Humboldt Express v. Apex Express

PUBLISHED

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

In Re: APEX EXPRESS CORPORATION;
HUMBOLDT EXPRESS, INCORPORATED,
Debtors.

HUMBOLDT EXPRESS, INCORPORATED,
No. 98-2204
Plaintiff-Appellee,

v.

THE WISE COMPANY, INCORPORATED,
Defendant-Appellant.

Appeal from the United States District Court
for the Western District of North Carolina, at Charlotte.
Robert D. Potter, Senior District Judge.
(CA-97-357-3-P, BK-96-3548, BK-96-30221)

Argued: May 3, 1999

Decided: September 22, 1999

Before MURNAGHAN, LUTTIG, and KING, Circuit Judges.

_________________________________________________________________

Affirmed in part, reversed in part, and remanded by published opin-
ion. Judge Murnaghan wrote the opinion, in which Judge Luttig and
Judge King joined.

_________________________________________________________________

COUNSEL

ARGUED: Raymond Andrew Selvaggio, Sr., AUGELLO, PEZOLD
& HIRSCHMANN, P.C., Huntington, New York, for Appellant.
Joseph L. Steinfeld, Jr., A.S.K. FINANCIAL, Washington, D.C., for
Appellee. ON BRIEF: George Carl Pezold, AUGELLO, PEZOLD &
HIRSCHMANN, P.C., Huntington, New York; Howard M. Widis,
Charlotte, North Carolina, for Appellant. John T. Siegler, Joseph A.
Hess, A.S.K. FINANCIAL, Washington, D.C.; A.S.K. FINANCIAL,
Eagan, Minnesota, for Appellee.

_________________________________________________________________

OPINION

MURNAGHAN, Circuit Judge:

Plaintiff Humboldt Express, Inc. ("Humboldt"), a freight trucking
corporation in bankruptcy, seeks to recover amounts allegedly owed
by Defendant The Wise Co., Inc. ("Wise"), as penalties for late pay-
ment of freight charges. This case is one of hundreds of similar suits
brought by the bankruptcy estate. After Humboldt went bankrupt, it
paid an outside firm to "mine" its computer billing records to find
long-settled accounts for which Humboldt could technically invoke
the late payment penalty provisions of its tariffs.

The bankruptcy court granted summary judgment in favor of Hum-
boldt; the district court affirmed. Both of these courts found that
Humboldt had made a prima facie showing that Wise owed the late
payment penalties and that Wise had not presented any evidence cre-
ating a genuine issue of material fact. Wise now appeals, claiming,
inter alia, that the district court used the wrong standard of review;
that a genuine issue of material fact existed; that the late payment
penalties are unreasonable; that Humboldt's claim is subject to vari-
ous equitable defenses; that the bankruptcy court should have referred
various issues to the Surface Transportation Board ("STB"); and that
Wise enjoys various statutory defenses. We affirm in part, reverse in
part, and remand for proceedings consistent with this disposition.

I.

Humboldt was a trucking company which held dual authority from
the Interstate Commerce Commission ("ICC") 1 to operate as a com-
_________________________________________________________________
1 Under the Interstate Commerce Commission Termination Act, Pub. L.
No. 104-88, 109 Stat. 803 ("ICCTA"), effective January 1, 1996, the ICC

2
mon and contract carrier. Wise manufactures seats for vehicles such
as trucks, tractors, boats and forklifts. From 1985 through the end of
1995, Wise used the services of Humboldt to transport its products.
During its relationship with Humboldt, Wise asserts that it tendered
approximately 15 to 24 shipments per month, or about 240 per year.

The rates at which Humboldt transported this freight were
expressed in terms of discounts taken off of what are commonly cal-
led "class" or "bureau" rates. These"class" rates are collectively-made
rates utilized by trucking companies as a benchmark. Wise asserts,
however, that full class rates are seldom charged to a regular cus-
tomer. Instead, each trucking company establishes discounted rates,
which are the rates that are set to meet the prevailing market rate
offered by competitors. These assertions are supported by the record,
as Humboldt generally charged Wise a rate which was enumerated as
a discount off of the class rate. During the period at issue Wise was
initially receiving a 50 percent discount off the class rates. In early
1995, Wise's discount level was increased to 55 percent.

Humboldt's governing tariff provided that if a customer failed to
pay its freight charges within thirty days, the customer would be
penalized by losing its discount:

PENALTY FOR NONPAYMENT OR
LATE PAYMENT

1. Failure to make payment of freight charges to[Hum-
boldt] for service performed as a common carrier within
thirty (30) calendar days of presentation of the Freight Bill
will result in the forfeiture of all discounts, allowances,
commodity rates, brokerage agreements, incentives or any
other reductions to which the debtor may otherwise be enti-
tled.

(J.A. at 67.) The rule goes on to provide that if no discounts are appli-
cable, Humboldt will assess a thirty percent (30%) late charge subject
_________________________________________________________________
was abolished and replaced in part by the Surface Transportation Board
("STB").

3
to a $25.00 minimum. (Collectively, the loss of discount provision
and the late payment assessment will be referred to as the "late pay-
ment penalties.")

On February 7, 1996, Humboldt filed a voluntary petition for liqui-
dation under Chapter 11 in the U.S. Bankruptcy Court for the Western
District of North Carolina. At some point, Humboldt contracted with
Trans Allied Audit Company ("Trans Allied") to collect its so-called
"accounts receivable." Trans Allied specializes in auditing freight
bills of bankrupt or otherwise defunct trucking companies. Trans
Allied has audited the books of about 100 bankrupt or otherwise
defunct carriers. Wise asserts the following about Trans Allied's prac-
tices:

Trans Allied reviews the carrier's past billing practices
looking for errors to support undercharge claims and to
"create" so-called "receivables". In other words, Trans
Allied scours the books and records of a defunct carrier . . .
looking for errors or technicalities in the trucking compa-
ny's tariffs that can be used to seek additional charges on
invoices that have long since been paid by the trucking com-
pany's former customers. Then, Trans Allied issues a bill to
the former customers of the trucking company indicating
that at the time of shipment ([often] some two or three years
ago), the trucking company failed to either charge or collect
the correct amount. This type of bill is typically referred to
as a bill for "undercharges".2

(Appellant's Br. at 9.) The facts seem to bear out Wise's description
of Trans Allied's practices. The case at bar is only one of hundreds
of cases brought by Humboldt against its former customers in the
wake of Trans Allied's audit of its accounts. Trans Allied apparently
found about $15 million in potentially collectible late payment penal-
ties and other amounts due. After Trans Allied uncovered these
amounts, Humboldt sent out dunning notices to the customers who
allegedly owed for past services. Fourteen of the fifteen late payment
_________________________________________________________________
2 Whether Humboldt's attempts to collect the late payment penalties is
an attempt to collect "undercharges" is discussed at greater length at note
23, infra.

4
penalties Humboldt attributes to Wise were well over one year old
when Humboldt began this post-bankruptcy dunning campaign in the
summer of 1996. For most of the bills sent to Wise, Wise submitted
evidence indicating that this campaign was the first attempt by Hum-
boldt to impose the late charges. When the recipients of the dunning
notices refused to pay, Humboldt began filing lawsuits in the bank-
ruptcy court. The present case was filed November 8, 1996.

In order to be able to collect late payment penalties, Humboldt had
to prove that it complied with the credit regulations at 49 C.F.R. part
1320.2(g) (1996).3 See section III, infra. To establish compliance,
Humboldt needed to show: (1) that Humboldt warned shippers of its
late payment terms when it sent out the original freight bills; (2) the
date on which original freight bills were mailed by Humboldt; (3) that
payment was not received within thirty days of presentation of the
original bill; and (4) that Humboldt mailed out a "Past Due" bill
within 90 days after the expiration of its credit period, (5) which
imposed the late payment penalty.

The first element -- whether Humboldt's freight bills warned ship-
pers of late payment penalties -- was undisputed. Wise admits that
Humboldt's freight bills contained a warning on the back which cal-
led for the possibility of a penalty for late payments.

