# State of Maryland v. Wirtz

> District Court, D. Maryland · June 13, 1967 · 269 F. Supp. 826

URL: https://www.frixlaw.com/law-library/cases/9685155

## Case

- **Full name:** STATE OF MARYLAND, Plaintiff, and State of Colorado Et Al., Intervening Plaintiffs, v. W. Willard WIRTZ, Secretary of Labor, United States Department of Labor and Clarence T. Lundquist, Administrator of the Wage and Hour and Public Contracts Division of the United States Department of Labor, and William Hargadine, Jr., Regional Director, Third Region, Wage and Hour and Public Contracts Division, United States Department of Labor, Defendants
- **Court:** District Court, D. Maryland
- **Decided:** June 13, 1967
- **Citations:** 269 F. Supp. 826
- **Precedential status:** Published
- **Opinion:** Concurrence by Thomsen
- **Judges:** Winter, Thomsen, Northrop
- **Cited by:** 11 later opinions in the Frix Law Library

## Citator (automated)

- No negative treatment found by the automated citator. That is not the same as a confirmation that the case is good law; read the citing cases.
- Full citator and citing cases: https://www.frixlaw.com/law-library/cases/9685155

## Opinion text

THOMSEN, Chief Judge
(concurring in part):
I agree with the conclusion reached by Judge Winter- — that the injunction requested by plaintiffs should be denied— but for somewhat different reasons and with one important reservation. I agree that the operation of schools and hospitals by the several States and their subdivisions affects interstate commerce to a substantial degree, whether or not such operations themselves constitute interstate commerce, and that use of the “enterprise concept” does not itself render unconstitutional the 1966 Amendments to the Fair Labor Standards Act. The potential Eleventh Amendment problems, suggested by the States, should be considered as they may arise in subsequent actions against the several States. But I cannot agree that the power of the federal government to regulate essential sovereign functions of the States is absolute and unqualified, despite the broad language of the opinions cited by Judge Winter.
When the thirteen sovereign States adopted the Constitution they gave up only part of their sovereignty to the United States of America. The system created by the Constitution was and is a federal system; the States are not administrative divisions of a central government. For reasons which were reviewed by Judge Wisdom in United States v. Manning, W.D.La., 215 F.Supp. 272 (1963), and are not disputed, the Tenth Amendment was adopted in 1791. To characterize that Amendment as a “truism” does not mean that it was intended to be devoid of meaning, lulling the States into acceptance of a national government which may, without further amendment to the Constitution, take away from the States the substance, if not the trappings, of the sovereignty which they intended to preserve. The Tenth Amendment makes explicit the principle of federalism, which recognizes the supremacy of the federal government with respect to the powers delegated to it, but also recognizes that the States retained certain sovereign powers. The sovereign powers retained by the States are not specified in the Tenth Amendment or in any other provisions of the Constitution; they are limited only by the scope and thrust of the powers delegated to the federal government.
The power to regulate interstate commerce delegated to the federal government has been held to be “plenary” and has been accorded a very wide range by the Supreme Court. The cases in which the extent of the commerce power has been discussed in relation to the Tenth Amendment fall into two categories: those in which the regulation was being applied to and challenged by a party other than a State or a political subdivision, and those in which the regulation was being applied to and challenged by a State itself or by a political subdivision of a State.
In the first category, the pendulum has swung away from decisions 1 which *848 restricted the commerce power. Since 1937 the Supreme Court has consistently held that the federal regulatory power under the commerce clause may control intrastate activities which merely affect commerce. 2
