SECURITY SERVICES, INC. v. KMART CORP.
Legal provision: Interstate Commerce, as amended
Argument of Paul O. Taylor
Chief Justice Rehnquist: We'll hear argument now in Number 93-284, Security Services, Inc. v. The K Mart Corporation.
Mr. Taylor: Thank you, Mr. Chief Justice, and may it please the Court:
My client, Security Services, is a motor common carrier.
It filed a tariff, a tariff called 501-B, submitted it to the ICC, the ICC accepted this tariff, it put their stamp on it, "Received", they put it on their shelf, and it was there for the public to use.
The tariff was never rejected, it wasn't cancelled, it wasn't suspended, it wasn't set aside, it was never challenged until my client exercised its statutory rights under section 10761(a) to collect the filed tariff rates.
Unknown Speaker: Well, it was never enforced during the time that the actual carrier had it, whatever its validity.
Mr. Taylor: --I don't agree, Mr. Chief Justice, that it wasn't enforced.
The fact was that it was on file and gave notice to the public as to what the rate is.
This Court in Berwind, Berwind-White Coal Mining v. Chicago and Erie Railroad in 1914 said that a tariff, while arguably lacking some of the formalistic requirements that the act requires and that the Interstate Commerce Commission might require, is enforceable if it is received with no objection as to form and if it is adequate to give notice to the public of the rate.
This tariff disclosed a rate, the rates were not stated in cents per mile, but they were determinative on getting the mileage.
The tariff said you go to this mileage guide for purposes of getting a mile and applying this rate.
It contained everything essential to rate a shipment.
Unknown Speaker: But both the mileage guide itself and the commission regulations, as I understand it, advised whoever was going to check the tariff not to look to that mileage guide after a certain date, namely, the date when you were no longer listed as one of the people supporting that mileage guide.
Mr. Taylor: Well, Justice Scalia--
Unknown Speaker: Would that not confuse the public at least?
The public wouldn't know whether you continued to be using that mileage guide or not.
Mr. Taylor: --No, I don't believe the public would be confused, for several reasons, if I might elaborate.
First of all, the ICC's claimed voiding power does not come from this failure to be listed in the participating carrier's tariff.
The ICC's claimed voiding power comes from the failure to give a power of attorney to the publisher of the guide.
Unknown Speaker: Well, you don't have to call it a voiding power.
You just have to call it putting the public on notice.
The public reading the regs and reading the guide itself, or the things attached to the guide, would believe that you were no longer using that mileage guide after a certain date.
Mr. Taylor: Your Honor, what the public reads is a tariff, and the tariff discloses the rate.
The statute does not require a mileage guide, the statute requires disclosure of rates, and this tariff, this 501-B tariff, very plainly disclosed what the rate would be for Riss.
Unknown Speaker: Well, if the shipper had read the guide and seen the asterisk, then he would have known that the rate should not be enforced--
Mr. Taylor: I don't believe that's correct.
What happens is, there's lots of tariffs that are allowed to go into effect with defects.
This Court acknowledged it in Davis v. Portland Seed, said its defects are inevitable, and if there's a certain defect, what do you look to if you have, perhaps, tariffs that conflict, or tariffs that might be partially incomplete.
What you look to is the intent of the framers, and what is the disclo--
Unknown Speaker: --Well, this wasn't a defect in a calculation, it was a failure of a condition that must continue for the rate to be valid, and that condition failed.
Mr. Taylor: --I don't agree that the rate's not valid, Justice Kennedy.
The rate is still contained in the tariff, and let us assume for the sake of argument that we were not permitted to use this distance guide.
You still have this rate sitting out there.
You can calculate rates.
You certainly cannot apply the tariff without having a distance, but a mileage is not something that is abstract, a mileage is finite.
There is only one shortest, practical distance from Chicago to Minneapolis or from Baltimore to Boston.
Unknown Speaker: If that's so, why is it so complicated to have all these distances that you have to have a bureau do it?
Mr. Taylor: I don't think that you have to have a bureau do it.
As a matter of fact, during this time period, the Interstate Commerce Commission was allowing all sorts of methods of filing: Rand McNally road maps, mileage guides that weren't on file--
Unknown Speaker: Is it in fact true that it's very obvious... to Washington to Baltimore, that it's very obvious there's one and only one shortest practical route?
Mr. Taylor: --That's true.
I believe that to be true.
Unknown Speaker: Have you traveled it often?
Mr. Taylor: I have traveled it on several occasions.
I'm more familiar with the distance from Chicago to Minneapolis than I am from Baltimore to Washington, but by the--
Unknown Speaker: You don't take the position that there was something unreasonable beyond the statutory power on the ICC to require the filing of the mileage guide, do you?
Mr. Taylor: --No.
I don't think... I don't think--
Unknown Speaker: Don't we then have to take tariff as meaning what the ICC has construed it to mean to require both the mileage rate and the mileage distance specification?
Mr. Taylor: --No, Justice Souter, you take the tariff as to what it discloses, and this tariff disclosed the rate dependent upon mileage, the charge, the derivative charge, and that said we're going to use these mileages.
Unknown Speaker: You had one guide, and there were other guides that gave different distances between the same two points, were there not?
There was a choice.
You could have filed a map, you could have joined this guide, you could have joined another guide, and they weren't uniform, were they?
Mr. Taylor: No.
No, they weren't, Justice Ginsburg.
Mileage guides were not uniform, but there was only one mileage guide disclosed by my client.
We didn't say, we're using all sorts of other different mileage guides.
There was one mileage guide that our holding out to the public said we would use.
Unknown Speaker: Well, now, what if somebody else who read the ICC's rules said, I'm going to use this mileage guide to start off with, but after a certain date I'm going to withdraw from it, after which that will not govern me.
Now, couldn't a person do that?
Mr. Taylor: Sure, absolutely they could.
Unknown Speaker: Sure.
Now, how is the public to know whether you're that kind of person or whether you are your kind of person--
Mr. Taylor: Because, Justice Scalia--
Unknown Speaker: --who wants to continue to have the mileage guide applicable?
Mr. Taylor: --Because the public would know from the rate tariff.
When you rate a shipment, and what the reasonable user is going to use in using a tariff is, they are going to open this tariff and they are going to see this is the rates that Riss, in its own tariff, not in the tariff filed by a third party agent, but in a tariff that it has disclosed to the public saying these are our rates, the tariff that's circulated.
These are our mileage rates, and this is what we are going to use.
Unknown Speaker: And this is the mileage, but the reader might think well, of course, they are doing that on the assumption that they are following the ICC's rules, which means they only mean it for so long as they continue to subscribe to the mileage guide.
