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Supreme Court of Pennsylvania.
PROGRESSIVE CASUALTY INSURANCE COMPANY, Appellant
v.
Blanche M. HOOVER and James E. Hoover, her Husband, Loren J. Druist, Wayne S.
Hursh, Marbec Trucking Company, Marvin SenseniG t/d/b/a Marbec Trucking
Company, and K.B.S., Inc., Appellees.
Justice SAYLOR.
This appeal requires us to consider, for purposes of determining the effect
of an interstate commerce endorsement appended to a commercial vehicle liability
insurance policy, whether a tractor_trailer was engaged in interstate commerce
when it collided with another vehicle.
The accident occurred in November, 1995, in Forward Township, Allegheny
County; the tractor_trailer involved was dispatched by Appellee Marbec Trucking
Company, leased from Appellee Wayne S. Hursh, and driven by Loren J. Druist. In
a civil action commenced in Allegheny County against Marbec, Hursh, Druist, and
others, Appellees Blanche M. and James E. Hoover averred that Druist failed to
observe a traffic signal, causing the truck to strike the automobile driven by
Mrs. Hoover, who sustained serious injuries. Marbec's insurer, Appellant
Progressive Casualty Insurance Company, filed the present declaratory judgment
action naming the parties to the underlying action as defendants and seeking a
judicial determination concerning its obligations under the policy issued to
Marbec.
Progressive's base policy covered vehicles scheduled within the declaration
pages, which did not include Hursh's truck. Nevertheless, in connection with
Marbec's federal certification to conduct interstate operations, the business
had also obtained from Progressive an "Endorsement for Motor Carrier
Policies of Insurance for Public Liability under Sections 29 and 30 of the Motor
Carrier Act of 1980." [FN1] Commonly referred to as an "MCS_90"
or "interstate commerce endorsement," this rider required Progressive
to pay a final judgment recovered against its insured "resulting from
negligence in the operation, maintenance or use of motor vehicles subject to the
financial responsibility requirements of Sections 29 and 30 of the [MCA]
regardless of whether or not each motor vehicle is specifically described in the
policy." Since Sections 29 and 30 of the MCA pertained to certain matters
involving interstate commerce, see infra note 8, the endorsement was
therefore implicated in relation to Hursh's truck only to the extent that it was
operated, pursuant to the Marbec lease, in furtherance of interstate commerce.
FN1. P.L. 96_296, 94 Stat. 793 (July 1, 1980) (the "MCA")
(amending various provisions interspersed throughout Title 49 of the United
States Code).
Progressive and the Hoovers filed cross_motions for summary judgment to
vindicate their respective views concerning the application of the MCS_90 and,
in particular, to resolve whether the shipment at issue was interstate or
intrastate in character. According to Progressive, because Hursh's tractor_
trailer was transporting its cargo between two points within Pennsylvania, it
was necessarily engaged exclusively in intrastate commerce. Appellees' position
was that the carriage via Hursh's truck represented merely the final leg of a
continuous, interstate shipment, since the truck's contents previously had moved
between states. To further contextualize the question, the parties attached to
their submissions transcripts from deposition testimony adduced from parties and
witnesses.
The cargo involved was distiller's grain, a byproduct of the production of
ethanol used as a feed additive for dairy cattle. The shipment derived from an
order placed approximately one month prior to the accident by the Pennsylvania
Agricultural Commodities Marketing Association, Inc. ("PACMA"), a
grain broker, [FN2] with the Jesse Stewart Co. ("Jesse Stewart"), a
grain wholesaler that sells primarily to feed mills in Pennsylvania. PACMA
requested to purchase fifteen truckloads of the grain, or approximately 345
tons. Jesse Stewart's usual practice was to wait until it had accumulated enough
orders to warrant the purchase of a bargeload (1,000 to 1,500 tons) of
distiller's grain, and then arrange for a barge to transport the commodity from
the producer's Illinois distillery to a storage facility owned and operated by
Clairton Slag in West Elizabeth, Allegheny County, Pennsylvania. [FN3] There,
Clairton Slag unloaded, stored, and loaded grain onto trucks at Jesse Stewart's
expense, with some trucks being commissioned by Jesse Stewart for delivery to
its customers and others by the customers themselves. In the case of customers,
including PACMA, making their own arrangements for land transportation, title to
the grain transferred upon loading at the Clairton Slag facility.
FN2. PACMA, formerly a cooperative, is now a privately held merchandiser
of grain and feed ingredients, with three rail_to_truck transfer facilities,
two warehouses, and a headquarters in Palmyra, Dauphin County, Pennsylvania.
FN3. Portions of Jesse Stewart's purchases were also based upon
predictions about its customer needs or prospective sale in the "spot
market."
When purchasing quantities of distiller's grain, Jesse Stewart's intention
was to have the product move through the storage facility to customers as
quickly as possible. A bargeload apparently remained in the facility for seven
to fifteen days on average. [FN4] Although it appears that an order such as that
placed by PACMA would aid in prompting Jesse Stewart toward purchasing a
bargeload, a representative of the company testified that it would have done so
only in the context of an overall buying strategy, not in the sense that the
quantity ordered by PACMA could be traced to a particular bargeload (the storage
facility could hold approximately one and one_half bargeloads). Moreover, the
depositions do not reflect knowledge on the part of Jesse Stewart of the
ultimate destination of the relevant portion (one of fifteen truckloads) of the
distiller's grain. This destination was Kreider's Feed Mill in Loysville, Perry
County, Pennsylvania (PACMA's customer), with PACMA arranging for the
transportation with Marbec as the carrier. The timing of the lodging of the
order of Kreider's Feed Mill with PACMA is also not clear. [FN5]
FN4. A substantial portion of the deposition testimony presented is
couched in generalizations and approximations. For example, the seven_to_
fifteen day reference derived from the testimony of a Jesse Stewart
representative as follows:
Q: How long generally__you say you want to move [distiller's grain] as
quickly as you can__how long generally do bargeloads remain at Clairton Slag
from the time that they are off_loaded until they are ultimately transported
out?
A: We load anywhere from one to two barges per month, so they might last,
you know, I don't know, anywhere from like 7 to 15 days.
See also infra note 5.
FN5. A PACMA representative testified that "[g]enerally speaking in
the distillers trade [PACMA would] buy four or five loads at a time, and
then [would] turn around and sell them as the market__as the need
[arose]." At the time of his deposition, he was unable to provide more
specific information with regard to the Kreider's Feed Mill order.
Based on the above, the common pleas court denied Progressive's motion for
summary judgment and granted the Hoovers', noting that even though the route of
a shipment may be entirely within a single state (here, West Elizabeth to
Loysville, Pennsylvania), the shipment may nevertheless be part of a larger,
continuing movement in interstate commerce. See Texas v. United States,
866 F.2d 1546, 1553 (5th Cir.1989). The common pleas court explained that
whether a particular shipment is interstate or intrastate depends upon the
essential character of the commerce__the primary determinant of which is the
shipper's fixed, persisting intent at the time of shipment__and that all of the
circumstances surrounding the shipment at issue are to be considered in
ascertaining the shipper's prevailing intent. See Century Indem. Co. v.