To satisfy the remaining four elements of its prima facie case of
compliance, Humboldt relied solely on information gleaned from
Trans Allied's post hoc reconstruction of its computer billing records.
It is not clear whether Humboldt maintained contemporaneous hard-
copy records and, if so, what happened to all of such records. Trans
Allied hired James Edward Cook in May 1996 to explore Humboldt's
computer records to find the date on which original freight bills were
allegedly generated by Humboldt, the date on which Humboldt alleg-
edly received payment, and the date on which the Past Due bills were
allegedly generated by the computer. Humboldt then generated dupli-
cates of the Past Due freight bills which Humboldt had allegedly sent
_________________________________________________________________
3 Although the credit regulations also allow for service charges (i.e.,
interest) in addition to liquidated damages for late payment, see 49
C.F.R. part 1320.2(e), Humboldt has never asserted that the fees at issue
were, in whole or in part, service charges.

5
out to each of its delinquent customers. Additionally, Humboldt cre-
ated a post-hoc statement of account recreating all of the necessary
data mined from its computers. The statement of account pertinent to
the case at bar is reprinted in part below:

Past Due Chart

Billdate PD Date Billed Paiddate Paid Total Due

1 04/06/94 05/11/94 165.98 01/30/95 127.66 38.30
2 04/19/94 05/25/94 175.80 01/30/95 79.11 96.69
3 05/06/94 06/15/94 161.09 01/30/95 80.54 80.55
4 06/17/94 07/27/94 415.89 01/30/95 207.94 207.95
5 06/20/94 08/03/94 325.25 01/30/95 146.36 178.89
6 08/08/94 09/14/94 6,056.50 01/30/95 2,725.40 3,331.10
7 10/10/94 11/16/94 794.70 01/30/95 611.31 183.39
8 10/20/95 11/30/94 227.57 01/30/95 175.05 52.52
9 01/10/95 02/15/95 496.27 03/13/95 248.13 248.14
10 01/20/95 03/01/95 358.02 03/13/95 161.11 196.91
11 01/25/95 03/01/95 710.98 03/13/95 355.49 355.49
12 01/26/95 03/08/95 503.00 03/20/95 251.50 251.50
13 01/28/95 03/08/95 2,085.60 03/20/95 896.79 1,188.80
14 02/08/95 03/17/95 198.70 03/20/95 89.41 109.29
15 09/26/95 11/02/95 94.07 11/13/95 69.07 25.00
_______ _______
6244.89 6544.52

In the case at bar, Humboldt seeks to collect the $6,544.52 in
"Total Due" penalty charges for the above fifteen freight bills, which
were allegedly paid late. Humboldt alleged that it mailed fifteen origi-
nal freight bills to Wise on or about the "Billdate" dates in 1994 and
1995 identified above. These fifteen freight bills were allegedly not
paid within thirty days. Humboldt allegedly sent another, "Past Due,"
freight bill, on or about the dates in 1994 and 1995 which are identi-
fied above as the "PD Date." It is undisputed that Wise paid only the
"Paid" amount on the "Paiddate" enumerated above. Therefore, Hum-
boldt sought to collect the "Total Due" for each bill.

In response to Humboldt's claims, Wise introduced copies of the
freight bills that it allegedly actually received in connection with the
shipments at issue. Of the fifteen freight bills at issue, twelve

6
(invoices 1-8 and 12-14) are denoted in the upper right-hand corner
as "REPRINT." Wise was not able to substantiate the exact date on
which it received each freight bill, but the fax date on some of the
REPRINT bills indicates that Wise received these bills several
months after Humboldt contends they were sent.

Wise also submitted evidence that since 1988, Wise retained Allen
Traffic Service ("ATS") to pre-audit freight bills from the carriers
used by Wise. As a customary and routine business practice, Wise
accumulated all carrier freight bills received during the course of a
week and sent them to ATS on the Friday of that week or the follow-
ing Monday. ATS audited the bills to determine if the freight charges
were correct and returned them to Wise for payment within five days
from when ATS received them. A representative of ATS stated that
"[t]he only freight bills received for these[fifteen] shipments are
those [fifteen] freight bills" submitted by Wise. (J.A. at 192.) Signifi-
cantly, in only three (invoices 10, 11, and 15) of the freight bills had
Humboldt added the late payment penalty to the amount due, even
though all of the freight bills except one (invoice 14) were sent to
Wise after Humboldt's asserted "PD Date." 4

On May 28, 1997, the bankruptcy judge held a hearing on motions
for summary judgment by Humboldt and Wise and a motion by Wise
for stay and referral to the Surface Transportation Board. On June 10,
1997, the bankruptcy court granted Humboldt's motion for summary
judgment and denied Wise's motions. The bankruptcy court denied
Wise's motion for reconsideration on June 13, 1997. Wise timely
filed a notice of appeal of this decision.

The district court affirmed the bankruptcy court's order on June 17,
1998. The district court held that Humboldt had fulfilled its prima
facie case and Wise had presented no evidence competent to create
a genuine issue of material fact. The district court also agreed that
referral to the Surface Transportation Board was not necessary. Wise
timely filed a notice of appeal of this decision.
_________________________________________________________________

4 It is unclear when invoice 9 was sent to Wise.

7
II.5

A.

The district court followed the bankruptcy court in holding that the
present proceeding was in the nature of an attempt to collect accounts
receivable and so is a "core" proceeding within the meaning of 28
U.S.C.A. §§ 157(b)(2)(A), (E), and (O) (West 1993).6 What is at stake
is the proper standard of review applicable to the bankruptcy court's
factual determinations. If the proceeding is a core proceeding, the dis-
trict court correctly reviewed the bankruptcy court's factual determi-
nations for clear error and its legal conclusions de novo. Fed. R.
Bankr. P. 8013. See also In re Johnson, 960 F.2d 396, 399 (4th Cir.
1992). If the proceeding is non-core, the district court should have
undertaken a de novo analysis of both the factual findings to which
Wise objected and the law. See 28 U.S.C.A.§ 157(c)(1) (West 1993).
See also In re Johnson, 960 F.2d at 399.
_________________________________________________________________

5 Wise has not urged in its briefs before this Court several arguments
that it raised before the bankruptcy and district courts including, inter
alia, that Humboldt was required to establish the postmark date on which
it sent out the various bills under 49 C.F.R. part 1320.4(c) (1996); that
Humboldt's late payment penalties are void as against public policy; that
Humboldt's record keeping did not comply with ICC regulations; that
Humboldt aggregated its late payment bills in violation of 49 C.F.R.
part 1320.2(g)(2)(iii); that the Federal Aviation Administration Authori-
zation Act of 1994 preempts Humboldt's attempts to enforce its late pay-
ment penalties; that Humboldt's late payment provisions did not apply to
the shipments at issue; and that Wise was entitled to summary judgment
on the intrastate claims. Therefore, we do not address those issues. See
Canady v. Crestar Mortgage Corp., 109 F.3d 969, 973-74 (4th Cir.
1997) (issues raised in notice of appeal but not briefed on appeal deemed
waived).

6 Core proceedings include, but are not limited to: "(A) matters con-
cerning the administration of the estate; . . . (E) orders to turn over the
property of the estate; . . . (O) other proceedings affecting the liquidation
of the assets of the estate or the adjustment of the debtor-creditor . . .
relationship, except personal injury tort or wrongful death claims." 28
U.S.C.A. § 157(b)(2) (West 1993).