Mr. Taylor: Well, Justice Scalia, the fact is that during this time period, the ICC rules, the ICC had issued a rule in 1984 when it amended the tariff publishing regulations.
First of all, what they did was, they eliminated from that section of the notice of proposed rulemaking... it originally said, if you refer to a distance guide, you have to also provide a power of attorney or concurrence in that distance guide.
1) That was deleted.
2) The ICC issued an opinion called,
"Revision of Tariffs, All Carriers. "
When they made a complete overhaul of its rules, and it said, due to issues of copyright and general availability, we will no longer mandate for distance guides their filing with the commission or who must be parties to it.
This 1312.4(d) voiding power at least to the extent the commission attempts to retroactively apply it to Riss' tariff which continued in effect is something that is basically newfound.
It's not something that any reasonable reader of those regulations would have determined back in 1984, or in 1985 at the time Riss filed the tariff which is at issue in this case.
Unknown Speaker: How much were the dues involved that weren't paid that led to Riss not being a party to the--
Mr. Taylor: The dues I believe, Justice Ginsburg... and I'm only going from my personal knowledge and not from the record... were about $83 during this time period.
Unknown Speaker: --Is there anything that accounts for how widespread this failure to continue to be members of the guide were, because I think one figure in the record was that between the years 1984 and 1988, 40 percent of the common carriers weren't paying their dues.
Mr. Taylor: Yes, Justice Ginsburg.
That was in the record in the Jasper Wyman case, a portion of which is attached to amicus Overland's brief in this case.
In fact, during this time period, aside from 40 percent not participating, there were all sorts of other methods which were disclosed, and as a matter of fact, when the commission was made aware of actual violations, they did nothing to strike the tariffs.
Unknown Speaker: Was this because everybody was really making deals outside the tariff?
Mr. Taylor: --No, I don't believe so.
I believe it was because the commission had basically issued this decision in revision of tariffs in 1984 that said, we are no longer going to require filing of distance guides, and we are not going to require participation in them.
The commission now says, well, that means copyrighting or something like that, but I think the unequivocal language of that decision is... and I can quote it almost verbatim... is due to issues of copyright and general availability, we will no longer mandate for distance guides their filing with the commission or participation in them.
At least, it's language very similar to that, so I think--
Unknown Speaker: You didn't at the time Riss... the prebankruptcy Riss didn't have a whole lot of interest in adherence to this tariff, because in fact you were making deals for a price lower than the tariff.
Mr. Taylor: --Well, Justice Ginsburg, I don't agree with that.
In the vast majority of cases, Riss billed their tariff rate, and in the vast majority of these bankruptcies, I know there's a lot of these cases that have developed their way up through the system, this Court having had several in the last 3 years.
In the vast majority of the cases, the carrier bills the tariff rate.
The other thing in this case, it's not a matter of protecting the Riss, it's a matter of protecting the public and their ability to challenge rates that are on file.
There's no way, if... the core purpose of the act that this court said in Maislin was to disclose the rate and allow people to challenge them as discriminatory and also to provide stability in the rate by allowing the Commission's... the circuit court's application of the Commission rule, basically what the Court would be saying in that case would be that well, you can negotiate whatever you want, and if your tariff is somewhat defective, it doesn't meet the proper form, then, well, okay, you cannot collect it.
Unknown Speaker: I understand what your argument is now in collecting from customers who paid less, but suppose there had been no bankruptcy, could Riss have gone after the people that it gave discount rates to, or would there have been some kind of estoppel working prebankruptcy?
Mr. Taylor: I'm not sure I understand the question, Your Honor.
Unknown Speaker: All of these cases seeking more from customers who were given discounted rates come up in the context of a bankruptcy?
Suppose there had been no bankruptcy.
You made a deal with customers and said, forget the tariff, we are going to give you a better price, because there's competition out there, and then 2 months later you say, sorry, we were entitled, because of our filed rate, to charge you more, so we're going to send you an additional bill.
Would there have been some kind of estoppel operating prebankruptcy?
Mr. Taylor: No, I don't believe so.
First of all, the application of the filed rate doctrine has never been dependent on somebody being in bankruptcy.
It's not just my client's right to collect its tariff charge, it's my client's duty, whether bankrupt or not bankrupt, to collect the tariff charges, so by that same token the liability for the shipper exists whether or not we actually make the demand for payment.
They are charged with knowledge of what is contained in the tariff.
On top of it--
Unknown Speaker: And you say in addition, to answer Justice Ginsburg's... that Riss could have brought this action had no bankruptcy supervened?
Mr. Taylor: --Not only could they have, they should have, and were required to by the act to bring that action.
Congress has mandated the collection of--
Unknown Speaker: How do you explain the fact that no solvent carriers ever brought any of these actions?
Mr. Taylor: --Solvent carriers bring these types of actions not as frequently as bankrupt carriers.
Unknown Speaker: Do they bring any of them?
Are there any solvent carriers in this whole family of cases?
Mr. Taylor: Recently?
Unknown Speaker: Yes.
Mr. Taylor: Solvent carriers... yes, I have several carriers who I represent who have brought actions for undercharges.
For example... and I know many people who are engaged in the collection business, when a client comes in and says, I want to collect payment from a particular shipper--
Unknown Speaker: These are nonpaying shippers.
Mr. Taylor: --Yes, in that setting.
Unknown Speaker: Are there any undercharged suits that you know of brought by solvent carriers?
Mr. Taylor: Not that I'm aware... not recently.
In the past, yes, but not recently that I'm aware of.
I think what happens in a case such as this is that what the Interstate Commerce Commission advocates through its rules and through its newfound interpretation of its regulation is that somehow that there should be a punishment upon Riss for not filing this power of attorney and remembering that the voiding power does not come from not being listed in the tariff, the voiding power comes from not providing the power of attorney.
But the act is there to protect the public, and it's there to protect the core purpose there, being able to challenge a filed rate as discriminatory, as unduly preferential and perhaps unreasonable under some of the other criteria in the act, and it's really the public interest that's being protected.
Unknown Speaker: Can I ask another question--
Mr. Taylor: Yes, Justice--
Unknown Speaker: --about this general category?
Are there any suits brought by competitors of shippers claiming they were hurt by these discriminatory rates that you know of?
Mr. Taylor: --Not in recent years.
As a matter of fact, I think part of it--
Unknown Speaker: That's surprising, if there's this strong public interest supporting the full enforcement of the tariff rate.
Mr. Taylor: --Well, the fact is that the Interstate Commerce Commission does not reach the issue of reasonableness any more.
