Filed: Aug. 14, 1992
Latest Update: Mar. 02, 2020
Summary: IN THE UNITED STATES COURT OF APPEALS FOR THE FIFTH CIRCUIT _ No. 91-1507 _ FREIGHTCOR SERVICES, INC. Plaintiff-Appellee, versus VITRO PACKAGING, INC. Defendant-Appellant. _ Appeal from the United States District Court for the Northern District of Texas _ ON PETITION FOR REHEARING* (Opinion June 26, 1992, 5 Cir., 1992, _F.2d_) (August 14, 1992) Before GOLDBERG, JOLLY, and WIENER, Circuit Judges. E. Grady JOLLY, Circuit Judge: * The plaintiff-appellee, Freightcor Services, Inc., has filed a petit
Summary: IN THE UNITED STATES COURT OF APPEALS FOR THE FIFTH CIRCUIT _ No. 91-1507 _ FREIGHTCOR SERVICES, INC. Plaintiff-Appellee, versus VITRO PACKAGING, INC. Defendant-Appellant. _ Appeal from the United States District Court for the Northern District of Texas _ ON PETITION FOR REHEARING* (Opinion June 26, 1992, 5 Cir., 1992, _F.2d_) (August 14, 1992) Before GOLDBERG, JOLLY, and WIENER, Circuit Judges. E. Grady JOLLY, Circuit Judge: * The plaintiff-appellee, Freightcor Services, Inc., has filed a petiti..
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IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
____________________
No. 91-1507
____________________
FREIGHTCOR SERVICES, INC.
Plaintiff-Appellee,
versus
VITRO PACKAGING, INC.
Defendant-Appellant.
__________________________________________________________________
Appeal from the United States District Court for the
Northern District of Texas
__________________________________________________________________
ON PETITION FOR REHEARING*
(Opinion June 26, 1992, 5 Cir., 1992, ___F.2d___)
(August 14, 1992)
Before GOLDBERG, JOLLY, and WIENER, Circuit Judges.
E. Grady JOLLY, Circuit Judge:
*
The plaintiff-appellee, Freightcor Services, Inc., has filed
a petition for rehearing challenging our decision and opinion dated
June 25, 1991. The petition for rehearing is granted; our earlier
opinion is hereby withdrawn, and the following opinion, which
differs from its predecessor in part III.B(2), is entered in its
place.
In this suit a bankrupt interstate carrier, Freightcor, Inc.,
seeks undercharges1 from a shipper, Vitro Packaging, Inc. The
district court rejected Vitro's defense that, under the "filed rate
doctrine,"2 Freightcor's tariff was void because it referred to a
mileage guide in which Freightcor did not formally participate.
The court therefore granted summary judgment for Freightcor. For
the reasons below, we today hold that a mileage guide is a tariff
and that a tariff that refers to another tariff without official
participation in that tariff is void as a matter of law.
Freightcor therefore cannot collect undercharges against Vitro
under the filed rate doctrine.
I
Freightcor, now in bankruptcy, is a common carrier operating
in interstate commerce and subject to regulation by the ICC. From
1985 until 1987, Freightcor hauled glass bottles and containers for
Vitro. Vitro paid rates between $.98 and $1.13 per mile. All of
these charges were based upon rates that were not drawn from
1
"Undercharges" are the difference between the rate a shipper
is billed for a shipment and the amount of the rate for that
shipment according to the carrier's tariff. See Maislin Industries
U.S., Inc. v. Primary Steel,
497 U.S. 116, ___,
110 S. Ct. 2759,
2764 (1990).
2
The "filed rate doctrine" requires that only a tariff duly
filed with the ICC can govern the billing of shipments by common
carriers. The rate, however, must be reasonable. The filed rate
doctrine seeks to avoid secret rates negotiated between shippers
and carriers. Maislin Industries, U.S., Inc. v. Primary Steel,
Inc.,
497 U.S. 116, ____,
110 S. Ct. 2759, 2766 (1990).
-2-
tariffs filed with the ICC, but instead were negotiated between
Freightcor and Vitro.
