MAISLIN INDUSTRIES, U.S., INC., ET AL., PETITIONERS V. PRIMARY
STEEL, INC., ET AL.

   No. 89-624

   In The Supreme Court Of The United States

   October Term, 1989

   On Writ Of Certiorari To The United States Court Of Appeals For The
Eighth Circuit

   Brief For The Federal Respondent

            TABLE OF CONTENTS
   Questions Presented
   Opinions below
   Jurisdiction
   Statutory provisions involved
   Statement
      A. The development of the ICC's Negotiated Rates
         policy
      B. The present controversy
   Summary of argument
   Argument:
      The ICC's Negotiated Rates policy is a proper exercise
      of the Commission's power to protect against
      unreasonable practices
      A. The ICC's Negotiated Rates policy does not conflict
         with the filed rate doctrine
      B. Negotiated Rates provides a permissible remedy
         for an unreasonable carrier solicitation and billing
         practice
      C. Referral to the ICC of a claim under Negotiated
         Rates is required under the primary jurisdiction
         doctrine
   Conclusion

                            OPINIONS BELOW

   The opinion of the court of appeals (Pet. App. 1a-13a) is reported
at 879 F.2d 400.  The opinion of the district court (Pet. App.
14a-26a) is reported at 705 F. Supp. 1401.  The opinion of the
district court granting referral to the Interstate Commerce Commission
(J.A. 5-8) is unreported.  The decision of the Interstate Commerce
Commission (Pet. App. 28a-44a) is unreported.

                             JURISDICTION

   The judgment of the court of appeals was entered on July 17, 1989.
The petition for a writ of certiorari was filed on October 16, 1989,
and granted on January 16, 1990.  The jurisdiction of this Court is
invoked under 28 U.S.C. 1254(1).

                     STATUTORY PROVISIONS INVOLVED

   The pertinent portions of Sections 10701(a), 10704(b), 10761(a),
and 10762(a)(1) of the Interstate Commerce Act, 49 U.S.C. 10701(a),
10704(b), 10761(a), and 10762(a)(1) (1982 & Supp. V 1987) are set
forth in an appendix to this brief (App., infra, 1a-2a).

                          QUESTIONS PRESENTED

   1. Whether the Interstate Commerce Commission's determination that
a motor common carrier should be denied recovery of its tariff rate,
because of its unreasonable practices in failing to file the
negotiated rate originally charged, is compatible with the "filed
rate" doctrine.

   2. Whether, in a motor carrier's civil action against a shipper to
collect unpaid tariff charges, a court is required under the primary
jurisdiction doctrine to refer to the ICC the question whether the
carrier's unreasonable practices should bar it from collecting the
tariff rate.

                               STATEMENT

   A. The Development of the ICC's Negotiated Rates Policy

   1. Since 1935, the Interstate Commerce Commission has regulated
interstate transportation by motor carriers.  Motor Carrier Act of
1935, ch. 498, 49 Stat. 543.  Under the Interstate Commerce Act (Act),
motor carriers providing transportation services subject to ICC
regulation must publish all common carrier rates in tariffs filed with
the Commission.  49 U.S.C. 10761(a), 10762(a)(1).  The Act further
provides that a carrier "may not charge or receive a different
compensation for that transportation * * * than the rate specified in
the tariff." 49 U.S.C. 10761(a).

   The Act also requires that a carrier's "rate(s)" and "practice(s)"
must be reasonable.  49 U.S.C. 10701(a).  The authority to enforce the
requirement of reasonable rates and practices is reposed exclusively
in the ICC.  49 U.S.C. 10704(b)(1) (1982 & Supp. V 1987).  If the ICC
determines that a carrier is charging a rate or is engaging in a
practice that is unreasonable, the ICC "shall prescribe the rate * * *
or practice to be followed" by the carrier.  49 U.S.C. 10704(b)(1)
(1982 & Supp. V 1987).

   In a series of cases decided under the Interstate Commerce Act in
the early part of this century, this Court developed the principles
that later became known as the "filed rate" doctrine.  Under that
doctrine, when a carrier files an action in court seeking to recover
unpaid tariff charges, the court may not entertain any defense based
on the carrier's misquotation of the tariff rate or the shipper's
ignorance of that rate.  See, e.g., Louisville & Nashville R.R. v.
Maxwell, 237 U.S. 94, 97 (1915);  Texas & Pacific Ry. v. Mugg, 202
U.S. 242, 245 (1906);  Gulf, Colorado & Sante Fe Ry. v. Hefley, 158
U.S. 98 (1895).  A primary purpose of the filed rate doctrine, as
initially enunciated by this Court, was to reinforce the statutory
prohibition against rate discrimination.  See Keogh v. Chicago & N.W.
Ry., 260 U.S. 156, 163 (1922).  In addition, by divesting courts of
the authority to inquire into the reasonableness of imposing a tariff
rate in a particular situation, the filed rate doctrine protects "the
agency's primary jurisdiction over reasonableness of rates(.)"
Arkansas Louisiana Gas Co. v. Hall, 453 U.S. 571, 577-578 (1981);
Arizona Grocery Co. v. Atchison, T.&S.F. Ry., 284 U.S. 370, 384
(1932).

   2. In 1980, Congress enacted the Motor Carrier Act of 1980 (MCA),
Pub L. No. 96-296, 94 Stat. 793, which substantially revised the
transportation policy of the United States by encouraging a more
competitive environment in the motor carrier industry.  Congress
directed the ICC, in regulating motor carriers, "to promote
competitive and efficient transportation services in order to (A) meet
the needs of shippers * * * (and) (B) allow a variety of quality and
price options to meet changing market demands and the diverse
requirements of the shipping and traveling public." 49 U.S.C.
10101(a)(2).  Several provisions of the MCA reflect this
pro-competition policy.  The MCA significantly relaxed restrictions on
entry into the motor carrier industry, which resulted in a doubling of
the number of licensed motor common carriers during the last decade.
/1/ The MCA also permitted carriers to operate as both common carriers
and contract carriers, thereby freeing carriers to tailor rates to
individual shippers.  /2/ In addition, in carrying out the MCA's
goals, the ICC has authorized common carriers to exercise broader
operating authority than previously permitted, /3/ and has removed
restrictions on volume discounts and common-carrier rates that are
specifically limited to a named shipper.  /4/ The ICC has also sought
to facilitate the competitive negotiation of rates by authorizing
motor carriers to file tariffs lowering their rates on one day's
notice.  /5/ 49 C.F.R. 1312.39(h)(1).

   As a consequence of these regulatory changes, it is common today
for carriers and shippers to negotiate the rates charged for
particular transportation services.  Typically, carriers and shippers
will agree upon a rate and other pertinent terms and conditions, the
shipper will tender freight to the carrier in reliance upon these
agreed-upon terms, and the carrier will then bill the shipper and
receive payment at the negotiated rate.  The shippers involved in this
process generally assume, or in some cases are expressly told, that
the carriers will incorporate the negotiated rates in tariffs that
will be properly filed with the ICC.

   Some motor common carriers, however, have not always complied with
the statutory tariff filing requirements.  As long as the carrier
remains a going concern, these derelictions may go unnoticed.  When a
carrier becomes bankrupt, however, the receiver or trustee will often
retain an auditor to search the records of the carrier for instances
in which the rates the carrier billed and collected were lower than
the applicable rates on file at the ICC.  When these discrepancies are
uncovered, the receiver or trustee will then file a collection action
to recover the difference from the unsuspecting shipper.  Because of
rising numbers of motor carrier bankruptcies brought about by
increased competition, the number of such actions has increased
significantly in recent years.  Such claims have also proliferated
because some failed carriers made thousands of shipments without
properly adjusting their filed tariffs.  See 1988 ICC Ann. Rep. 66 &
n.9 (McLean Trucking Company bankruptcy alone involved approximately
1,800 undercharge claims).

   3. As these actions to recover unpaid tariff charges on behalf of
bankrupt carriers became more common, a national shippers' association
requested the ICC to address the problem.  In response, the ICC
carefully considered the issues raised by the increasingly prevalent
carrier practice of failing to file negotiated rates, and adopted a
policy statement designed to address that practice.  National Indus.
Transp. League -- Petition to Institute Rulemaking on Negotiated Motor
Common Carrier Rates, 3 I.C.C.2d 99 (1986) (hereinafter Negotiated
Rates I, reproduced at J.A. 11-25).  /6/ The Commission explained that
in regulating the reasonableness of carrier practices it was required
to accommodate the traditional antidiscrimination goal of the Act with
the current congressional emphasis on competition and the marketplace
consequences that competition had engendered.  Although the filed rate
doctrine prohibits courts from considering equitable defenses to
carrier undercharge actions, the Commission concluded that the
doctrine does not preclude the ICC from exercising its regulatory
power under 49 U.S.C. 10701(a), 10704(b)(1) (1982 & Supp. V 1987) to
ensure that carrier billing practices are reasonable.  In view of the
vastly changed regulatory and business environment under the MCA, the
Commission determined to reconsider prior policies that had governed
its regulation of unfiled motor carrier rates.  J.A. 16-17.

   The Commission stressed that "carriers must continue to charge the
tariff rate, as provided in the statute." J.A. 16.  But the ICC
explained that "an inflexible policy" of enforcing the filed rate when
a carrier had negotiated a rate with a shipper, but had failed to file
that rate in a tariff, would "frustrate() the intent of the (national
transportation policy) to encourage pricing innovation, since it could
chill rate negotiation between shippers and carriers, and inhibit
legitimate pricing initiatives." The Commission further concluded that
enforcement of the filed rate "regardless of the circumstances is
inappropriate and unnecessary to deter discrimination today." J.A. 20.
 Noting that "the filed rate doctrine was not intended to condone or
reward carriers in the circumstances involved here, especially where
carrier actions may constitute fraudulent business practices," J.A.
17, the ICC announced that in carrier actions to collect unpaid tariff
charges, it would conduct an "advisory analysis," on referral from a
court under the primary jurisdiction doctrine, to "determine * * *
whether collection of undercharges based on the rate contained in the
filed tariff would constitute an unreasonable practice and, if a
negotiated rate is found to exist, whether this amount is all the
carrier should be permitted to collect." J.A. 22.

