and tariff provisions as follows:
[The Act] entails a balanced and coherent system for the payment and review of rates. The shipper is required to pay the filed rate at the time of shipment but may later seek review and reparations in the I.C.C. The carrier, on the other hand, receives assurance that the payment will not be delayed pending review; but the carrier must be prepared to reimburse amounts later found to be unreasonable.
Southern Pacific Transp. Co. v. San Antonio, 748 F.2d 266, 274 (5th Cir. 1984); In re Caravan Refrigerated Cargo, Inc., 864 F.2d 388, 391 (5th Cir. 1989), cert. denied, 110 S. Ct. 3254 (1990).
In addition to citing the Fifth Circuit's description of the statutory scheme, the Fourth Circuit In re Carolina Motor Express, Inc., 949 F.2d 107, 110 (4th Cir. 1991), reasoned that permitting referral "would provide a strong incentive for shippers routinely to contest the validity of the carrier's rates in order to delay paying the carrier's filed rate." It also read Supreme Court precedent to hold that "carriers are entitled to receive the filed rate for their services immediately when due." 949 F.2d at 110 (citing Arizona Grocery Co. v. Atchison, Topeka & Santa Fe R. Co., 284 U.S. 370, 384, 76 L. Ed. 348, 52 S. Ct. 183 (1932)).
I agree with the Fourth and Fifth Circuits that the Act requires adherence to the tariff, and that a stay pending referral of the reasonableness issue to the ICC is contrary to the provisions and purposes of the Act. Although it may seem unfair to hold a shipper to an unreasonable rate, the Supreme Court has said that the shipper is charged with knowledge of the rates listed in the tariff: "Ignorance or misquotation of rates is not an excuse for paying or charging either less or more than the rate filed. The rule is undeniably strict, and it may work hardship in some cases, but it embodies the policy which has been adopted by Congress in regulation of interstate commerce in order to prevent unjust discrimination." Maxwell, 237 U.S. at 97. Therefore, under the Act the shipper is required to pay according to the tariff and cannot claim either ignorance or mistake as an excuse for non-payment. Nor should a shipper be permitted to raise unreasonableness as a defense to paying the filed rate. In addition to being charged with knowledge of the rates, presumably the shipper has voluntarily contracted with the carrier, has reviewed the tariff and has considered the rates of other carriers. The shipper has had an opportunity to consider the reasonableness of the tariff rate prior to contracting.
Moreover, the Act provides shippers with a specific remedy. If it is later discovered that the filed rates are unreasonable, the Act provides for "reparations" following a determination of unreasonableness by the ICC. 49 U.S.C. § 11704 (1982 ed.). The very characterization of the remedy in the statute -- "reparations" -- suggests a rule of pay first and sue later. Thus, the statutory scheme suggests that the only reasonable expectation by both carrier and shipper is that the tariff governs the transaction and its terms are immediately enforceable. In re Caravan Refrigerated Cargo, 864 F.2d at 391. "It would be anomalous to allow the defendants, a further delay in paying the rates, of which they had been charged with knowledge from the beginning." Carolina Motor Express, 949 F.2d at 110.
Moreover, prohibiting referral will discourage negotiation of rates below the filed rate. If a shipper is aware that a carrier can enforce the filed rate at any time, it is less likely that the shipper will try to get the carrier to agree to evade the tariff. While a rule requiring immediate payment of the rates specified in the tariff will not eliminate such agreements, it will make them less attractive for shippers and thereby further the policy of eliminating rate discrimination.
For the reasons stated above, defendant's motion is denied.
Michael B. Mukasey,
U.S. District Judge
Dated: New York, New York
February 11, 1992
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