They have not yet that I'm aware of actually issued a dispositive ruling ever determining whether or not a rate is reasonable or... unreasonable.
They basically have adopted a hands-off approach, and in my opinion it would be futile for a shipper to make a challenge to a rate as unduly discriminatory because the Interstate Commerce Commission has allowed all sorts of rates that are discriminatory and it hasn't, that I'm aware of, actually issued an order finding that a rate might be discriminatory.
Unknown Speaker: Mr. Taylor, I assumed... well, under one of the regs of the Commerce Commission you can file a rate that has an expiration date on it, can't you?
Mr. Taylor: Yes.
Unknown Speaker: And what happens to that rate when the expiration date comes?
It automatically is no longer effective?
Mr. Taylor: It goes away.
Unknown Speaker: Now, why isn't this simply the same thing?
What the Commission's rule said is that if you file a rate that refers to this extrinsic mileage chart, your rate will automatically expire at the time that... it's simply telling the public that... it's just like saying, in the regs, when you say, we will round off your mileage to the nearest hundred so that if you say, 75 miles, that shall be deemed to be 100 miles.
Anybody that files a rate that says, 75 miles, will know that it means 100 miles.
Mr. Taylor: But in this case, Justice Scalia, the Riss 501-B tariff continued to be on the shelf, continued to be charged to people other than K Mart, and it was there for the public to view to see and to challenge if they wanted to.
Unknown Speaker: Yes, but the ICC had in effect said Riss' tariff shall be deemed to expire when Riss' membership expires.
That's what the ICC... now, do you say that the rule was unauthorized?
Mr. Taylor: No, the rule is authorized.
The rule is proper, but the application of the rule to have an effect saying this tariff that was on the shelf since 1984, we should pretend does not exist and should give no legal effect to it, that is contrary to law.
It runs contrary to this Court's precedent in Maislin, it runs contrary to this Court's precedent in Berwind.
Tariffs don't have to be perfect.
They frequently aren't.
A part of the problem is, frankly, lack of oversight by the Commission, for whatever reason.
Part of the problem is the Commission has shortened the time period for filing tariffs.
Statutorily, they can shorten it to less than 30 days, so you can decrease a rate, now, on 1 day notice, you can increase it on 7 days' notice.
That certainly doesn't give the Commission time to go through it and say, hey, there's something wrong with your tariff.
Unknown Speaker: How is determination shown?
If someone looks at the guide, they just looked at the mileage from X point to Y point, they wouldn't see anything, but the names of the people... how was that... when Riss dropped out, when it didn't pay the $83, how was notice of that conveyed to the shipping world?
Mr. Taylor: Well, it's affected through what's called a participating carrier's tariff, so what you have to do is, you have to start with the Riss tariff, which says it's governed by the mileage guide and only by the mileage guide, and then you go from the mileage guide, which says this only applies for people listed in tariff 107, so you make a two-step removal from Riss' tariff to see who's listed.
Then there's supplements that come out from time to time that the Household Goods Tariff Bureau would publish, which show through symbolization Riss's name being stricken and all sorts of other carriers being stricken from the tariff, but the Commission hasn't gotten to the point to where they go back and cancel Riss' here.
Unknown Speaker: But that would be in a different booklet than the mileage guide itself, the list of people who haven't paid up?
Mr. Taylor: Yes, that's exactly correct.
The fact is... and I think the principal point in a case such as this, however, is that what is the disclosed rate?
What does the statute require?
The statute requires us to file rates, it doesn't require us to file mileages.
You can determine mileages without having a mileage guide.
As a matter of fact, the Commission's own regulations at 49 C.F.R. part 1048, when referring to what are called commercial zones, refers to airline miles around a particular city, which would require some sort of external measurement, so the tariffs don't require precision.
What it requires disclosure of rates in such a fashion that would enable somebody to challenge the rates as discriminatory or unreasonable.
One thing this Court cited with approval in the Maislin case was the regular common carrier conference case by the D.C. circuit decided in 1986.
In that case, the Commission had put forth a rule which basically said, you can put in your tariff, or actually a group of carriers had published a rule which says, you can negotiate whatever you want to.
That was in the tariff.
That is basically the sum and substance of what was said, and it was challenged by a group of carriers which said, that doesn't meet the requirement for a rate in the tariff, and the D.C. Circuit said, that requirement is utterly central to the act, and the Commission came back and said, well, we have all these other methods of determining tariff rates.
And what the D.C. Circuit said is that while those tariffs haven't been challenged yet, what they said... and this is from page 380, 793 Fed 2d 380... for example, under volume discount rules, competing carriers cannot determine the per unit rate, but the carrier is charged with knowing the volume tendered by the shipper, but they do at least know how the per unit rate is determined, enabling them to protest the application of a different formula to a particular shipper.
So if for some reason some shipper took that extraordinary step and went two tariffs removed from Riss' tariff and was somehow confused about the mileages, at least we have a disclosed rate and a method of challenging that rate and perhaps challenging the application of that rate for a calculation of mileages in that case.
And by the circuit court's opinion, by upholding the retroactive effect of 1312.4(d), they basically got the filed rate doctrine.
It makes the disclosed rate unreliable, and this Court has said in Berwind, said it in Davis v. Portland Seed, that that disclosed rate, that the carriers at a certain point have to be able to place repose in the tariffs that are on file.
Unknown Speaker: Now, when you say, retroactive, this was not retroactive so that it voided the tariff before the date of the supplement to the rating bureau.
Mr. Taylor: That's correct, Justice Kennedy.
Unknown Speaker: So it's not... it's retroactive only in the conclusory sense that you say that the rating bureau publication is irrelevant.
Mr. Taylor: That's correct.
From that date forward, from the date after Riss was dropped from the list of participating carriers, those shippers who relied on that tariff, the 501-B tariff that Riss filed in its own name, those shippers that relied on it, paid that rate, at that point that tariff becomes retroactively voided for them and basically leaves us with no tariff.
The additional application of the rule, while not present in this case, but the record attached to Overland's brief, the amicus brief filed by Overland in this case, indicates that you can have the reverse effect.
In American trucking, all you had was a restoration to a cheaper rate, but if you void... if the Commission is allowed to void carriers' rates, it may... it doesn't in this case, but it may in other cases and does in other cases, result in higher rates, so the--
Unknown Speaker: Well, Mr. Taylor, what happens in the case of a rate which has passed its expiration date?
It remains on file, but it's no longer valid?
What are the rights of the carrier and the shipper in that case?
Mr. Taylor: --There is no right.
Nobody can claim a right to a rate that has expired.