8
We disagree with the district court and the bankruptcy court that
Humboldt's claim is a core proceeding. In Northern Pipeline Con-
struction Co. v. Marathon Pipe Line Co., 458 U.S. 50 (1982), the
Supreme Court struck down portions of the Bankruptcy Act of 1978
as violative of Article III of the Constitution. See Northern Pipeline,
458 U.S. at 87. The chief basis for the plurality opinion was that the
Bankruptcy Act of 1978 allowed non-article III courts (i.e., bank-
ruptcy courts) to hear claims based upon state-created private rights
that arose independent from and antecedent to the bankruptcy pro-
ceedings and involved strangers to the bankruptcy action. See id. at
84 (plurality opinion). In the wake of Northern Pipeline, Congress
enacted the core/non-core distinction to try and remedy the defects in
the bankruptcy system. See Bankruptcy Amendments and Federal
Judgeship Act of 1984 (1984 Act), Pub. L. No. 98-353, 98 Stat. 333
(1984).

The distinction between what is "core" and what is "non-core" is
far from clear. On the one hand, a broad reading of the literal terms
of the statutory text could lead to the result that courts treat just about
every dispute as "core." See, e.g. , 28 U.S.C.A. § 157(b)(2)(A)
("matters concerning the administration of the estate"); § 157(b)-
(2)(O) ("Other proceedings affecting the liquidation of the assets of
the estate"). But, the statute must be interpreted keeping in mind (1)
that Congress passed it in response to the defects revealed by
Northern Pipeline, and (2) that Northern Pipeline remains good law,
even if perhaps narrowed by subsequent decisions, see Thomas v.
Union Carbide Agric. Products Co., 473 U.S. 568 (1985); Commodity
Futures Trading Comm'n v. Schor, 478 U.S. 833 (1986).

Courts are split on whether "accounts receivable" claims against
strangers to the bankruptcy proceeding and other litigation based on
pre-petition contract-based rights are core or non-core. The bank-
ruptcy court followed In re Wilson Feed Co., Inc., 142 B.R. 123
(Bankr. E.D. Va. 1992); In re Leco Enterprises, Inc., 125 B.R. 385
(S.D.N.Y. 1991); In re Allegheny, Inc., 68 B.R. 183 (Bankr. W.D. Pa.
1986); In re National Equipment & Mold Corp., 60 B.R. 133 (Bankr.
N.D. Ohio 1986), in holding that Humboldt's claim was a core pro-
ceeding. See also In re American Freight System, Inc., 164 B.R. 341
(D. Kan. 1994); In re Bingham Systems, Inc., 139 B.R. 809 (Bankr.
N.D. Miss. 1991); In re Total Transp., Inc., 87 B.R. 568 (D. Minn.

9
1988). These courts reason that "accounts receivable" actions are core
because they represent estate assets, often a substantial portion of
such assets, and therefore their prompt resolution concerns the admin-
istration of the estate under § 157(b)(2)(A), and affects liquidation of
the estate under § 157(b)(2)(O). See, e.g., In re Leco Enterprises, 125
B.R. at 389-90; In re Franklin Computer Corp. , 60 B.R. 795, 802
(Bankr. E.D. Pa. 1986). Further, requiring the bankruptcy trustee to
litigate such claims in state court would impose an administrative bur-
den on the bankruptcy estate. See, e.g. , In re Wilson Feed Co., 142
B.R. at 126. The courts also view accounts receivable claims to be
"turnover" claims under § 157(b)(2)(E), because they believe that
accounts receivable are property of the estate which is due, payable
on demand, and for a sum certain within the meaning of a "turnover"
proceeding under 11 U.S.C.A. § 542(b) (West 1993). These courts
view the § 542(b) rights of trustees to pursue mature debts to be "a
traditional type of proceeding which is at the core of a bankruptcy."
In re Best Refrigerated Express, Inc., 132 B.R. 420, 421 (Bankr. D.
Neb. 1991).

We think the better approach is that such claims, at least when
grounded in state law and arising pre-petition, must be treated as non-
core.7 A majority of courts have taken this approach. See, e.g., Beard
v. Braunstein, 914 F.2d 434, 444-445 (3rd Cir. 1990); In re Orion
Pictures Corp., 4 F.3d 1095, 1102 (2nd Cir. 1993); In re Pisgah Con-
tractors, Inc., 215 B.R. 679 (W.D.N.C. 1995); In re National Enter-
prises, Inc., 128 B.R. 956, 960 (E.D. Va. 1991); In re Maislin Indus.,
U.S., Inc., 50 B.R. 943, 948-950 (Bankr. E.D. Mich. 1985)); In re
Mec Steel Buildings, Inc., 136 B.R. 606, 610 (Bankr. D.P.R. 1992);
In re United Security & Communications, Inc., 93 B.R. 945, 957
(Bankr. S.D. Ohio 1988) ("clear majority, and better-reasoned, view"
is to treat pre-petition accounts receivable as non-core); In re Tobler
Transfer, Inc., 74 B.R. 373, 375 (Bankr. C.D. Ill. 1987). We also note
that without analysis this Court has referred to similar claims as non-
core proceedings. See In re Bulldog Trucking, Inc., 66 F.3d 1390,
1392-93 (4th Cir. 1995). The primary reason for our holding is that
such claims fall squarely under the dictates of Northern Pipeline.
Congress may not force non-consenting claimants whose claims are
_________________________________________________________________
7 When a creditor files a claim with the bankruptcy court, though, she
has consented to its jurisdiction.

10
based on state-created private rights into non-Article III courts. See
Northern Pipeline, 468 U.S. at 70-72, 77, 81-84.

Further, the logic used by the courts which would treat "accounts
receivable" and other basically contract claims as "core" proves too
much. The main justification supplied by these courts is that because
the accounts receivable are in some sense the property of the bank-
ruptcy estate, and because the outcome of the claim will affect the
bankruptcy estate (by altering its size), then the claims are "core."
See, e.g., In re Leco Enterprises , 125 B.R. at 389-90; In re Franklin
Computer Corp., 60 B.R. at 802. But, under this logic any claim
involving a potential money judgment would be considered core, even
the precise contract claim at issue in Northern Pipeline. Thus, the
rationale used by these courts would swallow the rule established by
Northern Pipeline. See In re Orion Pictures , 4 F.3d at 1102 (to treat
pre-petition contract claims as core proceedings under §§ 157(b)-
(2)(A) or (O) "creates an exception to Northern Pipeline that would
swallow the rule.").

Finally, we believe that the courts treating pre-petition contract-
based claims as "core" proceedings pay insufficient attention to the
public rights/private rights distinction which was a key aspect of
Northern Pipeline. See Northern Pipeline, 458 U.S. at 69-72, 77 (plu-
rality opinion). Cf. also Granfinanceria, S.A. v. Nordberg, 492 U.S.
33, 53-55 (1989) (dealing with Seventh Amendment jury trial right;
stating analysis is the same for Article III and Seventh Amendment
jury trial rights and re-affirming importance of public rights/private
rights distinction in the analysis). But cf. Thomas, 473 U.S. at 585-86
(public rights/private rights distinction not determinative for Article
III purposes). The Court in Northern Pipeline observed that "the
restructuring of debtor-creditor relations, which is at the core of the
federal bankruptcy power" is a public right. Northern Pipeline, 458
U.S. at 71 (plurality opinion). Because the public right nature of bank-
ruptcy proceedings gives Congress the power to assign judicial func-
tions to non-Article III bankruptcy courts, the core/non-core
distinction should depend upon the connection the claim has to this
public right. The type of dispute at issue only has some theoretical
and indirect impact on the public act of debt restructuring. But, the
dispute itself is entirely separate and entirely private -- the contract-
based liability between two private parties. See id. at 69-70 (plurality

11
opinion) (citing Crowell v. Benson, 285 U.S. 22, 51 (1932)). The res-
olution of the present private right dispute is hardly at the core of
restructuring debtor-creditor relationships. To be faithful to Northern
Pipeline, we must treat such a private rights dispute as a non-core
matter.

