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Judicial Smackdown

March 4, 2008
Perry A. Trunick, chief editor Who said legislators cant learn? Rowe v. The New Hampshire Motor Transport Association wont make the best seller list,
Perry A. Trunick, chief editor

Who said legislators can’t learn?

Rowe v. The New Hampshire Motor Transport Association won’t make the best seller list, but should rank right up there with Maislin Industries Inc. v. Primary Steel Inc. on logistics professionals’ bookshelves.

Maislin sent a shudder through the industry in 1990 when the Court ruled that Congress had not eliminated the requirement for motor carriers to file and collect tariff rates. Shippers suddenly became liable for massive undercharges on freight bills where they had relied on a negotiated rate they thought carriers had subsequently filed with the Interstate Commerce Commission. It took years to get a remedy.

By the time Congress passed the Federal Aviation Authorization Act of 1994 it wasn’t about to repeat earlier mistakes with regard to its intent in deregulating the motor carrier industry. This time, it borrowed language from the legislation that deregulated the airline industry in 1978. That language was not only specific, it had been tested in the courts, including the US Supreme Court.

The case of the Maine Tobacco Delivery law comes down to rates, routes and service. The legislators were very clear in adopting the language of the earlier bill that they intended to deregulate carrier rates, routes and service and did not want the states reversing them. The Court indicated the legislators knew this issue had been tested in the earlier airline bill and they also knew the language would withstand any further judicial tests.

With the lines between modes, services and even who is a carrier blurring, the ruling in the Maine Tobacco Delivery Law case could have lasting significance for an increasingly outsourced logistics function. The focus on rates, routes and service may be the distinction the industry needs to adopt when it faces state and local actions that force change onto some facet of logistics.

The Court identified a logical thread connecting the state’s attempt to restrict minors from acquiring tobacco and the impact that law has on the transportation marketplace. The industry should take hold of that thread and strengthen it. It’s just the type of argument that may be required to forestall future state actions. It’s difficult to know what shape those future cases might take, but it will be important to be prepared.

Justice Antonin Scalia, who was part of the Court that ruled on Maislin, concurred in part with the decision on Rowe v. New Hampshire Transport Association. His exceptions were where the ruling relied on the reports of committees of “one House of Congress to show the intent of that full House and of the other. . ..” That language harks back to an admonishment in Maislin that the ICC was wrong to interpret the intent of Congress in the Motor Carrier Act of 1980. The Congressional members' intent was clear in the FAA Authorization Act of 1994. That should make the matter of motor carrier deregulation bulletproof, but Scalia has inserted a small spoiler in raising doubt about the intent of the few representing the view of the majority. It’s a small flaw and may easily be outweighed by the Congressional vote that passed the law in 1994, the subsequent presidential signature enacting it and this recent Court ruling.

Perry A. Trunick, chief editor [email protected]

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