In this case, the rate tariff continued on file, Mr. Chief Justice.
Unknown Speaker: So in that case, the shipper and the carrier could negotiate their own deal, so to speak?
Mr. Taylor: No.
Well, in those cases, 1)--
Unknown Speaker: Well, now, you've said no rate applies, so wouldn't the only alternative be for the carrier and the shipper to negotiate their own deal?
Mr. Taylor: --Mr. Chief Justice, in the case where there is no otherwise applicable rate, there would be no tariff and the carrier would be subject to whatever civil penalty... the civil penalties under the act, because the act does require you to maintain rates in other cases.
Unknown Speaker: But by hypothesis, you haven't maintained rates, and you've made a deal with the shipper to ship at a particular price.
Is that voidable, or can the carrier come back and charge more later?
Mr. Taylor: The carrier can always charge, and must always charge his tariff rate.
Unknown Speaker: But by hypothesis we have no--
Mr. Taylor: If you had no tariff rate at all, in any tariff, not just the 501-B tariff, but if there was no other tariff applicable that might be higher or lower, now at that point you would... I assume you would have an illegal contract and nobody would be entitled to any compensation.
Unknown Speaker: --So that the carrier would be carrying for nothing, in effect.
Mr. Taylor: I agree, yes.
Unknown Speaker: It seems a remarkably harsh result.
Mr. Taylor: I--
Unknown Speaker: I'm sure that is not how it works out.
Do you have a case for that proposition?
Mr. Taylor: --No.
Well, there's a split of case law among the district courts.
Some say that a carrier is entitled to a quantum meruit recovery, other cases say, well, the rates are determined on the tariff, and if you have no tariff you have no rate and thus there's nothing to collect, and assuming if you pay the negotiated rate you might leave the parties in the position as you find them, but that is assuming, again, you have no rate.
In this case there was a disclosed rate, and the operation of the court of appeals decision is such that it makes that disclosed rate unreliable, and anybody who looked at it, relied on it, paid it, could be penalized either up or down, as a matter--
Unknown Speaker: The carrier is acting unlawfully if it has no filed rate.
Mr. Taylor: --That is correct, Justice Ginsburg.
Unknown Speaker: What are the penalties, apart from what the shipper would owe?
What are the penalties for not having an operative filed rate?
Mr. Taylor: Well, there are certain civil forfei ure penalties.
The penalty provisions of the act are outlined at section 11901 through 11904.
At that point, one would assume that they would be liable for charging something that's discriminatory, because who knows what they would be charging in that case.
There's criminal and civil penalties that would provide up to... I believe the criminal penalties under the act are 2 years in jail and $10,000 per violation, and it's been construed that the violation is on a shipment-by-shipment basis.
But if I can leave with one point, and that is that there's never been a requirement of tariff perfection.
The question is, what is the public likely to see, what are their rights, and how do you justify them in this case?
How do we vindicate the public rights?
That is, upholding the disclosed rate, not allowing a negotiated rate to stand.
That's the core purpose that this Court stressed in Maislin.
Maislin cited American Trucking for the proposition that while the Commission can craft appropriate remedies, it cannot do something that undermines the core purpose of the act, and by stating, because this tariff has some sort of pimple or technical imperfection, it should be totally treated as void, and a negotiated rate should stand, really does undermine the intent of Congress.
Thank you very much.
I'd like to reserve the rest of my time for rebuttal.
Unknown Speaker: Very well, Mr. Taylor.
Is that the correct pronunciation of your name?
Argument of William J. Augello
Mr. Augello: It is, Mr. Chief Justice.
Mr. Chief Justice, and may it please the Court:
The sole issue in this Court today is whether or not Riss had an effective tariff.
I think the Court has identified that problem, and I would like to refer you to the principal source of the cancellation of the tariff.
Now, you will find a copy of the note in the Household Goods Mileage Guide at Joint Appendix 35.
That note clearly says that
"This mileage guide may not be employed by a carrier as a governing publication for the purpose of determining transportation rates based on mileage or distance unless the carrier is shown as a participant in the above-named tariff. "
Riss was once a party to that carrier... to that tariff, and so its rates were complete when they initially filed the Riss 501 tariff.
That's the rate tariff.
They paid their dues until 1985, when they decided to stop.
It's irrelevant how much the dues were, because under the filed rate doctrine the carrier's name must be in every tariff that it publishes.
In 1985, as I said, it stopped paying.
The Household Goods Mileage Bureau duly cancelled Riss from the tariff by filing a cancellation supplement.
That supplement is a tariff.
The tariff is notice to the world that Riss is no longer a party to this tariff.
Unknown Speaker: Isn't it... I suppose, as your opposing counsel said, a separate publication?
If I wanted to ship goods, I know what the rate is, and I want to see what the mileage is.
I look at the mileage guide, but to find out whether Riss is still a party to that Household Goods, I have to look at yet a third book?
Mr. Augello: That's correct.
That's not a problem.
Unknown Speaker: So you pick up the... if you just pick up the rate, you can pick up the mileage book and stop there, then you don't know that Riss is no longer paying its $83 a year.
Mr. Augello: But the point is that it really is irrelevant whether you pick up the tariff or not, because carriers and shippers alike are charged with constructive notice of every duly filed tariff, and that I think is the problem that we ran into in the Overland case when the Court did not duly apply that principle.
They were talking about, well, did the shipper really check the tariff, did the shipper really check to see if the power of attorney was executed?
Unknown Speaker: Mr. Augello, Mr. Taylor has told us that by 1985, when this tariff as you put it no longer governed because the company no longer participated in it, by that time, the Commission by decision had eliminated the requirement that you be a participant.
Mr. Augello: That is incorrect.
Unknown Speaker: Is that incorrect?
Mr. Augello: It is.
In the Jasper Wyman case at page 252 the Commission addressed that contention and said... first of all, I'm afraid that Mr. Taylor did not quote the language in that 1984 revision of tariffs regulation because... he didn't quote it correctly.
This is what the Commission said... and I'm reading now from page 252 of the Jasper Wyman case.
That the Commission would not
"mandate for distance guides who must be parties, or ICC filing of the publication. "
What the Commission was saying is, we're not going to mandate that any publisher of a mileage guide must file their tariff with the Commission because of copyright problems, and the Commission went on to say the Commission meant simply that because of the pending copyright litigation involving the right to author a mileage guide, it would not preclude any author from filing a mileage guide with the Commission nor deny any carrier's right to participate in any filed mileage guide.
That clarifies the situation.
The note at page Joint Appendix 35 acts like a stop sign.
