371 U.S. 156 (1962), 27, Burlington Truck Lines, Inc. v. United States

Docket NºNo. 27
Citation371 U.S. 156, 83 S.Ct. 239, 9 L.Ed.2d 207
Party NameBurlington Truck Lines, Inc. v. United States
Case DateDecember 03, 1962
CourtUnited States Supreme Court

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371 U.S. 156 (1962)

83 S.Ct. 239, 9 L.Ed.2d 207

Burlington Truck Lines, Inc.


United States

No. 27

United States Supreme Court

Dec. 3, 1962

Argued October 15-16, 1962




Because of a labor dispute, arrangements between nonunionized shortline motor carriers in Nebraska for the interchange of traffic with unionized trunkline motor carriers for movement to and from points beyond Nebraska were disrupted by a union-induced boycott of such traffic under "hot cargo" clauses in contracts between the unions and the trunkline carriers which protected the employees' right to refuse to handle "unfair goods." To meet this situation, the short-line carriers organized a corporation which applied to the Interstate Commerce Commission under §207(a) of the Interstate Commerce Act for authority to act as an interstate motor carrier. The Commission found that the union-induced boycott of the short-line carriers by the trunkline carriers had resulted in serious inadequacies in the services available to a large section of the public, and it granted the applicant part of the operating authority requested. It made no findings to justify the choice of this remedy instead of other forms of relief under other sections of the Act. Four months later, Congress enacted the Labor-Management Reporting and Disclosure Act of 1959, which at least raised serious questions as to the validity of the union-induced boycott. Subsequently, the District Court sustained the Commission's order as within the scope of its authority, based on adequate findings and supported by substantial evidence.

Held: the judgment is reversed and the case is remanded to the District Court with instructions to set aside the Commission's order and remand the case to the Commission for further proceedings. Pp. 158-174.

1. The Commission's order must be set aside as an improvident exercise of its discretion as to the choice of remedies. Pp. 165-170.

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(a) When, as here, the particular deviations from an otherwise completely adequate service (which has economic need for the traffic) consist solely of illegal and discriminatory refusals to accept or deliver traffic from or to particular carriers or shippers, the powers of the Commission under §§204, 212, and 216 bear heavily on the propriety of relief under § 207. Pp. 165-166.

(b) In such a case, the choice of the certification remedy may not be automatic; it must be rational and based upon conscious choice that, in the circumstances, the public interest in "adequate, economical, and efficient service" outbalances whatever public interest there is in protecting the revenues of existing carriers, in order to "foster sound economic conditions in transportation and among the several carriers," and the other opposing interests. Pp. 166-167.

(c) The Commission made no findings or analysis to justify its choice of remedies, and gave no indication of the basis on which it exercised its expert discretion. Such adjudicatory practice is not acceptable to this Court, nor permissible under the Administrative Procedure Act. Pp. 167-168.

(d) The Commission erred in disregarding the suggestion that the refusals of the trunkline carriers to serve could be terminated through complaint procedures, thus obviating the need for additional service; and that error cannot now be justified on the ground that a cease and desist order would have been ineffective, since the Commission made no findings to support such a conclusion. Securities & Exchange Comm'n v. Chenery Corp., 332 U.S. 194. Pp. 168-169.

(e) Moreover, there was not substantial evidence of record upon which to base a finding that complaint procedures would have been ineffective, and there was every indication at the time that such procedures would have been effective under the law as it then stood. Pp. 169-170.

2. In view of the enactment of the Labor-Management Reporting and Disclosure Act of 1959, four months after the Commission's decision and over a year before the District Court handed down its decision, the District Court should not have affirmed the Commission's order; in the exercise of its discretion, it should have vacated the order and remanded the case to the Commission for further consideration in the light of changed circumstances. Pp. 171-172.

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3. Upon remand, the Commission should be particularly careful in its choice of remedy (if any still be needed), because of the possible effects of its decision on the functioning of the national labor relations policy. Pp. 172-174.

194 F.Supp. 31 reversed, and cause remanded.

WHITE, J., lead opinion

[83 S.Ct. 241] MR. JUSTICE WHITE delivered the opinion of the Court.

These are direct appeals under 28 U.S.C. § 1253, from the judgment of a three-judge District Court, 194 F.Supp. 31 (S.D.Ill.), which upheld an order of the Interstate Commerce Commission, 79 M.C.C. 599, granting a motor common carrier application. This Court noted probable jurisdiction because of important questions raised as to the relationship and interplay between remedies available under the Interstate Commerce Act and under the National Labor Relations Act as amended by the Labor Management Relations Act. 49 U.S.C.A. § 1 et seq.

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

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Omaha and other gateway points with over 20 larger trunkline carriers, among whom are the appellant carriers, with whom through-route, joint-rate, interline arrangements have been established. Some of the stockholder carriers serve Nebraska communities without other motor carrier or rail service.

For some time prior to May, 1956, the stockholder carriers had resisted efforts by the Teamsters Union too 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, trunkline carriers upon whom the stockholder carriers were dependent for interchanging traffic to and from points beyond Nebraska. The collective bargaining contract between the trunkline 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

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In May, 1956, some of the stockholder carriers began experiencing difficulties in receiving and delivering freight from and to many of their normal and logical connections at Omaha and, to some extent at Sioux City, Lincoln, and Grand Island. The difficulty consisted primarily of the refusal on the part of many of [83 S.Ct. 242] the larger carriers to accept interline traffic tendered to them by the stockholder carriers and the refusal to turn over to them inbound traffic routed over their lines or normally turned over to them for delivery to ultimate destinations in Nebraska. The stockholder carriers, shippers, and consignees thus experienced considerable delay, inconvenience, and unforeseen expense in the movement of traffic to and from interior Nebraska points. At the same time, however, some of the larger interlining carriers, particularly appellants Burlington Truck Lines, Inc., and Santa Fe Trail Transportation Company, generally maintained normal interline relationships with the stockholder carriers.

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

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operating authority over irregular routes between Omaha and points in 32 different States was filed six months later. The applications were assigned to two different examiners, each of whom recommended that the application before him be denied. The Commission stated that "the pertinent facts are accurately and adequately stated" in the examiners' reports and adopted the statements as its own (79 M.C.C. at 605, 608), but it concluded that the first application should be granted in part.2 The Commission found that, although service in the area was satisfactory before May, 1956, after that date, the union-induced boycott of the stockholder carriers caused "a substantial disruption" and "serious inadequacies in the service available." 79 M.C.C. at 612, 613. Accordingly, it found that grant of Short Line's application was required by "the present and future public convenience and necessity." Id. at 613. The Commission declared that it was not attempting to adjudicate a labor dispute or trench upon the jurisdiction of the National Labor Relations Board, and it conceded its lack of jurisdiction to look beyond the duties of carriers to the public under the terms of the Interstate Commerce Act. Id. at 611. It strongly criticized the carrier appellants for yielding to union secondary boycott demands, however, and it declared that the carriers' failure to fulfill their duties as common carriers was particularly inexcusable since there had been no violence or imminent threats of danger to property or person. The Commission expressed the opinion that alleged "apprehensions of certain of the organized carriers that any opposition to the demands of the union would have resulted in reprisals against them" were "greatly exaggerated," and it noted that some of the interlining

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carriers had successfully continued to deal with the stockholder carriers,...

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