White v. Dean Bros. Pump Division of Met-Pro Corp. (In re Lyons Transportation Lines, Inc.)

159 B.R. 182, 1993 Bankr. LEXIS 1420
CourtDistrict Court, W.D. Pennsylvania
DecidedOctober 5, 1993
DocketBankruptcy No. 90-00768E; Adv. Nos. 92-0069, 92-1514 and 92-1575
StatusPublished
Cited by1 cases

This text of 159 B.R. 182 (White v. Dean Bros. Pump Division of Met-Pro Corp. (In re Lyons Transportation Lines, Inc.)) is published on Counsel Stack Legal Research, covering District Court, W.D. Pennsylvania primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
White v. Dean Bros. Pump Division of Met-Pro Corp. (In re Lyons Transportation Lines, Inc.), 159 B.R. 182, 1993 Bankr. LEXIS 1420 (W.D. Pa. 1993).

Opinion

OPINION

WARREN W. BENTZ, Bankruptcy Judge.

Background

Lyons Transportation Lines, Inc. f/d/b/a CTS Acquisition, Inc., f/d/b/a Lyons Group, Inc., f/d/b/a Express Transport, Inc., f/d/b/a Transportation Brokers, Inc. filed a voluntary Petition under Chapter 11 of the Bankruptcy Code on October 19, 1990. On January 24, 1991, the case was converted to a proceeding under Chapter 7. As used in this Opinion, the term “Debtor” shall mean Lyons Transportation Lines, Inc. Vedder J. White, Esq. was appointed as Trustee on January 25, 1991. Following Mr. White’s untimely death, Gary V. Skiba, Esq. was appointed as successor Trustee and now prosecutes these actions.

Prior to its demise, the Debtor was a common carrier regulated by the Interstate Commerce Commission (“ICC”). Following the usual course in the bankruptcy of a trucking company, the Trustee hired an auditor, Motor Carrier Audit & Collection Co., to audit the Debtor’s prior freight bills. The auditor determined that Lyons had billed shippers less than the full amount of freight charges prescribed by the Debtor’s tariff rates on file with the ICC at the time of shipment.

The Trustee issued correction notices and made demand for payment of the “undercharges.” Following the refusal of numerous shippers to make the additional payments, the Trustee commenced several hundred adversary proceedings which demand judgment against the shippers for the “undercharges.”

In many of the undercharge eases initiated by the Trustee, the shipper/defendant has raised among other defenses the issue [184]*184of “rate reasonableness” and asserted that the adversary proceedings must be referred to the ICC for determination. Each of the undercharge cases involves slightly different factual considerations. The within adversaries in which the Defendants have raised the issue of rate reasonableness and have filed motions for stay and referral to the ICC are representative of the issues that are common to most of the undercharge cases before this Court.

The three cases can be described as follows:

(1) White v. Dean Bros. Pump, Adversary No. 92-0069

The undercharge question in this case is what has been termed the “gap issue.” The Debtor published a tariff which granted Dean Bros. Pump a 30% discount effective as of September 15, 1990. The Debtor provided services prior to September 15, 1990 on which the Debtor billed and Dean Bros. Pump paid a 30% discounted rate. The undercharges which the Trustee seeks to recover are the 30% discount amounts allowed during this “gap” period, the period prior to the effective date of the tariff.

(2) White v. Sonwil Distribution Center, Adversary No. 92-1514

The undercharge issue in this case is what has been termed the National Motor Freight Classification or “NMFC issue.” Class rates are based on the commodity classification system set forth .in the NMFC, a tariff published under the auspices of the American Trucking Associations, Inc. on behalf of participating motor carriers. Some carriers independently publish their own class rate tariffs, which are generally similar in format and in the rate levels to the NMFC. The starting point to determine, the freight charge for a shipment is to identify the commodity and determine its class rating from the NMFC. The issue can be described in simple terms: The Debtor published a discount tariff for the shipper. It applied to commodities “A,” “B” and “C.” The shipper shipped commodities “X,” “Y” and “Z.” The issue is whether the discount tariff should apply to the shipments of commodities “X,” “Y” and “Z.”

(3)White v. Cambridge T00V& Manufacturing Company, Inc., Adversary No. 92-1575

The undercharge issue in this case is what has been termed the “loading allowance issue.” The Debtor published a tariff which granted an allowance to Cambridge Tool for loading shipments into the Debt- or’s trailers. The Trustee alleges that Cambridge Tool failed to present a claim for payment of the loading allowance to the Debtor as required by the tariff. Therefore, the Trustee alleges that the loading allowances which the Debtor paid to the shipper were unauthorized and are subject to recovery.

The underlying issue in each case is “rate reasonableness” — whether the rates which the Trustee seeks to apply are unreasonable and whether these matters should be referred to the ICC for a determination of rate reasonableness or whether the Trustee’s claims should be adjudicated here and, if appropriate, judgment entered against the defendants with the Defendants subsequently proceeding on the issue of rate reasonableness before the ICC.

We fixed an argument on the within matters and realizing that the resolution of these matters would affect all similar adversary proceedings, invited attorneys in similar matters to file Amicus Curiae Briefs and to participate in the Argument. After consideration of the pleadings in these matters, Briefs, Briefs of Amicus Curiae and the Arguments of Counsel, we now render our decision.

Positions of the Parties

It is the Trustee’s position that the tariff applicability issues are separate and distinct from the rate reasonableness issues and should be resolved by this Court prior to referral of the rate reasonableness issue to the ICC. The Trustee also asserts that a shipper cannot obtain referral to the ICC merely upon the bald allegation of an unreasonable rate, but rather must make [185]*185some factual allegations of unreasonableness. The Trustee further asserts that referral to the ICC is inappropriate because the ICC is biased towards shippers and that these cases will disappear into a “black hole.” Also mentioned is the question of whether the rate reasonableness issue may be raised as a defense or whether it must be raised as a counter-claim.

The shippers assert that a stay and referral to the ICC is appropriate because of the intertwined issues of tariff applicability and interpretation, classification of commodities, tariff publication practices, and rate reasonableness all of which are within the particular expertise of the ICC; that the issue of rate reasonableness must be referred to the ICC and that each underlying issue involves rate reasonableness so that the entire matters should be referred.

Discussion

The Interstate Commerce Act, 49 U.S.C. § 10101, et seq., requires common carriers, such as the Debtor, to publish (file with the ICC) tariffs which state the rates that the carrier charges its customers, the shippers. 49 U.S.C. § 10762. The carrier must charge and the.shipper must pay the published rate. 49 U.S.C. § 10761. This precludes the parties from agreeing to a lesser rate. A trustee for a bankrupt carrier may recover the filed rates even though the carrier had earlier agreed to accept and did accept a lesser rate. See Maislin Industries, U.S., Inc. v. Primary Steel, Inc., 497 U.S. 116, 110 S.Ct. 2759, 111 L.Ed.2d 94 (1990). The “filed rate doctrine” is strictly enforced. Id.

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Bluebook (online)
159 B.R. 182, 1993 Bankr. LEXIS 1420, Counsel Stack Legal Research, https://law.counselstack.com/opinion/white-v-dean-bros-pump-division-of-met-pro-corp-in-re-lyons-pawd-1993.