell had already filed a complaint with the ICC in January 1987. In a decision filed February 2, 1988, the ICC found that collection of the undercharges would constitute an unreasonable practice.

In this case, we have determined: that defendant Highway agreed to a negotiated commodity rate; and that it was developed under circumstances in which the shipper could reasonably expect it to be valid. Moreover, it is clear that Sewell tendered the subject traffic to Highway in direct reliance on the rate it had understood to have been negotiated. We find that it would be an unreasonable practice now to require Sewell to pay undercharges for the difference between the amount Highway invoiced and Sewell paid, and the amount contained in Highway’s tariff when the transportation was performed.

[121]*121The district court, on November 17, 1988, affirmed the decision of the ICC and granted summary judgment for Sewell on the interstate claims. Orr v. Interstate Commerce Comm’n, 703 F.Supp. 676 (W.D.Tenn.1988). In January 1989, the district court granted summary judgment for Se-well on the intrastate claims. Orr v. Sewell Plastics, Inc., 707 F.Supp. 967 (W.D.Tenn., 1989). This appeal of both orders followed.

II.

The ICC, pursuant to the Interstate Commerce Act, regulates interstate shipping by motor common carriers. The Act prohibits discrimination and, among other things, requires motor common carriers to file tariffs with the ICC. The carriers must charge customers the filed tariffs, a practice often referred to as “the filed rate doctrine.” The Act also provides that rates and practices of the carriers must be “reasonable.”

The issues in this case address two statutory provisions in the Act, sections 10761 and 10701, and the relationship between them. Section 10761 establishes the basis for the “filed rate doctrine.” It reads in relevant part:

[A] carrier providing transportation ... shall provide that transportation or service only if the rate for the transportation or service is contained in a tariff that is in effect under this subchapter. That carrier may not charge or receive a different compensation for that transportation or service than the rate specified in the tariff whether by returning a part of that rate to a person, giving a person a privilege, allowing the use of a facility that affects the value of that transportation or service, or another device.

49 U.S.C. § 10761(a) (emphasis added).

Section 10701 requires that rates and practices be “reasonable.” “A rate, ... classification, rule, or practice related to transportation or service provided by a carrier subject to the jurisdiction of the Interstate Commerce Commission under chapter 105 of this title must be reasonable.” 49 U.S.C. § 10701.

This case requires analysis of the interplay between these two requirements in a situation in which an attempt to collect the difference between the filed rates and the negotiated lower unfiled rates has been labeled an “unreasonable practice” by the ICC.

III.

Plaintiffs Orr and Highway Express argue that the district court erred in granting summary judgment for defendants based on the ICC’s determination that collection of the undercharges constituted an unreasonable practice. They claim error because of the Supreme Court precedent supporting strict adherence to section 10761(a)’s requirement that rates charged must be filed rates regardless of any equitable considerations.

Defendants argue that the district court properly granted summary judgment based on the ICC’s determination that plaintiffs’ actions in enforcing the higher filed rate would constitute an “unreasonable practice” in violation of 49 U.S.C. § 10701. They assert that the “filed rate” provisions and the “unreasonable practice” provisions are co-equal statutory requirements and that finding an unreasonable practice in this case does not conflict with legal precedent.

The Supreme Court has strictly enforced the filed rate requirements of 49 U.S.C. § 10761(a).

Under the Interstate Commerce Act, the rate of the carrier duly filed is the only lawful charge. Deviation from it is not permitted upon any pretext.

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Bluebook (online)
912 F.2d 119, 1990 WL 120313, Counsel Stack Legal Research, https://law.counselstack.com/opinion/orr-v-interstate-commerce-commission-ca6-1990.