   4. On the basis of Negotiated Rates I, many district courts granted
the motions of shippers to refer collection actions to the ICC for a
determination whether the parties had agreed on rates that the carrier
had failed to file as required by law and whether, under the
circumstances, the carrier had engaged in an unreasonable practice.
See, e.g., Delta Traffic Service Inc. v. Marine Lumber Co., 683 F.
Supp. 754 (1987), after referral, 705 F. Supp. 513 (D. Or. 1989),
aff'd, 893 F.2d 1016 (9th Cir. 1990);  Motor Carrier Audit &
Collection Co. v. Family Dollar Stores, Inc., 670 F. Supp. 644
(W.D.N.C. 1987).  Other courts, however, viewed the ICC's policy
statement as simply offering to render a non-binding "advisory"
analysis on the issue, and concluded that reference to the Commission
was incompatible with the filed rate doctrine.  See, e.g., In re
Caravan Refrigerated Cargo, Inc., 864 F.2d 388 (5th Cir. 1989),
petition for cert. pending, No. 88-1958.

   To clarify its policy, and in response to another petition from a
shippers' association, the Commission issued a second statement on the
issue.  Petition to Institute Rulemaking on Negotiated Motor Common
Carrier Rates, 5 I.C.C.2d 623, 626 (1989) (hereinafter Negotiated
Rates II).  /7/ That statement reaffirmed that the ICC's source of
authority for its negotiated rates policy is the statutory requirement
that a carrier's practices must be reasonable;  consequently, the
ICC's determinations constitute a legal, rather than an "equitable"
defense to an undercharge action.  5 I.C.C.2d at 628 & n.11.  To
remove any confusion resulting from its use of the term "advisory
analysis" in Negotiated Rates I, the ICC also explained that its
determinations result in "binding and dispositive" orders, subject to
review only for arbitrariness and capriciousness.  Id. at 624, 625.
Finally, to protect its jurisdiction in light of the refusal of some
courts to refer such claims, the ICC announced that it would rule on
negotiated-rates allegations by shippers without awaiting a court
referral.  Id. at 635-636.

   B. The Present Controversy

   1. a. From 1981 to 1983, a division of Maislin Industries, U.S.,
Inc. (Maislin), operating as a certificated motor common carrier, made
1,081 shipments of steel for Primary Steel, Inc. (Primary).  The vast
majority of the shipments were from Primary's Connecticut facilities
to 157 destinations in 12 States.  Primary negotiated rates with
Maislin for this transportation, and Primary understood that Maislin
would file the rates in tariffs with the ICC.  /8/ Despite that
understanding, Maislin failed to file the negotiated rates in proper
tariffs.  Pet. App. 2a, 30a.

   Following Maislin's bankruptcy, an audit agency appointed by the
bankruptcy court claimed that Maislin's actual tariff rates were
higher than the rates charged to Primary.  Maislin then commenced an
action in district court to recover alleged undercharges in the amount
of $187,923.36.  /9/ Relying on the primary jurisdiction doctrine, the
district court granted referral to the ICC of Primary's claim that the
alleged undercharges resulted from unreasonable practices in violation
of the Interstate Commerce Act.  Pet. App. 2a, 14a, 17a-19a;  J.A.
5-8.

   b. Citing its policy statement in Negotiated Rates I, the ICC
rejected Maislin's argument that an unreasonable-practice
determination in the circumstances of this case would violate the
filed rate doctrine.  /10/ The Commission noted that "(i)n the past,
ignorance or misquotation of rates generally was not an excuse for
paying less than the tariff rate." But "in today's more flexible
pricing atmosphere(,) * * * penalizing a shipper for the mistakes of a
carrier may be unnecessary to deter discrimination" and would
"frustrate() the intent of the national transportation policy to
encourage pricing innovation." The ICC emphasized that it was "not
abolishing the requirement in (49 U.S.C. 10761) that carriers must
continue to charge the tariff rate." Pet. App. 36a.  Nevertheless, the
Commission found that "our jurisdiction over unreasonable practices
gives us discretion to find that the tariff rate filed by motor
carriers need not and should not be applied in a particular case,"
explaining that it was authorized under 49 U.S.C. 10701(a) and 10704
(1982 & Supp. V 1987) "to consider all the circumstances surrounding
an undercharge suit." Pet. App. 34a-35a.  The Commission further
explained that its inquiry was remedial in nature -- to address the
carrier practice of negotiating a rate with a shipper, but to file
that rate in a tariff even though billing and collecting at it.  Pet.
App. 35a.

   Applying those principles, the ICC found that Maislin's
solicitation and billing practices were unreasonable.  On the basis of
extensive factual findings, the ICC concluded that Maislin and Primary
had negotiated particular shipping rates.  The ICC also concluded that
Primary had a reasonable basis for relying on Maislin properly to
implement those rates.  /11/ Consequently, the ICC detemrined that
Primary should not be required to pay additional charges for the
difference between the negotiated rates and the tariff rates.  Pet.
App. 36a-44a.

   c. On review of the ICC's order, the district court granted summary
judgment in favor of Primary.  The court rejected Maislin's arguments
that the ICC had exceeded its statutory authority and that its order
was barred by the filed rate doctrine.  The court also determined that
the ICC's order was supported by substantial evidence, and was neither
arbitrary nor capricious.  Pet. App. 19a-25a.

   2. The court of appeals affirmed.  Pet. App. 1a-13a.  The court
first held that the ICC had primary jurisdiction over the claim that
Maislin had engaged in unreasonable practices.  Relying on United
States v. Western Pacific R.R., 352 U.S. 59, 65 (1956), the court
reasoned that the considerations of agency expertise and the uniform
development of policy that underlie the primary jurisdiction doctrine
apply with full force here.

   The court next turned to Maislin's "central argument" -- that the
filed rate doctrine barred the district court from considering the
ICC's finding that Maislin had engaged in an unreasonable practice.
The court noted that the statutory source of the filed rate doctrine,
49 U.S.C. 10761(a), requires a carrier to charge the full tariff rate,
and that prior Supreme Court decisions had strictly precluded
equitable defenses based on ignorance or misquotation of the filed
tariff.  Pet. App. 7a, citing Louisville & Nashville R.R. v. Maxwell,
237 U.S. 94, 97 (1915).  The court explained, however, that the ICC
has separate statutory authority, set forth in 49 U.S.C. 10701, to
require carriers' practices to be reasonable.  On that basis, the
court distinguished Negotiated Rates I from the holdings of Maxwell
and Square D Co. v. Niagara Frontier Tariff Bureau, Inc., 476 U.S. 409
(1986);  although both Maxwell and Square D supported enforcement of
filed rates, neither involved "rates or practices deemed to be
unreasonable by the ICC." Pet. App. 9a.  The court accordingly
concluded that when the provisions governing the collection of rates
and the reasonableness of practices conflict, "the proper authority to
harmonize these competing provisions is the ICC." Ibid.

   With those considerations in mind, the court held that the ICC's
Negotiated Rates policy was a reasonable accommodation of statutory
policies.  The court determined that the ICC's policy was consistent
with the requirement that a carrier charge the filed rate;  the effect
of the policy was to temper the consequences of that doctrine for
shippers who reasonably rely on a carrier's quotation of a negotiated
rate.  Pet. App. 12a.  The court noted that the ICC had properly
explained its change in policy by referring to the relaxation of
regulatory requirements under the MCA.  Ibid.  The ICC had reasonably
determined, the court concluded, that "in light of the regulatory
changes 'the inability of a shipper to rely on a carrier's
interpretation of a tariff is a greater evil than the remote
possibility that a carrier might intentionally misquote an applicable
tariff rate to discriminate illegally between the shippers.'" Ibid.,
quoting Seaboard System R.R. v. United States, 794 F.2d 635, 638 (11th
Cir. 1986).

                          SUMMARY OF ARGUMENT

   This case involves a challenge to the validity of the ICC's
Negotiated Rates policy.  After a thorough reevaluation of its prior
policies, the ICC announced in Negotiated Rates that it would
henceforth determine, in particular cases, whether a motor common
carrier had engaged in an unreasonable practice, in violation of 49
U.S.C. 10701(a), by negotiating shipping rates, failing to file those
rates in tariffs despite the customer's reasonable belief that the
carrier would do so, and later rebilling the shipper to collect
additional charges based on higher tariff rates actually on file at
the ICC.  If a shipper establishes the facts showing this course of
conduct, then the ICC will enter an order finding it to be an
unreasonable practice for the carrier (or its trustee in bankruptcy)
to enforce payment of the tariff rate.

   In formulating its policy, the ICC carefully considered the
competing requirements of two statutory provisions:  49 U.S.C.
10761(a), which requires that carriers charge and collect only those
rates that are reflected in ICC tariffs, and 49 U.S.C. 10701(a), which
requires that carriers engage only in those practices (including
solicitation and billing practices) that are reasonable.  The ICC
determined that in the present context, Section 10701(a) should be
interpreted to prevent carriers (or their bankruptcy trustees) from
enjoying windfall profits based on filed tariffs when a shipper has
reasonably relied on the carrier to take the steps required to make
the negotiated rtre lawful.  In the Commission's opinion, the
formulation of such a remedial policy was necessary to prevent a
carrier from exploiting its own failure to fulfill its tariff-filing
obligations.  See 49 U.S.C. 10762(a)(1).

   Petitioners operated a motor carrier that, before its entry into
bankruptcy, failed to file all of its negotiated rates in tariffs with
the ICC.  Petitioners now seek to take advantage of their lapse by
imposing additional charges on a shipper.  In an effort to avoid the
ICC's regulation of their solicitation and billing practices, they
claim the protection of the filed rate doctrine.  The filed rate
doctrine, however, does not apply in this case.  The heart of the
filed rate doctrine is the principle that a court may not refuse
collection of tariff rates based on a claim that the rate is
"unreasonable" or that its enforcement would be inequitable.  The
doctrine was never intended to insulate carriers from the Commission's
jurisdiction to regulate unreasonable rates or practices.  Rather, a
carrier's right to collect a tariff rate is qualified by the
Commission's power to determine that the imposition of that rate would
be "unreasonable." See Louisville & Nashville R.R. v. Maxwell, 237
U.S. 94, 97 (1915).

   Negotiated Rates is thus faithful to the historic division of
authority between the courts and the Commission reflected in the filed
rate doctrine.  Just as the ICC has exclusive authority to determine
whether a motor carrier rate is unreasonable, it also has exclusive
authority to determine whether a carrier practice is unreasonable.
Under Negotiated Rates, carriers must file their rates in tariffs, and
no court may set aside a tariff based on a shipper's "equitable"
defense.  The ICC, however, retains exclusive power to find that the
carrier's delinquency in filing a negotiated rate amounts to an
unreasonable billing practice in violation of Section 10701.

