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The Interstate Commerce Act (ICA) requires that motor common carriers charge the tariff rates they file with the Interstate Commerce Commission (ICC), 49 U.S.C. 10762, and that such rates be "reasonable," 10701(a). Between 1984 and 1986, petitioner shippers tendered shipments to Carolina Motor Express, a motor carrier subject to ICC regulation, at negotiated rates that were lower than the applicable tariff rates on file with the ICC. When Carolina filed for bankruptcy, respondents, the trustee in bankruptcy and a rate auditing firm, brought adversary proceedings against petitioners in the Bankruptcy Court to recover the difference between the negotiated and tariff rates. Petitioners responded, inter alia, that the tariff rates were unlawful because they were unreasonably high. The Bankruptcy Court entered judgment for respondents based on the tariff rates, but the District Court reversed and referred petitioners' defenses to the ICC. The Court of Appeals reversed, holding the petitioners' "unreasonable rate" claims were no obstacle to respondents' actions because, even if the tariff rates were unreasonable, the "filed rate doctrine" required petitioners to pay those rates first and then seek relief in a separate action under 11705(b)(3), which gives shippers an express cause of action against carriers for damages (reparations) in the amount of the difference between the tariff rate and the rate determined by the ICC to be reasonable.
Held:
SCALIA, J., delivered the opinion of the Court, in which REHNQUIST, C.J., and WHITE, STEVENS, O'CONNOR, KENNEDY, SOUTER, and THOMAS, JJ., joined. BLACKMUN, J., dissented. [507 U.S. 258, 260]
Carter G. Phillips argued the cause for petitioners. With him on the briefs were Robert J. Gallagher and Rex E. Lee.
Michael L. Dreeben argued the cause for the United States as amicus curiae urging reversal. With him on the brief were Solicitor General Starr, Deputy Solicitor General Wallace, Robert S. Burk, Henri F. Rush, and Ellen D. Hanson.
Joseph L. Steinfeld, Jr., argued the cause for respondents. With him on the brief were Robert B. Walker, John T. Siegler, and Langdon M. Cooper. *
[ Footnote * ] Rex E. Lee, Carter G. Phillips, John K. Maser III, Frederic L. Wood, Richard D. Fortin, Daniel J. Sweeney, Paul H. Lamboley William J. Augello, Martin W. Bercovici, and Robert J. Verdisco filed a brief for the National Industrial Transportation League et al. as amici curiae urging reversal.
Briefs of amici curiae urging affirmance were filed for American Freight System, Inc., by Norman E. Beal; for the International Brotherhood of Teamsters by Richard N. Gilberg, Babette Ceccotti, Marc J. Fink, and William W. Pollock; and for Lloyd T. Whitaker as Trustee for the Estate of Olympia Holding Corp. by Kim D. Mann.
Leonard L. Gumport filed a brief pro se as amicus curiae.
JUSTICE SCALIA delivered the opinion of the Court.
This case presents the question whether, when a shipper defends against a motor common carrier's suit to collect tariff rates with the claim that the tariff rates were unreasonable, the court should proceed immediately to judgment on the carrier's complaint without waiting for the Interstate Commerce Commission (ICC) to rule on the reasonableness issue.
In many ways, this is a sequel to our decision in Maislin Industries, Inc. v. Primary Steel, Inc.,
The shippers here are petitioners California Consolidated Enterprises (CCE) and Peter Reiter. Between 1984 and 1986, they were engaged in the business of brokering motor carrier transportation, which essentially involves serving as a middleman between motor carriers and the shipping public. During that period, petitioners tendered shipments to Carolina Motor Express, Inc., which was operating as a certified motor carrier in interstate commerce subject to regulation by the ICC. Carolina and petitioners negotiated rates for several shipments that were lower than the applicable tariff [507 U.S. 258, 262] rates on file with the ICC. (Petitioners believed that Carolina would publish these negotiated rates in its tariffs, but Carolina never did so.)