It requires the tariff reader to stop, don't go any further until you see whether or not the carrier is listed in Household Goods Tariff Number 107--
Unknown Speaker: Assuming someone would get that book and look at it, but there is no question that the word, "participate" means nothing more than pay your annual dues to belong to this--
Mr. Augello: --No, Your Honor.
Section 1312.27(e) of the Commission's regulations state clearly that if a carrier refers to another tariff, it must participate in that tariff.
Unknown Speaker: --I'm just asking what participate means.
Mr. Augello: Means?
It means be listed as a participating carrier.
Unknown Speaker: And one gets listed by filing the power of attorney and paying annual fees?
Mr. Augello: Precisely.
Unknown Speaker: There's nothing else beyond that.
Participation doesn't mean anything fancier than--
Mr. Augello: No.
That's all it means.
Unknown Speaker: --Subscribe and pay your annual fee.
Mr. Augello: That's correct.
Unknown Speaker: Do you know why it is that the discontinuance was so widespread, so many carriers stopped paying their annual fees?
Mr. Augello: Yes.
I'd be happy to address that, Your Honor.
First of all, the estimate that you read in the Overland case is completely unreliable.
There is absolutely no factual basis for that estimate.
I tracked it down and found that it came from a newspaper interview of the President of the Household Goods Mileage Guide who said, I estimate that approximately 40 percent of the carriers that refer to my tariff are not parties to it.
When the Household Goods Mileage people finally realized what was going on... a lot of people were using their tariff without paying for it... they filed a petition with the ICC.
You'll see the citation at page 20 of our brief, in footnote 8.
It's the Household Goods Carriers Bureau Petition for Cancellation of Tariffs of Nonparticipating Carriers.
When they filed that petition, they found only 111 carriers that were not party to the tariff, that had referred to the tariff in their own rate tariff, but didn't participate.
Unknown Speaker: What percentage was that?
Mr. Augello: Well, there's prob... I think there are 12,800 carriers listed in the Household Goods... that's the figure that I recall from the Commission's brief in the Overland case, so 111 carriers.
That was a complete fabrication.
And as I said earlier, Riss originally was a party to the tariff, and so its rates were once legal.
They were once complete, but when you publish a mileage rate, it isn't just one rate, it is a combination of a mileage rate and distances.
The reason the Commission requires the publication of distance is to prevent discrimination, because if you don't do that, one carrier could say to a favored shipper, between New York and Chicago we'll call it 1,000 miles.
For another shipper, it will be 1 mile less.
You see, these distances do not operate on actual miles, or even actual traveled miles, or even the shortest distance.
It's whatever the carrier decides is going to be the basis for his mileage, and then he must stick to it.
Unknown Speaker: If we can go back to my question, I think your answer was that the percentage was in fact a lot lower, but 111 is still a significant number dealing with a rule of the Commission that says one must have a filed rate, and to have this rate complete we need two parts, the rate and the distance.
Is there any explanation why 111 carriers, knowing of the filed rate doctrine, simply didn't pay the $83?
Mr. Augello: --Beginning in 1980, Congress decided to open the doors up to trucking, and the Commission's certificates, authorized carriers, suddenly jumped from about 15,000 to 35,000.
There were a lot of owner-operators running their own trucks who never heard of the ICC before, and they suddenly got saddled with these tariff regulations, and you know, it was just a complete breakdown of the former method of formalized tariffs and everybody knew what they were doing.
There were a lot of people in the business who didn't know what they were doing.
Unknown Speaker: Well, it's the same reason Mr. Taylor's client didn't charge the tariffed rate.
They thought the old rules were all gone.
Mr. Augello: Exactly.
Unknown Speaker: Who cares about tariffs?
Mr. Augello: Exactly.
Unknown Speaker: The ICC's not enforcing them any more.
A reasonable rate is what the market will bear, and... part of the same development, I assume, wasn't it?
Mr. Augello: That's right, but the shippers who were in good faith negotiating these rates with carriers, believing that the carrier was in full compliance with his tariffs, are now being saddled with these billions of dollars of undercharges.
Unknown Speaker: Apropos of a comment you made a moment ago, Mr. Augello, in your view, would it be permissible, or have been, for a carrier to file a mileage guide that said the distance from New York to Chicago is 300 miles so long as he did that with every single shipper?
Mr. Augello: Yes.
See, that's one of the options he has.
The Commission gives you three options to file mileage rates, attaching that to the tariff, specify what the mileage is, or refer to a guide.
Unknown Speaker: And it doesn't matter how unrealistic the mileage is?
Mr. Augello: I... I don't... no, I don't say that.
I'm saying he has that option of specifying what the mileage is.
Unknown Speaker: My question was--
Mr. Augello: How close?
Unknown Speaker: --300 miles from New York to Chicago, which, you know, is very optimistic.
Mr. Augello: I wouldn't expect anyone would do that, but, you know, from a hypothetical standpoint I suppose if a competitor found him doing that he'd have a right to file a complaint, and--
Unknown Speaker: I don't see why he couldn't file a tariff that says I'm only charged for the first 300 miles of the carriage, as sort of a... if he does it to everybody in a nondiscriminatory--
Mr. Augello: --As long as there's no discrimination.
Unknown Speaker: --He just in effect says, everybody knows it's farther, but this is a... you know, it's like all sorts of discount deals that you run into.
I'm most of the way there by then.
Mr. Augello: That's a novel one, but... I suppose they could also say, you get a reduced rate if your freight travels over Saturday night, like the airlines.
But there are two components to a mileage rate, the point I was trying to make.
Unknown Speaker: It might save him a lot to truck in Findlay, Ohio, too, I suppose.
Mr. Augello: And both components must be published in a tariff.
When they are not, it voids the rate tariff that refers to that tariff.
You'll see a copy of all of the tariff pages in our briefs and in our joint appendix, showing you just how that works.
There must be a sequence, and under this Court's teachings, the filed rate doctrine must be strictly enforced.
The point is, it must be strictly enforced against carriers as well as shippers, and in this case... and incidentally, this is the first case where the strict application of the filed rate doctrine works against the carrier's interest, but it's the carrier who violated the law, and so we believe that the court below properly granted summary judgment and dismissed the actions because without an effective tariff there is no basis for an undercharge.
There's got to be the foundation of an effective, lawful tariff before you can file an undercharge claim.
Unknown Speaker: It works in the bankrupt carrier's interest.
You said it worked against the carrier's interest.
Mr. Augello: Yes, it does, because they're trying to collect the undercharges.
It doesn't matter whether the carrier's bankrupt or not.
