Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca13-13-05056/USCOURTS-ca13-13-05056-0/pdf.json

Parties Involved:
Estes Express Lines
Appellant
United States
Appellee

Document Text:

United States Court of Appeals 

for the Federal Circuit ______________________ 

ESTES EXPRESS LINES,

Plaintiff-Appellant,

v.

UNITED STATES,

Defendant-Appellee.

______________________ 

2013-5056

______________________ 

Appeal from the United States Court of Federal 

Claims in No. 11-CV-0597, Judge Francis M. Allegra.

______________________ 

Decided: January 3, 2014 

______________________ 

ROBERT D. MOSELEY, JR., Smith Moore Leatherwood, 

LLP, of Greenville, South Carolina, argued for plaintiffappellant. 

DANIEL B. VOLK, Trial Attorney, Commercial Litigation Branch, Civil Division, United States Department of 

Justice, of Washington, DC, argued for defendantappellee. With him on the brief were STUART F. DELERY, 

Acting Assistant Attorney General, JEANNE E. DAVIDSON, 

Director, and MARTIN F. HOCKEY, JR., Assistant Director. 

______________________ 

Before PROST, REYNA, and TARANTO, Circuit Judges.

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2 ESTES EXPRESS LINES v. US

REYNA, Circuit Judge. 

Estes Express Lines (“Estes”) appeals from a final order of the Court of Federal Claims (“Claims Court”) 

dismissing Estes’s complaint for lack of subject matter 

jurisdiction. Estes Express Lines v. United States, 108 

Fed. Cl. 416 (2013). For the reasons below, we reverse 

and remand for further proceedings.

BACKGROUND

Estes, a federal motor carrier, seeks to recover from 

the Government freight charges incurred by Marine Corps 

Community Services (“MCCS”). The charges in question 

correspond to shipments arranged on behalf of MCCS by a 

freight broker, Salem Logistics (“Salem”), for deliveries 

between June 2008 and February 2009. Estes and Salem 

do not have a written contract, and Estes handled all 

shipments under its common carrier tariff. 

Salem arranged the shipments pursuant to a contract 

with MCCS (“the Salem-MCCS contract”). Under this 

contract, Salem agreed to provide MCCS with certain 

transportation and freight management services, including coordinating the pick-up, transport and delivery of 

vendor products to various MCCS or Marine Corps Exchange (“MCX”)1 locations around the country. Specifically, upon being contacted by a vendor who received an 

order from MCCS or MCX, Salem would select a carrier to 

move the merchandise from the vendor to the MCCS/MCX 

destination. The contract provided that Salem would pay 

the carriers directly and then invoice MCCS. Salem 

further agreed not to represent itself as an agent or 

representative of MCCS. 

Each shipment handled by Estes was identified by a 

bill of lading, a freight bill, and a delivery receipt. All 

1 MCX is a division of MCCS. 

 

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ESTES EXPRESS LINES v. US 3

bills of lading listed a MCCS or MCX destination as the 

“consignee,” and most bills of lading identified the thirdparty vendor as the “shipper.” In some instances, goods 

were moved from a Navy Exchange location to an MCX 

location, or from one MCX location to another, in which 

case a government entity was listed as the “shipper.” 

Pursuant to the Salem-MCCS contract, all bills of lading 

further indicated that “third party freight charges” were 

to be billed to “Marine Corps Exchange C/O Salem Logistics.” The delivery receipts also specified that charges 

should be billed to the “Marine Corps Exchange.” Each 

delivery receipt was signed by a representative of the 

MCCS or MCX location to which the goods were delivered. 

Following delivery, Estes invoiced “MCX, care of Salem” for freight charges. Although MCCS paid Salem for 

some of the shipments, it appears that Salem never 

remitted payment to Estes. After it became aware that 

Salem was failing to pay Estes and other carriers, MCCS

began paying carriers directly, but only for shipments for 

which it had not yet paid Salem. 

On February 3, 2010, Estes filed suit against Salem 

and the Government in district court seeking to recover 

$147,645.33 in freight charges for which it allegedly had 

not received payment from Salem or MCCS. On July 8, 

2011, the case was transferred to the Claims Court. On 

January 6, 2012, the Government moved to dismiss 

pursuant to Rules 12(b)(1) and 12(b)(6) of the Rules of the 

Court of Federal Claims (“RCFC”). Although Estes did 

not attach any shipping documents to its complaint, it 

included copies of exemplary bills of lading and delivery 

receipts in its opposition to the Government’s motion to 

dismiss. 