Carlson, 133 F.3d 591, 595 (8th Cir.1998) (quoting Roberts v. Levine,
921 F.2d 804, 812 (8th Cir.1990)). Having implicitly identified Jesse Stewart as
the shipper, the common pleas court summarized the facts of the case and
concluded that
[clearly] this grain was moving in interstate commerce. When Jesse Stewart
purchased the grain from [the producer] in Illinois, its ultimate destination
had in large part been predetermined. It would ultimately be shipped to Jesse
Stewart's customers at various locations in Pennsylvania based upon
preexisting orders. The barge trip from Illinois to West Elizabeth was
intended to be only the first leg of shipment. Once the grain was unloaded
into the storage facility, it would only remain there briefly until Jesse
Stewart's customers picked it up to transport it to the final destinations
within Pennsylvania.
Thus, Jesse Stewart clearly intended that the distillers grain would move
beyond its storage facilities in West Elizabeth.
Therefore, the common pleas court determined that the MCS_90 applied and,
accordingly, directed Progressive to pay any final judgment obtained by the
Hoovers against Marbec, up to the policy limits. [FN6]
FN6. The Hoovers assert that on May 17, 2001, the non_jury trial of the
underlying action culminated in verdicts in their favor in the amounts of
$854,465 for Mrs. Hoover and $85,000 for Mr. Hoover, and that the verdicts
have not been appealed.
On Progressive's appeal, the Superior Court affirmed, applying the same focus
as the common pleas court in terms of the essential character of the commerce,
the fixed and persisting intent of the shipper, and the totality of the
circumstances surrounding the shipment. See Progressive Cas. Ins. Co. v.
Hoover, 768 A.2d 1157 (Pa.Super.2001). The Superior Court also agreed with
the common pleas court's position that Jesse Stewart was the relevant shipper,
and Jesse Stewart's intent was to move the grain as far into Pennsylvania as
barge transportation would allow, with the understanding that the product's
ultimate destination beyond the warehouse had already been determined when
PACMA's customers placed their orders. See Hoover, 768 A.2d at 1161_62.
In response to Progressive's argument that the common pleas court erred in
focusing on Jesse Stewart rather than PACMA as the shipper (since title to the
distillers grain passed to PACMA in West Elizabeth and PACMA arranged the
relevant carriage by Marbec), the Superior Court cited Middlewest Motor
Freight Bureau v. ICC, 867 F.2d 458 (8th Cir.1989), noting that in that case
the court deemed an instance of transportation between two in_state points to
have been one leg of an interstate journey without reference to the identity of
the shipper for each particular segment. See Hoover, 768 A.2d at 1162_63
(citing Middlewest, 867 F.2d at 460_61).
The Superior Court also made an assessment of the temporary storage of the
distiller's grain at the Clairton Slag facility following its journey from
Illinois. In this regard, the court distinguished decisions in which shipments
came to rest for manufacturing or processing reasons, see Hoover, 768
A.2d at 1161 (citing National Retail Transp., Inc. v. Pennsylvania Pub.
Utility Comm'n, 109 Pa.Cmwlth. 72, 530 A.2d 987 (1987)), and for maintenance
in inventory pending solicitation of customer orders, see Hoover, 768
A.2d at 1161_62 (citing Pittsburgh_Johnstown_Altoona Express (PJAX), Inc. v.
Pennsylvania Pub. Utility Comm'n, 123 Pa.Cmwlth. 237, 554 A.2d 137 (1989),
and Atlantic Coast Line R.R. v. Standard Oil Co., 275 U.S. 257, 48 S.Ct.
107, 72 L.Ed. 270 (1927)), concluding that the brief storage pending retrieval
by a pre_designated broker/customer did not disrupt the continuity of the
interstate movement. See Hoover, 768 A.2d at 1162. The Superior Court
acknowledged Progressive's accurate citation to decisions of the former
Interstate Commerce Commission (the "ICC"), applying a "two_shipper
rule" foreclosing a finding of fixed and persistent intent where multiple
shippers are involved in transportation. See id. at 1164 (citing Hays
Home Delivery Serv., Inc., MC_C_30219, 1994 WL 665958 (ICC Nov. 15, 1994)
(articulating the precept that "when the initial shipper (in interstate or
foreign commerce) is different from the second shipper (which only distributes
the merchandise or products involved within a single State) there can be no
fixed and persisting intent, for there is no one shipper in a position to
manifest that intent with respect to both legs of the shipment")). [FN7] It
nonetheless found such reasoning to be in conflict with applicable decisions of
federal courts and inconsistent with the central focus on the essential
character of the transportation. See Hoover, 768 A.2d at 1164.
FN7. The ICC was abolished as of January 1, 1996, via the ICC Termination
Act of 1995, P.L. 104_88 109 Stat. 803 (1995), its responsibilities
transferred to the Department of Transportation and its newly created
Surface Transportation Board, see id. at ¤ 201, 109 Stat. at 932_34,
and various statutory provisions deriving from the MCA revised and
renumbered. Pursuant to a savings provision, however, Congress expressly
prescribed that regulations issued by the ICC would "continue in effect
according to their terms until modified, terminated, superseded, set aside,
or revoked in accordance with law." Id. at ¤ 204(a), 109 Stat.
at 941; see Lynch v. Yob, 95 Ohio St.3d 441, 768 N.E.2d 1158, 1161
& n. 2 (2002). See generally Empire Fire & Marine Ins. Co. v.
Liberty Mut. Ins. Co., 117 Md.App. 72, 699 A.2d 482, 491_92 (1997)
(elaborating on the effects of the ICC Termination Act). While the
regulatory scheme has changed substantially since the time of the accident
involving the Hoovers, see generally The Munitions Carriers Conference,
Inc. v. United States, 147 F.3d 1027, 1029 (D.C.Cir.1998), it appears
that ICC interpretations retain some continuing validity pursuant to the
savings provisions or otherwise. See generally El Conejo Americano of
Texas, Inc. v. Department of Transp., 278 F.3d 17, 19 (D.C.Cir.2002)
(observing that "[t]he Department of Transportation ... recognized,
pursuant to [the] savings provision, the continuing legal vitality of ICC
decisions; it gave public notice that it interpreted the savings provision
to cover all legal documents of the ICC that were issued or granted by an
official authorized to effect such document' " (citation omitted)). The
agency's decisions are pertinent to the present case, of course, since the
ICC administered the relevant federal regulatory scheme at the time of the
accident.
