S. Furniture Leasing, Inc. v. YRC, Inc.

989 F.3d 1141

SOUTHERN FURNITURE LEASING, INC., Plaintiff - Appellant,

v.YRC, INC.; Roadway Express, Inc.; Yellow Transportation, Inc.; YRC Worldwide, Inc., Defendants - Appellees.

No. 19-3262

United States Court of Appeals, Tenth Circuit.

FILED March 3, 2021

Eric D. Barton, Wagstaff & Cartmell, LLP, Kansas City, Missouri (Nicholas W. Armstrong, Price Armstrong, LLC, Birmingham, Alabama, with him on the briefs), for Plaintiff – Appellant.

Stephen L. Hill, Jr. (Jacqueline M. Whipple with him on the brief), Dentons US LLP, Kansas City, Missouri, for Defendants – Appellees.

Before MATHESON, McHUGH, and EID, Circuit Judges.

McHUGH, Circuit Judge.

Southern Furniture Leasing, Inc. ("Southern Furniture") filed this putative class action against a group of less-than-truckload ("LTL") freight carriers, all predecessors to or current subsidiaries of YRC, Inc. ("YRC"). Southern Furniture's allegation is that YRC "carried out a widespread and systematic practice of overcharging its customers by intentionally using inflated shipment weights when determining shipment prices." App. 8.

YRC asks that we affirm on the alternate ground that Southern Furniture failed to allege Article III standing. The district court rejected YRC's standing argument, and we agree with its analysis.

The district court granted YRC's motion to dismiss on the grounds that Southern Furniture had only 180 days to contest the alleged overcharges under 49 U.S.C. § 13710(a)(3)(B). We agree with the district court's interpretation of § 13710(a)(3)(B) and therefore affirm.

I. BACKGROUND

A. Factual History

YRC is an LTL carrier. This means that YRC "consolidate[s] shipments that do not themselves constitute a full trailer to transport and deliver, generally for manufacturing and retail businesses." App. 18.

A business that wants to contract with YRC for shipping must use its pre-printed two-page form contract, where the only blank terms are for the customer's contact information and the weight of the shipment. The two-page contract "provides that the weight entered is ‘[s]ubject to correction,’ and that ‘[i]f the description of articles or other information on this bill of lading is found to be incorrect or incomplete, the freight charges must be paid based upon the articles actually shipped.’ " App. 18 (alterations in original).

YRC does not always rely on a customer's weight estimate when it assesses charges. Rather, the industry standard is for YRC to charge based on actual weight if it reweighs the shipment in question.

If the actual weight is greater than the customer's weight estimate, that is a "positive reweigh." App. 19. Conversely, if the actual weight is less than the customer's weight estimate, that is a "negative reweigh." App. 19.

Starting in September 2005, YRC eliminated negative reweigh corrections, resulting in overcharges. YRC did not, however, inform its customers about its revised reweigh policy.

In December 2018, the Department of Justice unsealed a qui tam complaint that revealed YRC's reweighing scheme. Only then did Southern Furniture learn that YRC had been overcharging its customers.

B. Procedural History

On March 8, 2019, Southern Furniture filed a complaint for damages and injunctive relief in the District of Kansas against YRC, Roadway Express, Yellow Transportation, and YRC Worldwide. YRC then filed a motion to dismiss.

The district court had not yet ruled on YRC's motion when Southern Furniture filed an amended complaint. The amended complaint alleged (1) breach of contract; (2) breach of the duty of good faith and fair dealing; (3) unjust enrichment; and (4) violations of the Florida Deceptive and Unfair Trade Practices Act.

YRC again moved to dismiss. Specifically, YRC argued that Southern Furniture had failed to comply with § 13710(a)(3)(B). In addition, YRC argued that Southern Furniture lacked Article III standing, that Southern Furniture had failed to plead the minimum amount in controversy, and that Southern Furniture had failed to state a plausible claim.

On October 31, 2019, the district court granted the motion to dismiss and entered judgment in favor of YRC. The district court first rejected YRC's standing and amount-in-controversy arguments. With respect to standing, the district court determined that Southern Furniture's amended complaint alleged a concrete injury based on overcharges for shipments. And with respect to the amount in controversy, the district court determined that Southern Furniture's amended complaint alleged an injury to the putative class far in excess of the $5,000,000 amount set forth in the Class Action Fairness Act.

Next, the district court determined that Southern Furniture's alleged overcharges were governed by and did not comply with the 180-day limit set forth in § 13710(a)(3)(B). Moreover, the district court refused to toll the 180-day period because—in its view— § 13710(a)(3)(B) supplies a statute of repose, not a statute of limitations. Having found in YRC's favor under § 13710(a)(3)(B), the district court expressly declined to address the other arguments raised in YRC's motion to dismiss. Southern Furniture timely filed a notice of appeal.

