Vining v. Rock Wool Manufacturing Co. (In re Thompson)

989 F.2d 1424, 1993 WL 124630
CourtCourt of Appeals for the Fifth Circuit
DecidedMay 7, 1993
DocketNos. 92-4160, 92-4201
StatusPublished
Cited by1 cases

This text of 989 F.2d 1424 (Vining v. Rock Wool Manufacturing Co. (In re Thompson)) is published on Counsel Stack Legal Research, covering Court of Appeals for the Fifth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Vining v. Rock Wool Manufacturing Co. (In re Thompson), 989 F.2d 1424, 1993 WL 124630 (5th Cir. 1993).

Opinion

REYNALDO G. GARZA, Circuit Judge:

These two cases were styled differently and scheduled for oral argument consecutively. Although we did not hear oral argument in Vining v. Rock Wool, No. 92-4160, we have consolidated these two cases and dispose of them together in the following opinion.

Rock Wool appeals from a summary judgment entered by the district court for freight undercharges. The district court denied Rock Wool the opportunity to assert the counterclaim of rate unreasonableness in the plaintiffs undercharge action. However, the court did not make an “express determination” required under Rule 54(b) for entry of a separate judgment. Further, because the district court did not transfer the issue of tariff unreasonableness to the ICC under the primary jurisdiction doctrine on remand it must either make such an express determination or refer the issue of reasonableness to the ICC.

Makita also appeals an adverse summary judgment entered by the district court for freight undercharges. We find that the summary judgment was entered improperly in two respects. First, one of the four tariffs considered by the trial court appears to be a valid filed discount tariff and summary judgment as to any shipments made pursuant to that tariff was improper. Secondly, Makita was also improperly denied the opportunity to assert its counterclaim. Therefore, we REVERSE the district court’s entry of summary judgment as to both Makita and Rock Wool and REMAND both cases consistent with the following opinion.

I. FACTS

On August 30, 1989, Steven D. Thompson Trucking, Inc. (“Thompson”) filed for Chapter 11 bankruptcy. Subsequently, the case was converted to a chapter 7 bankruptcy at which time Billy R. Vining was appointed trustee of the debtor. Vining, as trustee, filed an adversary proceeding against the defendants, Rock Wool and Makita, to recover freight undercharges.

a. Rock Wool.

Thompson and Rock Wool had negotiated rates on interstate transportation that were below the applicable published tariffs. The trustee conducted an audit of Thompson’s books and discovered undercharges on previous freight bills to Rock Wool. The audit revealed that Rock Wool had received discounts that were not based on valid filed tariffs with the Interstate Commerce Commission (“ICC”). The 35 audited freight bills totalled $7,950.59 in undercharges. The trustee commenced this action seeking to recover the difference between the contracted rate and the higher filed tariff rate because under the filed rate doctrine,1 car[1427]*1427riers are not permitted to vary from the tariff rate.

b. Makita.

Makita and Thompson had negotiated rates on interstate transportation that were below the applicable published tariffs. The trustee conducted an audit of Thompson’s books and discovered undercharges on previous freight bills to Makita. The audit revealed that Makita had received discounts that were not based on valid filed tariffs with the Interstate Commerce Commission (“ICC”). Makita’s audited freight bills totalled $17,697.85 in undercharges.

II. PROCEDURE

The bankruptcy court found that Vining was entitled to a judgment for $7,950.59 plus interest from Rock Wool. The court also found that Vining was entitled to a judgment for $17,697.85 plus interest from Makita. The court determined that both Rock Wool and Makita had contracted with Thompson in violation of the filed rate doctrine at an unpublished discount rate. Therefore, the court assessed undercharges against both of them, which were calculated by deducting the amount they had actually paid from the higher applicable published tariff.

Rock Wool and Makita contended that: (a) Thompson should be estopped from varying from its negotiated rate; (b) the tariff rate to be applied was unreasonable; and (c) certain documents were inadmissible copies of originals. Rock Wool alone contended that: (d) it and Thompson were engaged in contract carriage and, thus, was exempt from the filed tariff rate. Makita alone contended that: (e) the discount rates that it paid were on file with the ICC.

a. Estoppel.

The bankruptcy court rejected the equitable defenses raised by the defendants out of hand. The court reasoned that equitable defenses, such as estoppel, were not available in the face of the inflexible, unyielding filed rate doctrine. See, e.g., Armour Packing Co. v. United States, 209 U.S. 56, 81, 28 S.Ct. 428, 435, 52 L.Ed. 681 (1908) (“If the rates are subject to secret alteration by special agreement, then the statute will fail of its purpose”); see also Illinois Cent. Gulf R.R. Co. v. Golden Triangle Wholesale Gas Co., 586 F.2d 588, 592 (5th Cir.1978) (rejecting estoppel defense, storage charges in tariff applied despite repeated assurances by carrier that they would not apply). The court proceeded to note that even intentional or fraudulent misquotation of the rate will not provide the defendant with a defense to the filed rate. See Paulson v. Greyhound Lines, Inc., 628 F.Supp. 888, 892 (D.Minn.) (citing Pittsburgh, Cincinnati, Chicago & St. Louis R.R. Co. v. Fink, 250 U.S. 577, 581, 40 S.Ct. 27, 27, 63 L.Ed. 1151 (1919)) (shipper is conclusively presumed to know the terms of the published tariff), aff'd, 804 F.2d 506 (8th Cir.1986).

b. Tariff Unreasonableness.

Next, Rock Wool and Makita both contended that the tariffs used in computing their undercharges were unreasonable. The court rejected their contention, holding that the only available avenue to challenge the reasonableness of a carrier’s rate is to pay the overcharges and then commence a reparations action before the ICC. See 49 U.S.C. § 11705(b)(3). The court based its decision in this regard on Matter of Caravan Refrigerated Cargo, Inc., 864 F.2d 388, 391 (5th Cir.1989), cert. denied, 497 U.S. 1010, 110 S.Ct. 3254, 111 L.Ed.2d 763 (1990).2 Moreover, the court stated: “[ejven if the unreasonableness of the debt- or’s rates would have been a defense in this action, defendant completely failed to show that there existed any issue of material fact concerning the reasonableness or the applicability of the rates in the tariffs uti[1428]*1428lized in reaching the amount of the undercharges.”

c. Admissibility of Photocopies.

Rock Wool and Makita also contended that certain documents were not originals or were not authenticated. However, the bankruptcy court rejected this contention because both parties failed to allege that any of the documents were not accurate copies or that the tariffs were not complete and accurate. See Fed.R.Evid.

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