   No provision of the Interstate Commerce Act speaks directly to the
question whether the Commission may interpret its authority over
unreasonable motor carrier practices to preclude the conduct described
in Negotiated Rates.  Nor does the design of the statute as a whole
express an intent of Congress on this point.  Although Negotiated
Rates reflects a change from prior ICC policy, it represents a proper
administrative response to a recent and unanticipated trend in motor
carrier practices.  As we previously described (see pp. 5-7, supra),
the ICC's policy evolved in response to the increasingly competitive
environment introduced by the MCA and was framed in light of the
revised national transportation policy.  The policy, accordingly, is
not addressed to isolated instances of carrier negligence or fraud in
billing its customers.  Rather, the ICC formulated its policy only
after the agency became aware of an industry-wide pattern of delayed
collection actions that threatened to undermine the benefits
competitive pricing had provided to shippers.  Negotiated Rates is a
reasonable response to a unique problem that arose in the motor
carrier industry under the MCA;  because that policy does not conflict
with the filed rate doctrine, this Court should uphold the ICC's
policy as applied in this case.  /12/

   Under the primary jurisdiction doctrine, the court of appeals
correctly upheld referral to the ICC of the Negotiated Rates claim in
this case.  The primary jurisdiction doctrine requires that
"(w)henever a rate, rule or practice is attacked as unreasonable or as
unjustly discriminatory, there must be preliminary resort to the
Commission." Great Northern Ry. v. Merchants Elevator Co., 259 U.S.
285, 291 (1922).  The primary jurisdiction doctrine governs not only a
claim that a carrier's rates are unreasonable, but also a similar
claim directed at its practices.

   Petitioners contend (Br. 12-20) that under T.I.M.E. Inc. v. United
States, 359 U.S. 464 (1959), the ICC's Negotiated Rates policy
improperly gives a remedy for past unreasonable practices.  This
Court, however, has never held that the ICC lacks authority to examine
the reasonableness of past motor carrier practices under 49 U.S.C.
10701(a).  Although in T.I.M.E. this Court denied the ICC the power to
examine past motor carrier rates, that decision was soon thereafter
narrowed by this Court to exclude certain unreasonable practices, and
T.I.M.E. itself was overruled by Congress.

   Referral of a Negotiated Rates claim to the ICC in the midst of an
action to collect additional tariff charges does not upset the
remedial scheme for challenging the reasonableness of a rate or
practice contemplated by the filed rate doctrine.  Rather, the refusal
to refer an unreasonable-practice claim under Negotiated Rates would
interfere with the ICC's primary jurisdiction, by effectively denying
the ICC the opportunity to protect a shipper from being forced to pay
charges that stem from an unreasonable practice.  Accordingly, the
ICC's determination to accept referrals in the midst of a tariff
collection action should be upheld.

                               ARGUMENT

   THE ICC'S NEGOTIATED RATES POLICY IS A PROPER EXERCISE OF THE
COMMISSION'S POWER TO PROTECT AGAINST UNREASONABLE PRACTICES

   A. The ICC's Negotiated Rates Policy Does Not Conflict With The
Filed Rate Doctrine

   The filed rate doctrine has historically consisted of two
complementary principles.  First, a court adjudicating a tariff
collection action may neither set aside the tariff rate as
unreasonable, nor entertain an equitable defense based on the
shipper's understanding that a different rate would apply.  Second,
because the ICC retains exclusive authority to regulate the
reasonableness of carrier rates and practices, a carrier may not
collect a tariff rate the imposition of which the ICC has found to be
unreasonable.  Together, these principles preserve the Commission's
authority to achieve uniformity and fairness in the regulation of
carrier rates and practices, while protecting against discriminatory
departures from the tariff.  Negotiated Rates is firmly rooted in the
ICC's power, long recognized as an integral part of the filed rate
doctrine, to deny collection of the tariff rate when to do so would
involve an unreasonable rate or practice.

   1. The filed rate doctrine is based on the provision in the
Interstate Commerce Act that carriers must file their rates in public
tariffs and charge and collect only the rates filed.  49 U.S.C.
10761(a).  That provision was designed to prevent carriers from
engaging in rate discrimination that favored some shippers over
others, which was a central objective of the Act.  See, e.g., New
York, N.H. & H.R.R. v. ICC, 200 U.S. 361, 391 (1906);  Southern
Pacific Transportation Co. v. Commercial Metals Co., 456 U.S. 336,
343-344 (1982);  S. Rep. No. 46, 49th Cong., 1st Sess. 181, 188-190,
198-200 (1886).  In furtherance of that goal, this Court long ago
ruled that a shipper's ignorance of the tariff rate, or a misquotation
of the rate by the carrier, does not justify a court in refusing to
enforce the tariff rate.

   The classic statement of the filed rate doctrine is set forth in
Louisville & Nashville R.R. v. Maxwell, 237 U.S. 94, 97 (1915).  In
that case, an individual had purchased a ticket at the rate quoted by
the ticket agent without knowing that the filed tariff reflected a
higher rate;  he was later sued by the railroad for $58.30 in
undercharges.  This Court found for the railroad, explaining:

         Under the Interstate Commerce Act, the rate of the carrier
      duly filed is the only lawful charge.  Deviation from it is not
      permitted upon any pretext.  Shippers and travelers 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.

237 U.S. at 97.  The Court concluded that any hardship produced by
that rule was necessary to fulfill the anti-discrimination purposes of
the Act.  Ibid.  See also Louisville & Nashville R.R. v. Central Iron
& Coal Co., 265 U.S. 59, 65 (1924);  Armour Packing Co. v. United
States, 209 U.S. 56, 81 (1908).

   As the foregoing quotation from Maxwell indicates, however, the
filed rate doctrine incorporates an important qualification:  the
filed rate governs "unless it is found by the Commission to be
unreasonable." 237 U.S. at 97.  That qualification reflects the
statutory command that a carrier's rates must be reasonable, 49 U.S.C.
10701(a), and the parallel principle that the Commission alone can
determine the reasonableness of rates.  As the Court explained in
Texas & Pacific Ry. v. Abilene Cotton Oil Co., 204 U.S. 426 (1907),
the Interstate Commerce Act pre-empted the common-law right of a
shipper to contest the reasonableness of rates in a court action.
Under the Act, courts could not hear such actions, "without reference
to prior action by the Commission, finding the established rate to be
unreasonable." The Court reasoned that the availability of relief for
particular shippers in court actions would disrupt the uniform
application of rates and would produce "a preference or discrimination
not enjoyed by those against whom the schedule of rates was continued
to be enforced." Id. at 440.  In contrast, the ICC's invalidation of
unreasonable rates would not give rise to discrimination;  the ICC
could protect against that prospect by prescribing a rate for the
future and awarding reparations to shippers injured during the period
when the tariff rate was applied.  Id. at 441-442.

   Other cases expounding the filed rate doctrine similarly indicate
that the court's obligation to enforce the tariff is subject to the
Commission's review of the tariff for reasonableness.  For example, in
Keogh v. Chicago & N.W. Ry., 260 U.S. 156, 163 (1922), the Court held
that a shipper could not bring a private antitrust treble damages
action against a carrier based on a claim that tariff rates had been
fixed by an agreement prohibited by the Sherman Act.  The Court stated
that "(t)he legal rights of shipper as against carrier in respect to a
rate are measured by the published tariff," and "cannot be varied or
enlarged by either contract or tort of the carrier." Significantly,
however, the Court added the caveat that the tariff rate applied
"(u)nless and until suspended or set aside" by the ICC.  260 U.S. at
163.

   The Court again reaffirmed the supremacy of the Commission's
authority over rates in Arizona Grocery Co. v. Atchison, T. & S.F.
Ry., 284 U.S. 370 (1932).  In that case, the Court distinguished
between carrier-initiated rates, which must be published and filed in
tariffs and charged to all similarly situated shippers alike, id. at
384, and Commission-prescribed rates.  With respect to the former, the
Court observed that the Interstate Commerce Act had "altered the
common law by lodging in the Commission the power theretofore
exercised by courts, of determining the reasonableness of a published
rate." Ibid.  When the Commission exercises its power to prescribe a
carrier's future rates, however, those rates "take the place of the
legal tariff rates theretofore in force by the voluntary action of the
carriers, and themselves become the legal rates." Id. at 387.  As a
result, the Court held, even the ICC could not retrospectively find
that a carrier's rates were unreasonable when the rates it charged
were within the range prescribed by a prior Commission order.  Id. at
389.  /13/

   2. This line of cases establishes that the filed rate doctrine
restricts the discretion of courts to review the reasonableness of
carrier rates and practices, but does not divest the Commission of
similar powers.  Inded, the exclusive authority of the ICC to review
the reasonableness of rates and practices is one of the key elements
of the filed rate doctrine.  /14/ That doctrine was never intended to
render the tariff rate the exclusive measure of rights between shipper
and carrier when the Commission has rendered a contrary finding about
the reasonableness of imposing that rate.

   The Negotiated Rates policy was developed against the backdrop of
these principles.  That policy reflects an implementation of the
Commission's fundamental authority to determine whether the imposition
of filed rate would involve an unreasonable practice, contrary to the
statute.  Just as the Commission enjoys unchallenged authority to
determine that a common carrier cannot insist on the exaction of filed
rates found to be unreasonable, so too, the Commission may determine
that a carrier cannot collect charges when their imposition involves
an unreasonable practice.

   The issue in this case is thus quite different from that presented
in Square D Co. v. Niagara Frontier Tariff Bureau, Inc., 476 U.S. 409
(1986).  There, the Court refused to overrule its decision in Keogh v.
Chicago & N.W. Ry., 260 U.S. 156 (1922), which had precluded private
antitrust claims based on an agreement among motor carriers to fix
rates that were filed in tariffs with the ICC.  The Court found that
the pro-competition policies contained in the MCA were insufficient to
justify reconsideration of Keogh.  Congress was presumed to be aware
of the Keogh rule, the Court reasoned, yet no statutory provision or
specific legislative history evidenced a departure from it.  In these
circumstances, the Court concluded that "harmony with the general
legislative purpose is inadequate for (the) formidable task" of
demonstrating that Congress intended to "overturn the longstanding
Keogh construction." 476 U.S. at 420.