II. DISCUSSION

On appeal, Southern Furniture argues the district court erred in dismissing its amended complaint for failure to state a claim. Specifically, Southern Furniture contests the district court's conclusion that § 13710(a)(3) ’s time limit applies to this case. YRC argues the time limit does apply and additionally invites us to affirm on the alternate ground that Southern Furniture lacks standing. We address standing, then the adequacy of the allegations in Southern Furniture's amended complaint. We review both issues de novo. See Niemi v. Lasshofer , 770 F.3d 1331, 1344 (10th Cir. 2014) ; Georgacarakos v. United States , 420 F.3d 1185, 1186 (10th Cir. 2005).

A. Standing

YRC argues that Southern Furniture's amended complaint is so vague as to the details of Southern Furniture's dealings with YRC that it fails to allege an injury in fact. We disagree.

The Constitution extends the "judicial Power" only to "Cases" and "Controversies." U.S. Const. art. III, § 2. To establish a case or controversy, a plaintiff must possess standing to sue. See Spokeo, Inc. v. Robins , ––– U.S. ––––, 136 S. Ct. 1540, 1547, 194 L.Ed.2d 635 (2016). "The plaintiff must have (1) suffered an injury in fact, (2) that is fairly traceable to the challenged conduct of the defendant, and (3) that is likely to be redressed by a favorable judicial decision." Id. "To establish injury in fact, a plaintiff must show that he or she suffered ‘an invasion of a legally protected interest’ that is ‘concrete and particularized’ and ‘actual or imminent, not conjectural or hypothetical.’ " Id. at 1548 (quoting Lujan v. Defs. of Wildlife , 504 U.S. 555, 560, 112 S.Ct. 2130, 119 L.Ed.2d 351 (1992) ).

"At the pleading stage, general factual allegations of injury resulting from the defendant's conduct may suffice." Defs. of Wildlife , 504 U.S. at 561, 112 S.Ct. 2130. "However, ‘[t]hreadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice.’ " COPE v. Kan. State Bd. of Educ. , 821 F.3d 1215, 1221 (10th Cir. 2016) (alteration in original) (quoting Ashcroft v. Iqbal , 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) ).

We agree with the district court that Southern Furniture has alleged an injury in fact. The amended complaint alleges that, "[l]ike thousands of other small businesses across the country, [Southern Furniture] contracted with YRC to ship goods pursuant to a standard, pre-printed bill of lading." App. 9. Under that contract, the price "was based in part upon weight on multiple occasions." App. 11. When YRC eliminated negative reweighs, Southern Furniture "pa[id] more for shipments than [it] should have." App. 20–21. From those allegations it is reasonable to infer that Southern Furniture contracted with YRC after 2005 but before 2018, i.e. , during the period when YRC had secretly eliminated negative reweighs. See Iqbal , 556 U.S. at 678, 129 S.Ct. 1937 ("A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged."). These allegations are therefore sufficient to plausibly claim an injury in fact at the pleadings stage.

B. Section 13710(a)(3)

The statute at issue in this appeal— 49 U.S.C. § 13710, "Additional billing and collecting practices"—has an odd history. It was first enacted as part of the Trucking Industry Regulatory Reform Act of 1994 ("TIRRA"), Pub. L. 103-311, § 206, 108 Stat. 1673, 1685. Then it was re-enacted as part of the Interstate Commerce Commission Termination Act of 1995 ("ICCTA"), Pub. L. 104-88, § 103, 109 Stat. 803, 877–78.

Today, § 13710(a)(3) resides in a subsubsection of the "Additional billing and collecting practices" statute titled "Billing Disputes," which is itself nestled within a subsection titled "Miscellaneous provisions." It provides:

(A) Initiated by motor carriers.—

In those cases where a motor carrier (other than a motor carrier providing transportation of household goods or in noncontiguous domestic trade) seeks to collect charges in addition to those billed and collected which are contested by the payor, the carrier may request that the Board¹ determine whether any additional charges over those billed and collected must be paid. A carrier must issue any bill for charges in addition to those originally billed within 180 days of the receipt of the original bill in order to have the right to collect such charges.

(B) Initiated by shippers.—

If a shipper seeks to contest the charges originally billed or additional charges subsequently billed, the shipper may request that the Board determine whether the charges billed must be paid. A shipper must contest the original bill or subsequent bill within 180 days of receipt of the bill in order to have the right to contest such charges.

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