Burlington Truck Lines, Inc. v. United States
371 U.S. 156 (1962)
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Rule of Law:
An administrative agency abuses its discretion when it selects a broad, disruptive remedy, such as granting a new operating certificate, without providing findings or a rational basis to justify its choice over other available, more narrowly tailored remedies like a cease-and-desist order.
Facts:
- A group of twelve small, non-union motor carriers in Nebraska (the 'stockholder carriers') interchanged freight with larger, unionized trunk-line carriers.
- The Teamsters Union, attempting to unionize the stockholder carriers, initiated a secondary boycott to apply economic pressure.
- Leveraging 'hot cargo' clauses in their collective bargaining agreements, union members at the trunk-line carriers began refusing to handle freight interchanged with the non-union stockholder carriers.
- This refusal by many trunk-line carriers to interchange traffic led to a substantial disruption of shipping services for the public in Nebraska.
- In response to the boycott, the stockholder carriers formed a new corporation, Nebraska Short Line Carriers, Inc. ('Short Line').
- Short Line then applied to the Interstate Commerce Commission (ICC) for a certificate of public convenience and necessity to operate as a new common carrier, effectively bypassing the boycotting carriers.
Procedural Posture:
- Nebraska Short Line Carriers, Inc. filed an application with the Interstate Commerce Commission (ICC) for a common carrier certificate.
- The ICC hearing examiners recommended denying the application.
- The full Commission rejected the examiners' recommendations and granted the application in part.
- Protesting carriers and the Teamsters Union (appellants) sought judicial review of the ICC's order in a three-judge U.S. District Court for the Southern District of Illinois.
- The District Court upheld the ICC's order.
- Appellants filed a direct appeal to the U.S. Supreme Court against the ICC and Nebraska Short Line Carriers, Inc. (appellees), and the Court noted probable jurisdiction.
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Issue:
Does the Interstate Commerce Commission (ICC) abuse its discretion by granting a new common carrier certificate to remedy a service disruption caused by a secondary boycott, without first adequately considering less drastic remedies and without articulating a rational basis for its choice?
Opinions:
Majority - Mr. Justice White
Yes. The Interstate Commerce Commission abuses its discretion when it fails to provide a reasoned analysis for choosing the sweeping remedy of new certification over a more direct remedy, such as a cease-and-desist order. The disruption in service resulted solely from the trunk-line carriers' refusals to serve, which stemmed from union pressure; the existing carriers were otherwise adequate. The Commission failed to make findings justifying its choice, articulate any rational connection between the facts and the remedy selected, or address the shortcomings of alternative remedies. Under the Administrative Procedure Act and the principles of SEC v. Chenery Corp., a court cannot uphold an agency's discretionary order on post hoc rationalizations offered by counsel; the decision must stand or fall on the reasoning articulated by the agency itself. Furthermore, an intervening change in law—the passage of § 8(e) of the National Labor Relations Act outlawing 'hot cargo' clauses—fundamentally altered the circumstances and should have been considered by the reviewing court.
Concurring-in-part-and-dissenting-in-part - Mr. Justice Black
Yes. The order should be set aside, but the case should not be remanded for further proceedings. The ICC had no power to grant a permanent certificate because the issue was fundamentally a labor dispute within the exclusive jurisdiction of the National Labor Relations Board. The ICC's action was an impermissible encroachment on the NLRB's domain. The subsequent congressional enactment of § 8(e) outlawing hot cargo agreements has rendered the original dispute moot, and any future violations should be handled by the NLRB, not the ICC.
Concurring - Mr. Justice Clark
Yes. The grant of a permanent certificate is a drastic remedy that should only be used in compelling circumstances. The District Court should have vacated the ICC's order and remanded the case for reconsideration after Congress enacted § 8(e) of the NLRA. This new law raised serious questions about the legality of the union's 'hot cargo' pressures and thus the likelihood of any continued service disruption, potentially mooting the entire issue.
Concurring - Mr. Justice Goldberg
Yes. The ICC must act with a 'discriminating awareness' of the consequences of its actions, which in this case required rejecting additional certification in favor of a limited cease-and-desist order. Granting a new certificate involved the Commission too deeply in a labor dispute, trenching on the Labor Board's jurisdiction. A cease-and-desist order, properly limited to requiring carriers to fulfill their public duties in a manner compatible with federal labor law, would have been an effective and appropriate remedy.
Analysis:
This decision establishes a crucial principle of administrative law, reinforcing the 'reasoned decision-making' requirement for agency action. It solidifies the rule from SEC v. Chenery Corp. that an agency's discretionary choice must be judged solely on the grounds it articulated at the time of its decision, not on later justifications. The case also underscores the need for regulatory agencies to accommodate their statutory mandates with the policies of other federal schemes, in this instance, transportation law and labor law. By requiring the ICC to justify its choice of remedy, the Court limits agency discretion and ensures that broad, market-altering remedies are not deployed when more targeted solutions are available.
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