Opinion ID: 702344
Heading Depth: 2
Heading Rank: 2

Heading: Proper Construction of Section 9 of the NRA

Text: 11 Despite the NRA's apparent focus on the undercharge claims of bankrupt carriers, the Trustee argues that applying the Act to such claims violates Section 9 of the NRA. According to the Trustee, when the NRA is applied to prevent bankrupt carriers from recovering undercharges, it limits and otherwise affects the application of the Bankruptcy Code to undercharge claims in violation of Section 9. Section 9 of the NRA provides: 12 Sec. (9) LIMITATION ON STATUTORY CONSTRUCTION. 13 Nothing in this Act (including any amendment made by this Act) shall be construed as limiting or otherwise affecting application of title 11, United States Code, relating to bankruptcy; title 28, United States Code, relating to the jurisdiction of the courts of the U.S. (including bankruptcy courts); or [ERISA]. 14 The bankruptcy and district courts rejected the Trustee's argument. They found that applying Section 2(a) of the NRA, Sec. 10701(f)(9), to Lifschultz's undercharge claims did not violate the antiforfeiture provisions of the Bankruptcy Code and therefore did not violate Section 9. 15 Section 9 of the NRA is susceptible to two interpretations. One reading is that offered by the Trustee: Section 9 means the NRA should not affect the treatment of undercharge claims under the Bankruptcy Code or ERISA. 6 The other reading is that offered by Lifschultz and adopted by the courts below: Congress crafted the NRA to address undercharge claims brought by bankrupt carriers but without interfering with the Bankruptcy Code or ERISA; Section 9 means that if those laws come into conflict, the NRA must give way. The language of Section 9 appears to be broad but, as FDSI has shown, reading Section 9 broadly severely undercuts Section 2(a), Sec. 10701(f)(1)(A), which creates a class almost wholly composed of bankrupt carriers. Because these provisions appear to conflict, it would be helpful to examine the NRA's legislative history. See Primate Protection League v. Tulane Educ. Fund, 500 U.S. 72, 84, 111 S.Ct. 1700, 1707-08, 114 L.Ed.2d 134 (1991) (recourse to legislative history is appropriate where proffered interpretation of a statute would compel an odd result); Merrill Lynch, Pierce, Fenner & Smith, Inc. et al. v. Lauer, 49 F.3d 323, 326-27 (7th Cir.1995) (we look beyond express language of statute only where such language is ambiguous, or where a literal interpretation would lead to absurd results or thwart the goals of the statutory scheme). 16
17 As noted, the Supreme Court's holding in Maislin began the process that culminated in the NRA. The drafters of that Act intended it to address undercharge claims brought by bankrupt carriers. For example, the House Report that recommended passage of the NRA in 1993 stated: 18 The purpose of H.R. 2121, as reported, is to provide a statutory process for resolving disputes for claims involving negotiated transportation rates brought about by Trustees for non-operating motor carriers for past transportation services. The bill provides a procedure for settlement of such claims, as well as a statutory mechanism for certain other transportation regulatory changes. 19 House Report 103-359, p. 7-8, U.S.C.C.A.N.1993, pp. 2534-35. The Senate report for its version of the NRA likewise stated: 20 The bill, as reported, is intended to alleviate the freight motor carrier undercharge litigation crisis by establishing a statutory procedure for resolving disputes resulting from efforts by Trustees for bankrupt motor carriers or nonhousehold goods forwarders to collect additional amounts for past transportation. 21 . . . . . 22 S.Rep. No. 103-79. Indeed, references to bankrupt carriers dominate the House and Senate reports. The class of carriers created by Section 2(a), Sec. 10701(f)(1)(A), is almost wholly comprised of bankrupt carriers, and the Act addresses each of the principal undercharge theories advanced by trustees. 7 Thus, it is certain that the NRA was originally drafted to resolve undercharge claims made by bankrupt carriers--at least initially. 