851 F. Supp. 313 | N.D. Ill. | 1994
MEMORANDUM OPINION AND ORDER
Plaintiff, Gross Common Carrier, Inc. (“Gross”), is a common and contract carrier engaged in bankruptcy reorganization proceedings in the Western District of Wisconsin and continuing in operation as a debtor-in-possession. Gross seeks $59,460.78
On a motion for summary judgment, the entire record is considered with all reasonable inferences drawn in favor of the non-movant and all factual disputes resolved in favor of the nonmovant. Holland v. Jefferson Nat’l Life Ins. Co., 883 F.2d 1307, 1312 (7th Cir.1989); Oxman v. WLS-TV, 846 F.2d 448, 452 (7th Cir.1988); Jakubiec v. Cities Service Co., 844 F.2d 470, 471 (7th Cir.1988). Summary judgment will be granted where there are no genuine issues of material fact and the movant is entitled to judgment as a matter of law. Damjanovic v. United States, 9 F.3d 1270, 1272 (7th Cir.1993).
Gross is a motor carrier with both common and contract motor carrier authority from the ICC. According to Gross, Gross and Baxter entered into a contract to transport hospital and medical items from September 1988 to August 1991. The uncontradicted facts
From time to time, Gross used joint line carriers to perform portions of the underlying transportation service. Although Gross billed any interline shipments to Baxter at the contract rate, Gross now argues the interlining invalidates the contract and, therefore, the shipments involving interlining are subject to Gross’ filed tariff rates under the filed rate doctrine.
Whether or not transportation was provided by a carrier in its common or contract carrier capacity is a question normally falling within the primary jurisdiction of the ICC, which has expertise in this area. See Negotiated Rates Act of 1993, § 8,139 Cong. Rec. S16183-01,1993 WL 478679 (Cong.Rec.) (Nov. 18, 1993); Reiter, — U.S. at-, 113 S.Ct. at 1220-21 (matters within the special competence of the ICC fall within the ICC’s primary jurisdiction). Both parties argue that this court should not refer the resolution of the contract issue to the ICC.
The settled law of the ICC forbids a motor contract carrier from participating in interline service with any other carrier entity. Holmes Contract Cartier Application, 8 M.C.C. 391, 393 (1938); Acme Fast Freight, Inc., Common Carrier Application, 8 M.C.C. 211, 226-27 (1938); Chicago and Wisconsin Points Proportional Rates, 17 M.C.C. 573, 577 (1943); Service of Contract Carriers, 49 M.C.C. 103, 105 (1949). The status of any carrier participating in- interline service must
Baxter argues Gross’ cited case law is no longer applicable and does not deal with the issue in the ease. The Holmes case was an ICC review of an application by a common carrier for contract status, over routes requiring it to partly utilize common carriers. Baxter argues the 1980 amendments to the Interstate Commerce Act specifically removed the prohibition against dual contract and common carrier carriage authority, 49 U.S.C. § 10930(a)(2), and implicitly removed any proscription against interlining by contract carriers. While it is true that the strictures over contract carriage have been steadily loosened, see Ford Motor Co. v. Security Services, Inc. f/k/a Riss Int'l Corp., 9 I.C.C.2d 892, 1993 WL 326548, *9-16, 1993 MCC LEXIS 124, *28-50 (Aug. 27, 1993) (extensively reviewing history of contract carrier regulation), the ICC continues to follow Holmes’ prohibition of interlining by contract carriers. See Rubbermaid Inc. (Transcon Lines), No. 40946, 1993 WL 407377 (I.C.C.) n. 19 (Oct. 13,1993) (“Contract carriers cannot interline shipments with other carriers, but they may tender them to another carrier as shipper’s agent”, citing Holmes).
The ICC has also held that “[ujnder ... a [contract carriage] relationship, the carrier cannot subsequently unilaterally recharacterize the traffic as common carrier traffic and rerate the charges using its common carrier tariffs. In other words, if there is a contract carrier relationship to provide services within the scope of the carrier’s permit, and the carrier performs those services, there is no statutory basis for ... the parties ... to remedy any actual or asserted deficiencies or breaches of the contract or performance thereunder by voiding the contract carrier relationship and retroactively treating the transportation as that of a motor common carrier.” Ford Motor, 1993 WL 326548 at *3, 1993 MCC LEXIS 124 at *7-8; see also General Mills Inc., 8 I.C.C.2d 313 (1992) (even a contract incomplete or deficient with respect to Commission regulations would not void the contract carrier relationship and subject the shipper to tariff rates).