   Unlike Square D, the question here is not whether a prior decision
of this Court construing an Act of Congress should be overruled.  The
ICC's Negotiated Rates policy does not depart from this Court's
precedents applying the filed rate doctrine.  In each of those
decisions, this Court applied the filed rate doctrine to prevent a
court from recognizing equitable defenses to the collection of the
filed tariff rate.  As such, none of those decisions speak to the
ICC's power to implement the statutory requirement of reasonableness.
The narrow question presented for decision is, rather, whether the
unreasonable practice described by the ICC in Negotiated Rates
reflects a permissible construction of the statute, and, if so,
whether a court hearing an action by a motor carrier to collect
additional tariff charges should refer such an unreasonable-practice
claim to the ICC under the primary jurisdiction doctrine.  The court
of appeals correctly answered both aspects of that question in the
affirmative.

   B. Negotiated Rates Provides A Permissible Remedy For An
Unreasonable Carrier Solicitation And Billing Practice

   Section 10701(a) of the Act declares that "a rate * * * or practice
related to transportation or service provided by a carrier subject to
the jurisdiction of the Interstate Commerce Commission * * * must be
reasonable." 49 U.S.C. 10701(a) (emphasis added).  /15/ Section
10704(b)(1) provides that when the ICC decides that a "practice of (a
motor common) carrier, does or will violate this chapter, the
Commission shall prescribe the * * * practice to be followed." 49
U.S.C. 10704(b)(1).  Negotiated Rates reflects the ICC's application
of these provisions to a particular carrier solicitation-and-billing
practice that consists of:

      (1) (N)egotiating a rate;  (2) agreeing to a rate that the
      shipper reasonably relies upon as being lawfully filed;  (3)
      failing, either willfully or otherwise, to publish the rate;
      (4) billing and accepting payment at the negotiated rate for
      (sometimes) numerous shipments;  and (5) then demanding
      additional payment at higher rates.

Negotiated Rates II, 5 I.C.C.2d at 628 n.11.

   The standards for reviewing petitioners' challenge to the validity
of the ICC's interpretation of its governing statute are well settled.
 The first inquiry is whether the unreasonable-practice provisions, or
the design of the statute as a whole, reveal an "unambiguously
expressed intent of Congress" on the issue addressed by the ICC's
interpretation.  Chevron U.S.A. Inc. v. Natural Resources Defense
Council, Inc. (NRDC), 467 U.S. 837, 843 (1984).  If not, then the
ICC's policy must be upheld if it reflects a "permissible
construction" of the provisions at issue, ibid., that is, one that is
"rational and consistent with the statute." NLRB v. United Food &
Commercial Workers, 484 U.S. 112, 123 (1987);  Sullivan v. Everhart,
110 S. Ct. 960, 963-964 (1990).

   1. Sections 10701(a) and 10704(b)(1) do not address the precise
question whether the carrier billing practice at issue in Negotiated
Rates may be regulated as an unreasonable practice.  Each provision is
framed in general terms and represents a charge to the Commission to
apply its expertise, in light of the policies of the Act, to determine
whether a particular practice is "reasonable." Neither provision
provides an unambiguous answer to the issue faced by the ICC in this
case.  /16/

   Nor does the structure of the statute as a whole reveal a clearly
expressed intent of Congress on this point.  The Interstate Commerce
Act includes a number of provisions designed to maintain the integrity
of the tariff filing system.  The Commission's Negotiated Rates policy
is consistent with each of these provisions, and indeed serves to
reinforce the statutory duty imposed on carriers to file and maintain
their rates in published tariffs.

   Section 10761(a) provides that carriers must have an effective
tariff on file in order to provide transportation and that the
"carrier may not charge or receive a different compensation for that
transportation or service than the rate specified in the tariff." 49
U.S.C. 10761(a).  Negotiated Rates does not absolve a carrier of the
requirement that it charge and collect rates that it has embodied in a
proper tariff.  See Negotiated Rates I, J.A. 16 ("we emphasize that
carriers must continue to charge the tariff rate, as provided in the
statute").  Rather, Negotiated Rates speaks to the remedies available
to the ICC (as opposed to the courts) when "less than the tariff rate
has in fact been charged and paid for past shipments." Seaboard System
R.R. v. United States, 794 F.2d at 638.  This remedial question is a
matter that the statute does not address.

   Specifically, Section 10761(a) does not answer the question whether
a tariff rate must be enforced when the application of that rate would
reward a carrier's unreasonable practice.  Although the carrier
ordinarily has a duty to collect the tariff rate, see Commercial
Metals, 456 U.S. at 343, the Interstate Commerce Act does not
authorize collection of a tariff rate that the Commission has found to
be unreasonable.  See Lowden v. Simonds-Shields-Lonsdale Grain Co.,
306 U.S. 516, 520 (1939) (recognizing propriety of a carrier's
reduction of its claim below the full tariff rate after ICC had found
the tariff rate to be excessive);  Pennsylvania R.R. v. United States,
363 U.S. 202, 205 (1960) (ICC order that tariff rates were
unreasonable was "by no means a mere 'advisory opinion,' its 'legal
consequences' are obvious, for if valid it forecloses the 'right' of
the Railroad to recover its domestic rates on those shipments").  The
requirement that a carrier must employ reasonable practices is found
in the same provision of the Act that requires a carrier to establish
reasonable rates.  49 U.S.C. 10701(a).  Since Section 10761(a) does
not trump Section 10701(a) by requiring a carrier to collect an
unreasonable tariff rate, it cannot be construed to require the
collection of a rate produced by an unreasonable practice.  As is
suggested by the introductory phrase of Section 10761(a) ("Except as
provided in this subtitle * * * "), that provision is intended to be
read in concert with the other provisions of the Act.

   Nor does the remedy adopted by Negotiated Rates conflict with 49
U.S.C. 10762(a), which requires that "(a) motor carrier shall publish
and file with the Commission tariffs containing the rates for
transportation it may provide under this subtitle." As this section
makes clear, the Act imposes the primary duty to assure compliance
with Section 10761(a) squarely on the carrier, not the shipper.
Accordingly, a policy that seeks to impose the consequences of a
violation of Section 10761(a) on the derelict carrier rather than the
shipper is entirely consonant with this provision.  Indeed, contrary
to petitioners' suggestion that Negotiated Rates will undermine the
tariff filing system or "condon(e) noncompliance" with the filed-rate
requirement (Pet. Br. 12), the ICC's policy is designed to prevent a
carrier from reaping a reward for its own failure to observe the
statutory requirements.

   The Negotiated Rates policy is also consistent with those
provisions of the Act that do make express provision for remedies for
the violation of Section 10761(a).  Specifically, Section 11902 of the
Act, 49 U.S.C. 11902, creates civil liability to the United States for
a shipper's knowing receipt of a rebate, and Section 11903 of the Act,
49 U.S.C. 11903, imposes criminal liability for the knowing receipt by
a shipper (or provision by a carrier) of transportation at
below-tariff rates.  A shipper that violates those provisions by
knowingly paying a negotiated but unfiled transportation rate would be
barred from taking advantage of the Commission's Negotiated Rates
policy, because reliance on the applicability of the negotiated rate
must be reasonable.  On the other hand, a carrier that violates these
provisions is hardly in a position to complain if it is later denied
the windfall of a higher tariff rate that exists only because it
breached its duty to make a timely tariff filing.  /17/

   In this regard, we do not agree with the suggestion advanced by
amici Yaquinto et al. (Br. 15) that the statute embodies a strict
policy that imputes "constructive knowledge" of the tariff rate to all
persons for all purposes, so that a shipper's reliance on a carrier to
implement a negotiated rate can never be reasonable.  Such a reading
of the Act would render superfluous the specific "knowledge"
requirements that are needed to establish violations involving a
deviation from the filed rate under 49 U.S.C. 11902, 11903, 11904
(1982 & Supp. V 1987).  See United States v. United States Steel
Corp., 645 F.2d 1285, 1294-1297 (8th Cir. 1981) (explaining that a
shipper's honestly mistaken departure from published rates or its
honest mistake as to the appropriate rate was not covered by the
predecessor of 49 U.S.C. 11902).  The ICC has long adhered to the
principle that the reasonableness of attributing knowledge of the
tariff rate to a person depends upon the particular circumstances.
See Piedmont Mills, Inc. v. Norfolk & Western Ry., 296 I.C.C. 481, 485
(1955) (presumption that shippers are conversant with the published
tariff not applied in the face of longstanding assurances by the
carrier that a different rate applied).  /18/ A rule of imputed
knowledge in all cases would be particularly inappropriate in view of
the intensely competitive environment produced by the MCA.  As the
Commission noted in Negotiated Rates, the myriad of rapid rate changes
characteristic of the contemporary motor carrier industry has made it
"extremely difficult for shippers to determine, prior to movement,
whether the agreed rate is actually on file." J.A. 20.

   Finally, the ICC's policy does not conflict with the
antidiscrimination provision of the Act.  49 U.S.C. 10741 (1982 &
Supp. V 1987).  To be sure, under Negotiated Rates, a shipper whose
unreasonable-practice claim is referred to the ICC can be protected
against paying the rate reflected in a filed tariff, while that rate
may in theory have been applied to some other shippers.  The same is
true, however, whenever a claim of unreasonable rates is referred to
the ICC.  Nevertheless, it has been settled since Abilene Cotton that
a finding by the ICC that a tariff rate is unreasonable does not
produce discrimination in violation of the statute.  204 U.S. at
441-442.  If a shipper has previously paid the tariff rate, rather
than lower rates negotiated with other shippers, it may bring a claim
alleging unreasonable discrimination, 49 U.S.C. 11705(b)(3), and may
recover if it satisfies applicable standards governing such a claim.
See Rates for a Named Shipper or Receiver, 367 I.C.C. 959, 963 (1984)
(describing criteria for a discrimination claim).  /19/

   2. Because the Interstate Commerce Act does not speak to the
precise question addressed in Negotiated Rates, the validity of the
policy turns on its reasonableness in light of the statutory scheme.
In Negotiated Rates I, the Commission explained the considerations
that prompted its action.  While the Commission historically rejected
claims that the misquotation of rates impairs the carrier's right to
collect the filed rate, see A.J. Poor Grain Co. v. Chicago, B.&O. Ry.,
12 I.C.C. 418, 422-423 (1907), Congress's substantial amendment of the
national transportation policy in the MCA caused the ICC "to take a
fresh look at the proper regulatory response to the matter of unfiled
negotiated motor carrier rates." J.A. 18.