During these years, Freightcor had two filed tariffs that are
now material. Tariff ICC FSSI 282 applied to "Building Materials
or Supplies." Tariff ICC FTHS 275 applied to "Freight of all
Kinds, except Class A and B Explosives, Household Goods and
Materials in Bulk." The rate for ICC FTHS 275 was $3.00 per mile,
and the rate in FSSI 282 was considerably less.
Both FTHS 275 and FSSI 282 computed mileage for specific
shipments according to the Household Goods Carriage Bureau ("HGCB")
MF-ICC 100-A Mileage Guide. The parties agree that Freightcor did
not file a power of attorney or concurrence with the HGCB to
"participate" in the mileage guide.
Freightcor declared bankruptcy and, as debtor-in-possession,
sued Vitro in U.S. district court for undercharges, or the
difference between the rate actually charged and the rate posted in
a carrier's applicable tariff on file with the ICC. Vitro answered
alleging, among other defenses, that the proper forum for this
dispute is the ICC, that the tariffs Freightcor sought to apply
were void because Freightcor had not participated in the mileage
guide these tariffs referred to, that an attempt to collect filed
rates after negotiating a lower rate was an unreasonable practice,
and that the rates sought were unreasonable. Freightcor moved for
summary judgment, arguing that, under the filed rate doctrine, the
sole question for the court was whether Vitro had paid the amount
-3-
of money required in the duly filed tariffs that governed
Freightcor's shipments of Vitro's cargo. The court initially
denied the motion, noting that a factual dispute persisted
concerning the applicability of FSSI 282: whether glass bottles and
containers, which Freightcor had hauled for Vitro, were included
within the term "Building materials or supplies" as found in FSSI
282.
On March 15, 1991, however, the court granted reconsideration.
The court rejected Vitro's defenses and held that FTHS 275 had
properly referred to mileage guide HGCB MF-ICC 100-A. The court
further held that, although there was a dispute with respect to the
applicability of FSSI 282, there was no factual dispute as to the
applicability of FTHS 275, which covered "freight of all kinds."
The court therefore held that FTHS 275 was applicable. It noted,
however, that because Freightcor had also contended, viz.,
"conceded," that FSSI 282 was also applicable, the court would
apply the lower rate under FSSI 282 and assess Freightcor's damages
on that basis. In so doing, the court observed it was undisputed
that when two tariffs are applicable, the proper rate to apply is
the lower rate. Because Freightcor had contended that both FSSI
282 and FTHS 275 were applicable, it could not complain that the
district court applied the lower rate to assess undercharge
damages. Judgment was entered for $19,199 in principal and $5,449
in prejudgment interest. Vitro filed a motion for "new trial,"
which was denied. Vitro then filed this appeal.
-4-
II
We review de novo the summary judgment, applying the same
standards of law as those available to the district court. Trial
v. Atchison, Topeka and Santa Fe R. Co.,
896 F.2d 120, 122 (5th
Cir. 1990). Therefore, to sustain the summary judgment rendered
below, we must find that there is "no genuine issue as to any
material fact and that the moving party is entitled to judgment as
a matter of law." Fed.R.Civ.P. 56(c).
III
The heart of Vitro's appeal is its argument that the district
court erred in applying the filed rate doctrine based on
Freightcor's tariff FTHS 275. Vitro argues that FTHS 275 was void
under ICC regulations because, although FTHS 275 refers to HGCB MF-
ICC 100-A for the mileage of specific shipments, Freightcor did not
give to the HGCB a power of attorney in order to "participate" in
the tariff, as required by the Commission's regulations.
Therefore, contends Vitro, FTHS 275 is unenforceable, and
Freightcor may not collect undercharges based upon its rates. In
response, Freightcor argues that the regulations do not require it
to participate in the mileage guide in order to refer to it, and if
they do, they still cannot be used to retrospectively void a tariff
that had been otherwise duly filed and effective.
The district court found that Freightcor
permissibly referred to HGCB MF-ICC 100-A in tariff ICC
FTHS 275 for the purpose of computing the distance rate.
