Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-4_05-cv-00538/USCOURTS-azd-4_05-cv-00538-1/pdf.json

Nature of Suit Code: 890
Nature of Suit: Other Statutory Actions
Cause of Action: Civil Miscellaneous Case

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IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF ARIZONA

Fulfillment Services, Inc., 

Plaintiff, 

vs.

United Parcel Service, Inc., et al.,

Defendant. 

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CV 05-538 TUC DCB

ORDER

For the reasons explained below, Defendants' Motion for Attorney Fees (document 30)

is denied.

Plaintiff, Fulfillment Services, Inc. (Fulfillment), filed a class action law suit, alleging

that Defendants, United Parcel Service (UPS), violated 49 U.S.C. § 13703, a provision of the

Motor Carrier Act that provides an exemption from antitrust laws for certain collective

activities. Plaintiff asserted that 49 U.S.C. § 14704(a), which creates a private cause of action

for violations of the Interstate Commerce Act (ICA), Motor Carrier provisions, allowed it to

bring a law suit for damages related to Defendants' alleged violation of 49 U.S.C. § 13703(f).

Relying on Owner-Operator Driver's Ass'n v. New Prime, Inc., 192 F.3d 778 (8th Cir.

1999), this Court found that "49 U.S.C. § 14704(a)(2) authorizes damages to remedy at least

some violations of the Motor Carrier Act, but that it does not provide a private cause of action

for damages for every and any kind of violation of the Motor Carrier Act. It does not provide

a private cause of action for a violation of 49 U.S.C. § 13703(f)." (Order filed April 21, 2006

at 12.) 

This Court explained, "Congress struck a delicate balance when it adopted § 13703,

excepting certain agreements from antitrust liability. The agreement requirements contained

Case 4:05-cv-00538-DCB Document 48 Filed 11/15/06 Page 1 of 4
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in § 13703, including those allegedly violated by the UPS, are not tariff filing requirements.

They serve the purpose of the statute, which is to provide an exemption from antitrust liability

for agreements that comply with the very specific provisions of the statute for securing such an

exemption. Imposing further liability, as Fulfillment suggests exists under § 14704(a)(2), goes

beyond the narrow purpose of § 13703, constrains contractual freedom, and is contrary to the

policies and principles behind deregulation. This Court finds that liability under § 13703 does

not extend beyond antitrust violations." Id. at 10.

This Court also found that the express limitations contained in "§ 14704 would be

pointless if the courts overrode them by interpreting subsection (a)(2) to provide private causes

of action for every kind of violation of the Motor Carrier Act." Id. at 11.

This Court had subject matter jurisdiction over the case because the Plaintiff alleged a

violation of a federal statute. See 28 U.S.C.A. § 1331 (as a general matter, federal courts have

subject matter jurisdiction over civil actions “arising under the Constitution, laws, or treaties

of the United States.”) A court always has jurisdiction to determine its jurisdiction.

Standing is an issue of subject matter jurisdiction because a court may exercise its

jurisdiction only when cases are in controversy. This requires a plaintiff to show: "(1) it has

suffered an ‘injury in fact’ that is (a) concrete and particularized and (b) actual or imminent, not

conjectural or hypothetical; (2) the injury is fairly traceable to the challenged action of the

defendant; and (3) it is likely, as opposed to merely speculative, that the injury will be redressed

by a favorable decision.” Rivas v. Rail Delivery Service, Inc., 423 F.3d 1079, 1083 n. 1 (9th Cir.

2005). In Rivas, the court explained that the district court must dismiss the action for lack of

subject matter jurisdiction because the private cause of action under ICCTA, 49 U.S.C. §

14704(a), did not apply retroactively to agreements executed after the ICCTA's effective date.

In other words, the plaintiff lacked standing to bring an action under § 14704(a). Following

Rivas, this Court dismissal of Plaintiff's action for lack of subject matter jurisdiction was

because Plaintiff lacked standing under 49 U.S.C. § 14704(a)(2) to bring an action for the

alleged violation of 49 U.S.C. § 13703(f).

