United Shipping Company, Inc. v. General Mills, Inc.

34 F.3d 1383, 1994 U.S. App. LEXIS 24123, 25 Bankr. Ct. Dec. (CRR) 1732
CourtCourt of Appeals for the Eighth Circuit
DecidedSeptember 7, 1994
Docket93-1232
StatusPublished

This text of 34 F.3d 1383 (United Shipping Company, Inc. v. General Mills, 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
United Shipping Company, Inc. v. General Mills, Inc., 34 F.3d 1383, 1994 U.S. App. LEXIS 24123, 25 Bankr. Ct. Dec. (CRR) 1732 (8th Cir. 1994).

Opinion

34 F.3d 1383

25 Bankr.Ct.Dec. 1732

The BANKRUPTCY ESTATE OF UNITED SHIPPING COMPANY, INC., Appellant,
v.
GENERAL MILLS, INC., Appellees.
United States of America, on behalf of the Interstate
Commerce Commission, Intervenor-Appellee.

No. 93-1232.

United States Court of Appeals, Eighth Circuit.

Submitted Oct. 11, 1993.
Decided Sept. 7, 1994.

Thomas E. Wolff, Eden Prairie, MN, argued, for appellant.

Brent William Primus, Minneapolis, MN, argued (Louis A. Harris and William J. Augello, on the brief), for appellee.

Before McMILLIAN, Circuit Judge, LAY, Senior Circuit Judge, and BOWMAN, Circuit Judge.

McMILLIAN, Circuit Judge.

The Bankruptcy Estate (Estate) of United Shipping Co. (United), the plaintiff in an adversary proceeding in the bankruptcy court, appeals from a final judgment entered in the District Court for the District of Minnesota1 that affirmed the order of the bankruptcy court2 awarding summary judgment in favor of General Mills, Inc. (General Mills). In re United Shipping Co., No. 3-92-0668, 1992 WL 683810 (D.Minn. Dec. 24, 1992), aff'g No. 4-88-533 (Bankr.D.Minn. Aug. 27, 1992) (No. ADV 4-89-345). The United States intervened in the appeal on behalf of the Interstate Commerce Commission (Commission or ICC) because Estate challenged the bankruptcy court's decision to give effect to a determination made by the ICC, pursuant to the bankruptcy court's referral, that the transportation relationship between United and General Mills constituted contract carriage. General Mills, Inc., 8 I.C.C.2d 313 (1992) (General Mills ). For reversal, Estate argues that the district court erred in applying a deferential standard of review and in affirming the decision of the ICC because the ICC failed to follow its own precedents and in effect improperly attempted to retroactively invalidate the applicable regulation, 49 C.F.R. Sec. 1053.1 (1991). Estate also argues the bankruptcy court erred in failing to award prejudgment interest. For the reasons discussed below, we affirm in part and reverse in part and remand the case with directions.

REGULATORY BACKGROUND

The ICC is an independent regulatory agency charged by Congress to administer the Interstate Commerce Act (ICA), as amended, 49 U.S.C. Sec. 10101 et seq., including the regulation of interstate motor carrier transportation. To lawfully provide interstate motor carriage, a person must obtain appropriate operating authority from the ICC. Id. Secs. 10921-10923. The ICC has plenary power to supervise and insure that carriers comply with their licensing permits. Id. Secs. 10925, 11701(a), 11702(a)(4).

Motor carriers regulated by the ICC can operate as contract carriers as well as common carriers. Common carriage involves services that are held out indiscriminately to all shippers; contract carriage is limited to shippers with which carriers enter into specific agreements or contracts. A carrier may be licensed to provide services in one or both capacities. Id. Secs. 10102(14), 10923(b). The prohibition against "dual operations," that is, providing both common and contract carriage, was eliminated in 1980. Motor Carrier Act of 1980; Pub.L. No. 96-296, 94 Stat. 793 (repealing 49 U.S.C. Sec. 10930(a)(1)). This case demonstrates the difficulties one encounters in distinguishing contract carriage from common carriage.

