Hewitt-Robins Incorporated v. Eastern Freight-Ways, Inc., 293 F.2d 205, 2d Cir. (1961)
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Scribd Government DocsHewitt-Robins Incorporated v. Eastern Freight-Ways, Inc., 293 F.2d 205, 2d Cir. (1961)
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Scribd Government Docs293 F.
2d 205
HEWITT-ROBINS INCORPORATED, Plaintiff-Appellant,
v.
EASTERN FREIGHT-WAYS, INC., Defendant-Appellee.
No. 268, Docket 26685.
United States Court of Appeals Second Circuit.
Argued Feb. 23, 1961.
Decided July 25, 1961.
Harry Teichner, Brooklyn, N.Y., for plaintiff-appellant.
Goldman & Drazen, New York City (Milton D. Goldman and Wilfred R.
Caron, New York City, on the brief), for defendant-appellee.
Before HINCKS and MOORE, Circuit Judges, and BRENNAN, District
Judge.*
BRENNAN, District Judge.
The question involved in this litigation requires the application of the
provisions of the Interstate Commerce Act (49 U.S.C.A. 301-327),
sometimes known as the Motor Carrier Act, to the facts disclosed in the
complaint. The Court below held the complaint to be insufficient under
Rules 12(b), 12(c) and 56 F.R.Civ.P., 28 U.S.C.A., to present a justiciable
issue. A brief statement of facts is set out below.
During the period from January 1953 to February 1955, the appellant
delivered to the appellee at Buffalo and New York City numerous
unrouted shipments of cartons containing foam rubber pads for
transportation between the two above cities. The service was performed
by the appellee over an interstate route. The freight charges, in accordance
with the filed tariff for such route, were paid by appellant who seeks to
recover some $10,000 which represents the excess of said charges over
those applicable to an alternate intrastate route.
The appellee, hereinafter referred to as 'Eastern,' is a certified common
carrier by motor vehicle, possessing operating rights between Buffalo and
New York City over both interstate and intrastate routes. The applicable
rates for the interstate movement were somewhat higher than the rates for
the intrastate movement as fixed in the tariffs filed with the Interstate
Commerce Commission and the Public Service Commission of the State
of New York.
The complaint alleges specifically that the action 'arises under Part II of
the Interstate Commerce Act, U.S. Code, Title 49, Sections 301 to 327.' It
is further alleged therein that the '* * * rates charged * * * and the
practice of the defendant in misrouting the shipments * * * were unjust
and unreasonable in violation of Section 216, Part II, of the Interstate
Commerce Act. (U.S.Code, Title 49, Section 316).' Other allegations are
found in the complaint asserting the unreasonableness of the rates
charged, all of which are put in issue by the answer. The appellant
recognizes the jurisdiction of the Interstate Commerce Commission in the
matters referred to in the above allegations. The complaint requests a stay
of the determination f the issues involved until the Interstate Commerce
Commission could determine 'the reasonable and just rates for the
transportation of the aforesaid shipments' in a proceeding to be instituted
by appellant upon the commencement of the action. It may be stated that
such a proceeding was taken and an administrative determination was
made holding that Eastern's routing practice, as indicated above, was
unreasonable. A cease and desist order to oeprate prospectively was
entered. Such determination is challenged by Eastern in an action to
review same. The action is pending in the United States District Court for
the District of New Jersey.
Subsequent to the commencement of this action, the Supreme Court
handed down the decision reported as T.I.M.E. Inc. v. United States, 359
U.S. 464, 79 S.Ct. 904, 3 L.Ed.2d 952. The lower court relied upon that
decision in holding that the complaint, insofar as it is based upon the
statute, does not state a claim upon which relief may be granted. The
appellant's argument that this action may be distinguished from the
holding in the T.I.M.E. case, because the later decision involved rates
which were intrinsically unreasonable while here the rates are
unreasonable by reason of misrouting, is not persuasive. Under Part 1 of
the Interstate Commerce Act, 49 U.S.C.A. 1 et seq., 'Whether the practice
of the carrier of shipping over the interstate route was reasonable, when a
lower intrastate route was open to it, presents an administraive question, *
* *' Northern Pacific Ry. Co. v. Solum, 247 U.S. 477, 482-483, 38 S.Ct.
