# Petition for Writ of Certiorari — Travis-Edwards, Inc. v. Hodgson > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385606_1535%3A1 ## Record - **Collection:** Supreme Court brief - **Document type:** Petition for Writ of Certiorari - **Published:** January 1, 1972 - **Citation:** 409 U.S. 1076 ## Text In the Supreme Court of the United States OCTOBER TERM, 19.... eee ee eee eeeeeeeeeee JAMES D. Hopcson, SECRETARY OF LABOR, Unrtrep STATES DEPARTMENT OF LABOR, Respondent. PETITION FOR A WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE FIFTH CIRCUIT y 3600 Republic National Bank Tower Dallas, Texas 75201 Area Code 214, 744-4511 Attorneys for Petitioner INDEX Page Citation to Opinions Below ooo... eeseeseeeeneeeeeeee: 1 ale DE eee eS 2 III nnesirneecnesccseennvnniniiiiennunivonnevivenanrenscenes 2 EERE ee en 2 I I. csersievieoseninnioomcambssisincsinewes 2-3 A. The Decision of the Trial Court ........0..........00000. 4 B. The Decision of the Court of Appeals ................ 4-6 Reasons for Granting the Writ o.oo. 6-10 eg amnion 10-11 Appendix A io eniorieenenectasainneniolcaioud 1-4 Appendix B Decision of the Court of. Appeals .................... 1-14 Appendix B-2 Order of the Court of Appeals 200000000000... 1-2 Appendix C Opinion of the Trial Court 202.0000... cece. 1-12 : i j yy 3 a a : 4 Rg Pelton. ccis vic neat Niner weit “3 HA ii Citations Cases Bozant v. Bank of New York, 156 F.2d 787 i RE AEC RON 3 Se 10 Kelly v. Ford, Bacon & Davis, 162 F.2d 555 (3. Cir. 1947) LF TEATS ARONA SO 10 Kirshbaum Co. v. Walling, 316 U.S. 517, 520 RARE be Sip SEM set RNs ARE. 7 Maneja v. Waialua Agricultural Co., 349 U.S. IE I scssah te ca psiasercantt Mendaececc needa 7 Maryland v. Wirtz, 392 U.S. 183, 188 (1968) ............8 Mitchell v. Lublin, McGaughy & Associates, 250 F.2d 253, 259 (4 Cir. 1957) .. EN Mitchell v. Welcome Wagon ‘pssemmanenane Inc., 232 F.2d 892 (6 Cir. 1956) .. ee School v. McWilliams Dredging Co., 169 F.2d F | Rie a eee 10 Stevens v. Welcome Wagon International, Inc., 390 F.2d 75 (3 Cir. 1968) .. vesvesee By 9 10 East 40th Street Building, Inc. v. Cotton 925 U.S. S7B (1945) once csecececsceeeeeees 4, 5, 7,8 Walling v. Jacksonville Paper Co., 317 US. ner eee Ne 7 Statutes I I ie cs ee en 2 UBL. Sie, ob ome. ...................................... 2, 4, 7, 8,9 In the Supreme Court of the United States OCTOBER TERM, 19.... TrAvis-EDWARDS, INC., Petitioner, v. JaMEs D. Hopcson, SECRETARY OF LABOR, UnrTep STATES DEPARTMENT OF LABOR, Respondent. PETITION FOR A WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE FIFTH CIRCUIT Travis-Edwards, Inc. (hereinafter “Travis- Edwards”), Petitioner, prays that a Writ of Certiorari issue to review the opinion, judgment and order deny- ing rehearing of the United States Court of Appeals for the Fifth Circuit in the subject case. CITATION TO OPINIONS BELOW The opinion of the United States Court of Appeals for the Fifth Circuit is printed as Appendix B hereto, pp. 1-4; it is not yet officially reported. The decision 2 of the District Court is reported at 320 F. Supp. 834 (DC La. 1971), and is printed as Appendix C hereto, infra, pp. 1-12. The Order of the United States Court of Appeals for the Fifth Circuit denying Petitioner’s Mo- tion for Rehearing En Banc is not officially reported but is reprinted as Appendix B-2 hereto, infra, p.._, JURISDICTION The opinion of the United States Circuit Court of Appeals was rendered on July 10, 1972. Rehearing was denied August 17, 1972. The jurisdiction of this Court is invoked under 28 U.S.C. §1254(1). QUESTION PRESENTED Whether a purely local business is an “enterprise en- gaged in commerce or the production of goods for commerce” within the meaning of the Fair Labor Standards Act, as amended, solely because two clerical employees periodically communicate with corporate officers who happen to live outside the state. STATUTES INVOLVED The relevant ‘statutory provisions are set forth in Appendix A, pp. 1-4. STATEMENT OF THE CASE Travis-Edwards owns and operates the Henry C. Beck Building, a 20-story office building located in 3 Shreveport, Louisiana, which rents office space to an unrestricted variety of tenants (R.17). Prior to January 1, 1979, Travis-Edwards also owned and operated a concession stand located in the Henry C. Beck Building and open to the public. Two employees of Travis-Edwards worked in this concession stand (R. 18, 19). On January 16, 1970, Travis-Edwards leased the space occupied by the concession stand to a third party and sold to such third party all the equipment and inventory used in the operation of the concession stand (R. 18). Employees of the Henry C. Beck Building consist of the following: 1. Office employees who perform clerical and book- keeping duties relating to the operation of the building, and incorporate information concern- ing the operation of the building into three re- ports, copies of which are mailed to officers of Travis-Edwards (R. 19-20) ; 2. Engineers who, “in the maintenance of the build- ing” and in the “repair and maintenance of the air conditioning and heating system” regularly utilize certain material and equipment (R. 20); 3. Maids and porters who “in their custodial and janitorial duties in and about Defendant’s build- a certain materials and equipment (R. 4, Parking lot attendants who regularly and cus- tomarily park and drive automobiles for tenants and the public (R. 21); and + 5. One maid who, in addition to her duties as a maid, operates an elevator when it is used to transport deliverymen with large deliveries of freight; this maid takes no part in the handling of the freight, and operates the elevator only “in order to assure that it is promptly returned to the basement, changed back to automatic operation and made available to building ten. ants” (R. 