The Supreme Court/The Supreme Court.iso/pc/ascii/1993/93_284/93_284.zd1

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SUPREME COURT OF THE UNITED STATES
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No. 93-284
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SECURITY SERVICES, INC., PETITIONER v.
KMART CORPORATION
on writ of certiorari to the united states court
of appeals for the third circuit
[May 16, 1994]

  Justice Ginsburg, dissenting.
  The filed rate doctrine is an integral part of the
Interstate Commerce Act.  See 49 U. S. C. 10761(a) (a
-carrier may not charge or receive a different compensa-
tion . . . than the rate specified in [its] tariff-).  At least
since 1915, this Court has held that the doctrine entitles
a carrier to collect the rate on file with the Interstate
Commerce Commission (ICC), despite a contract, negoti-
ated between shipper and carrier, setting a lower price.
See Louisville & Nashville R. Co. v. Maxwell, 237 U. S.
94, 97 (1915).  The main rule to which we have adhered
requires enforcement of the filed rate unless the Com-
mission either rejects the tariff because of a formal or
substantive defect, before the rate takes effect, 49
U. S. C. 10762(e), or prospectively invalidates a tariff
after initiating an investigation and finding the filed
rate unreasonable.  10704(b)(1).  See Keogh v. Chicago
& Northwestern R. Co., 260 U. S. 156, 163 (1922) (-The
legal rights of shipper as against carrier in respect to a
rate are measured by the published tariff.  Unless and
until suspended or set aside, this rate is made, for all
purposes, the legal rate, as between carrier and ship-
per.-) (emphasis added).
  Under our filed rate doctrine decisions, even defective
filings, including those containing substantively unlawful
rates, see Davis v. Portland Seed Co., 264 U. S. 403, 425
(1924), normally control.  See ICC v. American Trucking
Assns., Inc., 467 U. S. 354, 363-364, n. 7 (1984);
Berwind-White Coal Mining Co. v. Chicago & Erie R.
Co., 235 U. S. 371, 375 (1914).  A shipper's remedy,
when a filed rate imposes an unlawful charge, ordinarily
is confined to actual damages. See American Trucking,
supra, at 364, n. 7 (citing Boren-Stewart Co. v. Atchison,
T. & S. F. R. Co., 196 I. C. C. 120 (1933), and Acme
Peat Products, Ltd. v. Akron, C. & Y. R. Co., 277 I. C.
C. 641, 644 (1950)).  The ICC may not reject a tariff
once accepted and in effect, American Trucking, supra,
at 360-364, unless two conditions are satisfied:  first,
the Commission's action must -further a specific statu-
tory mandate-; second, the action -must be directly and
closely tied to that mandate,- 467 U. S., at 367.
  In the 1980's, as the Court recognizes, ante, at 6-7,
many carriers responded to competitive pressures by
ignoring the tariffs they had filed with the ICC and
negotiating with shippers rates for carriage lower than
the filed rates.  When carrier bankruptcies ensued,
trustees asserted claims against shippers for the differ-
ence between the filed rates and the negotiated rates.
Reacting to these claims, the Commission refused to
enforce filed rates when it appeared inequitable to exact
from the shipper more than the negotiated lower price.
In Maislin Industries, U. S., Inc. v. Primary Steel, Inc.,
497 U. S. 116 (1990), this Court held the ICC's nonen-
forcement policy inconsistent with the Act, explaining:
-[T]he filed rate doctrine . . . forbids as discrimina-
tory the secret negotiation and collection of rates
lower than the filed rate.  By refusing to order
collection of the filed rate solely because the parties
had agreed to a lower rate, the ICC has permitted
the very price discrimination that the Act by its
terms seeks to prevent.-  Id., at 130  (citation
omitted).
  Invoking the filed rate doctrine and case law elaborat-
ing on it, petitioner Security Services seeks to recover
undercharges for shipments its predecessor, Riss Interna-
tional, made between November 1986 and December
1989.  During the period for which recovery is sought,
the ICC followed the policy later declared unlawful in
Maislin, i.e., the Commission routinely refused to order
collection of the filed rate where the parties had agreed
upon a lower rate.  Newly professing strict adherence to
the filed rate doctrine, the ICC now contends it may
nonetheless void a carrier's tariff, though valid when
filed, and uphold, in place of the filed rate, -secret-
contract rates of the kind held invalid in Maislin.  The
ICC asserts it may do so for this reason:  the carrier
allowed a power of attorney to the Household Goods
Carriers' Bureau (HGCB) to lapse and neglected to pay
a nominal annual fee to maintain its membership
participation in HGCB's Mileage Guide.  The Court
upholds the ICC's position, describing the carrier's tariff
as -lack[ing] an essential element,- ante, at 9; -a carrier
employing distance rates without purporting to be bound
by stated distances,- the Court reasons, -would be just
as well placed to discriminate among shippers by
measuring with rubber instruments as it would be by
charging shippers for a stated distance at mutable rates
per mile.-  Ibid.; see also ante, at 12 (-We are dealing
. . . with an incomplete tariff insufficient to support a
reliable calculation of charges.-).
  It is difficult to regard the Commission's approach,
and the Court's approval of it, as anything other than
an end-run around the filed rate doctrine so recently
and firmly upheld in Maislin.  For the distances put
forward in the tariff at issue are not genuinely in doubt.
On the contrary, Riss' tariff explicitly incorporated the
mileage figures from HGCB's Mileage Guide.  A -close
inspection of [HGCB's tariff supplement] might have
raised some uncertainty in a shipper's mind about the
propriety of [Riss'] reference to the Guide [Riss not
having paid its dues], but not any uncertainty over the
