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Carriers Traffic Service Inc. v. Anderson

decided: August 7, 1989.

CARRIERS TRAFFIC SERVICE, INC., PLAINTIFF-APPELLANT,
v.
ANDERSON, CLAYTON & COMPANY, DEFENDANT-APPELLEE, AND UNITED STATES OF AMERICA AND INTERSTATE COMMERCE COMMISSION, DEFENDANTS-APPELLEES. INMAN FREIGHT SYSTEMS, INC. AND JIM S. GREEN, TRUSTEE, PLAINTIFFS-APPELLANTS, V. BOISE CASCADE CORPORATION, DEFENDANT-APPELLEE, AND UNITED STATES OF AMERICA AND INTERSTATE COMMERCE COMMISSION, DEFENDANTS-APPELLEES. ORSCHELN BROTHERS TRUCK LINES, INC., BARRY S. SCHERMER, TRUSTEE, ASSIGNOR, AND CARRIERS TRAFFIC SERVICE, INC., ASSIGNEE, PLAINTIFFS/PETITIONERS-APPELLANTS, V. COOPER INDUSTRIES, INC., DEFENDANT-APPELLEE, AND UNITED STATES OF AMERICA AND INTERSTATE COMMERCE COMMISSION, RESPONDENTS-APPELLEES



Appeals from the United States District Court for the Northern District of Illinois, Eastern Division. Nos. 85 C 8639, 83 C 8968 -- Marvin E. Aspen, Judge. No. 85 C 8938 -- Suzanne Conlon, Judge.

Wood, Jr., Cudahy, and Kanne, Circuit Judges.

Author: Cudahy

CUDAHY, Circuit Judge

These consolidated cases arise from identical disputes over retroactive application of a "shipper load and count" notation requirement for a reduced rate tariff. In all three cases goods were shipped, and shippers billed, under a reduced rate. In order to obtain the reduced rate, shippers were required to load their goods, count them and make notations on the bills of lading indicating that they had performed the loading and counting. The evidence in all three cases before us indicates that these shippers performed the loading and counting as required;*fn1 unfortunately, however, they did not comply with the notation requirement. The carriers subsequently filed for bankruptcy and, in the course of preparing for bankruptcy proceedings, auditors discovered that the pertinent bills of lading lacked the requisite notations. The carriers attempted to retroactively change the reduced rates to higher rates and collect the difference from the shippers. The shippers objected to this attempt at retroactive imposition of higher tariff rates. All three cases were referred by the district court to the Interstate Commerce Commission (the "ICC"), which determined that retroactive application of the notation requirement in order to impose a higher tariff in any of these cases would be unreasonable. The district court opinions granted summary judgment in favor of the ICC and the shippers. We affirm.

I.

The three consolidated cases involve very similar factual settings. In Inman Freight Systems, Inc. v. Boise Cascade Corp., 881 F.2d 475, Inman Freight Systems, Inc. ("Inman") sues Boise Cascade Corporation ("Boise Cascade") to collect alleged freight undercharges. During 1980 and 1981, Inman transported metal can ends from Tennessee to Missouri for Boise Cascade.*fn2 Inman billed Boise Cascade under published tariff rate ICC MWB 240 Item 11280, subject to ICC MWB 125 Item 578, which provides:

(1) At the time of shipment, consignor must endorse on the Bill of Lading and Shipping Order the notation "Consignor load and count and/or consignee must unload" the shipments as the case may be.

(2) If the consignor fails to comply with the requirements of paragraph (1) herein, or if for any reason the consignor or any party tendering any portion of the shipment refuses to perform the loading and counting, the rate will not apply and rates otherwise published will be assessed.

When Inman later filed for bankruptcy, its auditor (Carriers Traffic Service) discovered that the notation requirement had not been met and billed Boise Cascade for the balance due under the higher tariff rate. Boise Cascade refused to pay this balance and Inman filed suit in the district court. The district court referred the action to the ICC for a determination whether retroactive imposition of the higher tariff was reasonable. The ICC initially ruled that imposition of the higher rate was reasonable, but subsequently reopened the proceeding and reversed its initial decision on appeal. The ICC then declined Inman's petition for a partial stay of its decision. When the case returned to the district court, Judge Aspen granted the ICC and Boise Cascade summary judgment as to the "shipper load and count" notation issue.

Carriers Traffic Serv., Inc. v. Anderson, Clayton & Co., 881 F.2d 475, similarly involves the retroactive invocation of the "notation" requirement in order to raise the applicable tariff rate. Orscheln Brothers Truck Lines, Inc. ("Orscheln") transported food products for Anderson, Clayton & Co. ("Anderson") during 1982 and 1983. Orscheln billed Anderson under ICC OBTL 400 Item 350, which incorporates ICC MWB 125 Item 578 (shipper load and count notation requirement). Orscheln filed for bankruptcy in 1983 and its auditor, Carriers Traffic Service ("CTS"), again discovered a "notation" problem. When Anderson refused to pay the alleged undercharges, Orscheln filed suit in the district court, which referred the case to the ICC for a "reasonableness" determination. CTS subsequently became Orscheln's assignee in this action by order of the United States Bankruptcy Court for the Eastern District of Missouri. The ICC ruled against CTS and in favor of Anderson. Anderson (along with the ICC) then prevailed in the district court.

Orscheln Bros. Truck Lines, Inc. v. Cooper Industries, 881 F.2d 475, also involves Orscheln and its assignee, CTS. In 1983 Cooper Industries ("Cooper") arranged to have Orscheln transport its air compressors and air compressor parts from Illinois to Tennessee. The parties negotiated a tariff "subject to shipper load, consignee unload," which incorporated by reference the notation requirement of MWB 125 Item 578. Once again CTS and Orscheln attempted to collect undercharges, and once again the ICC ruled that retroactive application of the notation requirement was unreasonable. In the district court, Judge Conlon granted summary judgment to Cooper and the ICC.

II.

The appellants ("Carrier Interests") essentially raise two issues on appeal: (1) Did the ICC err in ruling that application of the notation requirement to retroactively rise the tariff rate was unreasonable in these cases? and (2) Did the ICC ...


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