21-22). A. The Decision of the Trial Court Upon the basis of these facts, the Trial Court found that Travis-Edwards is “not an enterprise within the coverage of the Fair Labor Standards Act” (App. C, p. 11. It reasoned that the office employees were not covered by the Act because “in light of the funda- mentals enuniciated” in 10 East 40th Street Building, Inc. v. Callus, 325 U.S. 578 (1945), that operation of the office building “as here, constitutes local business,” the activities of the office employees did not constitute “being engaged in commerce or in the production of goods for commerce” (App. C, pp. 6-7); that the maids, porters, engineers and parking lot attendants were not covered by the Act because the materials and equipment which they utilized ceased to be “goods’— within the meaning of the Act upon their delivery into the physical possession of the ultimate consumer (App. C, pp. 7-8); that the “maid - sometimes - elevator opera- tor” is not “engaged in commerce within the meaning 5 of the Act” (App. C, pp. 9-10); and that “operation of a concession stand and an office building” are not related activities within the meaning of the Act (App. C, pp. 10-12). B. The Decision of the Court of Appeals In an opinion by Judge Tuttle, joined in by Judge Ingraham, the Court of Appeals reversed the lower Court and held that the Henry C. Beck Building is “an enterprise engaged in commerce or the procuction of goods for commerce” solely because the duties of some of its office employees included preparation of certain reports concerning the operation of the building and mailing such reports to two corporate officers in Dallas, Texas, and one corporate officer in Atlanta, Georgia (App. B, pp. 1-9). The majority reasoned that al- though “these documents may have no intrensic value, and are for internal corporate use only, they are, in our view, nonetheless sufficient to meet the wnexacting standards of the statutory definition of ‘commerce’ ” (App. B, p. 8). Judge Roney dissented, saying: “ ..I1 think the majority is wrong to hold that . Defendant’s office employees are engaged in com- merce and the production of goods for commerce, within the meaning of the Fair Labor Standards Act, solely by virtue of the fact that they prepare and mail operating reports of a purely local busi- — S out of town directors and officers.” (App. »p.9). He pointed out that in all decisions which held that written materials were “goods” within the meaning of the Act or that office workers who mailed such materials were “engaged in commerce,” the employees performed “an essential and integral part of (the employer's) interstate business” (App. B, p. 10). Citing 10 East 40th Street Building, Inc. v. Callus, supra, Judge Roney stated that if the officers and directors of Travis. Edwards “lived in the State, there is little doubt that the operation of the Beck Building would be held to be local business” (App. B, p. 10). He further pointed out that the opinion of the majority is in direct conflict with the decisions of the Third and Sixth Circuits in Stevens v. Welcome Wagon International, Inc., 390 F 2d 75 (3 Cir. 1968) and Mitchell v. Welcome Wagon Inter. national, Inc., 232 F.2d 892 (6 Cir. 1956) (App. B, pp. 11-12). Judge Roney concluded his dissent with the follow. — ek en Sp een ean oa é D> goods for commerce within the ing of I would affirm the decision of the District (App. B, p. 12). REASONS FOR GRANTING THE WRIT The decision of the Court below is directly contrary to the principles enunciated by this Court that Congress _ in enacting the Fair Labor Standards Act did not ex- haust its constitutional power over commerce but left APE TS PENIS POT TIMES TWEE RELI! — e 2, C 7 jocal business to the protection of the States, and that running an office building constitutes such local busi- ness. The decision is, moreover, in direct conflict with numerous other Circuit Court decisions which have consistently held that the mere use of the mails incident to a purely local business does not constitute engaging in commerce or in the production in commerce. (1) The Fair Labor Standards Act, as amended, was enacted to correct and eliminate detrimental conditions “in industries engaged in commerce or in the production of goods for commerce,” 29 U.S.C. §202. Construing the Act and its legislative history, this Court pointed out that Congress did not by the Act “see fit * * * to exhaust its constitutional power over commerce” Kirshbaum Co. v. Walling, 316 U.S. 517, 520 (1942); that “the history of the legislation leaves no doubt that Congress chose not to enter areas which it might have occupied,” Maneja v. Waialua Agricultural Co., 349 US. 254, 272 (1955); that “Congress in enacting this statute plainly indicated its purpose to leave local business to the protection of the states,” Walling v. Jacksonville Paper Co., 317 U.S. 564, 570 (1943); and that, “We must be alert, therefore, not to absorb by adjudication essentially local activities that Congress did not see fit to take over by legislation,” 10 East 40th Street Building, Inc. v. Callus, supra, 325 U.S. at pp. 582-583. This Court in 10 East 40th Street Building, Inc. v. Callus, Inc., supra, applied this limitation on the cover- Sire) OPW PP Qenyereeta gy wre ~~ age of the Act and held that employees of an office building similar to but more than twice as large as the Beck Building were not covered by the Act. It said that “Renting office space in a building exclusively set aside for an unrestricted variety of office work spontaneously satisfies the common understanding of what is local business and makes the employees of such a building engaged in local business,” 325 U.S. at p. 583. Referring to the boundary of the Act’s coverage, this Court said that: ing an office building, are to tsntell ap