The United States
sought to enjoin V-1 Oil, a liquefied propane gas retailer, from preventing
unannounced inspections by Federal Railroad Administration (FRA) inspectors
under the pervasively regulated industry exception to the warrant requirement
of the Fourth Amendment. Under this exception, developed in New York v.
Burger,[1] government
searches do not violate the Fourth Amendment if three conditions are met:
first, the underlying regulatory scheme must advance a substantial government
interest; second, the warrantless inspection must be necessary to further the
regulatory scheme; and finally, the statutory scheme must provide a
constitutionally adequate substitute for a warrant by constructively notifying
the owner of the likelihood of periodic inspections, and by sufficiently
limiting the time, place, and scope of the inspection. The Ninth Circuit found
that V-1 Oil's right to be free from unreasonable search and seizure was
adequately protected by the Hazardous Materials Transportation Act (HMTA).
Accordingly, FRA inspectors could conduct warrantless inspections of V-1 Oil's
facilities because V-1 Oil had notice that its activities, such as unloading
and resealing railroad cars containing hazardous materials, made it subject to
inspections pursuant to the HMTA.

The court found the HMTA easily satisfied the initial conditions of Burger because the government has a substantial interest in protecting life and property by regulating the transportation and storage of hazardous material, and surprise inspections reasonably ensure that the HMTA is satisfactorily enforced. V-1 Oil argued that the HMTA did not meet the third requirement of the Burger test because the HMTA lacks the necessary safeguards required to serve as a substitute for the warrant. Specifically, V-1 Oil claimed that the HMTA is overbroad because it applies to every business engaged in interstate commerce that uses any hazardous materials, and the scope of the inspections are unlimited. Unpersuaded by V-1 Oil's argument, the Ninth Circuit held that the HMTA passed the third Burger requirement as applied because of V-1 Oil's extensive activities involving the transportation of propane gas. Also, the court determined that the HMTA adequately limited the scope of the inspector's discretion because it defined the business premises and documents to be inspected and required inspections to be conducted only at reasonable times and in a reasonable manner.

Finally, the court disagreed with V-1 Oil's argument that the district court's issuance of a permanent injunction was inappropriate. V-1 Oil contended that the injunction did not meet the standard of Federal Rule of Civil Procedure 65(d) because the injunction did not describe the act or acts to be restrained specifically and in reasonable detail, as the rule requires. The court found to the contrary that the injunction's language was unambiguous because it allows warrantless searches to enforce the HMTA and could not be construed to allow other prohibited searches. The court concluded that the district court did not abuse its discretion by issuing the permanent injunction because the HMTA is a constitutional statute and a permanent injunction permitting the enforcement of a constitutional statute is not an abuse of discretion.