23 But the Trustee argues that Section 9 was a key compromise which shows that the NRA does not limit the Bankruptcy Code. And a review of the hearings held in the House of Representatives concerning the NRA does indicate that the interplay between the NRA, the Bankruptcy Code, and ERISA was a focal point of the legislative process. See generally The Negotiated Rate Issues and Proposed Legislative Solutions Thereto, Hearing before the Subcommittee on Surface Transportation of the House Committee on Public Works and Transportation, 103d Cong., 1st Sess. (1993). Proponents of the NRA regarded undercharge claims as an economically debilitating business practice and believed it was fundamentally unfair for carriers to recover undercharges after they had negotiated lower rates. Their opponents were organized labor and the trustees for employee pension plans. These groups argued that just like the shippers, they were the victims of carriers who failed to pay wages, payroll taxes, contributions to pension and welfare funds and/or termination or withdrawal payments. For those reasons, they argued, any effort to eliminate the undercharge crisis had to offer special protections to employees and employee ERISA funds. As a result of these disparate interests, two rival versions of undercharge legislation were offered for consideration by the House of Representatives in 1993: H.R. 2021 and H.R. 2121. 8 But ultimately it was H.R. 2121, the version favored by shippers (and which is almost identical to the now-enacted NRA) that was reported out favorably by the Committee on Public Works and Transportation. The bill was reported out for consideration by the House after efforts to amend the bill in Committee failed. See 139 Cong.Rec.H. 9601 (November 15, 1993) (remarks of Rep. Lipinski). 24 According to the Trustee, the reporting of H.R. 2121 out of Committee explains the origin of Section 9, and the legislative history shows that Section 9 means the NRA does not apply to undercharge claims made by bankrupt carriers. We do know that on November 15, Chairman Mineta wrote to Chairman Brooks as follows: 25 Because of your Committee's jurisdiction over Federal courts and bankruptcy, I recognize your right to request a sequential referral of H.R. 2121. However, and in accordance with your letter, I am pleased that we were able to agree on language clarifying that we do not intend in this legislation to affect[ ] either the Bankruptcy Code or the jurisdiction of the bankruptcy courts. Based on our agreement, it is my understanding that you will not pursue your request for a sequential referral. 26 Letter of Hon. Norman Y. Mineta, Chairman, House Committee on Public Works and Transportation to Hon. Jack Brooks, Chairman, House Committee on the Judiciary (November 15, 1993), reported in House Report 103-359, p. 16. That same day, Chairman Brooks replied: 27 .... As you know, under Rule X of the Rules of the House of Representatives, our Committee has jurisdiction over bankruptcy and Federal Courts. Based on this jurisdiction, we are concerned that H.R. 2121, as currently drafted, could be construed to limit or otherwise affect application of Title 28, United States Code, relating to the jurisdiction of the courts of the United States (including bankruptcy courts). On the basis of these concerns and others, our Committee has requested a sequential referral of the bill. 28 However, it is my understanding that as a result of staff discussions on this issue, amended language will be included in the version of H.R. 2121 to be called-up on suspension that will make it clear that nothing in the bill shall be construed as limiting or otherwise affecting application of Title 28, United States Code, relating to the jurisdiction of the courts of the United States (including bankruptcy courts). 29 Based on these assurances, such a change in statutory language would also create circumstances whereby the Judiciary Committee would withdraw its request for sequential referral.... 30 Letter of Hon. Jack Brooks, Chairman, House Committee on the Judiciary to Hon. Norman Y. Mineta, Chairman, House Committee on Public Works and Transportation (November 15, 1993), reported in House Report 103-359, pp. 16-17. 31 The floor discussion of the NRA which followed certainly illustrates why legislative history is notoriously unreliable. For the most part, the Representatives addressed H.R. 2121 as if Section 9 did not exist. The few Representatives that did address Section 9 were those who were intimately involved with the events described above, and their remarks are most charitably described as tendentious. 9 Whatever the case, after a brief floor discussion H.R. 2121 was passed by the House of Representatives, 139 Cong.Rec.H. 9657, 9659 (November 15, 1993). Three days later the House version of the bill, which was substituted for the text of S. 412, see Congressional Record Digest, 139 Cong.Rec. D1302, was approved by the Senate. 139 Cong.Rec. S16187 (November 18, 1993). 10 32