On January 15, 2013, the Claims Court dismissed Estes’s complaint pursuant to RCFC 12(b)(1) for lack of 

subject matter jurisdiction. The Claims Court held that 

there is no direct privity of contract between Estes and 

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4 ESTES EXPRESS LINES v. US

the Government because “[i]t was Salem, and not Estes 

Express, that had a contractual relationship with defendant; Estes Express’ contractual relationship was with 

Salem only, as a subcontractor.” 108 Fed. Cl. at 421. 

According to the Claims Court, this relationship “is plainly reflected in the contract that defendant had with Salem,” and “[n]othing in the bills of lading that plaintiff has 

introduced into the record contradicts this notion.” Id. 

The Claims Court also rejected Estes’s “deemed privity” 

theory, finding that Salem did not act as the Government’s agent. Finally, the Claims Court also rejected 

Estes’s claim under 49 U.S.C. § 13706, which governs the 

liability of consignees for shipping charges incurred by a 

common carrier, following Claims Court precedent holding that the statute does not “create liability in the consignee in the face of an express contractual allocation 

elsewhere of freight charges.” Id. at 422 (citing Cent. 

Freight Lines, Inc. v. United States, 87 Fed. Cl. 104, 112 

(2009); Cent. Transp. Int’l, Inc. v. United States, 63 Fed. 

Cl. 336, 340 (2004)).

Estes timely appealed. We have jurisdiction pursuant 

to 28 U.S.C. § 1295(a)(3). 

DISCUSSION

We review de novo whether the Claims Court possessed jurisdiction. Maher v. United States, 314 F.3d 600, 

603 (Fed. Cir. 2002). The plaintiff bears the burden of 

establishing subject matter jurisdiction by a preponderance of the evidence. Reynolds v. Army & Air Force Exch. 

Serv., 846 F.2d 746, 748 (Fed. Cir. 1988). In deciding a 

motion to dismiss for lack of subject matter jurisdiction, 

the court accepts as true all uncontroverted factual allegations in the complaint, and construes them in the light 

most favorable to the plaintiff. See Cedars-Sinai Med. 

Ctr. v. Watkins, 11 F.3d 1573, 1583-84 (Fed. Cir. 1993). 

The Tucker Act, 28 U.S.C. § 1491, confers jurisdiction 

on the Claims Court and waives sovereign immunity for 

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ESTES EXPRESS LINES v. US 5

certain claims for monetary relief against the United 

States. But the Tucker Act itself does not create a substantive cause of action; to demonstrate that the Claims 

Court has jurisdiction to entertain its claim under the 

Tucker Act, the plaintiff must identify a constitutional 

provision, federal statute, executive agency regulation, or 

“any express or implied contract with the United States”

that creates the right to money damages. See 28 U.S.C. 

§ 1491(a)(1). Estes advances two grounds upon which it 

argues the Claims Court has Tucker Act jurisdiction. 

First, Estes asserts a claim based on contract, arguing 

that a contractual relationship with the Government 

exists either directly under the bills of lading or, alternatively, because Salem acted as an agent of the Government, binding the Government under a “deemed privity” 

theory. Second, Estes asserts a claim under 49 U.S.C.

§ 13706, arguing that the Government is directly liable as 

the consignee and owner of the freight. 

To maintain a cause of action under the Tucker Act 

based on a contract, Estes must show that there is a 

contract directly between itself and the Government, i.e., 

that there is privity of contract. See Cienega Gardens v. 

United States, 194 F.3d 1231, 1239 (Fed. Cir. 1998); 

Anderson v. United States, 344 F.3d 1343, 1351 (Fed. Cir. 

2003). The effect of finding privity of contract is to find a 

waiver of sovereign immunity. Cienega Gardens, 194 

F.3d at 1239. Whether a contract exists is a mixed question of law and fact, but where “the parties do not dispute 

the relevant facts, the privity issue reduces to a question 

of law, which we review de novo.” Id.

The Claims Court found a lack of direct privity between Estes and the Government because “[i]t was Salem, 

and not Estes Express, that had a contractual relationship with defendant; Estes Express’ contractual relationship was with Salem only, as a subcontractor.” 108 Fed. 

