RTC TRANSPORTATION, INC., a Georgia Corporation, Motor
Carrier Audit & Collection Company, a Division of
Delta Traffic Service, Inc., a Texas
Corporation, Plaintiffs-Appellees,
v.
CONAGRA POULTRY COMPANY, f/n/a Country Pride Foods, Ltd., a
Delaware Corporation, Defendant-Appellant.
No. 89-15836.
United States Court of Appeals,
Ninth Circuit.
Argued June 12, 1992.
Submission Deferred June 12, 1992.
Submitted June 23, 1992.
Decided July 29, 1992.
Lawrence A. Wengel, Gary Scott Decker, Greeve, Clifford, Diepenbrock & Paras, Sacramento, Cal., Peter A. Greene, Thompson, Hine & Flory, Washington, D.C., for defendant-appellant.
Miles L. Kavaller, Beverly Hills, Cal., for plaintiffs-appellees.
Appeal from the United States District Court for the Eastern District of California.
Before: GOODWIN, SCHROEDER and BEEZER, Circuit Judges.
BEEZER, Circuit Judge:
This case addresses whether a shipper who did not pay a common carrier's filed rate, but instead paid a lower negotiated rate, may defend an action to collect the undercharge either because the carrier acted as a contract carrier or because the filed rate was unreasonable. The district court granted summary judgment for RTC Transportation, Inc. and Motor Carrier Audit & Collection Company (collectively RTC Transportation) on the grounds that (1) Conagra Poultry Company (Conagra) offered no evidence that RTC Transportation met the statutory definition of a contract carrier; (2) RTC Transportation's unreasonable practices do not afford a defense to the filed rate doctrine; and (3) Conagra did not argue that RTC Transportation's filed rates were unreasonable. We have jurisdiction over the district court's final order. 28 U.S.C. § 1291. We affirm in part, reverse in part and remand to the district court with instructions that it refer to the ICC to determine whether RTC Transportation's filed rates were reasonable.
* RTC Transportation shipped cargo for Conagra at tariff rates less than those on file with the Interstate Commerce Commission (ICC). RTC Transportation billed Conagra at the lower rates negotiated by Conagra and RTC Transportation, and Conagra paid them. Following an ownership change, RTC Transportation sought to collect the higher "filed rates" from Conagra.
RTC Transportation filed an "undercharge" claim against Conagra in the district court. Because the ICC has primary jurisdiction over the reasonableness of carriage rates, classifications, rules and practices, see 49 U.S.C. § 10701(a), the district court granted Conagra's motion to refer the matter to the ICC. The ICC determined that RTC Transportation had engaged in an unreasonable practice, which the ICC then considered a defense to an undercharge claim. The district court rejected the ICC's determination and applied the "filed rate doctrine." It found that Conagra had not presented a valid defense to the filed rate doctrine and granted summary judgment for RTC Transportation.
We review de novo the district court's grant of summary judgment. Tzung v. State Farm Fire & Casualty Co.,
II
Conagra argues that the district court should have found a genuine issue whether RTC Transportation was a contract carrier, because RTC Transportation was a duly licensed contract carrier and it consistently provided service to Conagra at rates other than those on file with the ICC. In deciding Conagra's petition, the ICC found:
In contending that the operations at issue were contract carriage, petitioner merely refers to RTC's contract carrier authority. It does not indicate how the involved service meets either statutory definition of contract carriage in 49 U.S.C. 10102(14)(B) [sic], or that it satisfied any of the requirements of the Commission's contract carriage regulations at 49 CFR 1053. The evidence here does not suggest that RTC served Conagra as other than a common carrier, and we thus will examine the evidence under our Negotiated Rates policy.
Conagra Poultry Co., No. MC-C-30064,
Because this is an appeal of a grant of summary judgment, we perform the same direct review of the ICC's decision as the district court. Tzung,
A motor common carrier is "a person holding itself out to the general public to provide motor vehicle transportation for compensation over regular or irregular routes, or both." 49 U.S.C. § 10102(14). A motor contract carrier, by contrast, assigns carriage vehicles "for a continuing period of time for the exclusive use of" the shipper. Id. § 10102(15)(B)(i). Among other factual deficiencies, Conagra nowhere asserts any evidence of such an exclusive use contract. We find no genuine issue whether RTC Transportation was a contract carrier and affirm this aspect of the district court's grant of summary judgment.