But in closing I just would like to--
Unknown Speaker: Oh, I see, it means the absence of the... the filed rate doctrine is what... the filed rate is what the carrier is trying to enforce.
Mr. Augello: --Yes, even though that filed rate was not honored by him originally.
He negotiated his rates with the shippers, he told them that the rates are on file, but then didn't adhere to the rates, but met the market-driven competitive rates.
That's what's happened in this whole field, and then later on when his auditors come in and get hired by the bankruptcy trustee, they look for these defects.
Unknown Speaker: You're saying he wants to have an advantage from not having turned one square corner, but not the disadvantage of not having turned the other.
Or to put it another way, he can have his pound of flesh but not one drop of blood.
Mr. Augello: But I... thank you, Your Honor.
Unknown Speaker: Thank you, Mr. Augello.
Mr. Manning, we'll hear from you.
Argument of John F. Manning
Mr. Manning: Thank you, Mr. Chief Justice, and may it please the Court:
Under the Commission's longstanding and consistent interpretation of the Interstate Commerce Act, if a carrier wishes to meet its filed rate obligation by referring to someone else's tariff, he must participate in a continuing agency relationship with that other entity.
That interpretation, which goes back more than 50 years, is currently reflected in the Commission's void for nonparticipation rule, which provides that if a carrier allows its participation in an agency tariff to lapse, the tariff becomes void as a matter of law as to that carrier.
Unknown Speaker: What's the reason for that nonparticipation rule, Mr. Manning?
Is it really just to enable the person who files the other tariff to be able to collect $83, or is there some other reason for it?
Mr. Manning: Well, as the ICC indicated in its Wonderoast decision, which is cited in our brief and which appears in 8 I.C.C. 2nd, that doctrine is an interpretation of the statutory requirement that appears in two sections.
In section 10702 of title 49, it provides that the carrier shall establish the rates for its transportation services subject to the jurisdiction of the Interstate Commerce Commission under the relevant subchapter, and section 10762 of title 49 provides that the carrier shall file a tariff containing those rates, and so in effect the ICC has interpreted the statute in a way that places the responsibility on the carrier to set its own rates.
Now, the practical reason, I think, for the policy is that these tariffs are very complicated and expensive to put together, and a lot of tariffs are put together by so-called rate bureaus which compile this information and set up the system of rules and practices and so forth that govern the transportation subject to the jurisdiction of the act, and if there were not a participation requirement in the ICC's rules, then everyone would literally free ride on these agency tariffs simply by filing a tariff that referred to the agency tariff.
That's why the ICC's rules are quite explicit in saying that when a carrier who is a party to a tariff, and that includes its own tariff, refers to a separate tariff, and when its rates are governed by that separate tariff, it must be a participant in that separate tariff as well, and that requirement is contained in section 1312.27(e), and I just want to pause for a moment and address petitioner's claim that the decision in this case is actually inconsistent with the ICC's regulations, when in fact it is not.
The HGB Mileage Guide, the tariff from which petitioners... I'm sorry, from which Riss' participation was cancelled, is governed by a provision contained in section 1312.30, which is in on pages 9a and 10a of the appendix to our brief, and on page 10a, subsection 4 provides that except as provided in the specified subsection, which refers to Government publications, only distance guides officially on file with the Commission may be referred to.
Now, that's another way of saying, as the Commission explained in its Jasper Wyman decision, that a distance guide is in fact a tariff.
Now, if you then turn to page 8a and look at section 1312.27(e), the provision I've just cited, it says that a carrier participating in a tariff which refers to... in tariffs which refer to and are governed by separate tariffs, they shall also participate in those governing separate tariffs, and that means that when a carrier refers to a mileage guide, and when its rates are governed by that mileage guide, it must also participate in that mileage guide.
Now, there's one other provision I want to refer you to, and that's the heart of this case, and that's 1312.4(d), which is cited on page 3a of our appendix, and that provision says that a carrier... and this... I'm starting at the third line down, after the word "however", a carrier may not participate in a tariff issued in the name of another carrier or an agent unless a power of attorney or concurrence has been executed.
Absent effective concurrences, or powers of attorney, tariffs are void as a matter of law.
Now, we believe and the Commission has so held in the Jasper Wyman decision as well as other decisions, that if you read those three provisions together, they require the conclusion that a carrier must participate, must maintain an agency relationship with the publishers of a mileage guide in order to be able to refer to that mileage guide as part of its filed rate.
Now, Riss did not do that in this case, as petitioners concede, and for that reason, although Riss did have a filed tariff, its tariff number 501-B was on file, it did not have a filed rate, because a shipper who consulted Riss' tariff 501-B would be referred to the mileage guide to determine the critical quantity term in the tariff, and examining the mileage guide, the carrier would see that the mileage guide in a notice that's in bold letters on page 2 of that tariff--
Unknown Speaker: Mr. Manning--
Mr. Manning: --I'm sorry.
Unknown Speaker: --the last sentence of 1312.4 on page 3a of the appendix of your brief says,
"Should a challenge to a tariff be made on this basis, carriers will be required to submit the necessary proof. "
"What sort of a challenge would be made by a carrier on that basis? "
Mr. Manning: Well, that refers to... I think that that sentence refers to the kind of proceeding that Mr. Augello described in which HGB might come in and say, there are 111 carriers who refer to our mileage guide, but they haven't maintained their powers of attorney, they haven't paid their participation fees, and what the Commission has done in those cases, and there are two recent cases that involve this, both of which are cited in Mr. Augello's brief, what the Commission will do is, it will issue an order to the carriers either to reinstate their participation in the Mileage Guide tariff, or to cancel any reference to that participation.
Unknown Speaker: But the sentence says carriers shall submit the necessary proof.
That suggests to me that it's a carrier... that a... would be challenging it.
Mr. Manning: No, no, I think that means that if someone challenges the tariff on the ground that a carrier has not--
Unknown Speaker: I see.
Mr. Manning: --maintained, then the carrier has to show that it has participated.
Unknown Speaker: Okay.
Mr. Manning: And that raises an important point, which--
Unknown Speaker: Mr. Manning, the Chief Justice's question brings up something that has... seems to me to underlie this whole matter.
You've done a very good job of telling us why a component of the rate has not been filed, but the question is, what should the consequence of that be, and the ICC says the cornerstone of this whole thing is the filed rate.
Then there's an absence, an incomplete aspect of this tariff, and instead of saying, carrier, you make that tariff complete, you pay your $83, it says, well, then, all bets are off, and we have no filed rate, when the filed rate is supposed to be so important.
It's your solution to say, we get rid of the filed rate, instead of, if you are true to that the filed that is fundamental to this whole regime, like it or not, to say, measure up.