Presently, the parties agree that the determination of whether Progressive's
interstate commerce endorsement mandates payment for liability on account of an
unscheduled vehicle operated for Marbec depends upon which general regulatory
scheme (federal or state) applies to the transportation, and, concomitantly, its
interstate versus intrastate character. [FN8] Both parties recognize the
mandatory nature of the interstate commerce endorsement as respects carriers
that choose to meet federal financial responsibility requirements for engaging
in commercial transportation between states by means of insurance. [FN9]
Further, they acknowledge the salutary purposes of such requirement, in terms of
fostering safety incentives for carriers and protecting against the possibility
that, by inadvertence or otherwise, some vehicles may be omitted from a policy,
to the detriment of the public. See 49 C.F.R. ¤ 387.1. See generally
Adams v. Royal Indem. Co., 99 F.3d 964, 968_69 (10th Cir.1996). [FN10]
FN8. As previously noted, the interstate commerce endorsement applies
with regard to vehicles subject to the financial responsibility requirements
of Sections 29 and 30 of the MCA, regardless of whether the vehicles are
scheduled in a policy. Section 30(a)(1) of the MCA required the Secretary of
Transportation to establish regulations mandating minimal levels of
financial responsibility pertaining to public liability, property damage,
and environmental restoration for commercial, motor transportation conducted
on an interstate basis. See P.L. 96_296 30(a)(1), 94 Stat. at 820
(codified at 49 U.S.C. ¤ 10927(a)(1) (superseded)).
FN9. In the MCA, Congress authorized the ICC to promulgate regulations
rendering lessee_carriers fully responsible to the public for the operation
of the equipment they leased. See generally Empire, 868 F.2d at 362; Rediehs
Express, Inc. v. Maple, 491 N.E.2d 1006, 1010_11 (Ind.Ct.App.1986). In
response, the ICC implemented regulations requiring that leases entered into
by ICC_licensed carriers contain a provision stating that the authorized
carrier maintain "exclusive possession, control, and use of the
equipment for the duration of the lease," and "assume complete
responsibility for the operation of the equipment for the duration of the
lease." 49 C.F.R. ¤ 1057.12(c) (superseded). Further, the ICC required
that all ICC_certified carriers maintain insurance or other form of surety
"conditioned to pay any final judgment recovered against such motor
carrier for bodily injuries to or the death of any person resulting from the
negligent operation, maintenance, or use of motor vehicles" under the
carrier's permit. 49 C.F.R. ¤ 1043.1 (superseded). The ICC developed the
MCS_90 to assure compliance with this requirement, mandating inclusion of
the endorsement in insurance policies of carriers who used leased vehicles
to transport property under ICC certificate. See 49 C.F.R. ¤ 1003.3.
FN10. Under the prior regulatory scheme, in an effort to evade
restrictions that accompanied federal regulation, some authorized carriers
adopted the practice of leasing equipment from owners who were exempt from
such regulation. See generally American Trucking Ass'ns v. United States,
344 U.S. 298, 303_04, 73 S.Ct. 307, 311, 97 L.Ed. 337 (1953); Integral
Ins. Co. v. Lawrence Fulbright Trucking, Inc., 930 F.2d 258, 261 (2d
Cir.1991) (describing the purpose of the MCA and the regulations promulgated
under it as "to stem the unregulated use of non_owned vehicles that
threatened both public safety and the vitality of the trucking
industry"). Such practice, particularly in the form of "trip
leasing" (leasing an owner_operator's vehicle for a single trip), was
inimical to the protection of the public, as the equipment of these exempt
owner_ operators was often unsafe and poorly maintained; in addition,
regardless of whether the owner_operators had adequate insurance of their
own, the agreements with the carrier_lessees designated them as independent
contractors, thereby enabling the carrier_lessees to avoid liability arising
from accidents in which the leased vehicles were involved. See Integral,
930 F.2d at 261; Empire, 868 F.2d at 362; Rediehs, 491 N.E.2d
at 1010.
Thus, as previously noted, the ICC endorsement that is the subject of
this appeal had its origin in the ICC's desire that the public be adequately
protected where a federally licensed carrier uses a leased vehicle to
transport goods pursuant to an ICC certificate. See generally Rediehs,
491 N.E.2d at 1011 ("The independent contractor concept has been
eliminated for lease arrangements under ICC regulations[;][l]iability of a
carrier is fixed as a matter of policy upon the carrier owning operating
authority in lease situations[.]").
Although Progressive thus concedes that the MCS_90 endorsement "cast[s]
a wide protective net for the motoring public," it nonetheless emphasizes
that such rider does not require an insurer to pay every judgment entered
against the motor carrier on whose behalf it is issued. While Progressive
acknowledges the common pleas court's determination that Jesse Stewart clearly
intended the distillers grain to move beyond its storage facilities in West
Elizabeth, it implies that such finding is simply irrelevant given that Jesse
Stewart was not the shipper for the West Elizabeth_to_Loysville journey. On the
same basis, Progressive discounts the significance of PACMA's apparent knowledge
that the product that it ordered was manufactured in another state; when PACMA
functioned as a shipper, Progressive contends, its only intent was to move the
product from one location in Pennsylvania to another. Progressive maintains that
the decisional law, and in particular the decisions of the ICC, reflect the
two_shipper rule without exception, and that the ICC, as the agency that was
responsible for administering the MCA, is owed deference.
The Hoovers argue that the fixed and persisting intent of both Jesse Stewart
and PACMA throughout was to cause the distillers grain to be transported by
virtually continuous movement from Peoria, Illinois, to West Elizabeth,
Pennsylvania, and from there to the location of PACMA's customer, specifically,
Loysville, Pennsylvania. That being the case, the Hoovers contend, it is
irrelevant that Jesse Stewart did not arrange the West Elizabeth_to_Loysville
leg of the journey, as the ICC's two_shipper rule should not apply where, as
here, it is evident that the party in control of the inbound shipment intended
from the start that the shipment would move beyond the storage facility in a
substantially continuous fashion. According to the Hoovers, therefore, the
common pleas court and the Superior Court properly focused on Jesse Stewart's
intent as determinative of the interstate character of the transportation.
Alternatively, the Hoovers assert that PACMA can be viewed as the initial
shipper, since, although it did not directly arrange the inbound shipment of the
distillers grain, it set the shipment in motion by placing an order for a
specific product that it knew to be manufactured in Illinois, with the intent to
have the product transported to Loysville, Pennsylvania.