33 To date approximately 50 courts have considered whether Section 9 prohibits the application of the NRA to undercharge claims brought by bankrupt carriers. Given the text of Section 9 and the legislative history of the NRA, it is no surprise that courts have produced the wide variety of views concerning the proper construction of Section 9 and the effect of the NRA upon undercharge claims made by bankrupt carriers. 11 And we can see why. Ultimately, the question boils down to whether Section 9 should be read broadly or narrowly, see, e.g., In re Jones Truck Lines, Inc., 57 F.3d 642, 645 (8th Cir.1995). If Section 9 is read broadly it means the NRA cannot limit or eliminate undercharge claims made by bankrupt carriers. If Section 9 is read narrowly it means that the NRA does apply to such claims. The NRA would be restricted only when it comes into a direct conflict with the Bankruptcy Code. For one trying to choose the proper reading of Section 9, the legislative history provides no clear guidance. So after reviewing the legislative history we are left where we started: we have an Act directed almost exclusively towards the undercharge claims of bankrupt carriers and a last minute amendment that, if read broadly, effectively nullifies the Act. Under these circumstances, it is not surprising that the vast majority of courts have held that Section 9 does not preclude application of the NRA to undercharge claims brought by bankrupt carriers. After we heard oral argument in this case, the Eighth Circuit joined that majority in an opinion that addresses the identical issues before us. Jones Truck Lines, Inc., id. The court held that applying Sec. 10701 to undercharge claims made by bankrupt carriers does not violate the Bankruptcy Code or Section 9. The Eighth Circuit is the first circuit to have addressed this issue. 34 Because this case presents an issue of statutory interpretation, [o]ur task is to give effect to the will of Congress, and where its will has been expressed in reasonably plain terms, that language must ordinarily be regarded as conclusive. Negonsott v. Samuels, --- U.S. ----, ---- - ----, 113 S.Ct. 1119, 1122-23, 122 L.Ed.2d 457 (1993) (quotations omitted). The statutory text is the best evidence of a statute's purpose, West Virginia Univ. Hospitals, Inc. v. Casey, 499 U.S. 83, 98, 111 S.Ct. 1138, 1146-47, 113 L.Ed.2d 68 (1991), and courts must presume that a legislature says in a statute what it means and means in a statute what it says there. Connecticut Nat. Bank v. Germain, 503 U.S. 249, 253-54, 112 S.Ct. 1146, 1149, 117 L.Ed.2d 391 (1992). Thus, we have a duty to give effect, if possible, to every clause and word of a statute. Moskal v. United States, 498 U.S. 103, 109-110, 111 S.Ct. 461, 466, 112 L.Ed.2d 449 (1990) (internal quotations omitted). However, we must not be guided by a single sentence or member of a sentence, but look to the provisions of the whole law, and to its object and policy. U.S. Nat. Bank of Or. v. Independent Ins. Agents, --- U.S. ----, ----, 113 S.Ct. 2173, 2182, 124 L.Ed.2d 402 (1993) (internal quotations, brackets and citations omitted). Statutory construction is a holistic endeavor and, at a minimum we must account for a statute's full text, language as well as punctuation, structure, and subject matter. Id. Therefore, we have a deep reluctance to interpret a statutory provision so as to render superfluous other provisions in the same enactment. Pa. Dept of Public Welfare v. Davenport, 495 U.S. 552, 562, 110 S.Ct. 2126, 2133, 109 L.Ed.2d 588 (1990). 35 Established canons of statutory construction lead us to conclude that the Trustee's broad reading of Section 9 is incorrect. For one thing, if we read broadly the parts of Section 9 dealing with jurisdiction, several of the NRA's stay and referral provisions are rendered totally void. For example, Section 2(a), Sec. 10701(f)(6), contains a mandatory stay and referral provision pending an ICC determination as to the reasonableness of the carrier's filed rate. That provision limits the power a federal court would otherwise have to render judgment on undercharge claims consistent with Reiter, supra, and takes away a court's discretion to determine undercharge claims and related issues without referral to the ICC. Indeed that was the whole purpose of these stay and referral provisions. But if nothing in the NRA can affect the jurisdiction of the federal courts, then this provision is totally void. The same would be true for Sections 2(a), Sec. 10701(f)(1)(B)(v), 2(e)(2), 2(g), and Section 8 of the NRA. Understandably, we have a deep reluctance