See 49 C.F.R. § 1312.30(c)(1). The mileage guide in
question complied with 49 C.F.R. § 1312.30(c)(4) because,
-5-
without dispute, it was on file with the ICC at the time
the tariff was published and filed. The court rejects
Vitro's arguments to the contrary.
Thus the district court did not expressly address the effect of
Freightcor's failure to file a power of attorney with respect to
the HGCB mileage guide. We read the district court's opinion as
holding implicitly either (1) that the mileage guide is not a
tariff, or (2) that Freightcor was not required to participate in
the mileage guide, or (3) that Freightcor's mere reference to the
mileage guide amounted to participation.
A
The ICC regulations make clear that whether a carrier
"participates" in the tariff of another carrier or an agent is a
matter of certain formalities. ICC regulation 49 C.F.R. §
1312.4(d) mandates that
a carrier may not participate in a tariff issued in the
name of another carrier or an agent unless a power of
attorney or concurrence is attached. Absent effective
concurrences or powers of attorney, tariffs are void as
a matter of law.
The regulations do not require that Freightcor file its power of
attorney or concurrence with the ICC; instead, it files such
documents with the HGCB, which in turn publishes the carriers
participating in MF-ICC 100-A. Freightcor did not file a power of
attorney or a concurrence with the HGCB, and it therefore did not
participate in the HGCB MF-ICC 100-A. The initial question for
this court is, therefore, whether under the ICC's regulations
-6-
Freightcor was obligated to participate in the HGCB mileage guide
in order to refer to it in Freightcor's own tariffs.
First, Freightcor argues that MF-ICC 100-A is only a distance
guide and not a "tariff issued in the name of another carrier or an
agent." Freightcor asserts that formal participation is only
required if a carrier refers to another agent's tariffs in order to
designate the rate per mile governing shipments.
We begin our inquiry, therefore, by determining whether HGCB
MF-ICC 100-A is a tariff issued in the name of an agent under
section 1312.4(d). "Tariff" and "agent" are defined in 49 C.F.R.
§ 1312.1(b).
(2) "Agent" means a person, association or
corporation authorized to publish and file rates
and provisions for a carrier's account in tariffs
published in the agent's name.
.....
(35) "Tariff" means a publication containing rates,
classification ratings, rules, regulations, and
other provisions as amended, filed in the carrier's
or an agent's name.
Indisputably, the HGCB is an agent authorized to publish and
file rates, and a mileage guide is a publication, containing
provisions meant to be the basis for shipping bills, filed in
an agent's name. Furthermore, HGCB MF-ICC 100-A was filed
with the Commission in accordance with section 1312.30(a), as
is required in order for Freightcor to refer to the guide. 49
C.F.R. § 1312.30(c)(4). The number "100-A" is assigned by the
Commission to designate it as a tariff in accordance with
-7-
section 1312.8(3). Freightcor's own tariffs describe HGCB MF-
ICC 100-A as a tariff.
We conclude, therefore, that HGCB MF-ICC 100-A was
clearly a "tariff" as the word is used in section 1312.4(d).
The conclusion that MF-ICC 100-A is a tariff does not,
however, end our inquiry. We must determine whether a mileage
guide, even though a tariff, is an exception to the general
rule that a carrier who utilizes the tariff of another carrier
or agent can only participate in that tariff by complying with
the formalities of filing a power of attorney or concurrence
with the issuing agent pursuant to section 1312.4(d).
No current ICC regulation specifically addresses this
point.3
The ICC, however, has recently addressed the question and
found that, under its regulations, reference to a mileage
guide requires participation in that tariff. Petition of
Jasper Wyman & Son, et al. re: Overland Express, Inc., ICC
Case No. 40150, 8 I.C.C.2d 246 (1992). We defer to an
agency's interpretation of its governing statute and
regulations, and affirm that interpretation if it has a
3
ICC regulation 49 C.F.R. § 1312.27(e) provides indirect
authority for such a requirement. Under section 1312.27(e), a
carrier whose tariff refers to a second tariff that refers to a
third tariff must either participate in the third tariff or limit
its participation in the second tariff to terms that are not
controlled by the third tariff. This regulation does not, however,
expressly establish an obligation to participate in the second
tariff.