The present case is complicated because while Humboldt's claim
is fundamentally contractual in nature, the governing law is federal
not state. Northern Pipeline indicated that Congress has greater lee-
way in assigning resolution of federally-created rights, even private
rights, to non-Article III tribunals. See Northern Pipeline, 458 U.S. at
81-84 (plurality opinion). We believe, however, that the federal nature
of the dispute involved is only incidental to the question being dis-
cussed. First, the Supreme Court stated in Schor that "there is no rea-
son inherent in separation of powers principles to accord the state law
character of a claim talismanic power in Article III inquiries." Schor,
478 U.S. at 852. See also 28 U.S.C.A. § 157(b)(3). We think the same
can be said for the federal law character of a claim. Second, the issue
here is not whether Congress could assign a dispute over interstate
freight billing to a non-Article III tribunal; the question is whether
Congress assigned such a dispute to a non-Article III tribunal under
the language of 28 U.S.C.A. § 157(b)(2). We conclude that the
answer to the latter question is clear. Section 157(b)(2) defines "core"
and "non-core" without reference to the federal or state nature of the
right. A pre-petition state-based contract claim and a pre-petition
federal-based contract claim stand in the same position vis-a-vis the
statutory language of § 157(b)(2) and vis-a-vis the core public rights
function of bankruptcy courts. There is thus no reason to treat the
claim at issue any different than a pre-petition state-based contract
claim.

B.8

Thus, the bankruptcy and district courts erred in holding that the
_________________________________________________________________
8 Because we conclude that the bankruptcy court's factual findings
were clearly erroneous, our disposition of the above issue is not crucial
to the remainder of our decision. It will, however, affect the district
court's review on remand.

12
proceeding was a core proceeding, and the district court therefore
erred in applying the incorrect standard of review.

Because this was a motion for summary judgment and we have
before us all of the facts developed below, rather than remanding to
the district court so that it can conduct a de novo factual analysis, we
undertake that de novo analysis in the first instance.

III.

Pursuant to Rule 56 of the Federal Rules of Civil Procedure, a
court should grant a motion for summary judgment only if there is no
genuine issue as to any material fact and the moving party is entitled
to judgment as a matter of law. See Anderson v. Liberty Lobby, Inc.,
477 U.S. 242, 247 (1986). In deciding the motion, the court must con-
sider whether a reasonable jury could find in favor of the non-moving
party, taking all inferences to be drawn from the underlying facts in
the light most favorable to the non-movant, in this case Wise. See,
e.g., Helm v. Western Maryland Ry. Co., 838 F.2d 729, 734 (4th Cir.
1988); Anderson, 477 U.S. at 255.

Wise must set forth specific facts showing a genuine issue, and it
may do so by reference to the "pleadings, depositions, answers to
interrogatories, and admissions on file, together with the affidavits, if
any." See Fed. R. Civ. P. 56(c). Wise cannot satisfy its burden by sim-
ply showing a mere metaphysical doubt about the facts. Matsushita
Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 586
(1986).

The bankruptcy court9 held that there were no genuine issues of
material fact. First, the court found that Humboldt had fulfilled its
prima facie case against Wise. This holding by the bankruptcy court
is reasonable: Wise's discovery responses admitted receipt of the
freight bills, notice of the credit terms including the late payment pen-
_________________________________________________________________
9 The district court merely adopted the factual findings and legal con-
clusions of the bankruptcy court. Therefore, although we formally are
reviewing the district court's decision, we will frequently refer to the
bankruptcy court's decision.

13
alty, receipt of Past Due bills,10 and failure to pay the late payment
charges.

Second, the bankruptcy court held that the various affidavits and
other evidence provided by Wise were insufficient to demonstrate a
genuine issue of material fact. The bankruptcy court deemed the affi-
davit of Wise's president, James Freudenberg, to be irrelevant
because it did not indicate that Freudenberg had any personal knowl-
edge or basis for his statements and thus must have been based on
conjecture or hearsay.11 See Fed. R. Civ. P. 56(e). The court rejected
the affidavit of the contractor in charge of handling Wise's freight
billing, Bob Allen, because it allegedly "simply misse[d] the point."
The court thought that Allen's statement that Humboldt did not send
Allen the original invoices did not address whether such invoices had
been sent to Wise. Finally, the court noted that"conspicuously
absent" from Wise's submissions were any contemporaneous business
records or other evidence to support its assertions. Therefore, the
court made all of its findings in favor of Humboldt and accepted
Humboldt's re-created computer records as conclusive evidence that
Humboldt sent out the required original invoices and Past Due
invoices with late payment penalties.

We find error in the bankruptcy court's conclusion that there were
no genuine issues of material fact. We first reiterate Humboldt's bur-
den. At the time of facts giving rise to this case, carriers were allowed
to extend credit only pursuant to regulations established by the ICC.
See 49 U.S.C.A. § 10743(a), (b) (West 1995). Under the regulations
established by the ICC, Humboldt had to show (1) that it gave notice
to Wise of its late payment penalty provisions; (2) that it sent out the
_________________________________________________________________
10 Wise did admit that it had received Past Due bills. Crucially, how-
ever, Wise never admitted that these bills contained revised rates reflect-
ing that Humboldt was imposing a late payment penalty. Wise maintains
that most of the Past Due bills it received contained the original, dis-
counted rate.
11 It is worth noting that two of the three affiants for Humboldt based
the majority of their relevant statements on hearsay, not personal knowl-
edge. See Affidavit of Rodney A. Johnson, J.A. at 86-90; Affidavit of
James Edward Cook, J.A. at 92-95. The bankruptcy court never
addressed this point.

14
original freight bill; (3) that payment was not received within thirty
days of presentation of this bill; (4) that it sent out a Past Due freight
bill within 90 days after the original thirty day period had elapsed
(i.e., within 120 days of original billing); and (5) that the Past Due bill
was revised in that it imposed a late payment penalty. See 49 C.F.R.
part 1320.2(g) (1996); Interstate Commerce Commission v. Transcon
Lines, 513 U.S. 138, 148-49 (1995).12 See also, e.g., Dillard Depart-
_________________________________________________________________
12 Although both parties have assumed the applicability of Transcon to
the case at bar, we note Transcon does not dictate that Wise may raise
49 C.F.R. part 1320.2(g)(2) as a defense. See Transcon, 144-147 (declin-
ing to address "whether or not we would allow shippers to defend against
a carrier's collection action by relying on the carrier's violation of credit
regulations"). We hold, however, that a carrier must show compliance
with the regulations formerly in 49 C.F.R. part 1320.2 before it can col-
lect late payment penalties. The case which gave the Supreme Court
pause in Transcon was Southern Pacific Transp. Co. v. Commercial Met-
als Co., 456 U.S. 336 (1982). That case is distinguishable on several
bases. First, as recognized by the Supreme Court in Transcon, 513 U.S.
at 146, the defendant in Commercial Metals was seeking to enforce a
regulation which was intended to benefit the carrier. Here, Wise seeks to
enforce regulations which were intended to benefit shippers such as
Wise. Second, in Commercial Metals, to the extent that the ICC had spo-
ken on the topic, it had indicated that a defendant of the type involved
could not raise as an affirmative defense a violation of the regulation at
issue. See Commercial Metals, 456 U.S. at 345. No such pronounce-
ments exist to limit the regulations invoked by Wise. In fact, the govern-
ing law indicates that shippers should be able to challenge charges
subsequently billed by carriers. See 49 U.S.C.A. § 13710(a)(3)(B) (West
1997). And, the ICC/STB has indicated that shippers should be able to
invoke the credit regulations at issue. See, e.g., Dillard Department
Stores, Inc.--Petition for Declaratory Order--Certain Rates and Prac-
tices of P*I*E Nationwide, Fed. Carr. Cas. (CCH)¶ 38,188, 1995 WL
277124 (I.C.C. May 12, 1995) [hereinafter Dillards]. Third, regardless of
whether Wise could raise an affirmative defense, Humboldt must show
as part of its prima facie case compliance with the applicable credit regu-
lations because absent such compliance, Humboldt may not impose late
payment penalties. See 49 C.F.R. part 1320.2(g)(2)(vi) (using the manda-
tory "shall"); Transcon, 513 U.S. at 141 ("Before collecting liquidated
damages by tariff rule, however, a carrier must follow specified proce-
dural requirements." (emphasis added)); Dillards, Fed. Carr. Cas.
¶ 38,188, 1995 WL 277124.

