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THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT

No. 91-1320

ADVANCE UNITED EXPRESSWAYS, INC.,
Plaintiff-Appellee,
versus
EASTMAN KODAK COMPANY,
Defendant-Appellant.
_________________________________________________________________
_
Appeal from the United States District Court for the
Northern District of Texas
_________________________________________________________________
(June 26, 1992)
Before GOLDBERG, JOLLY, and WIENER, Circuit Judges
E. GRADY JOLLY, Circuit Judge:
In this interstate tariff undercharge case, we examine the
roles played by the Interstate Commerce Commission and the district
courts when the reasonableness of a tariff rate or practice is at
issue. For the reasons set forth below, we hold that, in the light
of Maislin Industries, U.S., Inc. v. Primary Steel, Inc., 497 U.S.
116 (1990), shippers may assert rate unreasonableness as a defense
in an action by a carrier for undercharges and that district courts
should refer issues pertaining to rate unreasonableness in such
cases to the Interstate Commerce Commission.

I
Advance United Expressways, Inc. ("Advance") hauled cargo for
the Eastman-Kodak Company ("Kodak") at rates below the rates in
some of the tariffs Advance posted with the ICC. Advance filed for
Chapter 11 bankruptcy in Minnesota in 1987.
In 1988, a rate auditor for Advance's bankruptcy estate began
billing Kodak for "undercharges," or the difference between the
amount paid and the applicable tariff price, on some 7,596 freight
bills.
In May 1989, Kodak sought a declaratory order from the
Interstate Commerce Commission ("ICC" or "Commission") declaring
Advance's rates and practices unreasonable. Advance moved for a
contempt order in bankruptcy court, alleging Kodak's petition for
a declaratory order violated the automatic stay. The ICC action
was then stayed until the bankruptcy stay was lifted on August 14,
1989.
On August 9, 1989, Advance sued Kodak in the United States
district court in Dallas, seeking $456,838 in undercharges. Kodak
moved for a stay pending the ICC ruling, which was denied. At the
invitation of the court, Advance filed its motion for summary
judgment on December 22, 1989.
Meanwhile, the ICC had lifted the stay on its proceedings in
August 1989. Both Advance and Kodak submitted evidence to the
Commission. In February 1990, the ICC ruled for Kodak, applying
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the Commission's "negotiated rates policy." This policy provides
that, because a carrier is responsible for filing a new tariff when
it negotiates a rate below the existing filed tariff's rate, the
carrier who fails to file a new tariff, but later tries to collect
undercharges on the higher rate of the old filed tariff, acts
unreasonably.1 Thus, Advance's attempt to collect undercharges was
an unreasonable practice. The Commission also considered arguments
that tariff ADUE 652, a tariff rate with a 20% discount, governed
some portion of the shipments in dispute. The Commission found
that letters from Advance to Kodak satisfied a "letter of
participation" provision of ADUE 652 and that the discounts in the
letters that conformed to ADUE 652 governed the shipments. The
Commission separately found that Advance's distinct practices
(1) of negotiating rates, billing and accepting payment
at the negotiated rate, but assertedly failing to file
the rates; (2) of billing and accepting payment under
discount programs provided for in a filed tariff and
written agreements of participation, but denying the
applicability of such discounts,...
were unreasonable.
In March 1990, the district court stayed proceedings pending
a ruling by the United States Supreme Court in Maislin, which was
issued in June. 497 U.S. 116 (1990). In Maislin, the court struck
down the negotiated rates doctrine as violative of the "filed rate
1See NITL -- Petition to Institute Rulemaking on Negotiated
Motor Common Carrier Rates, 5 I.C.C.2d 623 (1989)(often called
the "Negotiated Rates II" decision).
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doctrine." As its name implies, this doctrine derives from the
Interstate Commerce Act requirement that a carrier's rate be filed,
49 U.S.C. � 10761, and which, simply stated, is that
this rate is the only lawful charge. Shippers and
travellers are charged with notice of it, and they as
well as the carrier must abide by it, unless it is found
by the Commission to be unreasonable. Ignorance or
misquotation of rates is not an excuse for paying or
charging either less or more than the rate filed.
Louisville & Nashville R. Co. v. Maxwell, 237 U.S. 94, 97 (1915),
quoted in Maislin, 110 S.Ct. at 2765, 2766.
Following the decision in Maislin, on November 30 the district
court entered summary judgment for Advance. The court rejected
Kodak's argument based upon the ICC's 1990 decision as an argument
based solely on the negotiated rates policy discredited in Maislin.
The court further refused to hear the defense that the filed rate
was unreasonable. Citing our opinion in In re Caravan Refrigerated
Cargo, Inc., 864 F.2d 388 (5th Cir. 1989), the court held that,
although
Kodak may properly raise
the issue of rate
unreasonableness before the ICC, Kodak may not raise the issue as
a defense in the action for undercharges. The court, therefore,
awarded Advance the entire amount requested and also granted
prejudgment interest from the dates of shipment. Two weeks later,
judgment was entered for $469,244.78 in undercharges, $150,079 in
interest, and $120 in costs. Kodak moved for reconsideration, and
later for alteration or stay of the judgment, all of which were
denied.
-4-