-8-
reasonable basis in law. Western Coal Traffic League v. U.S.,
719 F.2d 772, 777 (5th Cir. 1983) cert. denied
466 U.S. 953
(1984).
In Jasper Wyman, the Commission addressed the fundamental
argument made by Freightcor: that section 1312.30(c)(4)4
requires only that tariffs be on file in order to refer to
them; consequently, a carrier, who only refers to a mileage
table, is not required to participate in that tariff. In
supporting that contention, Freightcor points out that in
adopting 1984 amendments to Commission's regulations, the ICC
eliminated the explicit requirement that carriers must
participate in a mileage guide.5
The ICC, however, found that the excising of the language
only removed a redundant requirement to participate in the
449 C.F.R. § 1312.30(c)(4) provides
Except as provided in § 1312.13(e)(2), only distance guides on file with the Commission may
be referred to. More than one may be referred to provided the rate tariff clearly specifies
the circumstances under which each guide will apply. An agent's tariff may refer to another
agent's distance guide.
Section 1312.13(e)(2) provides that rules published by the federal government need not be separately filed with
the Commission.
5
Prior to 1984, section 1310.16 provided
Only distance guides officially on file with the
Commission may be referred to. More than one may be
referred to provided the rate tariff clearly specifies
the circumstances under which each guide will apply. All
carriers parties to distance rates referring to one or
more distance guides must also be parties to each guide
referred to. An agent may refer to a distance guide
published in the name of another agent for the account of
participating carriers also parties to the guides.
When this section became effective as revised section 1312.20, the
underlined language was omitted.
-9-
tariffs of other carriers, Jasper Wyman, 8 I.C.C.2d at 251,
which was set out at 49 C.F.R. § 1312.25. Furthermore, the
ICC found that the elimination of the redundant language
allowed carriers, who, as private entities, could not be
"parties" to government distance guides, to nevertheless use
those guides. Therefore, the ICC held that the requirement of
section 1312.4(d) to participate formally in the tariffs of
another agent continued to apply to mileage guides. Jasper
Wyman, 8 I.C.C.2d at 252.
The ICC's ruling -- that mileage guides are tariffs, that
carriers must participate in mileage guides as in any other
tariff, and that the 1984 amendments did not remove this
requirement to participate in mileage guides -- has a
reasonable basis in law. As to the first prong of the ruling,
we have independently determined above that mileage guides are
clearly tariffs. As to the next prong of the ruling, the
Interstate Commerce Act does not distinguish between one form
of tariff and another in requiring Commission regulation of
joint tariffs. 49 U.S.C. § 10762(a)(1). Moreover, the text
of section 1312.30(c)(4) establishes no exception to the
general obligation placed upon a carrier whose tariff is
governed by the terms of the tariff of another carrier or
agent: it must formally participate in the tariff of the other
carrier or an agent. As to the last prong of the holding, the
Commission's view that the 1984 amendments did no more than
-10-
delete a redundant regulation is a plausible explanation for
what occurred.
We hold, therefore, that section 1312.4(d) requires that
a carrier who refers to the mileage guide of another carrier
or agent to participate in that mileage guide. Thus, because
FTHS 275 referred to the mileage rates of HGCB MF-ICC 100-A,
Freightcor was required under section 1312.4(d) to participate
in HGCB MF-ICC 100-A. Freightcor filed neither a power of
attorney nor a concurrence with HGCB to participate in MF-ICC
100-A. Accordingly -- under regulation 1312.4(d) -- FTHS 275
was "void" as a matter of law.6
6
Freightcor argues that a mere irregularity in the tariff is
no basis for the ICC to void the tariff, because the tariff is in
substantial compliance. Freightcor cites Genstar Chemical Ltd. v.