550, 552, 62 L.Ed. 1221. 1 The same practice when arising under the
Motor Carrier Act 201 et seq., Part II of Interstate Commerce Act, 49
U.S.C.A. 301 et seq., 2 must necessarily be an administrative question. For
there is no significant difference of language between the applicable
sections of Part 1 of the Interstate Commerce Act and of the Motor Carrier
Act. It follows that the rationale of the T.I.M.E. case, 359 U.S. at pages
472, et seq., 79 S.Ct. at page 909 is directly applicable here: if, as
T.I.M.E. holds, under the saving clause of 216(j) of the Motor Carrier Act,
49 U.S.C.A. 316(j), no common law remedy is saved to a shipper
aggrieved by an unreasonable rate, which was an administrative question,
no such remedy is saved to a shipper aggrieved by the application of an
unreasonable route, which was also an administrative question as held in
Northern Pacific Ry. Co. v. Solum, supra.
Affirmed.
LEONARD P. MOORE, Circuit Judge (dissenting).
The merits of the only question now before the court to me seem so clear
that it is difficult to conceive of any ground for disagreement. The
question is: should plaintiff (appellant) be deprived of an opportunity to
place its case before a trial court upon all the facts or, stated in different
form, should the doors of the court house be permanently closed to it after
a perusal of the pleadings. The doors have been closed by the district
court; the majority here now securely bolts them. The only real issue
which the complaint submits for determination is the misrouting of
plaintiff's shipments. The majority, as did the District Court, bases its
decision upon a recent opinion by the Supreme Court in T.I.M.E. Inc. v.
United States, 1959, 359 U.S. 464, 79 S.Ct. 904, 3 L.Ed.2d 952 wherein
that court in a five-to-four decision held that a shipper of goods by motor
carrier in postshipment litigation cannot challenge the reasonableness of
the carrier's charges which had been made in accordance with filed tariffs
governing the shipment.
Unlike the T.I.M.E. case, no issue of reasonableness of rates is here
presented-- in fact, the rates filed are not challenged. The gravemen of the
complaint is that defendant carried the goods over the wrong route for
which error it should not be charged.
Plaintiff has obtained a ruling from the Commission in an administrative
proceeding that the practice was unreasonable. However, merely because
the word 'unreasonable' appears in the T.I.M.E. opinion, wherein a
recovery for unreasonable rates was denied, does not make it logical to
place the decision here upon the reasoning that T.I.M.E. held that no
common law remedy was saving to a shipper aggrieved by an
unreasonable rate, that the determination of 'unreasonable rate' was an
administrative question; and, therefore, because misrouting was
unreasonable and so determined in an administrative proceeding, no
common-law remedy was available or preserved by the exceptive
provisions of the statute (Section 216(j), 49 U.S.C.A. 316(j): 'Nothing in
this section shall be held to extinguish any remedy or right of action not
inconsistent herewith.'). In my opinion, this is specious syllogistic
reasoning wherein parallelism is sought to be created by looking only at
the words 'unreasonable' and 'administrative' without analyzing the real
basis underlying the result in the T.I.M.E. case. The opinions therein of
Mr. Justice Harlan for the majority and Mr. Justice Black for the minority
four members of the court trace the legislative history carefully and
exhaustively. Their respective views are stated with great clarity and,
although differing in result on the specific facts with which they were
dealing, even the majority opinion does not preclude a decision that on the
facts here presented plaintiff would not have a right to be heard in a
federal court.
As the Supreme Court pointed out, 'the Motor Carrier Act apparently
sought to strike a balance between the interests of the shipper and those of
the carrier and * * * the statute cut significantly into pre-existing rights of
the carrier to set his own rates and put them into immediate effect * * *.'
Thus 'under the Act a trucker can raise its rates only on 30 days' prior
notice, and the I.C.C. may, on its own initiative or on complaint, suspend
the effectiveness of the proposed rate for an additional seven months
while its reasonableness is scrutinized.' T.I.M.E., 359 U.S. at pages 479480, 79 S.Ct. at page 913. And as the T.I.M.E. decision further notes, this
seven-month suspension period is usually ample to permit the
adjudication of the rate's reasonableness. The issue in T.I.M.E. therefore,
was whether the shipper could recover in a common law action an
asserted unreasonable charge when the rate had been previously filed with
the Commission after notice to all concerned and had been approved by
the Commission to the extent of permitting it to prevail when it could
have been suspended. Congress having provided the shipper with such a
built-in protection, it was not unreasonable to assume that the shipper's
common law right to recover on the theory that the filed rate was
unreasonable was implicitly extinguished by the Act. In fact, to allow such
a remedy to stand would be inconsistent with and undercut the
anticipatory procedures provided.