In 1986, Carolina filed for bankruptcy and respondent Langdon Cooper was appointed trustee. Respondent Mark & Associates of North Carolina was retained to conduct an audit of Carolina's shipping bills, which revealed undercharges (below applicable tariff rates) in the amount of $58,793.03 on shipments made by CCE and $13,795.73 on shipments made by Reiter. Respondents brought adversary proceedings against petitioners in Bankruptcy Court to collect those amounts. Petitioners raised the standard "unreasonable practice" and "unreasonable rate" claims, and moved the Bankruptcy Court to stay proceedings and to refer those claims to the ICC. The Bankruptcy Court refused to do so, and entered judgment for respondents. In re Carolina Motor Express, Inc., 84 B.R. 979 (WDNC 1988). In 1989 (prior to our decision in Maislin), the District Court reversed and held that the "unreasonable practice" defense should be referred to the ICC. The Court of Appeals, after holding respondents' appeal in abeyance until our decision in Maislin, reversed the District Court. In re Carolina Motor Express, Inc., 949 F.2d 107 (CA4 1991). It held that, in light of Maislin, there was no need to refer the "unreasonable practice" issue to the ICC, 949 F.2d, at 109; and that the "unreasonable rate" claim was no obstacle to the carrier's action, since even if the tariff rates were unreasonable, the "filed rate" doctrine requires the shipper to pay them first and then seek relief in a separate action for damages under 11705(b)(3), id., at 110-111. We granted certiorari.
The ICA requires carriers' rates to be "reasonable," 10701(a), and gives shippers an express cause of action against carriers for damages (called "reparations" in the precodification version of the statute, see 49 U.S.C. 304a(2),
[507
U.S. 258, 263]
(5) (1976 ed.)) in the amount of the difference between the tariff rate and the rate determined to be reasonable by the ICC, 11705(b)(3).
1
Respondents argue, however, that the unreasonableness of a tariff rate may not be asserted as a "defense" to an action to recover charges based on that rate. That may be true in a technical sense, since 11705(b)(3) provides a cause of action rather than a defense. But that does not establish that the "unreasonable rate" issue cannot be raised in the present suit, since a defendant having a cause of action against a plaintiff may - indeed, often must - assert that cause of action as a counterclaim. See Fed.Rule Civ.Proc. 13; Southern Constr. Co. v. Pickard,
Under 49 U.S.C. 11706(c)(2), a shipper "must begin a civil action to recover damages under [ 11705(b)(3)] within two years after the claim accrues," which occurs "on delivery or tender of delivery by the carrier," 11706(g). That
[507
U.S. 258, 264]
limitation is not applicable here, however, since, presented in response to the carrier's suit, petitioners' claims seek merely "recoupment" - i.e., the setting off against asserted liability of a counterclaim arising out of the same transaction. Recoupment claims are generally not barred by a statute of limitations so long as the main action is timely. See Bull v. United States,
One major consequence does attach to the fact that an unreasonable rate claim is technically a counterclaim, rather than a defense: a defense cannot possibly be adjudicated separately from the plaintiff's claim to which it applies; a counterclaim can be. Federal Rule of Civil Procedure 54(b) permits a district court to enter separate final judgment on any claim or counterclaim, after making "an express determination that there is no just reason for delay." See Sears, Roebuck & Co. v. Mackey,
Nothing in the ICA provides that, in an action by a carrier to collect undercharges, a 11705(b)(3) counterclaim is not subject to the normally applicable provisions of the Federal Rules. Respondents contend that the so-called "filed rate doctrine" gives them absolute entitlement to judgment on their undercharge claims, without defense or counterclaim.
