Maislin Industries US Inc. v. Primary Steel Inc./Opinion of the Court

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Opinion of the Court
Concurring Opinion
Scalia
Dissenting Opinion
Stevens


Under the Interstate Commerce Act (Act), 49 U.S.C. § 10101 et seq. (1982 ed.), motor common carriers must file their rates with the Interstate Commerce Commission (ICC or Commission), and both carriers and shippers must adhere to these rates. This case requires us to determine the validity of a policy recently adopted by the ICC that relieves a shipper of the obligation of paying the filed rate when the shipper and carrier have privately negotiated a lower rate. We hold that this policy is inconsistent with the Act.

* A.

The ICC regulates interstate transportation by motor common carriers to ensure that rates are both reasonable and nondiscriminatory. See 49 U.S.C. §§ 10101(a), 10701(a), 10741(b) (1982 ed.). The Act provides that a "common carrier . . . may not subject a person, place, port, or type of traffic to unreasonable discrimination." § 10741. In addition, the Act states that "[a] rate . . ., classification, rule, or practice related to transportation or service . . . must be reasonable." § 10701(a). [1] The ICC has primary responsibility for determining whether a rate or practice is reasonable. See Texas & Pacific R. Co. v. Abilene Cotton Oil Co., 204 U.S. 426, 440-442, 27 S.Ct. 350, 355-356, 51 L.Ed. 553 (1907). The Commission may investigate the reasonableness of a rate "on its own initiative or on complaint." § 11701(a). When the Commission determines that a rate or practice violates the statute, it "shall prescribe the rate . . . or practice to be followed." § 10704(b)(1). Moreover, motor common carriers are liable "for damages resulting from the imposition of rates for transportation or service the Commission finds to be in violation" of the Act. 49 U.S.C. § 11705(b)(3) (1982 ed., Supp. V).

The Act requires a motor common carrier to "publish and file with the Commission tariffs containing the rates for transportation it may provide." 49 U.S.C. § 10762(a)(1) (1982 ed.). The Act also specifically prohibits a carrier from providing services at any rate other than the filed (also known as the tariff) rate:

"Except as provided in this subtitle, a carrier providing transportation or service subject to the jurisdiction of the Interstate Commerce Commission . . . 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." § 10761(a).

Deviation from the filed rate may result in the imposition of civil or criminal sanctions on the carrier or shipper. See §§ 11902-11904. [2]

As the Court has frequently stated, the statute does not permit either a shipper's ignorance or the carrier's misquotation of the applicable rate to serve as a defense to the collection of the filed rate. See Southern Pacific Transp. Co. v. Commercial Metals Co., 456 U.S. 336, 352, 102 S.Ct. 1815, 1825, 72 L.Ed.2d 114 (1982); Louisville & Nashville R. Co. v. Maxwell, 237 U.S. 94, 97, 35 S.Ct. 494, 495, 59 L.Ed. 853 (1915). In 1986, however, the ICC concluded that changes in the motor carrier industry "clearly warrant a tempering of the former harsh rule of adhering to the tariff rate in virtually all cases." NITL Petition to Institute Rulemaking on Negotiated Motor Common Carrier Rates, 3 I.C.C.2d 99, 106 (1986) (Negotiated Rates I ). Under the new policy, when cases are referred to the Commission, it "decid[es] if the collection of undercharges would be an unreasonable practice." Id., at 100.

In Negotiated Rates I, the Commission adverted to a growing trend in the motor carrier industry whereby carriers and shippers negotiate rates lower than those on file with the ICC, and the shippers are billed for and remit payment at the negotiated rate. In many instances, however, the negotiated rate is never filed with the ICC. In some of those cases, the carrier subsequently files for bankruptcy and the trustee bills the shipper for the difference between the tariff rate and the negotiated rate, arguing that § 10761 compels the collection of the filed rather than negotiated rate. Id., at 99. The Commission concluded that, under such circumstances, "it could be fundamentally unfair not to consider a shipper's equitable defenses to a claim for undercharges." Id., at 103. The Commission reasoned that the passage of the Motor Carrier Act of 1980, which significantly deregulated the motor carrier industry, justified the change in policy, for the new competitive atmosphere made strict application of § 10761 unnecessary to deter discrimination. 3 I.C.C.2d, at 106. Moreover, the Commission asserted that it had authority under § 10701 to determine whether the collection of the undercharge in a particular case would constitute an unreasonable practice. Id., at 103. [3]