The cases involving federal regulation of activities engaged in by the States or their subdivisions have been analyzed in Judge Winter’s opinion. Some of them involved the competing interests of several States, 3 the treaty power, 4 the power over foreign commerce, 5 or the war power. 6 Others involved the operation by a State of a railroad, 7 a waterfront terminal 8 or the dominion which the federal government has, “to the exclusion of the States,” over navigable waters of the United States. 9 The opinions in some of those eases state the power of the federal government over interstate commerce in broad and unqualified terms, indicating that when Congress exercises its power over interstate commerce, the welfare or needs of the States need not even be considered. The broad language of the opinions must, however, be read in the context of the cases in which they were rendered. In none of those cases were the essential taxing and budgetary functions of the States so seriously affected as they are by the statute under consideration. We must heed the admonition in Gomillion v. Lightfoot, 364 U.S. 339, at 343-344 , 81 S.Ct. 125, at 128 , 5 L.Ed.2d 110 : “Particularly in dealing with claims under broad provisions of the Constitution, which derive content by an interpretative process of inclusion and exclusion, it is imperative that generalizations, based on and qualified by the concrete situations that gave rise to them, must not be applied out of context in disregard of variant controlling facts.”
The question remains: Does the principle of federalism, implicit in the Constitution as originally drawn, and made explicit by the Tenth Amendment, prevent Congress from regulating, in the manner provided by the 1966 Amendments, the operation of public schools and hospitals by the States and their subdivisions ?
The States cite a number of cases arising under the taxing power, to the effect that the taxing power is subject to limitations imposed by the principle of federalism, and argue that similar limitations apply to the commerce power. Limitations on the taxing power have been recognized when the exercise of that power would unduly interfere with the governmental activities of the States. 10 “This principle is implied from *849 the independence of the national and state governments within their respective spheres and from the provisions of the Constitution which look to the maintenance of the dual system.” Indian Motocycle Co. v. United States, 283 U.S. 570, 575 , 51 S.Ct. 601, 603 , 75 L.Ed. 1277 (1931). 11 The States argue that the reach of the commerce power is no greater than the reach of the taxing power, citing a statement from one of the opinions in New York v. United States, 326 U.S. 572, 582 , 66 S.Ct. 310, 314 , 90 L.Ed. 326 (1946): “Surely the power of Congress to lay taxes has impliedly no less a reach than the power of Congress to regulate commerce.” It must be recognized, however, that a limitation has been placed upon the taxing power which has not yet been placed upon the commerce power.
In another opinion in New York v. United States, Chief Justice Stone, concurring for himself and three other Justices, stated:
“ * * * we are not prepared to say that the national government may constitutionally lay a non-diseriminatory tax on every class of property and activities of States and individuals alike. * * * [A] federal tax which is not discriminatory as to the subject matter may nevertheless so affect the State, merely because it is a State that is being taxed, as to interfere unduly with the State’s performance of its sovereign functions of government. * * * ” 326 U.S. at 586-587 , 66 S.Ct. at 316 .
“The problem is not one to be solved by a formula, but we may look to the structure of the Constitution as our guide to decision. * * * ” 326 U.S. at 589 , 66 S.Ct. at 317 .
The limitation on the taxing power— undue interference with a State’s performance of its sovereign functions of government — responds to Chief Justice Marshall’s famous dictum: “The power to tax .involves the power to destroy”. M’Culloch v. State of Maryland, 4 Wheat. 316, 431 , 4 L.Ed. 579 (1819). The potentially destructive power of taxation lies in the ability of one sovereign to impose an economic burden upon the functions of the other too great to be borne, thereby curtailing or eliminating a particular activity.
Taxation is not the only way in which the federal government may destroy or cripple essential State functions. There must be some limit beyond which the federal government cannot go in its attempt to exercise against the States themselves the power of the federal government over interstate commerce. Neither the Solicitor of Labor, who argued the case for all the defendants, nor Judge Winter in his opinion, denies that there may be some limit, but they argue and hold respectively that whatever limit there may be has not been exceeded in this case.
