Imports, Etc., Ltd. v. Abf Freight System, Inc.: the Eighth Circuit Confuses Rather Than Clarifies the Deregulation of the Trucking Industry by Applying the Filed Rate Doctrine

• Publication year: 2022

33 Creighton L. Rev. 305. IMPORTS, ETC., LTD. V. ABF FREIGHT SYSTEM, INC.: THE EIGHTH CIRCUIT CONFUSES RATHER THAN CLARIFIES THE DEREGULATION OF THE TRUCKING INDUSTRY BY APPLYING THE FILED RATE DOCTRINE

Creighton Law Review

Vol. 33

INTRODUCTION

In modern American society, extensive federal regulation is both accepted and expected.(fn1) Agency regulation, as we know it today, was born in 1887 when Congress passed the Interstate Commerce Act(fn2) ("ICA") and created the Interstate Commerce Commission ("ICC"), the first regulatory agency.(fn3) Congress enacted the ICA to regulate the railroad industry and solve the problems associated with the burgeoning industry.(fn4) One of the major problems Congress targeted in the ICA was the widespread discrimination that existed in pricing.(fn5) Congress dealt with the problem by subjecting railroads, or common carriers, who offered their services to the general public to federal regulation.(fn6) These common carriers were required to charge the same rate to all persons who received the same service.(fn7) To ensure the correct rates were charged and those receiving enhanced services were charged higher rates, Congress required the railroads to file detailed tariffs with the ICC, which listed all rates and other related details such as routes.(fn8) Railroads were bound to their "filed rates."(fn9) When courts examined the anti-discrimination provisions of the ICA, they consistently and strictly enforced the rate filing and charging provi-sions.(fn10) The rate filing and charging requirements became known as the "filed rate doctrine."(fn11) As new modes of transportation developed, Congress expanded the provisions of the ICA to encompass them.(fn12) The Motor Carrier Act of 1935(fn13) expanded the ICA to cover transportation by motor vehicles.(fn14) The ICA distinguished motor common carriers who offered their services to the general public from motor contract carriers who provided their services to only the specific parties that contracted with them.(fn15)

As with the railroads, the ICA required that the motor common carriers abide by the strict rate filing and charging requirements of the filed rate doctrine.(fn16) The strict requirements of the ICA began a trend toward strict government regulation in other industries.(fn17)

In the later part of this century, the trend in economic regulation has moved from regulation to deregulation.(fn18) After the airline deregulation of the 1970's, movements began to force the government to deregulate other industries.(fn19) One of the targeted industries was interstate commerce, specifically the interstate trucking industry.(fn20) For many years, the courts, Congress, and federal administrative au-thorities struggled with the deregulation issue.(fn21) In particular, questions arose about whether strict regulations such as the filed rate doctrine were still applicable in the modern interstate trucking industry.(fn22) The enactment of the Interstate Commerce Commission Termination Act of 1995(fn23) ("ICCTA") ended much of the controversy by passing many deregulatory measures, including the effective repeal of the filed rate doctrine in the interstate trucking industry.(fn24) As of January 1, 1996, the filed rate doctrine no longer applies to all motor carriers.(fn25) Federal law now only requires motor carriers to charge tariff rates when they are transporting household goods or engaging in non-contiguous domestic transportation.(fn26) Nevertheless, the United States Court of Appeals for the Eighth Circuit in Imports, Etc., Ltd. v. ABF Freight System, Inc.(fn27) attempted to apply the filed rate doctrine to a contract dispute between a shipper and a carrier even after the effective date of the ICCTA.(fn28)

This Note will first examine the facts and holding of Imports.(fn29) This Note will then review the regulatory history of the interstate trucking industry by examining the evolution of the filed rate doctrine, the doctrine's application to motor carriers formerly classified as motor common carriers, and the effective repeal of the filed rate doctrine.(fn30) This Note will also review canons of statutory construction, ICC regulations, and the United States Supreme Court's recent interpretation of the filed rate doctrine in the communications industry.(fn31) In the analysis, this Note will: (1) criticize the Eighth Circuit for addressing the filed rate doctrine and ignoring the statutory changes that occurred in the interstate trucking industry; and (2) argue that the court's discussion of the filed rate doctrine, in a case where it no longer applies, adds confusion and inconsistency to the law of interstate trucking rather than serving as a guide in the new deregulatory environment.(fn32)