We also affirm the aspect of the district court's judgment precluding Conagra from interposing as a defense to RTC Transportation's undercharge claim the ICC's finding that RTC Transportation engaged in unreasonable trade practices. Maislin Indus. v. Primary Steel, Inc.,
III
Conagra argues that it should have a second opportunity to argue before the ICC the issue of the reasonableness of RTC Transportation's filed rates. This argument presents two major questions: first, may a shipper interpose rate unreasonableness as a defense to an undercharge claim; and second, did Conagra preserve its rate unreasonableness argument? We recently considered "whether a shipper may raise unreasonableness of the rates as a defense in a filed rate action and thereby cause the proceedings to be stayed until the ICC resolves the claim." Milne Truck Lines v. Makita U.S.A., Inc.,
* Before we proceed to whether Conagra preserved its unreasonable rate defense, we must place our inquiry in perspective. We recognize that we tread in uncharted waters with swiftly moving currents. The Motor Carrier Act of 1980, Pub.L. No. 96-296, 94 Stat. 793 (the 1980 Act), introduced market mechanisms into an area of law formerly subject to pervasive administrative regulation. See ICC v. American Trucking Ass'n,
One line of cases that has emerged since 1980 involves choosing which of two filed rates is applicable. In American Trucking, the Supreme Court found that the ICC has "a statutory basis ... to approve motor-carrier tariffs on the condition that the [ICC] may later nullify increases found to have been submitted in substantial violation of rate-bureau agreements."
In a similar vein, we recently considered a case in which a carrier, through its trustee in bankruptcy, sought to collect its full charge rate after it had billed at discount rates, both of which were on file with the ICC. We held, first, that the discount filed rate applies only so long as the shipper meets the timely payment precondition. Afterward, the full charge filed rate applies. ICC v. Transcon Lines,
In Milne, we confronted a slightly different situation. Milne had filed discount tariff rates for shipments originating in San Jose, California. Makita paid those discount rates on shipments from Fremont and Cerritos, California. We held, first, that shipments from Fremont might qualify for the San Jose filed discount rate because of Fremont's proximity to San Jose. We remanded the proximity issue for ultimate determination by the ICC. Shipments from Cerritos, which is near Los Angeles, could not possibly qualify for the San Jose discount. Milne,
In this case, we do not face a choice between two filed rates. RTC Transportation does not challenge the lawfulness of its own filed rate, which we refused to allow the carrier to do in Transcon, but instead seeks to collect its filed rate, the "legal" rate. RTC Transportation thus challenges the legality of its own negotiated rate. See Transcon Lines,
Conagra's challenge poses a question of remedy that we do not reach because we consider it better to allow the ICC to address the matter in the first instance.1 The Maislin Court specifically stated that "[w]e have never held that a carrier's unreasonable practice justifies departure from the filed tariff schedule." 497 U.S. at ----,
We consider a carrier attempting to collect its "legal" filed rate. Because of a lower negotiated rate, the shipper challenges the lawfulness, and thus the enforceability, of that filed rate. See generally Transcon Lines,
B
The "filed rate applies 'unless it is found by the Commission to be unreasonable.' " Maislin, 497 U.S. at ----,
* Conagra raised the issue of the unreasonableness of RTC Transportation's filed rates as the sixth defense in its answer. Conagra, Answer and Demand for Jury Trial 3 (Mar. 5, 1987). The district court referred to the ICC a "determination o[f] the reasonableness of the carrier rates and practices." Order, No. CV-S-86-1509-MLS, at 2 (Aug. 11, 1987). We presume that Conagra made a showing before the district court satisfactory to warrant this initial reference. See Milne,
A fair reading of the transcript of the bench ruling reveals that the district court focused primarily on unreasonable practices, not rates, as the contested issue being referred. Transcript of Bench Ruling, No. CV-S-86-1509-MLS, at 3-6 (June 26, 1987). It also felt that the ICC's determination would be advisory only. Id. Even so, to this point, Conagra raised and preserved the rate unreasonableness issue.
2
Conagra then "petition[ed] the [ICC] for a declaratory order resolving the issue of the reasonableness of the carrier rates and practices." Conagra, Petition for Declaratory Order 1 (Sept. 9, 1987). As with the district court's reference, a fair reading of Conagra's petition reveals a focus on the unreasonable practices issue:
4. In response to [RTC Transportation]'s claim ConAgra has asserted, inter alia, that collection of additional charges would constitute an unreasonable practice in violation of the provisions of 49 U.S.C. § 10701.
5. Because only the I[CC] may determine the unreasonableness of a practice engaged in by a carrier subject to its jurisdiction, Conagra moved for an order referring this case to the ICC for such a determination.
....
WHEREFORE, ConAgra prays that the ICC ... enter an Order resolving the issues presented herein and terminating this controversy....
Id. at 2-3. Despite the petition's focus on the unreasonable practices issue, it adequately raises the issue of rate unreasonableness.
Conagra argues that it presented evidence of both issues to the ICC, but that the ICC decided only the unreasonable practices issue, resolving the case. Conagra contends that a review of the record reveals that it produced ample evidence before the ICC pertaining to rate unreasonableness. See Rate Reasonableness and Unreasonable Practices,
Walters compared RTC Transportation's rates with those he had solicited from other carriers:
The rates that I negotiated with RTC were actually slightly higher than the rates quoted to us by the other carriers available to us to perform the same service for which we used RTC. However, because RTC performed a very high quality and reliable service we were willing to pay at a slightly higher rate.
....
If at any time ... any suggestion had been made that the [applicable] rates ... were other and higher than those quoted to us, ... we could and would have immediately begun to use other carriers then available to us at rates which were actually slightly below those of RTC.
