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SERVICEMASTER CO., L.P. v. FTR TRANSP.

September 7, 1994

THE SERVICEMASTER COMPANY, L.P.
v.
FTR TRANSPORT, INC.



The opinion of the court was delivered by: JAMES MCGIRR KELLY

 J. M. KELLY, J.

 SEPTEMBER 7, 1994,

 Presently before the Court are two motions of Defendant FTR Transport, Inc. ("FTR"): (1) Motion for Summary Judgment, (2) Motion for Sanctions pursuant to Federal Rule of Civil Procedure 11(b)(2) and (b)(3). This action arises from allegations by Plaintiff ServiceMaster Company, L.P. ("ServiceMaster") that it had been overcharged $ 226,937.30 for 210 shipments of freight. FTR filed a counterclaim to recover $ 16,093.22 in unpaid invoices for its brokerage services. ServiceMaster asserts that this Court has jurisdiction over the matter pursuant to 49 U.S.C. § 11705(b)(2) and 28 U.S.C. § 1337.

 BACKGROUND

 ServiceMaster's principal place of business is in Illinois. It has various branch manufacturing operations, including one in Pennsylvania. FTR is an independent freight broker, licensed by the Interstate Commerce Commission ("ICC"). Its principal place of business is in Pennsylvania.

 Between 1987 and 1991, Robert Barley was the traffic coordinator for ServiceMaster, responsible for the routing of freight by ServiceMaster to its various customers. He had limited authority to engage transportation services, and could not commit ServiceMaster to any contract worth more than $ 10,000. Dep. of Andrew Konstanty at 16. In the spring of 1989, Richard Beers, a Kingsway employee, advised Barley that ServiceMaster could obtain better service than Kingsway had been providing by using FTR Transport. Dep. of Robert Barley at 23. Beers informed Barley that FTR Transport had numerous motor carriers under contract and might be able to move freight for less than typical tariff rates charged by common carriers for exclusive use. *fn1" Dep. of Richard Beers at 15, 27-28.

 FTR asserts that it arranged to have different carriers that were under contract to FTR provide service to ServiceMaster. *fn3" Dep. of Richard Beers at 17. FTR claims that by moving the freight by contract carriage, FTR, as an independent broker, was able to charge ServiceMaster less than a common carrier charging exclusive use tariff rates would charge. *fn4" Def.'s Mot. for Summ. J. at 4.

 In November 1991, after deciding that the services provided by FTR had not been cost effective, ServiceMaster terminated its relationship with FTR. Dep. of Andrew Konstanty at 26. Barley was discharged for mismanagement. Id. at 30. An audit firm made demand for overcharges from FTR. The demand was not answered.

 ServiceMaster then filed a complaint against FTR and various carriers, alleging that it had been overcharged $ 226,937.20 for 210 shipments of freight by motor carriage. After the close of discovery, ServiceMaster settled with all of the other original defendants, and filed an amended complaint, naming FTR as the sole defendant. ServiceMaster pleads four theories of recovery: (1) "broker liability" for overcharges on goods transported by common carrier under the filed rate doctrine; (2) two alternative theories of breach of contract; and (3) misrepresentation.

 In support of its Motion for Summary Judgment, FTR makes several arguments. It argues that the Court lacks subject matter jurisdiction because the statutory provision upon which ServiceMaster relies pertains only to carriers and freight forwarders, not to brokers. FTR contends that the contract between the broker and the shipper is not regulated by federal law but is a "garden variety" contract. FTR argues, as a matter of law, that it cannot be held liable for overcharges based upon tariff rates because brokers cannot be held liable for overcharges. Lastly, FTR asserts that the breach of contract claims and the misrepresentation claim have no factual basis.

 DISCUSSION

 A. UMotion for Summary Judgment

 Under Fed. R. Civ. P. 56(c), summary judgment "shall be rendered forthwith if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." This court is required, in resolving a motion for summary judgment pursuant to Rule 56, to determine whether "the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 91 L. Ed. 2d 202, 106 S. Ct. 2505 (1986). In making this determination, the evidence of the nonmoving party is to be believed, and the district court must draw all reasonable inferences in the nonmovant's favor. See id. at 255. Furthermore, while the movant bears the initial responsibility of informing the court of the basis for its motion, and identifying those portions of the record which demonstrate the absence of a genuine issue of material fact, Rule 56(c) requires the entry of summary judgment "after adequate time for discovery and upon motion, against a party who fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial." Celotex Corp. v. Catrett, 477 U.S. 317, 322-23, 91 L. Ed. 2d 265, 106 S. Ct. 2548 (1986).

 1. Broker Liability

 The statutory provision upon which ServiceMaster asserts jurisdiction provides:

 
§ 11705. Rights and remedies of persons injured by ...

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