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Consider the following scenario: The auditors of ABC Manufacturing have completed their fieldwork. John Smith, ABC's controller, tells Jane Jones, the assistant controller, "I think this year's audit went very smoothly. I don't think there should be any audit adjustments and our earnings figures are right on target."
Suddenly, the director of transportation comes in and asks "have you heard about Maislin? With all the contracts we have negotiated with common carriers, I wonder if we have an exposure for unbilled shipping costs."
Smith and Jones ask what Maislin is and are informed that it is a recent Supreme Court decision that may allow common carriers to recover "undercharges" -- the difference between the rate actually charged and the rate filed with the Interstate Commerce Commission (ICC).
Upon hearing this, Jones states, "We may have a significant liability that is currently unrecorded. What do you think we should do?"
The Filed Tariff Doctrine
The filed tariff doctrine forbids a motor common carrier from charging rates for its transport services other than those properly filed with the ICC. Prior to 1980, the filing of interstate motor carrier tariffs with the ICC was a routine process except in those rare cases in which a shipper protested that the filed rate was too high. In this period of regulated rates, a collectively set tariff was filed with the ICC by the Motor Carrier Rate Bureau on behalf of a number of motor carriers, or a carrier filed its own rate with the ICC; and unless challenged (an infrequent occurrence), the tariff became the effective rate.
The Motor Carrier Act of 1980 (the Act) deregulated the industry and permitted price competition. However, this deregulation did not abrogate the filed tariff doctrine for the motor carrier industry. As a result, any motor carrier holding ICC certificates continues to be required to file its interstate tariffs with the ICC to make the tariffs effective. A failure to file a tariff means that the previously-filed tariff rate continues to be in effect.
After the deregulation of the motor carrier industry, motor carriers engaged in price cutting measures in order to attract traffic in the newly-competitive environment. In doing so, many motor carriers contracted with shippers in a fashion illustrated by the following...