The proper limit is indicated, though not fixed, by the statement of Chief Justice Stone, quoted above, that “a federal tax which is not discriminatory as to the subject matter may nevertheless so affect the State, merely because it is a State that is being taxed, as to interfere unduly with the State’s performance of its sovereign functions of government.” The attempted exercise against a State of the power of the federal government over interstate commerce should face the test: does it interfere unduly with the State’s performance of its sovereign and indispensable functions of government? If the concept of federalism is to survive, it must stand on constitutional limitations, not on the sufferance of the federal government.
When the federal government invokes the commerce power, unaided by the Fourteenth Amendment or any other constitutional provision, to regulate the relations between a State and state employees who are not themselves engaged in interstate commerce or in the production of goods for commerce, the Court *850 should consider a number of factors in determining the constitutionality of the proposed regulation. The Court should give weight and deference to any congressional findings with regard to the effect which the action sought to be regulated has on interstate commerce. The Court should also consider whether the activity subject to the proposed regulation is an important function of the State and its political subdivisions; whether the service in question is offered or might be offered to the same extent and on substantially the same terms by private enterprise or other non-state sources; and whether such regulation would seriously interfere with the State’s performance or regulation of its indispensable sovereign functions.
The statute enacting the 1966 Amendments contains no congressional findings with respect to the relationship between interstate commerce and the proposed coverage of state employees. 12
The operation of public schools and hospitals is undoubtedly one of the most important functions of State governments. The Supreme Court in Brown v. Board of Education, 347 U.S. 483, 493 , 74 S.Ct. 686, 691 , 98 L.Ed. 873 (1954), stated flatly: “Today, education is perhaps the most important function of state and local governments.” The importance of public hospitals to the community is also beyond dispute.
Public hospitals in many instances provide service otherwise unavailable. 13 The public schools and hospitals could not be replaced by nongovernmental enterprises. 14 The alternative would be federal schools and hospitals, and no one has argued for that.
From the mass of evidence submitted to the Court pursuant to stipulation, it is clear that the impact of the 1966 Amendments on the States is far-reaching. The Act imposes upon the States a graduated financial burden, which will necessitate *851 either increased taxes or a curtailment of the services now being rendered by the States and their political subdivisions. Most of the States must operate out of current funds provided by budgetary appropriations, 15 and in many instances the responsible political subdivisions, notably school districts, are taxing at their constitutional maximum and would have to curtail the amounts spent for teachers, textbooks and the like, or reduce the number of people served, unless and until the State constitution is amended.
Nevertheless, I cannot say that the minimum wage provisions interfere so unduly with the States’ performance of their indispensable sovereign functions as to make those provisions unconstitutional. It is of course true, as Judge Northrop points out, that the minimum wage provisions interfere with the budgetary function of the States. But that interference must be weighed against the interest of the federal government, representing all the people of the United States, in seeing that all the people are paid an appropriate minimum wage. Serious problems are presented by the possible application of the Act to work done by inmates of correctional and other institutions as part of their education or rehabilitation programs, but I agree with the Solicitor of Labor that these can best be handled by the regulations or on a ease by case basis, and do not justify a sweeping injunction.