The ICC clarified its new policy in NITL-Petition to Institute Rulemaking on Negotiated Motor Common Carrier Rates, 5 I.C.C.2d 623 (1989) (Negotiated Rates II ). The Commission explained that its policy did not recognize "equitable defenses" but rather applied the "affirmative statutory requiremen[t] and obligatio[n]" of § 10701 that a carrier's practices be reasonable. Id., at 631, n. 18. [4] "[T]he Commission is finding to be an unreasonable practice . . . a course of conduct consisting of: (1) negotiating a rate; (2) agreeing to a rate that the shipper reasonably relies upon as being lawfully filed; (3) failing, either willfully or otherwise, to publish the rate; (4) billing and accepting payment at the negotiated rate for (sometimes) numerous shipments; and (5) then demanding additional payment at higher rates." Id., at 628, n. 11.

This case involves the application of the Commission's new Negotiated Rates policy. It arises from an action by petitioner Maislin Industries, U.S., Inc. (Maislin), to recover freight undercharges for 1,081 interstate shipments performed for a shipper, respondent Primary Steel (Primary), by petitioner's subsidiary, Quinn Freight Lines (Quinn). From 1981 to 1983, Quinn, a motor common carrier certificated by the ICC, privately negotiated rates with Primary that were lower than Quinn's rates then on file with the ICC. Quinn never filed the negotiated rates with the ICC.

In 1983, Maislin filed for bankruptcy, and a postpetition audit of its accounts revealed undercharges of $187,923.36 resulting from billing Primary at the negotiated, rather than filed, rates. The agents of the bankrupt estate, pursuant to the authorization of the Bankruptcy Court, issued balance due bills to Primary for these undercharges. When Primary refused to pay the amounts demanded, the estate brought suit in the United States District Court for the Western District of Missouri under 49 U.S.C. § 11706(a) (1982 ed.) [5] for the difference between the filed rates and the negotiated rates.

In its answer, Primary alleged that since the parties had negotiated lower rates, rebilling at the tariff rates would constitute an unreasonable practice in violation of § 10701; that the tariff rates themselves were not "reasonable" within the meaning of § 10701; and that the asserted tariff rates were otherwise inapplicable to the shipments at issue. The District Court, finding these matters to be within the primary jurisdiction of the ICC, stayed the proceeding at Primary's request and referred the case to the Commission. App. 6-8.

The ICC ruled in Primary's favor, rejecting Maislin's argument that the Commission lacked the statutory power to release a shipper from liability for such undercharges. Relying on Negotiated Rates I, the ICC reiterated that § 10701 authorized it to "consider all the circumstances surrounding an undercharge suit" to determine whether collection of the filed rate would constitute an unreasonable practice. App. to Pet. for Cert. 35a. In the Commission's view, its role was "to undertake an analysis of whether a negotiated but unpublished rate existed, the circumstances surrounding assessment of the tariff rate, and any other pertinent facts." Id., at 36a. With respect to the instant controversy, the ICC concluded that Quinn and Primary had negotiated rates other than the tariff rates [6] and that Primary had relied on Quinn to file the rates with the ICC. [7] "Primary reasonably believed that the amounts quoted and billed by Quinn were the correct total charges for the transportation services it performed, that the amounts were reached as the result of negotiations between Primary and Quinn, and that, since full payment was made by [Primary]," Maislin was not entitled to recover the filed rates. Id., at 43a.

The case returned to the District Court where both parties moved for summary judgment. The court granted summary judgment for Primary, rejecting Maislin's argument that the ICC's new policy was, in effect, an impermissible recognition of equitable defenses to the application of the filed rate. The District Court concluded that the ICC's policy of determining case by case whether the collection of undercharges would be an unreasonable practice under § 10701 was based on a permissible construction of the Act. 705 F.Supp. 1401, 1405-1406 (1988). The court also determined that the ICC's finding that Maislin had engaged in an unreasonable practice was supported by substantial evidence. Id., at 1406-1407.

