BURLINGTON TRUCK LINES, INC., ET AL. v. UNITED STATES ET AL.
No. 27
Supreme Court of the United States
Argued October 15-16, 1962. —Decided December 3, 1962.*
371 U.S. 156
*Together with No. 28, General Drivers & Helpers Union, Local 554, International Brotherhood of Teamsters, Chauffeurs, Warehousemen & Helpers of America, v. United States et al., also on appeal from the same Court.
David D. Weinberg argued the cause and filed briefs for appellant in No. 28.
Robert W. Ginnane argued the cause for the United States et al., appellees. With him on the brief were Solicitor General Cox, Assistant Attorney General Loevinger, J. William Doolittle, Robert B. Hummel, Elliott H. Moyer and I. K. Hay.
J. Max Harding argued the cause for Nebraska Short Line Carriers, Inc., appellee. With him on the brief was Robert A. Nelson.
MR. JUSTICE WHITE delivered the opinion of the Court.
These are direct appeals under
Appellee Nebraska Short Line Carriers, Inc., is a Nebraska corporation, organized in June 1956. All of its stock is owned by 12 motor carriers serving eastern and central Nebraska and interchanging interstate traffic at
For some time prior to May 1956, the stockholder carriers had resisted efforts by the Teamsters Union to unionize their operations. Eventually, the union sought to bring economic pressure to bear upon the stockholder carriers by a secondary boycott against their traffic through the larger, unionized, trunk-line carriers upon whom the stockholder carriers were dependent for interchanging traffic to and from points beyond Nebraska. The collective bargaining contract between the trunk-line carriers and the union contained protection of rights or so-called “hot cargo” clauses which reserved to the union and its members “the right to refuse to handle goods from or to any firm or truck” involved in any controversy with the union and provided that it should not be a cause for discharge if an employee of the carrier refused to handle “unfair” goods.1
The stockholder carriers thereupon organized Short Line and on June 22, 1956, Short Line filed an application with the Interstate Commerce Commission for common carrier authority to transport commodities on a regularly scheduled basis between certain Nebraska and Iowa points and points in other States. A further application for
Finally, the Commission considered the remedy appropriate to the situation. Short Line had applied for operating authority under § 207 (certificates of public convenience and necessity). As the Commission noted, the Act provides other means of correcting deficiencies of service. Section 204 (c) empowers the Commission to order carriers to comply with the transportation laws, and the Commission may act upon complaint or upon its own motion without complaint, in each case after notice and hearing, and sanctions are available to enforce its orders;4 § 212 (a) empowers the Commission to suspend certificates for failure to comply with duties under the Act. The Commission proceeded to dispose of the remedy problem in the following manner:
“We do not agree with those of the parties who insist that the procedure here adopted; namely, the filing of the instant applications under the provisions of section 207 of the act, is in any manner inappropriate. Regardless of the injection of the labor situation into the matter, the instant applications are based upon claimed deficiencies in the motor service
available to the shipping public of Nebraska. Where, as here, the existing carriers are shown to have so conducted their operations as to result in serious inadequacies in the service available to a large section of the public, one effective method of correcting the situation is by the granting of authority for sufficient additional service, and, in fact, we are charged with the duty of procuring such additional facilities as may be necessary to carry out the purposes of the national transportation policy. The fact that other remedies are available, such as the suggested filing of complaints by the aggrieved carriers and shippers does not alter the situation or deprive any carrier of the right to follow the course here chosen.” Id., at 613.
The Commission therefore granted the application.5
The protesting carriers and the affected union sought judicial review before a three-judge District Court (
In regard to the choice of remedy, the court rejected the contention that the passage of the Labor-Management Reporting and Disclosure Act of 1959, which added § 8 (e) to the National Labor Relations Act, as amended by the Labor Management Relations Act, 73 Stat. 543,
We have concluded that the judgment of the District Court must be reversed and the Commission‘s order set aside as an improvident exercise of its discretion. The Commission found from the facts of record that the refusals to handle interchange traffic and to accept freight from certain shippers7 caused a substantial disruption in motor service and serious inadequacies in the service available, despite the efforts of some of the larger trunk-line carriers to maintain normal interline relationships. There was ample evidence to support these findings and we do not disturb them.