As noted, the MCS_90 endorsement provides that, in consideration of the
policy premium, Progressive will pay any final judgment recovered against Marbec
for liability resulting from negligence in the operation of motor vehicles in
interstate commerce, regardless of whether the subject vehicle is listed in the
policy. [FN11] Section 203(a) of the MCA, 49 U.S.C. ¤ 303(a), defines the
term "interstate commerce," quite simply, as, inter alia,
"commerce between any place in a State and any place in another State or
between places in the same State through another State...." [FN12]
FN11. Parenthetically, we note that, as between the insured and the
insurer, all of the policy's terms, conditions, and limitations remain in
effect, and the insured agrees to reimburse the insurer "for any
payment that the [insurer] would not have been obligated to make ... except
for the agreement contained in this endorsement." Accordingly, the
MCS_90 endorsement does not constitute insurance coverage per se. See
National Am. Ins. Co. v. Central States Carriers, Inc., 785 F.Supp. 793,
795 (D.N.Ind.1992). Rather, in furtherance of the goal of protecting the
public, it extends the coverage provided by the insured's policy to any
vehicle for which the insured is responsible, regardless of policy
exclusions or the lack of active negligence on the part of the insured
itself. See 49 C.F.R. ¤ 387.1; Adams, 99 F.3d at 968; see
also Century Indem., 133 F.3d at 594; Empire, 868 F.2d at 362_63
("the ICC endorsement negates any inconsistent limiting provisions in
the insurance policy to which it is attached"). With respect to injured
third parties, then, the MCS_90 imposes on the insurer an obligation
analogous to that of a surety. See Harco Nat'l Ins. Co. v. Bobac Trucking
Inc., 107 F.3d 733, 736 (9th Cir.1997).
FN12. It should be noted that legal questions involving the breadth of
interstate commerce arise in many different statutory contexts. See
McLeod v. Threlkeld, 319 U.S. 491, 495, 63 S.Ct. 1248, 1250, 87 L.Ed.
1538 (1943) ("There is no single concept of interstate commerce which
can be applied to every federal statute regulating commerce"); Federal
Trade Comm'n v. Bunte Bros., 312 U.S. 349, 351, 61 S.Ct. 580, 582, 85
L.Ed. 881 (1941) (observing that construction of every statute regulating
interstate commerce presents "a unique problem in which words derive
vitality from the aim and nature of the specific legislation"). See
generally Swift Textiles, Inc. v. Watkins Motor Lines, Inc., 799 F.2d
697, 700_01 & n. 2 (11th Cir.1986) (noting various contexts in which the
essential_character_of_commerce test arises). Our focus here is on decisions
that turn upon the essential nature of the commerce or transportation as the
litmus.
Pursuant to the relevant decisional law, [FN13] the opinions of the Superior
Court and the common pleas court properly reflect that transportation of goods
within a single state may be deemed "interstate" in character when it
forms part of a "practical continuity of movement" across state lines
from the point of origin to the final destination. Johnsen v. Allsup's
Convenience Stores, Inc., 119 N.M. 245, 889 P.2d 853, 857 (Ct.App.1995)
(citing Walling v. Jacksonville Paper Co., 317 U.S. 564, 568, 63 S.Ct.
332, 335, 87 L.Ed. 460 (1943)). As noted, the interstate versus intrastate
determination hinges upon an assessment of the essential character of the
commerce, manifested by the shipper's fixed and persisting intent at the time of
the shipment, and ascertained from all of the circumstances attending the
transportation. See United States v. Erie R.R. Co., 280 U.S. 98, 102, 50
S.Ct. 51, 53, 74 L.Ed. 187 (1929). See generally Swift Textiles, 799 F.2d
at 700_01 (noting that an " 'intent' inquiry ... underlies all modern
interstate commerce analysis"). Relevant circumstances include, in
particular, the presence (or absence) of certain indicia of "through
carriage" such as through billing; storage_in_transit tariff provisions;
uninterrupted movement; continuous possession by the carrier; unbroken bulk; and
absence of processing or substantial product modification. See Texas v.
United States, 866 F.2d at 1556; Georgia Textile Mach., Inc. v. Federal
Express Corp., 252 Ga.App. 594, 556 S.E.2d 845, 849_50 (2001). Courts
frequently caution, however, that no particular factor is, in and of itself,
determinative. [FN14] The determination is, instead, to be based upon the
practical realities of the transportation at issue. See Northwest Terminal
Elevator Ass'n v. Minnesota Pub. Util. Comm'n, 576 F.Supp. 22, 25
(D.Minn.1983) (citing Swift & Co. v. United States, 196 U.S. 375,
398, 25 S.Ct. 276, 280, 49 L.Ed. 518 (1905)), aff'd, 725 F.2d 80 (8th
Cir.1984).
FN13. Federal law governs the operation and effect of ICC_mandated
endorsements. John Deere Ins. Co. v. Nueva, 229 F.3d 853, 856 (9th
Cir.2000), cert. denied, 534 U.S. 1127, 122 S.Ct. 1063, 151 L.Ed.2d
967 (2002); see also Harco Nat'l Ins., 107 F.3d at 735; Canal Ins.
Co. v. First Gen. Ins. Co., 889 F.2d 604, 610 (5th Cir.1989), modified
on other grounds, 901 F.2d 45 (5th Cir.1990).
FN14. See Texas & New Orleans R.R. Co. v. Sabine Tram Co., 227
U.S. 111, 33 S.Ct. 229, 57 L.Ed. 442 (1913) (observing that a shipment's
"mere accidents," such as bills of lading or passage of title, are
not controlling); see also Swift Textiles, 799 F.2d at 699. See
generally North Carolina Utilities Comm'n v. United States, 253 F.Supp.
930, 934 (E.D.N.C.1966) ("The general import of the decisions is that
isolated factors are themselves not controlling, but that enough single
factors added together to manifest an overall intent that goods be shipped
in interstate or foreign commerce will bring the commerce within the federal
domain."); United States v. Majure, 162 F.Supp. 594, 598
(S.D.Miss.1957) ("The intent of the shipper is to be ascertained from
the 'bundle of circumstances' that surrounds the movement.").
While these guiding principles are readily stated, their application has
proved to be less straightforward. [FN15] Indeed, during its tenure, the ICC
attempted to reformulate the relevant test on multiple occasions. [FN16]
FN15. See generally Kreider Truck Service, Inc. v. Augustine, 76
Ill.2d 535, 31 Ill.Dec. 802, 394 N.E.2d 1179, 1181_82 (1979) ("The
problems confronted in determining whether an activity constitutes
interstate or intrastate commerce are ... perplexing ... and produce
uncertainty [.]"); Texas v. United States, 866 F.2d at 1548
("Shippers, truckers, state regulators, and federal agencies have
litigated ... wrangles over 'hub_and_spoke' distribution systems for at
least sixty years." (citations omitted)); Webb v. Athens Newspapers,
Inc., 999 F.Supp. 1464, 1471 (M.D.Ga.1998) ("subtle factual
differences highlight how slender is the reed on which the applicability of
[an exemption pertaining to truckers engaged in interstate commerce] may at
times rest"); Policy Statement__ Motor Carrier Interstate
Transportation__From Out_Of_State Through Warehouses to Points In Same
State, 8 I.C.C. 470, 473_74 (1992) (noting that "challenges [to ICC
jurisdiction] persist despite an unbroken string of Commission, Federal
Court and Supreme Court decisions explaining the difference between
interstate and intrastate trucking services provided within a single
State").