ICC,
665 F.2d 1304 (D.C.Cir. 1981) cert. denied Nitrochem, Inc. v.
ICC,
456 U.S. 905 (1982); Davis v. Portland Seed Co.,
264 U.S. 403
(1924); and Berwind-White Coal Mining Co. v. Chicago & E. R. Co.,
235 U.S. 371 (1914), in support of this position.
In Jasper Wyman, the ICC distinguished these cases as being
suits on effective tariffs that did not conform to a regulation, as
opposed to tariffs that are void or otherwise ineffective. (In
Berwind-White, the tariff's failing was in not conforming to page
format requirements; in Davis, the rate was too high, and in
Genstar, there was an insufficient period of notice prior to the
effective date.) Certainly, none of the cases were based on a
statutory or regulatory provision stating that the "tariff is void
as a matter of law."
We need not reach this question of substantial compliance, as
there is no question but that Freightcor did not comply at all,
much less substantially, with section 1312.4(d), which defines
nonconforming tariffs as void. We therefore will concern ourselves
with the operation and validity of section 1312.4(d) and do so
according to the standards set out in ICC v. American Trucking
Assos., Inc.,
467 U.S. 354 (1984), which is more recent than the
cases indicated by Freightcor.
-11-
B
Freightcor argues, however, that, even if section
1312.4(d) applies to mileage guides, its tariffs are not void
because the ICC is without authority to issue regulation
1312.4(d) to the extent that it retrospectively voids a tariff
that has been approved by, and is on file with, the ICC.
Here, for example, Freightcor contends that it duly filed its
tariff FTHS 275 with the ICC, and the ICC accepted that
tariff; accordingly, it is an effective rate. The ICC, it
argues, has no authority to promulgate a regulation that
retrospectively voids this effective tariff.
(1)
Freightcor relies on the Supreme Court's opinion ICC v.
American Trucking Assos., Inc.,
467 U.S. 354 (1984), and its
simultaneous remand of Aberdeen & Rockfish R. Co. v. U.S.,
467
U.S. 1237 (1984), in contending that its tariffs are not void
pursuant to the terms of section 1312.4(d). In doing so,
Freightcor acknowledges that this circuit has upheld the
authority of the ICC to issue regulations that void effective
tariffs. Aberdeen & Rockfish R. Co. v. U.S.,
682 F.2d 1092
(5th Cir. 1982). It asserts, however, that by vacating
Aberdeen & Rockfish, the Supreme Court precluded our reaching
that result in this case. We disagree.7
7
The Supreme Court, in Aberdeen & Rockfish,
467 U.S. 1237
(1984), vacated and remanded Aberdeen & Rockfish R. Co. v. U.S.,
682 F.2d 1092 (5th Cir. 1982), for reconsideration in the light of
-12-
In American Trucking, the Supreme Court reviewed a
holding of the Eleventh Circuit that although the ICC clearly
had authority to reject proposed tariffs that did not conform
to rate bureau requirements, the ICC lacked the express
statutory authority to reject retrospectively a tariff that
had been on file with the ICC and applied by the carrier in
the conduct of its business; or, in short, the appellate court
held that the ICC lacked the authority to reject,
retroactively, effective tariffs. American Trucking Assos. v.
U.S.,
688 F.2d 1337 (11th Cir. 1982).
American Trucking. Freightcor argues that this remand overruled
our opinion rather than merely vacating it.
In Aberdeen & Rockfish, we considered an ICC regulation
providing that tariffs that did not contain certain symbols
denoting rate changes would be unenforceable, even if the tariffs
were duly filed with the ICC. We held that the ICC did not abuse
its discretion by adopting the regulation, and it was consequently
enforceable. The Supreme Court granted certiorari in American
Trucking and Aberdeen & Rockfish because the Eleventh Circuit
opinion conflicted with our opinion in Aberdeen & Rockfish.
American
Trucking, 467 U.S. at 358. Ultimately, the Supreme Court
reversed the Eleventh Circuit's holding that the ICC may not
enforce rate bureau agreements by rejecting effective tariffs.
