Source: http://supreme.justia.com/cases/federal/us/497/116/case.html
Timestamp: 2013-12-09 15:25:02
Document Index: 32819143

Matched Legal Cases: ['§ 10762', '§ 10761', '§ 10741', '§ 10701', '§ 10704', '§ 10701', '§ 10761', '§ 10761', '§ 10101', '§ 10741', '§ 10701', '§ 11701', '§ 10704', '§ 11705', '§ 10761', '§ 10761', '§ 10701', '§ 10701', '§ 10761', '§ 10741']

Maislin Indus. v. Primary Steel - 497 U.S. 116 (1990) :: Justia US Supreme Court Center
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Maislin Indus. v. Primary Steel - 497 U.S. 116 (1990)
Case	U.S. Supreme CourtMaislin Indus. v. Primary Steel, 497 U.S. 116 (1990)Maislin Industries, Inc. v. Primary Steel, Inc.No. 89-624Argued April 16, 1990Decided June 21, 1990497 U.S. 116CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR
The Interstate Commerce Act (Act) requires motor common carriers to publish their rates in tariffs filed with the Interstate Commerce Commission (ICC), 49 U.S.C. § 10762, and prohibits both carriers and shippers from deviating from those rates, § 10761. The Act also specifies that a carrier's rates must be nondiscriminatory, § 10741, and that its rates and practices must be reasonable, § 10701, and charges the ICC, upon determining that a rate or practice violates the statute, with prescribing the rate or practice to be followed, § 10704(b)(1). Purportedly pursuant to this authority, the ICC, in its recent Negotiated Rates decisions, has adopted a policy that relieves a shipper of the obligation to pay the filed rate when it has privately negotiated a lower rate with the carrier. From 1981 to 1983, Quinn Freight Lines, a motor common carrier and a subsidiary of petitioner Maislin Industries, Inc., privately negotiated interstate shipment rates with respondent Primary Steel, Inc., that were lower than Quinn's filed rates. Quinn never filed the negotiated rates with the ICC. In 1983, Maislin filed for bankruptcy, and the bankrupt estate issued balance due bills to Primary for the difference between the filed rates and the negotiated rates. When Primary refused to pay the undercharges, the estate brought suit in the District Court, which referred the matter to the ICC. Rejecting the argument that it lacked the statutory power to release a shipper from liability for such undercharges, the ICC relied on its Negotiated Rates policy to hold 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. The ICC concluded that Maislin was not entitled to recover, since Quinn and Primary had negotiated other rates, and since Primary had relied on Quinn to file those rates, had reasonably believed that the amounts quoted and billed were the correct total charges, and had made full payment. The case returned to the District Court, which granted summary judgment for Primary on the basis of the ICC's decision. The Court of Appeals affirmed, agreeing with the District Court that the approach taken by the ICC was consistent with the Act. Page 497 U. S. 117
(c) The passage of the Motor Carrier Act of 1980 (MCA) --which substantially deregulated the motor carrier industry for the avowed purpose of promoting competitive and efficient transportation services -- does not justify the ICC's Negotiated Rates policy. Although the ICC has both the authority and the expertise generally to adopt new policies when Page 497 U. S. 118 faced with new developments in the industry, its power does not extend to a policy that directly conflicts with its governing statute. Nothing in the MCA repeals §§ 10761 and 10762, and generalized congressional exhortations to "increase competition" cannot provide the ICC authority to alter the requirements of those sections as interpreted by this Court. Cf. Square D Co. v. Niagara Frontier Traffic Bureau, Inc., 476 U. S. 409, 476 U. S. 420. The fact that, even before the MCA's passage, Congress had allowed the ICC to exempt motor contract carriers from the requirement that they adhere to the published tariff, see § 10761(b), demonstrates that Congress is aware of the requirement, and has deliberately chosen not to disturb it with respect to motor common carriers. Pp. 497 U. S. 133-136.
BRENNAN, J., delivered the opinion of the Court, in which WHITE, MARSHALL, BLACKMUN, O'CONNOR, SCALIA, and KENNEDY, JJ., joined. SCALIA, J., filed a concurring opinion, post, p. 497 U. S. 138. STEVENS, J., filed a dissenting opinion, in which REHNQUIST, C.J., joined. post, p. 497 U. S. 138. Page 497 U. S. 119
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). [Footnote 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, 204 U. S. 440-442 (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 Page 497 U. S. 120 the Commission finds to be in violation" of the Act. 49 U.S.C. § 11705(b)(3) (1982 ed., Supp. V).
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. Page 497 U. S. 121 Commercial Metals Co., 456 U. S. 336, 456 U. S. 352 (1982); Louisville & Nashville R. Co. v. Maxwell, 237 U. S. 94, 237 U. S. 97 (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. [Footnote 3] Page 497 U. S. 122
This case involves the application of the Commission's new Negotiated Rates policy. It arises from an action by petitioner Maislin Industries, Inc. (Maislin), to recover freight undercharges for 1,081 interstate shipments performed Page 497 U. S. 123 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.
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 Page 497 U. S. 124 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
"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 Page 497 U. S. 125 was made by [Primary],"
Ibid. (citation omitted). Because the Courts of Appeals have disagreed on the important issue of whether the ICC's Negotiated Rates policy is consistent with the Act, [Footnote 8] we granted certiorari. 493 U.S. 1041 (1990). Page 497 U. S. 126
Given the close interplay between the duties imposed by §§ 10761-10762 and the statutory prohibition on discrimination, Page 497 U. S. 127 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 202 U. S. 245; Hefley, supra, 158 U.S. at 158 U. S. 101. 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 (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 m