The difficulty with the order arises in connection with the findings and conclusions relevant to the choice of remedy. The assumption of the Commission was that the deficiencies of service made either of two remedies available—additional certification or entry of a cease-and-desist order—and that it had unlimited discretion to apply either remedy simply because either might be effective. It is unmistakably clear from the opinion of the Commission and from the fact-findings it made or adopted,8 that the disruption in service resulted solely from refusals to serve, which in turn arose from union pressure applied to obtain union objectives. It is equally clear that absent union pressure there would have been no refusals to serve and that in such normal circumstances
There are no findings and no analysis here to justify the choice made, no indication of the basis on which the Commission exercised its expert discretion. We are not prepared to and the Administrative Procedure Act15 will not permit us to accept such adjudicatory practice. See Siegel Co. v. Federal Trade Comm‘n, 327 U. S. 608, 613-614. Expert discretion is the lifeblood of the administrative process, but “unless we make the requirements for administrative action strict and demanding, expertise, the strength of modern government, can become a monster which rules with no practical limits on its discretion.” New York v. United States, 342 U. S. 882, 884 (dissenting opinion). “Congress did not purport to transfer its legislative power to the unbounded discretion of the regulatory body.” Federal Communications Comm‘n v. RCA Communications, Inc., 346 U. S. 86, 90. The Commission must exercise its discretion under § 207 (a) within the bounds expressed by the standard of “public convenience and necessity.” Compare id., at 91. And for the courts
Appellants’ position is and was that the refusals to serve could be terminated through complaint procedures and thus the need for additional service obviated. The Commission was, as indicated, unresponsive to these arguments in its order, deeming that the availability of the other remedy “[did] not alter the situation.” This was error. Commission counsel now attempt to justify the Commission‘s “choice” of remedy on the ground that a cease-and-desist order would have been ineffective. The short answer to this attempted justification is that the Commission did not so find. Securities & Exchange Comm‘n v. Chenery Corp., 332 U. S. 194, 196. The courts may not accept appellate counsel‘s post hoc rationalizations for agency action; Chenery requires that
“[A] simple but fundamental rule of administrative law ... is ... that a reviewing court, in dealing with a determination or judgment which an administrative agency alone is authorized to make, must judge the propriety of such action solely by the grounds invoked by the agency. If those grounds are inadequate or improper, the court is powerless to affirm the administrative action....” Ibid.
For the courts to substitute their or counsel‘s discretion for that of the Commission is incompatible with the orderly functioning of the process of judicial review. This is not to deprecate, but to vindicate (see Phelps Dodge Corp. v. Labor Board, 313 U. S. 177, 197), the administrative process, for the purpose of the rule is to avoid “propel[ling] the court into the domain which Congress has set aside exclusively for the administrative agency.” 332 U. S., at 196.
The second and longer answer to the attempted justification is that there is not substantial evidence of record upon which to base a finding that a cease-and-desist order would have been ineffective. There was every indication at the time that a cease-and-desist order would render the deficiencies in service purely temporary phenomena and would thus be effective in promoting adequate, economical, and efficient service and in fostering sound economic conditions among the carriers affected.
It is said that attempted compliance by the unionized carriers might in some way “so aggravate their labor difficulties as to cause a complete cessation of operations.” But this ignores the Commission‘s conclusion that carrier apprehensions of teamster reprisals were exaggerated and unwarranted. It further ignores the fact that, as the Commission was aware, the National Labor Relations Board
Finally, although we do not wish to fetter the Commission‘s expert, discretionary powers by specifically prescribing that cease-and-desist order relief be granted (if, indeed, any relief is still needed) rather than additional certification, nevertheless the Commission should be particularly careful in its choice of remedy, and should have been particularly careful, because of the possible effects of its decision on the functioning of the national labor relations policy. The Commission acts in a most delicate area here, because whatever it does affirmatively (whether it grants a certificate or enters a cease-and-desist order) may have important consequences upon the collective bargaining processes between the union and the employer. The policies of the Interstate Commerce Act and the labor act necessarily must be accommodated, one to the other.
“But it is said that the Board is not enforcing the Interstate Commerce Act or interfering with the Commission‘s administration of that statute, but simply interpreting the prohibitions of its own statute in a way consistent with the carrier‘s obligations under the Interstate Commerce Act. Because of that Act a carrier cannot effectively consent not to handle the goods of a shipper. ... But the fact that the carrier‘s consent is not effective to relieve him from certain obligations under the Interstate Commerce Act does not necessarily mean that it is ineffective for all purposes, nor should a determination under one statute be mechanically carried over in the interpretation of another statute involving significantly different considerations and legislative purposes.” 357 U. S., at 110.
The Court concluded that although “common factors may emerge in the adjudication of these questions” under the two Acts by the two different agencies, nevertheless independent consideration and resolution were possible, the National Labor Relations Board directing itself to consideration of whether the employees violated their duties under § 8 (b) and the Interstate Commerce Commission directing its attention to whether the carrier “may have failed in his obligations under the Interstate Commerce Act.”
Implicit in this analysis is a recognition that if either agency is not careful it may trench upon the other‘s jurisdiction, and, because of lack of expert competence, contravene the national policy as to transportation or labor relations. In such a context, choice of the sweeping relief of certification rather than the more precise and narrowly
The judgment of the District Court is reversed. The case is remanded to it with instructions to enter an order enjoining, annulling, and setting aside the order of the Interstate Commerce Commission, and remanding the case to the Commission for further proceedings consistent with this opinion.
It is so ordered.
MR. JUSTICE BLACK, concurring in part and dissenting in part.
