Petition for Writ of Certiorari — Roland Electrical Co. v. Walling
Supreme Court brief1946
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JIN THE Seine <A ee
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Papeeme ‘Court of the United Staies
Octobe Term mre , ‘ ‘
Pur, Rotaxp Buncrnican Compasy, Pilitioner, .
8 oe Vs. r F =e
L.. Metoarre Warirsd, Apministraton ore THe Wace axp
Iforr Diviswn, Devarr a kEN f so ] ABOR, Respondent. °
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cere ey
4
PETITION FOR A WRIT OF CERTIORARI TO' THE ees
UNITED STATES CIRCUIT COURT OF APPEALS
FOR THE FOURTH CIRCUIT TO REVIEW A
' JUDGMENT. WHICH REVER -SED ‘A JUDGMENT
OF THE. DISTRICT: COURT FOR THE DISTRICT
OF MARYLAND AT BALTIMORE — BRIEF :
IN SUPPORT THEREOF.
4 . oe 5
YO. R. MeGuirr,'
Southern’ Building,
Washington, 1D. C
ener é ae Attorne » tir Polit fitiner, --
- sd é 2
Press OF BYRON & ApamMs. WasuINGTON, D. ¢
‘INDEX.
SA Noes | : a ._ Page «.
The Petition ...:......... brah mt ci ehie ee ae
Opinions eater ivaaa ebac saws <a 2.
: ~ Jurisdiction abe iowa aaa ae Si leperty = eaters oe :
Questions presented: spices Ween Kocina a Feat oe
Federal Statute involv ed 5 iA nee ORS EEA Nee CE “23 -
Statement of facts ......: ited egtee es Sestics sera S
(a) Character of petitioner’s place of business. . 4
(b) Volime and description of work performed
' im-petitioner’s -businegs .....5....5..4....: 5
- (ec) Number of petitioner’s: employees and de-
scription of their duties ................... 8
Specfication of Error to be urged .:.... every sire 4
Reasons for granting the writ ........... Se Paeeney 5
The Brief in Support of the Petition De eRe 15-28
oof
_ ARGUMENT:
. .I. Conflict among the’ ‘circuit coutts of eal and
with this Court as to what constitutes produe-
- tion of goods for Commerce within the terms of .
~ the Fair Labor Standards Act ........... ie
Confli¢t among circnit courts of appeal.....16,26 —
Conflict with Judgments of this-Court ...... 18
II. The petitioner’s business is a retail and ser-
viee establishment the greater part of whose
_ selling and servicing is wholly. in intrastate
ecommerce ....... ES eae e licbic oa eeeewcaicr 24 ‘
Canela aes ie eens Paxneres. 27
| _ Exhibit ra, “The opinion of the court below ae eats .29
Exhibit ‘“B’’, The opinion of the Circuit Court of. 7 =
peals, 2nd Cirenit i in Phillips, administriz et al v. All
Service Laundry Corporation, et al, decided Janu- |
sie 5 a Pry BEST Ue ee ae re eee EY Ee 36
ao“ id icwcmenaaics pedpecnss omye's oe 0s 42
il . : on Index Continued.
, AUTHORITIES. ;
_Sratu TES: Page
Fair Labor Standards Act approved J une 25, 1938,
Ch. 676 (52 Stat. — Title 29 U. 8. Code— -
Geo .
“Section 2 wets ee ee hers Tesedege as a
Section 203 6). eo erOeee FO me Te
—Serction 206°... -. ¥- Ss Pre ae ich aca a Setiee 13
a os ae
pie Section 213 (a)(2) -.......... Vebenneee 4, 11, 13, “
BR eee E eOr erry: Peer ries Tre ere
ig Judicial. Code, Section 280 (Tit. 28, Section 247, a
U.S. — See ee a ee aeyee eceeee twee a2 2
; (PPASES : xs ; eee
(fuess v. ‘Meetense, 140. Fed, (2nd) 500. Saee eee =, 37
___.._Higeins-v. Carr Brothers Co., 317 U.S. 574 2.2... 12, 17
~ * Hunt v..National Linen Service, 178 Tenn. 262-.....-.. 12 .
Kirschbaum Company v. Walling, 319 U.‘S. 517.12, 22, 23.
Lonas v. National Linen Service Corporation, 136:
Fed. (2nd) “433, 150 A. L. R. 697, Certiorari denied, -
320: U. 8. 785 ... 23 Lelia aay 66a w-orch Seanad . AZ, 26, oT.
McLeod v. Threlkeld, 319 U. SS Seer Pay 12, 17, 20
Martino v. Michigan Window Cleaning Company, .
me. &, : Srey ear eee - 12
na Phillips, et al, v. All Service ete a Corporation,
| et al., U.S. CTA, (2nd), decided: January 9, 1945
Se Se ae 12, 16, 21
Schechter Poultry Corp. v. United States, 295 U. Ss.
eda seas dita Keak cas tac waa Soe eee 12; 17
Walling v.. Roland Electrical Company, 54 Fed.
i Ee ees ies is
_ Western Union Telegraph Co. v. Lenroot, No. 49,
U.S. S44, decided January 8, 1945. . 12, 17, 18, 20, 22
* White Moto} Company Vv. Littleton; 124 Fed. (2nd)
A ee GWA cee NaRe Cd0 0s GL CeeESO TCO PES
.
. } :
. j < ’ ‘
‘ .
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.
oa THE ery: :
| Supreme Court of the Anited States
October Ferm 1944, °
No.
ee
Tur Rotayp Execrkica, Company, Petitioner,
vs.
°
+ preetee W ALLING, ADM!NISTRATOR OF THE Wace anp
_—Hour Divisiox, , Dervruent or Lapor, Re Respondent.
‘PETITION OF THE ROLAND ELECTRICAL COMPANY
_ FOR A WRIT OF CERTIORARI TO THE UNITED
- STATES CIRCUIT COURT OF APPEALS FOR THE
reat FOURTH CIRCUIT TO REVIEW A JUDGMENT.
\, WHICH REV ED THE JUDGMENT OF THE
_- DISTRICT COURT OF THE UNITED STATES FOR
THE DISTRICT OF MARYLAND AT BALTIMORE,
The Roland Electrical Co y, a corporation organized .-
and existing under the lawsof [the State of Mary land and
having its principal place of business at 418 East Pratt
‘Street, in the City of Baltimore, Maryland, files this as.
_ its petition praying that a Writ of Certiorari be issued to
' review the judgnient of the United States Circuit Court of
Appeals for the Fourth Circuit entered.in this ¢ase on
January 3, 1945, (R: 105), reversing a judgment entered by .
the District. Court of the United States for the District of
Maryland at Baltimore denying an injunction to the’ re-
spondent. as Administrator of the Wage and Hour Division, -
- Department of Labor in a suit brought against the peti-
tioner under Section 17 of the Fair Labor, Standards Act,
52 Stat. 1069, Title 29, Section 217 U. S.-Code. (R. 24).
7" s === TT — 2 -
aetna = _ OPINIONS BELOW.
° g
“The opinior ‘dated February 3, 1944, ty the ‘District pk
Court of ‘the a States for the District of Maryland
is in the record (pp. 24-33) and ‘is. reported asL. Metcalfe .
W alling, soma untested of the Wage and Hour Division,
o4 F ed. poli 733. The opitiion dated January 3, 1945, by
the United States Circuit Court of Appeals is uot yet re-
ported, but a copy thereof is contdined in the record (R.
98, 104) and has been reprinted as Exhibit ‘*A”’ tothe
‘brief in. separ: of this petition. (Infra, 29-35).
2S:
ca) Wee Tena JURISDICTION. |
The jariedietton « of this Court is suvoked under its Rule™
-38 (5)(b) and Section 240 (a) ‘of the J — Code (Title
- Bee. 347, v. S. Code). he ao
QUESTIONS PRESENTED.
“The Circuit Court of. Appeals “en Fourth Circuit —
" stated in its opinion “(R. 98) that the quéstions presented —
_ by the case are;
s
(1) ‘Whether the Sistiyies, of ‘eeibaaeceniek oper-
-ates a repair shop for the repair and reconditioning of .
electrical motors for its’ customers, with. incidental Sale :
* of new and used motors to somé-of ‘its customers from: <
time to .time—are engaged in the production of goods for °
| commercewithin the terms of Section 3(j) of the Fair Labor
‘Standards Act (Title 29, Section 203(j), U.S. , Code) 1;
(2) ‘And/or whether the petitioner is a ‘‘retail or service
establishment the greater. part of whose-selling.or servicing -
is in intrastate commerce’? in Mary land. within the terms .
of Section 13(a) (2) of the. said Fair Labor Standards Act.
(Title. 29, Section 913(a)(2), U. S. Code)? Bs
The petitioner eqncedes that these two questions are pre-
* sented by the record but says that further questions are-also .
presented thereby, namely ? me
-e 3
- (3) Whether the oink stnciician motors repaired by peti-
tioner. for its customers were not then iit the’ possession of
the ultimate consumers and had been removed from the
' stream of commerce at the titne the petitioner was requested
by its intrastate customers to, and did, repair the same? -
(4) Whether. the electrical facilities in the Maryland
: plants and establishments of the: petitioner’s customers
_ which the petitioner ‘semployees sometimes repaired in such
plants and establishments likewise had been removed from,
the stream of ecommerce, had become fixtires of the real
estate, and thereby ir the hands of the ultimate consumers of
such electrical facilities? -
(5). Whether the ‘electrical motors atid other electrical
, « faailitios repaired by petitioner’s employees for petitioner’s
intrastate customers and which such customers used.to .
operate machines and other-appliances for the production
of goods for commetce were -not too remotely connected
,with the prodition of goods for commerce to. justify the.
conclusion that petitioner’s employees were engaged i im the
produetide of goods for commerce?
. FEDERAL STATUTE INVOLVED.
The Federal Statute-inv olved is the Fair Labor Stand-
ards Act of June 25; 1938, Ch. 76. (52 Stats. ‘at Large,.1060,
~ et seq.) and particularly that part thereof as follows:
Title 29, Sec. 203(b), U-& Coh— : we
«© ¢Commierce’ means trade, commerce, beensserte-
- tion, transmission, or communication among the several
States or from any State to any place outside thereof.’’
Title. 29, See: 203(j), U. Ss Code— a
‘¢< Produced’ means produced, manufactured, mined;
handled, or in any manner worked on in any: State;
and for the purpose of this chapter an employee shall
be deemed to have been engaged in the production of
goods if-such em loyee was employed in producing,
'* manufacturing, mining, handling, transporting,:or in
any other manner working on such goods, or in any
<i
. . .
2 e
4 s °
“process or: ocoupatiolf necessary fo the » production |
thereof in 1 any state.’’ .. TAGs
Title 29, Section ‘213(a) (2)
"The provisions of sections 206 and 207 of this! title’.
shall not apply with respect to * * * (2) any employee,
. engaged in any- retail or: service establishment the
greater part of whose selling or servicing is in intra-
state commerce -* * — iy es .
ral STATEMENT OF ieee;
The basic and essential facts in this casé were stipulated
by the parties, the stipulation filed on February 2, 1944,
in the trial court, and are not in dispute. A copy te that
stipulation i is in the record (R. 6, 14), a copy. thereof was -
printed iti thie appendix of the Administrator’s brief’ in the -
_ Cireuit Court aad for the convenience of this Court it has ©
- been reprinfed as Exhibit -“*C”’ tq the brief .in support of
this petition. (Infra, 48-49) Some testimony was taken by.
both parties in the trial court but in general the evidence
so taken is eymulative and explanatory of the stipulated
facts. Each of the parties printtd in the Appendices to.
. their briefs extracts from such testimony and cepies of.