15
ment Stores, Inc.--Petition for Declaratory Order--Certain Rates
and Practices of P*I*E Nationwide, Fed. Carr. Cas. (CCH) ¶ 38,188,
1995 WL 277124 (I.C.C. May 12, 1995).

Wise submitted evidence sufficient to create genuine issues of
material fact as to each of the last four required showings in the above
paragraph. First, Wise presented evidence tending to show that it
never received the original invoices. Freudenberg's affidavit states
outright that the original freight bills were never received by Wise.
The bankruptcy court dismissed Freudenberg's statements on the
basis of lack of foundation. See Fed. R. Civ. P. 56(e). Freudenberg,
however, was the president of a small business for 30 years. We have
held in the Rule 56(e) context that "ordinarily, officers would have
personal knowledge of the acts of their corporations." Catawba
Indian Tribe of South Carolina v. South Carolina, 978 F.2d 1334,
1342 (4th Cir. 1992). Therefore, in the absence of evidence from
Humboldt that Freudenberg was not competent to testify, we assume
that he was. See id.

We need not rely solely on Freudenberg's statement that Wise did
not receive the original invoices from Humboldt, however. Even if we
had some doubts about whether Freudenberg was competent to testify
about the receipt of fifteen specific invoices, we have no trouble
under Catawba finding Freudenberg competent to testify as to Wise's
regular invoice payment business practices. Freudenberg stated that
Wise's regular business practice since 1988 was to forward all freight
invoices received to Allen Traffic Service ("ATS"). Bob Allen, presi-
dent of ATS, submitted an affidavit confirming that Wise's routine
was to forward all freight invoices to Allen. Allen's affidavit states
that the original bills at issue were not received. The bankruptcy
court's assertion that Allen's affidavit "misses the mark" because it
deals with whether ATS received the bills rather than whether Wise
received them is itself off-target. Wise presented evidence that, in the
regular course of its business every freight invoice received by Wise
was forwarded to Allen. Thus, in the normal course of business, Allen
was the custodian of Wise's freight bills (i.e., business records)
received in its regularly conducted business activities.13 The absence
_________________________________________________________________
13 Humboldt argues that Wise's interrogatory answers, in which Wise
identified one Wilma Fulghum as "the person(s)" at Wise who served as

16
of business records can be used as evidence to prove the non-
existence of such a record. See Fed. R. Evid. 803(7). It was error,
then, for the bankruptcy court to reject Allen's testimony, especially
given that all inferences were to be drawn in Wise's favor. We think
that these two affidavits combined create a genuine issue of material
fact as to whether Humboldt actually sent Wise the original bills for
the fifteen invoices at issue.

Second, the above evidence also creates genuine issues of material
fact as to whether some of the Past Due bills were sent out within the
required 120 days. The evidence tends to show that the only bills for
invoices one through eight, see Past Due chart, supra, were sent on
January 20, 1995. Therefore, for invoices one through six, the bill,
even assuming it was a valid revised Past Due invoice, was sent after
the 120 day period had expired.

Third, Wise presented evidence indicating that Humboldt's recre-
ated statement of account is generally inaccurate. Wise submitted
copies of actual freight bills received by Wise from Humboldt regard-
ing each specific freight charge at issue.14 Twelve of the fifteen bills
at issue (invoices 1-9, 12-14), were identified as"REPRINTs." Ten
of these REPRINTs (invoices 1-8, 12-13) contain facsimile headers
indicating that they were sent to Wise by Humboldt some time after
the PD Date shown on the statement of account submitted by Hum-
boldt. This creates a genuine issue of material fact whether Hum-
boldt's post hoc computer recreations can be relied upon at all.

Humboldt seeks to explain the discrepancy in the dates by stating
that faxing of REPRINT bills was done for various purposes and was
not necessarily recorded in its computer systems. This explanation,
_________________________________________________________________

the custodian and individual responsible for freight invoice payment,
showed that neither Freudenberg nor Allen was competent to testify on
the matters in their affidavits. These interrogatory answers, however, do
not establish that no one other than Ms. Fulghum had the requisite
knowledge to testify about Wise's freight invoice practices.
14 Thus, the bankruptcy court was in error when it stated that Wise had
not submitted any contemporaneous business records. In fact, the only
contemporaneous business records submitted below came from Wise.

17
while potentially persuasive, proves the point, however -- there is a
genuine factual dispute as to the implications of the REPRINT bills.

Fourth, and most importantly, Wise submitted evidence which
tended to show that for most of the invoices at issue, Humboldt's Past
Due bills did not include the late payment penalties. Ten of the
REPRINT bills (invoices 1-8, 12-13) were sent to Wise after the date
when these bills became past due, and these bills still reflect dis-
counted freight charges (i.e., no late payment penalty was included).
Given all inferences in Wise's favor, we hold that this documentary
evidence itself creates a genuine issue of material fact at least as to
these ten bills.15

In addition to the above issues of material fact, we also note that
Wise presented evidence sufficient to create a genuine issue of mate-
rial fact with regard to whether Wise may raise equitable defenses
against Humboldt's collection of the late payment penalties.16 Both
Freudenberg and Allen's affidavits state that Wise routinely ignored
late fees and that Humboldt acquiesced in this practice. This testi-
mony was inconsistent with affidavits submitted by Humboldt's wit-
ness Baird.17

We therefore reverse the district court's grant of summary judg-
ment. The Freudenberg and Allen affidavits and Wise's copies of the
_________________________________________________________________
15 Wise also notes that the bankruptcy judge who handled the case
below has since ruled in a companion case that Humboldt was not enti-
tled to recover when the defendant produces REPRINT bills which con-
tinue to show the discounted amounts. See Humboldt v. Smith
Fiberglass, Adv. Pro. No. 96-3886, slip op. at 9-10 (Bankr. W.D.N.C.
1997). We do not pass on that issue.
16 Other aspects of such equitable defenses are discussed at section V,
infra.
17 It is worth noting that Baird's testimony was specious on the record.
Baird stated that "Wise was habitually late in paying its bills and refused
to cooperate with our demands for timely payment." (J.A. at 55.) The
record shows that, on average Wise would have tendered approximately
720 shipments during the time frame audited. Humboldt found unpaid
late payment penalties on only 15 of these -- only 2% of Wise's busi-
ness with Humboldt.

18
REPRINT bills create genuine issues of material fact as to whether
Humboldt's post hoc recreation of its billing practices was accurate.
Summary judgment is inappropriate in the face of such disputed
issues of material fact.

IV.

A.

Wise argues that, even if Humboldt had fulfilled all of the proce-
dural requirements to be able to charge Wise late payment fees, such
late payment fees would be unreasonable and unenforceable as penal-
ties rather than as liquidated damages. For support, Wise cites to the
only published case that squarely addressed the issue, Robins Motor
Transportation, Inc. v. Associated Rigging & Hauling Corp., 944 F.
Supp. 409 (E.D. Pa. 1996):

In accordance with general principles of contract law, any
award of liquidated damages [for a late payment fee] must
be reasonable. 49 U.S.C. § 13701(a)(1) (1996) ("A rate,
classification, rule, or practice related to transportation or
service . . . must be reasonable."); 49 U.S.C. § 10701 (1995)
("A rate . . . classification, rule, or practice related to trans-
portation or service related to transportation or service pro-
vided by a carrier subject to the jurisdiction of the Interstate
Commerce Commission . . . must be reasonable."); 49
C.F.R. part 1320.2(g)(1) (1995) ("Carriers may, by tariff
rule, assess reasonable and certain liquidated damages for
all costs incurred in the collection of overdue freight
charges."); Regulations for Payment of Rates and Charges--
Penalty Charges for Nonpayment, 1988 WL 224678, n.2
(Feb. 17, 1988) ("Penalty") ("The level of the [liquidated
damages] charge would, of course, be subject to review on
reasonableness grounds under 49 U.S.C. § 10701.").