I concur in the Court‘s judgment setting aside the Commission‘s order granting a permanent certificate to a new carrier to compete with existing carriers who but for temporary interruptions caused by lawful labor union activities would adequately meet the needs of commerce. I do not concur, however, in the remand to the Commission for further proceedings. Congress has vested power to regulate the employer-employee relationship in the National Labor Relations Board, not in the Interstate Commerce Commission, and I think the Commission‘s grant of a permanent certificate here, which stems wholly from temporary transportation delays owing to a labor dispute within the Labor Board‘s jurisdiction and which in effect punishes carriers for honoring their then lawful
Since it is my view that under the facts here the Commission has no power to grant a permanent certificate to a competitor, I see no reason to direct that this matter be referred back to the Commission for further proceedings. Such a remand assumes that there is some further action by way of a cease-and-desist order the Commission can or should take. My view is that the facts in this record provide no possible basis for permitting the Commission to order the carriers to cease and desist from carrying out their agreement with the unions. Nothing in the Interstate Commerce Act gives the Commission power to prohibit carriers or unions under the circumstances shown by this record from doing that which the Labor Act permits them to do. Moreover, as the Court points out, four months after the Commission‘s order Congress outlawed the kind of conduct which here interfered with transportation. Since Congress has, by this enactment, so clearly taken this matter in hand in a way that does not rely for enforcement on the Interstate Commerce Commission, the old Commission proceedings have all the earmarks of mootness, whether technically moot or not. If the union or the truck lines should hereafter violate this new law the Labor Board, backed by the courts, is vested with ample power to force both carriers and unions to obey that law.
MR. JUSTICE CLARK, concurring in the result.
Four months after entry of the Commission‘s order Congress enacted § 8 (e) as an amendment to the National Labor Relations Act,
For this reason I concur in the Court‘s reversal and remand to the District Court. In view of the lapse of time and the fact that the conduct which caused the disruption of service has been outlawed† by Congress, however, it appears that the issue has been mooted, and the Commission may determine that further proceedings would serve no purpose.
*Cf. San Diego Building Trades Council v. Garmon, 359 U. S. 236 (1959).
†Although the effectiveness of the § 8 (e) ban on “hot cargo” clauses may have been subject to doubt when the District Court adjudicated this case, subsequent cases tend to remove any such doubt. See, e. g., Labor Board v. Local 294, International Brotherhood of Teamsters, 298 F. 2d 105 (C. A. 2d Cir. 1961).
I join in the opinion and add only a few words to state my conviction that the “discriminating awareness of the consequences of its action” required of the Commission by the opinion, inevitably must lead, if any relief is now warranted (which I doubt), to a rejection of the remedy of additional certification in favor of an appropriately limited cease-and-desist order.
As the matter was presented to the Commission and to the District Court, the additional certification, as the facts here plainly demonstrate, involved the Commission in intervention in the underlying labor dispute to a degree unduly trenching upon the Labor Board‘s jurisdiction and the rights and duties of the affected parties. Most certainly after the 1959 amendments to the labor law, the Commission, had the case then been remanded to it by the District Court as it should have been, could have entered a cease-and-desist order under which no conflict could or would have arisen between the I. C. C. and the N. L. R. B. in the respective exercise of their powers and in the discharge of their responsibilities. Such a cease-and-desist order should have been appropriately limited to requiring the carriers to provide service in a manner and to the extent compatible with their labor agreements and with both the carriers’ and the union‘s rights and duties under federal labor law. That such an order would have been sufficient in practical effect is demonstrated by the fact that both Burlington and Santa Fe, parties to the hot cargo agreements, were able to carry out their duties under the Motor Carrier Act without creating any serious problems under their union agreements or under the National Labor Relations Act. This being so in the absence of a cease-and-desist order, it is difficult to understand why entry of such an order against the carriers would have been ineffective.
Notes
“It shall not be a violation of this Agreement and it shall not be cause for discharge if any employee or employees refuse to go through the picket line of a Union or refuse to handle unfair goods. Nor shall the exercise of any rights permitted by law be a violation of this Agreement. The Union and its members, individually and collectively, reserve the right to refuse to handle goods from or to any firm or truck which is engaged or involved in any controversy with this or any other Union; and reserve the right to refuse to accept freight from or to make pickups from, or deliveries to establishments where picket lines, strikes, walk-outs or lockouts exist.
“The term ‘unfair goods’ as used in this Article includes, but is not limited to, any goods or equipment transported, interchanged, handled, or used by any carrier, whether party to this Agreement or not, at any of whose terminals or places of business there is a con-
troversy between such carrier or its employees on the one hand, and a labor union on the other hand; and such goods or equipment shall continue to be ‘unfair’ while being transported, handled or used by interchanging or succeeding carriers, whether parties to this Agreement or not, until such controversy is settled.“The insistence by any Employer that his employee[s] handle unfair goods or go through a picket line after they have elected not to, and if such refusal has been approved in writing by the responsible officials of the Central States Drivers Council, shall be sufficient cause for an immediate strike of all such Employer‘s operations without any need of the Union to go through the grievance procedure herein.”