On July 12, 1991, the ICC granted a petition by Kodak to
reopen its proceedings against Advance in the light of Maislin.
That decision reaffirmed the determination that the 20% discount
rate applied to a significant number of the disputed bills. The
ICC has set a schedule for the introduction of evidence on the
reasonableness of Advance's tariffs.
Kodak here appeals the summary judgment entered by the
district court. Kodak has taken pains to point out that it does
not appeal the refusal of the district court to apply the
negotiated rates doctrine. Instead, Kodak attacks the summary
judgment by raising three distinct arguments: (1) the district
court should have deferred to the ICC in its decision on the
applicable tariff; (2) Kodak should have been allowed to present
its defense that the tariffs were unreasonable; and (3) if the
court refused to grant Kodak an opportunity to present its defense
of unreasonableness, then the court should have stayed its
proceedings to allow the ICC to rule on the issue.2
2Kodak raises another issue which we note only in passing:
the court improperly granted summary judgment because of a year-
long delay after the motion was filed. This issue lacks merit,
since the parties were on notice that summary judgment could be
issued at any time later than 20 days after the motion was filed.
N.D.Tex. Local R. 5.1. This point is moot, in any event, as we
find below that summary judgment was improper for other reasons.
Kodak also argues that the district court abused its
discretion by awarding prejudgment interest to Advance and also
that it improperly calculated interest from the date of the
shipments. Because we reverse the entire award and remand for
further consideration, we will pretermit this issue. We note in
passing, however, that the proper standard for the award appears
-5-

II
We review de novo the summary judgment, applying the same
standards of law as those available to the district court. Trial
v. Atchison, Topeka and Santa Fe R. Co., 896 F.2d 120, 122 (5th
Cir. 1990). Therefore, to sustain the summary judgment rendered
below, we must find that there is "no genuine issue as to any
material fact and that the moving party is entitled to judgment as
a matter of law." Fed.R.Civ.P. 56(c).
III
Our consideration of this appeal begins with an examination of
the recent United States Supreme Court opinion in Maislin, a case
whose issues and procedural history are similar to our case today.
Maislin, a bankrupt carrier, sued a shipper, Primary, for
undercharges for freight shipments carried over two years. Primary
answered, asserting defenses that the asserted tariff rates were
inapplicable to the shipments in issue, that the rates sought were
unreasonable, and that the practice of negotiating a rate lower
than the tariff and rebilling at the higher tariff rate was
unreasonable. The district court found that these defenses raised
not to be one of discretion, but, barring extraordinary
circumstances, such awards seems to be considered mandatory in
order to make the injured party whole, Louisiana & Arkansas Ry.
Co. v. Export Drum Co., 359 F.2d 311 (5th Cir. 1966). Cf.
Southern Pacific Transp. Co. v. San Antonio, 748 F.2d 266, 274
(5th Cir. 1984).
-6-