The Court of Appeals for the Eighth Circuit affirmed, agreeing that the approach taken by the ICC was consistent with the Act. The court reasoned that "[s]ection 10761(a), which mandates the collection of tariff rates, is only part of an overall regulatory scheme administered by the ICC, and there is no provision in the [Act] elevating this section over section 10701, which requires that tariff rates be reasonable." 879 F.2d 400, 405 (1989). The court concluded: "[T]he proper authority to harmonize these competing provisions is the ICC. . . . The approach taken by the ICC does not abolish the filed rate doctrine, but merely allows the ICC to consider all of the circumstances, including equitable defenses, to determine if strict adherence to the filed rate doctrine would constitute an unreasonable practice." Ibid. (citation omitted). Because the Courts of Appeals have disagreed on the important issue whether the ICC's Negotiated Rates policy is consistent with the Act, [8] we granted certiorari. 493 U.S. 1041, 110 S.Ct. 834, 107 L.Ed.2d 830 (1990). II

The Act requires a motor common carrier to publish its rates in a tariff filed with the Commission. 49 U.S.C. § 10762 (1982 ed.). This Court has long understood that the filed rate governs the legal relationship between shipper and carrier. In Keogh v. Chicago & Northwestern R. Co., 260 U.S. 156, 163, 43 S.Ct. 47, 49, 67 L.Ed. 183 (1922), the Court explained:

"The legal rights of shipper as against carrier in respect to a rate are measured by the published tariff. Unless and until suspended or set aside, this rate is made, for all purposes, the legal rate, as between carrier and shipper. The rights as defined by the tariff cannot be varied or enlarged by either contract or tort of the carrier. . . . This stringent rule prevails, because otherwise the paramount purpose of Congress-prevention of unjust discrimination-might be defeated." (Citations omitted.)

See Square D Co. v. Niagara Frontier Tariff Bureau, Inc., 476 U.S. 409, 415-417, 106 S.Ct. 1922, 1927, 90 L.Ed.2d 413 (1986); Abilene Cotton Oil, 204 U.S., at 439, 27 S.Ct. at 354; Texas & Pacific R. Co. v. Mugg, 202 U.S. 242, 245, 26 S.Ct. 628, 630, 50 L.Ed. 1011 (1906); Gulf, C. & S.F.R. Co. v. Hefley, 158 U.S. 98, 101, 15 S.Ct. 802, 803, 39 L.Ed. 910 (1895). The duty to file rates with the Commission, see § 10762, and the obligation to charge only those rates, see § 10761, have always been considered essential to preventing price discrimination and stabilizing rates. "In order to render rates definite and certain, and to prevent discrimination and other abuses, the statute require[s] the filing and publishing of tariffs specifying the rates adopted by the carrier, and ma[kes] these the legal rates, that is, those which must be charged to all shippers alike." Arizona Grocery Co. v. Atchison, T. & S.F.R. Co., 284 U.S. 370, 384, 52 S.Ct. 183, 184, 76 L.Ed. 348 (1932).

Given the close interplay between the duties imposed by §§ 10761-10762 and the statutory prohibition on discrimination, see § 10741, this Court has read the statute to create strict filed rate requirements and to forbid equitable defenses to collection of the filed tariff. See Mugg, supra, 202 U.S., at 245, 26 S.Ct., at 630; Hefley, supra, 158 U.S., at 101, 15 S.Ct., at 802. The classic statement of the "filed rate doctrine," as it has come to be known, is explained in Louisville & Nashville R. Co. v. Maxwell, 237 U.S. 94, 35 S.Ct. 494, 59 L.Ed. 853 (1915). In that case, the Court held that a passenger who purchased a train ticket at a rate misquoted by the ticket agent did not have a defense against the subsequent collection of the higher tariff rate by the railroad.

"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. Shippers and travelers are charged with notice of it, and they as well as the carrier must abide by it, unless it is found by the Commission to be unreasonable. Ignorance or misquotation of rates is not an excuse for paying or charging either less or more than the rate filed. This rule is undeniably strict and it obviously may work hardship in some cases, but it embodies the policy which has been adopted by Congress in the regulation of interstate commerce in order to prevent unjust discrimination." Id., at 97, 35 S.Ct., at 495. [9]

