Reproduced with the Permission of Miles Kavaller
On August 3, 1997 185,000 Teamsters struck United Parcel Service ("UPS"). Approximately three weeks later the strike was settled before major disruptions in the economy were suffered. The primary issues in the strike involved UPS' use of part-time workers, subcontracting, pensions and safety and health. Most believe that the Teamsters were successful in obtaining improved benefits and hourly wages for its employees.
Developments continue in the freight undercharge and overcharge arena. On June 3, 1997 in Case No. 41911, Infinity Systems, Inc.--Petition for Declaratory Order--Certain Rates and Practices of Superior Fast Freight, Inc., the Surface Transportation Board ("STB") ruled that Superior Fast Freight ("SFF") operated as a freight forwarder and could not collect undercharges from shippers. (See 1997 Fed.Car.Case. [CCH] 38,315 at pages 48,148-48,154). The evidence before the STB established that SFF had operated as a freight forwarder for 50 years. It assembled and consolidated LTL shipments, used line-haul motor or rail carriers and provided or arranged for distribution at destination, services characteristic of a freight forwarder. The STB reached its decision notwithstanding the motor carrier operations of Superior Fast Drayage dba Superior Express, an ICC authorized common and contract carrier into which SFF was merged in 1986. It also changed its name to SFF which then could operate as either a freight forwarder, a motor common carrier or a motor contract carrier. However, SFF ("SUFF") continued to participate in the NMFC where it was identified as a freight forwarder. Superior Express ("SULA") identified itself as a motor carrier in the NMFC. In finding that SFF was a forwarder, the STB found that it did not adopt or participate in Tariff RMB 583, the tariff on which it relied to collect undercharges. And the STB also rejected SFF's contention that its failure to adopt the motor carrier tariffs of Superior Drayage, Inc. dba Superior Express was a minor or technical deficiency.
The STB's decision was issued in connection with SFF's bankruptcy which is pending in the United States Bankruptcy Court for the Central District of California in Los Angeles. Undercharge claims which are still pending in adversary proceedings before the bankruptcy court will likely be dismissed as a result of this decision. However, those who have already settled SFF's undercharge claims and executed releases, will not be able to obtain a refund.
The ICC Termination Act went into effect on January 1, 1996. There is an 18 month period of limitations for overcharge claims. Shippers who believe that they have paid carriers more than the applicable rate are required not only to submit written claims for refund of overcharges within 180 days of billing, but must also file suit within 18 months if a settlement is not reached. If suit is filed more than 18 months after delivery, a shipper may not recover overcharges from a motor carrier.
This statute of limitations was the subject of a recent decision by a federal court in Los Angeles. The court concluded that the 18 month period of limitations applied to all shipments, even those transported before the effective date of the ICC Termination Act, where the suit was filed after January 1, 1996, the effective date of the new law. Accordingly, the shipper's overcharge claims for shipments which would have otherwise been timely under the Negotiated Rates Act of 1993 were time-barred.
In the same case, the district court also ruled that the motor carrier who had successfully defended the overcharge refund lawsuit was entitled to its attorneys' fees. The motor carrier's lawyers argued that although the Interstate Commerce Act would not have provided for the payment of a motor carrier's attorneys' fees, a subtle change in the language of the ICC Termination Act, established the congressional intent to provide for an award of attorneys' fees to the party prevailing in an overcharge refund lawsuit, whether shipper or motor carrier.
The district court's decision was not published and is therefore of little precedential value. Nevertheless, it represents at least one district court's view on the application of the overcharge refund and statute of limitations provisions in the ICC Termination Act.
Under the Interstate Commerce Act motor common carriers were permitted to file suit in federal district court to collect tariff charges. Recently, however, a district court also in Los Angeles ruled that given the abolition of filed tariffs in TIRRA (Trucking Industry Regulatory Reform Act of 1994) and the ICC Termination Act, the federal district court lacked jurisdiction to consider a motor carrier's complaint for the payment of unfiled, albeit "tariff" charges for shipments transported after August 26, 1994. The irony of this ruling lies in the fact that a federal district court has jurisdiction to consider motor carrier suits for the payment of freight charges arising out of contracts executed after January 1, 1996 under the provisions of the ICC Termination Act. (49 U.S.C.14101(b)(2)).