diaines inct from those necessary parts of a Pater Senders SPSS US a tak (ene sis supplied ) At least as to the office employees of Travis-Edwards, nothing in the 1961 or 1966 Amendments to the Act altered the proposition that regulation of local activities was left to the states; as this Court pointed out in Maryland v. Wirtz, 392 U.S. 183, 188 (1968), the effect of the addition in these Amendments of the enterprise concept was “to extend protection to the fellow em- ployees of any employee who would have been pro- tected by the original Act, but not to enlarge the class of employers subject to the Act” (emphasis the Court’s). The building involved in the case at bar clearly is not an industry “engaged in commerce or in the pro- duction of goods for commerce” which Congress in- tended to regulate by the Fair Labor Standards Act. It is, as this Court established, a purely local business which Congress left “to the protection of the States.” The office employees of Travis-Edwards formed “part of a distinctive enterprise, such as the enterprise of running an office building”; their occupation therefore is, as this Court said in Callus, supra, “to be treated as distinct from those necessary parts of a commercial process which alone, with due regard to local regula- tions, Congress dealt with in the Fair Labor Standards Act.” Accordingly, they are not covered by the Act and the majority of the Court below erred in concluding otherwise. (2) As Judge Roney correctly pointed out in his dissent, the decision of the Court below is in direct con- flict with the decisions of the Third and Sixth Circuits in the Welcome Wagon International cases, supra. The majority decision is, moreover, irreconcilable with num- erous additional decisions by other circuits, Mitchell v. Lublin, McGaughy & Associates, 250 F.2d 253, 259 (4 Cir. 1957): “The mere use of the mails and of ) facilities across state lines is not inter- state commerce. There must be some relation to a business which is interstate in character . . . where a business is essentially local and there is no pro- PPite sein adn Dba: 10 duction of ‘goods,’ communication which is merely incidental to the local enterprise cannot be classed as commerce.”" School v. McWilliams Dredging Company, 169 F.2d 729 (2 Cir. 1948): ariel ae re rhs ew Yo in Sent ior au to te Gta Uae aa ae ee of constituted his t in the i goods for commerce. In our opinion, this work can- not be so i since use of these 1947): letters sent out by Kelly crossed state lines. But even assuming that they did, we are satisfied from our independent examination of the evidence, tha the District Judge was entitled to as he did, that these were ‘an incident of in te busi- ness’” 162 F.2d at pp. 569-560. "Significantly, this Court in Mitchell v. Lublin, McGaughy & Associates, 358 U.S. 207 (1959) did not disturb this portion of the Fourth Circuit decision. It held that various employees including stenographers were ll Bozant v. Bank of New York, 156 F.2d 787 (2 Cir. 1946), in determining whether a bank’s employees were covered, “the mere writing of letters or the drawing of which have no value of their own except as records, are not to be counted: 156 F.2d at 790; other- wise, “the Act would sweep into its maw every business, however local, which manufactured nothing whatever, merely because it carried on by correspondence, which is the case in all business” (156 F.2d at 789). CONCLUSION For the foregoing reasons, the Petition for a Writ of Certiorari should be granted. Respectfully submitted, 3600 Republic National Bank Tower Dallas, Texas 75201 (214) 744-4511 Attorneys for Petitioner a a 1 APPENDIX A STATUTORY PROVISIONS FAIR LABOR STANDARDS ACT OF 1938, AS AMENDED (29 U.S.C. 201, et seq.) SEC. 2. (a) The Congress hereby finds that the existence, in industries engaged in commerce or in the production of goods for commerce, of labor conditions detrimental to the maintenance of the minimum stan- dard of living necessary for health, efficiency, and gen- eral well-being of workers (1) causes commerce and the channels and instrumentalities of commerce to be used to spread and perpetuate such labor conditions among the workers of the several States; (2) burdens commerce and the free flow of goods in commerce; (3) constitutes an unfair method of competition in com- merce; (4) leads to labor disputes burdening and ob- structing commerce and the free flow of goods in com- merce; and (5) interferes with the orderly and fair marketing of goods in commerce. * 7 = SEC. 3. As used in this Act— * * * (b) “Commerce” means trade, commerce, trans- portation, transmission, or communication among the several States or between any State and any place outside thereof.’ * s e (i) “Goods” means goods (including ships and marine equipment) wares, products, commodities, mer- Pes of the Fair Labor Standards Amendments APPENDIX A 2 chandise, or articles or subjects of commerce of any character, or any part or ingredient thereof, but does not include goods after their delivery into the actual physical possession of the ultimate consumer thereof other than a producer, manufacturer, or processor thereof. = * * (j) “Produced” means produced, manufactured, mined, handled or in any other manner worked on in any State; and for the purposes of this Act an employee shall be deemed to have been engaged in the production of goods if such employee was employed in producing, manufacturing, mining, handling, transporting, or in any other manner working on such goods, or in any other manner working on such goods, or in any closely related process or occupation directly essential to the production thereof, in any state.