This rigid approach was deemed necessary to prevent carriers from intentionally "misquoting" rates to shippers as a means of offering them rebates or discounts. See S.Rep. No. 46, 49th Cong., 1st Sess., 181, 188-190, 198-200 (1886). As the Commission itself found: "[P]ast experience shows that billing clerks and other agents of carriers might easily become experts in the making of errors and mistakes in the quotation of rates to favored shippers, while other shippers, less fortunate in their relations with carriers and whose traffic is less important, would be compelled to pay the higher published rates." Poor v. Chicago, B. & Q.R. Co., 12 I.C.C. 418, 421-422 (1907); see also Western Transp. Co. v. Wilson & Co., 682 F.2d 1227, 1230-1231 (CA7 1982). Despite the harsh effects of the filed rate doctrine, we have consistently adhered to it. See, e.g., Thurston Motor Lines, Inc. v. Jordan K. Rand, Ltd., 460 U.S. 533, 535, 103 S.Ct. 1343, 1344, 75 L.Ed.2d 260 (1983); Southern Pacific Transp. Co., 456 U.S., at 343-344, 102 S.Ct., at 1820-1821; Baldwin v. Scott County Milling Co., 307 U.S. 478, 484-485, 59 S.Ct. 943, 947-948, 83 L.Ed. 1409 (1939); Louisville & Nashville R. Co. v. Central Iron & Coal Co., 265 U.S. 59, 65, 44 S.Ct. 441, 442, 68 L.Ed. 900 (1924).

The filed rate doctrine, however, contains an important caveat: The filed rate is not enforceable if the ICC finds the rate to be unreasonable. See Maxwell, supra, 237 U.S., at 97, 35 S.Ct., at 495 (filed rate applies "unless it is found by the Commission to be unreasonable ") (emphasis added); see also Keogh, supra, 260 U.S., at 163, 43 S.Ct., at 49 ("The legal rights of shipper as against carrier in respect to a rate are measured by the published tariff. Unless and until suspended or set aside, this rate is made, for all purposes, the legal rate") (emphasis added). The filed rate doctrine, therefore, follows from the requirement that only filed rates be collected, as commanded by §§ 10761 and 10762, the requirement that rates not be discriminatory, see § 10741, and the requirement of § 10701 that carriers adopt reasonable rates and practices. As we explained in Arizona Grocery, supra, although the filed rate is the legal rate, the Act

"did not abrogate, but [rather] expressly affirmed, the common-law duty to charge no more than a reasonable rate. . . . In other words, the legal rate was not made by the statute a lawful rate-it was lawful only if it was reasonable. Under [the Act] the shipper was bound to pay the legal rate; but if he could show that it was unreasonable he might recover reparation.

"The Act altered the common law by lodging in the Commission the power theretofore exercised by courts, of determining the reasonableness of a published rate. If the finding on this question was against the carrier, reparation was to be awarded the shipper, and only the enforcement of the award was relegated to the courts." Id., 284 U.S., at 384-385, 52 S.Ct., at 184 (footnote omitted).

In the instant case, the Commission did not find that the rates were unreasonable, [10] but rather concluded that the carrier had engaged in an unreasonable practice in violation of § 10701 that should preclude it from collecting the filed rates. The Commission argues that under the filed rate doctrine, a finding that the carrier engaged in an unreasonable practice should, like a finding that the filed rate is unreasonable, disentitle the carrier to collection of the filed rate. We have never held that a carrier's unreasonable practice justifies departure from the filed tariff schedule. [11] But we need not resolve this issue today because we conclude that the justification for departure from the filed tariff schedule that the ICC set forth in its Negotiated Rates policy rests on an interpretation of the Act that is contrary to the language and structure of the statute as a whole and the requirements that make up the filed rate doctrine in particular.

Under the Negotiated Rates policy, the ICC has determined that a carrier engages in an unreasonable practice when it attempts to collect the filed rate after the parties have negotiated a lower rate. The ICC argues that its conclusion is entitled to deference because § 10701 does not specifically address the types of practices that are to be considered unreasonable and because its construction is rational and consistent with the statute. See Chevron U.S.A. Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 843, 104 S.Ct. 2778, 2781, 81 L.Ed.2d 694 (1984).

We disagree. For a century, this Court has held that the Act, as it incorporates the filed rate doctrine, forbids as discriminatory the secret negotiation and collection of rates lower than the filed rate. See supra, at 126-128. By refusing to order collection of the filed rate solely because the parties had agreed to a lower rate, the ICC has permitted the very price discrimination that the Act by its terms seeks to prevent. See 49 U.S.C. § 10741 (1982 ed.). As we stated in 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 to establish a rate duly published, known to all, and from which neither shipper nor carrier may depart. . . . [The Act] has provided for the establishing of one rate, to be filed as provided, subject to change as provided, and that rate to be while in force the only legal rate. Any other construction of the statute opens the door to the possibility of the very abuses of unequal rates which it was the design of the statute to prohibit and punish."

