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CENTRAL STATES TRUCKING CO. v. PERISHABLE SHIPPERS

May 2, 1991

CENTRAL STATES TRUCKING COMPANY, Plaintiff,
v.
PERISHABLE SHIPPERS ASSOCIATION, AGRIPAC, INC., J.R. SIMPLOT COMPANY, WESTERN ALASKA FISHERIES INC., STEMLIT GROWERS, SKONE & CONNERS PRODUCE, OREGON CHERRY GROWERS, NORPAC FOOD SALES, NEW CENTURY, NATIONAL FROZEN FOODS CORP., KRASO-JOSEPH, INC., HANSEN FRUIT AND COLD STORAGE, JACK FROST FRUIT CO., DISTRON DIVISION OF PILLSBURY, DIAMOND FRUIT GROWERS, INC., BELLINGHAM FROZEN FOODS, Defendants


George M. Marovich, United States District Judge.


The opinion of the court was delivered by: MAROVICH

GEORGE M. MAROVICH, UNITED STATES DISTRICT JUDGE.

 Central States Trucking Company ("Central States"), an interstate common freight carrier, brings this collection action pursuant to the Interstate Commerce Act, 49 U.S.C. § 1 et seq., against J. R. Simplot Company ("Simplot"), for shipping charges related to Simplot's freight. What would normally be a simple collection matter is complicated by the insolvency of the Perishable Shippers Association ("PSA"), a not-for-profit shippers' association formed pursuant to 49 U.S.C. § 1002(c) (recodified as 49 U.S.C. § 10562(3)). Not-for-profit shippers' associations obtain favorable shipping rates for their members by pooling their members' freight into larger shipments. By pooling freight in this way, the associations are able to negotiate favorable shipping rates with common carriers. PSA paid the freight charges for each shipment and then charged the relevant amounts back to the individual members whose freight had been shipped. PSA pooled tractor-trailer loads of freight and then contracted with interstate carriers, such as Central States, to haul it. Simplot was a member of PSA. Simplot has paid PSA for all of its freight shipped by Central States; however, PSA became insolvent while still owning Central States $ 249,962.55. Central States now seeks to hold the solvent Simplot responsible for the freight charges, related to Simplot's freight, which the insolvent PSA did not pay.

 Both parties have waived their right to trial, stipulated to have the court decide all disputed facts, and agreed to have the court enter judgment based upon the trial briefs and exhibits submitted. *fn1" We have subject matter jurisdiction pursuant to 28 U.S.C. § 1337. We find in favor of Central States and enter a judgment of $ 249,962.55 against Simplot. Our findings of fact and conclusions of law are set forth below.

 FINDINGS OF FACT *fn2"

 1. Central States is a for-hire motor carrier operating in interstate commerce as both a common and contract carrier of general freight pursuant to licenses issued to it by the Interstate Commerce Commission. Fred Grane is President of Central States. His brother, Wayne Grane, is Vice President of Operations. Grane Aff. at paras. 1 and 2. Grane Dep. at page 7.

 2. PSA is a not-for-profit shippers' association formed for the purpose of moving freight from the Pacific Northwest to points throughout the United States using carriers including Central States. PSA hired Fred H. Tolan Traffic Services ("Tolan"), to manage PSA's operation. Dick E. Jones ("Jones") was employed by Tolan and was responsible for managing PSA. Jones Dep. at pages 5, 7-11, 19-21, 101, 103-105.

 3. PSA was formed to obtain lower freight rates for members by having larger volumes of freight shipped and controlled by one entity. Jones Dep. at page 20.

 4. Simplot is in the frozen food business and ships products in interstate commerce. Ruth E. Walton ("Walton"), is Vice President of Operations and also was a member of the PSA Board of Directors from mid-1987 until 1989. Walton Dep. at pages 2-3.

 5. Simplot was a member of PSA for all times relevant to this litigation. Walton Dep. at pages 5-6.

 6. A Simplot member always attended PSA's annual meetings. Jones Dep. at pages 44-46.

 7. PSA's Board of Directors consisted of five members who had general charge of the affairs of PSA and authority to act for PSA. PSA Bylaws Article V, §§ 1(a) and 6.

 8. PSA members were responsible for all freight charges whether the freight was carried on a prepaid or collect basis. Failure of a consignee to pay collect freight charges resulted in those charges being collectible from the shipping member. PSA Bylaws, Article IX, § 5.

 9. PSA members were free to direct PSA to ship their freight by a variety of methods, the most common two being door-to-door or ramp-to-ramp service. For door-to-door service, PSA would arrange to have a motor carrier pick up the member's trailers at the member's location and transport them to the nearest railhead where the freight was loaded onto a railroad car. Once the product reached a railhead near its destination, another motor carrier would pick up the trailer and deliver it to the destination.

 When a member selected door-to-door service, it had the right to select the trucking company. Simplot primarily opted for door-to-door service but allowed PSA to choose the motor carrier.

 A PSA member could also choose ramp-to-ramp service. For ramp-to-ramp service, PSA would only arrange for the railway movement of the freight. Members would be responsible for transporting their trailers to a railhead near their location and transporting their trailer from the railhead to the destination. Jones Dep. at pages 50-54. Walton Dep. at pages 78-79.

 10. Simplot's identity was always available to both PSA and to Central States because each trailer order from PSA would identify the PSA member whose freight was ...


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