‘such printed Appendices have been filed with this es
and brief. | x
| Ses 7
Character of Petitioner’s Place of Business. ©
- “Rhee character, OF equipment of petitioner’s place of busi-
ness has been’ set forth in Paragraph V of the aforestated |
stipulation, (R. 8),as follows . :
“The defendant occupies the front part of the first
floor of 418 West (East) Pratt Street, Baltimore,
Maryland, .for business. office, drafting space for
dranghtsian, and -shop for tepair of sniall electric .
motors, , electric toasters, electric irons, and. similar
appliances. ‘In the rear of the first floor is ‘the shop.
where all large motors, compensators, switches, ete.,
are repaired or rebuilt; the oven for baking repaired’
7)
re: and rebuilt motors ; lathes, pulleys, and other. equip: -
'. ment essential to the. operation of the shop. All elec-
trieal supplies and aS sold over the counter’ or:
used in connection with * repair work are stored on the - -
first floor. The rear of the secdiad floor is used fo the
storage of old and: new. equipment and sundry fabrica-
tion of carbon brushes. Electrical motors and. equip-
- ment prior to-sale of same are stored: tu .defendant’s |
warehouses at 1418 Belvidere Street. Defendant owns.
this warehouse, but rents the brilding , at 418 West
‘s (East) Pratt Street. | |
For the purpose of. rebuilding, repairing and re-
conditioning’ ‘motors for its varicus customers, the
_defendant is employing the following machinery : three’
lathes one drill press and pne shaper, with their re-
“spective tools, cutters and other attachments; vises,.
saws, emery wheels, a hydraulic press, two ‘electric:
~ hoists and four chain falls and other toois and ma:. °
chinery generally used in- establishments of this kind. e
it will be noted that. this. stipulated desiription ‘of the
_ petitioner’ S- shop. shows no machinery, tools, ete., for the
“manufaéture of new electric motors or appliances, but
rather. for repair, reconditioning’ and rebuilding of old and -
“used electrical equipment for petitioner’s customers. It is
‘this machinery for which petitioner liolds from the City of
- Baltimore, under an, Ordinance 462, approv ‘ed Mi ivch 6; 1919,
a certificate of exemption froni taxation as stated in 1 para- me
cd
3°
: “— XIV of the stipulation. (R. 13). bees w
; ok *(b) rete E : pe aa 7s?
? Sisacres and Description of Work Performed i in: Petitioner's 8
_ Business,
It 1 was stipulated in paragraph VI (R. 9, 10) as repre:
sentative of petitioner.’s ‘‘present volume and char acter, of
business’’ that the breakdown of petitioner’s business for .
the period of January 1, 1942, to October 31, 1942, showéd .
an aggregate gross income of $251, 833.35, as follows :
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Lop Se {yemmajane jeoptnsoye say20 puy eumow jo) seu - < .
ee | er (auyedas sojow yea pus Sew Jo ATU sates -yseo) Bolts oRpuBYyoi8 A . oo'ssL'T. _oorasurts eae oe ine
> (pees Pas nou Tig s10Fou JO 20434 o1gB SOPHIZU]) BOIws ION — 908! ——~=——— po'08e'y ————= -
Loe ot ee ee J0 a1edas uo #800 Aout Pus s0qy] sepnjou!) sajes doyg . _ ores SL FOB LEL'SS §=-B9"LZ9°99. 00°829'T 8e'9Ps" 1
4S" era si" coq STVAvUt pu® s0qut #uypnjour) or subi er'gor" LL -~ oS 1r 910'89
ze mache esp “SUONWOYISSB[D <ASpo] asies tev’ es . wie 88°90¥" uss $6°69$ m
Pag russues (e042 peas) srapel yestmed senas neuaereinn SES [kO], 89788 [e}O],” aeusy BOlVs YOR) S91"S OF10Y? goes Gg soles,.v,,
ores 30 2 SEnES 20 20 ere 20 dogg"
/ gueqey : Pes ; ——— : anti ; WAL King * : meee: ee
fee Hs eniianiadias ah :
CED . “ [eaendand pRrRE ae 20} Gen WY YO!YR sIaBpa__UOIhqQLIySIP w0ay peqriosuwsy} >:
Mad (ede ibaa . soqve ee. 18790 0% e161 bs Fe mr ay} 40f ope _ umopyna.g »
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phe -The- designations: “Shop ‘or ‘A’ Sales’’, ‘‘ Wiring or ‘B’
Sales’’ and ‘‘ Material or Storage Charge Sales’’, as used in
the-above tabulation showing gross' business of. $251,833. 35
. for the ‘period January 1, 1942, to Qetober: 31, 1942, are:
defined in paragraph VI of the stipulation. It is stated
therein ‘that “Shop * or ‘A’ sales’’ represented all income
. vbtained from customers as the result of repairs: and recon-
ditioning of.motors on and off of the premises of the cus-
° -tomer and included“both the labor ‘and material costs of
such nee ae ‘The ‘* Wiring or.‘B’ sdles’” represented all °
‘income from customers for thé repair and installation of
wire, fittings, and relocation and rearrangement of elec- -
trical motors, -ete., ‘in ithe plants of such customers. The
‘Material or storage charge sales’’ represented receipts
_- from the sale of new and used motors, generators, ete.
_- There’ was an additional income of $500 resulting from |
sales by petitiones, of scrap incidental to. the repair and
reconditioning work in its shop. (R. 4 ee
tioner were not manufactured by the petitioner but equip-
ment.it ad purchased from manufacturers. thereof for
resale in the petitioner’s retail trade. is
ae was’ stipulated in Paragraph IX:of the stipulation (R.:
that as of November 1, 1942, the petitioner had approxi-
on y. 1,000 active accounts, 99 per cent of which were those
* of commercial or industrial. firms... It is further stipulated. ,
in paragraph VIT that during the period-of June 30, 1941,
to October 31, 1941, the petitioner performed work i in Mary-
land plants for bat eleven customers whose pripcipal offices
were -in- other. states and that during that etitire year the \
petitioner sold but ‘six rebuilt and repaired: motors for an
aggregate of $1,020.09 to/ customers in other states than
Maryland: (R. 11) Thé-parties apparently used the figures -.
. for 1941 in this reSpect either because the figures for the _
* above,period of January 1, 1942, to October.31,.1942, w ere...
not available or.the stated figures for 1941 were represen-
. tative of the volume of petitioner’s business of an interstate
The new motors’ and other equipment sold by the peti- ra ees
8.
1 character, infinitesimal part | of the aggregate business:
Among the 99 per cent of. the commercial ‘or industrial
firms which were customers of. the petitioner, 33 of them
‘furnished $55,013.20 of the total .of $251,833.35 business
- dene by ‘petitioner for' the period from January 1, 1942,,.
to October 31, 1942, and of the 33, four were engagéd in’
the State: of Maryland i in repair of ships, tugs, barges and
other boats intended for movement inf interstate commerce ;
_and 28 were engaged in the production of other goods than
electric motors and other appliances for commerce, as set
forth in paragraplis X’and XI of the stipulation. (R. 11-13). |
The record dees ‘not sliow that-the other 967: accounts - °
producing the balance of $196,820.15 of the aggregate in-
come of $2 51,833.35 were producing goods for commerce, .
though it is indicated ‘in paragraph. [X of the’ stipulation
3 that they. were almost entirely commercial and industrial
concerns. (R. 11)-4n-view of the care with which it was stip-
ulated i in paragraph XI that almost all of those 33 concerns: -
were producing: goods for commerce; it'must be presumed
upon’ the basis of: expres St0, unis est exclusio alterius, that ;
none of the other 967 concerns were doing oe .:) =
Some of these customers of the petitioner had electrical
maintenance departments, but for some reason or another,
not fully disclosed by the record, the petitioner was called
upon to do some of their repoit work, (R. 68, 69).
" (¢)
| Number of Petitioner’ 8s Employees and Deicription of |
. Their Duties.
Thia electrical repair shop employs thirty- Six - persons,
including one foreman, eight mechanics, six help€rs and |
‘four trouble shooters in the shop departments, six mechanics -
and five'helpers in the wiring department, and. six office
employees: Eliminating the six office eraployes, this shop |
is taanned by thirty men, eleven of whom are helpers. ( R.
t, 8).
They ‘manufacture nota for commerce, either intra-
state or interstate, unless it be a few. parts for use in|
9 >
repairing, rebuilding siden sensilla biinin mating —
or some other electrical appliance for customers. (R. 17,
71-95). The men in‘the shop work on disassembling, clean-
‘ ing, rewiring, and/or rebuilding electrical motors and other
electrical appliances belonging to customers of the peti-
tioner. .In a few instances it. may be assumed that they re-
~ build or recondition electrical motors which the petitioner —
. purehused’ from, or took in trade from, some of its
custumers. ;
The trouble shooters divide their. time. between work in,
the shop on the repair, ete., of electrical appliances, and
work in the plants and’ business. establishments of peti->_
ioner ’s customers where an ‘electrical. motor or appliance
mete out of working condition and the trouble is such that it
may be® corrected. without disconnecting the motor and
taking it to petitiéner’s shop for repairs. These trouble. hia
shooters also do a ¢gertain amount of rewiring and relocating
electrical motors in the shops of petitioner’s customers— _
= located in Baltimore. When.a motor has to be removed
to petitioner’s shop for repairs, a motor, the property of
=a ioner, is usually loaned or rented to-the customer for
’ use during the repair peried. These lozned or rented motors |
*. are installed and connected in the customers’ plants and.
establishments’ by the petiticaer’s trouble shooters. It -is
_ . Stated in -the stipulation (Far, XIT) that approximately
400 motors of custowiers were in petitioner’ s shop for
repairs as of November 1, 1943. (R. 13).
There is nothing in the stipulation or in the record to ;
the effect that any of petitioner’s thirty-six employees © —
operate machines when installed in the. plants and other
establishments of the cpstomers of the petitioner in the
manufacture of anything for commerce. By repairing. and
installing the electrical motor or other appliance owned by’> .
the customer, or even a used or new ‘motor sold. by the |
petitioner to’ its customer, such a motor becomes a fixture -
and is removed from the stream of commerce, as. effectively
> as was ‘the. sack of cement converted into concrete and used
in the construction # the building i in | which such motor is
housed. (R. heat ae
10°
——frere is likewise nothing in the record to show, or even
_ suggest, that the customers of the petitioner are engaged
in manufacturing and repairing elevtrical motors for com-
,merce. On the contrary, the showing is‘to the effect that |
~ some 32,.only, of the 1,000 firms and ,individuals having m5
accounts with the petitioner as of Nov ember 1, 1942, manu-
faeture or otherwise produce other goods for commence.
While. some part of the ‘other 968 firms and individuéls are .
stated to be commercial of industrial firms, it is not stated
that they or-any of. them produced goods for interstate
commerce and that fact cannot be assumed. On the con-
trary, having regard for the industrial. and commereial
_ community of .Baltimore—of. which the Court may-take —
, judicial notice—it i “to ‘be assumed. that these other 968
industrial and cotimer cial concerns are retail stores, hotels,
shops, and the like.. °° . ‘
The status of petitioner’s employees as to the production
‘of: goods by petitioner’ ~ customers . for commerce is not
unlike ‘that of an. employee operating a shop ‘to grind axes
. to be used by woodsinen in‘ cutting trees which are after-
wards sawed into tumber and the lumber placed in the
stream of ecommerce. ° : 6
, As to motors sold by the petitioner, its status is that of a
retail dealer and as to used motors and other. appliances
_ repaired by ‘petitioner: for its customers to be used in, their
_. ‘plants and business establishments, the status: of petitioner
~ remains that of both a retailer‘and a service establishment.
The status of, the customers owning both the used motors
and the new motors is‘ that of the ultimate consumer. ©
SPECIFICATIONS OF ERRORS TO-BE Sameera
The Cireuit Court of Appeals erred: ae
i ae: Rowwising the District Court of the United
States for the District of Maryland at Baltimére which
‘gave judgment forthe petitioner here and in giying:
judgment for the — here.
e
ae w | = =
“3. lx holding that the petitioner’s. employees : were
engaged i in the production af goods for commerce within
the terms of the Fair Labor Standards Act (Title 29,.
Section 203 (j), U. S. Cede), instead of affirming | the
. employees were not oneged in in the db capemerets of ‘goods
: for commerce.
exemption from the Fair Labor Standards Act..( Title
29, Section 213(a)(2), U. S. Code), as being a ‘‘retail .
or service establishment the greater part of whose
selling or servicing is in.intrastate commerce.’’