   In the MCA, Congress declared that "it is the policy of the United
States Government * * * in regulating transportation by motor carrier,
to promote competitive and efficient transportation services," in
order to achieve, among other things, "a variety of quality and price
options to meet changing market demands and the diverse requirements
of the shipping * * * public." 49 U.S.C. 10101(a)(2).  /20/ Under the
MCA, thousands of new carriers have entered the market and have
competed vigorously for business, under a regime allowing for far
greater pricing freedom than prevailed under prior law.  With
"hundreds, or even thousands, of individual motor common carrier rates
* * * negotiated daily," the ICC noted "it can be extremely difficult
for shippers to determine, prior to movement, whether the agreed rate
is actually on file." J.A. 20.  Rigid enforcement of the tariff rate
when "a motor common carrier has negotiated a lower rate and has
indicated that the negotiated rate would be the one charged (and
therefore presumably filed as a tariff)" threatened to undercut the
development of competitive markets, as intended by the MCA.  Ibid.

   At the same time, the MCA authorized pricing activities that would
previously have constituted unlawful discrimination.  For example, the
MCA eliminated the prohibition against a carrier's holding dual
authority to engage in both contract and common-carrier operations.
See Central & Southern Motor Freight Tariff Ass'n v. United States,
757 F.2d at 311 & n.55.  A carrier operating in contract capacity can
serve a shipper without publishing its rates in tariffs at all, id. at
305, and without being subject to the antidiscrimination provisions of
the Act, id. at 325 & n.152.  J.A. 21;  see Negotiated Rates II, 5
I.C.C.2d at 633.  Moreover, a common-carrier tariff may be limited to
a particular shipper without being per se discriminatory.  See Rates
for a Named Shipper or Receiver, 367 I.C.C. 959 (1984).  With the
availability of such lawful, individualized pricing options, it is
highly implausible to suppose that a common carrier would quote
below-tariff rates as a means to discriminate between shippers.  /21/

   Collectively, these regulatory changes signal a dilution of the
antidiscrimination purposes that had previously animated the Act.
J.A. 20-21.  Against that background, the ICC properly concluded that
"'the inability of a shipper to rely on a carrier's interpretation of
a tariff is a greater evil than the remote possibility that a carrier
might intentionally misquote an applicable tariff rate to discriminate
illegally between shippers.'" J.A. 21, quoting Seaboard System R.R. v.
United States, 794 F.2d at 638.  In light of Congress's understanding
that the ICC must have "sufficient flexibility" to realize the
statute's diverse objectives, H.R. Rep. No. 1069, 96th Cong., 2d Sess.
12 (1980), the Commission's Negotiated Rates properly draws upon
Section 10701 to implement Congress's overall goals for the motor
carrier industry.  /22/

   Moreover, to embrace the view that the statute requires collection
of the tariff rate regardless of the presence of an unreasonable
practice, as petitioners apparently contend (Pet. Br. 9-12 & n.6),
would lead to absurd results.  If the tariff-collection provision
prevailed over the requirement of reasonable practices, a carrier
could intentionally engage in "bait and switch" tactics by negotiating
one rate, fraudulently representing that it was properly filed, and
then insisting upon collection of a higher tariff rate.  The
requirements of Section 10761(a), which were intended to prevent
intentional discrimination, cannot be construed to leave the
Commission helpless to provide redress for shippers' injuries flowing
from such affirmative misconduct.  /23/ Indeed, this Court has
specifically reserved the question, "whether the filed rate doctrine
applies in the face of fraudulent conduct." Arkansas Louisiana Gas Co.
v. Hall, 453 U.S. 571, 583 n.13 (1981).  /24/

   Whether the filed rate doctrine prevents a court from declining to
enforce a tariff rate based on a finding of affirmative misconduct is
not at issue here.  The ICC, however, surely has discretion, in
administering its express remedial authority over unreasonable
practices, to devise a response to such misconduct or related unfair
practices.  Such a response may include, if the ICC finds it
appropriate, the remedy of nonenforcement of the tariff rate.  Cf.
Southern Pacific Transportation Co. v. Commercial Metals Co., 456 U.S.
336, 352 (1982) ("The remedies for a carrier's violations of the
(credit) regulations are best left to the ICC for such resolution as
it thinks proper.").

   The fact that Negotiated Rates represents a change in the ICC's
interpretation of its unreasonable-practice powers does not cast doubt
on the policy's validity.  As the Court observed in American Trucking
Ass'ns, Inc. v. Atchison, T.&S.F. Ry., 387 U.S. 397, 416 (1967):

      (T)he Commission, faced with new developments or in light of
      reconsideration of the relevant facts and its mandate, may alter
      its past interpretation and overturn past administrative rulings
      and practice.  * * * Regulatory agencies do not establish rules
      of conduct to last forever;  they are supposed, within the
      limits of the law and of fair and prudent administration, to
      adapt their rules and practices to the Nation's needs in a
      volatile, changing economy.

See also Chevron U.S.A. Inc. v. NRDC, 467 U.S. at 863 ("that the
agency has from time to time changed its interpretation (does not
mean) that no deference should be accorded the agency's interpretation
of the statute").  Provided that the Commission adequately explains
its rationale, as it did here, the ICC is free to make permissible
changes in the construction of its governing statute.  Cf. Atchison,
T.&S.F. Ry. v. Wichita Bd. of Trade, 412 U.S. 800, 805-809 (1973)
(plurality opinion);  Motor Vehicles Manufacturers Ass'n v. State Farm
Mutual Auto Ins. Co., 463 U.S. 29, 41-42 (1983).

   In any case, Negotiated Rates has roots in the ICC's traditional
use of its unreasonable-practice powers.  For example, the ICC has
long exercised its unreasonable-practice powers to prevent a carrier
from enforcing a higher filed rate when a notation on a bill of lading
(which was required by a tariff containing a lower rate) was
inadvertently omitted.  See Standard Brands, Inc. v. Central R.R., 350
I.C.C. 555 (1974);  cf. Dulien Steel Products, Inc. v. New York, N.H.
& H. R.R., 287 I.C.C. 386 (1952).  These "superfluous notation" cases
illustrate the longstanding exercise of the ICC's power to temper
unintended consequences or inequitable results for shippers stemming
from the inflexible application of tariffs.  The extension of those
principles to encompass the unreasonable practices found in the
present case accords with the underlying purposes and express
provisions of the Act.

   Finally, the ICC is not barred from adopting Negotiated Rates
simply because Congress did not anticipate the problem addressed by
that policy and legislatively provide a solution.  Even where the
Commission has not relied on a specific statutory power, this Court
has sustained the agency's authority to devise remedies needed to
implement the goals set forth in the statute.  In ICC v. American
Trucking Ass'ns, 467 U.S. 354, 364-365 (1984), the ICC developed the
new remedy of retroactively rejecting effective tariffs submitted in
substantial violation of rate-bureau agreements.  Despite the absence
of express statutory authority for that remedy in the MCA or in
predecessor provisions, this Court upheld it as a proper exercise of
the ICC's discretionary powers because it was "directly and closely
tied" to a specific statutory mandate.  Id. at 367.  In this case,
Negotiated Rates does not spring from the ICC's implied authority to
carry out the Act, but from its express responsibilities over
unreasonable practices.  Applying the same considerations of deference
expressed in American Trucking Ass'ns, the ICC's determination to
protect shippers against shouldering the unfair costs produced by a
carrier's failure to file the agreed rate is a valid exercise of
agency discretion.  /25/

   C. Referral To The ICC Of A Claim Under Negotiated Rates Is
Required Under The Primary Jurisdiction Doctrine

   If the Commission's Negotiated Rates policy reflects a permissible
interpretation of its authority to proscribe unreasonable practices
under 49 U.S.C. 10701(a), then the remaining question is whether a
district court hearing a tariff collection action should refer to the
ICC, under the primary jurisdiction doctrine, a shipper's
unreasonable-practice claim under Negotiated Rates.  Relying on this
Court's primary jurisdiction decisions, the court below correctly held
that referral to the ICC is required in this situation.

   1. The primary jurisdiction doctrine requires that "(w)henever a
rate, rule or practice is attacked as unreasonable or as unjustly
discriminatory, there must be preliminary resort to the Commission."
Great Northern Ry. v. Mechants Elevator Co., 259 U.S. 285, 291 (1922).
 The doctrine protects the uniform development of policy by the ICC
and ensures the application of accumulated agency expertise to
questions requiring intimate familiarity with conditions of the
regulated industry.  Mitchell Coal & Coke Co. v. Pennsylvania R.R.,
230 U.S. 247, 255-259 (1913);  United States v. Western Pacific R.R.,
352 U.S. 59, 63-64 (1956);  ICC v. Atlantic Coast Line R.R., 383 U.S.
576, 580, 594 (1966);  Nader v. Allegheny Airlines, Inc., 426 U.S.
290, 304 (1976).  The primary jurisdiction doctrine governs not only a
claim that a carrier's rates are unreasonable, but also a similar
claim directed at a carrier's practices.  Hewitt-Robins Inc. v.
Eastern Freight-Ways, Inc., 371 U.S. 84, 87 (1962) (primary
jurisdiction applies to a claim that a carrier's misrouting
constitutes an unreasonable practice);  Northern Pacific Ry. v. Solum,
247 U.S. 477, 483 (1918) ("the rule which requires * * * preliminary
determination of administrative questions by the Commission applies *
* * to any practice of the carrier which gives rise to the application
of a rate").

   The foregoing principles dictate that a claim under Negotiated
Rates must be referred to the ICC.  The power to declare a practice
unreasonable is entrusted to the ICC's administration;  there is no
residual power in a court to declare that a practice is unreasonable
in violation of the statute.  Cf. General American Tank Car Corp. v.
El Dorado Terminal Co., 308 U.S. 422, 433 (1940) ("When it appeared *
* * that an administrative problem, committed to the Commission, was
involved, the court should have stayed its hand pending the
Commission's determination of the lawfulness and reasonableness of the
practices under the terms of the Act.").  Indeed, Congress has given
statutory authority to the district courts to refer cases to the ICC
in order to avail themselves of the Commission's primary jurisdiction.
 28 U.S.C. 1336(b).