The situation is vastly different here. legislative history referred to in
T.I.M.E. built-in protection for the shipper has been provided. Nor does a
shipper have notice that it will be routed around Robin Hood's Barn until
after this has actually occurred. In effect the shipper is in a position similar
to that of a shipper who has been charged a rate in excess of the filed
tariff. In such a situation even the legislative history referred to in T.I.M.E.
indicates that such overcharges can still be recovered in a court
proceeding.1 That decision also suggests a distinction both pertinent and
applicable here. The shipper in T.I.M.E. was relying on certain legislative
history to support its view that there existed a common law remedy for the
recovery of unreasonable rates. In reading this history contrary to the
shipper's view, the Court noted Commissioner Eastman's testimony as
distinguishing 'between the availability of a judicial remedy in respect of
inapplicable tariff rates and the unavailability of such a remedy in respect
of rates claimed to be 'unreasonable' though embodied in a filed tariff.' The
former situation seems clearly applicable to this case, since it is claimed
by plaintiff, not that the tariff rate itself is unreasonable, but that the
application of this rate to the partcular shipment was unreasonable.
The Supreme Court 'has frequently had occasion to say that interpretations
of statutes by agencies charged ith their administration are entitled to very
great weight.' Fawcus Machine Co. v. United States, 1931, 282 U.S. 375,
378, 51 S.Ct. 144, 75 L.Ed. 397; Skidmore v. Swift & Co., 1944, 323 U.S.
134, 140, 65 S.Ct. 161, 89 L.Ed. 124. Although it does not reach the status
of an agency interpretation, the analysis of the situation now before this
court made by the Interstate Commerce Commission, Office of the
General Counsel, with respect to the effect of the T.I.M.E. case on this
case is so accurate that it is entitled, in my opinion, both to respect and to
weight.
'Thus, the claim (in the instant case) is not that the rate charged was
intrinsically unreasonable, rather the controversy is over which of two
rates, each embodied in published tariffs of the carrier, should have been
charged. The T.I.M.E. and Davidson cases do not purport to deal with the
present situation.
'Obviously, once a carrier takes possession of a shipment, the shipper has
no way to guard against a carrier misrouting his shipment. It would be
contrary to all sense of fair play to hold that a shipper is so at the mercy of
a carrier that the latter may collect and retain the rate over whatever route
it chooses to transport even though it violates its duty to select the
cheapest route available to it. Consequently, the courts have recognized
the right of shippers to protection from misrouting by the transporting
carrier. For example, in Wooleyan Transportation Co. v. George Rutledge
Co., 162 F.2d 1016 (3rd Cir.1947), the carrier quoted theshipper an
intrastate rate for transporting goods between two points in New Jersey.
The carrier, however, moved the goods via its interstate route and
demanded payment on the basis of its higher interstate route, contending
that it was required by the Interstate Commerce Act to observe its
interstate rate by the route of movement. In denying recovery by the
carrier the Court of Appeals said:
"* * * The contract between the parties was for intrastate carriage of the
goods by motor truck between Montclair and Pedricktown, * * * Instead,
for its own convenience and because of certain union contracts with its
truck drivers, it transported the goods over a longer interstate route, via
Wilmington, Delaware. By such unilateral action, however, it could not
convert a lawful contract for intrastate carriage into one for interstate
carriage so as to impose upon the defendant shipper liability for a rate
higher than it had agreed to pay.
"* * * Here, however, the plaintiff, with the obvious direct intrastate route
open to it, took the defendant's goods around Robin Hood's barn in getting
them from Montclair to Pedricktown."
Counsel concludes (as do I) that:
'As I have indicated, the T.I.M.E. and Davidson cases do not require the
conclusion that a suit to recover for misrouting is not judicially
cognizable.'
As Mr. Justice Black pointed out in his dissent in T.I.M.E.:
'There can be no seious doubt that at common law a cause of action existed
against carriers who charged unreasonable rates. See Texas & P.R. Co. v.
