Estes Express Lines v. United States
11-597
Fed. Cl.Aug 8, 2017Background
- Estes Express Lines (carrier) performed shipments for Marine Corps Community Services (MCCS) under MCCS’s contract with broker Salem Logistics; freight billed to “Marine Corps Exchange c/o Salem Logistics.”
- Shipments were documented by bills of lading, freight bills, and delivery receipts; delivery receipts were signed by MCCS/MCX representatives and invoices were sent to MCX c/o Salem.
- Salem failed to pay Estes for certain freight; MCCS paid Estes directly for some invoices on July 2, 2009, but refused to pay amounts it previously paid to Salem.
- Estes sued (originally in district court, transferred to the Court of Federal Claims); the Federal Circuit held Estes’s bills of lading established privity with the government but did not decide ultimate liability.
- On remand, parties cross-moved for summary judgment on (1) ICA jurisdiction, (2) existence of a contract with the government, and (3) whether the government assumed risk of Salem’s nonpayment.
- Court held: (1) ICA jurisdiction exists (claim timely under 49 U.S.C. §14705); (2) privity/contract with the government exists based on bills of lading and delivery receipts (Federal Circuit mandate); (3) government did not assume risk of broker nonpayment, so no liability for the unpaid freight — complaint dismissed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Jurisdiction under the Interstate Commerce Act (ICA) | Claim is timely under ICA because suit was filed within three years of government payment and other triggering events | ICA provides jurisdiction only if timely; government disputed applicability earlier but not after remand | Held for Estes: court has ICA jurisdiction (timely claim) |
| Existence of contract/privity with U.S. government | Bills of lading, freight bills, and signed delivery receipts create privity between Estes and government | Government contended Federal Circuit only resolved jurisdictional question, not merits | Held for Estes: Federal Circuit established privity; court bound by that ruling (valid contract) |
| Whether government assumed risk of Salem’s nonpayment (liability) | Industry doctrine: party that inserts broker assumes risk; government should be liable when broker fails to pay | No government official with authority agreed that government would pay carriers if Salem failed; sovereign immunity bars recovery absent waiver | Held for Government: no evidence an authorized government rep assumed risk; claim would be implied-in-law (no waiver) — government not liable |
| Remedy available in Claims Court | Estes sought money damages under contract theory | Government argued relief would amount to implied-in-law obligation (not actionable against U.S.) | Held for Government: recovery would require imposing an implied-in-law obligation; Tucker Act does not permit suits on such theories absent waiver; dismissal affirmed |
Key Cases Cited
- Estes Express Lines v. United States, 739 F.3d 689 (Fed. Cir. 2014) (bills of lading and delivery receipts sufficient to establish privity)
- Inter-Coastal Xpress, Inc. v. United States, 296 F.3d 1357 (Fed. Cir. 2002) (ICA can waive sovereign immunity for carriers)
- Sheridan Transp. Sys., Inc. v. Gen. Servs. Admin., [citation="651 F. App'x 987"] (Fed. Cir. 2016) (carrier may bring claim under ICA to Court of Federal Claims)
- Cienega Gardens v. United States, 194 F.3d 1231 (Fed. Cir. 1999) (privity required for Tucker Act contract claims)
- Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375 (1994) (federal courts are courts of limited jurisdiction)
- Anderson v. Liberty Lobby, Inc., 477 U.S. 242 (1986) (summary judgment standard; materiality and genuine issue of fact)
- Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574 (1986) (inferences on summary judgment)
- Merritt v. United States, 267 U.S. 338 (1925) (Tucker Act does not permit suits on contracts implied in law)
- United States v. Mitchell, 463 U.S. 206 (1983) (distinguishing implied-in-fact contracts from those implied-in-law)
- Hawkspere Shipping Co. v. Intamex, S.A., 330 F.3d 225 (4th Cir. 2003) (assumption-of-risk doctrine among private parties; not binding for government contracts)