## Facts

- Yellow Transportation, Inc., an interstate motor carrier headquartered in Kansas, operated vehicles registered in multiple states and traveled in Michigan.
- Before ISTEA, interstate motor carriers used an ICC-administered “bingo card” system under which participating states could charge annual registration fees up to $10 per vehicle and could enter reciprocity agreements to discount or waive fees for certain out-of-state carriers.
- Michigan participated in the pre-ISTEA system and, in 1990–1991, waived certain fees for Yellow’s vehicles because of reciprocity arrangements.
- ISTEA directed the ICC to replace the bingo card system with the Single State Registration System (SSRS) and to cap each participating state’s fee at an amount equal to the fee the state “collected or charged as of November 15, 1991,” not to exceed $10 per vehicle.
- The ICC interpreted ISTEA’s fee-cap provision to forbid states from terminating or modifying existing reciprocity agreements in a way that increased the fee “collected or charged” as of November 15, 1991.
- Michigan revised its reciprocity policy to depend on a carrier’s principal place of business; because Yellow was headquartered in Kansas, Michigan imposed a $10 per-vehicle fee on Yellow’s fleet for the 1992 registration year.
- Yellow paid under protest and sought a refund for fees on vehicles that had been fee-exempt under Michigan’s reciprocity practice as of the 1991 baseline date.

## Issues

1. Whether the ICC permissibly construed ISTEA’s fee-cap provision to incorporate the effects of preexisting reciprocity agreements into the “fee ... collected or charged as of November 15, 1991.”
2. Whether courts must defer to the ICC’s interpretation, requiring states to refrain from renouncing or altering reciprocity in ways that increase the capped baseline fee.
3. Whether Michigan could rely on a “generic” nominal fee schedule, ignoring reciprocity, to determine the ISTEA-capped fee.

## Decision

- The Supreme Court unanimously reversed the Michigan Supreme Court and remanded.
- The Court held that the ICC’s interpretation of ISTEA’s fee-cap provision was a permissible construction and binding on state courts.
- The Court rejected Michigan’s view that only a generic nominal fee, without regard to reciprocity, determines the “fee ... collected or charged” as of November 15, 1991.
- Justice Stevens concurred in the judgment.

## Legal Principles

- When a federal statute is ambiguous and an implementing agency adopts a reasonable interpretation within its delegated authority, courts must defer to that interpretation.
- Under ISTEA’s SSRS fee-cap provision, “fee ... collected or charged as of November 15, 1991” may be understood to reflect the operative fee burden as implemented in practice, including reductions or waivers produced by reciprocity agreements in place on the baseline date.
- A participating state may not terminate or modify preexisting reciprocity arrangements in a manner that increases fees above the ISTEA baseline as construed by the ICC.

## Conclusion

The Court required Michigan to apply ISTEA’s SSRS fee cap as interpreted by the ICC, including the continuing effect of 1991 reciprocity arrangements, and ruled that Michigan could not increase capped fees by changing reciprocity rules while characterizing the baseline as a nominal generic charge.


Yellow Transportation, Inc. v. Michigan, 537 U.S. 36 (2002)