   The considerations of uniformity and agency expertise underlying
the primary jurisdiction doctrine fully apply here.  The ICC's
Negotiated Rates determinations bring to bear the agency's expertise
in evaluating transportation practices.  See J.A. 22.  Although it is
true that a case referred under Negotiated Rates has elements of
contract law, the proper evaluation of the facts in a particular case
requires familiarity with competitive conditions, trade customs, and
methods of dealing in the motor carrier industry.  The ICC is by
design much more fully steeped in such matters than the generalist
courts.  /26/ In determining that Primary reasonably relied on Maislin
to implement the negotiated rates, the ICC drew upon its experience
with "other similar proceedings before the Commission involving
Maislin" that encompassed "over 40 shippers and many thousands of
shipments." Pet. App. 41a.  Those proceedings provided the ICC with
the background necessary to perceive a pattern in Maislin's dealings
with shippers.

   In addition, consolidating review of all unreasonable practice
claims before the ICC facilitates the consistent resolution of
analogous claims.  Cf. Thompson v. Texas Mexican Ry., 328 U.S. 134,
147-148 (1946).  Finally, reference of Negotiated Rates cases to the
Commission provides it with the raw material for evaluating the
success of its efforts to apply the statutory policies to motor
carrier billing practices, and to make any appropriate adjustments.
/27/

   2. Relying principally on T.I.M.E. Inc. v. United States, 359 U.S.
464 (1959), petitioners contend (Br. 12-20) that even if the ICC has
primary jurisdiction to adjudicate the reasonableness of carrier
practices, the ICC's Negotiated Rates policy improperly gives a remedy
for past unreasonable practices where Congress intended none to exist.
 Petitioners' interpretation of the statutory scheme is mistaken.

   This Court has never held that the ICC lacks authority to examine
the reasonableness of past motor carrier practices under 49 U.S.C.
10701(a).  In T.I.M.E., supra, the Court held by a 5-4 vote that in an
undercharge action by a motor carrier, a court could not refer to the
ICC the shipper's defense that the tariff rate imposed in the past was
unreasonable.  The Court stated that neither the Motor Carrier Act of
1935 nor the common law authorized a shipper to challenge, in
postshipment litigation, the reasonableness of tariff rates previously
charged by a motor carrier.  Three years later, in Hewitt-Robins Inc.
v. Eastern Freight-Ways, Inc., 371 U.S. 84 (1962), the Court
distinguished T.I.M.E. in allowing the Commission to review past
unreasonable practices.  In that case, a shipper had filed suit
against a carrier for unreasonable routing practices that caused the
shipper to make excessive payments.  The Court held that an action for
misrouting survived passage of the Motor Carrier Act, and that the
question whether the carrier's past routing practices were
unreasonable should be referred to the ICC under its primary
jurisdiction.  /28/

   Congress responded to both decisions:  it overruled T.I.M.E. by
amending the Motor Carrier Act;  in the process, the House Report
specifically indicated approval of Hewitt-Robins.  /29/ The clear
import of Congress's action was to authorize the Commission to
determine that a carrier's past charges did not conform to the
requirements of the Act, as had been ICC's established practice before
T.I.M.E.  See Bell Potato Chip Co. v. Aberdeen Truck Line, 43 M.C.C.
337 (1944).  There can be no doubt that in acting to "restore" a
procedure it thought to be previously available to shippers, and in
indicating (albeit informally) approval of Hewitt-Robins, Congress
intended to open past motor carrier rates and practices to legal
challenges by shippers under the same standards of reasonableness that
governed future rates and practices.

   Petitioner provides no support for the view that Congress
understood that it was leaving some past unreasonable practices
insulated from review.  Indeed, if petitioners' contention were
accepted, it would call into question the well-settled practice of
referring unreasonable "notation" claims to the ICC, when a shipper
contends that a lower tariff rate is applicable even though the bill
of lading lacked a required notation.  See Carriers Traffic Service,
Inc. v. Anderson, Clayton & Co., supra;  cf. Western Transp. Co. v.
Wilson & Co., 682 F.2d 1227, 1231 (7th Cir. 1982).

   Under the language enacted by Congress to overrule T.I.M.E., a
shipper may be awarded reparations for "charges for transportation
services to the extent that the Commission * * * finds them to have
been unjust and unreasonable." 49 U.S.C. 304a(5) (1976).  The current
version of that provision, reflecting the recodification of the Act in
1978, is equally encompassing.  It states that a motor common carrier
"is liable for damages resulting from the imposition of rates for
transportation or service the Commission finds to be in violation of
this subtitle." 49 U.S.C. 11705(b)(3) (1982 & Supp. V 1987).  /30/
Under a natural reading of the statutory text, both of these
formulations cover the type of claim defined by Negotiated Rates.
/31/

   Indeed, any narrower reading of Section 11705(b)(3) in the present
context would be entirely artificial, since the shipper's core
complaint in a Negotiated Rates case is that imposing a tariff rate is
unreasonable because of the carrier's underlying conduct.  While the
ICC has described a Negotiated Rates claim as an unreasonable
practice, a parallel analysis could be applied to declare that a
negotiated, but unfiled rate is in certain circumstances the maximum
reasonable rate.  See Iowa Power & Light Co. v. Burlington Northern,
Inc., 647 F.2d 796, 807-809 (8th Cir. 1981) (upholding an ICC order
prescribing, as a maximum reasonable rate, the rate negotiated between
the parties rather than the tariff rate filed by the carrier), cert.
denied, 455 U.S. 907 (1982);  Burlington Northern Inc. v. United
States, 679 F.2d 915, 917 (D.C. Cir. 1982) (per curiam) (sustaining
the ICC's consideration of the parties' understanding as an "important
factor" in determining a maximum reasonable rate).  /32/ In that
setting, reparations or a referral to the ICC of a defense to an
undercharge action would clearly be allowed even under petitioners'
theory.  Given that the same relief could be granted to shippers if
their claim were described in terms of unreasonable rates rather than
unreasonable practices, it can hardly be maintained that the referral
to the ICC of a Negotiated Rates claim is inconsistent with the
statutory scheme.  /33/

   3. This Court has never held, in a tariff collection action by a
motor carrier, that the filed rate doctrine precludes a district court
from staying further judicial proceedings pending reference of a
question of reasonableness to the ICC.  The Fifth Circuit, however,
has reached this conclusion in declining to refer a Negotiated Rates
case to the ICC.  In re Caravan Refrigerated Cargo, Inc., 864 F.2d at
391-393 & n.6, citing Southern Pacific Transportation Co. v. San
Antonio, 748 F.2d 266, 274 (5th Cir. 1984).  This Court should not
endorse the Fifth Circuit's rule restricting the power of courts to
stay a motor carrier tariff collection action.

   The Southern Pacific decision, on which the Fifth Circuit relied,
involved considerations not pertinent here.  In Southern Pacific, the
district court had stayed enforcement of a judgment in favor of a rail
carrier, based on the filed tariff rate, pending the ICC's
determination in an ongoing proceeding whether the tariff rate was
unreasonably high.  Noting that the shipper would later have an
adequate opportunity to seek reparations, the court of appeals stated
that "execution of the railroads' judgment would not render the
I.C.C.'s determination moot or ineffectual." 748 F.2d at 273.
Consequently, compelling the shipper "to pay the filed rate
immediately would not interfere with the I.C.C.'s primary
jurisdiction." Id. at 272-273.

   In contrast, the refusal to refer an unreasonable-practice claim
here would interfere with the ICC's primary jurisdiction.  In the
typical case governed by the ICC's Negotiated Rates policy, the motor
carrier is insolvent and hence unable to satisfy any subsequent
reparation order.  /34/ In these circumstances, enforcement of the
filed tariff without referral to the ICC would effectively nullify the
reasonableness requirement of the statute:  it would undermine the
ICC's meaningful exercise of its unreasonable-practice jurisdiction
and would deny the shipper an adequate remedy.  For its part, the
carrier can assert no offsetting equity in insisting upon prompt
payment when the collection of the rates may entail an unreasonable
practice and the carrier is not prepared later to reimburse the
shipper.  The carrier simply has no right to collect rates or to
engage in practices that the ICC finds are unlawful.  Cf. Lowden v.
Simonds-Shields-Lonsdale Grain Co., 306 U.S. at 520;  Pennsylvania
R.R. v. United States, 363 U.S. at 205.  In that situation, where the
ICC has determined to accept referrals in the midst of a collection
action, a court should stay judicial proceedings pending referral of
the unreasonable practice charge to the Commission.  Cf. Burlington
Northern Inc. v. United States, 459 U.S. 131, 142 (1982) (structuring
court review of ICC determinations to preserve the ICC's primary
jurisdiction and to protect parties unable to benefit from later
reparation proceedings).  /35/

                              CONCLUSION

   The judgment of the court of appeals should be affirmed.

   Respectfully submitted.

   KENNETH W. STARR

      Solicitor General

   THOMAS W. MERRILL

      Deputy Solicitor General

   MICHAEL R. DREEBEN

      Assistant to the Solicitor General

   ROBERT S. BURK

      General Counsel

   ELLEN D. HANSON

      Associate General Counsel

   CECELIA E. HIGGINS

      Attorney Interstate Commerce Commission

   APRIL 1990

   /1/ In 1980, there were approximately 17,000 regulated motor common
carriers.  H.R. Rep. No. 1069, 96th Cong., 2d Sess. 12 (1980).  In
1988, there were over 37,000 such carriers.  1988 ICC Ann. Rep. 141,
App. E, Table 1.

   /2/ The MCA repealed the limitations on a carrier's ability to hold
both common and contract carrier authority.  See Pub. L. No. 96-296,
Section 10(b), 94 Stat. 800.  A contract carrier may charge a rate to
an individual shipper that is different from the rate charged to
other, similarly situated shippers.  See Central & Southern Motor
Freight Tariff Ass'n v. United States, 757 F.2d 301, 310 n.44 (D.C.
Cir.) (per curiam), cert. denied, 474 U.S. 1019 (1985).

   /3/ A carrier may now readily obtain authority to transport
virtually all commodities throughout the contiguous 48 states.  See
Acceptable Forms of Requests for Operating Authority, 133 M.C.C. 328
(1984), aff'd in part and rev'd on other grounds sub nom. American
Trucking Ass'ns v. ICC, 659 F.2d 452 (1981), mandate enforced, 669
F.2d 957 (5th Cir. 1982), cert. denied, 460 U.S. 1022 (1983).