Compare American
Trucking, 467 U.S. at 370 to American
Trucking,
688 F.2d at 1354; on remand American Trucking Assos. v. United
States,
744 F.2d 754 (11th Cir. 1984), cert. denied
467 U.S. 1240.
The Supreme Court merely vacated the judgment in Aberdeen &
Rockfish and remanded it to this court "for further consideration
in light of" American Trucking. Aberdeen & Rockfish,
467 U.S. 1237
(1984). This court then remanded the case to the ICC where it
became moot when the ICC repealed the regulations that were the
subject of the suit. 49 Fed.Reg. 38641 (1985). Although it is
certainly true that our opinion was vacated in Aberdeen & Rockfish,
it is incorrect to assume that the Supreme Court's remand
constituted a bar to our upholding the power of the ICC to void an
effective tariff.
-13-
The Supreme Court agreed that the Motor Carrier Act, 49
U.S.C. § 10762(e), does not expressly authorize the Commission
to reject effective tariffs -- a holding that Freightcor
suggests controls our case today. American
Trucking, 467 U.S.
at 364. This holding, however, did not resolve the issue
presented. The court proceeded further to hold that the
Commission has discretion to develop extrastatutory remedies,
including the remedy of voiding effective tariffs. American
Trucking, 467 U.S. at 370. In exercising this discretionary
power, however, the Court prescribed a standard for the
Commission to follow:
To lie within the Commission's discretionary power,
the proposed remedy must satisfy two criteria:
first, the power must further a specific statutory
mandate of the Commission, and second, the exercise
of power must be directly and closely tied to that
mandate.
American
Trucking, 467 U.S. at 367. The court then applied
that standard to the Commission's remedy of voiding tariffs
that had become effective but later were found to be in
violation of agreements among members of the particular rate
bureaus. The Commission argued that, after the tariff had
become effective, the only appropriate remedy to address a
later discovered non-conforming tariff, was voiding the
tariff. The court accepted the argument, saying
[W]e agree with the Commission that its new remedy
is a justifiable adjunct to its express statutory
mandate. The nullification of effective tariffs
submitted in violation of rate-bureau agreements is
directly aimed at ensuring that motor carriers
-14-
comply with the guidelines established by
Congress...
467 U.S. at 370. Accordingly, the Supreme Court reversed the
Eleventh Circuit's holding that the ICC lacked the power to
enforce rate bureau agreements by voiding effective tariffs.
American
Trucking, 467 U.S. at 370.
(2)
Our question is then, in the light of American Trucking,
whether section 1312.4(d) -- in retrospectively voiding a non-
complying tariff -- is within the ICC's statutory authority.
Applying the standards set down by the Supreme Court, we will
uphold the power claimed by the ICC in its regulation if (1)
the power furthers a specific statutory mandate of the
Commission, and (2) the exercise of power is directly and
closely tied to that mandate. American
Trucking, 467 U.S. at
367.8
Before we apply American Trucking's two-step test, we
briefly restate the power claimed by the Commission in our
case today: the authority to declare "void as a matter of
law" a carrier's tariffs that refer to other tariffs without
participation in the second tariff. This power may also be
8
We believe that the American Trucking test appropriately
governs our review of section 1312.4(d), despite the procedural and
substantive distinctions between 1312.4(d) (governing participation
by several carriers or agents in a common tariff) and Motor Carrier
Rate Bureaus -- Implementation of P.L. 96-296, 364 I.C.C. 464
(1980)(governing the conformity of carriers' tariffs to applicable
agreements of rate bureaus to which the carriers belonged), the
ruling of the Commission considered by the American Trucking court.
-15-
characterized as a power to determine whether a tariff is
effective. Jasper Wyman, 8 I.C.C.2d at 258. In other words,
section 1312.4(d) does not authorize the ICC to act
affirmatively to void a tariff. This regulation defines when
a tariff became effective or becomes void through the action
or inaction of a carrier.
The first inquiry that American Trucking requires us to
make is whether this power claimed by the Commission furthers
a statutory mandate. The relevant statutory mandate is in the
Interstate Commerce Act, under which the Interstate Commerce
Commission has jurisdiction to regulate the tariffs of
interstate motor common carriers.9 Congress first set forth
the transportation policy it intends to govern interstate
carriers in the Interstate Commerce Act, 24 Stat. 379 (1887),
which has been refined in its amendments and successor acts,
particularly, the Interstate Commerce Act of 1978, 92 Stat.