Congress has not diverged from this interpretation and we decline to revisit it ourselves. See California v. FERC, 495 U.S. 490, 499, 110 S.Ct. 2024, 2029, 109 L.Ed.2d 474 (1990), (recognizing the respect "this Court must accord to longstanding and well-entrenched decisions, especially those interpreting stautes that underlie complex regulatory regimes"). Once we have determined a statute's clear meaning, we adhere to that determination under the doctrine of stare decisis, and we judge an agency's later interpretation of the statute against our prior determination of the statute's meaning. Labeling the carrier's conduct an "unreasonable practice" cannot disguise the fact that the ICC is justifying deviation from the filed rate purely on the ground that the carrier and shipper have privately negotiated a lower rate. Stripped of its semantic cover, the Negotiated Rates policy and, more specifically, the Commission's interpretation of "unreasonable practices" thus stand revealed as flatly inconsistent with the statutory scheme as a whole, cf. Fort Stewart Schools v. FLRA, 495 U.S. 641, 645, 110 S.Ct. 2043, 2046, 109 L.Ed.2d 659 (1990); Dole v. Steelworkers, 494 U.S. 26, 32, 110 S.Ct. 929, 934, 108 L.Ed.2d 23 (1990), and §§ 10761 and 10762 in particular.

Nor can the Negotiated Rates policy be justified as a remedy for the carrier's failure to comply with § 10762's directive to file the negotiated rate with the ICC. See Negotiated Rates I, 3 I.C.C.2d, at 103. The Commission argues that the carrier should not receive a windfall, i.e., the higher filed rate, from its failure to comply with the statute. See Brief for Federal Respondent 25-27. But § 10761 requires the carrier to collect the filed rate, and we have never accepted the argument that such "equities" are relevant to the application of § 10761. [12] See, e.g., Maxwell, 237 U.S., at 97, 35 S.Ct., at 495. Indeed, strict adherence to the filed rate has never been justified on the ground that the carrier is equitably entitled to that rate, but rather that such adherence, despite its harsh consequences in some cases, is necessary to enforcement of the Act. See supra, at 126-128.

Compliance with §§ 10761 and 10762 is "utterly central" to the administration of the Act. Regular Common Carrier Conference v. United States, 253 U.S.App.D.C. 305, 308, 793 F.2d 376, 379 (1986). "Without [these provisions] . . . it would be monumentally difficult to enforce the requirement that rates be reasonable and nondiscriminatory, . . . and virtually impossible for the public to assert its right to challenge the lawfulness of existing proposed rates." Ibid. (citations omitted). Although the ICC argues that the Negotiated Rates policy does not "abolis[h] the requirement in section 10761 that carriers must continue to charge the tariff rate," App. to Pet. for Cert. 36a, the policy, by sanctioning adherence to unfiled rates, undermines the basic structure of the Act. The ICC cannot review in advance the reasonableness of unfiled rates. Likewise, other shippers cannot know if they should challenge a carrier's rates as discriminatory when many of the carrier's rates are privately negotiated and never disclosed to the ICC. Thus, although we agree that the Commission may have discretion to craft appropriate remedies for violations of the statute, see ICC v. American Trucking Assns., Inc., 467 U.S. 354, 364-365, 104 S.Ct. 2458, 2464-2465, 81 L.Ed.2d 282 (1984), the "remedy" articulated in the Negotiated Rates policy effectively renders nugatory the requirements of §§ 10761 and 10762 and conflicts directly with the core purposes of the Act.