Id. at 410-11 (emphases added). Wise also cites to the ICC's state-
ment made when promulgating the credit regulations allowing the
loss of discount provision that "[t]he [late payment fee] . . . should be
reasonably tied to the carrier's anticipated collection expenses." Reg-
ulations for Payment of Rates and Charges--Penalty Charges for

19
Nonpayment, 4 I.C.C.2d 340, 344, 1988 WL 224678 (April 3, 1988).
Based on the above authority, Wise argues that in order to be reason-
able and enforceable, a late penalty provision must not be a "penalty,"
but must qualify as "liquidated damages," as that term is defined in
the general common law.

Humboldt argues that Wise's arguments here are unfounded
because the general common law concepts cited by Wise are pre-
empted by federal law. See 49 U.S.C.A. § 14501(c)(1) (West 1997)
(state may not "enact or enforce a law, regulation, or other provision"
related to a price, route, or service of any motor carrier).

Humboldt misconstrues Wise's argument, however. Wise bases its
penalty-versus-liquidated damages arguments on federal common
law, not state law.18 We find Wise's arguments persuasive and adopt
the approach in Robins. In addition to the sources cited by Wise, we
also note the following support for Wise's position: The regulation
allowing for the imposition of late payment penalties refers to them
as "liquidated damages," see 49 C.F.R. part 1320.2(g)(1), thus
impliedly referencing the federal common law on liquidated damages.
The Supreme Court has also recognized that the late payment penal-
ties allowed in 49 C.F.R. part 1320.2(g) are to be treated as liquidated
damages. See Transcon, 513 U.S. at 141. Finally, the ICC/STB has
reiterated that late payment penalties must be reasonably tied to col-
lection costs. See Delta Traffic Service, Inc. v. Mennen Co., 730 F.
Supp. 1309, 1313 (D.N.J. 1990) (stating on referral that 35% loss of
discount late payment penalty was unreasonable because, inter alia,
it was not related to the carriers costs).
_________________________________________________________________

18 Wise also rejects the argument that state common law of contract
was preempted by § 14501. Cf. American Airlines, Inc. v. Wolens, 513
U.S. 219 (1995) (rejecting preemption of state common law of contract
by federal law almost identical to 49 U.S.C.A. § 14501(c)(1)). Noting
that the logic of Wolens would not necessarily apply to "binding stan-
dards of conduct that operate irrespective of any private agreement," see
id. at 229 n.5, like the anti-penalty doctrine, we decline to address this
issue.

20
B.

The courts below dismissed Wise's reasonableness/penalty claim
on the basis that Wise had presented no evidence that the late pay-
ment fees sought to be charged by Humboldt were unreasonable.
Wise submitted no evidence indicating what other carriers charged as
late payment fees. The bankruptcy court observed that "[i]t appears
from the record here (and in related cases) that discounts -- and dis-
counts of the magnitude of Humboldt's -- were common in the truck-
ing industry; that loss of discount penalties were common in the
industry; and that this was accepted practice in the industry." (J.A. at
38.)

Wise, for its part, notes the general rule that liquidated damages are
not a penalty only if such damages are "reasonable in the light of the
anticipated or actual loss caused by the breach and the difficulties of
proof of loss." Restatement (Second) of Contracts§ 356 (1981). See
also Priebe & Sons, Inc. v. United States, 332 U.S. 407, 413 (1947).
Wise asserts that it cannot seriously be questioned that the amount of
liquidated damages sought herein is grossly disproportionate to Hum-
boldt's actual damages and collection costs. The original freight
charges were $6,224, while the "late payment" charges now sought to
be collected are $6,544 -- some 105% of the cost of the service itself.

At this preliminary stage, we pay attention to what Wise contends.
The test of "reasonableness" must be evaluated through the liquidated
damages/penalty lens. Given the size of the late payment fees at issue
in relation to the original charges, we find that, without further evi-
dence, Wise has made a prima facie showing of unreasonableness.19
_________________________________________________________________
19 We agree that having comparative figures would be useful, but dis-
agree that such figures are necessary. First, we note that cases indicating
that a shipper should provide comparative rates in order to show unrea-
sonableness of the rate as a whole, see, e.g., Miller v. WD-40 Co., 29 F.
Supp.2d 1040, 1045 (D. Minn. 1998); Lewis v. Shepard's/McGraw-Hill,
Inc., 829 F. Supp. 348, 351 (D. Colo. 1993), are inapposite. We deal here
only with the reasonableness of the liquidated damages charges, not the
rate as a whole. The latter inquiry is a fairly technical one which gener-
ally requires some comparative information. The former inquiry, how-
ever does not. The penalty/liquidated damages analysis is based on the
reasonableness of the fee in light of the costs incurred by the carrier, not
in light of the costs incurred by its competitors.

21
The court's reliance on the fact that "everyone else is doing it" is
misleading. The court noted that all other carriers provide steep dis-
counts and include on their tariffs loss of discount provisions. While
everyone agrees that large discounts are routinely given, see also
Delta Traffic Service, 730 F. Supp. at 1313 (observing that since 1980
few shipments have moved at the full tariff rate), the key issue here
is whether the penalty provisions are routinely ignored. We think that
taking all inferences in Wise's favor the record indicates that it was
rare that a carrier, at least a solvent one, would actually seek to
enforce its late payment provisions.

The few cases that we could find on the subject also support Wise
at the summary judgment stage. In Robins, the court sua sponte found
that a 50% late payment collection charge was an unreasonable pen-
alty "that bears no relationship to the[ ] actual or reasonably estimated
collections costs." See Robins, 944 F. Supp. at 412. Similarly, the ICC
found in Delta Traffic Service that the loss of a 35% discount is "a
severe penalty that is not related to the cost of credit." Delta Traffic
Service, 730 F. Supp. at 1313. The case at bar involved loss of dis-
counts of between 50% and 55% (i.e., collection costs of between
100% and 122%). Collection costs of such magnitude seem to us to
be prima facie unreasonable.20

The district court and bankruptcy court also reasoned that Hum-
boldt's loss of discount provision must be presumed valid, reasonable
and enforceable as a mandate of the ICC/STB because 49 C.F.R.
part 1320.2(g)(1)(ii) allows carriers to eliminate discounts as a
method of calculating liquidated damages. This argument is question-
begging and proves too much, however. The regulation which allows
loss of discount as liquidated damages does not at all indicate whether
the amount of any particular loss of discount provision is reasonable
and enforceable. In fact, 49 C.F.R. part 1320.2(g) specifically requires
that late payment fees be "reasonable." Under the above reasoning,
absolutely any loss of discount provision would be per se reasonable.
_________________________________________________________________
20 If Humboldt's liquidated damages of 50% were stated in terms of the
annualized cost of credit, which is essentially what they are in this case,
the rate would be approximately 400% (assuming payment after 120
days).

22
That approach would read the "reasonableness" requirement out of the
regulation.

Therefore, we conclude that summary judgment was erroneously
granted against Wise's unreasonableness claim. We do not go so far
as to hold that Humboldt's late payment penalties are unreasonable,
but remand the issue to the district court for further development.

V.

Wise argues that, even if Humboldt had fulfilled the requisite pro-
cedural requirements to charge a late fee, such fees would not be
recoverable because of various equitable defenses, including waiver,
estoppel, and laches. Wise bases its claim on an unpublished case,
Moore's Trucking Co. v. National Starch & Chemical , 1994 WL
741081 (D.N.J. Sept. 27, 1994). In Moore's, the plaintiff motor car-
rier sought loss of discount late payment fees of over $216,000 on
2,025 bills. The court dismissed the claim in its entirety on waiver,
estoppel, and laches grounds based on the following facts: (1) the
motor carrier had accepted payment of the discounted amount on the
bills in question without protest; (2) the motor carrier had continued
to do regular business with the customer during the relevant time
period without indicating an intent to actually enforce the loss of dis-
count provision; (3) the motor carrier had waited between two and
four years to pursue the loss of discount provisions; and (4) the cus-
tomer had relied upon this non-enforcement insofar as the customer
could have sought out a new carrier if it had known that the motor
carrier intended to enforce the loss of discount provisions after all.
Wise asserts that Moore's is on all fours with the case at bar.