Do what's necessary to have a filed rate.
Mr. Manning: --Well, the ICC does believe that the filed rate and the filed rate doctrine are central to the whole scheme of regulating the transportation industry, and the ICC does... has in recent years taken an aggressive stance in enforcing the requirement of participations.
In fiscal year 1993, I am advised by the Commission, the Commission entered 24 consent decrees with carriers who had let their participations in mileage guides and other tariffs lapse, and had sought and obtained one injunction, and the proceeding that Mr. Augello referred to, which is in 9 I.C.C. 2nd.
, was a proceeding in which HGB came to... the Household Goods Carriers Bureau came to the ICC and said, we are aware that this certain number of carriers have not participated in our mileage guide but are referring to it, and the ICC issued an order pursuant to its broad remedial powers saying that these carriers either had to make their participation current or strike any reference to the HGB Mileage Guide from their tariffs.
Now, the consequence of that obviously is that if they do not have a filed rate, any filed rate that covers transportation, it is unlawful for them to undertake transportation that's covered by the act.
Unknown Speaker: This is really a new belief in the centrality of filed rates by the Commission after our last few decisions.
It's fair to say that during the period at issue here, the Commission didn't believe in the centrality of filed rates.
Mr. Manning: Well, I think... I mean, I think that a lot of the problems that have arisen in this case and that are percolating up through the system do come from the era prior to Maislin in which the Commission was taking a less aggressive stance about the centrality of the filed rate and had a more tolerant view of negotiated rates.
Unknown Speaker: But you're saying now, at least, post Maislin, the Commission is proceeding logically and consistently.
Mr. Manning: Post Maislin the Commission is enforcing this requirement, yes, it is.
Before I close I'd like to make one final point, and that is the retroactivity point.
Unknown Speaker: Well, may I ask why--
Mr. Manning: Oh, of course.
Unknown Speaker: --in this very situation the Commission didn't say, if it is indeed saying the filed rate is it, didn't say, when such... when we detect such a thing, then we require the carrier to join, pay all the back dues, and slap a penalty on them.
Wouldn't that be the most effective way, if what we were genuinely concerned about was maintaining the filed rate, instead of saying, well, they didn't comply, therefore we allow the secret rates to operate?
Mr. Manning: Well, that might be... that might be an appropriate exercise of the Commission's remedial discretion.
That would obviously be a matter for the Commission to decide in the first instance.
I would simply point out that this case arises from a private lawsuit filed by Security Services, Incorporated against the K Mart Corporation, and it was not a proceeding before the Commission.
Unknown Speaker: Yes, but you are supporting the result that says, you missed your $83 so all bets are off and the privately negotiated rate is what sticks.
Mr. Manning: That is correct.
Whatever remedial action the Commission may take in the future concerning the enforcement of the filed rate, the fact remains that in this case there was no filed rate, and in order for petitioner to sustain its undercharge claim it must affirmatively point to and rely on the existence of a filed rate.
Unknown Speaker: Well, of course, I suppose it was much too late to give a remedy looking to the future, because the carrier was bankrupt, or out of business.
Mr. Manning: Well, that's true, the carrier is not providing any--
Unknown Speaker: --do something that enabled them--
Mr. Manning: --The carrier is not providing any additional services.
Unknown Speaker: --This is looking at a situation when that... it's much too late to order that particularly.
I'm curious to know about the significance of this case.
I had the impression from that other opinion we're talking about 40 percent of this package of litigation.
Do you agree with the estimate it's only 111 carriers out of 12,000?
Mr. Manning: Well, that's the only number that is... that the Commission has encountered in any official way.
I'm not sure where the--
Unknown Speaker: So this is really kind of a fly speck in the whole picture.
Mr. Manning: --Well, if... I mean, based on the number of violations that have been brought to the Commission's attention by HGB, which has every incentive to police the nonpayment of dues by those who refer to is mileage guide, I would think that the problem is not particularly significant as a percentage of the total participants.
If there are no further questions--
Unknown Speaker: Were you going to attempt to address the retroactivity?
Mr. Manning: --Oh, I'd be happy to.
The Government's position is that this is not a retroactive invalidation of the rule... I'm sorry, of the tariff.
This is, as the Chief Justice pointed out, precisely the same thing as if the carrier's own tariff had expired or been cancelled.
The Commission's consistent view has been that if a carrier cancels its own tariff, even if it's accidental, that cancellation is effective without the Commission's taking any form of action to validate or formalize the cancellation, and here, the participation of Riss in HGB Mileage Guide 100 tariff was cancelled by operation of its agent, the Household Goods Carriers Bureau.
That cancellation was duly published in a tariff filed by HGB pursuant to Commission rules.
Under Commission rules, and that's specifically rule 1312.10(a), if a power of attorney is cancelled, if a participation is cancelled, that cancellation is not effective until it is published in a tariff, and so in other words, the cancellation only becomes effective when the public gets notice of it, and in that respect it is very much like the expiration or cancellation of the carrier's own tariff.
Unknown Speaker: May I ask one other question?
Mr. Manning: Yes.
Unknown Speaker: We were directed to the attention of page 35 of the Joint Appendix, and treating that as though it were a third document as part of all the tariffs.
Do you agree that that is a tariff, that notice has the same presumptive effect in the sense that shippers are presumed to know about that notice just as they're presumed to know about everything in the filed tariff?
Mr. Manning: Oh, yes.
Yes, Your Honor.
I mean, that is part of the HGB Mileage Guide 100 tariff, and the shipper is on constructive notice of what's contained in that notice, but we would say that even if that notice were not part of the tariff, this would be the same case, because the Commission's rules clearly state that a tariff must list all of the participants in that tariff, either in the tariff or in a separate participating carrier's tariff, and that's 1312.13(c), and the tariff 1312.17, which pertains to amendments... that's subsection (b)(2)... also says that if a carrier's participation in a tariff is cancelled, that cancellation must be noted in the tariff.
Unknown Speaker: Thank you, Mr. Manning.
Mr. Taylor, you have 4 minutes remaining.
Rebuttal of Paul O. Taylor
Mr. Taylor: Thank you, Your Honor.
The voiding power that the Commission claims doesn't come from failure to be listed in the tariff, it comes from the failure to provide a private power of attorney, failure to provide it to the publisher of the distance guide, and the Commissioner has said those documents are no longer used by us.
That's where the voiding power comes from, so at the time... now, they say, well, it only comes... the Government says, well, it only comes about when you cancel your participation.
Well, that's simply not the case.
They claim it comes--
Unknown Speaker: Well, the Government... it only comes about effectively when notice is given to the public.