[507
U.S. 258, 266]
We disagree. The filed rate doctrine embodies the principle that a shipper cannot avoid payment of the tariff rate by invoking common law claims and defenses such as ignorance, estoppel, or prior agreement to a different rate. See Texas & Pacific R. Co. v. Mugg,
Contrary to respondents' contention, the preclusive effect of the filed rate doctrine over reparations counterclaims is not established by our opinion in Crancer v. Lowden,
Respondents raise two arguments to the effect that petitioners' 11705(b)(3) counterclaims are not yet cognizable in court. First, respondents argue that there exists what they denominate as a "pay first" rule, whereby payment of the tariff rate is a "prerequisite to litigating the rate reasonableness issue." Brief for Respondents 23. See also Milne Truck Lines, Inc. v. Makita U. S. A., Inc., 970 F.2d 564, 572 (CA9 1992) (embracing similar theory). That argument would have merit if the holding in United States ex rel. Louisville Cement Co. v. ICC,
Second, respondents contend that the doctrine of primary jurisdiction requires petitioners initially to present their unreasonable rate claims to the ICC, rather than to a court. That reflects a mistaken understanding of primary jurisdiction, which is a doctrine specifically applicable to claims properly cognizable in court that contain some issue within the special competence of an administrative agency. It requires the court to enable a "referral" to the agency, staying further proceedings so as to give the parties reasonable opportunity to seek an administrative ruling.
3
See Western Pacific,
The result that respondents seek would be produced, not by the doctrine of primary jurisdiction, but by the doctrine of exhaustion of administrative remedies. Where relief is available from an administrative agency, the plaintiff is ordinarily required to pursue that avenue of redress before proceeding to the courts; and until that recourse is exhausted, suit is premature, and must be dismissed. See Myers v. Bethlehem Shipbuilding Corp.,
Nor can we discern within the ICA an intent that, even though the ICC cannot decree relief, ICC determination of [507 U.S. 258, 270] the reasonable rate issue must be obtained before filing the civil action. Since the limitations period for filing actions under 11705(b)(3) begins running at the time of delivery of the shipment, rather than at the time the ICC enters an order, compare 11706(c)(2) and (g) with 11706(e), the period could expire before the ICC acted. We are not disposed to find an implicit prior agency determination requirement that would have such consequences.
Since we have concluded that petitioners' unreasonable rate claims are subject to the ordinary rules governing counterclaims, the judgment below must be reversed. Neither the Court of Appeals nor the District Court made the "express determination" required under Rule 54(b) for entry of a separate judgment on respondents' claims, and we cannot say categorically that it would be an abuse of discretion either to grant or to deny separate judgment. In the ordinary case, where a carrier is solvent and has promptly initiated suit, the equities favor separate judgment on the principal claim: referral of the unreasonable rate issue could produce substantial delay, and tariff rates not disapproved by the ICC are legal rates, binding on both the shipper and the carrier. See Keogh v. Chicago & Northwestern R. Co.,
The judgment of the Court of Appeals is reversed, and the case is remanded for proceedings consistent with this opinion.
[ Footnote 2 ] For purposes of applying the Federal Rules of Civil Procedure governing counterclaims, it does not matter that this action arose in bankruptcy. Rules 8 and 54 are made fully applicable in adversary proceedings by Bankruptcy Rules 7008 and 7054, and Rule 13 is made applicable with only minor variation (not relevant here) by Bankruptcy Rule 7013. It is well settled, moreover, that a bankruptcy defendant can meet a plaintiff-debtor's claim with a counterclaim arising out of the same transaction, at least to the extent that the defendant merely seeks recoupment. See In re B & L. Oil Co., 782 F.2d 155, 157 (CA10 1986); Lee v. Schweiker, 739 F.2d 870, 875 (CA3 1984). Recoupment permits a determination of the "just and proper liability" on the main issue, and involves "no element of preference." 4 Collier on Bankruptcy § 553.03. p. 553-17 (15th ed. 1991).
[
Footnote 3
] "Referral" is sometimes loosely described as a process whereby a court refers an issue to an agency. See, e.g., 28 U.S.C. 1336. But the ICA (like most statutes) contains no mechanism whereby a court can, on its own authority, demand or request a determination from the agency; that is left to the adversary system, the court merely staying its proceedings while the shipper files an administrative complaint under 11701(b). See 11705(c)(1) (second sentence). Use of the term "referral" to describe this process seems to have originated in Western Pacific, which asserted that, where issues within the special competence of an agency arise, "the judicial process is suspended pending referral of such issues to the administrative body for its views." United States v. Western Pacific R. Co.,
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Citation: 507 U.S. 258
No. 91-1496
Argued: December 01, 1992
Decided: March 08, 1993
Court: United States Supreme Court
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