The overtime provisions present a more serious problem. Unlike the minimum wage provisions, the overtime provisions are not limited to the lowest paid employees. Many State functions, ineluding some which are affected by the 1966 Amendments, require work arrangements other than the standard 40-hour work week. Public school, college and university personnel, who generally receive lengthy vacations, must often work longer than 40 hours per week during some part of the school year. The statute under consideration makes some provision in this regard for the employees of hospitals, whose round-the-clock requirements do not fit comfortably into a 40-hour work week. 16 A common practice has been to give these and other State employees compensatory time, or to make various other budgetary arrangements to keep in fair balance State jobs of the most diverse character. If the overtime provisions of the 1966 Amendments are valid, many of those arrangements may no longer be possible. The Act will seriously hamper the organizational and budgetary functions of the States by forcing them to favor employees of their hospitals and schools over other programs such as welfare and law enforcement, unless the States rearrange their entire civil service and appropriate additional sums for employees not covered by the Act.
For reasons stated above, I am satisfied that a line must be drawn, and that with respect to some if not all state employees covered by the 1966 Amendments the overtime requirements of the Act probably go beyond the permissible limits. The interference with the organizational and budgetary functions of the States has been noted. On the other hand, Congress has not stated, and neither the committee hearings nor the stipulated facts in this case show, what *852 if any effect on interstate commerce the overtime practices of the several States may have. The issue in each instance is whether the particular regulation unduly interferes with one or more indispensable sovereign functions of the State. This indicates that the question whether the application of the overtime provisions of the statute to state employees goes beyond the permissible limits should be decided in the context of particular cases, when the extent of the interference with an indispensable state function can be weighed against the effect, if any, which the State’s overtime practices have on interstate commerce. 17 I conclude that a sweeping injunction at this time would not be proper.
The denial of relief in this case should be without prejudice to the right of the several States and their political subdivisions to challenge the overtime provisions of the Act applicable to employees of the States and their political subdivisions, in future cases presenting specific situations.
. Hammer v. Dagenhart, 247 U.S. 251 , 38 S.Ct. 529 , 62 L.Ed. 1101 (1918); Schechter Poultry Corp. v. United States, 295 U.S. 495 , 55 S.Ct. 837 , 79 L.Ed. 1570 (1935) ; and Carter v. Carter Coal Co., 298 U.S. 238 , 56 S.Ct. 855 , 80 L.Ed. 1160 (1936).
. United States v. Darby, 312 U.S. 100 , 61 S.Ct. 451 , 85 L.Ed. 609 (1941); N.L. R. B. v. Jones & Laughlin Steel Corp., 301 U.S. 1 , 57 S.Ct. 615 , 81 L.Ed. 893 (1937); see also Wickard v. Filburn, 317 U.S. 111 , 63 S.Ct. 82 , 87 L.Ed. 122 (1942); Katzenbach v. McClung, 379 U.S. 294 , 85 S.Ct. 377 , 13 L.Ed.2d 290 (1964); Heart of Atlanta Motel, Inc. v. United States, 379 U.S. 241 , 85 S.Ct. 348 , 13 L.Ed.2d 258 (1964).
. Sanitary District of Chicago v. United States, 266 U.S. 405 , 45 S.Ct. 176 , 69 L.Ed. 352 (1925); United States v. Appalachian Electric Power Co., 311 U.S. 377 , 61 S.Ct. 291 , 85 L.Ed. 243 (1940).
. Sanitary District of Chicago v. United States, supra.
. Board of Trustees of University of Illinois v. United States, 289 U.S. 48 , 53 S.Ct. 509 , 77 L.Ed. 1025 (1933).
. Case v. Bowles, 327 U.S. 92 , 66 S.Ct. 438 , 90 L.Ed. 552 (1946).
. United States v. State of California, 297 U.S. 175 , 56 S.Ct. 421 , 80 L.Ed. 567 (1936); State of California v. Taylor, 353 U.S. 553 , 77 S.Ct. 1037 , 1 L.Ed.2d 1034 (1957); see also Parden v. Terminal Ry. Co., 377 U.S. 184 , 84 S.Ct. 1207 , 12 L.Ed.2d 233 (1964).
. State of California v. United States, 320 U.S. 577 , 64 S.Ct. 352 , 88 L.Ed. 322 (1944).
. City of Tacoma v. Taxpayers of Tacoma, 357 U.S. 320 , 78 S.Ct. 1209 , 2 L.Ed.2d 1345 (1958); State of Oklahoma ex rel. Phillips v. Guy F. Atkinson Co., 313 U.S. 508 , 61 S.Ct. 1050 , 85 L.Ed. 1487 (1941).
. Graves v. People of State of New York ex rel. O’Keefe, 306 U.S. 466, 477, 478 , 59 S.Ct. 595 , 83 L.Ed. 927 (1939).
. See also New York v. United States, 326 U.S. 572, 577 , 66 S.Ct. 310 (1946); Willcuts v. Bunn, 282 U.S. 216 , 51 S.Ct. 125 , 75 L.Ed. 304 (1931).
. Findings with respect to labor conditions in industries engaged in commerce or in the production of goods for commerce, were included in the original Fair Labor Standards Act, see 29 U.S.C.A. § 202 (a).