rate.-  Overland Express, Inc. v. ICC, 996 F. 2d 356, 361
(CADC 1993) (Silberman, J.), cert. pending, No. 93-883.
As crisply stated in Brizendine v. Cotter & Co., 4 F. 3d
457, 463-464 (CA7 1993) (Flaum, J.), cert. pending, No.
93-1129:
-[S]urely [the carrier's] tariff provided sufficient
information about its rates to give notice to its
customers about the price of shipping.  Any shipper
who consulted [the carrier's] tariff would find the
rate per mile and would know where to
look-namely, to another tariff on file with the
ICC-to determine the distance. . . . [T]he only way
a curious shipper would ever know that [the carrier]
failed to submit a power of attorney to HGCB would
be if it looked up [the] filed rate; saw that the tariff
refers to HGCB's mileage guide; inspected the mile-
age guide; noticed that page two of the guide states
that it applies only to participating carriers listed in
a supplement; turned to the supplement; and discov-
ered that [the carrier's] name was missing.-
  Were the Commission in fact set on adherence to the
filed rate doctrine, carriers like Riss could employ no
-rubber instruments.-  Riss' tariff clearly said that the
carrier incorporated the distances in HGCB's guide.
The Commission could hold Riss to that representation,
while imposing a sanction for the HGCB membership
lapse that did not negate the filed rate.  As Judge
Flaum stated in Brizendine:
-Under the filed rate doctrine, even tariffs that con-
tain substantively unlawful rates or violate ICC
filing rules are not nullities.  The shipper must pay
the rate on file, and may then sue for the harm, if
any, caused by the tariff's unlawfulness or irregular-
ity.  The enforceability of published rates, however
defective, discourages the parties (especially ship-
pers, who may face undercharge suits later) from
bargaining for other prices.-  4 F. 3d, at 463 (cita-
tions and footnote omitted).
  The Court attempts to justify the Commission's appli-
cation of 49 CFR 1312.4(d) (1993) as a -void-for-non-
participation- rule by equating that rule to a tariff's
expiration date.  Ante, at 10-11.  But American Truck-
ing held that the Commission generally lacks authority
to reject a tariff -once that tariff has gone into effect.-
467 U. S., at 360; see id., at 363, n. 7; Brizendine,
supra, at 463 (American Trucking -makes clear that a
carrier's submitted rate becomes the legal, governing
rate when the ICC accepts it.-).  As Judge Silberman
explained in Overland Express:
-A regulation that purports to make a tariff [, once
effective,] `void' or `ineffective' if a carrier fails to
follow a procedural rule, . . . does not [escape]
American Trucking's holding.  The Commission is
restricted whenever it attempts to invalidate (or
alter the past effects of) a tariff after [the tariff's
effective date].  Otherwise, shippers and carriers
could not rely confidently on the rate on file with
the Commission, and . . . the filed rate doctrine
would be undermined.-  996 F. 2d, at 359-360.
   Nor does the void-for-nonparticipation rule fit within
the limited exception described in American Trucking for
actions that directly and closely -further a specific stat-
utory mandate,- 467 U. S., at 367.  The Commission
says that its rule advances the ICC's -mandate to deter-
mine the information that is required to be disclosed in
a tariff- to -ensure that tariffs reveal the applicable
rates.-  Brief for United States et al. as Amici Curiae
24 (citing 49 U. S. C. 10762(a)(1) and (b)(2)).  But as
the Seventh Circuit observed:
-[I]t is difficult to see how failure to [maintain in
effect] a power of attorney [with the HGCB] would
adversely affect the uniformity of pricing.  The true
purpose of the participation rule may be the facilita-
tion of the ICC's ability to monitor the shipping
market.  Requiring that every publisher of a tariff
list all the other carriers that have also signed onto
that tariff enables the ICC to see, at a glance, how
many carriers' rates are being controlled by a single
tariff.  Publishing that list provides no new informa-
tion that is not available by inspecting each
carrier's tariff individually-it simply collects it in
one convenient place.-  Brizendine, supra, at 464.
  Even if the Commission's action here furthered a
statutory mandate, voiding a tariff after its effective
date would not -be directly and closely tied to that
mandate- under American Trucking.  467 U. S., at 367.
Nullification of a rate can be an extremely harsh rem-
edy, for it -renders the tariff void ab initio.  As a re-
sult, whatever tariff was in effect prior to the adoption
of the rejected rate becomes the applicable tariff for the
[relevant] period.-  Id., 467 U. S., at 358 (citation omit-
ted); id., at 361.  Accordingly, when the Court upheld
the Commission's action in American Trucking as -di-
rectly and closely- tailored to a specific statutory man-
date, see n. 1, supra, it stressed that other less drastic
remedies, like actual damages, would have been ineffec-
tive checks.  See 467 U. S., at 369-370.  Here, by con-
trast, there is no suggestion that relief of another kind
would not do to check any cognizable injury to shippers
or mileage guide publishers.  See Overland Express,
supra, at 362 (-[I]f shippers or mileage guide publishers
were to show that they were injured, damages presum-
ably would be adequate to remedy the injury.-); see also
Brizendine, supra, at 465.

                         *  *  *
  It may be that -the Court stumbled badly in Maislin
Industries.-  See ante, at 1 (Stevens, J., concurring).
But the way to correct that error, if error it was, is to
overrule the unsatisfactory precedent, not to feign fideli-
ty to it while avoiding its essential meaning.
  For the reasons stated here, and more fully developed
in Brizendine and Overland Express, I respectfully dissent.