1337, and the Motor Carrier Act of 1980, 94 Stat. 2013. This
policy is currently codified at 49 U.S.C. § 10101. As goals
9
Subchapter II of section 105 of the Interstate Commerce Act
provides, in part,
...[T]he Interstate Commerce Commission has jurisdiction
over transportation by motor carrier ... to the extent
that passengers, property, or both are transported by
motor carrier (1) between a place in -- (A) a State and
a place in another State; ..... (2) ... or on a public
highway.
49 U.S.C. § 10521.
-16-
of this policy, federal regulation of transportation should
promote fairness and efficiency.10
The courts have long recognized that a central purpose
underlying the transportation policy of the Interstate
Commerce Act is a Congressional mandate that the ICC regulate
the relationship between carriers and agents to prevent
secrecy in the negotiation of tariffs, which promotes
discrimination, favoritism, market inefficiency, and
artificially high rates. See
Maislin, 110 S. Ct. at 2768,
quoting Armour Packing Co. v. United States,
209 U.S. 56, 81
(1908). Simply put, public disclosure of the parties to each
tariff promotes fairness and helps to level the playing field
on which the players must know whom they are playing with and
against. See, e.g., Kansas City Southern R. Co. v. C.H.
10
49 U.S.C. § 10101(a)(1) provides, in part,
It is the policy of the United States Government .....
(B) to promote safe, adequate, economical, and efficient
transportation;
(C) to encourage sound economic conditions in
transportation, including sound economic conditions among
carriers;
(D) to encourage the establishment and maintenance of
reasonable rates for transportation, without unreasonable
discrimination or unfair or destructive competitive
practices....
Furthermore, the statutory policy is directed specifically to
regulate transportation by motor carrier to promote competition and
efficiency so that motor carriers' services will, in sum,
(A) meet the needs of shippers, receivers, passengers,
and consumers; (B) allow a variety of quality and price
options to meet changing market demands and the diverse
requirements of the shipping and travelling public...
49 U.S.C. § 10101(a)(2).
-17-
Albers Comm. Co.,
223 U.S. 573, 597 (1912)(secret agreements
between shipper and carrier forbidden).
In support of this policy, the Interstate Commerce Act
specifically requires the ICC to regulate the relations among
motor common carriers that have entered into joint tariffs.
49 U.S.C. § 10762(a)(1) provides, in part,
.... A motor common carrier shall publish and file
with the Commission tariffs containing the rates
for transportation it may provide under this
subsection. The Commission may prescribe the other
information that motor common carriers shall
include in their tariffs. .....
Thus, each motor carrier is required by statute to publish and
file with the Commission all tariffs containing rates. The
Commission, moreover, is under an express mandate -- distinct
from the mandates of the statute imposed on carriers -- both
to determine the nature of the information the carrier must
file in each tariff and to require that this information be
provided. Within this mandate to require certain information,
and in the light of the policy against allowing secret
agreements, we believe it is necessary, practically, for the
Commission to require the identification of each participant
in every tariff.11
11
As well as this general mandate of the ICC to set
requirements for joint tariffs, the ICC is specifically required to
monitor the use of joint classifications and rates, as well as the
division of revenues collected pursuant to charges under joint
rates among shippers. 49 U.S.C. § 10705(b)(1) provides:
The Interstate Commerce Commission may, and shall when it
considers it desirable in the public interest, prescribe
... joint classifications, joint rates, (including
-18-
In sum, the congressional mandate to the ICC is that the
Commission must maintain a fair and efficient transportation
market, which, at the very least, does not permit secret
negotiations and arrangements between carriers and shippers.
Mindful of this policy, the Commission is specifically under
a statutory mandate to determine what information must be
provided in every joint tariff and provide mechanisms to
ensure that this information is provided and is accurate.
Pursuant to this obligation, we believe that there is a strong
presumption that the Commission must require the disclosure of
the identity of the carriers participating in every tariff.