. In Maryland 867 beds, all publicly owned and operated, constitute the total facilities for tubercular care in the State of Maryland. A similar situation exists in Texas. Under Texas law, on the discovery of tuberculosis the patient can be committed to a state hospital until the disease is no longer communicable. But non-state hospital beds for tubercular patients are vitually non-existent and the few that are available are extremely expensive. Similarly, approximately 90% of the facilities for the mentally disturbed and mentally retarded in Maryland are provided by the State, and, undoubtedly, much the same proportion applies in other States. Moreover, it is the public hospital which bears the main burden of providing care for the indigent. In Texas, for example, most of the people in State mental institutions are charity or near charity patients. In the Texas tubercular hospitals only nine out of 2,900 patients paid for the complete cost of their hospital care in 1966. The necessity of keeping the mentally disturbed and those ill with communicable diseases away from the community at large is too obvious to require elaboration.
. In Maryland approximately 80% of the total number of secondary and elementary school students are enrolled in public schools. In Texas and Ohio the comparable figures are approximately 86% and 84% respectively. The great majority of the other schools are either parochial or religiously affiliated. In Maryland public institutions of higher education served 74% of the students enrolled toward degree credit. In Texas and Ohio the comparable figures were 77% and 63% respectively. In 1965 over half the hospital beds in Maryland were located in hospitals operated by State and local governments. It is true, as defendants note, that these hospitals accounted for only 15% of the total admissions, but that figure reflects their role in' treating the chronically ill and long-term mental and tubercular patients. In Texas, State hospital beds account for almost half the total number of beds in all Texas hospitals, and for about 25% of the admissions. State and local government hospitals in Ohio provided almost half the total number of hospital beds in the State and accounted for about 15% of the admissions.
. Thus, Texas represents to the Court that in order to meet the standards of the Fair Labor Standards Act the expenditures of the Texas Youth Council will be increased by over $3,000,000 annually ; the Department of Mental Health and Mental Retardation will need an additional $7,500,000 annually; the cost of the Institutions of Higher Education will go up over $3,250,000 annually and the Fort Worth Independent School District will need by 1971 to find additional tax revenue sources for approximately $575,-000 annually. Even though the Fort Worth District is one of the larger districts in the State, there are over 1,-300 other Independent School Districts whose cost will be increased proportionately and who also must find additional sources of revenue. Many of these districts have reached their constitutional tax rate limit as well as property value limitations.
. 29 U.S.C.A. § 207 (j) (1966 Cum. Supp.).
. At the hearing of this case the Solicitor of Labor argued for all of the defendants. He was asked from the Bench whether and where a line should be drawn. Without conceding that any line should be drawn in this ease, and without withdrawing from his position that the plenary power of the federal government over interstate commerce applies to the States as well as to individuals, the Solicitor suggested: “* * * we have such a variety of situations that it may not be the path of wisdom to try to issue any blanket rule [to cover] the variety of different situations demon-stated [by the stipulations with respect to] Maryland, Ohio and Texas, and which can be assumed to exist in a multiplicity of cases throughout the fifty States.” Tr. p. 193. The Solicitor concluded “that this is not the appropriate place and case for blanket injunctions or orders on a blanket basis so far as the application of this rule to schools and hospitals are concerned. Instead, it would seem most appropriate if such a new line were conceived and fashioned, if it should be, that the concept and the fashioning of it should not be for this Court, but by the Supreme Court in any later proceedings, or perhaps, as I have suggested several times before, it should be done as cases actually come up in the future and action is taken where we can get a full exposure of all of the different facts and facets on issues that may well be presented at that future time.” Tr. pp. 204, 205.

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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/9685155. Public record. Not legal advice.