Abilene Cotton Oil Co., 204 U.S. 426, 436, 27 S.Ct. 350, 353, 51 L.Ed. 553;
Arizona Grocery Co. v. Atchison, T. & S.F.R. Co., 284 U.S. 370, 383, 52 S.Ct.
183, 184, 76 L.Ed. 348. 1 Nor can it be questioned that the Motor Carrier Act
confirmed the common-law policy against unreasonable rates and in fact
expressly made such rates illegal.2 It is also clear that the Act attempted to
preserve all pre-existing remedies which did not directly conflict with its
aims.'3 359 U.S. at pages 480-481, 79 S.Ct. at pages 913-914.
There may be sufficient reasons for denying redress in the courts to shippers for
claims that filed rates are unreasonable but it by no means follows that shippers
should be deprived of access to the courts for all wrongful acts committed by
motor carriers, for example, mishandling, erroneous billing, misrouting, etc.
Such a determination would not prejudice the carrier's defenses such as
agreement to the interstate route, payment of the charges with knowledge,
acquiescence, estoppel, laches, etc., any or all of which may well defeat
plaintiff's claim but at least plaintiff would thus have a determination on the
merits and not be left without remedy merely because its complaint mentioned
a statutory basis for its asserted claim.
4
I would reverse.
Sitting by designation
Part 1 of the Interstate Commerce Act, 49 U.S.C.A. 1(5), with respect to
carriers by rail provides that 'all charges * * * shall be just and reasonable, and
every unjust and unreasonable charge * * * is prohibited and declared to be
unlawful.' 49 U.S.C.A. 1(6) provides that 'every unjust and unreasonable * * *
practice is prohibited and declared to be unlawful.' 49 U.S.C.A. 15(1) provides
that whenever '* * * the Commission shall be of opinion that any individual or
joint * * * practice whatsoever * * * is or will be unjust or unreasonable * * *
the Commission is authorized and empowered to determine * * * what
individual * * * practice is or will be just, fair, and reasonable.'
Similarly, the Motor Carrier Act, 216(b) and (d), 49 U.S.C.A. 316(b) and (d),
provides that it 'shall be the duty of every common carrier of property by motor
vehicle * * * to establish * * * just and reasonable rates * * * and practices * *
*' and that all such charges 'shall be just and reasonable and every unjust and
unreasonable charge * * * is prohibited and declared to be unlawful.' And
216(e) of the Motor Carrier Act, 49 U.S.C.A. 316(e), provides that whenever
'the Commission shall be of the opinion that any individual * * * rate * * * or
practice * * * is or will be unjust or unreasonable * * * it shall determine * * *
the lawful rate * * * or the lawful * * * practice.'
T.I.M.E., footnote 18, 359 U.S. at pages 477-478, 79 S.Ct. at page 912, reads in
part:
'It is suggested that Congress was fully informed at the time of passage of the
Transportation Act of 1940 of 'an existing interpretation' of the Motor Carrier
Act which would allow common-law actions for the recovery of unreasonable
rates. We do not so read the legislative history relied upon. On the contrary,
Commissioner Eastman, testifying before the Senate Committee, appeared to
distinguish between the availability of a judicial remedy in respect of
inapplicable tariff rates and the unavailability of such a remedy in respect of
rates claimed to be 'unreasonable' though embodied in a filed tariff. The
Commissioner said:
"So far as reparation is concerned, there is no reason why these provision
should not be applied to motor carriers as well as to railroads. They were
omitted from the Motor Carrier Act only because of the desire to lighten the
burdens of the motor carriers in the early stages of regulation, in the absence of
any strong indication of public need. Motor carriers have practically no traffic
which is noncompetitive, and there is little danger that they will exact
exorbitant charges. Since the Motor Carrier Act became effective in 1935, the
Commission has not once had occasion to condemn motor-carrier rates as
unreasonably high. I don't think we have had any complaints to that effect. It
follows that there is nothing to indicate that shippers need provisions to enable
the Commission to award reparation for damages suffered because of
unreasonable charges.
"The occasion for reparation from motor carriers would chiefly arise, therefore,
in the event of overcharges above published tariff rates. Shippers can recover
such overcharges in court as the law now stands."
'Hearings before Senate Interstate Commerce Committee on S. 1310, S. 2016,
S. 1869, and S. 2009, 76th Cong., 1st Sess., pp. 791-792.'