Our second step in applying the American Trucking test is
to determine whether the ICC's regulation -- which requires
that a tariff is void if the participating carrier fails to
maximum and minimum rates or both), the division of joint
rates ... for a motor common carrier of property
providing transportation subject to the jurisdiction of
the Commission under subchapter II of chapter 105 of this
title [i.e. motor carriers] with another such carrier...
Furthermore, 49 U.S.C. § 10701(a) provides:
A rate (other than a rail rate), classification, rule, or
practice related to transportation or service provided by
a carrier subject to the jurisdiction of the Interstate
Commerce Commission under chapter 105 [e.g. motor common
carriers] must be reasonable. Divisions of joint rates
by those carriers (including rail carriers) must be made
without unreasonable discrimination against a
participating carrier and must be reasonable.
(Emphasis added.) Certainly, the Commission cannot monitor such
joint rates and joint classifications, nor can it guard against
unreasonable discrimination in the use of joint tariffs unless the
participants of each tariff are identified.
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follow the prescribed procedure12 -- is directly and closely
tied to the Commission's mandate under the Interstate Commerce
Act. We find that this power is clearly tied to the statute
as a necessary means of enforcing the Interstate Commerce Act.
As we have noted, the Commission is required by statute to
determine the standards for filing tariffs. The Commission is
further required to determine the information that must be
provided by every carrier participating with other carriers in
a tariff. Finally, we have noted that the Commission is
expected to further the transportation policy of the federal
government, which, at the very least, bars secret arrangements
among carriers and between carriers and shippers. The
Commission was well within its mandate in dictating that every
tariff must identify the carriers that are party to it.
In fulfilling the statutory mandate, the Commission
designated participation via concurrence or powers of
attorney. The ICC regulations prescribe a simple method for
compliance with the statute and declare that tariffs that do
not comply with important statutory mandates are void. Stated
in another way, the regulation defines the essential elements
12
49 C.F.R. § 1312.4(d). The Commission has promulgated other
rules that are in furtherance of this same mandate, which are not
implicated by Freightcor's argument: Each tariff must list all
other tariffs that govern its terms. 49 C.F.R. § 1312.13(e).
Conversely, every tariff in which carriers participate must include
a section listing all participating carriers. 49 C.F.R. §
1312.13(c). The Commission has also detailed the form and scope of
powers of attorney used by a carrier to participate in another
carrier's or an agent's tariff. 49 C.F.R. § 1312.10(a).
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of an effective tariff that refers to other tariffs that
govern its terms.
Although the use of voiding as a method of compliance is
potentially a harsh measure, we are satisfied that the
Commission has not exceeded its discretion by determining that
tariffs are void if they fail to comply with formalities that
serve important statutory purposes.13 A stricter corrective
measure -- voiding tariffs and giving shippers an explicit
right to overcharges -- was upheld by the Supreme Court in
American Trucking to remedy non-conforming tariffs. American
Trucking,
467 U.S. 370. The public policy that the Commission
seeks to enforce through the exercise of this mandate is one
that has long been integral to the regulation of interstate
commerce: the prevention of secrecy in the dealings among
carriers and between carriers and favored shippers. Thus, we
conclude that section 1312.4(d) was within the Commission's
statutory authority.
IV
We have thus determined that section 1312.4(d) voids as
a matter of law any tariff that has not complied with the
regulation's provisions. We have determined that the
13
We note that, of the vast number of technical requirements
the Commission has placed on tariffs, only the requirement of
formal participation is enforced with the voiding mechanism. We
find no other regulation in which the ICC currently requires a
carrier to comply with the regulation or find that its non-
conforming tariff is "void as a matter of law."
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Commission has the authority to issue such a provision.
Consequently, both of Freightcor's tariffs -- FSSI 282 and
FTHS 275 -- are void as a matter of law because neither
complied with section 1312.4(d). Therefore, Freightcor can
assert neither tariff as a basis for an action for
undercharges under the filed rate doctrine. Thus, the
district court erred in granting summary judgment and entering
judgment in favor of Freightcor. Accordingly, we reverse the
district court, vacate the judgment, and remand to the
district court with directions to enter a judgment for Vitro.
VACATED, REVERSED, and REMANDED.
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