Whitaker v. Younkers, Inc. (In re Olympia Holding Corp.)

142 B.R. 477, 6 Fla. L. Weekly Fed. B 154, 1992 Bankr. LEXIS 961, 23 Bankr. Ct. Dec. (CRR) 123
CourtUnited States Bankruptcy Court, M.D. Florida
DecidedJune 15, 1992
DocketBankruptcy Nos. 90-4195-BKC-3P7, 90-4223-BKC-3P7; Adv. No. 91-448
StatusPublished
Cited by1 cases

This text of 142 B.R. 477 (Whitaker v. Younkers, Inc. (In re Olympia Holding Corp.)) is published on Counsel Stack Legal Research, covering United States Bankruptcy Court, M.D. Florida primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Whitaker v. Younkers, Inc. (In re Olympia Holding Corp.), 142 B.R. 477, 6 Fla. L. Weekly Fed. B 154, 1992 Bankr. LEXIS 961, 23 Bankr. Ct. Dec. (CRR) 123 (Fla. 1992).

Opinion

FINDINGS OF FACT AND CONCLUSIONS OF LAW

GEORGE L. PROCTOR, Bankruptcy Judge.

This adversary proceeding came to be heard upon the Motion of Defendant for Referral to the Interstate Commerce Commission. A hearing was held on December 13, 1991. Upon the evidence presented, the Court makes the following Findings of Fact and Conclusions of Law:

[478]*478 Findings of Fact

Debtor was both a motor common and motor contract carrier operating in interstate commerce pursuant, to the authority of the Interstate Commerce Commission (“ICC”).

Debtor filed tariffs with the ICC which provided for a Class 70 exception rate with a discount of 55-59% off of that Class 70 exception rate. Subsequent to the filing of such tariff rate, debtor filed tariff item 721 stating that any customer not paying its bill within 60 days of the date of the invoice would lose its class exception and its discount (“loss-of-discount tariff”).

Debtor filed a chapter 11 petition on October 16, 1990. Lloyd T. Whitaker was appointed as chapter 11 trustee on December 26, 1990. The case was subsequently converted to chapter 7 on March 11, 1991, and Lloyd T. Whitaker was appointed the chapter 7 trustee.

Defendant, as shipper, and Debtor, as common carrier, did business together on a tariff basis for a substantial amount of time.

In late November and early December of 1990, a dispute arose between debtor and defendant. Defendant claimed approximately $14,000.00 against debtor for goods lost or damaged in shipment and withheld payment on the shipping bills.

Plaintiff conducted an audit of debtor’s records and determined that the original amounts billed were not properly rated in accordance with the filed tariff. Accordingly, the plaintiff sent new bills to defendant which did not include the class exception or the discount and which were rerated at the full class rates. The rerated bills represented an increase in rates from the original bills of at least 65-69%. Plaintiff based the change on the loss-of-discount tariff. Defendant refused to pay the rerat-ed bills.

On June 20, 1991, plaintiff filed this adversary proceeding seeking turnover of property and a money judgment for $31,-516.48, based on the rerated bills. Defendant filed an answer raising the defenses of set-off and unreasonable rates and asked that the proceeding be referred to the ICC. With plaintiff’s consent, defendant later filed an amended answer asserting further defenses, as well as a counterclaim for damages.

Defendant contends that 1) the tariff rates on which plaintiff relies are inapplicable to the shipments in question; 2) if the rates do apply, they are unreasonable and unlawful under 49 U.S.C. § 10701(a); 3) the tariff rules violate 49 U.S.C. § 10761 and ICC regulations contained in 49 C.F.R. Part 1320; and 4) some sums sought by plaintiff were not demanded until after the requisite time periods of 49 C.F.R. parts 1320.2(e)(2) and (3), 1320.2(g)(2)(vi).

Plaintiff, on the other hand, argues that 1) this Court does not have jurisdiction under 28 U.S.C. § 1336(b) to make a referral to the ICC; 2) referral is not necessary because defendant must pay the filed rate and then seek reparations; 3) the loss-of-discount tariff does not violate ICC credit regulations, and 4) violation of the credit regulations is not a defense to enforcement of filed tariff rates.

Thus, the Court must initially determine whether it has the authority under 28 U.S.C. § 1336 to refer any issue to the ICC. If the Court does have such power, the question arises as to whether the issues raised in this proceeding must be resolved by the administrative agency and if so, at what point in time must such a determination be made.

Conclusions of Law

A. Referral Power

Congress provided in 28 U.S.C. § 1334(b) that “... district courts shall have original but not exclusive jurisdiction of all civil proceedings arising under title 11, or arising in or related to cases under title 11.” Under 28 U.S.C. § 157(a), the district court may provide that any or all cases or proceedings arising under title 11 shall be referred to the bankruptcy judges. The United States District Court for the Middle District of Florida has entered such a referral order. Rule 104, Local Rules for the Middle District of Florida. Accordingly, this bankruptcy case and this adversary [479]*479proceeding have been referred to this Court.

The district court’s jurisdiction to refer issues to the ICC is embodied in 28 U.S.C. § 1336, which provides in relevant part:

(a) Except as otherwise provided by Act of Congress, the district courts shall have jurisdiction of any civil action to enforce, in whole or in part, any order of the Interstate Commerce Commission, and to enjoin or suspend, in whole or in part, any order of the Interstate Commerce Commission for the payment of money or the collection of fines, penalties, and forfeitures.
(b) When a district court or the United States Claims Court refers a question or issue to the Interstate Commerce Commission for determination, the court which referred the question or issue shall have exclusive jurisdiction of a civil action to enforce, enjoin, set aside, annul, or suspend, in whole or in part, any order of the Interstate Commerce Commission arising out of such referral.

Under the district court’s referral order, the bankruptcy court is sitting in the adversary proceeding as a unit of the district court. Thus, for purposes of 28 U.S.C. § 1336, “district court” includes the bankruptcy court. Railway Labor Executives’ Assn. v. ICC, 894 F.2d 915 (7th Cir.) reh’g denied, 908 F.2d 127 (7th Cir.1990); In re Total Transportation, Inc., 84 B.R. 590 (D.Minn.1988). Accordingly, this Court has jurisdiction to refer the issues at hand to the ICC.

It should also be noted that although his brief argues to the contrary, plaintiff’s counsel stated during the hearing that this Court has “the power to refer matters to any federal agency, including the ICC.” (Transcript at page 9).

B. Primary Jurisdiction

The doctrine of primary jurisdiction serves to ensure that the courts provide administrative agencies charged with specific regulatory responsibilities the appropriate opportunity to fulfill such duties.

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142 B.R. 477, 6 Fla. L. Weekly Fed. B 154, 1992 Bankr. LEXIS 961, 23 Bankr. Ct. Dec. (CRR) 123, Counsel Stack Legal Research, https://law.counselstack.com/opinion/whitaker-v-younkers-inc-in-re-olympia-holding-corp-flmb-1992.