The bankruptcy court found that Moore's was distinguishable. In
particular, the court noted that the evidence showed that Humboldt
had routinely demanded payment of the loss of discount penalty and
had not waited two to four years to make its first demand for pay-
ment.

Insofar as waiver, estoppel, and laches are possible in the case at
bar,21 we believe that there is a genuine issue of material fact as to
_________________________________________________________________
21 We affirm the district court on this issue as regards the six bills that
were governed by the filed rate doctrine (invoices 1-6 on the Past Due

23
whether they apply. The crucial questions for these claims are the cru-
cial questions for the case as a whole -- did Humboldt actually send
out late payment notices and did these notices contain newly calcu-
lated charges reflecting the loss of discount. Because the bankruptcy
court's rejection of those defenses was contingent upon its erroneous
conclusion that there was no genuine issue of material fact as regards
these crucial questions, we reverse and remand, pending resolution of
the factual issues.

VI.

Wise claims that the Negotiated Rates Act of 1993, Pub. L. 103-
180, 107 Stat. 2044 ("NRA"), is applicable to the case at bar. The
NRA would provide Wise with several affirmative defenses if it were
applicable -- a small business exemption from paying Humboldt's
additional charges, see 49 U.S.C.A. § 13709(h) (West 1997); certain
statutory settlement options, see 49 U.S.C.A. § 13709(b) (West 1997);
and a per se "unreasonable practice" defense, see 49 U.S.C.A.
§ 13711(a) (West 1997 & Supp. 1999).22

Some background information on the NRA is helpful. See
generally In re Bulldog Trucking, Inc., 66 F.3d 1390 (4th Cir. 1995).
The NRA was passed in the wake of an outbreak of"undercharge"
claims filed by insolvent carriers. Under the Interstate Commerce Act
_________________________________________________________________
Chart, supra). Equitable defenses were not available to prevent collection
of a published tariff under the filed rate doctrine. See Maislin Indus. U.S.,
Inc. v. Primary Steel, Inc., 497 U.S. 116, 126-27 (1990). With the effec-
tive date of the Trucking Industry Regulatory Reform Act of 1994
("TIRRA"), the filed rate doctrine was abolished for individually deter-
mined rates. See In re Bulldog Trucking, Inc. , 66 F.3d 1390, 1393 n.4
(4th Cir. 1995) (quoting Policy Statement on the Trucking Industry Reg-
ulatory Reform Act of 1994, 10 I.C.C.2d 251 (1994)). It stands to reason
that after that time, equitable defenses became available to shippers sub-
ject to individually determined rates.
22 Because TIRRA later limited the filed rate doctrine, and the NRA
assumes the existence of the filed rate doctrine, the applicability of the
NRA is relevant only as to the claims that arose before the effective date
of TIRRA (i.e., as to invoices one through six, arising before August 26,
1994).

24
(ICA), 49 U.S.C. § 10101 et seq., all motor common carriers were
subject to the strict filed rate doctrine. This meant they had to charge,
and shippers had to pay, the officially filed rate in all circumstances.
In the 1980s Congress began to deregulate the trucking industry,
allowing individually negotiated rates. Deregulation did not, however,
repeal the filed rate doctrine. Carriers often failed to file the individu-
ally negotiated rates. Numerous bankruptcies accompanied the
deregulation initiatives. Trustees for these bankrupt carriers began to
invoke the filed rate doctrine in suits against shippers who had paid
the individually negotiated, but unfiled rate. The ICC's attempt to
treat such "undercharge"23 claims by carriers as unreasonable prac-
tices was rebuffed by the Supreme Court's confirmation of the
supremacy of the filed rate doctrine in Maislin Industries, U.S., Inc.
v. Primary Steel, Inc., 497 U.S. 116 (1990). In response to Maislin,
Congress passed the NRA to combat the undercharge phenomenon.
_________________________________________________________________
23 There is some confusion among the courts as to what constitutes an
"undercharge" dispute. All agree that an undercharge occurs when a car-
rier ignores the negotiated "off-tariff" rate and seeks to charge the filed
rate. There seems to be some disagreement, however, whether the factual
scenario at bar -- when a carrier seeks to recover late payment penalties
which it allegedly had previously not enforced -- also involves "under-
charges." The bankruptcy court held that it did not. This holding may
have been influenced, in part, by the court's erroneous view of the facts
(i.e., by the view that Humboldt had always sought to enforce the late
payment penalties). In any event, several courts have characterized the
situation at bar as one involving "undercharge" claims. See, e.g.,
Transcon Lines, 513 U.S. at 140; Lifschultz Fast Freight, Inc. v. Nat'l
Mfg. Co., 804 F. Supp. 1059, 1060 (N.D. Ill. 1992); Delta Traffic Ser-
vice, Inc., 730 F. Supp. at 1310. The ICC also calls Humboldt's post-
bankruptcy late payment collection efforts "undercharges". See, e.g.,
Dillards, Fed. Carr. Cas. ¶ 38,188, 1995 WL 277124. When all is said
and done, whether the case at bar is properly characterized as an "under-
charge" action is irrelevant for purposes of the NRA since that word does
not anywhere appear in the text of the statute. While it does appear in the
title section of 49 U.S.C.A. § 13711, "the title of a statute . . . cannot
limit the plain meaning of the text. For interpretive purposes, [it is] of
use only when [it] shed[s] light on some ambiguous word or phrase."
Brotherhood of R.R. Trainmen v. Baltimore & Ohio R. Co., 331 U.S.
519, 528-529 (1947) (citation omitted), quoted in Pa. Dept. of Correc-
tions v. Yeskey, 524 U.S. 206, 118 S. Ct. 1952, 1955 (1998). There is no
ambiguity in the text of § 13711.

25
Given this background, the courts below held that the Negotiated
Rates Act, as evident from its title and the purpose for which it was
passed, applied only to situations in which the motor carrier and the
customer negotiated a rate inconsistent with the filed tariff. All agree
that the present case does not involve "off-tariff" negotiated rates.
Humboldt is not now seeking to charge Wise a higher, filed tariff rate
in contravention of a negotiated, unfiled rate. Instead, Humboldt is
merely seeking to enforce late payment provisions that have always
been included in its filed tariff.

Although we do not agree with every aspect of the reasoning of the
courts below, we do agree that, at least as to the per se unreasonable
practice defense and the statutory settlement provisions, by its plain
terms the NRA does not apply to the factual scenario at bar. Both of
these provisions can only apply if the case involves rates which have
been specifically negotiated and which are different from the filed tar-
iff rate. See 49 U.S.C.A. § 13709(a)(1)(B) (West 1997 & Supp. 1999)
(requiring defendant to show she was offered a rate other than that
legally on file); 49 U.S.C.A. § 13711(a) and (f) (unreasonable practice
to charge the difference between legally applicable rate and the "ne-
gotiated rate"). There are no such negotiated rates in the case at bar.

Under the simple terms of the statutory subsection, the small busi-
ness exception of the NRA could still be applicable. See 49 U.S.C.A.
§ 13709(h). That provision only requires that there be a difference
between the carrier's "applicable and effective tariff rate and the rate
originally billed and paid." Id. Arguably, this situation exists in the
case at bar. The small business exception is merely a subsection of
§ 13709, however. As a whole, § 13709 deals only with off-tariff
negotiated rates. Thus, the reference to the "originally billed and paid"
rate in 49 U.S.C.A. § 13709(h) should be read in the context of the
statute as a whole to mean the originally negotiated rate. See, e.g.,
Bennett v. Spear, 520 U.S. 154, 174 (1997) (subsection should be
interpreted in context of entire statute); Branch Banking & Trust Co.
v. Fed. Deposit Ins. Corp., 172 F.3d 317, 326 (4th Cir. 1999) (court
interprets statutory language in broader context of statute as a whole).

