MAISLIN INDUSTRIES, U. S. – Appellant
Versus
PRIMARY STEEL, (1990) – Respondent
The Interstate Commerce Act (Act) requires motor common carriers to publish their rates in tariffs filed with the Interstate Commerce Commission (ICC), 49 U.S.C. 10762, and prohibits both carriers and shippers from deviating from those rates, 10761. The Act also specifies that a carriers rates must be nondiscriminatory, 10741, and that its rates and practices must be reasonable, 10701, and charges the ICC, upon determining that a rate or practice violates the statute, with prescribing the rate or practice to be followed, 10704(b)(1). Purportedly pursuant to this authority, the ICC, in its recent Negotiated Rates decisions, has adopted a policy that relieves a shipper of the obligation to pay the filed rate when it has privately negotiated a lower rate with the carrier. From 1981 to 1983, Quinn Freight Lines, a motor common carrier and a subsidiary of petitioner Maislin Industries, U.S., Inc., privately negotiated interstate shipment rates with respondent Primary Steel, Inc., that were lower than Quinns filed rates. Quinn never filed the negotiated rates with the ICC. In 1983, Maislin filed for bankruptcy, and the bankrupt estate issued balance due bills to Primary for the difference between the filed rates and the negotiated rates. When Primary refused to pay the undercharges, the estate brought suit in the District Court, which referred the matter to the ICC. Rejecting the argument that it lacked the statutory power to release a shipper from liability for such undercharges, the ICC relied on its Negotiated Rates policy to hold that 10701 authorized it to consider all the circumstances surrounding an undercharge suit to determine whether collection of the filed rate would constitute an unreasonable practice. The ICC concluded that Maislin was not entitled to recover, since Quinn and Primary had negotiated other rates, and since Primary had relied on Quinn to file those rates, had reasonably believed that the amounts quoted and billed were the correct total charges, and had made full payment. The case returned to the District Court, which granted summary judgment for Primary on the basis of the ICCs decision. The Court of Appeals affirmed, agreeing with the District Court that the approach taken by the ICC was consistent with the Act. [497 U.S. 116, 117]
Held:
The ICCs Negotiated Rates policy is inconsistent with the Act, and is therefore invalid. Pp. 126-136.
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