The ICC maintains, however, that the passage of the Motor Carrier Act of 1980 (MCA), Pub.L. 96-296, 94 Stat. 793, justifies its Negotiated Rates policy. The MCA substantially deregulated the motor carrier industry in many ways in an effort to "promote competitive and efficient transportation services." Pub.L. 96-296, § 4, formerly codified at 49 U.S.C. § 10101(a)(7) (1976 ed., Supp. V). In addition to loosening entry controls, see § 5, codified at 49 U.S.C. § 10922 (1982 ed.), the MCA also created a zone of reasonableness within which carriers can raise rates without interference from the ICC. See § 11, codified at 49 U.S.C. § 10708 (1982 ed.). More importantly, the MCA also allows motor carriers to operate as both common carriers and contract carriers. See § 10(b)(1), amending 49 U.S.C. § 10930(a) (1982 ed.). A contract carrier transports property under exclusive agreements with a shipper, see § 10102(14), and the Commission has exempted all motor contract carriers from the requirements of §§ 10761 and 10762. See Exemption of Motor Contract Carriers from Tariff Filing Requirements, 133 M.C.C. 150 (1983), aff'd sub nom. Central & Southern Motor Freight Tariff Assn., Inc. 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). [13] The Commission has also relaxed the regulations relating to motor common carriers, most significantly, by allowing decreased rates to go into effect one day after the filing of a tariff. See Short Notice Effectiveness for Independently Filed Rates, 1 I.C.C.2d 146 (1984), aff'd sub nom. Southern Motor Carriers Rate Conference v. United States, 773 F.3d 1561 (CA11 1985). [14] In Negotiated Rates I and II, the Commission concluded that in light of the more competitive environment, strict adherence to the filed rate doctrine "is inappropriate and unnecessary to deter discrimination today." Negotiated Rates I, 3 I.C.C., at 106. According to the Commission, " 'the inability of a shipper to rely on a carrier's interpretation of a tariff is a greater evil than the remote possibility that a carrier might intentionally misquote an applicable tariff rate to discriminate illegally between shippers.' " Ibid., quoting Seaboard System R. Co. v. United States, 794 F.2d 635, 638 (CA11 1986).

We reject this argument. Although the Commission has both the authority and expertise generally to adopt new policies when faced with new developments in the industry, see American Trucking Assns., Inc. v. Atchison, T. & S.F.R. Co., 387 U.S. 397, 416, 87 S.Ct. 1608, 1618, 18 L.Ed.2d 847 (1967), it does not have the power to adopt a policy that directly conflicts with its governing statute. Nothing in the MCA repeals §§ 10761 and 10762 or casts doubt on our prior interpretation of those sections. Generalized congressional exhortations to "increase competition" cannot provide the ICC authority to alter the well-established statutory filed rate requirements. As we said in Square D Co. v. Niagara Frontier Tariff Bureau, Inc., with respect to a similarly longstanding judicial interpretation of the Act:

"Congress must be presumed to have been fully cognizant of this interpretation of the statutory scheme, which had been a significant part of our settled law for over half a century, and . . . Congress did not see fit to change it when Congress carefully reexamined this area of the law in 1980. [Respondent has] pointed to no specific statutory provision or legislative history indicating a specific congressional intention to overturn the longstanding . . . construction; harmony with the general legislative purpose is inadequate for that formidable task." 476 U.S., at 420, 106 S.Ct. at 1928-1929 (footnotes omitted).

See also California v. FERC, 495 U.S., at 498, 499-500, 110 S.Ct., at 2029-2030. Even before the passage of the MCA, Congress had allowed the Commission to exempt motor contract carriers from the requirement that they adhere to the published tariff, see 49 U.S.C. § 10761(b) (1982 ed.), demonstrating that Congress is aware of the requirement and has deliberately chosen not to disturb it with respect to motor common carriers. [15] If strict adherence to §§ 10761 and 10762 as embodied in the filed rate doctrine has become an anachronism in the wake of the MCA, it is the responsibility of Congress to modify or eliminate these sections.

Accordingly, the judgment of the Court of Appeals is reversed, and the cause is remanded for further proceedings consistent with this opinion.

It is so ordered.