FN16. Compare, e.g., Ex Parte No. MC_48, Determination of Jurisdiction
Over Transportation of Petroleum Products Transported Within A Single State,
71 M.C.C. 17 (1957) (citing as primary manifestations of a shipper's intent:
the absence of a specific order being filled for a specific quantity at the
time of the shipment; the character of the terminal storage facility as a
distribution point or local marketing facility; and the arrangement of
further transportation only after sale or allocation from storage), with
Policy Statement, 8 I.C.C. at 473_74 (reimplementing a totality
evaluation and enumerating salient factors). See generally Roberts,
921 F.2d at 811_12; California Trucking Ass'n v. ICC, 900 F.2d 208,
212 (9th Cir.1990) ("The agency appears to have recharacterized the
applicable test").
In a substantial line of decisions, courts and regulators have considered
whether two phases of transportation, one which crosses state borders and
another that does not, should be regarded as a single, interstate venture, or as
comprised of separate interstate and intrastate components. In many of these
cases, the intrastate leg occurs first, for example, where a seller transports
his goods to a port or other distribution point for export. [FN17] The seminal
decision of the United States Supreme Court in Sabine, 227 U.S. at 112,
33 S.Ct. at 229, is illustrative, as it concerns shipments made to the seaboard
for export, holding that such shipments were to be treated as residing in
foreign commerce from the time that their movement to their foreign destination
commenced, and that the character of the shipment was not affected by such
incidents of transportation as intrastate billing, reconsignment, reshipment at
port, or processing in transit. See id. at 127, 33 S.Ct. at 234. [FN18]
FN17. See, e.g., Champlain Realty Co. v. Town of Brattleboro, Vt.,
260 U.S. 366, 43 S.Ct. 146, 67 L.Ed. 309 (1922); Sabine, 227 U.S. at
111, 33 S.Ct. at 229; Ohio RR. Com'n v. Worthington, 225 U.S. 101, 32
S.Ct. 653, 56 L.Ed. 1004 (1912); Century Indem., 133 F.3d at 591; Burlington
Northern, Inc. v. Weyerhaeuser Co., 719 F.2d 304 (9th Cir.1983); Southern
Pacific Transp. v. ICC, 565 F.2d 615 (9th Cir.1977); State Corp.
Comm'n v. Bartlett and Co., Grain, 338 F.2d 495 (10th Cir.1964); ICC
v. Columbus and G. Ry. Co., 153 F.2d 194 (5th Cir.1946); Texas v.
Anderson, Clayton & Co., 92 F.2d 104 (5th Cir.1937); Northwest
Terminal, 576 F.Supp. at 22; Farmers Union Cooperative Marketing
Ass'n v. State Corp. Comm'n, 302 F.Supp. 778 (D.Kan.1969); Dallum v.
Farmers Co_operative Trucking Ass'n, 46 F.Supp. 785 (D.Minn.1942); State
v. Roberts, 344 N.W.2d 407 (Minn.1984); State v. Berg, 106 Ohio
App.3d 596, 666 N.E.2d 646 (1995).
FN18. See also Champlain Realty, 260 U.S. at 376_77, 43 S.Ct. at
149; Worthington, 225 U.S. at 111, 32 S.Ct. at 657; Anderson,
Clayton, 92 F.2d at 107; Northwest Terminal, 576 F.Supp. at 25
(describing transportation of grain from country elevators to river
terminals in Minnesota as the "first leg of a large and constantly
recurring course of interstate commerce"); Bartlett, 338 F.2d at
498_ 99; Farmers Union Cooperative, 302 F.Supp. at 784; Dallum,
46 F.Supp. at 788 ("The movements of the goods by the defendant and
other carriers was [sic] done in the performance of a preconceived intention
to transport said goods to interstate destinations."); Roberts,
344 N.W.2d at 410_11. But see Coe v. Errol, 116 U.S. 517, 6 S.Ct.
475, 29 L.Ed. 715 (1886); Burlington Northern, 719 F.2d at 310; Southern
Pacific Transp., 565 F.2d at 621; Columbus and G. Ry., 153 F.2d
at 196.
Although the front_end cases yield differing results depending upon the
particular facts and circumstances involved, courts and regulators have remained
especially circumspect in cases in which the intrastate leg of the
transportation occurs after interstate travel followed by some pause in the
voyage, for example, at a warehouse or distribution point. [FN19] For example,
in an early decision, the United States Supreme Court expressed the following dictum
regarding such "back_end" cases:
FN19. See, e.g., Atlantic Coast Line, 275 U.S. at 257, 48 S.Ct. at
107; Merchants Fast Motor Lines v. ICC, 5 F.3d 911 (5th Cir.1993); Roberts,
921 F.2d at 804; California Trucking, 900 F.2d at 208; Middlewest,
867 F.2d at 458; Texas v. United States, 866 F.2d at 1546; Swift
Textiles, 799 F.2d at 697; Baird v. Wagoner Transp. Co., 425 F.2d
407 (6th Cir.1970); Galbreath v. Gulf Oil, 413 F.2d 941 (5th
Cir.1969); Long Beach Banana Distributors v. Atchison, Topeka & Santa
Fe Railway Co., 407 F.2d 1173 (9th Cir.1969); Shew v. Southland
Corp., 370 F.2d 376 (5th Cir.1966); Johnsen, 889 P.2d at 853.
The mere fact that cars received on interstate movement are reshipped by
the consignee, after a brief interval, to another point, does not, of course,
establish an essential continuity of movement to the latter point. The
reshipment, although immediate, may be an independent intrastate movement. The
instances are many where a local shipment follows quickly upon an interstate
shipment and yet is not to be deemed part of it, even though some further
shipment was contemplated when the original movement began. Shipments to and
from distributing points often present this situation, if the applicable
tariffs do not confer reconsignment or transit privileges.
Baltimore & Ohio South_Western Railroad Co. v. Settle, 260 U.S.
166, 173_ 74, 43 S.Ct. 28, 31, 67 L.Ed. 189 (1922). A particular concern has
been expressed that carriers should not be subject to unreasonable uncertainties
in identification of the character of a shipment and, correspondingly, the
controlling regulatory framework. [FN20] Moreover, the ICC had noted that
shipments from a distribution point following an interstate movement are often
deemed a separate intrastate movement if the applicable tariffs do not confer
reconsignment or transit privileges. See Armstrong World Indus., Inc., 2
I.C.C.2d 63, 69 (1986), aff'd, State of Texas v. I.C.C., 866 F.2d at
1546; see also Boyd v. United States, 275 F. 16, 18 (4th Cir.1921)
("When goods moving in interstate commerce reach their ultimate
destination, and are reconsigned from that destination on a new contract of
shipment to some other point in the same state, the last movement is not
interstate." (citations omitted)); Frito_Lay, Inc. v. Wisconsin Labor
and Indus. Review Comm'n, 95 Wis.2d 395, 290 N.W.2d 551, 556_57
(Ct.App.1980), aff'd, 101 Wis.2d 169, 303 N.W.2d 668 (1981). Indeed, in a
number of earlier cases in which back_leg transportation within a single state
was deemed part of a larger interstate movement there were elements of fraud or
subterfuge on the part of a shipper or carrier attempting to manipulate tariff
rates or regulation. See, e.g., Settle, 260 U.S. at 173_74, 43 S.Ct. at
31 (refusing to find that a pause in transportation destroyed its interstate
character, where the shipper admitted that the stoppage was solely for the
purpose of taking advantage of local tariff rates). See generally Rush Common
Carrier Application, 17 M.C.C. 661, 677 (1939) (citing cases).