to interpret a statutory provision so as to render superfluous other provisions in the same enactment. Pa. Dept of Public Welfare, 495 U.S. at 562, 110 S.Ct. at 2133. For the same reason, when forced to choose between specific substantive provisions and a general savings clause, we choose the more specific provisions because we believe they express congressional intent more clearly. See Morales v. Trans World Airlines, Inc., 504 U.S. 374, 379, 384-85, 112 S.Ct. 2031, 2034, 2037, 119 L.Ed.2d 157 (1992), citing International Paper Co. v. Ouellette, 479 U.S. 481, 494, 107 S.Ct. 805, 812, 93 L.Ed.2d 883 (1987) (We do not believe Congress intended to undermine this carefully drawn statute through a general savings clause.); see also Norman J. Singer, Sutherland Statutory Construction, Secs. 47.08-11 (5th Ed.1995) (resolve doubts about the scope of statutory provisions and exceptions against those provisions). Therefore, these more specific stay and referral sections must prevail over the general language of Section 9 that refers to jurisdiction. 36 These same principles indicate that we should also read narrowly the language in Section 9 concerning Title 11 and ERISA. Cf. Estate of Cowart v. Nicklos Drilling Co., 505 U.S. 469, 478-80, 112 S.Ct. 2589, 2596, 120 L.Ed.2d 379 (1992). Specifically, a broad reading of Section 9's reference to the application of the Bankruptcy Code will all but eviscerate the NRA. The class of carriers and claims treated by the Act is almost entirely comprised of bankrupt carriers. See Sections 2(a), Sec. 10701(f), and 2(e). Also, if Section 9 is read broadly, the result will be two bodies of law relating to undercharge claims. For example, Section 3 of the NRA amends 49 U.S.C. Sec. 11706(a)(b) & (d) by changing the statute of limitations governing claims for charges or overcharges. If Section 9 is read to preclude the application of this amendment to undercharge claims coming within the scope of the bankruptcy court or ERISA, then there will be two different limitation periods governing such claims. There are other provisions that would create similar anomalies. 12 All of these results would surely be very odd. We thus conclude that we must defer to the more specific statutory sections rather than override them with a very broad application of Section 9. Cf. Primate Protection League, 500 U.S. at 84, 111 S.Ct. at 1707-08. However, reading Section 9 narrowly will not render it superfluous. Even under this narrower reading, if there is a conflict between the provisions of the NRA and the Bankruptcy Code's antiforfeiture provisions or the ERISA lien, then Section 9 indicates that the NRA should yield. See, e.g., In re Maislin Industries, U.S., Inc., 176 B.R. 436 (Bankr.E.D.Mich.1995) (Section 9 provides that Bankruptcy Code controls NRA, but NRA does not violate the antiforfeiture provisions of the Code, and therefore, does not violate Section 9). In fact, other courts have held that the NRA trumps the Code in cases of direct conflict. In re Parker Refrigerated Service, Inc., 173 B.R. 704, 716 (Bankr.W.D.Wash.1994) (applying NRA to undercharge claims of bankrupt carrier would violate the antiforfeiture provisions of the Bankruptcy Code, but NRA, as more recent and specific enactment, prevails over the Code); see also In re Americana Expressways, 177 B.R. 960, 966 (D.Utah 1995) (adopting this view). 37 We conclude that we must read Section 9 narrowly. [C]ourts must presume that a legislature says in a statute what it means and means in a statute what it says there. Connecticut Nat. Bank v. Germain, 503 U.S. at 253-54, 112 S.Ct. at 1149. And when we are forced to choose between specific statutory provisions and a general savings clause, we err on the side of the specific provisions in the belief that they reflect congressional intent more clearly. See International Paper Co. v. Ouellette, 479 U.S. at 494, 107 S.Ct. at 812-13. Absent a clearly expressed intention contrary to those more specific provisions, see Consumer Product Safety Com'n v. GTE Sylvania, Inc., 447 U.S. 102, 108, 100 S.Ct. 2051, 2056, 64 L.Ed.2d 766 (1980), we simply cannot believe Congress intended to undermine this carefully drawn statute through a general savings clause, see International Paper, 479 U.S. at 494, 107 S.Ct. at 812, consistent with our duty to make sense rather than nonsense of the corpus juris. West Virginia Univ. Hospitals, Inc. v. Casey, 499 U.S. at 101, 111 S.Ct. at 1148. Therefore we conclude that Section 9 does not override the NRA and that the NRA does apply to the undercharge claims in question. 38