To conclude that particular traffic moved under contract carriage, the ICC or the court must ordinarily find: (1) that the carrier held appropriate contract carrier authority to provide the service, (2) that the shipper and the carrier had an agreement for the transportation to be provided as contract carriage and the shipments moved under that agreement, and (3) that the transportation was consistent with the statutory definition of contract carriage. Rubbermaid, 1993 WL 407377 (I.C.C.) at *6 The statutory
In this case, the parties do not dispute the fact that Gross had the authority to provide contract carriage services, that Gross and Baxter had a written contract for the transportation to be provided as contract carriage, that the shipments moved under that contract and that the transportation, aside from the interlining, was pursuant to a continuing agreement designed to meet the distinct needs of the shipper. Gross argues, however, that Baxter knew of the interlining. Baxter, in response, argues that it never knew of the interlining and that the contract did not allow for Gross to interline. Given the undisputed facts, whether or not Baxter knew of the interlining is not crucial to a resolution of these motions. The pivotal issue is whether or not the contract between Baxter and Gross provided for transportation within Gross’ contract authority; whether or not the contract allowed Gross to interline. Stated another way, if Gross’ interlining was a breach of the contract, its unilateral act cannot subject Baxter to liability for Gross’ tariff rate under the filed rate doctrine.
In support of its motion, Gross argues, without any evidentiary support, that Baxter “was aware of the use of these [interline] carriers.” Gross’ Mem. at 2. Apparently, Gross’ belief that Baxter was aware of the interlining is evidenced by notations, made by Gross, on the freight billings issued to Baxter.
Gross also argues that the bills of lading used by Baxter authorized Gross to fulfill its carrier obligations by delivery to another carrier enroute to the destination and gave Gross the right to forward the property by any carrier enroute between the point of shipment and the point of destination. Gross has appended a sample of Baxter’s preprint-ed bill of lading which contains preprinted language, referring to the applicability of tariffs and the Uniform Domestic Straight Bill of Lading. However, the use of form bills of lading, issued by Baxter, for shipments that both parties intended to be transported under the written contract, do not supersede that contract. In this context, the bills of lading are merely preprinted forms used to evidence the tender of cargo to and from Gross. Gross also notes that the contract provided for percentage discounts from “class rates” contained in Gross’ tariffs. Again, however, merely referencing a tariff rate in an agreement for contract carriage does not, by itself, change the character of the contract nor evidence an intent to allow interlining not authorized under Gross’ contract authority.
Baxter presents cognizable, uncontrovert-ed
IT IS THEREFORE ORDERED that the motion of defendant Baxter Healthcare Corporation for stay and referral [18] is denied as moot. Cross-motion of plaintiff Gross Common Carrier, Inc. for summary judgment [28] is denied. Motion of defendant Baxter Healthcare Corporation for summary judgment [14] is granted. The Clerk of Court is directed to enter judgment in favor of defendant Baxter Healthcare Corporation and against plaintiff Gross Common Carrier, Inc., dismissing this case with prejudice.
. Although Baxter’s motion gives this figure, Gross' cross-motion indicates $49,761.47 principal amount due.
. Gross failed to file Local Rule 12(M) and 12(N) statements of uncontested and contested facts. Gross merely appended the affidavit of its transportation auditor to its cross-motion. Failure to follow Rule 12(M) is grounds for denying Gross’ motion.
. Gross does not argue that Baxter is liable for the interliners’ tariffs or that Gross is itself liable to the interliners for any additional amounts under their tariffs.
. Baxter has filed an alternative motion to stay and refer this case to the ICC for determination of its unreasonableness counterclaim in the event this court denies Baxter's motion for summary judgment.
. Title 49 U.S.C. § 10703(a)(4)(A) provides authority for common carriers to establish “through routes and joint rates ... with other carriers of the same type.”
. Although Baxter concedes that certain alphanumeric notations on these billings may have . indicated interlining, the sample billing attached to Gross' motion reveals nothing that would indicate carriers other than Gross were used.
. Gross failed to file Local Rule 12(M) and 12(N) statements and failed to support its motion with affidavits or other evidentiary support on the issue of interlining under the contract.