‘ * . * (r) “Enterprise” means the related activities per- formed (either through unified operation or common control) by any person or persons for a common busi- ness purpose, and includes all such activities whether performed in one or more establishments or by one or more corporate or other organizational units including departments of an establishement operated through leasing arrangement, but shall not include the related activities performed for such enterprise by an inde- pendent contractor: Provided, That, within the mean- ing of this subsection, a retail or service establishment which is under independent ownership shall not be deemed to be so operated or controlled as to be other | ee by section 3(b) of the Fair Labor Standards Amendments oO ; 3 APPENDIX A than a separate and distinct enterprise by reason of any arrangement, which includes, but is not necessarily limited to, an agreement, (1) that it will sell, or sell only, certain goods specified by a particular manufac- turer, distributor, or advertiser, or (2) that it will join with other such establishments in the same industry for the purpose of collective purchasing, or (3) that it will have the exclusive right to sell the goods or use the brand name of a manufacturer, distributor, or adver- tiser within a specified area, or by reason of the fact that it occupies premises leased to it by a person who also leases premises to other retail or service establish- ments. * * . (s) “Enterprise engaged in commerce or in the pro- duction of goods for commerce” means an enterprise which has employees engaged in commerce or in the production of goods for commerce, including employees handling, selling, or otherwise working on goods that have been moved in or produced for commerce by any person, and which— (1) during the period February 1, 1967, through January 31, 1969, is an enterprise whose annual gross volume of sales made or business done is not less than $500,000 (exclusive of excise taxes at the. retail level which are separately stated) or is a gasoline service establishment whose annual gross volume of sales is not less than $250,000 (exclusive of excise taxes at the retail level which are separ- ately stated), and beginning February 1, 1969, is an enterprise whose annual gross volume of sales made or business done is not less than $250,000 (ex- clusive of excise taxes at the retail level which are separately stated) ; APPENDIX A 4 = . * SEC. 6. (a) Every employer shall pay to each of his employees who in any workweek is engaged in com. merce, or in the production of goods for commerce, or is employed in an enterprise engaged in commerce or in the production of goods for commerce, wages at the following rates: (b)* Every employer shall pay to each of his em. ployees (other than an employee to whom subsection (a) (5) applies) who in any workweek is engaged in commerce or in the production of goods for commerce, or is employed in an énterprise engaged in commerce or in the production of goods for commerce, and who, in such workweek is brought within the purview of this section by the amendments made to this Act by the Fair Labor Standard Amendments of 1966, wages at the following rates: SEC. 7“* (a) (1) Except as otherwise provided in this section, no employer shall employ any of his em- ployees who in any workweek is engaged in commerce or in the production of goods for commerce, or is em- ployed in an enterprise engaged in commerce or in the production of goods for commerce, for a workweek longer than forty hours unless such employee receives compensation for his employment in excess of the hours “As amended by the Fair Labor Standards Amendments of 1961 and “Section 7 as amended by section 7 of the Fair Labor Standards Amendments of 1949, and as further amended as noted. Single asterisk (*) indicates provision amended by the 1949 Act; * * * OL OE Fs SEEPEM ILI N YE TOP EN Ta, a 88 NE REEE TYE IS OS a —— . a oa a wo . 5 APPENDIX A above specified at a rate not less than one and one-half times the regular rate at which he is employed. (2) No employer shall employ any of his employees who in any workweek is engaged in commerce or in the production of goods for commerce or is employed in an enterprise engaged in commerce or in the production of goods for commerce and who in such workweek is brought within the purview of this sub-section by the amendments made to this Act by the Fair Labor Stan-- dards Amendments of 1966— (A) for a workweek longer than forty-four hours during the first year from the effective date of the Fair Labor Standards Amendments of 1966, (B) for a workweek longer than forty-two hours during the second year from such date, or (C) for a workweek longer than forty hours = the expiration of the second year from such ate, unless such employee receives compensation for his employment in excess of the hours above specified at a rate not less than one and one-half times the regular rate at which he is employed. aA ine GLEN RBS FIM BONUS F SN GION TP PARE a Yel OTST TREE ETON NIE COI RE RSA Be 1 APPENDIX B IN THE UNITED STATES COURT OF APPEALS FOR THE FIFTH CIRCUIT No. 71-1297 JAMES D. Hopcson, SECRETARY OF LABOR, Unrrep STaTES DEPARTMENT OF LABOR, Plaintiff-Appellant, v. Travis Epwarps, INc., Defendant-Appellee. Appeal from the United States District Court for the Western District of Louisiana (July 10, 1972) Before TUTTLE, INGRAHAM and RONEY, Circuit Judges. TUTTLE, Circuit Judge: This appeal involves the question whether the Fair Labor Standards Act applies to the operation of the Henry C. Beck Building, a 20- story office building located in Shreveport, Louisiana. The district court held that this office building opera- tion was not an “enterprise engaged in commerce or the production of goods for commerce” within the APPENDIX B | : | the relief he seeks. a ST NE AE FN eS a a lm 3 APPENDIX B JAMES HODGSON v. TRAVIS EDWARDS, INC. ion of goods for commerce, including employees handling, selling, or otherwise working on goods which have been moved in or produced for commerce.” 