   /4/ See Petition for Declaratory Order -- Lawfulness of Volume
Discount Rates -- Motor Common Carrier of Property, 365 I.C.C. 711
(1982), and Rates for a Named Shipper or Receiver, 367 I.C.C. 959
(1984).

   /5/ Short Notice Effectiveness for Independently Filed Motor
Carrier and Freight Forwarder Rates, 1 I.C.C.2d 146 (1984), aff'd sub
nom. Southern Motor Carriers Rate Conference v. United States, 773
F.2d 1561 (11th Cir. 1985).  Previously, a motor carrier had to have a
tariff rate on file for 30 days before implementing the new rate.

   /6/ The shippers' association had proposed that the ICC promulgate
a blanket rule declaring that whenever a carrier and shipper have
negotiated a rate and the carrier then fails to file an appropriate
tariff, the negotiated rate is the maximum reasonable rate that the
carrier may charge, provided that the shipper entertained a good faith
belief that the negotiated rate was legally applicable.  The
Commission rejected that proposal in favor of a case-by-case approach
based on the reasonable-practice provision of the Act.  Negotiated
Rates I, J.A. 12 & n.1, 14-16.

   /7/ For the Court's convenience, we have lodged copies of the
Commission's decision in Negotiated Rates II with the Clerk's office.

   /8/ Maislin had originally solicited Primary's business in 1979.
At that time, Primary told Maislin that it would consider using
Maislin if its rates were competitive with those of another firm, P&NE
Trucking Co.  Based on Maislin's representation that it would meet
those rates, Primary began tendering freight to Maislin.  Pet. App.
31a.  Subsequent rates were also negotiated between Primary and
Maislin based on this competitive situation.  Id. at 31a-32a.

   /9/ Maislin did not designate the tariff that it believed was
applicable, but simply asserted a blance due.  J.A. 7.

   /10/ The Commission's order in this case was entered on January 12,
1988, after it had issued Negotiated Rates I, but before it had issued
Negotiated Rates II.

   /11/ The ICC did not find that Maislin had engaged in deceit in
competing for Primary's shipping business on the basis of unfiled
rates.  Rather, "(w)hat emerges from a review of this record is that
(Maislin) attempted to obtain, in a vigorous competitive manner,
Primary's traffic.  It then failed to provide (for unknown reasons)
for the publishing and filing of those rates." Pet. App. 42a.  The ICC
also found that for its part, Primary had acted reasonably in relying
on those rates, and "(t)here is no evidence that (Maislin) ever
demanded additional amounts over the amounts it billed at any time
during its business relationship with Primary." Id. at 43a.  Primary's
ignorance of the tariff rate was a factor to "be considered in
weighing the equities," but, the Commission found, did not undercut
the reasonableness of Primary's belief that "the amounts quoted and
billed * * * were the correct total charges." Ibid.

   /12/ The majority of the courts of appeals that have addressed this
issue have endorsed the validity of Negotiated Rates.  See INF, Ltd.
v. Spectro Alloys Corp., 881 F.2d 546 (8th Cir. 1989), petition for
cert. pending, No. 89-936;  West Coast Truck Lines, Inc. v.
Weyerhaeuser Co., 893 F.2d 1016 (9th Cir. 1990);  Delta Traffic
Service, Inc. v. Appco Paper & Plastics Corp., 898 F.2d 472 (2d Cir.
1990).  Two other circuits have accepted principles closely related to
Negotiated Rates without expressly ruling on the policy.  See Carriers
Traffic Service, Inc. v. Anderson, Clayton & Co., 881 F.2d 475 (7th
Cir. 1989) (approving referral of an unreasonable-notation claim to
the ICC);  Seaboard System R.R. v. United States, 794 F.2d 635, 638
(11th Cir. 1986) (approving an ICC finding of a rail-carrier
unreasonable practice in misquoting a tariff that was unclear to the
ordinary user).  The Fifth Circuit stands alone in refusing to refer
an unreasonable-practice claim to the ICC under Negotiated Rates.  See
In re Caravan Refrigerated Cargo, Inc., 864 F.2d 388 (1989), petition
for cert. pending, No. 88-1958.

   /13/ Although broad language in some decisions suggests that the
tariff rate governs in all circumstances, see, e.g., Pittsburgh, C.C.
& St.L.Ry. v. Fink, 250 U.S. 577, 581-582 (1919);  Boston & M.R.R. v.
Hooker, 233 U.S. 97, 112-113 (1914), those cases cannot be read to
override the holdings of many other cases (including those discussed
in the text) that the ICC's finding that a rate is unreasonable
prevails over a tariff rate.  See also p. 24, infra.

   /14/ The considerations informing the filed rate doctrine are thus
closely allied to those underlying the primary jurisdiction doctrine:
both serve to allocate functions between court and agency in order to
ensure the uniform and expert administration of a regulatory scheme.
Cf. Great Northern Ry. v. Merchants Elevator Co., 259 U.S. 285, 291
(1922);  United States v. Western Pacific R.R., 352 U.S. 59 63-64
(1956).

   /15/ Congress did not address the question of unreasonable carrier
"practices" in the original Interstate Commerce Act (Act of Feb. 4,
1887), ch. 104, 24 Stat. 379.  In the Hepburn Act of 1906, ch. 3591,
Section 4, 34 Stat. 589, Congress gave the Commission power to
determine whether a railroad's practices were unreasonable and to
prescribe a different practice for the future.  See ICC v. Illinois
Central R.R., 215 U.S. 452, 475-477 (1910).  In the Mann-Elkins Act of
1910, ch. 309, Section 7, 36 Stat. 546, Congress extended that
principle by imposing a duty on all rail carriers to engage in "just
and reasonable * * * practices." When Congress gave the Commission
authority to regulate motor carriers in 1935, it applied the same dual
requirement that motor carriers must establish and observe reasonable
rates and practices.  Motor Carrier Act of 1935, ch. 498, Section
216(b), 49 Stat. 558 (codified at former 49 U.S.C. 316 (1976)).  In
1978, the Congress revised, codified and enacted Title 49 of the
United States Code into positive law, without substantive change (Act
of Oct. 17, 1978, Pub. L. No. 95-473, Section 3, 92 Stat. 1466, 49
U.S.C. 10101 note).  In so doing, it consolidated in one section the
requirement of reasonable rates and practices for all carriers (other
than rail carriers) that the Commission regulates.  49 U.S.C.
10701(a).  (Under current law, the requirement of reasonable rates
applies to rail carriers only if the ICC finds that a carrier enjoys
market dominance.  49 U.S.C. 10701a(b)(1)).

   /16/ Amici Robert Yaquinto Jr. et al. (Yaquinto) argue (Br. 22)
that the ICC's jurisdiction over unreasonable practices is limited to
those practices listed in 49 U.S.C. 10702, which does not identify
"misquotation or billing practices." That novel argument, embraced
neither by petitioners nor the other amici, is at odds with the
traditionally broad reading given to the ICC's unreasonable practice
authority.  See Baltimore & Ohio R.R. v. United States, 391 F. Supp.
249, 258 (E.D. Pa. 1975) aff'd, 594 F.2d 856 (4th Cir.1979) (Table).
To begin with, neither Section 10701(a) nor Section 10704 cross-refers
to Section 10702;  there is no indication that the latter provision
was intended to control the former.  Moreover, assuming that the cited
provisions have some interrelationship, Section 10702 does not
enumerate all carrier practices, but merely requires the carrier to
establish "rules and practices on matters related to (its)
transportation or service, including" several itemized matters.  The
use of the word "including" signals that the list is illustrative
only, not exclusive.  Cf. Phelps Dodge Corp. v. NLRB, 313 U.S. 177,
189 (1941).  Finally, this Court in Adams v. Mills, 286 U.S. 397
(1932), recognized that a billing practice not reflected in a tariff
could constitute an "unjust and unreasonable" practice in violation of
the Act.

   /17/ Moreover, the fact that the statute specifies certain remedies
when a carrier collects a rate not filed in a tariff does not exclude
the ICC from applying its reasonable-practice powers to the same
conduct.  See 49 U.S.C. 10321(a) ("The Interstate Commerce Commission
shall carry out this subtitle.  Enumeration of a power of the
Commission in this subtitle does not exclude another power the
Commission may have in carrying out this subtitle.");  ICC v. American
Trucking Ass'ns, 467 U.S. 354, 359 n.3 (1984).

   /18/ Although some older cases of this Court state that knowledge
is presumed, Kansas City Southern Ry. v. Carl, 227 U.S. 639, 653
(1913) ("The shipper's knowledge of the lawful rate is conclusively
presumed * * * .");  Chicago & Alton R.R. v. Kirby, 225 U.S. 155, 166
(1912) (shipper was "presumed to have known" of published rates),
those cases did not involve instances where the shipper reasonably
relied on the carrier to implement a negotiated rate by properly
filing a tariff.  Since only a carrier can file a tariff, 49 U.S.C.
10762(a)(1), the ICC may reasonably conclude, in remedial proceedings,
that the shipper should not be compelled in a particular case to bear
the costs of the carrier's breach of that duty.

   /19/ Petitioners (Br. 28-29) and Amici Oneida Motor Freight, Inc.
et al. (Br. 11-12) also rely on the Household Goods Transportation Act
of 1980, 49 U.S.C. 10735(a)(1) (1982 & Supp. V 1987) in an effort to
demonstrate that Congress deliberately intended to preclude the ICC
from recognizing a defense to a carrier's collection action based on
the filed rate.  That provision states that a motor common carrier may
"establish a rate for the transportation of household goods which is
based on the carrier's written, binding estimate of charges for
providing such transportation." Amici Oneida imply that because
Congress in that context specifically provided for "a negotiated
unfiled rate to be binding on the parties" (Br. 11), it could not have
intended to authorize such a result in any other context.  But the
household goods provision addressed the quite different problem of
consumer dissatisfaction with a carrier's departure from a quotation
because of an incorrect estimate of the weight of the goods to be
shipped, not an incorrect quotation of the tariff rate.  See H.R. Rep.
No. 1372, 96th Cong., 1st Sess. 7 (1979).  "In order to address this
problem, these subsections create a foundation for written binding
estimates." Ibid.  There can be no negative implication from this
provision that Congress intended to limit the Commission's powers
under its unreasonable-practices jurisdiction, as applied to motor
carriers that violate the Act by failing to file their negotiated
rates.