FACTS AND HOLDING

In 1996, Imports, Etc., Ltd. ("Imports"), a shipper, had 511 cartons of women's shoes that needed to be delivered from Missouri to A&M Department Stores ("A&M") in New Jersey.(fn33) On July 9, 1996, Imports entered into a contract with ABF Freight System, Inc. ("ABF"), a motor common carrier.(fn34) The contract, the Alternate Straight Bill of Lading ("bill of lading"), directed ABF to deliver the shoes to A&M with payment to be collect-on-delivery ("COD").(fn35) ABF was to collect three items from A&M upon delivery: (1) the payment for the 511 cartons of shoes; (2) the COD fee; and (3) the freight charges.(fn36) As a motor common carrier, ABF had a current interstate tariff which described acceptable forms of payment and fees on a COD shipment.(fn37) ABF's tariff stated that ABF would accept the following for COD payments: "(1) cash up to a maximum of $500.00; (2) bank cashier's check; (3) bank certified check; (4) money order; or (5) personal check of the consignee when so authorized by the consignor."(fn38) However, the bill of lading specified the only form of COD payment to be collected was a COD cashier's check.(fn39)

When the ABF driver arrived at the address specified in the bill of lading, the driver found that A&M was not located at that address.(fn40) Instead, a different company, Bag Bazaar, occupied the location.(fn41) Bag Bazaar employees proceeded to contact representatives of A&M, who eventually arrived with Ryder trucks to accept the delivery.(fn42) The men had bank certified checks for the COD payment and the freight charges, but did not possess a check to satisfy the COD fee.(fn43) After a series of phone calls among ABF, A&M, and Imports representatives, the ABF driver accepted the COD fee in cash.(fn44)

The freight charges payment, a bank certified check, was deposited by ABF.(fn45) However, Imports did not deposit the bank certified check for the COD payment because it was not a cashier's check as specified in the bill of lading.(fn46) Imports was concerned about the events surrounding the merchandise delivery and the certification of the check.(fn47) Imports had good reason to be suspicious - the check ABF deposited was returned because the account was closed, and the bank certification on Imports' check was forged.(fn48)

Imports sued ABF in the Circuit Court of Franklin County, Missouri for the $53,180.90 COD payment ABF contracted to collect upon delivery of the merchandise.(fn49) ABF removed the case to the United States District Court for the Eastern District of Missouri.(fn50) Imports alleged that ABF breached its contract with Imports because ABF ac-cepted a COD payment in a form other than a cashier's check.(fn51) The district court agreed with Imports' theory and found ABF liable to Imports for the COD payment.(fn52) In reaching its decision, the district court examined the bill of lading and stated, "[i]nasmuch as [Imports] asserts only that defendant breached those terms of the contract governing collection of the COD amount, this Court looks to the duties assumed by the carrier in relation to the terms set out in the [bill of lading]."(fn53) The district court concluded that the bill of lading did not conflict with ABF's tariff because a cashier's check was listed on ABF's tariff as an acceptable form of payment.(fn54) Therefore, the district court found that ABF was bound to the specific instructions on the bill of lading.(fn55) The court further found that ABF's failure to collect the COD payment in the form of a cashier's check as specified in the bill of lading constituted a breach of contract.(fn56)

ABF appealed the decision of the district court to the United States Court of Appeals for the Eighth Circuit, arguing that it did not breach its contract with Imports by accepting a bank certified check, because the terms of the tariff listed a bank certified check as an acceptable type of COD payment.(fn57) ABF argued that it was not required to accept only the type of COD payment listed on the bill of lading because the terms of the tariff were incorporated into the bill of lading by reference.(fn58) ABF also argued that the incorporated terms of the tariff controlled any conflicts between the bill of lading and the tariff.(fn59) ABF's final argument was that "[a]ny attempt by Imports to deviate from ABF's COD tariff rules by restricting the tariff is ineffective and unenforceable because it would create discrimination between shippers."(fn60) However, the Eighth Circuit affirmed the decision of the district court, concluding that ABF breached the contract by accepting a form of COD payment other than the form specified in the bill of lading.(fn61)

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