4. In failing.to hold that the used motors and other
electrical. appliances, property of petitioner’s cus-
‘tomers, repaired, reconditioned, and/or rebuilt by peti- .
tioner for such customers, as well as the new and used ~
motors sold by petitioner to its customers, almost
wholly intrastate, were not goods in the hands of. the
ultimate consumers and thereby wholly. removed from
the stream of interstate comemrce.
i: 5. In failing to hold that repairing, reconditioning,
“: and/or rebuilding of electrical motors and other appli.
ances used by others as a tool. in producing ‘somé part
or all of some other type or class of goods ‘for com.
mercé was too remote from the production of stich
goods for commerce to come within. the terms of the .
Fair Labcr Standards Act.
6. In hélding that petitioner wa¢ not a retail and .
service establishment because goods were produced for
- gommerce by some 32 of its. 1,000 customers’ for all of
whom the petitioner performed repair, reconditioning, ©
and/or rebuilding services on theirs’ electrical appli-
-aneces or.sold.to some of. them at retail ‘new and/or
used electrical motors which were used by such ¢us- ©
tomers as a tool in the — of goods for .
commerce: «
REASONS FOR GRANTING WRIT.
Sa. The judgment entered, January 3, 1945, by the Court
“of Appeals for the Fourth Cirenit in this case is contrary
‘to ee of the following other United States Cir-
cuit Courts of Appeals, namely:
a)
s
_ holding wf the District Court that the petitioner’s. ”
3. In holding that the petitioner was not within the
12
“No. 78 decided January 9, 1945, _ the ania Cirepit
V ] _ + in Phallips, Administratriz, et al. v. Star Overall Dry
oF 7 Sie Laundry Company, Inc., and All” Service
Ze undry Corporation. The opinion in said case has
. ~ fot been xeported as yet but a copy thereof is printed
as Exhibit ‘‘B’’ to the brief in support of this
petition.
‘White Motor Company-v. Littleton, (Cc. C. & 5th),
-——7 72a Fed. (2nd) 92... °
Lonas v. National Linen Service Cor ‘poration, (C.C. A.
6th), 136 Fed. (2nd) 433, 150° A. L. R., 697; Certiorari
7 denied, 320 U. S. 785. To the same effect, 1 ‘Hunt vy. -
National Linen Serv sice 78 Tenn. 262.
Martino v. . Michigan Window Cleaning C ompany (G C. .
A, 6th), 145 Fed. (2nd) 163. Re
oa The judgment of the Circuit Court of Appeals in this
case is contrary to the Loccerac onto this Court: in the
“following cases:
MeLe od V. Threlkeld, 319 U. s. 491, 502.
Western, Union Telegraph Company v. Lenroat, ‘No. 49,
decided January ‘8, 1945, where the telegraph messages '
were no more ‘ produced” Vy the telegraph company
employees than the goods in commerce in this casé-«
were ‘‘produced|’’ by petitioner’s employees because
they worked on lectrical. appliances used by others to
assist. in produci 1g such goods.
rothers Company, 317 U. S. 574.
—— v. United ‘States, 295 .
e e
Higgins v. Carr
Schechter Poult?
U. S.. 495. 5.
eae oS Kirschbaum @ company v. W alling, 319 U. 8. 517.
3. Finally, the Circuit ‘Court of Appeals sin betauses
‘its judgment in this case is eontrary to the stipulated facts —
- that petitioner’s employees-wérked on electrie motors and
' other appliances which had’ ceased to be a part of the stream
of commefce and had come ‘into the possession of the ulti-
- mate consumers, the os « the petitioner, and such
eel
appliances, in the instance of 32 concerns, were but tools
used by such customers, and not by petitioner’s employees,’
in producing goods for commerce. Hence the petitioner’s’
_ employees were not within the terms of Sections.6 and .7
of, tha Fair Labor Standards Act; Title’ 29, Sections —-
and and 207 U. S_Code;- -aind-Wore Within the exceptions from.
~ said Act contained in Title 29, Seetion 13(a) (2), U..8
Code. :
; Respectfully ‘submitted, . ¢
O: R. McGutrz, ae a
Attorney for Petitioney”
° ? a
March &, 1945. /
1
2. IN THE
oupreme Court of. the, United States
October Term 1944.
No.
Tue Rofanp Exvecrricat.Company, Petitioner,
» eo : , F Vs. ‘
a. hia Waigss, Aduniersaton OF THE W AGE AND
Hovr Drivistox, Department oF Lanon, ‘Re spondent. -
BRIEF IN. SUPPORT. OF THE oak ulartes,
, THE PACTS.
The material and essential facts i in this matter have been’.
stipulated, the stipulation is in the record and the stipu-
lated facts have been summarized in the foregoing petition
under the subheads: (a) Character of petitioner’s place of
business; (b) Volume and description of work performed ~
in petitioner's business ; anid (c) Number’ of petitioner’ 8
employees and description of their work. -
These facts will not be repeated herein- except to ‘the™
extent necessary to point up the argument as to. why the
ie petition should be granted and the judgment. by the Circuit
Court of the United States for the Fourth Cireuit should |
be reviewed aml refersed in-order to prevent confusion ins:
the administration, of the Act. ;
ARGUMENT.
; ee ” i _ * P | ae
Conflict Afiong the Circuits and With This Court as to
What Co tes Production of Goods for Commerce
: - Within the Term’ of the Fair Labor Standards Act.
There exists a ‘decided conflict aniong judgments of
the Cireuit Court of Appeals and. with. judgments of
~
_ a tee SS. peel eae
this Court as to what constitutes the production of goods
’ for commerce within the terms of the Fair Labor Standards
Act, which conflict has not been, but which should be re-
solv ed by this Court.
oe “Conflict.among Circuit Coyrts of deen !
The Circuit Court of Appeals for the Fourth Circuit
held in this case to the effect that the petitioner’s employees
were engaged in the production of goods for commerce while
the Circuit Court of Appeals for the Second, and
Sixth Circuits have held in similar cases that the. employees
were not engaged jj in the production of goods for commeree.
This conflict will be hereinafter more fully stated.
“It seems that the difficulty has arisen by reason of the
opinion and judgment of this Court in Kirschbaum v. Wall- - -
ing, 316 U. S..517,.527, where. the Court, went to the
— limit in holding that employees were within the terms’
‘of the Fair Labor Staridards Act because they were |
employees of an owner of a loft building which was rented
to other compani¢s wherein they produced goods for com-
merce but the court there said, among other things, that—
~ “Selling space in a loft building is not the equivalent
is of Selling services to consumers, and, in any. even, the.
. ‘greater part’ of the ‘servicing’ done by the petitioners
here | is not in intrastate commerce,’
‘The Court further said i in that case that—
‘Our problem is, of course, one of ‘drawing lines.
_. But it is not at all a problem in mensuration. There
‘are no fixed point,though lines are to be drawn. The
real question is how the lines are to be drawn—what
are’the relevant considerations i in plaeing the line here
rather than there.’’
The K ireclibawin case can be, and should be, *istinguished
from. petitioner’s case—even as was«necessarily done by
the United States Circuit Court of Appeals for the Second >
Circuit in the case of Phillips, administratia et al v. All
_—
— a=
17 a yee = a,
‘Service Laundry Corporation, et al, No. 78, decided Janu-
ary 9, 1945, a copy of which opinion is printed as Exhibit *
_. “B?? to this brief. (Infra, 36-41). Also, a similar distinction
was necessarily made by the opinion and judgment of this -
_ Court dated January, 8, 1945, in Western Union Telegraph
Company v. Lenroot, No. 49 and in this Court’s prior opin--
_ jon and judgment in Releed v. Threkeld, 319 U.S. 491, 502.
' The United States CircuitsCourt of Appeals for the See-
ond Circuit in the case of Phillips, Administratix, et al, had
before it a case where the Star Overall Dry Cleaning Laun- *
dry Company, Inc., of New York, coblected laundry from
customers, some of such laundry being collected in other
States, and delivered the same to the All Service Laundry
Carporation to be cleaned and pregsed, being in this respect ,
similar to the poultrymen in Schechter Poultry Corpora-
tion v. United States, 319 U. S. 491 and the fruit dealer in .
Higgins v. Carr. Brothers Company, 317 U. 8. 572. See :
also the conflict’ with the Sixth Cireuit Court. of Appeals :
-herein set-forth on pages 26-27. > el
The Star Overall Dry Cleaning Company, Inc., then col-.
~ lected the laundry from the All Service Laundry ‘Corpora-
- tion and delivered the ’ same to the customers.’ “The suit
was. by employees of the "All. Service Laundry —
under the Fair Labor Standards ‘Act. The United States ©
District:Court gave judgment for. the employees and this *
. judgment was reversed by the Citcuit Court of Appeals
' for the Second Circuit.
"The court assumed for the purpose of ean. case that the
laundry of the garments was ‘“‘production’’ but did not
determine whether the Company doing the cleaning\was a
service company. The court placed its opinion on the
broader ground that the garments had come into the hands
of ultimate consumers before such garments were delivered
to the laundry and that the employees of the iaundry jn,
. cleaning the garments were not engaged in the production \
of goods for commerce, the garments having been removed .
‘from the stream of commerce by being placed in the hands _.
*
18°
of their ulti#fitate consumers before they canre inti the pos-
session of the laundry: “ .
“That court said in’ reference to Title 29, ‘Section 203(i)
" of the United States Coie that: :
“What are té be treated as géods within the Act fee
‘there defined, and it is made plain that,the definition ~
does not include goods after their delivery into the .
actual ‘physical possession of the ultimate consumer
thereof other than the producer, manufacturer, r
processor thereof.’’ 6
“«The statute makes a clear distinction between goods
which are being worked upon*in one or more of. thie -
ways embraced within the statutory. definition of ‘pro-
' duced’ before they get into the actual physical’ posses- ..
sion of the ultimate consumer and after they have
gone into such, possession, provided the: ultimate con-,
“ sumer is not himself a producer, ‘manufacturer or
processor. We think it is.also clear that the ultimate _.
consumers are the. persons who wear out these gar-
ments and incidentally get ‘them dirty while doing so.
’ Congress did not attempt. to regulate houfs and wages
to the full extent-of its power to do so.’”
‘Here the petitioner’s customers were the ultimate con-
* sumers of the electrical applicances owned by’ them whith
petitioner’ s employees repaired in its shop, or which they
_ repaired in the shops of the customers. (R. 23, 69, 71- 95a:
Such customers were also’ the ultimate eonstimers of: the
- second-hand or new-electrical | appliances whicli. said cus-
tomers purchased at retdil from petitioner’s shop. These: .
motors and other eléctrical appliances were not being
" worked upon or produced by petitioner’s employees for
; nercé; they had been effectively removed from all tom-
sale before they. -were worked on and repaired by" _ Peti-
tigner’s employ ees. Pots A CE
Conflict with Judgments of this- ‘Court.
This-Court had before it in Western. Union Telegzaph
Company v. Lenroot, decided January -8, 1945, basically
a similar question in denying the attempt of the respondent
to hoit-that the telegraph cotnpany had violated the Fair
Labor Standards Act by the employment of minor children
‘ to collect and deliver telegraph messages. After an exhaus-
_ tive review of:'the legislativé history of the Fair Labor
‘Standards Act, the Court concluded that the telegraph mes-
sengers, in collecting apd delivering the telegrams, did not
‘‘Produce’’ any goods in commerce and that in.fact the
telegrams themselves never entered commerce, but only |
’ the electric.impulses which ticked out the messages written .
by othérs on the telegrams. The Court there said: =
‘‘The Government contends. that in defining ‘pro-
duced’ the statute intends ‘handled’ or tworked on’ to
mean not only handling or Working or in relation to -
producing or making an article ready to enter inter- |
state transit, but also includes the handling or working |
‘on which accomplishes: the interstate transit or move- °- .
‘ment. in commerce itself. If this construction is”
adopted, every transporter, transmitter, or mover in
- interstate commerce fs a ‘producer’ of any. goods he .