Case 4:05-cv-00538-DCB Document 48 Filed 11/15/06 Page 2 of 4
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This Court finds no ambiguity and that the express language of the statute provides for attorney

fees as a right and remedy to injured plaintiffs, which shall be taxed as part of the costs of the action

for such prevailing plaintiffs. The original statute expressly mandated a reasonable attorney's fee as part

of the damages for which a carrier or broker is found liable, and the district court shall tax and collect

that fee as part of the costs of the action. Prime, 398 F.3d at 1071-72. The statute was amended to

eliminate the "as part of the damages" language to ensure that plaintiffs who receive injunctive relief

are entitle to attorney fees. Id. The deletion did not create any ambiguity given the clear directive of

the statute’s caption: “Rights and Remedies of Persons Injured by Carriers or Brokers.”

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Defendants seek attorney fees under 49 U.S.C. § 14704(e), which provides: "The district

court shall award a reasonable attorney's fee under this section. The district court shall tax and

collect that fee as part of the costs of the action." Plaintiff objects because this attorney fee

provision applies only with regard to prevailing plaintiffs, and furthermore, where the action

is dismissed for lack of subject matter jurisdiction there is no jurisdiction to award attorney fees.

Where a court determines that plaintiffs do not have a cause of action under § 14704, no

attorney fees are appropriate under the statute. Stewart v. Mitchell Transport, 241 F. Supp. 2d

1216 (Kan. 2002). More importantly, the Defendants may not seek attorney fees under 49

U.S.C. § 14704(e). 

In New Prime, the district court dismissed the claims brought pursuant to 49 U.S.C. §

14704(a) because the plaintiffs' lease agreements were entered into before the effective date of

the ICCTA. The district court granted attorney fees under 49 U.S.C. § 14704(e) to the

defendants. The appellate court reversed the award of attorney fees. It held that "the statutory

scheme was designed to benefit plaintiffs and that the remedy provided in 14704(e) must be

read consistent with that." New Prime, 398 F.3d at 1071.

It found the text of § 14704(e) to be ambiguous. Its title, "Rights and remedies of

persons injured by carriers or brokers" indicates that the fee shifting provision is one of the

remedies available to injured plaintiffs, yet it provides that fees are to be taxed 'as part of the

costs of the action,' and costs are generally associated with a prevailing party." Id. at 1069.1

Finding ambiguity, the court looked at the statute's legislative history to discover that Congress

intended to address the disparity in bargaining power between independent owner-operators and

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motor carriers, and that to allow defendants to secure attorney fees would have a chilling effect

on the use of the private right of action to enforce Truth in Leasing regulations. Id. at 1070-71.

The court noted that Congress legislates against the strong background of the American

Rule, which requires the parties to pay their own attorney fees unless Congress directs

otherwise. Id. at 1069. The court also noted that no other federal statute mandates an award

of attorney fees to a prevailing defendant. Id. at 1070. 

There is no evidence that Congress intended to benefit prevailing defendants, which

would have chilled the very purpose of the ICCTA to remedy the disparities in bargaining

positions between independent owner operators and motor carriers and provide a forum for

independent owner-operators to resolve what are often small claims. "The potential rewards

are already low, and increasing the risks by imposing attorney fees on owner-operators who do

not prevail would discourage them from pursuing their claims in court." Id. at 1071. In other

words, it makes no sense to create such a private remedy and create a unique formidable barrier

to its attainment. Id.

This Court finds the New Prime decision to be well reasoned and agrees that section

14704(e) did not create a mandatory fee shifting provision in favor of Defendants. Id.

Accordingly,

IT IS ORDERED that the Defendant's Motion for Attorney Fees (document 30) is

DENIED.

DATED this 14th day of November, 2006.

Case 4:05-cv-00538-DCB Document 48 Filed 11/15/06 Page 4 of 4