FN20. For example, in Gulf, Colorado & Santa Fe Railway Co. v.
Texas, 204 U.S. 403, 27 S.Ct. 360, 51 L.Ed. 540 (1907), the Supreme
Court stated:
In many cases it would work the grossest injustice to a carrier if it
could not rely on the contract of shipment it has made, know whether it was
bound to obey the state or Federal law, or, obeying the former, find itself
mulcted in penalties for not obeying the law of the other jurisdiction,
simply because the shipper intended a transportation beyond that specified
in the contract. It must be remembered that there is no presumption that a
transportation when commenced is to be continued beyond the state limits,
and the carrier ought to be able to depend upon the contract which it has
made, and must conform to the liability imposed by that contract.
Id. at 414, 27 S.Ct. at 363.
Nevertheless, in applying the essential character of the commerce assessment,
with particular emphasis on the shipper's fixed and persisting intent, back_end
situations are sometimes deemed to entail interstate transportation in the
absence of misconduct. See, e.g., Jacksonville Paper, 317 U.S. at 568, 63
S.Ct. at 335 ("The entry of the goods into the warehouse interrupts but
does not necessarily terminate their interstate journey[;][a] temporary pause in
their transit does not mean they are no longer 'in commerce' within the meaning
of the Act."). While generalizations in this arena are likely to
bemisleading, the placement of orders of the ultimate customer on a pre_shipment
versus post_arrival basis is frequently referenced as a substantial factor in
distinguishing interstate from intrastate commerce situations. See Murray v.
Briggs, 569 So.2d 476, 480 (Fla.App. 5 Dist.1990) ("Unquestionably, a
factor to take into account in determining the 'fixed and persisting intent' of
the shipper is whether, at the time the transportation commenced, a specific
interstate destination for the shipment was definitely planned." (citations
omitted)). [FN21] Along these lines, one court offered the following assessment:
FN21. Compare Klitzke v. Steiner Corp., 110 F.3d 1465, 1470 (9th
Cir.1997); Shew, 370 F.2d at 378, 380 (holding shipments from a
distribution point supplied by out_of_state shipments made pursuant to
preexisting orders were interstate in character); Beggs v. Kroger Co.,
167 F.2d 700, 703 (8th Cir.1948) (holding that interstate shipments to a
warehouse/distribution point through to same_state retail outlets retained
their interstate character, where the warehouse "was merely a
convenient instrumentality for the division of the shipments coming to it
and the continuation of the movement of each part to the retail
stores"); Georgia Textile, 556 S.E.2d at 850 ("Delivery of
goods to customers is often a multi_step process involving temporary
interruptions, and the simple fact that the transit is temporarily
interrupted does not mean that the shipment is no longer part of a
'continuous movement.' " (citation omitted)); Johnsen, 889 P.2d
at 859 ("if the halt in the movement of goods is a convenient
intermediate step in the process of getting them to their final destination,
they remain in commerce until they reach it"); Berg, 666 N.E.2d
at 646; Murray, 569 So.2d at 480 (transportation of "inventory
items to customers is usually not considered 'interstate commerce' for
purposes of the MCA"), with Atlantic Coast Line, 275 U.S. at
268, 48 S.Ct. at 110 (holding that intrastate transportation of imported oil
from coastal storage facilities to bulk stations constituted intrastate
commerce).
As a practical matter of business, any time a shipper moves products to a
terminal his ultimate intent is that they be distributed among various
consumers at various consuming points. If this is the only intention, the
interstate journey ordinarily ends at the terminal. However, if, at the time
he moves products to a terminal his present intention is that they merely be
put through the terminal on their way to specific consumers at specific
consuming points the interstate journey does not end until the products reach
those consumers at those points.
Majure, 162 F.Supp. at 601 (finding unitary interstate transportation
in a single_shipper, back_end paradigm involving through movement to specific
consuming points to be interstate); see also Beggs, 167 F.2d at 704
(holding that warehouse distributions to company_owned stores constituted
interstatecommerce, since, inter alia, the company knew at the time
out_of_ state shipments to the warehouse commenced that the shipments were bound
for its retail stores); Shew, 370 F.2d at 380_81 (finding interstate
commerce in the case of shipments from a company distribution point supplied by
out_of_ state shipments made pursuant to preexisting orders from company
branches). [FN22]
FN22. Corollary to its two_shipper rule, discussed further infra,
the ICC has expressed the view that this factor is less significant in cases
in which the initial shipper controls the purchase, shipment, and sale of
the goods throughout. See May Dep't Stores Co. & Volume Shoe Corp.,
MC_C_30146, 1990 WL 287520 (I.C.C. June 7, 1990), cited in Roberts,
921 F.2d at 813_14 (citing additional ICC decisions). Accord Texas v.
United States, 866 F.2d at 1556_57 (distinguishing between cases
involving through arrangements and those that do not in terms of the
importance of the shipper's knowledge of the ultimate destination).
Moreover, knowledge of a specific destination at the outset of the
transportation also has assumed lesser significance in the front_end cases. See,
e.g., Sabine, 227 U.S. at 126, 33 S.Ct. at 234 (finding it of no
consequence that the original shipper had no knowledge of its goods once
they had been delivered to a port for export); Century Indemnity, at
598_99 (same); Northwest Terminal, 576 F.Supp. at 31; Roberts,
344 N.W.2d at 410 ("The determining circumstance is that the shipment
of the lumber to [a port for export] was but a step in its transportation to
its real and ultimate destination in foreign countries." (quoting Sabine,
227 U.S. at 126, 33 S.Ct. at 234)). See generally Murray, 569 So.2d
at 478_79 ("Different factors may be important in certain types of
cases but not in others." (citation omitted)).
The jurisprudence of the former ICC also embodied a two_shipper rule, as
Progressive emphasizes, requiring that fixed and persistent intent be found
lacking in certain instances in which multiple shippers are involved in
transportation. [FN23] While Progressive contends that such precept is absolute,
perspective on this claim may be gained by examining its derivation from the
decision of the United States Supreme Court in Atlantic Coast Line, 275
U.S. at 257, 48 S.Ct. at 107. [FN24]
FN23. Black's Law Dictionary defines a "shipper" as:
[o]ne who engages the services of a carrier of goods. One who tenders
goods to a carrier for transportation; a consignor. The owner or person for
whose account the carriage of goods is undertaken.