issues in the "primary jurisdiction" of the ICC,3 stayed the court
proceedings, and referred the matter to the Commission. Maislin,
110 S.Ct. at 2764. The ICC ruled in Primary's favor, basing its
decision on its negotiated rates policy, but not reaching the issue
of reasonableness of the rates. Id., and at 2767 n.10. The
district court relied upon the ICC ruling and granted summary
judgment to Primary. The Eighth Circuit affirmed. Maislin
Industries v. Primary Steel, Inc., 879 F.2d 400 (8th Cir. 1989).
As we described above, the Supreme Court reversed, holding
that the negotiated rates policy of the ICC is contrary to the
purpose and scheme of the Interstate Commerce Act, primarily
because the negotiated rates policy undermines the filed rate
doctrine, which is fundamental to achieving the purposes of the
Act, to provide all shippers a uniform non-discriminatory rate.
Maislin, 110 S.Ct. at 2765-2767, 2770-2771. The court then
restated the inherent limitation of the filed rate doctrine: The
filed rate is not enforceable if it is unreasonable. Maislin, 110
S.Ct. 2676, citing, e.g., Louisville and Nashville R. Co. v.
Maxwell, 237 U.S. 94 (1915). Because the ICC had yet to determine
whether the tariff rate was itself unreasonable, the court assumed,
for the purposes of its opinion, that the rates were reasonable.
3Under the "primary jurisdiction doctrine," a district court
must refer issues committed to the special competence of the ICC
to the Commission for determination. City of New Orleans v.
Southern Scrap Material Co., 704 F.2d 755, 758 (5th Cir. 1983).
The ambit of this doctrine is discussed in greater detail below.
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Maislin, 110 S.Ct. at 2767, n.10. Significantly, the court noted
that, "The issue of the reasonableness of the tariff rates is open
for exploration on remand." Id.
IV
With the lessons of Maislin in mind, we now turn to the issues
raised in this appeal. The district court applied the filed rate
doctrine, relying on Maislin, to reject Kodak's position based on
the ICC application of its negotiated rates policy. On those
grounds, the court granted summary judgment for Advance. Kodak
argues that summary judgment was inappropriate because questions of
material fact persisted: which tariffs governed the bills in
dispute and whether the rates applied were reasonable.
A
Kodak contends, first, that the district court erred in its
failure to entertain the defense of unreasonable tariff rates. The
district court based its decision on this issue upon our holding in
In re Caravan Refrigerated Cargo, Inc., 864 F.2d 388 (5th Cir.
1989). In that case, we determined that unreasonableness of the
rate was no defense in an action to collect for undercharges.
Caravan, 864 F.2d at 392. Shippers must first pay the undercharge
found owing by the district court; thereafter, the shipper could
seek a determination from the ICC that the rate was unreasonable
and in a separate proceeding could seek to recoup such money
wrongly collected. Id. The district court applied this rule and
-8-

denied both the defense and a stay to allow Kodak to challenge the
tariffs as unreasonable before the ICC.
Kodak urges that the circumstance of this case, in which the
carrier was bankrupt at the time of judgment, illustrates a
practical fallacy of the approach in Caravan.4 Because the
carrier's assets, along with the judgment collected in this case,
will have been distributed to the creditors before a subsequent
action can be filed, Kodak is unlikely ever to recover wrongfully
paid monies. We must acknowledge that the bulk of these cases do
seem to arise out of bankruptcies.
The ICC, before us now as amicus curiae, argues that the
district court's refusal to refer this defense to its jurisdiction
nullifies the requirement of 49 U.S.C. � 10701(a) that rates be
reasonable. In Maislin, the ICC points out, the Supreme Court
expressly based the reasonableness requirement of the filed rates
doctrine upon section 10701. Maislin, 110 S.Ct. at 2767.
Moreover, in Maislin, the Supreme Court suggested a result
directly contrary to our earlier declaration in Caravan: the
4Caravan has not found much support among the circuits. In
Delta Traffic Service, Inc. v. Transtop, Inc., 902 F.2d 101 (1st
Cir. 1990), the First Circuit strongly criticized the Caravan
result and rejected it by construing earlier decisions of the
Supreme Court to bar referral for ICC review of future rates, not
historic rates. 902 F.2d at 105. Cf., Delta Traffic Service,
Inc. v. Appco Paper & Plastics Corp., 893 F.2d 472, 475 (2d Cir.
1990); Orscheln Bros. Truck Lines, Inc. v. Zenith Electric Corp.,
899 F.2d 642, 646 (7th Cir. 1990); West Coast Truck Lines, Inc.
v. American Industries, Inc., 893 F.2d 229, 234 (9th Cir. 1990).
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reasonableness of the undercharged tariff can be explored on
remand. 110 S.Ct. at 2767, n.10. This comment by the Court
follows its observation that the filed rate is not enforceable if
the rate is unreasonable. Id. 2767. Thus, any issue raised
concerning reasonableness obviously would require a determination
before the judgment in the case; consequently, unreasonableness of
the rate necessarily is a proper defense to raise against the
collection of the undercharges. This understanding of Maislin was
applied in Orr v. ICC, 912 F.2d 119 (6th Cir. 1990), when the Sixth
Circuit expressly applied Maislin to remand an undercharge case to
determine reasonableness of the tariff. See also Atlantis Express,
Inc. v. Standard Transportation Services, Inc., ___F.2d___ (8th
Cir. 1992).
The Supreme Court's allowance of unreasonableness as a defense
against collection of undercharges trumps our holding to the
contrary in Caravan. We therefore hold that the district court
erred in refusing Kodak this defense.
B
In support of its argument that the applicable tariff rates
are still undetermined, Kodak points to the ICC determination that
the discount rate governed many of the shipments instead of the
more expensive non-discount tariffs. The district court evidently
based the judgment on the higher rate tariffs, although there is no
reference to the calculations in the court's opinion or judgment.
-10-