-earries. But the statute while defining ‘produced’ to.
mean .‘ handled’ or ‘worked en’ has not defined ‘han- -
died’ or ‘worked on.’ These are terms of ordinar
‘speech and mean what. they mean in ordinary, inter-
‘course in this éontext, They setve a usefal purpose
when read to relate tovall steps, whether manufacture
or not; which-lead to readiness for putting goods ‘into
the stream of commerve. One who packages a product,
or. bottles a liquid, or labels, or perférms any number
of tasks ‘incidental to preparing: for shipnient. might
otherwise escape’the Act, for in a sense he neither’.-
~ Manufactures, produces, or mines the goods, We are
clear that ‘handled’ or ‘worked on’ inelndes every kind’.
of incidental operations preparatory to putting. ‘goods
“>, inté the stream of commerce.”? he
It seems clear that the repair, reconditioning, or rebuild-
ing of electriéal motors or other electrical ‘appliances by
petitioner’s employees for use of employees of petitioner’s
_ customers in producing, handling or working. on goods to | |
be placed into the stream of comnierce is not on the part
of petitioner’ 8 ban adic the “production,” ‘handling’?
20
__oF ‘‘working on’? the products which were later placed in : 7
the gtream of éommerce—any more than was the collec-
tion and delivery: of telegraph messages the ‘‘production,”’
‘‘liandling”’ or “working on’’ such messages for commerce.
The electrigal appliances repaired, reconditioned, and/or
rebuilt ‘by petitioner’s eniployees no more entered com-
merce tham did the messages in the Western Union Tele-
“graph Company case.
. While in the histances of some 32 of petitioner’s: approxi- -
mately 1,000 customers the electrical appliances repaired
by petitioner’s employees were probably used to some
extent in some of the processes of preparing other goods
for the stream of commerce, yet such 32 quatmere were
not ‘“producers, manufacturers or processors’ ’ of motors.
and other lectrical appliances worked on by petitioner’s
employees—the word ‘‘thereof’’-in Title 29, Section 203. .’
(j) U. S. Code obviously having reference to the goods
which went into commerce and ‘not the consumer godds,
such as electrical appMances used by the employees of such
customers in producing such other: goods _ Peeperegery to.
putting goods into the stream of commerce.’’ -
‘This point seems to have ‘been controlling in the opinion
and judement of this Court in McLeod v. Threlkeld, 319 U.S...
491, where the cook sought to.be brought under the terms
of the Fair Kabor Standards Act prepared food for em-
ployees who were under the Act as maintenance-of- way .
employees: of a railroad ‘company. The Court. there ad-
titted that food was necessary, for the cmiprer eee engaged
in commerce but: said: ete
Yl
“Tt is not important whether the employer, in this
case the contractor, is engaged in interstate commerce.
It is the work of the employee’ which is decisive. Here
the employee supplies the personal needs of the main-
tenance-of-way men. ie |
Food is consumed apart fecan their work. The fur-
nishing of the board seems to us as remote from com-
merce, in this instance, as in the cases where employees ©
3
supply themselves. In one instance the food would be
as necessary for the continuance. of their labor as the
_ > other.
- “Weagree with the sunebaclaiin of the District Court
and: the Cireuit Court of, Appeais that this: employee
. is not. engaged in commerce under ‘the Fair Labor
Standards Act.’”
“The stipadation ‘of facts clearly catahtish: that petitioner ml
. operates an electrical repair shop, serving all castomers
seeking its service and that all but a very small part of
_its business is wholly’ ‘intrastate ' in character—most of it
being for customers in the City of Baltimore. It: certainly
cannot be held that by. such local: and intrastate sales and
serviees the petitioner. is engaged in. commerce within the
terms of the Fair Labor Standards Act. 7
And we do not so read the opinion of the Cirenit Court
‘of Appeals. That opinion holds that petitioner’s employees -
come within the terms of the Fair Labor Standards Act
because the motors which they -repaired and the wiring
- which, they performed in the petitioner’ s§ shop or in. the
plants of petitioner’s customers were used by some 32 of
such customers. to produce . goods for commerce, and tii
99 per cent of the balante of 968 customers were commercial
and industrial concerns and ‘not private parties. Otherwise
the court beléw does not attempt*to determine why such
usé by the small number of 32 should require the other 968
customers of the petitioner to pay the increased costs neces-
sitated by petitioner’s compliance with ‘the Fair Laber
Standards Act. .-
‘Yet in‘addition to the facts that the electrical appliances
owned by petitioner’s customers on which -petitioner’s.em-
ployee’s worked had been removed from the stream of,
commerce and were in the possession and use of the ulti-
mate consumers, as were the garments in the above cited
Phillips. administratriz, et al@gase, the work on the motors
and other electrical appliances were as remote from the
goods produced by .the 32 customers of petitioner which
3
® . oF. £ 9
22 3 |
- went into. the stream of commerce as was the food eaten by
the rights-of-way men in McLeod v. dbealkeld. Further.
such electrical appliances no more wenf imerommerce than
' did the physical felegrams it in the Westérarv nion piecneti at
te i case. o-
It is clearly apparent fr rom the latter case, and the K Seok:
baum case that the work performed must have a direct rela-_
tion to the ‘goods actually produced, for commerce and not °
some remote relationship such as repairing an electrical
“motor which may or may ot: be used for the performance
of some part ‘of a production process and even if used, must °°
be used by others after having been supplied with electrical _
power or impulses generated by some third. party. This .
‘Court has pointed out beth in the Kirschbaum and Western:
“Union Telegraph Company. cases that the Fair Labor Stan-
“dards Act is. not as broad as the National Labor Relations
Act and that simply: ars affecting’: interstate cgmmerce is not.
sufficient to make out a case under the Fair Labor Stand-
ards: Act. This: Court said i1. Higgins v. Carr Brothers. “
Company on this point that:
‘‘# that connection it is argued that: respondent i is in
competition with wholesalers doing an interstate busi-
-néss-and that %t,can by underselling affect those busi-
nesses and their interstate activities. As we indicated
in Walling v. Jacksonville. Paper Company that argu-
ment would be xelevant- if this Act had followed the
+. ‘pattern of other federal legislation such as the National °°
+ Labor Relations Act and extended: federal xontrol to
business ‘‘affecting’’ commerce. But as we pointed out
‘in A. B. Kirschbaum Co. v. Walling, 316 U. 8. 517, this _
aci did not go so far but was more narrowly confined. sek
This quotation from the opinion is a sufficient answer to
’* ‘the suggestion contained in the opinion below of the Circuit _
* . Court -of Appeals . that if the repair work performed by ©
petitiongr’s emplévees had been performed by the em- -
- ployees. of: fite customers 'of petitioner producing goods for
‘commerce, such employees of petitioner’s customers would
: surely ~ been under _ Fair — Candaeds Act, and_
° .
eee, Se
hence petitioner’s ‘employees were, ‘too. .The cooks cn thie
dining cars of the railway company fer which the cook pre-
pared the meals in MeLeod v.. Threlkeld were doubtless in
commerce to the same extent as the right- of-way-mien. » Also.
- in thé Kirschbaum ease this Court pointed out that the Fair
Labor Standards Act did not go to the extent of covering
employees whose services merely affected interstate COi-
merce. eee ‘
> Farther, if the plant cauployete of petitioner's s ctaleanies :
who might, have repaired the efeetyical appliances were
covered by the Fair Labor ‘Standar Act—and as to that
we @xpress: no opinion—their additional wages ‘could be
added as a part. ef the price of the goods produced by their
“ employer for.commerce and passed{éh to the ultimate con-
sumer, whereas here-there. is a poi t. beyond which peti-—
tioner’s péiees’ for repairs, ete., -6¥ electrical appliances
cannot go with any hope of securing such work from these
‘plants having maintenance electrical employees. (R. 71-95).
It is this’ and other conditions which- led Congress
not to go as far i in the Fair Labor Standards Act as it did
in the National Labor Relations Act. We think the follow-
‘ing language of the Court in the K irschbaum case is‘an apt
reply.to the court below, namely :
If the work of the- employ ee has only thie most ten-
wo relation $6, and is not in any fitting sense ‘neces-
sary’ to, the production, it. is immaterial that their
activities would be sabstantialtly the same if the em-—
s ployees worked directly for the producers of goods for. .
. commerce,’’ . t re
4 \
This should surely: be true where but 32 out ofa total of -
-a 1,000 customers are.the only ones shown‘b¥ the reeord ©
to have.been engaged in producing goods for comineree, and
even that showing has not been clearly. made.
An intrastate customer may be both the ultimate con-
sumer. of tapital goods—such as the electrical motors and
. wiring in this case in the instanée of 33 of petitioner’s eas- -
tomers—and also a manufacturer or, j producer of. other »
sash for commerce.
24
: 7 7) : o | I. | |
The Petitioner’s Businéss Is a Retail and Service Estab-
lishment the: Greater Part: of Whose Selling” and .
Servicing Is in Intrastate Commerce. MS
_ While it is stipulated that the petitiontr held an exemp-
-&
tion from city taxation for certain of its machinery, this |
_ exemption was under a 1918-19 city ordinance which is
printed as-appendix ‘“B’’ fo ‘the appellant’s brief in the |
court below, (R. 34-35). This exemption extended,
among other things, to ‘‘mechanical tools, or implements,
whether worked by ‘hand ‘or steam or other motive power,
machinery. ’? Petitioner’s dies, lathes, etce., used in- its
repair shop clearly fall within this description and nowhere .
“jn-the stipulation ‘or other evidence in the record is there .
any suggestion that. petitioner operates a manufacturing
plant. “All of the evidence is to the effect ‘that petitioner -
operates. A ‘repair: shop and makes seme sales therein, at
* retail of new and used motors and incidental electrical
supplies. /
The court below - brushed ‘ diside, without comment, any
suggestion that the petitioner was-a manufacturer of elec-
‘trical equipment for interstate commerce and, as above
>
stated, grounded its ima on the point that petitioner’s
empleyees worked on electrical equipmerit used by 32 custo-
mers engaged ‘in mai™facturing goods for commerce and
that 99-per cent of the balance of petitioner’s 1, 000 custom-
ers: were ‘‘commercial and. industrial concerns.’? ~The
33 concerns produced but $51,013.20 of the petitioner’ 8 gross
aggregate income: of $251,833.35 ‘for the period and cer- |
"tainly the sum of 33 arid $51,013.20 are not the ‘greater
part”? o£,1,000 and $251,833:35, ‘respectively. €R. 10,13). =.
- Out of the gross return of $251, 833.35 on all of the busi-,
ness of petitioner for the &tated period, but $77,784. 76 :
resulted from. sales of new and used motors and $4,980.06
resulted from eash sales of material and: motor perts. (R.
*.
10). “The latter two items are -not the “greater: part”? of
the gross aggregate income from ‘‘service’’ and also they:
‘show thatthe petitioner is in fact a retail establishment in
addition to being a serv icing eStablishment.
The stipulated facts further show that for a typical period
the sales to customers of other states than Maryland aggre-
~ gated but $1,020.00 and the testimony of Mr: Stozenbach, —
president of petitioner, is undisputed that during the entire
year of 1941 but six sales were made to residents of other
states than Maryland and that three of ‘such sales were over
the counter in petitioner’ s shop in Baltimore, with the pur- .
chasers ‘hauling the purchases aWay with them. (R. 65-67).
It. is-thus self-evident that the ‘‘greatér part’ of peti-
tioner’s sales and services were wholly intrastate and even
intercity.
(a) (2). Spe cifically provides that its terms ae not apply
with respect to:
\ 3
“*(2) Any émploye ee éngaged i in any , retail or service
establishment the greater part of whose nelling or
serv icing i is in intrastate commerce. = a
If there was ever an establishment which met this statu:
_ tory test, it is that of the petitioner. It is as plain as‘a
pikestaff- ‘that the petitioner is wholly engaged in a retail
- sale and servicing business and that this busizess-is almost
wholly intrastate. , ~
Even if petitioner does ans as its customers some 32
or 33 concerns engaged in ‘‘producing”’ goods for com-
merce, with 967 or 968. others not doing so, ‘the 1e sales and
service to such 32 or 33, are intrastate transactions to the
‘same degree as are intrastate the sales and iitrastate
servicing to the balance of the 1,000 customers. There is
nothing in the plain language of the statute which would
nullify. this exemption, or exception by the mere sale ‘at
retail or.servicing of a concerti which produces other‘ ‘goods,
different from those produced by petitioner, in commerce,
gtd
The Fair Labor Standards Act (Title 29, Sentian 213
0.