Mr. Taylor: --Well, that is not, however, what the regulation says.
Unknown Speaker: Is that the way it works in practice?
I mean, do you know of any instance in which the rule has been evoked with respect to any carriage prior to the time of the filing so that the public could find out?
Mr. Taylor: --Justice Souter, you can't possibly know, because the powers of attorney are never filed.
When we don't know... this power of attorney that Riss had has disappeared.
There was a search made for it, and it's disappeared.
We don't know when it actually was cancelled.
We don't know... this is a carrier that is in bankruptcy proceedings.
We don't know if in fact they never did pay their fee, but one thing we know is that this tariff, the 501-B, continued on the shelf.
When a tariff is cancelled, the ICC physically removes it from the shelf.
This tariff remained on the shelf.
With regard to--
Unknown Speaker: Do you agree or disagree that the publication of the Household Goods 100 is a tariff?
Mr. Taylor: --It is a tariff.
Indeed, it is.
With respect to the proceeding to cancel the 111 tariffs, the Commission hasn't said that's a show cause proceeding to state, why shouldn't we cancel them?
Well, if they are void as a matter of law, there really is no reason to cancel them.
You just take them off the shelf.
They have allowed the opportunity to remedy that situation, recognizing that the tariffs that refer to it are still on the shelf, still relied on by the parties.
In addition, this 111 is just a starting number.
There is record in the Jasper Wyman proceeding that was attached to Overland's brief that said on page... their appendix page 8 of the amicus brief, affidavit by Don Norman,
"As an example, a study of filings for the months of April and May 1991. "
--a 2-month period... with the Commission, shows that more than 230 carriers filed tariffs that contained rates which referenced the Household Goods Mileage Guide as a methodology for determining miles applicable to those rates.
These publications have been accepted and passed to the tariff files without criticism or rejection by the ICC.
They simply did not enforce it.
Unknown Speaker: Well, wait... wait.
It just said that that many referred to.
Did it say that many carriers who were not participating?
Mr. Taylor: That continues on.
They were not participants.
Unknown Speaker: 230 out of 12,000.
Mr. Taylor: Yes, even though they did not... that's 230, Justice Stevens in a 2-month period.
That's what that is.
The Commission during this time period was simply not enforcing this regulation.
The other issue that we have to deal with is, assume that--
Unknown Speaker: All of the relevant events in this case come up pre-Maislin.
Mr. Taylor: --Yes.
Yes, they do.
Well, the actual shipping transactions came up pre-Maislin.
The question you deal with, now you have... assuming their argument is right, and you can't use the mileage guide, does that mean you have an incomplete tariff?
There's nothing in the law that says you have to have miles, a booklet of miles in order to determine mileages.
The same way Mr. Augello talked about being able to manipulate mileages, you can manipulate weight.
You have rates that are in cubic feet.
You can manipulate that.
There's all sorts of things that you can manipulate that would be illegal, but a mile is something that's finite.
This Court said, in a case called Hewitt Robbins v. Eastern Freightways in 1962, that a shipper is entitled to receive the rate over the cheapest route available.
There's nothing that says tariffs have to be perfect.
If we can't use the mileage guide, if you determine somehow that this reference was illegal, you still have this tariff that continued to be on the shelf that people continued to rely on.
By treating that tariff as void, by putting blinders on and saying, that tariff was there and accepted, nobody ever challenged is nonexistent, well then, of course, you're doing what Maislin says you shouldn't do.
You're allowing a negotiated rate to supersede a tariff that may have some imperfections, but a tariff that disclosed a rate that the public relied on.
Thank you very much.
Chief Justice Rehnquist: Thank you, Mr. Taylor.
The case is submitted.
Argument of Justice Souter
Mr. Souter: I have the opinion to announce in the case of Security Services against Kmart, No. 93-284.
This case comes to us on writ of certiorari to the United States Court of Appeals for the Third Circuit.
The case presents the question whether a motor carrier in bankruptcy may recover for undercharges based on tariff rates that have void as a matter of law or under the Interstate Commerce Commission's regulations.
A milage rate tariff has two components: charges per mile and stated distance.
The milage rate tariff that petitioner, Security Services filed with the Interstate Commerce Commission, did not list distances for calculating charges for shipments but instead relied on a milage guide filed by the Household Goods Carriers' Bureau.
The milage guide states that it may not be used to determine rates unless the carrier is shown as a participant in the guide.
Participants are listed in a separate tariff filed with the ICC.
When Security Services failed to pay its participation fees, the Bureau canceled Security Services' participation by publishing a supplement to its tariff which listed participants.
Sometime later, Security Services contracted with respondent, Kmart Corporation to transport Kmart's goods at contract rates below its filed tariff rates.
Security Services later filed for bankruptcy and, as debtor in possession, invoked the ICC or the Interstate Commerce Act?s filed rate doctrine which mandates that carriers charge and be paid the rates filed in the tariff.
Security Services, therefore, claimed that Kmart was liable for undercharges based on the difference between the contract and tariff rates.
Kmart refused to pay and Security Services sued.
The District Court granted summary judgment for Kmart and the Court of Appeals affirmed.
We granted certiorari to resolve a second conflict over the enforceability of the ICC void for non-participation regulation and we now affirm.
ICC regulations invalidate a milage-based tariff upon cancelation of the carrier's participation in an agent's distance guide, as occurred here.
Such a tariff is incomplete and seizes to satisfy the fundamental purpose of tariffs which is to disclose the freight charge due to the carrier.
A carrier employing distance rates without being bound by state of distances would be just as well placed to discriminate among shippers by measuring with rubber instruments as it would be by charging shippers for a state of distance at mutable rates per mile.
Security Services makes two main arguments, neither of which is availing.
It argues that the regulation operates retroactively but that is not the case.
Under a regulation, Security Services' tariff reference to the milage guide became void as a matter of law and its tariff filing is incomplete on the phase when the Bureau canceled its participation in the guide.
The transactions with Kmart occurred after that date.
Equally inept is Security Services' reliance on the technical defect rule.
Under our cases, neither procedural irregularity nor unreasonableness nullifies a filed rate.
But a tariff like this one that refers to another tariff for essential information which tariff in turn states that the carrier may not refer to it does not provide the adequate notice of rates to be charged that the court's technical defects cases require.
The trustee and bankruptcy and debtors in possession may rely on the filed rate doctrine to collect for undercharges but they may not collect for undercharges based on filed but void rates.
Justice Stevens has filed a concurring opinion; Justice Thomas and Justice Ginsburg have each filed dissenting opinions.