   /20/ See H.R. Rep. No. 1069, 96th Cong., 2d Sess. 27-28 (1980);
126 Cong. Rec. 7,777 (1980) (statement of Sen. Cannon).  This Court
has recognized that "(t)he legislative history of the Act is clear
that * * * Congress wanted the forces of competition to determine
motor-carrier tariffs." ICC v. American Trucking Ass'ns, 467 U.S. 354,
367 (1984).

   /21/ In addition, in Negotiated Rates II, the Commission drew on
its experience in referred cases (such as the present one) to observe:

      (T)here has been nothing in the records of the cases we have
      reviewed to suggest that it was the intent of the parties to
      establish secret, discriminatory rates.  Rather, the carriers
      simply negotiated these rates to attract business, not with any
      intent to prefer one of their shippers to the disadvantage of
      others.  Indeed, the effort was to promote and sell the
      carrier's service generally, not to attract a particular
      customer.  The shipper made its determination to use the
      carrier's service based on the quoted rate.  To permit the
      carrier subsequently to collect a substantially different higher
      rate for the past transportation service because it failed to
      publish the rate would be antihetical to a fundamental purpose
      of publishing rates -- i.e., to permit shippers to choose the
      best rate for their shipments from among those offered by
      competing carriers.

5 I.C.C.2d at 631-632.

   /22/ Contrary to petitioners' view (Br. 26), the ICC is not relying
on the "general purpose of the 1980 Act * * * to overcome the strict
requirements and harsh results of the filed rate doctrine." The ICC is
not calling into question the filed rate doctrine at all.  Rather, the
ICC is exercising its administrative powers over unreasonable
practices pursuant to the policy directions given to it by Congress.

   /23/ This is particularly true since the Act makes the failure of a
carrier to file and publish its rates a criminal violation.  49 U.S.C.
11903(b).

   /24/ The lower courts have generally held that the filed rate
doctrine precludes courts from granting relief on the basis of a
carrier's fraud.  See Consolidated Freightways Corp. v. Terry Tuck,
Inc., 612 F.2d 465 (9th Cir. 1980) (per curiam) (collecting cases);
cf. Marco Supply Co. v. AT&T Communications, Inc., 875 F.2d 434, 435
(4th Cir. 1989) (applying same rule to an FCC tariff).  If those
decisions are correct, under petitioners' view of the law no tribunal
would have the power to protect shippers from a carrier's deliberate
fraud regarding its applicable rates.

   /25/ It is unquestionably within the Commission's power to
determine that the appropriate remedy for the unreasonable practices
identified in Negotiated Rates is to apply the rate originally
negotiated rather than the tariff rate.  Enforcing the negotiated rate
allows the shipper to retain the benefit of the bargain it has reached
with the carrier, consistent with the policy of the MCA to promote a
competitive marketplace in order to meet the needs of shippers.  49
U.S.C. 10101(a)(2).  Indeed, in the highly competitive environment
that now characterizes the industry, such a remedy is singularly
appropriate, because the negotiated rate normally reflects the
prevailing rate that the shipper could have obtained from competing
motor carriers.

   /26/ For example, in this case the Commission had to determine
whether particular rates listed in "rate sheets" provided adequate
evidence of the existence of negotiated rates between Maislin and
Primary.  Pet. App. 37a-38a.  That inquiry involved the evaluation of
expert testimony, the procedures used by the parties to establish
"point to point" rates, and the issue whether asserted discrepancies
between the billed rates and the rate sheets undermined the contention
that the rates were negotiated.  In concluding that the discrepancies
were not dispositive, the ICC noted that the "fuel surcharge fold-in"
explained some of those discrepancies (because a one-step rounding
process was used at the quotation stage, while a two-step rounding
process was used at the billing stage), and that the remaining
instances of one-to-two cent deviations were not significant under the
circumstances.  Id. at 39a-40a.  Although courts also are capable of
resolving such matters, it is readily apparent the ICC's appraisal of
the facts was assisted by its knowledge of the ways of the
transportation industry.

   /27/ The ICC advises us that it has currently received 237 claims
under Negotiated Rates (including cases referred by courts and cases
filed directly with the agency).

   /28/ T.I.M.E. and Hewitt-Robins created confusion about the
exposure of motor carriers to liability for past rates and practices.
As the Comptroller General informed Congress, "(p)rior to the T.I.M.E.
decision, under established rules of law, our auditors availed the
Government of the Commission's prior findings of unreasonableness of
motor carrier rates and practices." The Comptroller added that the
Hewitt-Robins decision had caused uncertainty by approving one
postshipment remedy for an unreasonable carrier practice, but leaving
it unclear whether other remedies for past unreasonable practices
would also be acknowledged.  Letter from Joseph Campbell, Comptroller
General of the United States, to Hon. Oren Harris (Mar. 29, 1965),
reprinted in 1965 U.S. Code Cong. & Admin. News 2936-2939 (emphasis
added).

   /29/ Act of Sept. 6, 1965, Pub. L. No. 89-170, Sections 6-7, 79
Stat. 651-652 (codified at 49 U.S.C. 11705(b)(3) (1982 & Supp. V
1987), 49 U.S.C. 11706(c)(2)).  The amended statute authorized
reparations against motor carriers for past shipments, and defined
"reparations" to mean "damage resulting from charges for
transportation services to the extent that the Commission * * * finds
them to have been unjust and unreasonable, or unjustly discriminatory
or unduly preferential or unduly prejudicial." 49 U.S.C. 304a(5)
(1976).  The House Committee Report confirmed the intent of the
legislation to "permit a court * * * to award reparations to persons
injured through violations of the Interstate Commerce Act by motor
carriers and freight forwarders subject thereto.  This would be
accomplished in accordance with established judicial reference
procedures under which the Commission would be called upon to aid the
court by making necessary administrative determinations relating to
the amount of reparations." H.R. Rep. No. 253, 89th Cong., 1st Sess.
12 (1965) (emphasis added).  The Report stressed that the legislation
was designed to "restore a procedure formerly available to shippers
which was set aside by the Supreme Court in 1959 by the decision in
the T.I.M.E. case." Ibid.  The Report also stated that the provision
overruling T.I.M.E. "would not affect in any way the right of shippers
to recover damages from misrouting under the Hewitt-Robins doctrine."
Ibid.

   /30/ The 1978 reenactment was not designed to work substantive
changes in the law, see note 15, supra.

   /31/ Congress's focus in overruling T.I.M.E. was naturally on
rates, since that was what was directly at issue in T.I.M.E.  But we
are unaware of any decision holding that an unreasonable practice that
affects rates falls outside of 49 U.S.C. 11705(b)(3).

   Petitioners also note (Br. 20) that, as to rail and water carriers,
the Act authorizes reparations for "an act or omission of that carrier
in violation of this (Act)." 49 U.S.C. 11705(b)(2).  While this
formulation differs from that applicable to motor carriers,
petitioners are incorrect in suggesting that this difference has any
significance for this case.  Whether or not the reparations provision
for rail and water carriers has a wider application for a violation of
the Act that does not involve the imposition of rates, there is no
basis for limiting the plain meaning of Section 11705(b)(3) as to a
violation that does involve the imposition of rates -- as does the
violation addressed by Negotiated Rates.

   /32/ The ICC's unreasonable-rate determinations have often been
influenced by a course of dealing between the parties or the
understanding that particular rates were applicable.  See Piedmont
Mills, Inc. v. Norfolk & Western Ry., 296 I.C.C. 481, 485 (1955)
(carrier's rate misquotation does not ordinarily support shipper's
damages claim, but carrier's consistently expressed view that rates
charged were applicable under published tariffs was entitled to
weight);  Garson Iron & Steel Co. v. Atlantic & N.C. R.R., 237 I.C.C.
724, 726 (1940) (carrier intended to publish rates comparable to
competitors, but made an error in filing its tariff);  Sheboygan Fruit
Box Co. v. Chicago & N.W. Ry., 214 I.C.C. 157, 158 (1936) (carrier
applied non-tariff rates through an oversight, following which parties
agreed to establish those rates in a tariff).

   /33/ Petitioners argue (Br. 21-23) that Section 11705(b)(3) must be
read to exclude a claim under Negotiated Rates because the competing
legislation to overrule T.I.M.E. that was favored by the ICC would
have swept more broadly.  Because the plain language of Section
11705(b)(3) reaches this case, however, it is irrelevant that some
proposed bills would have gone farther.  In any event, the major
distinguishing feature of the bill favored by the ICC was that it
would have permitted shippers the choice of filing a reparations
complaint with the ICC or commencing an action in court.  Under the
legislation enacted by Congress, a shipper must file a complaint in
court, whereupon the court refers to the Commission the issue of
reasonableness.  See Informal Procedure for Determining Motor Carrier
and Freight Forwarder Reparation, 335 I.C.C. 403, 412-413 (1969).
That distinction goes to the procedural mechanisms for administering a
reparations claim, not to the substance of the claim.  As the ICC
explained:  "While in the opinion of the Commission uniformity with
respect to procedure for handling reparations under parts I, II, III,
and IV of the act would have been desirable, Congress elected to
provide otherwise." Id. at 413 (emphasis added).  Congress's rejection
of the ICC's preferred approach has no substantive implications for
the present case.

   /34/ Amici Overland Express, Inc. (Br. 16-18) and Yaquinto (Br.
16-17) contend that Negotiated Rates conflicts with the Bankruptcy
Code, but neither cite any provision of the Code that remotely bears
on the present issue.  The obligation of a bankruptcy trustee to
collect claims owed to the estate does not authorize the collection of
funds in violation of public policy.  Cf. 11 U.S.C. 362(b)(4) (police
and regulatory exception to automatic bankruptcy stay).  The ICC's
determination that the carrier's claim is tainted by an unreasonable
practice invalidates that claim.  Nor does it undermine the Bankruptcy
Code to deny the creditors of a failed carrier the fruits of the
carrier's dereliction of its duty to file its negotiated rates.  In
short, the Bankruptcy Code provides no basis for shifting losses from
the carrier's creditors to the innocent shipper.

   /35/ As petitioners note (Br. 26), a bill has been introduced in
the House that would, among other things, essentially codify the
policy reflected in Negotiated Rates.  H.R. 3243, 101st Cong., 1st
Sess. (1989).  The bill has been referred to the Committee on Public
Works and Transportation, and has not been reported out of committee.
We will apprise the Court of any legislative developments affecting
this case.

   APPENDIX