26
or which is a commereial_or. industrial concern. The. repair
of an electrical appliance or rewiring of a faetory to the
extent of rearranging an electrical motor does not consti-
_ tute the production of other goods i in the customer’ 8 plant
for commerce. :
The Circuit Court of Appeals below had _ previously.
_ adopted in Guess v. Montague, 140- Fed. (2nd) 500, and it
‘applied here the terms of a regulation (R. 47-53) which had
been rejected. as not iti conformity with law by the Circuit
Court of Appeals for the Sixth Circuit in Lonas v. National
Linen Service Corporation, 136 Fed, (2nd) 433,15 A. L. K.
697, certiorari denied, 320 U. S.'785. The court there said:
“**The Administrator, basing his argument upon In- |
terpretative Bulletiiy No. 6 issued December. 1938 and.
revised June 1941 by the Wage and Hour Division of
the Department of Labor, contends that the exemptions .
in See. 13(a)(2) are limited te establishments retail -
in charactcr whether they sell godds or services. This
view is based upon what he conceives to be drawn from
legislative history of the Act and the grammatical con-
struction ‘of the exemption. ‘section. Sifee the related
terms are coupled in the same’ sentence and are used
in the disjunctive with the terms ‘retail’ and ‘service’
both modifying the word ‘establishment’, they refer
‘to employers who deal directly with private.consumers
as distinguished from commercial and industrial eus-
tomers. In ‘other words, the service establishment ex-
emption extends only ta those establishments having
the characteristies of retail Stores, and the defendant’s
business is not a retail service. establishment because
60% of its-eustomers are. industrial or business
concerns. > =
: ‘‘We find no support for this interpretation in the
language of the exemption section. Two enterprises are <
therein exempted, one a retail establishment and the
other a service, establishment, the exempfion of each |
subject te the condition that in the case of the rétail: ie
establishment the greater part of its selling must be
ue intrastate commerce, and: j m- the. case of a service |
Steere *
establishment the greater.part of its servicing mast be .
intrastate commerce. Had the Congress ‘intende¢y to --
limit the exemption of service establishments to those
which perform serv ices for private.individuals as dis-’
« tinguished from business enterprises, it would haye
had ‘little difficulty in clearly expressing such .Rurpose.
In fact, the whole of the English language was available.
to the Congress from which to seleet-words to express any
such purpose as,the. Administrator and the Cireuit’ Court
of Appeals below have read into this. exemption, Under:
_ stipulated facts and the principles of the case of Lonas
;. National Linen Service Corporation it matters. ndthing
that 32 of petitioner’s named customers produced goods for
commerce and that 99 per cent of the balance of its —.
\ customers were ‘‘commercial an® ‘industrial concerns,’’
that is, not private parties. “Mcreover, as hereinbefore
shown, the petitioner’s customers were the ultimate con-
_ gumers of the electrical motors and other.electrical appli-, ~
ances on which the. petitioner’s employees worked in a -
dégree no whit different in principle from -the situation
where a farmer purchases a farm wagon for use in pro-
ducing crops or a groceryman purchases a truck for use
in haaling groceries to h# intrastate customers! » °.
‘Th failing to. follow the above quoted principles stated by
the Circuit Court of Appeals for the Sixth: Circuit in the
- Lonas case, and in failing to give effect to the stipulated
facts, the court below fell into error in reversing the frial
court—thereby perpetuating the error which it ltkd com-
mitted i in the prior.case of Guess \ v. M ontague.
* CONCLUSION. 4
Both bedaiabe the opinion and judgment of the Circuit.
Court of "Appeal® below’i is in conflict with the judgments of
.the Supreme Court of the United States and with judgments
of ‘other United States Cireuit Court of Appeals and be-
calise the epinion and judgment of said Cireuit Court of
Appeals for the Fourth Citcuit reversing the judgment of
28 PRAY
7 3 °
‘ the Dictrict Court, for Maryland are —s in error as a
matter of statutory construction, the petition for certiorari
should be granted and the conflict resolved jin the interests
of thousands of other similar retail and service establish-
ments engaged i in a intrastate business, et
‘ ' Respectfully submitted,
tS ee O. R. McGurrg,.
Attorney for Petitioner.
: SS: Rene
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Exhibit “A” ee veean
UNITED STATES CIRCUIT COURT oF APPEALS
FOURTH CIRCUIT.
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No. 6266. <<" mn
L. Mrrcanre WALLING; “Administrator of the Wage and
-Hour_ Division, United’ States Spartans: of Labor,’
_ Appellant, :
versus,
Tae Rotaxp Eecrricat Courasy,
Syl Tee
Appeal fre rom. the Distriat ‘Court of the United States
for the District of Maryland, at Baltimore.«
pees November 14, 19442. Decided eerene 3, “1948.
i George M. Szabad, Attorney, U.S; Department of Labor,
‘(Douglas B. Maggs, Solicitor ; Bessié Margolin, Assistant
Solicitor; Lemuel H. Davis, Regional Attorney, and
‘Joseph I:“Nachman, Attorney, U.S. Department of.Labor,
on brief) for. Appellant, and Raphael Walter oo
” Golgnas & Walter on — ) for Appellee.
»' *
Pek, bebe
‘PARKER; Cireuit Judge : °
This is an appeal from an order denying an injunetion to
the Administrator of the Wage and Hour Division in a suit
brought against the Roland Electrical Company under, siec-_
tion 17 of the Fair strc cuentas te Oot vans: (0) 1069, 28.
USCA 217. There are tw ions in the case: (1) whether
the s employees are engaged in the production
‘of goods for commerce within the meaning of section 3(j):
of the Act; 29 ss 203 ( i); ‘and (2) whether the semper:
2
*.
30
is a “retail or service establishment. the greater part of
whose selling or servicing is in intrastate commerce”’,
within the meaning of see. 13(a)(2) of the Act, 29 USCA
~213(a)(2). The District Judge while intimating doubt on
the first of these questions. answered the- second in the
affirmative and denied the injunction on that ground. 54
_ F. Supp. 733.
ministrator in his brief in.a statement which the ogre, 3
_ pereent of its custoniers, however, are commercial or in- —
~ dustrial firms. Thirty-two of these firms accounted, during
The pertinent faets are succinctly set forth. ‘by the Ad-
referred to there as appellee, accepts in its eae as @rrect.
That statement is as fellows:
“Virtually all of the rélevant facts have been stipulated.
Appellee holds itself gut as being engaged in the business ~
of commercial and industrial: wiring, electrical contracting,
and dealing i in electrical motors and generators, for private, :
commercial, and industrial uses. It holds a certificate of
exemption as a.manufacturer, pursuant to a Baltimore
ordingnee which exempts from taxation all personal prop-
erty used entirely or primarily for the purposes of Tmanu-.
_ facturing.
** Appellee’s principal activities fail roughly into three °
classes: (1) Repair, reconditioning, and rebuilding gf elec:
tric motors, which accounted for 27.42 percent of appellee’s
gross incorhe d ing the first ten months of 1942; (2) instal-
r
lation, relocation, extension, and repair of electrical wiring
systems which accounted for 35.29 percent of its income;
and (3¥5sale of new. and used electric motors which ac- |
counted for 33.13 percent of its ‘income.
‘*The motor repair and reconditioning work is ‘performed -
either: on appellee’s premises, consisting of a two-story
building, or on the premises of the customer for whom the
work is done. All of the wiring is, of course, performed on
the premises of the customer. To carry on its. work, ap-
pellee employs a foreman, fourteen mechanics, eleven help-
ers, four trouble shooters, and six office employees. © «.
! Appellee works on motors and wiring, and sells motors; is
for private, commercial, and industrial uses, Niaety-nine
the period covered by the sti ulation, ‘for 38 percent of
appellee’s motor repair work, 9 percent of its’ wiring ‘work
and 12 percent of its motor sales. Every mechanic employed.
by appellee worked in practically every workweek fors some
of these firms.”
“
..
$i,
We think that there can be no question but that defen-
dant’s employees were engaged i in the production of goods
for commerce within the meaning of the act. As shown by
the preceding statement, the greatep part of its business
consisted in the repair, rebuilding and reconditioning of
motors ‘and in the installation, relocation, extension and
repair of electrical wiring used in the production of goods _.
for interstate, commerce. An employee is deemed. to be
engaged in the production of goods for commerce within
the meaning of the act if he is engaged ‘‘in any process or
occupation necessary to the production thereof.”’ 29 USCA
M13C¥ 3 and the repair of motors and wiring for use in the - .
_ production of goods for commerce was certainly a ‘‘ process
or occupation necessary to the production thereof’. See
_ Hollandsy. Amoskeag Mfg. ('o., 44 F. Supp—884, 887. There
is nothing in the argument that the service is not to be
deemed within the meaning of the Act because it might
“have been ‘obtained from a number of independent con-
_ tractors. It was no less necessary because it might have
_ beer furnished by a number of persons who did not‘in fact
furnish it.The question is whether it constituted a part of
- the integrated effort by which the goods were pr 63
Armour.& Co, v. Wantock -... U. 8. ---. (decided D
1944.) As said in the case cited :. :
“The argument would give an unwarranted: ak
the application of the word ‘necessary,’ which has always .
- +been recognized as a word to be harmonized with its context,
“See McCulloch v. Maryland, 4 Wheat. 316, 413, 414.. No
hard oad fast rule will tell us what can be ‘dispensed with a
in ‘the production of ,zoods.’ All depends upon the detail \
- with which the bare phrase i is,clothed. In the law of infants’.
liability, what are ‘necessaries’ may well vary with the
environment. to.which the infant is exposed; climate and
station in life and many other factors. So, too, no hard and-
‘fast rule may be transposed from one industry to another to
say what is necessary in ‘the production of goods.’ What'is
‘practically necessary to it will depend on its environment
-— position.’ wig ghee ‘
».No one would EY we think, that employees who did
for the customers of the company what its employees did
here would not have been engaged in the production of —
’ goods fer commerce if they had been employed by the cus-_ -
tomers; but the fact that they were employed by an inde- «
pendent contractor makes no difference, since the applica-
tion of the act depends not upon the nature of the employer’s
‘ business but upon the character of the employées’ activity.
‘Kirschbaum v. W alling, 316 U. S. 517; Warren-Brads} ;
Drilling Co. v. Hall, 317 U. S.-88; Walling v. Jac ksonville
Paper Co., 317. U. 8. 564; Overstreet v. North Shore Corp,
* 318 U.S. 125; McLeod v. Threlke ld, 319 U.S.491° We went —
into this subject quite fylly in Bracey v. Luray, 4 Cir. 138 F.
2d 8, 11-12; and we need not repeat what was said there.
See also Davis v. Goodman, 4 Cir. 133 F. 2d 52, holding an
employer subject to the provisions of the act where all that
his employees did-was perform labor which enabled ancther
manufacturer to turn out @ product which entered into -
interstate commerce.
And we think it equally clear that the company does not
- fall. within the, exemption of 13(a)(2) of: the act, 29 USCA
~ 213(a)(2), which provides that the minimum wage and -
maximum hour provisions shal! not apply to ‘‘any employee
' engaged in any retail or service establishment the greater
- part of whose. selling or serv icing is in intrastate com-
merce’’. Even if the-company could be held to be a service
establishment within the meaning of this exemption, the ©
greater part of its servicing was not in intrastate-commerce,
and the exemption ‘did not apply to.-it for that reason. |
Fleming v. Arsenal Bldg. Corp., 2 Cir. 125 F. 2d 278, aff.