Cl. at 421. The Claims Court based its conclusion mainly 

on the MCCS-Salem contract, which “describe[s] the 

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6 ESTES EXPRESS LINES v. US

nature of [Salem’s] services and the invoicing mechanisms 

that would be employed in reimbursing Salem for the 

amounts that it paid to its carriers, such as Estes Express.” Id. But regardless of whether the contract reflects an agreement between Salem and MCCS regarding 

payment logistics, it also reflects MCCS’s intention that 

“[a]ll shipments that are F.O.B. origin must be shipped on 

a third party collect bill of lading” and that freight charges should be “third party billed to Marine Corps Exchange 

C/O Salem Logistics.” In other words, MCCS intended to 

be bound by bills of lading that would reflect not only that 

it was the consignee and owner of the freight, but also the 

party ultimately responsible for freight charges. Accordingly, the MCCS-Salem contract does not foreclose the 

existence of a separate contractual relationship between 

Estes and the Government that may have arisen under 

the bills of lading it elected to use.

The bill of lading is “the basic transportation contract 

between the shipper-consignor and the carrier; its terms 

and conditions bind the shipper and all connecting carriers.” S. Pac. Transp. Co. v. Commercial Metals Co., 456 

U.S. 336, 342 (1982). Ordinarily, under default bill of 

lading terms, the shipper or consignor assumes the obligation to pay freight charges. But a party to the shipment may assume liability where the terms of the bill of 

lading so provide and the party accepts the shipment

subject to the terms of the bill of lading. See Louisville & 

N.R. Co. v. Cent. Iron & Coal Co., 265 U.S. 59, 70 (1924). 

Here, the undisputed facts are sufficient to establish

that the Government is a party to the bills of lading not 

only as the “bill to” party, but also as the shipper at least 

in those instances in which goods were moved from one 

Government location to another. MCCS expressly authorized, by contract, its designation as a party to the bills of 

lading. Indeed, the Government concedes that all bills of 

lading were generated consistent with the instructions in 

the MCCS-Salem contract. The Claims Court also found 

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ESTES EXPRESS LINES v. US 7

that MCX accepted all shipments without exception, and 

that a MCX representative signed each delivery receipt 

listing MCX as the “bill to” party. Under these circumstances, the bills of lading are sufficient to meet Estes’s 

burden to show privity with the Government. 

To be clear, we need not, and do not decide the question of whether the Government may be liable for freight 

charges solely on the basis that it is the consignee and 

owner of the freight. We recognize previous decisions by 

the Claims Court, relied on by the court below, finding 

that uniform straight bills of lading were insufficient to 

establish privity of contract with the Government. See 

Cent. Freight Lines, 87 Fed. Cl. at 110-11; Cent. Transp., 

63 Fed. Cl. at 338-39. Those decisions are not binding on 

us, and are distinguishable as well. In those cases, unlike 

in this case, the Government was not a party to the 

commercial bills of lading in question, which were instead 

between the carriers and the brokers and did not list the 

Government as the party to be billed. See Cent. Freight 

Lines, 87 Fed. Cl. at 107, 109; Cent. Transp., 63 Fed. Cl. 

at 337-38.

The Claims Court erred in dismissing the weight of 

the bills of lading on the basis of the MCCS-Salem contract. Although the parties to a freight shipment are 

generally free to modify default bill of lading terms by a 

separate contract, see Louisville, 265 U.S. at 66, a contract with a broker who is not a party to the bills of lading 

does not necessarily accomplish the same. In this case, 

there is no indication that Estes agreed to any terms in 

the Salem-MCCS contract purporting to allocate liability. 

There is also no evidence that Estes agreed to release 

MCCS from liability upon MCCS forwarding payment to

Salem, or that Salem otherwise acted as an agent of Estes 

in collecting payment. Therefore, the provisions of the 

MCCS-Salem contract cannot alter any contractual obligations arising separately under the bills of lading.

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8 ESTES EXPRESS LINES v. US

CONCLUSION

The Claims Court erred in dismissing Estes’s complaint for lack of subject matter jurisdiction. Although we 

do not express any opinion regarding the merits of Estes’s 

claims and the issue of ultimate liability, we conclude that 

the bills of lading are sufficient to establish privity. We 

decline to address Estes’s “deemed privity” theory and 

whether 49 U.S.C. § 13706 provides the Claims Court 

with jurisdiction. Accordingly, we

REVERSE AND REMAND

COSTS

Each party shall bear its own costs.

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