Appeal from a judgment of the United States District Court for the Southern District of New York, Charles E. Stewart, Judge, granting plaintiff summary judgment in a suit under 49 U.S.C. § 318. Affirmed.
Before: FRIENDLY, OAKES, and CARDAMONE, Circuit Judges.
This case presents the question whether an individual shareholder of a contract carrier may recover on its behalf in a derivative action the difference between freight rates paid by a shipper and those set forth in the tariff filed by the carrier with the ICC pursuant to 49 U.S.C. § 318(a), amended by 49 U.S.C. § 10761(a) (Supp. V 1981). The United States District Court for the Southern District of New York, Charles E. Stewart, Judge, in two separate memorandum decisions, rejected the defendants' estoppel defense and granted summary judgment as to liability on the plaintiff's timely claims. We affirm.
The named plaintiff in this action, Robert Siegel, was a shareholder and President of Converters Transportation (Converters), a New York corporation operating as a contract carrier as defined in 49 U.S.C. § 303(15), amended by 49 U.S.C. § 10102(5), (13) (Supp. V 1981). Converters was formed in 1969, apparently for the sole purpose of providing transportation services to the defendant Elk Piece Dye Works (Elk), a corporation that dyes and finishes "piece goods" for the textile industry. Although legally separate from Elk, one-half of Converters' stock was held by Vincent Oltremare, Jr. and Joseph Scancarello, who both represented the interests of Elk.The other one-half was held by plaintiff Siegel. Converters also agreed to pay defendants Vincent Oltremare, Sr. and Louis Sgrosso, both principals of Elk, $12,500 annually as "commissions" for obtaining Elk's trucking business.
The appellees argued that the payments were illegal rebates. The amendment complaint sought both recovery of the commissions and compensation for payments for trucking services rendered Elk by Converters from May 30, 1975 to March 21, 1977. Elk argues that Converters should be estopped from recovering because, as Judge Stewart found, "[t]here is uncontroverted evidence that Siegel knew, ratified and participated in the alleged illegal payments." Converters argues that the "commissions" agreement was "attributable solely to Elk providing it with customers -- a bounty for its lifeblood." In the alternative, Elk argues that recovery for at least some of the period set forth in Converters' amended complaint is barred by the statute of limitations.
Elk's estoppel argument -- based on the equitable maxim that a party ought not to profit from his own wrongdoing -- runs contrary to well settled case law establishing essentially strict liability for any difference between the rates paid by a shipper and the tariff filed by the carrier. In short, "[u]nder the Interstate Commerce Act, the rate of the carrier duly filed is the only lawful charge." Louisville & Nashville R.R. v. Maxwell, 237 U.S. 94, 97, 59 L. Ed. 853, 35 S. Ct. 494 (1915). The Court in Louisville & Nashville recognized that "[t]his rule is undeniably strict and it obviously may work hardship in some cases" but concluded that strict liability "embodies the policy which has been adopted by Congress in the regulation of interstate commerce in order to prevent unjust discrimination." Id. Any number of recent cases from this and other circuits confirms the proposition that an estoppel defense is simply unavailable under the Act. See, e.g., Fry Trucking Co. v. Shenandoah Quarry, Inc., 202 U.S. App. D.C. 337, 628 F.2d 1360, 1361-63 (D.C. Cir. 1980); Illinois Central Gulf R.R. v. Golden Triangle Wholesale Gas Co., 586 F.2d 588, 592 (5th Cir. 1978); Nyad Motor Freight, Inc. v. W. T. Grant Co., 486 F.2d 1112, 1114 (2d Cir. 1973) ("a common carrier may, despite its own complicity, recover any illegal differential between its filed rates and the actual charges made"); Bowser and Campbell v. Knox Glass Inc., 390 F.2d 193, 194-97 (3d Cir.), cert. denied, 392 U.S. 907, 20 L. Ed. 2d 1365, 88 S. Ct. 2061 (1968).
Bangor Punta Operations, Inc. v. Bangor & Aroostook R.R., 417 U.S. 703, 41 L. Ed. 2d 418, 94 S. Ct. 2578 (1974), the case Elk relies upon most, does not call for a different result. In Bangor Punta the Court held that a corporation could not maintain an action for waste of corporate assets and mismanagement against the former owners of a corporation it has acquired at what was conceded to be a fair price. Elk argues that the decision "recognize[s] the principle that a stockholder may not maintain an action to recover for wrongful conduct if that stockholder acquiesced in, participated in, or ratified the wrongdoing complained of." We do not believe that Bangor Punta must -- or should -- be read so broadly. The Court's decision ultimately turned on its view that the plaintiff in Bangor Punta, having paid a fair price for its shares, suffered no injury as a result of any earlier mismangement of the acquired corporation. 417 U.S. at 711. Thus Bangor Punta was not a case where recovery was denied under either an "unclean hands" or "in pari delicto" rationale. See Memorex Corp. v. International Business Machines Corp., 555 F.2d 1379 (9th Cir. 1977).
B. Statute of limitations
Siegel originally filed suit on his own behalf on June 10, 1977. On September 15, 1978, Judge Stewart held that, under New York law, Siegel was not entitled to maintain the action and dismissed without prejudice. Siegel then filed a verified amended complaint as a derivative suit on October 30, 1978. Although Siegel's first complaint sought compensation only for shipments made between April 3, 1976 and March 21, 1977, the time period encompassed by the amended complaint ran from May 30, 1975 to March 21, 1977. Although it is clear that, under the applicable three year statute of limitations, 49 U.S.C. § 304a, amended by 49 U.S.C. § 11706 (Supp. V 1981), a claim relative to shipments dating back to May 30, 1975 would have been timely when the first complaint was filed on June 10, 1977, Elk contends that the amended complaint's alteration of the period for which damages were sought cannot "relate back" to the filing of the original complaint under Fed. R. Civ. P. 15(c).
The text of Rule 15 makes explicit Congress's intent that leave to amend a complaint "shall be freely given when justice so requires." Fed. R. Civ. P. 15(a). The purpose of Rule 15 "is to provide maximum opportunity for each claim to be decided on its merits rather than on procedural technicalities." 6 C. Wright & A. Miller, Federal Practice and Procedure, § 1471, at 359 (1971). To this end Fed. R. Civ. P. 15(c) provides in part that:
Whenever the claim or defense asserted in the amended pleading arose out of the conduct, transaction, or occurrence set forth or attempted to be set forth in the original pleading, the amendment ...