I had a brain cramp last night in Admin. I just couldn’t grasp what the professor was asking me when I was briefing a case. He wanted me to state the effect of a certain agency interpretation of a statute that required carriers to do business with shippers “reasonably.” The agency interpreted this to allow it to prohibit a practice whereby a carrier would tell the shipper it would charge one rate (the rate it supposedly filed with the government) but later file a higher rate and charge the shipper that rate. (Another statute required the carrier to charge the shipper only that rate which was filed with the Interstate Commerce Commission.)
The question related to the effect of the ICC’s reliance on the more general “reasonable” standard to prohibit this practice.
My answer: it would make the industry more honest.
Professor’s response: well, it would make the industry more honest but what effect would it have?
Smarter student: It would effectively deregulate the industry by allowing the general resonableness standard to supercede the more specific statute requiring the filing of certain rates. Basically, the carrier would be forced to negotiate the actual rate being charged and then file that rate.
I just couldn’t connect the actual effect of the interpretation.
Oh well.
No related posts.
Whoa. How does something that says you can’t change the rate turn into less government regulation?
I’m still not totally clear on that one.
So you have the specific statute – the shipper must pay the rate filed by the carrier at the ICC. And you have the general statute – the carrier must act reasonably in the course of its dealings with shippers.
The ICC interprets the reasonable statute to mean that the carrier (a trucker in this case) can’t tell a shipper that it filed one rate (lower), quote the shipper that rate, then turnaround after the work is done and file the higher rate and demand that higher rate from the shipper because that’s the rate that was filed.
Allowing the ICC to use the general statute to force the carrier to receive a rate different than what was actually filed would undermine the regulatory scheme Congress constructed to govern the tucking industry. In effect, it would mean deregulation according to the court and our professor.
However, it appears to me, now that I’m revisiting, that all the ICC was doing was ensuring that the rate filed is the rate agreed to. Though I guess the argument is that if the ICC could force the carrier to settle for the lesser rate in the situation at issue it could also decide that whatever rate was agreed upon and filed could also be unreasonable, regardless of how it was agreed upon, thus circumventing Congress’ intention of ensuring that the rate filed is the rate charged.
I keep thinking about this. I love this! Thanks for posting it! Doesn’t it come down to which statute takes precedence? Let’s say the carrier filed a ten dollar rate. Let’s also say that, prior to filing the ten dollar rate, the carrier had agreed to a six dollar rate. Now, the specific statute says the shipper has to pay the carrier ten dollars, ’cause the rule is (the specific statute states) that whatever rate gets filed (by the carrier) is the rate paid (to the carrier). Well, duh, who isn’t going to be inclined to file the highest rate they think they can get away with? The reasonableness statute says, okay yeah, the rate filed is the rate paid, but make sure you don’t file a rate you didn’t agree to. The carrier would violate the reasonablness statute by filing the ten dollar rate, instead of the six dollar rate already agreed to. Just because the specific statute says the ten dollar rate, the rate on file, is what they should be paid because it was the one that was filed, doesn’t mean they are owed ten bucks. They are not owed the ten bucks if the reasonableness statute beats the specific statute. So it’s a toss up, right? It’s entireley up to the judge to choose which statute is more important to uphold. The carrier gets six bucks based on the reasonableness statute, because six bucks is what they agreed would be filed. And the carrier should file the six buck rate, like he said he would. To turn around and file a ten buck rate violates that agreement (and violates the reasonableness statute). Just ’cause he (the carrier) is, for some crazy reason, allowed to file any old rate apparently, doesn’t mean the shipper should be required to pay any old rate (except he’s not allowed to file any old rate…doing so is in violation of the reasonableness statute).
Does the law provide guidance on which statute is the prevailing one?
Is there something that says specificity trumps all, for instance?
I see how it’s deregulation, but then again, it’s not. Technically, yeah, the rate filed is the rate charged, but you’re not allowed to file some bogus rate, either. The rate fileed IS the rate charged, provided the rate filed is reasonable. If it’s not reasonable, then the reasonableness statute applies first (well, a judge could decide that it should apply first, right?), so if/because/assuming that the reasonableness statute must be honored first, then the bogus rate should not count as being filed. Only reasonable rates are considered as “filed”. If that’s true, then yes, the rate filed is the rate charged. So the specific statute still stands; it is always in effect, always applicable. So it comes down to what it means to be a “filed” rate. In other words, based on the reasonableness statute, a rate that differs significantly between the time it was negotiated and the time it is filed by defnition CAN NOT BE FILED. Such rates are voided out by the reasonableness statute automatically…their filing is defunct/no good/bogus/didn’t happen. It’s not possible for it to be the filed rate. Why coudn’t it happen like that? I’m trying to find a way to ensure that the specific statute of “rate filed is rate paid” is always upheld. And if it is always upheld, then does the reasonableness statute really amount to deregulation after all?
Hey Anon. What’s happenin? Thanks for your very thoughtful comment.
First off if you’re so inclined, the case is Maislin Indus., U.S. v. Primary Steel, 497 U.S. 116 (1990). It’s one of the many cases following Chevron in our Admin casebook
Second the Court’s reasoning, as I understand it, was that the specific statute was a more reliable gauge of Congress’ intent and because it was unambiguous should supercede any agency interpretation of vague statutes (or terms within statutes) that would undermine the clearly expressed intent of Congress.
However, I think Scalia’s concurrence might also be illuminating. He uses the principle of statutory construction that a general statute cannot be used to undermine or reinterpret a specific statute.
So because Congress neglected to say anything in the specific statute against filing bogus rates, then it’s a-okay to file whatever rate you want and the shipper has to bend over and take it with a smile on his face? Niiiiiiice.
That’s the idea – for better or worse. (Whether the intent of Congress was to allow statutes to facilitate fraud is another question entirely.)
[...] exercise more oversight and where, the Scalia/texualist approach results in decisions like the one I wrote about the other week, where the literal meaning of terms precludes an agency from preventing fraud, [...]