“Eighteen months,” as expressed in the Interstate Commerce Commission Termination Act (ICCTA), means eighteen-months according to a recent Federal Court of Appeals decision.
This would seem to be self-evident, however, the Court decision involved a motor carrier using innovative ways to define certain transportation activity so as not to be barred from suing under the eighteen-month rule of the ICCTA. The carrier was trying to redefine time because the ICCTA provides a special statute of limitation period for such carriers to sue to recover transportation charges. The time period to file a court action is eighteen months from the time the claim accrues—meaning eighteen months from the time the carrier is first due a payment. If the carrier sues after expiration of the eighteen-month period the action will be dismissed by the court as out of time.
This case involved the movement of six industrial metal- stamping presses for General Motors (GM). These are known as “heavy haul” loads and can involve myriad details. The court described the logistics issues in such moves as “complex." The journey for each press began in Japan, where they were made. The presses were to be delivered to GM plants in Georgia, Michigan and Missouri.
GM contracted with a broker that specializes in heavy haul loads. The broker in turn contracted with the carrier. An underlying problem is that the contract between GM and broker consisted of only 46 words. No explanation is given why a complex multi-modal move valued at millions of dollars would be covered by a contract of only 46 words. In today’s logistics world everyone should know movements of this magnitude need to have various aspects of transportation services spelled out in some detail. If not, legal entanglements can arise if things go wrong.
Go wrong they did. After some of the transportation services were performed, GM apparently became dissatisfied with the work of the carrier and instructed the broker not to use the carrier in the future. A dispute arose between the carrier and broker over how much the carrier was owed. The carrier claimed it was due $4.9 million. After the broker made certain payments and then stopped, the carrier sued the broker for the rest. The trial court held that the carrier was out of time and out of luck because it had waited more than eighteen months before initiating a lawsuit over the transportation charges. On appeal, the appellate court also sided with the broker saying an action brought after eighteen months had passed could not be sustained.
Realizing it had a statute of limitation problem the carrier argued that the eighteen-month limitation period applied only when the claims were based on a filed tariff. The Court of Appeals rejected this idea by holding, as a number of other courts have held, that there no longer are any motor carrier tariffs except for the movement of household goods. The court reasoned that under the plain language of the statute the eighteen-month limitation period was not limited to tariff situations because tariffs are not even mentioned in that section of the ICCTA.
The carrier then argued that the bar to suits after eighteen- months applied only to actions for transportation services, which it contended involved only the actual movement of the goods. The carrier tried to maintain its efforts related to planning the move, stand-by time, researching the move, etc. were not actual transportation and therefore actionable beyond an eighteen-month period.
The Court of Appeals gave an expansive interpretation to the term “transportation services” relying on the definitions given in the ICCTA. This meant that services related to the actual movement of goods, such as arranging for the movement of the cargo, delivery, storage, handling, packing, unpacking and interchange of property were all part of the transportation services rendered and, therefore, also subject to the eighteen-month limitation period.
Finally, the carrier also argued that while the eighteenmonth period was part of a federal law, the contract was subject to state contract laws, which may provide for a longer statute of limitations period. The Court of Appeals also rejected this contention in effect saying that when federal law covers a subject it displaces state law.
The eighteen-month time limit applies to motor carriers bringing legal actions to recover transportation charges. It should not be confused with the time limits for shippers to file loss and damage actions. Under the ICCTA a motor carrier may not establish a time period shorter than nine months for a shipper to file a claim with the carrier for loss and damage, and shippers have two years to sue a motor carrier for loss and damage.
Both carriers and shippers need to keep in mind that the clock is ticking when it comes to rate disputes as well as claims for loss or damage.