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Carothers v. Western Transportation Co.

decided: April 27, 1977.

VIRGIL CAROTHERS, MEMBER AND REPRESENTATIVE OF A CLASS OF CERTAIN EMPLOYEES OF THE WESTERN TRANSPORTATION COMPANY, NAMED DEFENDANT, PLAINTIFF-APPELLANT,
v.
WESTERN TRANSPORTATION COMPANY, DEFENDANT-APPELLEE



Appeal from the United States District Court for the Southern District of Illinois, Northern Division. No. RI CIV 75-0015 - Robert D. Morgan, Judge.

Tom C. Clark,*fn* Associate Justice, Fairchild, Chief Judge, and Pell, Circuit Judge.

Author: Fairchild

FAIRCHILD, Chief Judge.

Plaintiff Carothers appeals from the dismissal of an action brought on behalf of himself and a class of employees of defendant Western Transportation Company, in which plaintiff charged defendant with violating Interstate Commerce Commission Special Permission No. 74-2525 (set out in the Appendix) and wrongfully converting revenues collected thereunder. The district court ordered the action maintained as a class action, and plaintiff and members of the class will be referred to as "plaintiffs."

I

Defendant Western Transportation Company is a motor vehicle carrier, authorized by the Interstate Commerce Commission ("I.C.C.") to transport commercial goods in interstate commerce. The plaintiffs are owner-operator employees of defendant; each owning truck-tractors which were leased to defendant and operated by plaintiffs in defendant's service between February 7, 1974 and August 26, 1974.

At all times pertinent hereto, a collective bargaining agreement between defendant and Local 710 of the International Brotherhood of Teamsters, Chauffeurs, Warehousemen, and Helpers of America (collective bargaining agent for plaintiffs) was in effect, governing the rights and obligations of the parties with respect to terms and conditions of employment. As contemplated in the union contract, each member of the class leased his equipment to Western. The leases provided that plaintiff lessors were to pay for fuel. Although the district court did not reach defendant's motion for summary judgment, it was claimed in supporting affidavits that the union contract was supplemented to provide that defendant was to compensate plaintiffs for increases in the cost of fuel.*fn1 Article 7 of the collective bargaining agreement spells out a grievance procedure for the resolution of disputes.*fn2 Defendant contends, and the district court agreed as one ground for dismissal, that plaintiffs could not maintain the action since they had failed to resort to the contractual grievance procedure.

On February 7, 1974, in response to marked increases in fuel costs affecting the trucking industry, the I.C.C. promulgated Special Permission No. 74-2525, denominated "Emergency Fuel Surcharge for Line-Haul Transportation Charges and Other Charges - Motor Common Carriers." Paragraph 1 of this order authorized all carriers who had tariffs or schedules on file with the Commission to increase by surcharge, up to 6 percent, fares and freight charges for services which consume fuel. Pursuant to this authorization, defendant instituted surcharges on certain of its services. Paragraph 4 of Special Permission No. 74-2525 stated that "The person actually responsible for the payment of fuel charges, by contract or otherwise, is to receive the full increase in revenue derived from surcharges published hereunder." Monies collected by virtue of defendant's surcharges were retained by defendant.

It is Special Permission No. 74-2525 and particularly paragraph 4 that form the parameters of this case. Plaintiffs alleged that they, rather than defendant, were "the person actually responsible for the payment of fuel charges" and thus were entitled to receive revenues derived from the surcharges imposed by defendant. Plaintiffs contended that the failure of defendant to "pass on" such monies was a violation of the I.C.C. order and constituted wrongful conversion. Defendant argued that the compensation it paid pursuant to the collective bargaining agreement supplements was equal to the increases in the cost of fuel and, as such, constituted full compliance with all pertinent provisions. Plaintiffs' complaint was filed in district court on June 20, 1975, more than one year after the date of the Commission's order.*fn3

The district court dismissed the complaint. It held that Special Permission No. 74-2525 was an "order for the payment of money" within the meaning of 49 U.S.C. § 16(3)(f) and thus found plaintiffs' action barred by the one-year statute of limitations established therein. As an alternative ground for dismissal, the district court held that it lacked jurisdiction since the grievance procedures of the parties' collective bargaining agreement had not been first invoked. It reasoned that the matter in controversy related to conditions of plaintiffs' employment and was therefore a subject governed by that agreement.

For the reasons set forth below, we reverse.

II

The initial issue which we must resolve is the applicability of 49 U.S.C. § 16(3)(f) to the maintenance of plaintiffs' action. Section 16(3)(f) states:

"A complaint for the enforcement of an order of the commission for the payment of money shall be filed in the district court . . . within one year from the date of the order, and not after."

Defendant argues that Special Permission No. 74-2525 is an order for the payment of money, that if plaintiffs' action be appropriate at all it would be a suit to enforce pursuant to § 16(2) "an order for the payment of money," and that this action is consequently barred by the provisions of section 16(3)(f) since it was not filed within one year from the date of such order.

The Commission's order, Special Permission No. 74-2525, was addressed to relief for the burden of increasing fuel costs. It authorized, prospectively, each carrier to impose, upon one day's notice, a percentage surcharge, not exceeding 6 percent. Although such surcharge was left to the option of the carrier, the stated purpose was to "recoup such average increased costs forthwith." The portion of the order under consideration provided that "The person actually responsible for the payment of fuel charges, by contract or otherwise, is to receive the full increase in revenue derived from surcharges published hereunder."

Any obligation by the carrier to pay an owner-operator under the order would arise only if the carrier elected to impose the surcharge and if, in fact, the owner-operator was actually responsible for the payment of fuel charges. An obligation would arise, even then, only as and in the amounts that surcharges were collected. The order, prospective in its impact, really amounts to a regulation. If "an order . . . for the payment of money" be analogized to a money judgment determining liability on the basis of already existing facts, and ordering that the liability be discharged by payment, the distinction between the Special Permission and an order for the payment of money is clear.

The Act contains no definition of an "order for the payment of money." It does appear, however, that the analogy of a money judgment (in contrast to a regulation) is sound.

49 U.S.C. § 13 provides for investigation of possible violations upon the filing of complaints and upon the Commission's own motion. Where the proceeding is initiated by a complaint, it can apparently result in an "order for the payment of money," because subsection (2), in granting the Commission on its own motion the same powers as upon a complaint, expressly includes the making and enforcing of orders "excepting orders for the payment of money."

49 U.S.C. § 16(1) provides as follows: "If, after hearing on a complaint made as provided in section 13 of this title, the commission shall determine that any party complainant is entitled to an award of damages under the provisions of this chapter for a violation thereof, the commission shall make an order directing the carrier to pay to the complainant the sum to which he is entitled on or before a day named."

The section apparently authorizes an "order for the payment of money" although it uses the phrasing "order directing the carrier to pay - the sum."

49 U.S.C. § 16(2) authorizes an action in district court to enforce an "order for the payment of money" and § 16(3)(f) prescribes a one year limitation for an action to enforce such order.

These provisions have been read together as relating to an "order for the payment of money." Wisconsin Bridge & Iron Co. v. Illinois Terminal Co., 88 F.2d 459, 462 (7th Cir. 1937); Missouri Pacific ...


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