Thurston Motor Lines, Inc. v. Jordan K. Rand, Ltd.

Background

A common carrier licensed by the Interstate Commerce Commission sued a company that allegedly failed to pay $661.41 in motor freight charges. The carrier said the charges were required by its tariffs on file with the Commission and filed in federal district court. The district court dismissed the case for lack of authority to hear the dispute, and the Ninth Circuit agreed, treating the matter as a routine contract-collection claim.

Reasoning

The Supreme Court reversed, relying on Louisville & Nashville R. Co. v. Rice (1918). The Court explained that a carrier’s right to collect charges set by federally filed tariffs depends on federal law, so the nature of the carrier’s claim — not the shipper’s defenses — determines whether federal courts have authority to hear it. The Ninth Circuit was wrong to treat the suit as purely a state contract case or to suggest Rice was no longer valid. The Court emphasized that only it may overrule its own precedents and therefore restored federal court authority over this tariff-based claim.

Real world impact

This decision makes clear that carriers can bring tariff-based collection suits in federal court when recovery depends on federally filed tariffs. Shippers and carriers will now understand that disputes about charges regulated by the Interstate Commerce Act may properly be heard in federal court. The case goes back to the Ninth Circuit for further proceedings consistent with the opinion.