Kirschbaum v. Walling, 316 U, S. 517. As said by Judge
Learned Hand, speakjng for the Circuit Court of ‘Appeals
\of the Second Circuit in the case cited : | :
: ‘Nor. do we think that the defendant i is a ‘service estab- ‘
- lishment the greater part of whose * * * servicing is.in in-
trastate commerce’; sec. 13(a) (2). * » If itisa ‘service |
shment’, at least its exemption must depend upon
eat to: which its servicing is intfastate. Suppos¢ for
e, that; these manufacturers, instead of pressing'the
NY webves, sent them out to other shops which
". not, we e think exempt the pressers; ‘their servicing would be e:
in interstate co nmerce’. The ‘Servicing’ being a part ;
_ the ‘production’,the test should be what kind of production
is a part of it. The question is really the same as that w
have just te whether it is important how that™
production is divided. among employers. t cannot be that.
if the’ exemption extends en retail ‘ seiersiat 3 ; if is the
, coe.
ecaiat of the ‘sérv icing itself. that counts, dined from
- the ‘production’ of which it is a part, Again, we should be
the -eapriciaus incidence of the aet. resulting from the
accident of the industrial division of the whgle process, *’
Li Kir schbaum v.13 ‘alling:. 16. U. S.- 517, the Supreine
“Court not only affirmed the decision below but dealt with
this particular point in the same way. The court said:
> ‘A fingl objection to the-decisions below need not detain
; us Jong. The petitioners’ buildings cannot: be regarded as”
‘service estabiishments’ within the exemption of sec. 13(a) —
(2). Selling space in a loft building i is not.the equivalent of
selling services. to consumers, and, in any event, the ‘ greater
part’ of the ‘servicing’ done, by, the petitioners here is not |
_ in intrastate commerce. The suggestion that the Act, if
applied to these eniployees, goes beyond the bounds of the’
commerce aes: is without merit. ”
_ . See also an ee ee Thre lk-ld, 319 U. S. 491, 494, see’:
‘Hanson vy. Lagerstrom, 8 boo 133 F. 2d 120; Consolidated
Timber, Co..v. Womack, 9 Cir. 132 F. 2d 101 y Walling v..
New Orleans Private Patrot Service, 57-F. Supp. 1433 Lo-. .
— v. American Trust Co., 45 F. Supp. - 139. ©
a a
‘hed we do not think that MK company can be held a
retail or service: éstabli -hment within the meaning of. the.
aet. The labor of its employ ees was performed almost alto- -
- + eoneerns, where the cost of the service would not be ab-
sorbed by- ‘the one to w hom they were rendered but would
‘ be passed'dri as a part of the price of. the produet. ‘The
whole policy of the act is to bring, employees rendering —
this sort of serviée under its provisions. Thus in sé¢: 3(i),-
29 _— seriall on whose petunia for commerce
: gen after their: delivery into the actual daar posses-
sion ‘of. the ultimate consumer thereof: other than a pro-"
" ducer, manufacturer, or-processor thereof.”’ (Italics sup-.’
plied). This throws light upon the sense in which the words
‘‘retail and service establishment’’ are used and indicates’
very clearly that they have application to’ establishments
furnishing goods or services-to the ultimate consumer, who
*
‘met by the. ahomaly arising from such an interpretation— © —
gether in rendering service to.commercial and industrial ~ —
.
—-34
- does not expect to pass the cost on to others as a producer,
manufacturer or processor. As we said in Guess v. Monta-
" que, 4 Cir. 140 F. 2d 500, 503:
. “In Bracey v. Luray; 4 Cir. 1 38 F. ad 8 8, this ais plecided;
we hold that a retail establishment within the meaning of’ -
the exemption is one which sells in small quantities to tlie
ultimate consumer, ‘n the principle noscitur a soctis, the
‘service’. establishment contemplated by the: exemption
must be of the same sort as thé.‘retail’” establishment therein -
referred to, i.e, it must be one ‘selling sérvices to: con-
‘sumers’, and this is the clear intimation of elie geod
* Court.°A. B. Kirschbaum Co.a. Walling, 316 U.S. 517, 526,-
62 S. Ct. 1116, 1121, 86 L. Ed. 1638. As. suggested by the
_Cireuit Court of Appeals of the Second Circuit in Fleming
V. Arsenal Building Corporation, 2 Cir. 125 #. 2d 278, 280,
we think that the exemption ‘should be limited. to: those
who serve consumets di-ectly, like tailors,. or garages, or
laundries’. Other illustrations of service: establishmenta
within the meaning of -the statute have been given: as
‘barber ships, beauty parlors, shoe-shining pariors, clothes.
pressing clubs, laundries; automobile repair shops, or the
- Jike.’ Wood v. Central Sand & Gravel Co., DA. 33 F. Supp..
40, 47; Fleming v. A. B. Kirschbaum Co, 3. Cir. }24 F, 2d
367, 572. sia Le a
In Br acey v. Luray, supra, we peinted out that the exemp-
tion was not contained in the act as originally drafted but |
was. inserted to, make clear that/the act would not apply to
those dealing. with the ultimate. consumer. We said:
‘‘The exemption was not contained in the bill as originally
introduced into: Congress. 8. 2475, H.R. 7200, 75th Cong,, -
Ist Sess. May 24, 1937. It was added by an amendment, the |
purpose of which was to make clear that the act would have
no application to ‘retail dry goods, retail butchering, gro-
cers, retail clothing stores, department stores’, lecated near
_and making occasional sales across state lines. 83 Cong.
* Ree. 7437-7438. Walling v. American Stores Co., 3 Cir. 133
F.2d 840, 843.”?.
2,
The services rendered to producers of goods for inter-
state commerce in the installation and repair of’wiring and
the ee servicing and reconditioning of motors are suf-
35 eae
"ficient without mere te bring the employees’ of the company
_ under the act. As'to the rest, its business consisted in the
’. sale of new motors and the reconditioning’ and salé of second
hand motors. This business was clearly not that of -a retail
or service establishment within the meaning of the act. —
Super-Cole Southwest Co. v. McBride, 5 Cir. 124-F. y 90 ;,
Guess v.. Montaque, supra. ; ine ;
The case is-fiot distingusshable in principle, although
there are a feW minor factual differences, from that-which
was before us in Guess v. Montague, supra. What we have
is not what anyone would think of -as a rétail or service
establishment, like.a grocery store or a barber shop, but an
electrical machinery repair: shop, whi¢h was. engaged in
~manufacturing to the extent that it rebuilt or recofiditioned
eleetrical machinery. A latge part of the services rendered
by.its employees were on the premises of its customers, and
praptically all of these were in furtherance of the produce’
tioh of goods for commerce. and were: of a sort which, if
\
rendered by the employees of the eustomers, would.unques-..
tionably have brought them under the act. The sales which
it made were not ordinary retail sales to consumers, but
sales of machinery to.be used for purposes of. production.
Tt is not clear that; if the work done by an employee is in.
interstate. commerce of in the production of goods for
interstate commerce, section, 13(a)(2) can ever have appli-
eation. See note 6 to MeLeo# v. Threlkeld, supra. Certainly -,
it can have no application to a ‘ease such as this. |
We have not overlooked the decision in Lanas.v. National .
Linen Service Corp., 6 Cir. 136 F. 24.433, and Martino v.
~ Michigan Window Cleaning C'o., 6 Cir. 145 F. 2d 163; but,.
if these decisions are accepted as sound law, we think they
are clearly distinguishable from the ease at bar in that the
services here were more clearly in furtherance of the pro-
dtiction of goods’ for. commerce and the establishinent is
more clearly not a retail @r servise establishment within
_ the meaning of the act. Cf. McLeod v. Threlkeld, supra. The
drawing of the. line between what does,and. what does not
fall under the-act is not always an easy matter. The cases
have been collected. and classified in the note te 150 A.L.R.
at p. 700 et seg. There can be no question, we think,-but that
the clear weight of anthority as mirrored by these cases
supports our conclusion that the company here is subject.
to the dct. . |» ; .
; eae : | Reversed. .
@
.
j
7
Before:
% 3 , : ° 36 7 { .
= Exhibit “B”. !
- UNITED STATES, CIRCUIT COURT OF APPEALS
‘For THE Seconp Circu iT
be
: No. 78—October Term, 1944.. |
(Argued November 1, 1944 Decided January 9, 1945.)
Danan: Mavup PHILLIPs, ‘as Administratix of the. goods, ..”
chattels and credits of Cutrrorp R. Puiups, deceased, .
-Joseru Bonvra, Tony Zv mMo}Foxy SaLapino, CHARLES *
SALADLNoO, Prmup Perri, ALBERT JETT, : Danny Fanto;
. Tuetma.Doveras, Ava BERKELEY, individually and on
~ behalf ef all other employees of defendant ‘similarly
situated,
os . Plaintiffs. Appellees- Appellants,
—against—
Srar OVERALL Div’ CLEANING Lav NDRY CoMPAny, Inc. bee
ay Defendant,
ond fo
AL , Service Launpry Corporation, — ra
_Defendant- Appellant Appellee.
os]
b. Hanp, Citas: pa cae,
,s al by the plaintiffs and i one of the defendants.
from a‘judgment of the District. Court for. the Southern |
District of New York. Reversed and complaint dismissed. -
Barney, Rosenstein, for: Plaintiffs- -AppelleesA p-
‘pellants.; “Charles R. Katz of. Counsel, Sidney
S. Wolchok, on the brief. .
Samvuet’ Prive, for’ Defendant- Appellant-Appel-
lee, Levy, Kornblum & - Katz and Joseph
Katz, of Counsel. — :
_ Posner anv Fox, for National Industrial ‘Laund-
4 erers'and Cleaners: Assn:, Amicus Curiue.
Cec Sis, ' for American Institute of Launder-
- "+ ing, Amicus Curiae, Bass,. Berry & Sims, of |
& Counsel. :
This suit was brought: by t fe plaintiffs, as employees,
Lillian Mand Phillips; Admi cia zach By been _—
\
Circuit Juitiee.
Mri ee cae
e es : eS 2 re
substituted for ‘her deceased husband who, was originally a
party, to recover for theyeelves and for others similarly.
situated overtime compensation and liquidated damages pur-
suant to the provisions of §16(b) of the Fair Labor Stand-
ards Act, 29 U. S. C. ‘A. §201. “It was at first only against —
Star Overall Dry Cleaning -Laundry Company, Ine., but
when the trial of the action was begun All Service Laundry
, Corporation for whom ‘these employees worked as pressers _
“and manglers was, by-stiputation, made a party defendant... .~
The facts were stipulated and may be summarized as fol- _.
lows: » : : , \
The defendant corporations have their principal atin
of business in Brooklyn, N. Y.,: where Star Overall Dry -
Cleaning Laundry Company, Ine., hereinafter to be ‘ealled ..
Star, was doing the period covered by the complaint engaged ;
in the business of collecting soiled linens, overalls, slacks,
coats, pants, union suits and hoovers ‘and of having them
Jaundered or otherwise cleaned.. It then returned them to
its customers and was paid a fee for the service. Many,
perhaps all, of tliesé garments were rented by Star to its
customers but some may have been owned by the customers
_themselves.- The record is not clear as to that and in our
view it is intmatedial because all the garments, whether
_ owned and rented by Star or owned. by its customers, had
_. been delivered to the ultimate consumer before they were:
_ collected by Star and worked upon by the plaintiffs. During
the time involved in this suit 95% of Star’s business was
done with customers within the State of: New York.and 5%.
_ with people outside that state. Its business was done with —
individuals to the extent of 82%: and 18% was ‘‘bulk’’,; a
- term meaning that the soiled clothes were received in larger ,
bundles than’ those collected from individuals. The bulk |
collections weré from many kinds of industrial, business
and professional ¢stablishments. ‘Star did not manufacture.
any of the garments. Mase o? ie eens geen,
Substantially all of the cleaning, laundering and pressing
_ of these garments -was done for Star by All Service Laundry _
Corporation, hereinafter to -be called All Service, which —
operated a laundry whose business. was entirely with cus-
tomers within the State of New York. Its work for Star
amounted to 80% of ail its business..
The defendants moved to dismiss the complaint on the
ground that the plantiffs were nofengaged in commerce or
in the production of goods for commerce within the meaning
of the Fair Labor Standards Act and on the further. ground
- that the defendants were service establishments, the greater
part of whose business was in intrastate commerce, which
were exempt from the provisions of the Act under §13(a) (2).
