Copyright — and Wrong — in Tariff Filing

Q: Your June 13 and July 18, 2011, columns request views regarding enforceability of National Motor Freight Classification provisions that a non-participating carrier has incorporated into its transportation contract. Having been general counsel to the National Motor Freight Transportation Association for many years, I have considered this issue for some time. I generally agree with your assessment that the imported provisions would apply.

Until the mid-1990s, the “filed rate doctrine” required motor common carriers to file their rates and classifications with the former Interstate Commerce Commission. As you indicated, in Security Services v. Kmart, 511 U.S. 431 (1993), the Supreme Court determined the filed rate doctrine required common carriers who relied on such collectively filed rates and classifications to establish participation with the involved bureaus.

When Congress repealed the filed rate doctrine, it enacted 49 U.S.C. Section 13703 to retain antitrust immunity for collective rate-making. The participation requirement was codified in 49 U.S.C. Section 13703(f), which required that motor carriers relying on “publications established under agreements approved under this section must participate in the determining or governing publication for such provisions to apply.”

A decade later, in its May 7, 2007, decision in Ex Parte No. 656, the STB disapproved the Section 13703 rate-making agreements of 11 motor carrier bureaus to withdraw the antitrust immunity shielding their collective activities. By eliminating these “agreements approved under this section,” the STB nullified the Section 13703(f) requirement that carriers must participate in such agreements.

You alluded to suggestions that the participation requirement is now found in the copyright law so that carrier participation in copyrighted publications is necessary before courts will allow application of the publications in contracts or bills of lading. There is no evidence Congress enacted the participation requirement to overlap existing copyright protection or the copyright law has somehow expanded to fill the gap left by nullification of that requirement.

Assuming for the sake of argument that copyright infringement could have some application to the matter at issue, it would depend on a number of factors and issues not normally considered in analyzing violations of Section 13703(f).

For example, the NMFC is a complex document with thousands of provisions derived from a variety of sources over three-quarters of a century. While the specific provisions to which your original writer referred weren’t identified, it would be important to determine whether these provisions are even covered by copyright. In past litigation alleging infringement of the NMFC, it was determined that many — perhaps most — of the thousands of provisions within that publication were in the public domain. Some were never copyrighted, the copyrights on others may have been registered but not renewed in a timely manner, while other classification provisions weren’t the work product of motor carriers but rather copied from the railroad tariffs.

Even if the provisions at issue were among those that could be protected by a copyright, these provisions are published in a freight classification guide (the NMFC) that the carrier purchased from the copyright owner. It could be argued the carrier’s use of the contractual provisions was authorized under the so-called fair use exception of the copyright law.

Finally, with regard to compensation for shipments transported under contract, even if application of classification provisions was barred by some technicality, depending on the equities and the language of the contract, the carrier may still be able to rely on the doctrine of quantum meruit.

Quantum meruit is an equitable remedy that would prevent the unjust enrichment of a party if it received a benefit and did not pay for it when fairness requires that payment be made. In such cases, courts may imply a quasi contract to avoid an unjust result. Of course, that determination couldn’t be made based on the facts we now have.

Thanks for the opportunity to comment on this significant issue.

William W. Pugh
Falls Church, Va.

A: And that, I think, concludes the dialogue I initiated on this subject.

Bill and I have corresponded often over the four decades I’ve written this column. We haven’t always agreed, but I’ve invariably found his comments intelligent, insightful and valuable.

This time we do — agree, I mean. And for me this pretty well settles the matter. Such a contract, as I’ve maintained all along, is enforceable.

Consultant, author and educator Colin Barrett is president of Barrett Transportation Consultants. Send your questions to him at 5201 Whippoorwill Lane, Johns Island, S.C. 29455; phone, 843-559-1277; e-mail, Contact him to order the most recent 351-page compiled edition of past Q&A columns, published in 2010.

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