29 USC 203(s).* The issue before us, then, is whether the Beck Building has employees involved in commerce in the manner prescribed by the Act. We think it does. ve of the opinion that the office employees are “en- gaged in commerce or in the production of goods for *An additional requirement is that the business have annual gross sales in excess of Gusaeee. 29 USC $8506) (1). Defendant aduite Gat the Beck Building operation meets requirement. "These employees “handled” and/or used cleaning materials, paper towels and light etc. ” ‘This concession stand was operated by two employees until it was lt see oo reer APPENDIX B 4 JAMES HODGSON v. TRAVIS EDWARDS, INC. shareholders, likewise live out-of-state, one in Dallas and one in Atlanta, Georgia. With respect to the office employees the stipulated facts reveal that “(these employees regularly and cus- tomarily performed various clerical and duties including the preparation and making of rent ledgers, bank deposits, accounts receivable and payable. “These daily and weekly facts and figures are then assimilated into three reports, copies of which are mail- (a) Mr. Wirt Davis, Dallas, Texas (b) Mr. Joe B. Hutchison, Atlanta, Georgia.” 5 APPENDIX B JAMES HODGSON v. TRAVIS EDWARDS, INC. Our inquiry is directed to whether these employees are “engaged in commerce or in the production of goods Sr eummmnen” Though it is plain that coverage under the Act will not here be derived from what the Beck Building tenants do, the line of case dealing with such derivative coverage’ is nonetheless relevant as bearing on what is directly involved here, ie., the meaning of the terms “engaged in commerce” and “engaged in the production of goods for commerce.” Of course, the pivotal question is whether there ex- ists, in the regular administration of the Beck Building, an element of “commerce” sufficient to meet the statu- tory requirements. We think it plain that if there is “commerce” here, the office employees are “engaged” in it (by virtue of their regular interstate communica- tions with executive personnel) and/or are producing “goods” for commerce. See Wirtz v. Giometti and As- sociates, Inc., 399 F.2d 738 (CA 5, 1968); PBA of Birmingham v. Goldberg, (supra). “Commerce” is defined by Section 3(b) of the Act as “trade, commerce, transporation, transmission, or communication among the several states.” (emphasis supplied ). Taken literally the siatutory definition clear- ly encompasses the varicus reports mailed to the out- of-state officers and directors and stockholders of Tra- vis Edwards, Inc, since such reports are without ques- tion transmissions or communications among the states. However, defendant argues that the use of the mails here is incidental to the operation of a purely local bus- "Kirschbaum Co. v. Walling, 316 U.S. 517; Public Building Authority of Birmingham v. Goldberg, 298 F.2d 367 (CA 5, 1962); Allen v. Atlantic Realty Co., 384 F.2d 527 (CA 5, 1967). ‘ “< co. | PO EE ELIA IO EOE OE APPENDIX B 6 JAMES HODGSON v. TRAVIS EDWARDS, INC. iness or in effect that such communications must in- volve some sort of business or profit-making activity in order for the Act to apply. While we do not perceive such a requirement in the statutory definition we would not in any event agree that what a corporation such as this one finds it worth paying its employees to do and which must consume a substantial portion of their time on the job is not a part of that business’ profit-making activities. Moreover, even upon the assumption that the sta- tute may require something more than the mere mail- ing of a paper across state lines, nevertheless this court has expressly disavowed the notion that profit or a pro- fit motive must attach to interstate communications in order to satisfy the commerce requirements of the Act. In PBA of Birmingham v. Goldberg, supra, the in- terstate communications consisted of Social Security checks mailed out to recipients in several states. This court noted that while it was difficult to grasp the con- cept that a government employee working on a Social Security claim was producing goods for commerce, “partially because commerce generally has a connota- tion of business or profit,” nonetheless there need be “no profit motive present to constitute commerce.” (emphasis supplied). 298 F.2d 367 at 370; see also Allen v. Atlantic Realty Co., supra. The Supreme Court case of Ten E. 40th Street Com- pany v. Callus, 325 U.S. 578 (1944), we think, throws no light upon the proper disposition of the case. The claim for coverage in that case was based upon the ELISE SAPIENS ALT OSI SF TAT BO _~_ 2 7 APPENDIX B JAMES HODGSON v. TRAVIS EDWARDS, INC. nature of the interstate business carried on by the ten- ants of the office building. The court indicated that it was a typical-office building with a variety of tenants, the building being locally owned and locally operated, and there being shown no interstate transaction of any kind in the operation of the building. The distinction between that cases and this is obvious; here the office employees of Travis Edwards regularly engage in inter- state communication by means of the operating re- ports, the preparation of which requires a considerable amount of their time. Rather, we think the situation here is more closely analogous to Allen v. Atlantic Realty Co., supra, in which this court found the necessary element of com- merce in executive material prepared in Atlanta to be sent interstate to agents and employees of Southern Bell, a company that occupied a substantial part of the office building concerned. If anything, the case before us, insofar as the applicability of the Act is concerned, is even stronger than the Atlantic