The motion of Star: was granted and the complaint was
dismissed as to it without cosis. Judgment was enteréd
- against All Service in favor of each plaintiff for stipulated ,
amounts without interest and for a reasonable attorney’
fee, the amount of which was stipulated. The plaintiffs and
All Service appealed. |
Cxase, Circuit Judge: ’
in Star was not the employer of the plaintiffs, it is dear
that the complaint should have been dismissed as to it and
no one now disputes that... It should be noted at the, outset
that the plaintiffs were not engaged in interstate commerce
_ simply because they performed part of the work involved: in
washing or otherwise-cleaning and making ready for deliv-
ery to Star garments which Star later returned to its inter-
state customers as and when it saw fit to Co so. Whether an
employee is engaged in interstate commerce for the purposes
of the Pair Labor Standards Act depends not upon ‘‘ whether - .”
the eniployee’s activities affect or indirectly relate to inter-
_state commerce but upon whether they are actually in or
~ sq closely related to the movement of the commerce as to
-be a part of it. Employee activities outside of this move-
:-. ment, so far as they are covered by wage-hour regulation,
are governed by the phrase, ‘production of goods for com-
meree.’’® McLedd v. Threlkeld, 319 U.S. 491
- Nor do we think the plaintiffs were engagdd i in the pro-~
. duction of goods for commerce, Nof because their work
was not “‘production’’ within the meaning of §3(j), for we
shall assume arguendo that the trial judge was right in|
holding that it was, but. because those garments were not |
‘‘ goods’? »within the statute because excluded therefrom by
the provisions of §3(i) of the Act. What are to be. treated
as goods within the Act is' there defined, and it is made
plain that ‘the definition ‘‘does not include goods after their
- delivery into the actual physical possession of the ultimate,
‘consumer thereof other than the producer, manufacturer, or
; processor thereof.”? -
- There is no clairh and no proof that : AIL poervice was
engaged in the production of goods for interstate commerce ,
; ig exeept as it washed or otherwise cleaned garments collected ..
' by Star and delivered to it. Indeed; the Raed con-'
39
clusively shows that its other business was all intrastate.
Nor is there any claim or evidence that any of.the garménts
’ which Star collected and delivered to All Service for clean-_—
_ ing-had not previously been delivered into the actual phys-
ical possession of the ultimate consumer. On the contrary ©
it is wk org that they were dirty, ‘used garments when
collected by Star and that what All Service did was. to
restore their cleanliness after they had™been used by the -
customers of Star, the ultimate consumers from whose ac-
_tual physical possession the garments had been taken. Cases
- relied on by the plaintiff like Enterprise Box Co. v. Fleming, .
125 F. (2) 897; Hamlet Ice Co. v: Fleming, 127. F. (2) 165;
and Chapman v. Home Ice Co., 136 Fy (2) 353,” dre to be-
distinguished because the ‘‘goods’’ had not been delivered
into the ‘‘actuai physical possession of an ultimate consumer
_who was not also a producer, manufacturer.or processor.’’
The gtatute makes a clear distinction between goods which -
“are being worked upon in one or more of the ways embraced
within the statutery definition of ‘‘préduced’’ before they
get. into the actual physical possession ‘of the ultimate con-
sumér and after they have gone into such possession; pro-
_ vided the ultimate consumer is not himself a producer,
- manufacturer or processor. We think it. also clear that
the ultimate consumers are the persons who wear-out these
garnients and incidettally get them dirty while doing so. °
' Congress did not attempt to-.regulate hours and wages to
the full extent of its power so to-do. Kirschbaum Co. v.-
Walling, 316 U. 8, 517; Walling v. Jacksonville Paper Co., .
317 U. S. 564. “The express limitations Congress put into
the statute must be given-eifect even though it is a reniedial
. Statute io be given a liberal construction. As this com-
pletely disposes of the appeal we ‘find it unnecessary to
=
determine whether All Service was a service establishment
exempt from-the Act by virtue of §13(a)(2). ;
_,:. Judgment reversed and complaint dismissed.
CuarK, Circuit Judge (dissentitig) : - ase
The effect of the qpinion is.to make a special exception
from the Fair_Labar Standards Act of all repairing and |
reconditioning work done on goods owned by another. - Dif-
ficulties may well develop as to the extent of this exception;
thus are factories or stores ultimate consumers as to repairs
or reconditioning of their equipment? Passing that, it seems
.to me this interpretation of the Act must be .rejected for~
several reasons. It makes an exception quite foreign to
re -; ' / ¢ f ve 5
v
= : | 78 4Q ‘Si
-any purpose of the Act and more or less in conflict or over-
lapping with other recognized exceptions whose purpose is
cléar, particularly the important one, so much discussed in
this case heretofore, of retail or service establishments; it’
‘finds the basis for such an exception in an unnattrat place.
in the Act (in a definition of-goods for commerce of §3(i),
29 U.S. C. A. §203(i), not in. the ‘‘xemptions’’ provision
of $13, which contains, inter alia, the exception for service’
establishments, nor even- as a limitation on the very ex-
‘tensive definition of ‘‘produced’’ of §3(j) to include ‘‘hand- |
_ ling’? or ‘‘in any other manner working on such goods’’) ;
and it gives what seems to me a clearly unintended turn to
the words used in the definition relied on. : .
In general, the definitions employed in this ‘* Definitions” -
section are designed to carry out the broad coverage shown
by the entire Act; witness the definition of goods in this
_ -very provision as including a-consideable list-of things and |
finally ‘‘articles or subjects of commerce of ariy character,
or any part or ingredient thereof,’ as well as the definition °
-of ‘‘produced’’ already referred to. The obvious purpose of
this particular limitation was declaratory; to make sure *
that the other broad provisions were not, indeed, carried too
. far; it.would not have been: necessary but for their extent;
and it should take its color from them and,its immediate
context, On the bare words of the other pevisions, goods
already ‘in the home, the factory, the store, or the hotel
would come within the Act, though ‘they were not-so in- °
tended. Much.of this limitation may be thought already ob-
vious, though a carefully drawn statute would still be so .
framed as to make these matters express rather than im- °
plied ; some of the transactions,otherwise included, however,
would be much less obvious.- hus, the linen used in a hotel,
the equipment. in-a store or factory; while being used on.
the: premises by these respective establishments, would
othrwise have fitted the definition: And the éonstruction -
made reduces to insignificance the words ‘‘the actual phys- -
ical possession of the ultimate consumer’’ and. magnifies the
word ‘‘after’’ (‘‘after their delivery’’); it would be more’
natural to hold that, if the goods. go out of the consumer’s °° *
actual physical possession back into the stream of commerce,
there must be a redelivery to him to make the provision
apply. .I would award interest, Greenberg v. Arsenal Bldg.
Corp., 2 Cir., 144 F. 2d 292, 254, and then affirm on the
grounds taken below, D.'C.S. D. N. Y., 58 F. Supp. 238,
oN), cerns 8 , Ble ‘ ‘ o
af ; ia o | . 41 :
But even if I am wholly wrong’ abdut all‘ this, I still
should not want to make sé novel—and, for all we’ know,
possibly far-reaching and administratively confusing—in-
terpretation of the Act in quite so offhand a way. There ap-
pears nothing in the past -history of the Act, or of its en-
actment, to suggest it; indeed, the contrary is indicated,
because the legislators’ diseussion called to our attention
_ Was so directed to the exemption for service establishments,
as well as the fact that the answer and the motion to dismiss
below were based on that exemption chiefly, with the single
other point, that the plaintiffs and the goods were not in
interstate commerce. That explafns why this statutory pro-
vision -was not-mentioned below, 55 F. Supp. 238, and -why
‘discussion centered ‘about the meaning and effect of Lonas
v. National Linen Service Corp., 6 Cir., 136 FR. 2d 433, cer- -
tiorari denied 64 S. Ct. 157, which all seem to have thought -
was the important decision and which likewise ‘does not
mention this statute. It also explains the limited attention
‘paid the provigion in ‘the. numerous briers filed before ius.
The interpretation has no ease support; it is opposed to the’
- view. taken in Walling v. Armbruster, D. C. W. D. Ark., 51 -
_ F. Supp. 166 (converting sedans into buses for their owners
held. within ‘the Act), and seemingly in Slover vy: Wathen,
4 Cir, 140 F. 24 258, 259 (barges being repaired held
‘‘goods’’ within the Act); and it rejects the reasoning of
cases such as Atlantic Co. vy. Walling. 5 Cir., 131 F. 24 518,
921, that the words relied on have ‘‘only the effect of placing
a time and circumstance limitation ‘on the application of
penalties,’’ or. Chapman'v. Home Ice Co. of Memphis, 6 Cir.,
136 F. 2d 353, 355, certiorari denied Home Ice-Co. of Meng
phas v. Chapman, 64 S. Ct. 72, and Hamlet Ice Co. v. Fleming,
4 Cir., 127 F. 2d 165, 170, certiorari ‘denied 317 U.S. 634, that
they: apply only to, goods ‘‘ withdrawn-from further traffic og
9) Cir., 125 F. 24 897 , certiorari denied Evxiterprise Bor Co. v.
Holland, 316 U.-S. 704, holding not exempt the making of
cigar boxes sold locally to cigar manufacturers who used ©
them to house their cigars for shipment and sale, is either -
directly controlling or else illustrates just the confusion ;
‘noted earlier as to the meaning of ultimate consumer which
must result from this interpretation. At the Very’ least
therefore,.J think the case should be reheard, after an invita.
tion to the Waxe & Hour Administrator to present his views,
sale.’? And a case such as Enterprise Box Co. v. LT ae a
&
° . 42 | =
"Exhibit “0”,
Smpvtation OF Facts.
| + Filed 2nd February 1944 \ as
* It is hereby. stipulated and agreed by and between the.
parties inthe. above-styled case, without waiving the right
to introduce additional testimony upon the trial of this case
' as to matters\covered herein, as well-as all other matters,
_and, further, without waiving the right to-object to the-intro-
duction of all or\any part of this stipulation as \irrelevent -
or immaterial! to \ssnes arising in this case, as follows: .
ged in the business, of. buying and sell-
otors of various types; of repairing,
-* Defendant is eng
ing néw and used
_ reconditioning, and/rebuilding used moters ; and of installing
‘and repairing private, commercial, and industrial witing
systems: The detaned character of the business of the firm
-is as follows: : a Sn :
. * (1) The relocation. and extension of wiring in systems
a.
already installed in private, commercial; and industrial
establishments.. # : erg.
(2) The repair. of private, commercial, and industrial
*wiring systems. ee °
_ (3) The installation of wiring in new private, commercial,
and industrial establishments.
(4) Instalaltion and relocation of commercial and indus-
trial moters, including the installation of necessary switches,
wiring, ete. . dere eke . "aes
(5) Sale of elec:rical materials and supplies over the
counter, et | an cee.
(6) Rental for periods of a month or less of motors, flood- .
lights, compensators, ete., to commercial and industrial
firms. 7 : q tae ies : ates
43.
(7) Sale of new and used motors.
(8) Reconditioning, repairjng, and rebuilding elect.ic |
_ motors and generators imits shop and repairing motor and
cenerators on its customers’ premises by removing old and -
defective brushes, comniutators, armatures, stators, wiring,
and bearings; anil by replacing said parts with new, re-
worked, and built-in parts. es) Be tee.
{9) The fabricating, when necessary, of shafts, brushes,
and other motor parts in connection with its teconditioning,
*. repairing, and rebuilding operations. | :
II
_ Defendant; as a matter of trade accommodation, oceasion-
‘ally sells motors to various dealers at special.dealers’ dis-
counts, and the invoices.thereof are marked ‘*Dealer’s Spe-
cial Discount, 10%—~30 Days, Otherwise Net,’’ and holds
‘itself out to the publie as being engaged, and does engage |
in, commercial and industrial wiring, electrical contracting,
and dealing in electrical motors and generators, for private,
commercial, and industrial uses.
a ee : : ‘Zan
A.substantial number of the motors which defendant regu-
\ larly sold, reconditioned, repaired, rebuilt, and relocated,
and a substantial part of -the wiring which was installed,
relocated, and repaired for various customers of the -de-
fendant, as: hereinafter listed, were respectively used in the
‘production of goods- for interstate ecommerce. A substantial
_ humber of the motors repaired, rgconditioned, and rebuilt
were small motors, sach as those used for electric fans, drink |
mixers, refrigerators and oil burners. A majority of work
in® repairing and reconditioning motors in‘dollar volume |
was done on motors used for industrial purposes, such pur-
poses being the production of goods for commerce.. °
: In connection with its operations it had,.on November 18, —
1942, thé following typés and numbers of employees:
| Office Employees. Noeatoaetctiontinaaianaanas = As
~
Shop Department |. - AOA At ae
Foreman ree
Trouble Shooters
-. Mechanigg -_. slice pris Oieatlintiisiaditaiasieawie
ED ries reba issc sth nisladLincih ch npemactinheboneteaaia
Wiring Reeianaas StS ae eR el Se
* ‘Mechanics hewitt acentingsiloineaiaionncntigipendiastishingieusivann 5
|
613463--44-- 4
11
Aa Rone
?