Notes

[edit]
  1. The Act states that when reviewing the reasonableness of a carrier's rates, the Commission "shall authorize revenue levels that are adequate under honest, economical, and efficient management to cover total operating expenses . . . plus a reasonable profit." 49 U.S.C. § 10701(e) (1982 ed.).
  2. Section 11902 provides that a shipper who knowingly receives a rebate or offset against the filed rate is liable to the Government for a civil penalty in an amount equal to three times the rebate. Section 11903(a) states that any person who "knowingly offers, grants, gives, solicits, accepts, or receives" service at less than the filed rate "shall be fined at least $1,000 but not more than $20,000, imprisoned for not more than 2 years, or both." A carrier who willfully fails to file and publish its tariffs is subject to the same penalty. See § 11903(b); see also § 11904 (corporate liability).
  3. The Commission stated that its new policy did not "abrogate Section 10761. Rather, we emphasize that carriers must continue to charge the tariff rate, as provided in the statute. The issue here is simply whether we have the authority to consider all the circumstances surrounding an undercharge suit." NITL Petition to Institute Rulemaking on Negotiated Motor Common Carrier Rates, 3 I.C.C.2d 99, 103 (1986) (citations omitted). The Commission rejected a proposal by the National Industrial Transportation League (NITL) that would have declared the negotiated rate to be the maximum reasonable rate. The Commission concluded that the proposal conflicted with § 10761 because it created a "per se determination that, as a matter of law, the negotiated rate would apply." Id., at 102.
  4. The Commission stated: "[O]ur Negotiated Rates policy does not represent a relaxed interpretation of § 10761, but rather a separate determination under § 10701. But even if it were viewed as a reinterpretation of a previously strict construction of § 10761, it would be . . . well within this agency's authority (and indeed duty) to reinterpret the Interstate Commerce Act, based on upon experience gained and changing circumstances." NITL Petition to Institute Rulemaking on Negotiated Motor Common Carrier Rates, 5 I.C.C.2d 623, 631 (1989) (citing American Trucking Assns., Inc. v. Atchison T. & S.F.R. Co., 387 U.S. 397, 416, 87 S.Ct. 1608, 1618, 18 L.Ed.2d 847 (1967)).
  5. Section 11706(a) provides:
  6. See App. to Pet. for Cert. 36a-38a. The Commission relied primarily on two "rate sheets" to find that negotiated rates existed. According to the Commission, a three-page rate sheet prepared by Primary in 1981 demonstrated that Quinn, through its agent James McGowan, had negotiated a five percent across-the-board increase in rates above those in Quinn's tariff on file with the ICC. Sometime in 1982, when Primary notified Quinn that it would need relief from the rates in order to continue using Quinn, the parties orally negotiated a decrease in the rates. Primary prepared a new rate sheet which was sent to all the relevant individuals. Subsequently, whenever rates were needed for destinations other than those shown on the rate sheet, McGowan would set a new rate based on the mileage involved. The ICC concluded that "there is evidence of offers, acceptances, and approvals by the involved parties" before each of the shipments in question. Id., at 36a; see also id., at 38a.
  7. See id., at 43a. This finding was based on the fact that McGowan represented that his superiors had approved the rates on the written rate sheets. See id., at 40a. The Commission noted that Primary's representative was never given an actual tariff documenting that the agreed upon rates had been filed with the ICC and that Primary's representative had no training with respect to tariffs, but the Commission concluded that the representative "understood that Quinn would do whatever was necessary to implement the agreed-upon rates." Id., at 32a. The Commission specifically found that "[w]hile Quinn may not have taken appropriate steps to legalize the quoted rates, it has not been demonstrated that this occurred as a result of any intent to engage in unlawful conduct." Id., at 42a.
  8. Compare In re Caravan Refrigerated Cargo, Inc. (Supreme Beef Processors), 864 F.2d 388 (CA5 1989), with Delta Traffic Service Inc. v. Transtop, Inc., 902 F.2d 101 (CA1 1990); Orscheln Bros. Truck Lines, Inc. v. Zenith Electric Corp., 899 F.2d 642 (CA7 1990); West Coast Truck Lines, Inc. v. Weyerhaeuser, Co., 893 F.2d 1016 (CA9 1990); Delta Traffic Service, Inc. v. Appco Paper & Plastics Corp., 893 F.2d 472 (CA2 1990).
  9. See also Louisville & Nashville R. Co. v. Central Iron & Coal Co., 265 U.S. 59, 65, 44 S.Ct. 441, 442, 68 L.Ed. 900 (1924) ("No contract of the carrier could reduce the amount legally payable; or release from liability a shipper who had assumed an obligation to pay the charges. Nor could any act or omission of the carrier (except the running of the statute of limitations) estop or preclude it from enforcing payment of the full amount by a person liable therefor"); Kansas City Southern R. Co. v. Carl, 227 U.S. 639, 653, 33 S.Ct. 391, 395, 57 L.Ed. 683 (1913) ("Neither the intentional nor accidental misstatement of the applicable published rate will bind the carrier or shipper. The lawful rate is that which the carrier must exact and that which the shipper must pay. The shipper's knowledge of the lawful rate is conclusively presumed").