Realty case because in that case the coverage was based on the activities of a tenant of the building, whereas here the employees of the building corporation itself are engaged in interstate activities. Of course, the pure volume of interstate com- munications is irrelevant to our decision since there is no de minimis rule with respect to the application of the Act. Schultz v. Kip’s Big Boy, 431 F.2d 530 (CA 5, 1970); see also Montalvo v. Tower Life Building, 426 F.2d 1135 (CA 5, 1970). In sum, we note that the reports we are dealing with are of such a nature as are required to be sent to APPENDIX B 8 JAMES HODGSON v. TRAVIS EDWARDS, INC. the president of the corporation and two out-of-state directors. Although the record does not disclose how many other directors there may be, indicating only that the local manager of the building was also an officer and director, it is common knowledge that a corporate president is ordinarily responsible to some degree for the success and management of the corporation. And, of course, the directors are responsible for the action of the president in the overall supervision and policy guidance of corporate affairs. We cannot assume, there- fore, that the operating reports have no relation to bus- iness matters in a broad sense concerning the Beck Building. Though these documents may have no in- trinsic value, and are for internal corporate use only, they are, in our view, nonetheless sufficient to meet the unexacting standards of the statutory definition of “commerce” (i.e., “... transmission or communication” among the states). In this conclusion we are supported by the case of Schultz v. Falk, 439 F.2d 340 (CA 4, 1971), cert. denied in which the Court of Appeals for the Fourth Circuit held under similar circumstances that the mailing of operating reports to out-of-state owners was at least one element in the case which sat- isfied the commerce requirement. We conclude, therefore, that the office employes are “engaged in commerce or in the production of goods for commerce.” It follows that Travis Edwards, Inc. is a covered “enterprise” and that all its employees, wheth- er or not they themselves are involved in commerce, 9 APPENDIX B JAMES HODGSON v. TRAVIS EDWARDS, INC. are covered by the wage and hour provisions of the Act.* The judgment is REVERSED and the case RE- MANDED for further proceeding consistent with this “ir RONEY, Circuit Judge, dissenting: I think the majority is wrong to hold that defend- ant’s office employees are engaged in commerce and the production of goods for commerce, within the meaning of the Fair Labor Standards Act, solely by virtue of the fact that they prepare and mail operating reports of a purely local business to out-of-town direc- tors and officers. The Secretary argues that the reports which these employees mail across state lines are “goods” under §3(s) of the Act, so that the office workers are en- gaged in the “production of goods for commerce.” Al- ternatively, he asserts that the office employees are “engaged in commerce” under §3(s). In certain circumstances we have held that docu- ments and written materials can be “goods” as the Act uses that term,’ or that office workers who mail such materials can be “engaged in commerce.”’ But those cases cannot be used as authority for a decision "We note that the concession stand was leased to a third party in January, 1970. Thus, employees, if any, of this third party are not cov- ered. However, the Beck Building employees who operated the con- cession stand prior to its being leased are entitled to recover unpaid back wages as provided in the Act. ‘Wirtz v. A. S. Giometti & Associates, Inc., 399 F.2d 738 (5th Cir. —y A + aa Authority of Birmingham v. Goldberg, 298 F.2d 367 ir. I \ "Montalvo v. Tower Life Bldg., 426 F.2d 1135 (5th Cir. 1970); Allen ty Realty Co., 384 F.2d 527 (5th Cir. 1967), cert. denied, 390 U.S. APPENDIX B 10 JAMES HODGSON v. TRAVIS EDWARDS, INC. in this case. In those cases, as in every other case cited to us by the Secretary’ where such documents and reports were determined to provide the basis for §3(s) coverage, the employer transacted some portion of its business in interstate commerce. The employees who were found to be covered performed “an essential and integral part of [the employer’s] interstate busi- ness.” Wirtz v. Wohl Shoe Co., 382 F.2d 848, 851 (5th Cir. 1967). In the case before us, since the employer’s business activity has no direct connection with inter- state commerce at all, it cannot be found that Travis Edwards’ office employees — duties which sup- port or aid in any interstate business. The holding of the Court converts an otherwise local business into an interstate business merely because its corporate directors and president live outside of the state. If they lived in the state, there is little doubt that the operation of the Beck Building would be held to be a local business.‘ The majority concedes that the coverage cannot here be derived from the inter- state activities of the Beck Building tenants, and that *Wirtz v. Valco, Inc., 407 F.2d 1322 (5th Cir. 1969), aff’g 280 F.Supp. 449 (S.D. Tex. 1968) (small loan company operated with funds supplied by out-of-state lender); Wirtz v. Wohi Shoe Co., 382 F.2d 848 (5th Cir. 1967) (employer operated retail shoe outlets in 42 states); Credit Serv., Inc. v. Fleming, 372 F.2d 143 (5th Cir. 1967) (11% of employer’s business was with out-of-state customers); Beneficial Fin. Co. of Wisconsin v. Wirtz, 346 F.2d 340 (7th Cir. 1965) (employer was branch office of inter- state consumer finance system); Wirtz v. Wardlaw, 339 F.2d 785 (4th Cir. 1964) (employees mailed cards and clippings to out-of-state business prospects, with aim of obtaining these prospects as customer); Wirtz v. C&P Shoe Corp., 336 F.2d 21 (5th Cir. 1964) (substantially all the shoes sold by employer came from out-of-state suppliers and manufacturers); Mitchell v. Kroger Co., 248 F.2d 935 (8th Cir. 1957) comgeeger operates interstate grocery chain); Union Nat’l Bank of Little Rock v. Durkin, 207 F.2d 848 (8th Cir. 1953) (bank handled “large quantities” of stocks, bonds, checks, and commercial paper shipped to and from points out of state); Meeker Cooperative Light and Power Ass’n v. Phillips, 158 F.2d 698 (8th Cir. 1946) (electric cooperative provided power upon which interstate businesses depended). ‘10 East 40 Street Bldg., Inc. v. Callus, 325 U.S. 578, 583 (1945) (“Renting office space in a building exclusively set aside for an unre- stricted variety of office work spontaneously satisfies the common under- standing of what is local business and makes the employees of such a building engaged in local business.”’). 11 APPENDIX B this does not fall within the Public Building Authority of Birmingham and Allen line of cases. See notes 1 and 2 supra. The very argument presented by the Secretary here was before the Third Circuit in the case of Stevens vy. Welcome Wagon International, Inc., 390 F.2d 75 (3rd. Cir. 1968). The plaintiff in that case was a Pennsyl- yania resident who operated a Welcome Wagon serv- ice which was entirely local in its scope of operation. She was, however, required to submit daily, weekly, and monthly reports to company offices in Tennessee and New York. The Court, in analyzing plaintiff's con- nection with “commerce,” found it appropriate to quote the following language from Mitchell v. Welcome Wagon, Inc., 139 F.Supp. 674 (W.D. Tenn. 1954), aff'd 932 F.2d 892 (6th Cir. 1956): “The communications with Defendant’s divi- sional offices, including the rare transmittal of the executory service contracts, are purely internal, and like the confidential daily reports sent to the subscribers, are incidental to the local services per- formed by the employee. The records, gy and the service contract have no value of their own. They are not Defendant’s objective and Defendant does not sell them as goods. Their preparation and transmission incident to a business whose purpose does not comprise the production of goods at all, do not constitute engaging in the production of ‘goods.’ ” 390 F.2d at 77, 78 [citations omitted]. The Court then concluded: “We realize that the Fair Labor Standards Act is to be given a liberal interpretation in favor of finding coverage and that the issue of whether an employee is engaged in commerce should be de- cided by applying practical rather than technical standards, Mitchell v. C. W. Vollmer & Co., 349 US. 427, 429, 75 S.Ct. 860, 99 L.Ed. 1196 (1954), but APPENDIX B 12 it is self evident on the record before us that ap. ye activities were local in nature ess sof communications with appellee’s New York City and Memphis offices. Nor can we accept appellant’s contention that she was engaged in the production of goods for commerce. See, Mitchell v. Welcome Wagon, Inc., supra, 139 F, Supp at page 679 and cases cited therein.” I think that the reasoning of the Third Circuit in Stevens applies with equal force to the situation pre- sented here.* Finding that no other employee group of defendant is engaged in commerce or in the production of goods for commerce within the meaning of the Act,’ I would affirm the decision of the District Court. ~ ‘Shultz v. Falk, faery dy de 1971), upon which the majority relies, is not in point here. There the reports were not mailed to owners of the business, P'sPhe employer is the consumer of the soap, waz, paper towel, igh 664 (S.D. Tex. 1970); Shultz v. Arnheim & Neely, ne., 304 F bag | Pa. 1969); cf. Mitchell v. Sherry Corine Co , 264 F.2d 831 (4th ce relied ‘om by the Secretary: Shultz »» Falk, cts on 1970) ; ionstr. Corp., 408 F.2d 626 (2nd Cir. 1969): 33s 7H = is Cir. v. Union Trust Bank of St. "Petersburg, 297 F. Supp. 1274 (M.D. Fla. 1969); Irby v. Davis, 311 F. Supp. 577 yen Ark. 1970); Wirtz v. Mayer Constr. Co., 291 F.Supp. 514 (D. N.J. 1968). The Secretary cites no cases to suppo ~) 7 parking lot attendants and the contention that the automobiles are “goods” ———— eee interpretation of the Statute. DPN eC Se AALS TIE NN RO TSU Red ! 1 APPENDIX B IN THE UNITED STATES COURT OF APPEALS FOR THE FIFTH CIRCUIT No. 71-1297 James D. Hopcson, SECRETARY OF LABOR, Untrep STaTES DEPARTMENT OF LABOR, Plaintiff-Appellant, v. Travis Epwarps, INc., _ Defendant-Appellee. Appeal from the United States District Court for the Western District of Louisiana ON PETITION FOR REHEARING AND PETITION FOR REHEARING EN BANC (Opinion July 10, 1972, 5 Cir., 1972, ..... , a ). (August 17, 1972) Before TUTTLE, INGRAHAM and RONEY, Circuit Judges. PER CURIAM: The Petition for Rehearing is DE- _. NIED and no member of this panel nor Judge in regu- lar active service on the Court having requested that APPENDIX B-2 2. J. D. HODGSON, ETC. v. T. endian INC. the Court be polled 2 en banc, (Rule 35 Federal Rules of Appella ure; Local Fifth Cir. cuit Rule 12) the ction for Rehearing En Banc is DENIED. 1 APPENDIX C. __IN THE UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF LOUISIANA SHREVEPORT DIVISION CIVIL ACTION No. 15,083 Grorce P. SHuLTz, SECRETARY OF LABOR Unrrep STATES DEPARTMENT OF LABOR, v. TRAVIS-EDWARDS, INC. FOR PLAINTIFF MESSRS. L. H. Silberman, Solicitor of Labor United States Department of Labor Washington, D. C. 20210 Beverly R. Worrell Roger J. Martinson United States Department of ~ Labor 1317 Peachtree Street N.E. — FOR DEFENDANT Larry M. Lesh Locke, Purnell, Boren, Laney & Neely Republic National Bank Tower 36th Floor Dallas, Texas 75201 Barry R. Nelson Nelson and Evans Beck Building Shreveport, Louisiana 71101 BEN C. DAWKINS, JR., CHIEF JUDGE APPENDIX C 2 OPINION The Secretary of Labor (the “Secretary”) instituted this action under Section 17 of the Fair Labor Stan. dards Act of 1938, as amended, 29 U.S.C. §§ 201, et seq. alleging that defendant Travis-Edwards, Inc. (“Travis prise within the meaning of Section 3(a) (1), 29 U.S.C. § 203(a) (1). = aie ath ie L i thy i al iat | a! 3 ate i - it ith i HE th Ht ie Ne bi ; i]: 3 ‘iit i ili it tt al? Ne Hil gif fie ot Na HUE oO i in t i ! * sited’, si pepdeeese oss . 