_ ‘Among the duties of persons employecywithin the desig-.
‘ation ‘* Mechanies,’’ in connection wth the ‘repair and
~ rebuilding of.motors, are: eee shies Fees
(a). making bearings, | ee
(b) making and shaping shafts,
(c) making contacts for controllers, -
. (d). boring out«pulleys and couplings,. ,
(e) resurfacing commutators and winding stators
"and armatures. ae i:
7 ae |
The physical set-up of the plant is as follows:. °
Defendant oceupi
“o
: ies the front part of the first floor of 418 —
West Pratt Street, Baltimore, Maryland, for business office, _
' ‘drafting space for a-draughtsman, and shop for repair of :
_ small electric motors, electric toasters, electric irons, and
- similar appliances. In the rear of the first floor is the shop-
‘where all large motors, compensators, switehes, ete., are
repaired or rebuilt; the oven for baking repaired and re-_-
': built motors; lathes, pulleys; and other equipment essential
.to the operation of the shop. All electrical supplies and
me terials sold. over the counter.or used in connection with |
repair work are stored* on the first floor.. The rear of the iS
_ second floor is used for the storage of old and new equip--
ment and sundry fabrication of carbon, brushes. Electrical
motors and equipment prior to sale of same are stored in
. . defendant’s warehouse at. 1418 Belvedere -Street, .. Defen-
_. dant owns, this warehouse but rents the building at 418 }
West Pratt Street. Re eas mie
4
45
_ For the purpose of rebuilding, repairing, and recondi-
’ tioning’ motors for its various customers, the defendant is
employing the following machinery : three lathes, one drill
press, and one shaper, with their respective tools, cutters,
and other attachments ; vises, saws, emery wheels, a hydrau-
lie press, two electric hoists and four chain falls, and other
- fools and machinéry generally used in establishments of
.this kind. ig coogi :
The business and activities of the defendant are amplified
and deseribed in the printed circular of the defendant, which
', is marked Exhibit A and annexed at the end hereof. °
_ The breakdoww of sales of the defendant for the period
January 1, 1942, to October 31, 1942, is as hereinafter set.
forth. Such breakdown is representative of present volume.
and character of business. | ; ge .
The designation ‘Shop or A Sales’ in said breakdown. |
‘means all inicome obtained as a result of the repair and_re-
_ conditioning of motors worked on in. its own shop or on.
_ customers’ premises, and includes labor ‘and material costs -
for such oo mang Re ee a . fis
The designatitn ‘*Wiring or B Sales”’ comprises income
from work done outside of defendant’s own shop, and at its -
respective eustomers’ locations, and comprises the repair .
and installation of wire, fittir zs, and relocation and rear-
rangement. of motors, together with incidental equipment.
‘The. designation Material or Storage Charge Sales”?
_-covers receipts from the sale of new and used motors, gener-
afors, ete. dat hs Sacks
mg (quamaynde [won 99[2 saqo pun cojers 30) wey
et": —_(eredes scjom queo puw sqejieywuy 70 Ajuo sows YsEd) soEs oM;pUEGosoH
sO (poe PUB Mou GI0q BIO}OW Jo sojad B[es SepPNioN!) se[ee 200K
4°08 ~~ (toour 0° ayeder wo e909 {Ha~wUI PUY s0qRI wopNoU}). soF¥e doug
c+ Fe he (#909 swAwU pue joqe; Surpnjouy) sajes Buja14
SUOPwoyserE[D 19Bpay
teinak Iedouas (weoive poss) expo, teiouss wos; poqicoewen sores troy
guecwsg
- OO - 969" * Bee get eR. uzeees avi
- QCCRSTNS OORT ZOLIT'S Su'sPP'S geRLe'Rs LI-ZE'6D
00°s92"t “o0°gen"t8
90°086'F ==. goroREEs
a) ) “88 BLzZ9'99 O0'eLE'T 88'°9PE'T
rie —— zooap’s = , IW 9T0'Se
Ore BB90r'L8$ 86698
sree (MOL seUeY | $2188 YSUD so[We oSIWYD soTTe _.Gf,, SOLES ,.V,,
01098 20 20 Buy aodoyg ~-
[eee
‘ aa (anop preg] o :
apatite
wae 1eL—ster' FB PO % BIEL ‘I “une porsed oy 40f 82,08 fo oe
go
- & : 47 i Wo
In the course of its activities, defendant accumulates and —
sells to local junk, dealers approximately 12,000 pounds of
scrap metal annually at an annua! sales value of approxi-
mately $500.00, which scrap is ultimately melted down and
shipped in interstate. commerce. - This’ serap metal is ob-
tained from. junked parts of purchased old mo rs; from
\; unusable parts; and from borings and filings of recondi- -
_ ‘tioned, repaired, and rebuilt motors resulting fro cutting
and Shaping parts for used motors worked on for‘d fealiant
- and defendant’s customers. All the inside mechani
form work in every: work-week, resulting in the accumula-
tion of such ju te ho
‘\ 4 ne \
Nie va
‘from June 30; 1941, to October 31, 1941, the defendant per- —
formed work inthe State of Maryland for eleven customers
outside said State, in the total amourit of $1,210.15.)
'*+[Nore: This paragraph contains a schédule showing that
‘during the calendar veah 1944, the defendant made Six Sales
of rebuilt motors to customers outside ‘the State of Mary-
land, fora total dollar voluige of $1,020.00.) di
IX. |
Fol y cs 1 \ ies ea
As of November 1, 1942, defendant had approximately |
1,000 active accounts as reflected in\its Accounts Receivable.
Ledger, 99 percent. of which Are commercial or industrial.
firms, which percentage is applicable.to the remainder of -
said 1,000 active ‘accounts as of said date »f November i,
For the period J anuary 1, 1942, througli October 3f, 1942,
defendant’s larger and most active accounts were as follows: —
f°
8 per- ee
? *
a
G t :
48
i a . “—_ Wir- .
; “A” Shop ing “Motor” Total
1: The American Ice Co. _... apaneyen-diet ome 2396.47 @ 828.81 3g 28.30 §$ 1,092.58
S. acenen Oe. 3! ON 136.32- 48.09 204.32
8. Anchor Post Fence Co... 146.00 | 836.09 - 429.56 1,404.65
4. Acme Stvel Engineerirg Co. 594.35 sl 149.56 744.41
5. American Smelting & Ref. Co. » CAO bore , 266.70 2,634.95
i ON OR oa ie ie 491.95 : 3.48- 495.41
7. American Brake Shoe & Foundry Co.’ 376.48 Nuke 274.48
8. Ameritan Cider Vinegar Co. Ss; s(242.68 536.61 161.46 940.73
9. Svein eS a an wee 2,368.06 2 < 643.66 1,912.61
‘10. Baltimore Paper Box fo.” 348.72 418.00 "761.78
fi 11. Baltimore Salesbook Co. 522.76 764.22 169.79 1,456.71.
12. Baltimore Marine Repair Shops... ~=—-413.92 aauks 40.00 463.92
13. Ches. & Pot. Tel. Co. of Balto: ; sel 300.48 ©... 34.00. .* 148,
ld Chesapeake | eee oni 66.64 158.74 34.60 26%
15. Commercial’ Envelope: Co, if Serene 91.10 228.33
16. Calvert Distilling Co. 9° “692.00 12.60 91.60 796.26
17. uken P. Fries @-Sons 160.23 nisi 510.99 ~ 761.22
‘18 Fertiltzer Mfg. Co-op. NSTI ES YE 82.17. 303.42 —.
19. Guilford Folding Box Co. -.- 651.00 . $68.28 8.0 - 922.32
‘AD 20; General Ship Repair Co...) 1,903.64 94.05 719. 2,717,038
21. Gordor. Lavin Paper Box Co. + 9 _ 625.74 1,449.36 112.81 2,187.91
22. Holtite Mfg. Co... : plasngen 887.65 1,571.34 " 244,16. 2,608.15
ia. International Bedding Co. _. bien peanilansi 196.21 522.46 ‘10.00 128.67
4: H. Klaff & Co., Inc. eee Ea 1,540.62 173.42 1,960.00. 3,664.04
26. Jas. J. Lacy Co... sacipsiina 559.94 24.61 77.61 662. F
26. Marine Enigine & Boiler Co. __ ae eee 70.21 2,626.11
27. Revere Brase Co. 187.56 99.10: 836.
28. Standard Metal Refining Co.’ __ geiguleiaabecin oy dt ES 5.76 406.40. ©
29. Maryland Drydock Co. egy SS . eer 2,652.67 - 6,002.88
30. Glenn L. Martin 0000 8 eoetey _ 852.40 1,978.19
31. Melville Woolen Mills __ alsa aiciniattaiinen . $86.13 9,292.99 — 230.83 10,509.96
32. Proetor and Gamble Pe Ninliltaheesbaisatiiainian 4523.96... : 61.60 616.56 .
33. Frank ».. Wight Distilling.Co.g87'38 “1.29606. 160-0 1,845.25
OCI een anne BOPOTOS “1T-94708 “10,10018 “BREAD
Percentage ae 48.89 ° 32.62. 18.48 © 100
_ and that the specific breakdown of jobs performed for said
customers during said period, was as follows for each of said
A BOONE 8G a ig : ek leee wy Tiee
| Nore: Here follows a bre#kdown of the transactions ré-
ferred to in Paragraph X, showing the date, order number,
and aniount-of the charge to each of the thirty-three custo-
mers set forth in the foregoing schedule.} : ne i
That during said period, Janhary 1, 1942, through Octo-
r 31, 1942, .évery mechanic of the defendant. worked, in
Practically every workweek, for some of the said ctstomers
r inthe repair of their motors, generators, the recon- |
_struetion:of used motors: sold ‘to them, or in performing
_ electrixal-work at their respective establishments. :
te F ee . 9 XI ; ” f arp é
; id list of 33 most active accounts, tlie following
~\__ were engag the repair of ships, tugs, barges, angl other.
vats which Were intended for movement in interstate com-
merce \ | oes oe
Balt
General
Marine Engi
Maryland Dy
/
L > oe
e
olaonenr
That the Chesapeake and Potomac Telephone Company is
engaged in interstate commerce, and that the remaining
companies on said-list, With the exclusion of ‘the American
‘lee Company, were engaged in the production of goods for-
commerce as defined in Séction 3 of the Fair Labor Stan-
dards Act of 1938, shipping at least a substantial portion
of their total production to points outside. the State ‘of
Maryland. : ae 5 rae
De: eee ME sees
That as of November 1, 1943, defendant had ‘in its shop
approximately 400 motors awaiting reconditioning, repair-
ing, of ‘rebuilding, a substantial number of which were en-
gaged in the Pepauction of goods for commerre.
yee ae
‘That the current activities of defendant and its employees
are substantially the same as those of the prior periods as
hereinbefore described. oes : sees en
=
ae
That defendant holds; ‘and is currenily operating under, a
certificate of exemption from taxation on miachinéry as. a
_ manufacturer from the City of Baltimore undér Ordnance
462, approved March 6, 1919. Jeng ws
PROC ee Eee eam
_. That in the years 1938 and 1939, defendant failed to com- —
_ ply with Section 6 (a) {1) of the Act; thatsin the vears 1939 -
and 1941, it failed to comply with Section 6 (a) (2) of the °
“Act ; that it has failed to comply. with Sections :7 (a) (1)-and
7-(a) (2) of the Act and is currently failing to comply with
Section 7 (a) (3) of the Act. ou cats i.
Defendant has not fully complied with the provisions of
‘Section 11 (c) of the Fair Labor Standards Act of.138 nor |
complied with the regulations prescribed by the Administra:
tor, issued under the authority of said Section 1] (ec):
Dated January 31,1944. *" Anan ;
This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.