BLACK'S LAW DICTIONARY 1378 (6th ed.1990).
FN24. See Hays, MC_C_30219, 1994 WL 665958, at *3_4 (citing Atlantic
Coast Line in support of the two_shipper rule); Advantage Tank Lines,
Inc., 10 I.C.C.2d 64, 74 & n. 10 (1994) (same); Association of
Texas Warehousemen, 8 I.C.C.2d 476, 489 (1992) (same); Pittsburgh_
Johnstown_Altoona Express (PJAX), Inc., 8 I.C.C.2d 821, 833 & n. 10
(1990) (same); Pacific Coast Bldg. Prod., Inc., MC_C_30121, 1989 WL
237806, at *3 (ICC Jan. 6, 1989) (same); Ottawa Strong & Strong, Inc.
v. Tobler Transfer, Inc., MC_C_30076, 1989 WL 238107, at *8 (I.C.C. Mar.
1, 1989); Quaker Oats Co., 251 F.3d 170, 4 I.C.C.2d 1033, 1048_49
(1987) (explicating the view that, in Atlantic Coast Line, "[t]he
involvement of two separate shippers__the first to point of temporary
storage, the second from the point of temporary storage__broke the
continuity of the movement"), aff'd, California Trucking, 900
F.2d 208.
This case involved the transportation of petroleum products by tank steamer
from refineries in Louisiana and Mexico, owned by sellers, to storage facilities
owned by a buyer at several locations on the Florida coast. See id. at
261_66, 48 S.Ct. at 108_09. The steamers were owned and chartered by the seller;
the buyer took title to the products upon delivery. The products remained in the
storage terminals until, on the basis of consumer demand, the buyer shipped them
to bulk stations throughout the state by means of tank cars that it leased and
hauled by a railroad company over its lines. When the railroad company began
charging for the in_state shipments at interstate rates, which were higher than
the intrastate rates previously charged, on the ground that such shipments were
a continuation of the flow of interstate commerce, the buyer sought to enjoin it
from doing so. See id.
The Supreme Court agreed with the buyer that the in_state shipments were
intrastate in character. See Atlantic Coast Line, 275 U.S. at 267, 48
S.Ct. at 110. In the course of its analysis, the Court emphasized that a
reshipment of an interstate shipment could constitute interstate or intrastate
commerce, and that determining the character of such a reshipment required
"weighing the whole group of facts in respect to it." Id. at
268_69, 48 S.Ct. at 110. The "important controlling fact," according
to the Court, was that the buyer's "whole plan" was to have its oil
purchases delivered to the seaboard storage facilities to await "convenient
distribution" within the state; the buyer did not need or intend to ship
the oil to the bulk stations "by immediate continuity of
transportation." See id. at 269, 48 S.Ct. at 110_11. The Court
explained that the seaboard facilities were the natural place for a change from
interstate to intrastate transportation to occur, and that nothing in the
history of the transaction militated against such a change. The sellers intended
to transport the oil products no farther than the seaboard storage facilities,
the Court noted, and neither they nor the railroad played any part in
determining the ultimate destinations of the products. See id. at 269, 48
S.Ct. at 111.
Thus, the Atlantic Coast Line Court did not indicate that it was
establishing an inflexible two_shipper principle, but rather, reemphasized that
ascertaining the character of a particular shipment requires careful examination
of all of the surrounding circumstances. See generally Roberts v. Levine,
921 F.2d 804 at 814 (reiterating that "to focus on any one fact would
violate [the essential_character_of_commerce] standard"). Moreover, while
Progressive asserts that the ICC applied the two_shipper rule absolutely, the
ICC announced that the rule is subject to express exception in the primary
decision that Progressive cites, Hays Home Delivery. There, the ICC
indicated that its two_shipper rationale:
does not apply if the initial shipper identifies (or addresses) the
merchandise for a particular, ultimate consignee. Then the requisite fixed and
persisting intent is manifest at the time of the initial shipment, and the
transportation remains interstate or foreign commerce at least until the
merchandise is delivered to that identified consignee.
Hays Home Delivery, 1994 WL 665958, at *5 n. 6. Such exception appears
to derive from and is consistent with the necessary focus on the essential
character of the commerce and practical realities, suggesting that the ICC
itself did not intended to dispense with a totality assessment in all cases
involving two shippers. Accord Swift Textiles, 799 F.2d at 699 ("The
nature of a shipment is not determined ... by when and to whom title
passes"); Roberts, 344 N.W.2d at 410 (recognizing that "the intent
element is to be gleaned from all the surrounding facts and testimony and not
solely from the subjective intent of the original shipper"). Further,
contrary to Progressive's contention, federal courts have in fact not applied
the rule universally. See, e.g., Klitzke, 110 F.3d at 1470 (following Jacksonville
Paper in holding that "even though the [initial] shippers did not know
the goods' ultimate destinations, the orders were placed and the goods were
shipped to satisfy contracts between [the second shipper] and its customers that
specified a final place of delivery within Oregon other than the [second
shipper's] warehouse" (emphasis in original)). [FN25] Indeed,
invariable application of the two_shipper rule would facilitate potential abuses
in a manner analogous to the practice of trip leasing bred under the prior
regulatory scheme. See supra note 10. See generally Hoover, 768
A.2d at 1164 (observing that to apply the two_shipper rule in the present
circumstances "would be to permit buyers and sellers to change the nature
of interstate commerce by merely changing shippers in mid_stream").
FN25. According to our review, in the cases in which the rule has not
been followed there have been other particularly strong factors favoring the
interstate commerce determination. See, e.g., Webb, 999 F.Supp. at
1472 (finding non_fungible character of goods to constitute the strongest
evidence of the shipper's fixed and persisting intent in the circumstances
presented in a back_end, two_shipper case).
Accordingly, and at least in absence of a specific indication to the contrary
by the present federal regulators, [FN26] we will not apply the former ICC's
two_shipper rule in a talismanic fashion. Rather, we read the cases as requiring
transportation to be deemed non_continuous in the two_shipper, back_end paradigm
in absence of indicia akin to storage_in_transit tariff provisions,
reconsignment privileges, or other strong indicia of a contrary intent on the
part of the shipper arising from the outset of the transportation. Accord
Texas v. United States, 866 F.2d at 1557; Swift Textiles, 799 F.2d at
701 (concluding that "[i]t is irrelevant that the foreign and domestic legs
of the voyage are effected by different shippers or carriers" where "a
shipment of foreign goods is sent to the United States with the intention
that it come to rest at a specific destination beyond its port of discharge"
(emphasis added)); cf. Georgia Textile, 556 S.E.2d at 849_50 (noting in a
one_shipper, back_end case that, even in absence of concrete indicia of a
through shipment, "the movement of the goods may be continuous even in the
absence of such incidents where it is admitted that a shipment made to the
ultimate destination had at all times been so intended"). [FN27] Obviously
the challenge facing the regulators was to implement the public policy
underlying the MCA, while at the same time imposing some framework facilitating
greater certainty in an arena necessarily governed by ad hoc totality
assessments. Certainly, the ICC's efforts in this regard were reasonable, and
are entitled to our respect. See generally supra note 7.