Wise cites to legislative history indicating, and several cases and
administrative actions in which the ICC apparently held, that the
NRA unreasonable practice defense, 49 U.S.C.A. § 13711(a), was

26
applicable to loss of discount cases like the one at bar. These sources
do not change our holding. In general, legislative history only comes
into play where there is an ambiguity in the statutory language. See,
e.g., Connecticut National Bank v. Germain , 503 U.S. 249, 253
(1992) ("When the words of a statute are unambiguous, then, this first
canon is also the last: `judicial inquiry is complete.'"). Similarly,
under Chevron, U.S.A., Inc. v. Natural Resources Defense Council,
Inc., 467 U.S. 837 (1984), courts engage in a two-step analysis to
evaluate agency interpretations of statutes. Under the first step, a
court must determine whether the statute is ambiguous on the issue:
"the court, as well as the agency, must give effect to the unambigu-
ously expressed intent of Congress." Chevron , 467 U.S. at 842-43.
Here, there is no ambiguity in the text of the statute to justify the
ICC's position or a turn to legislative history.

Therefore, we affirm the district court's conclusion that the cited
portions of the NRA do not, by their terms, apply to the case at bar.
Under identical reasoning, we also affirm the district court's holding
that Wise may not seek referral to the Surface Transportation Board
based on the aforementioned provisions of the NRA.

VII.24
_________________________________________________________________
24 The bankruptcy court found that Wise had waived the right to chal-
lenge the applicability of the late payment fees for shipments moving
after August 25, 1994 (invoices 7-15 on the Past Due Chart, supra). The
court found (1) that Wise had only 180-days after receipt of the bill to
challenge these fees under 49 U.S.C.A. § 13710(a)(3)(B) (West 1997),
and (2) it was undisputed that 180 days had passed since the original bills
and subsequent Past Due bills were received by Wise at the time of the
bankruptcy hearing. Because we reject the court's view that this latter
fact is undisputed, we also reject the court's application of the 180 day
limit. There is a genuine issue of material fact whether Wise ever
received the original bills and/or Past Due bills which included the late
payment penalty. Clearly Wise could not challenge imposition of the late
payment penalties if they had never been imposed. This is an issue that
must be resolved at trial. See also National Association of Freight Trans-
portation Consultants, Inc. -- Petition for Declaratory Order, Docket
No. 41826, 1997 Fed. Carr. Cas. (CCH) ¶ 38,308, pp. 48,130-131 (STB
April 21, 1997) (shipper may still raise defenses to action to collect dam-
ages even after 180 day period has expired; 180 day period only applies
to actions initiated by shippers).

27
Finally, Wise contends that several of Humboldt's claims are
barred by the statute of limitations imposed by the Interstate Com-
merce Commission Termination Act ("ICCTA"), Pub. L. No. 104-88,
109 Stat. 803, effective January 1, 1996.

Once again, some background is helpful to resolution of this issue.
The NRA established three statutes of limitations periods relating to
claims for transportation charges. The NRA explicitly preserved the
three year limitations period for transportation services performed
prior to its effective date. NRA § 3(a), codified at former 49 U.S.C.
§ 11706(a). None of the shipments at issue occurred during that time.
It changed to two years the statute of limitations relating to transpor-
tation services provided between December 3, 1993 through Decem-
ber 2, 1994. NRA § 3(a)(1). Eight of fifteen shipments occurred
within this time period (invoices 1-8). The NRA also changed to 18
months the statute of limitations for claims relating to transportation
services provided after December 2, 1994. NRA § 3(a)(2).

The ICCTA once again altered the statute of limitations on all
actions relating to transportation services, making it 18 months. Wise
argues that the ICCTA's statute of limitations was immediately effec-
tive as against all claims. Thus, six of Humboldt's fifteen claims
(claims 1-6, originating prior to August 7, 1994) 25 are untimely under
49 U.S.C.A. § 14705(a) & (g) (West 1997). To make Wise's position
clear, under its theory, actions which would have been timely before
passage of the ICCTA (because of the two-year statute of limitations
preserved under the NRA) are time barred after its passage (because
of the 18 month statute of limitations under the ICCTA).

The bankruptcy and district courts rejected Wise's position. The
courts were persuaded principally by the constitutional concerns that
would be associated with a retroactive reduction in the statute of limi-
_________________________________________________________________
25 Because Humboldt filed for bankruptcy, it had a two year extension
of time in which to commence an action that otherwise would have been
timely had the debtor filed suit on the date when its petition in bank-
ruptcy was filed. 11 U.S.C.A. § 108(a) (West 1993). For purposes of cal-
culating the statute of limitations in this matter, the date on which
Humboldt filed its petition in bankruptcy, i.e. , February 7, 1996, was the
operative date.

28
tations. See Landgraf v. USI Film Products, 511 U.S. 244, 272
(1994); Bowen v. Georgetown University Hosp., 488 U.S. 204, 208
(1988); Chenault v. U.S. Postal Serv., 37 F.3d 535, 539 (9th Cir.
1994) ("A newly enacted statute that shortens the applicable statute
of limitations may not be applied retroactively to bar a plaintiff's
claim that might otherwise be brought under the old statutory scheme
because to do so would be manifestly unjust."). Cf. also Saint Francis
College v. Al-Khazraji, 481 U.S. 604, 608-09 (1987) (noting mani-
festly inequitable result of retroactive change in statute of limitations).
Under Landgraf, there is a presumption against retroactivity when a
statute would impair rights existing prior to the passage of the legisla-
tion; for such a statute to be given retroactive effect, it must contain
explicit language of retroactivity.26 Landgraf, 511 U.S. at 280. The
courts found that the ICCTA contained no express language and indi-
cated no clear intention to retroactively alter the limitations period for
claims which would have been valid under the NRA. Therefore, the
courts concluded that the ICCTA limitations period only operates pro-
spectively.

On that point we affirm the courts below. In the ICCTA, Congress
did not speak with the clarity required by Landgraf retroactively to
cancel previously valid claims. Accordingly, Humboldt's claims are
timely.

VIII.

To conclude this complicated case, we hold that Humboldt's suit
to collect its disputed late payment penalties is a non-core proceeding.
We hold, as well, that it was inappropriate for the district court and
the bankruptcy court to grant summary judgment when there were
genuine issues of material fact. Wise presented ample evidence creat-
ing material uncertainties with regard to Humboldt's compliance with
the requirements of 49 C.F.R. part 1320.2(g). Specifically, Wise pre-
sented evidence calling into question whether Humboldt ever pre-
sented Wise with original bills for most of the claims, whether Hum-
_________________________________________________________________
26 Under Lindh v. Murphy, 521 U.S. 320, 117 S. Ct. 2059, 2063-64
(1997), a court should also examine the statute to see if, under normal
rules of statutory interpretation, the possibility of retroactive effect is
removed.

29
boldt ever presented Wise with Past Due bills for most of the claims,
and whether Humboldt ever sought to collect late payment penalties
for most of the claims. Wise's evidence was sufficient to call into
question the validity of Humboldt's post hoc virtual recreations of its
billing practices. We also find that Wise presented evidence sufficient
to create a genuine issue of material fact as to whether some of Hum-
boldt's claims may be subject to equitable defenses and/or a defense
of unreasonableness. We reverse and remand for resolution of each of
the above issues. We affirm the district court's holding that the por-
tions of the Negotiated Rates Act invoked by Wise are not applicable
to the case at bar. We also affirm the holding that the ICCTA's new
statute of limitations does not serve to retroactively bar Humboldt's
formerly valid claims. In all other respects we affirm the district
court. The case accordingly is

AFFIRMED IN PART, REVERSED IN PART,
AND REMANDED.

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