Jesse Walters, Verified Statement 2, 4 (Dec. 1, 1987). With respect to rate comparisons, the ICC states that "one of the best standards for determining the justness and reasonableness of a rate is a comparison thereof with rates on the same commodity to and from points in the same general territory." Rate Reasonableness,
As well, the rates proffered by RTC Transportation and relied upon by Conagra provide evidence of a reasonable rate. Id. at 75 & n. 23. "For each such shipment [RTC] is contending that we now must pay rates different from and higher than those quoted to us by RTC, paid by us and accepted by RTC." Jesse Walters, Verified Statement 3.
Finally, Walters' statement that higher rates would have resulted in a turn to other carriers addresses "[t]he most pragmatic of the criteria[:] whether the tariff rate upon which an undercharge claim is based is so high that it would not have moved the traffic at issue had it been quoted at the time the shipment took place." Rate Reasonableness,
In deciding Conagra's petition, the ICC addressed rate reasonableness only in passing, noting that RTC Transportation claimed that its rates were reasonable. The ICC then proceeded to find that RTC Transportation committed an unreasonable practice under the now-discredited Negotiated Rates policy.3 Conagra Poultry Co., No. MC-C-30064,
3
Upon securing a favorable determination from the ICC, Conagra moved for summary judgment in the district court. Understandably, Conagra relied heavily on the ICC's unreasonable practices determination. RTC Transportation vigorously opposed the interposition of the ICC's unreasonable practices determination as an equitable defense to the filed rate doctrine. RTC Transportation, Memorandum of Points and Authorities 13-28 (Jan. 17, 1989). The district court agreed with RTC Transportation, granted summary judgment in RTC Transportation's favor and ruled from the bench:
Defendant does not contest that the plaintiff transported goods for it or that plaintiff had lawful tariffs on file with the [ICC]. Neither does defendant argue that plaintiffs' filed tariffs were ambiguous or unreasonable. Given this, plaintiff has borne its burden of showing that there is no triable issue of fact.
....
As discussed previously, the Court is persuaded that it is required to apply the filed rate doctrine in this case. Under the filed rate doctrine, a Court may not entertain an equitable defense to a carrier's undercharge claim. Therefore, defendant has not borne its burden of showing it is entitled to judgment as a matter of law.
Transcript of Bench Ruling, No. CV-S-86-1509-MLS, at 5, 7 (Mar. 3, 1989) (citation omitted). Conagra contends that the district court erred in concluding that Conagra did not argue that RTC Transportation's rates were unreasonable.
A party cannot appeal a judgment entirely in its favor. It may, however, advance additional arguments in support of the judgment in its answering brief. Byron v. Clay,
Although Conagra focused on defending the ICC's unreasonable practices decision, it continued to pursue the unreasonable rates issue:
The first [question] is whether the defense of unreasonableness of a carrier rate or practice is one which must be referred to the ICC for determination in the first instance pursuant to its exclusive primary jurisdiction....
In rendering its decision of August 11, 1987, this Court has already determined that unreasonableness of a carrier rate or practice is a valid defense to RTC's claim and that the initial determination of that defense is a matter within the primary jurisdiction of the ICC....
....
... [T]he requirement of 49 U.S.C. § 10761(a) to charge a published tariff rate and the requirement of 49 U.S.C. § 10701(a) that carrier rates and practices must be reasonable, have always been read in harmony....
....
At page 19, RTC cites four Ninth Circuit cases for the proposition that the filed rate doctrine must be followed notwithstanding the ICC's decision on referral. None of those cases supports RTC's position.... The [cited] case had nothing to do with a defense of unreasonableness or the authority of the ICC to grant relief based on such a defense.... [Citation], involved an issue of unreasonable rates rather than practices and, unlike here, the shipper conceded that the rate was reasonable. Therefore, the court refused to refer the case to the ICC because there was no issue for the ICC to address.
Conagra, Reply in Opposition to RTC Transportation's Motion for Partial Summary Judgment 3, 5, 11-12 (Feb. 17, 1989) (citations omitted) (emphasis added). Based on Conagra's effort to apprise the district court of this ground for relief, which the ICC left unaddressed, we conclude that the district court erred when it decided that "defendant [does not] argue that plaintiffs' filed tariffs were ambiguous or unreasonable." Transcript of Bench Ruling, supra, at 5. We reverse the district court's judgment on this matter.
4
If the district court avoids an issue that, on appellate review, becomes dispositive, we will decide a question of law and resolve the case. Gladden v. Frazier,
IV
The district court's summary judgment is AFFIRMED IN PART, REVERSED IN PART and REMANDED WITH INSTRUCTIONS that it refer to the ICC for a determination of the reasonableness of RTC Transportation's filed rates.
Each party shall bear its own appeal costs.
Notes
Indeed, the ICC need not even reach the remedial question if RTC Transportation's filed rate is reasonable
Because the question is not before us, we do not address whether the ICC's policy for determining rate unreasonableness conforms to the language and structure of the Interstate Commerce Act. Cf. Maislin, 497 U.S. at ---- - ----,
National Indus. Transp. League,