FN26. The record does not reflect that any party has sought to invoke
primary jurisdiction of the present federal regulators with respect to the
instant controversy. See generally Central Freight, 899 F.2d at 417
(discussing the doctrine of primary jurisdiction in the interstate commerce
context); Middlewest, 867 F.2d at 459 (same).
FN27. As noted, in front_end cases, courts seem to attach lesser
significance to the presence of multiple shippers. See supra note 22.
But see Burlington Northern, 719 F.2d at 308_10.
The present circumstances involve a two_shipper, back_end paradigm in which
no evidence has been presented that is akin to storage_in_ transit tariff
provisions or reconsignment privileges. The proofs offered by the Hoovers are
lacking in material regards, including in terms of Jesse Stewart's (the initial
shipper's) awareness at the outset of the transportation that a portion of the
distiller's grain was bound for its ultimate destination, Kreider's Feed Mill in
Loysville, see generally Roberts, 921 F.2d at 810_11 (distinguishing Atlantic
Coast Line on the basis that it was a two_shipper case, in which the initial
shipper had no involvement with determining the commodity's ultimate
destination), or PACMA's receipt of a specific order from Kreider's Feed Mill at
or prior to such time. [FN28] While certainly the common pleas court and the
Superior Court were able to identify a number of uncontested factors that
militate in favor of their determinations, see supra, we find that the
material gaps in the deposition testimony presented, viewed in the light most
favorable to Progressive as the non_moving party, see Manzetti v. Mercy Hosp.
of Pittsburgh, 565 Pa. 471, 482, 776 A.2d 938, 944 (2001) (articulating the
applicable summary judgment standard), control, as they implicate both the
potential for a dispute regarding material factual details and a deficiency in
the Hoovers' present proofs as assessed according to the applicable authorities.
Such deficiency is particularly apparent on review of the painstaking detail
evaluated by federal courts in effectuating the essential character of commerce
assessment. Compare, e.g., Roberts, 921 F.2d at 806_09, with supra
notes 4_5. In our review, we have found no precedent, in a two_shipper case, for
rendering a matter_of_law declaration of continuous transportation in analogous
circumstances. [FN29]
FN28. Due to PACMA's identity as a commercial broker, its involvement
from the outset of the transportation, and Jesse Stewart's knowledge of
PACMA's involvement and trade from the outset, evidence of PACMA's knowledge
of an ultimate destination as of the time that the transportation commenced
in Illinois would serve as a close substitute for knowledge of the initial
shipper of an ultimate destination. See generally Farmers Cooperative,
302 F.Supp. at 782_84 (discussing the question of whose intent is properly
at issue and concluding that "[t]he authorities on this subject say
nothing to indicate that the 'continuing intent' must be that of the party
having control of the shipment at any particular point in its movement, nor
do they limit the scope of this concept to the elemental motivating factors
behind the acts of each of the initiating parties."); Southern
States Transp., Inc. v. State, 774 S.W.2d 639, 641 (Tex.1989)
(emphasizing fixed and persisting intent of the shipper, "or others for
whose benefit the shipment is made").
FN29. The Superior Court's citation to Middlewest, 867 F.2d at
458, would appear to be the decision most favorable to Appellees' position,
as it appears to involve a back_end paradigm, in which the ICC found the
relevant transportation to be part of continuous interstate transportation.
Nevertheless, it is not clear from the decision that two shippers were
involved, and, indeed, there are indicia to the contrary in the underlying
decision of the ICC. See, e.g., Matlack, Inc., No. MC_C_ 10999, 1989
WL 98610, at *4 (I.C.C. June 1, 1987) (concluding that "[h]ere, the
record demonstrates that [the shipper's] intent is to ship not to [its
distribution terminal] but to its customers"), aff'd, Middlewest,
867 F.2d at 458. Moreover, the circumstances entailed a situation in which
"the vast majority of shipments involve[d] supply contracts and other
sales arrangements entered into prior to the shipment, [such that the
shipper] knows, in almost all cases, the final destination from the moment
the shipment leaves its out_of_state origin." Matlack, 1989 WL
98610, at * 4; see also id. at *5 (contrasting Atlantic Coast Line
on the ground that "[h]ere, by contrast, it is clear that [the shipper]
intends the chemicals to continue their movement through the storage
facilities for delivery to known customers"). In this case, the
circumstances involve consignment to an intermediary broker, PACMA, with no
demonstrated knowledge on the part of Jesse Stewart or PACMA of the ultimate
destination as of the commencement of the shipment at its out_of_state
origin in Illinois.
Central Freight, also cited by Appellees, is not directly on point,
since it is a single_shipper case, and involved the use of storage_in_
transit provisions. See Central Freight, 899 F.2d at 420 ("A
storage_ in_transit tariff may effectively convert what would otherwise be a
separate movement into part of a through interstate movement by tying
movements together into a continuing service." (citations omitted)).
Indeed, Central Freight expressly distinguished, in terms of their
interversus intrastate character, shipments picked up by the shipper's
designated carrier from those concerning which transportation is arranged by
customers themselves. See Central Freight, 899 F.2d at 422.
While we conclude that the common pleas court erred in granting summary
judgment in the Hoovers' favor, we discern no error in the common pleas court's
refusal to enter judgment for Progressive on the record presented.
Significantly, in its summary judgment submissions made to the common pleas
court, Progressive did not identify the controlling standard in terms of the
essential character of the commerce measured with reference to the shipper's
fixed and persisting intent and assert an insufficiency of the Hoovers' proofs
in this regard. Rather, Progressive merely argued that, since it was undisputed
that the shipment via Hursh's truck occurred entirely within Pennsylvania, the
MCS_90 was inapplicable as a matter of law. See R.R. at 496a_515a. As
elaborated above, however, this analysis is misleading in its failure to
confront the controlling question of whether and to what degree the interstate
and intrastate phases of the transportation of the distiller's grain should be
deemed interrelated within the well_established framework for such inquiry.
Since, just as the record presented does not establish that the movement of
distiller's grain was continuous, it also does not definitively establish
non_continuous transportation, Progressive's motion was properly denied on the
merits of the argument presented.
In summary, we find the record presented insufficient to establish, as a
matter of law, the character of the shipment via Hursh's truck. Accordingly, the
order of the Superior Court is reversed and the matter remanded to the common
pleas court for further proceedings consistent with this opinion.
Chief Justice ZAPPALA concurs in the result.
Copyright 2003, Schindel, Farman, Lipsius, Gardiner & Rabinovich LLP
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