Security Services, Inc. v. Kmart Corp., 511 U.S. 431 (1994)

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certiorari to the united states court of appeals for the third circuit

No. 93-284. Argued February 28, 1994—Decided May 16, 1994

The mileage rate tariff that petitioner motor carrier filed with the Interstate Commerce Commission (ICC) did not list distances for calculating charges for shipments, but instead relied upon a Household Goods Carriers' Bureau (HGCB) Mileage Guide for its distance component. The Mileage Guide states that it may not be used to determine rates unless the carrier is shown as a "participant" in the Guide. Participants are listed in a separate HGCB tariff filed with the ICC. When petitioner failed to pay its fees, HGCB canceled petitioner's participation by supplementing the latter tariff. Sometime later, petitioner contracted to transport respondent shipper's goods at rates below its filed tariff rates. Petitioner subsequently filed for Chapter 11 bankruptcy and, as debtor-in-possession, asserted that respondent was liable under the Interstate Commerce Act's filed rate doctrine for undercharges based on the difference between the contract and tariff rates. Respondent refused to pay. Petitioner sued. The District Court granted summary judgment for respondent, and the Court of Appeals affirmed, concluding that the filed tariff could not support an undercharge claim because it was void under ICC regulations requiring participation in mileage guides referred to in a carrier's tariff; that the regulations' retroactive voiding of the tariff was permissible under ICC v. American Trucking Assns., Inc., 467 U. S. 354; and that nonparticipation in the Guide was not a mere technical defect excused by petitioner's substantial compliance with the filed rate rule.

Held: A motor carrier in bankruptcy may not rely on tariff rates it has filed with the ICC, but which are void for nonparticipation under ICC regulations, as a basis for recovering undercharges. Pp. 435-444. (a) A bankruptcy trustee for a defunct carrier or the carrier itself as a debtor-in-possession is entitled to rely on the filed rate doctrine, which mandates that carriers charge and be paid the rates filed in a tariff, to collect for undercharges based on effective, filed rates. Maislin Industries, U. S., Inc. v. Primary Steel, Inc., 497 U. S. 116. The ICC's void-for-nonparticipation regulation, however, invalidates a mileage-based tariff once cancellation of the carrier's participation in an agent's distance guide is published, as it was here. Such a tariff is incomplete and


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