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May 28, 1991


The opinion of the court was delivered by: Rambo, District Judge.



Plaintiffs, Horn's Motor Express, Inc. (Horn's) and Mark Services, Inc., (collectively plaintiffs) submitted a motion for summary judgment in the captioned action on March 13, 1991. The following day defendant, Harrisburg Paper Company, filed a motion to refer this action to the Interstate Commerce Commission (ICC) and to stay the instant action pending the outcome of the ICC proceedings. Although plaintiffs accelerated the briefing on their summary judgment motion, the court withheld consideration of it until briefing was complete on Harrisburg Paper's motion to stay and refer. That motion is now ripe for the court's decision.


Horn's, a motor carrier engaged in interstate commerce under the authority of the ICC, moved freight for Harrisburg Paper a number of occasions between July 15, 1987 and January 31, 1989. The parties negotiated a flat rate of $375.00 for some of the shipments at issue and a $412.00 flat rate for others at issue, which Horn's billed and Harrisburg Paper paid. The negotiated rate was lower than the tariff rates Horn's had filed with the ICC, and Horn's never published the negotiated rate.

In 1989, Horn's began bankruptcy liquidation proceedings. In furtherance thereof, Horn's contracted with plaintiff Mark Services to audit all freight bills issued in the preceding three years and collect for any amounts billed at less than the relevant tariff filed with the ICC by Horn's. Mark Services discovered the discrepancy between the negotiated rates and Horn's filed tariff and billed Harrisburg Paper for the difference. Harrisburg Paper refused to pay the amounts, after which plaintiffs filed the instant action to recover the undercharges. Plaintiffs now move for summary judgment on the grounds of the filed rate doctrine. Harrisburg Paper moves for a stay of the action and referral to the ICC for a determination on whether Horn's filed rate is unreasonable and, therefore, unenforceable.


The filed rate doctrine is a judicially announced doctrine under which the Supreme Court has held consistently that the filed tariff alone dictates the legal rights between a shipper and carrier as to undercharges. See, e.g., Keogh v. Chicago & Northwestern R. Co., 260 U.S. 156, 163, 43 S.Ct. 47, 49, 67 L.Ed. 183 (1922); Maislin, 110 S.Ct. at 2761. The doctrine precludes such equitable defenses to undercharge actions as misquotation or the shipper's ignorance of the filed rate. Maislin, 110 S.Ct. at 2761. The rule has always been subject, however, to the exception that the filed tariff may not be unreasonable within the meaning of the statute. Id. at 2767.

Maislin addressed a policy known as the "negotiated rates" policy, which had been administratively created by the ICC to deal with attempts by carriers to collect filed rates in spite of the fact that they had negotiated rates lower than the filed tariff. As in the instant case, Maislin involved a carrier that negotiated rates lower than those in its filed tariff, failed to file the negotiated rates, and in the process of subsequent bankruptcy proceedings, filed a claim to collect the undercharges from the shipper. Upon the district court's referral of the action, the ICC applied its negotiated rates policy, which relieved shippers of liability for higher filed rates on the theory that it was an unreasonable practice to demand payment of filed rates when the parties had negotiated lower rates. Id. at 2760. Under the negotiated rates policy, the question of whether a rate was unreasonable under the statutory standard of 49 U.S.C. § 10701(e) was never reached. Rather, the ICC would relieve a shipper of liability upon a showing that the carrier was trying to collect a filed rate that was higher than the negotiated rate.

The Maislin court struck down the ICC's negotiated rates policy, finding it to be blatantly inconsistent with the filed rate doctrine, and the scheme of the Interstate Commerce Act, in particular, sections 10761 and 10762. Id. at 2761. Acknowledging the sometimes harsh results engendered by the filed rate doctrine, the court reaffirmed that a carrier must collect the filed rate even though it may be substantially higher than the negotiated rate. Id. The court pointed out that the doctrine ensures that the underlying purpose of the filing and collecting requirements of § 10761(a), the prevention of illegal price discrimination, will be upheld. See id.

The court, nonetheless, reaffirmed the rule that a tariff rate will not be enforced if the ICC determines the tariff is unreasonable. At the same time, the Maislin court implicitly made clear that the determination of unreasonableness may not turn alone upon the fact that a filed rate is higher than a negotiated rate. See id. at 2761. Thus, the Maislin court signalled its recognition of the difference between a challenge based on an unreasonable practice theory linked to filed and negotiated rates and a challenge based on the unreasonableness of the rate in the context of the industry's economic climate.

Plaintiffs' arguments are as follows. First, plaintiffs argue that the Maislin decision's reaffirmance of the filed rate doctrine and rejection of the ICC's negotiated rates policy compels summary judgment in their favor. Plaintiffs also imply that Maislin supports their position against referral of this action to the ICC for a preliminary determination on whether Horn's filed tariff was unreasonable. Plaintiffs, however, rely primarily upon T.I.M.E. v. United States, 359 U.S. 464, 469, 79 S.Ct. 904, 3 L.Ed.2d 952 (1959), to argue against referral on the theory that rate unreasonableness is not available as a defense to a common carrier's undercharge collection suit. T.I.M.E., plaintiffs argue, makes a reparations action by the shipper the exclusive method for challenging unreasonable rates. Alternatively, plaintiffs argue that even if rate unreasonableness is a viable defense, Harrisburg Paper has not presented evidence sufficient to justify referral of the unreasonableness question to the ICC.

Harrisburg Paper argues that the holding in Maislin did not alter the right of a shipper to a determination of whether a carrier's filed rate is reasonable. To demonstrate that a question of unreasonableness exists, Harrisburg Paper urges that the "class rates," which plaintiffs now seek to collect, are unreasonably high in light of the economic and technological changes engendered by the enactment of the Motor Carrier Act of 1980, P.L. 96-296 (July 1, 1980), as well as a comparison of Horn's rates to those of its competitors for the relevant time period, freight, and route. Harrisburg Paper submits that Horn's filed rates were merely "paper rates," that were so much higher than the actual competitive rates that no freight moved under those rates. Attached to Harrisburg Paper's brief were two affidavits and supporting documents ...

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