  10. The ICC did not determine whether the tariff rates were unreasonable even though primary respondent requested such a determination. We therefore must assume, for purposes of our decision today, that the rates were reasonable. The issue of the reasonableness of the tariff rates is open for exploration on remand.
  11. None of our cases involving a determination by the ICC that the carrier engaged in an unreasonable practice have required departure from the filed tariff schedule altogether; instead, they have required merely the application of a different filed tariff. For example, in Hewitt-Robins Inc. v. Eastern Freight-Ways, Inc., 371 U.S. 84, 86, 83 S.Ct. 157, 158, 9 L.Ed.2d 142 (1962), the Commission's finding that a carrier had engaged in an unreasonable practice by routing intrastate shipments over interstate routes required only the application of a different filed rate, i.e., the intrastate rates, rather than departure from the tariff schedule entirely. See also Adams v. Mills, 286 U.S. 397, 412, 52 S.Ct. 589, 593, 76 L.Ed. 1184 (1932) (reparations ordered constituted difference between one filed rate and another). Likewise, the cases in which the ICC has determined that a carrier engaged in an unreasonable practice by requiring a certain notation attached to the bill of lading to qualify the shipper for a reduced tariff also did not require deviation from the filed tariff. See Standard Brands, Inc. v. Central R. Co. of New Jersey, 350 I.C.C. 555 (1974); Carriers Traffic Service, Inc. v. Anderson, Clayton & Co., 881 F.2d 475, 481-482 (CA7 1989) (collecting cases).
  12. Even if the equities of the situation were relevant, it is difficult to see how the equities favor the shipper. One would think that a shipper who has the market power to require a carrier to reduce his tariffs could also require proof from a carrier that the negotiated rates had been filed before tendering the shipment, especially since there are commercial services providing up-to-the-minute details of the carrier's rate schedule. But see Fort Howard Paper Co. v. Maislin Industries, U.S., Inc., No. MC-C-10983, (I.C.C. Aug. 4, 1987, p. 5) (unreasonable practice found even when the shipper had a copy of the tariff). Nevertheless, the Commission argues that if § 10761 "prevailed over the requirement of reasonable practices, a carrier could intentionally engage in 'bait and switch' tactics by negotiating one rate, fraudulently representing that it was properly filed, and then insisting upon collection of a higher tariff rate." Brief for Federal Respondent 30. We note first that the Commission determined that there was no intentional or fraudulent conduct in this case. Moreover, any carrier who engaged in such conduct could be punished under 49 U.S.C. § 11903(b) (1982 ed.). Finally, this risk of intentional misconduct on the part of a carrier has always existed and has never been considered sufficient to justify a less stringent interpretation of § 10761.
  13. The Act specifically provides that the Commission may "grant relief" from the filing requirements to motor contract carriers "when relief is consistent with the public interest and the transportation policy." §§ 10761(b), 10762(f); see also § 10702(b). The Commission concluded that granting a classwide exemption rather than individual exemptions was both in the public interest and consistent with the purpose behind the Act. See Exemption of Motor Contract Carriers from Tariff Filing Requirements, 133 M.C.C., at 156-158. The Commission has also allowed contract carriers to obtain permits to serve entire classes of unnamed shippers. See Issuance of Permits Authorizing Industrywide Service, 133 M.C.C. 298 (1983).
  14. The Act provides that rates will not go into effect until 30 days after the filing of a tariff, see § 10762(c)(3), but specifically allows the Commission to reduce the period if "cause exists." § 10762(d)(1). The Commission determined that cause existed to reduce the waiting period to one day after the filing of a tariff reducing rates and seven days after the filing of a tariff increasing rates. See Short Notice Effectiveness for Independently Filed Rates, 1 I.C.C.2d, at 150-160. In addition, the Commission has determined that neither tariffs applicable to a single shipper nor rates providing volume discounts are per se discriminatory. See Rates for a Named Shipper or Receiver, 367 I.C.C.2d 959 (1984); Petition for Declaratory Order-Lawfulness of Volume Discount Rates by Motor Common Carriers of Property, 365 I.C.C. 711 (1982). We express no view today on the validity of such policies.
  15. Moreover, in the Household Goods Transportation Act of 1980, Pub.L. 96-454, 94 Stat. 2011, Congress provided that "motor common carrier[s] providing transportation of household goods . . . may, subject to the provisions of this chapter (including the general tariff requirements of section 10762 of this title), establish a rate for the transportation of household goods which is based on the carrier's written, binding estimate of charges for providing such transportation." 49 U.S.C. § 10735(a)(1) (1982 ed., Supp. V) (emphasis added). This exception for household goods carriers also demonstrates that Congress is aware of, but has elected not to eliminate as applied to other motor common carriers, the general requirements of §§ 10761 and 10762.

This work is in the public domain in the United States because it is a work of the United States federal government (see 17 U.S.C. 105).

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