Both sides agree that discovery concerning the matter was ongoing
at the time the court entered summary judgment. We therefore hold
that a genuine question of material fact persists as to which
tariffs govern the bills in issue, and accordingly vacate the
summary judgment in all respects.
V
Having determined that Kodak was entitled to assert rate
unreasonableness as a defense and that the applicable rate is yet
to be determined, we are still confronted with the question of the
appropriate forum for the determination of these issues. Kodak
argues that the district court should have stayed the whole matter
and referred the issues to the ICC. In the event the district
court was not bound to refer the matter to the ICC, Kodak still
seeks to stay enforcement of the district court's judgment until
the ICC has rendered its opinion on these issues that are now
pending before it.
The general division of initial jurisdiction between the
courts and the ICC is defined by the "primary jurisdiction
doctrine," which requires that
"issues of transportation policy which ought to be
considered by the Commission in the interests of a
uniform and expert administration of the regulatory
scheme laid down by the act" be submitted initially to
the Commission for determination. Therefore, a district
court trying a case under the Interstate Commerce Act
must, if presented with such an issue, stay its
proceedings and refer the case to the Commission.
-11-

City of New Orleans v. Southern Scrap Material, 704 F.2d 755, 758
(5th Cir. 1983) (emphasis added) quoting ICC v. Atlantic Coast R.,
383 U.S. 576, 579 (1966). Where the reasonableness of a tariff
rate is at issue, the primary jurisdiction doctrine compels that
"there must be preliminary resort to the Commission." Southern
Pacific Transport Co. v. City of San Antonio, Texas, 748 F.2d 266,
272 (5th Cir. 1984) (emphasis added) quoting Great Northern Ry. v.
Merchants Elevator, 259 U.S. 285, 291 (1922). Furthermore, when
questions of construction and reasonableness of a tariff are "so
intertwined that the same factors are determinative of both issues,
then it is the Commission which must first pass on them."
Coca-Cola Co v. Atchison, T. & S. F. Ry. Co., 608 F.2d 213, 220
(5th Cir. 1989) (emphasis added) quoting U.S. v. Western Pac. R.R.,
352 U.S. 59 (1956).
Clearly, the primary jurisdiction doctrine mandates that the
defense of unreasonableness initially be committed, according to
the usual procedures under 28 U.S.C. � 1336(b), to the ICC for its
review and decision. Upon return of the referred issues from the
ICC, the district court should then accord appropriate review. See
Coca-Cola v. Atchison, Topeka and Santa Fe R. Co., 608 F.2d 213,
218 (5th Cir. 1979); Consolo v. Federal Maritime Comm'n, 383 U.S.
607, 619-617 (1966).
A separate question of referral and appropriate forum exists,
however, concerning the issue of rate applicability. Matters in
-12-

which the facts "raise technical or complex issues, regarding
appropriate rates, that require the expert administration of the
Commission" are, along with reasonableness, within the primary
jurisdiction of the Commission. Caravan, 864 F.2d at 389. Issues
of tariff construction and application may be committed to the ICC,
particularly if they involve terms or art, cost allocation, or
extraordinary constructions of language. Coca-Cola, 608 F.2d at
220. Otherwise, the courts are as competent as the Commission to
determine the issue. Id. Even when complicated tariffs are in
issue, the doctrine of primary jurisdiction does not require that
all questions regarding the tariffs must be first answered by the
ICC; when the ICC has already determined the applicable rate, the
courts need not refer the question again to the Commission. Coca-
Cola, 608 F.2d at 219.
Thus, the district court should initially determine whether a
given issue involves reasonableness, complicated or specialized
issues of construction, cost allocation, or other bases of primary
jurisdiction. If the district court finds that the issue is within
the primary jurisdiction of the ICC, the issue must be referred to
the Commission. Only if the district court finds that it can
resolve the issues before it, using the plain language of the
tariffs and the ordinary rules of construction, should the court
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then proceed to resolve the issues without referral to the
Commission.5
In this case, the issue of reasonableness of the applicable
tariff is inextricably linked to a prior determination of which
tariff will govern the bills in issue. Furthermore, the parties
had litigated a portion of the applicability issue before the ICC
before the entry of judgment by the district court. Both of these
issues should surely have been referred to the ICC for initial
determination.
VI
The summary judgment is VACATED and this cause is REMANDED to
the district court for further proceedings not inconsistent with
this opinion.
V A C A T E D and R E M A N D E D.
5In making such a determination, the district courts should
be mindful of the economy of maintaining only one action between
two parties. Therefore, as in this case, a pending ICC petition
between the parties who are also in the district court would
militate in favor of referral of any issues related to the
pending ICC petition.
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