Motor common carriers must publish and file tariffs with the ICC containing their transportation rates. 49 U.S.C. Sec. 10762; see e.g., Security Services, Inc. v. K Mart Corp., --- U.S. ----, ----, 114 S.Ct. 1702, 1706, 128 L.Ed.2d 433 (1994). The applicable tariff rate (the filed rate) filed by a common carrier is the legal rate and the only rate that the carrier may charge, and that a shipper may pay, for common carriage unless and until that rate is set aside by the ICC as unreasonable or unlawful. 49 U.S.C. Sec. 10761(a); Maislin Industries, U.S., Inc. v. Primary Steel, Inc., 497 U.S. 116, 120, 128-29, 110 S.Ct. 2759, 2762-63, 2766-67, 111 L.Ed.2d 94 (1990) (Maislin); ICC v. American Trucking Ass'ns, 467 U.S. 354, 360 n. 4, 104 S.Ct. 2458, 2462 n. 4, 81 L.Ed.2d 282 (1984) (American Trucking ); see also Reiter v. Cooper, 113 S.Ct. 1213 (1993). The purpose of the filed rate doctrine is to prevent rate discrimination and to promote rate stabilization.

Motor contract carriage is exempt from the tariff filing requirement and, therefore, the filed rate doctrine does not apply to shipments that move as contract carriage. 49 U.S.C. Secs. 10761(b), 10762(f); Exemption of Motor Contract Carriers from Tariff Filing Requirements, 133 M.C.C. 150 (1983), aff'd sub nom. Central & Southern Motor Freight Tariff Ass'n v. United States, 244 U.S.App.D.C. 226, 757 F.2d 301, cert. denied, 474 U.S. 1019, 106 S.Ct. 568, 88 L.Ed.2d 553 (1985). Yet, like the obligation of a common carrier to adhere to its filed rates, a contract carrier must observe the limits of its operating permit and may not, under its contract permit, provide or unilaterally recharacterize its service as a common carriage. If a contract carrier believes that its operations have crossed over into common carriage, it must test that in a proceeding brought before the ICC and, if necessary, have the ICC modify or revoke its contract carriage permit. 49 U.S.C. Sec. 10925(e); see Global Van Lines, Inc. v. ICC, 704 F.2d 829, 833-34 (5th Cir.1983).

Because Congress has given the ICC broad regulatory responsibility over a carrier's contract carriage operations, ICC v. J-T Transport Co., 368 U.S. 81, 88, 82 S.Ct. 204, 209, 7 L.Ed.2d 147 (1961), it is for the ICC to interpret and apply the statutory standards that define contract carriage. Atlantis Express, Inc. v. Standard Transportation Services, Inc., 955 F.2d 529, 532-34 (8th Cir.1992). The ICA defines a contract carrier as a person providing motor carriage under continuing agreements by either assigning vehicles for the exclusive use of a shipper or providing service designed to meet that shipper's distinct needs. 49 U.S.C. Sec. 10102(15)(B)(ii). At the time of the General Mills decision (March 1992), ICC regulations also required that contract carrier agreements be bilateral and in writing, provide for transportation for a particular shipper or shippers, impose specific obligations upon both carrier and shipper or shippers, and cover a series of shipments during a stated period of time in contrast to separate contracts of carriage governing individual shipments. See 49 C.F.R. Sec. 1053.1 (1991) (repealed, effective June 20, 1992, in Contracts for Transportation Property, Ex Parte No. MC-198 (I.C.C. Mar. 5, 1991, Sept. 11, 1991), 8 I.C.C.2d 520 (1992), appeal dismissed sub nom. Central States Motor Freight Bureau, Inc. v. United States, No. 92-1258, 1993 WL 558020 (D.C.Cir. Dec.

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34 F.3d 1383, 1994 U.S. App. LEXIS 24123, 25 Bankr. Ct. Dec. (CRR) 1732, Counsel Stack Legal Research, https://law.counselstack.com/opinion/united-shipping-company-inc-v-general-mills-inc-ca8-1994.