Interstate Commerce Commission v. Transcon Lines

Background

A large motor carrier that operated under authority from the federal regulator went into Chapter 11 bankruptcy, and the trustee sought to collect unpaid freight charges and liquidated damages from thousands of former customers. The carrier had published discount rates in a filed tariff and used a loss-of-discount method to measure liquidated damages. The federal transportation regulator sued to stop the trustee from collecting those liquidated damages, arguing the trustee was applying the charges in ways the carrier had not followed ICC credit rules.

Reasoning

The Court addressed whether the filed-rate rule — which normally requires carriers to collect only published tariff rates — bars the regulator from getting an injunction to enforce its credit regulations. The majority concluded the filed-rate doctrine does not prevent the regulator from seeking prospective injunctive relief to stop collection of liquidated damages when a carrier or its trustee violates valid credit rules. The Court relied on earlier decisions recognizing the regulator’s authority to seek injunctions, gave deference to the regulator’s interpretation of its rules, and explained the injunction is necessary and appropriate to enforce regulations that protect shippers.

Real world impact

The ruling lets the federal regulator use courts to stop trustees or carriers from collecting penalty charges when the carrier failed to satisfy the procedural protections in the regulator’s credit rules. The decision does not allow secret or unfiled rates to replace filed tariffs, and the case was sent back to the lower courts for further proceedings consistent with the opinion.