Andrew G. Nelson, Inc. v. United States

Background

This case involves a motor carrier that continued operating under a pre-Act "grandfather" permit originally held by its predecessor, who hauled goods for Walgreen stores. The permit authorized "new and used store fixtures, new and used household goods, and stock in trade of drug stores." A later investigation found the carrier hauling groceries, beer, batteries, and other items not clearly destined to become drugstore inventory, and the Interstate Commerce Commission issued a cease-and-desist order limiting the carrier’s operations.

Reasoning

The Court addressed whether the phrase "stock in trade of drug stores" meant goods like those sold in drugstores or only goods intended to become part of a drugstore’s actual inventory. Relying on ordinary meaning and prior agency practice, the Court accepted the Commission’s view that the phrase describes commodities by intended use: goods must be intended at the time of movement to become part of a drugstore’s stock. The Court held the Commission’s interpretation was not clearly wrong and could be applied even though the intended-use test was more fully developed after the permit issued.

Real world impact

The decision limits what carriers operating under similar grandfather permits may haul. Carriers cannot treat broad phrases like "stock in trade" as authorization to deliver general retail merchandise unless the goods are intended for a drugstore’s inventory. A carrier believing its pre-Act operation was broader must ask the agency to reopen the permit record rather than attack the permit in court.

Dissents or concurrances

Justice Douglas registered a dissent; the opinion text here notes only that he dissented without detailing his reasons.