Burlington Truck Lines, Inc. v. United States

Supreme Court of the United States · 1962 · Administrative Law

Administrative LawAgency reasoned decisionmakingJudicial review of agency actionAdministrative Procedure Actreasoned explanationarbitrary agency actionCheneryICC

Facts

Nebraska Short Line was formed by Nebraska carriers after union pressure led many larger trunk-line carriers to refuse to accept or deliver interline traffic for them, causing substantial service disruptions and inadequacies. Short Line applied to the Interstate Commerce Commission for operating authority, and although the Commission recognized that service had been satisfactory before the boycott-related refusals, it granted part of the application based on present and future public convenience and necessity. The Commission acknowledged that other remedies, including cease-and-desist procedures under the Act, were available but concluded that granting additional authority was an appropriate way to correct the service problem. Existing carriers challenged the order, arguing that the service failures were temporary and remediable through enforcement against the refusing carriers rather than by permanently certifying a new competitor.

Issue

Whether the Interstate Commerce Commission could grant permanent operating authority to a new carrier, on this record, without making findings and giving reasons that justify choosing certification over available cease-and-desist and enforcement remedies. Also, whether a reviewing court could sustain that choice based on counsel's appellate justifications or despite changed legal circumstances bearing on the effectiveness of other remedies.

Rule

When an agency exercises discretionary authority, it must disclose the basis of its order, make findings that support its decision, and articulate a rational connection between the facts found and the choice made, especially where different remedies with different consequences are available. A reviewing court must judge the propriety of agency action solely by the grounds invoked by the agency itself and may not affirm on appellate counsel's post hoc rationalizations.

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One of 10 multiple-choice questions for this case. Pick an answer to see why.

The Federal Freight Board finds that shipping delays in Wichita arose because several incumbent carriers temporarily refused to transfer loads from one regional line after a labor dispute intensified. The Board also finds that, apart from those refusals, existing service had long been adequate. It grants a permanent operating certificate to a new carrier, stating only that adding service is 'an effective means' of addressing current deficiencies.

If incumbent carriers seek judicial review, which argument is strongest?

Explanation. The majority required more than proof that service disruptions existed. Where the record shows otherwise adequate existing service and the problem stems from discriminatory refusals to serve, the agency must make findings and give reasons showing a rational connection between the facts found and the more sweeping remedy chosen. A bare statement that additional service is 'an effective means' is insufficient because it does not justify choosing permanent certification over narrower enforcement tools. (Derived from Burlington Truck Lines, Inc. v. United States (n.d.).)