5S fy sitat i tH He Ba al st Fant RE cn a ae ji lit it ie wii iets lh il a i He | Hate Hit fi HE a ii 9 ye Hae - oe ee APPENDIX C 6 The Court in 10 East 40th Street Building 3 Co. v. Cals: concluded: has not chosen to do so. Absent such action, it must be concluded that operation of an office building leased | ; 325 US. 583 (1945); See also Tobin v. Girard ies, Inc., 206 F.2d 524 (5th Cir. 1953); Johnson v. Dallas Downtown lopment *C}. Stevens v. Welcome Wagon Int'l, Inc., 390 F.2d 75 (3d Cir. 1968); Billeaudau v. Temple Assoc., 213 F.2d 707 (Sth Cir. 1954). In Wirtz v. i ‘ eF | 7 APPENDIX C ««* * * The records, reports * * * have no value and Defendant does not sell them as goods. Their = do not constitute engaging in the pro- uction of “goods” * * * “The Defendant’s employees who and transmit such records are not in the production of goods for commerce ithin the mean- In light of the fundamentals enunciated in Callus, that operation of an office building, as here, constitutes the Act. Il. MAIDS, PORTERS, ENGINEERS, AND PARKING LOT ATTENDANTS them “employees handling, selling, or otherwise work- ing on goods that have been moved in commerce” and thus they are covered by the Act. This contention primarily is based on these employees’ use of products which were produced outside the state and employed in performance of their respective duties. We cannot accept such a strained interpretation of the Act. “ ‘Goods’ means goods * * * wares, products, com- modities, merchandise or articles * * * but does not include goods after their delivery into the actual en ee ——— APPENDIX C 8 a en, manufacturer or processor thereof.” (Emphasis added.)” Clearly, Travis-Edwards is neither a producer, manu- facturer, or processor. The Secretary argues that the 1966 amendments to the Act extended coverage to the above captioned em- ployees. That clearly strained interpretation of legis- lative intent is not supported.” This legislative history does not support such a revolutionary interpretation. We think the rearrangement in phrasing of the section rather than to create an entirely new theory of cover- age. The Secretary’s own interpretation of the Act dis- poses of his contention with respect to the maids, por- ters, and engineers here: “.. . the term ‘handling or in any other manner ...” 29 C.F.R. 779.240(b) (Enaphasio added)” working on goods’ includes who sort, scssan prado, ot0en, pack, label sdivens, tunmpert. ee Se ae Sean ee & SES on goods.” 29 C.F.R. 779.240(b). “ .. An employee will be considered in ‘handling . . . or otherwise working on ” with- "29 U.S.C. § 203(1). “The Secretary relies heavily on statements to of the Act as to the scope of its coverage. We think statements not reflect legislative intent. cf i ts é i g : moved in for commerce son.” 29 C.F.R. 779.240(b) (Emphasis E ). | f : Fl : l i q a F Ee It seems clear that coverage of the Act does not ex- tend to a maid or porter who uses wax, etc., in his duties, an engineer who uses screws, etc., or an attend- to the “affecting commerce” coverage which was re- jected.” Accordingly, we reject the Secretary’s argu- ment that the maids, porters, engineers, and parking lot attendants are “handling, selling or otherwise work- ing on goods that have been moved in or produced for commerce by any person.” II MAID-ELEVATOR OPERATOR. The Secretary argues that because one maid has as part of her duties operation of an elevator when it is . Inc., F. Supp... , 19 W. H. Bldg. : 4 32, 218 (D.C. Tex 1969). infra. : ner pe ail APPENDIX C 10 used to transport deliverymen with large deliveries that she is engaged in commerce. Again, the Secretary’s con- tention must be rejected as urging too tenuous a con- nection with commerce or the production of goods for commerce to come within the scope of the Act. The Fifth Circuit Court of Appeals noted,"* “ * * * we do not think Congress intended that the Act with respect to those who are only ‘engaged in commerce’ should be stretched and strained to cover every person whose labor is of use or conven- ience or whose labor in some fashion contributes to the comfort or convenience of one who is so * * * Clearly, Congress intended the coverage the Act to stop somewhere, and the line bounding coverage must be drawn.” We do not think the maid-sometime-elevator operator is engaged in commerce within the meaning of the Act." IV. CONCESSION STAND EMPLOYEES It is clear that the activities of the concession stand empluyees are of the type of activity contemplated with- in the “handling” language of the Act. “However, the question then becomes whether operating of the con- cession stand is part of an “enterprise” as contemplated by the Act. “(r) ‘Enterprise’ means the related activities performed (either through unified operation or common control) by any person or persons for a common business purpose, and includes all such activities whether performed in one or more estab- lishments or by one or more corporate or other ~¥Johnson v. Dallas Downtown Development Co., supra, at 289-290. “See Houchin v. Thompson, 2 CCH W. H. Cases, Para. 32,377 (1970), aff'd 6th Cir. No. 20158, Aug. 26, 1970, distinguishing Wirtz v. Columbian Mutual Life Ins. Co., 246 F. Supp. 198 (W.D. Tenn. 1965). We think the Houchin rationale is applicable under the instant facts. w— 11 APPENDIX C organizational units including d ts of an establishment operated