Petition for a Writ of Certiorari — Eastern Sugar Associates v. Peña

FiIiLEav

SEP 7 1955

In the

Supreme Court cf the Anited States

Octosper Term, 1955.

No. 377

EASTERN SUGAR ASSOCIATES (a Trust),

Petitioner,

v.

JOSE A. PENA,

Respondent.

PETITION FOR WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS

FOR THE FIRST CIRCUIT

Earnie T. Firppier

Counsel of Record

Jose G. Gonzalez P. O. Box 3507

Tomas I. Nivo San Juan 17, Puerto Rico

Cantos J. Faure Attorney for Petitioner

Of Counsel

P. O. Box 3507

San Juan 17, Puerto Rico

Blanchard Printing Company, Boston, Mass. Law Printers

TABLE OF CONTENTS.

Sussecr I> pex. Page

Opleiens Dele a 1

Param SS kn RAS 2

Questians Freasate® <5 iS 20 eS A es 2

Ginbebes: svedues : Ge EA: dee 3

Meahemneiel of the Tleb s5 EO , Ree ERR 5

Reasons for Granting the Writ ..... oe seen oy ae

CE Se ES A aS aaa 23

AE 2 aa ad ae 24

CrraTIons.

Cases.

Adams v. Albany, 80 F. Supp. 876, 880-882 ......... 20

A. J. Phillips Co. v. Grand Trunk W. R. Co., 263 U.S.

OG8: GP ames. W464, TS - eS ee 19, 20

Amalgamated Ass’n v. Wisconsin Emp. Rel. Bd., 340

U.S. 888, 85-L.Tid. 364, S76. ..5. oe a aes 23

Angel v. Davenport, 271 U.S. 33, 70 L.Ed. 813, 817-818 19

, Arnson v. Murphy, 109 U.S. 238, 27 L.Ed. 920, 922 .. 19

Atlantic C.L.R. Co. v. Mims, 242 U.S. 532, 61 L.Ed.

476, 478 3 ALE une re

Awad v. Durant, 69 F. Supp. 921 ites 20

Bayridge Operating Co. v. Aaron, 334 U.S. 446, 92 m

Ed. 1502, 1517 . as se aoe

Berry v. Heller, 79 F. Supp. 476, 477 SERRE No ay eA: 20

Bethlehem Steel Co. v. New York Labor Rel. Bd., 330

U.S. 767, 91 L.Ed. 1234, 1247 ....... 21

Bindczyck v. Finucane, 342 U.S. 76, 96 L.Ba. 100, 110 19

Bonet, Sancho v. Yabucoa Sugar Co. (1939), 306 U.S.

G06. BS id: O66 90 a es 10, 16

Charleston & W.C.R. Co. v. Varnville Furniture Co.,

237 U.S. 59s, 59 L.Ed. 1137, 1140 ..... 21

Consolidated Royalties v. Ashton, 182 F.2d 296, 299 13

_—

ii Table of Contents.

Page

De Bonis v. U. S., 103 F. Supp. 123, 126 20

De Castro v. Foard of Commissioners, 322 U.S. 451,

88 L.Ed. 1384, 1392, 1393 gis _ 10, 16,17

Ecker v. Western Pacific i°?. Corp., 318 U.S. 448, 87

‘L.Ed. 892, 940 atte Gare yy

Finn v. U. S8., 123 USS. 297, 31 L.Ed. 128, 130 20

Gelpi v. Tugwell, 123 F.2d 377, 382 14

Grayson v. Harris, 267 U.S. 352, 69 L.Ed. 652, 656 13

Helvering v. Hormel, 111 F.2d 1, 5, aff’d Hormel v.

Helvering, 312 U.S. 552, 85 L.Ed. 1037 13

Hill v. Florida, 325 U.S. 588, 89 L.Ed. 1782, 1784-1785 23

Hines v. Davidowitz, 312 U.S. 52, 85 L.Ed. 581, 587 23

Jackson v. Northwestern Airlines, 76 F. Supp. 121, 125,

reversed on other grounds, 185 F.2d 74, cert. den.

342 U.S. 812, 96 L.Ed. 614 DNS ety 19

Jerome v. United States, 318 U.S. 101, 87 L.Ed. 640,

643 ae 22

John F. Jelke Co. v. Smietanka, 86 F.2d 470, 471, 473 20

Joint Council, etc. v. Delaware, L. & W. R. Co., 157

F.2d 417, 420 ee

Kiefer-Stewart v. Seagram, 340 U.S. 211, 95 L.Ed. 219,

224 18

Knickerbocker Ice Co. v. Stewart, 253 U.S. 149, 64

L.Ed. 834, 840-841 22

Local 626, etc. v. General Motors Covpavelion, 76 F.

Supp. 593, 594 19

Mercado Riera v. Mercado Riera, 152 F.2d 86, 92 14

Midstate Horticultural Co. v. Pennsylvania R. Co.,

320 U.S. 356, 188 L.Ed. 96, 100 19

Missouri P. R. Co. v. Porter, 273 U.S. 341, 71 L.Ed.

672, 675 . 21

Municipality of Rio Pisdree v. Serra, Garabis & Co.,

65 F.2d 691 yen 10, 14, 15, 16, 17

Nevada-California-Oregon R. Co. v. Burrus, 244 U.S.

103, 61 L.Ed. 1019, 1022 13

—

Table of Contents. iii

Page

Nickel v. Cole, 256 U.S. 222, 65 L.Ed. 900,905 ..._.. 13

Northwestern-Hanna Fuel Co. v. McComb, 166 F.2d

See eee SAE OEM age SSEERIES AE VTS ep te EPS 22

Ocean Park Development Corp. v. People of Puerto

wee, B08. F.2d STi, SIS... Ne SR 17

O'Neill v. Cunard White Star Ltd., 69 F. Supp. 943,

_ pce SOR ERS gee RUE GORE TN none Cheat 20

Paschal v. North Atlantic € Gulf 8.8. Co., 95 F. Supp.

PG NE oy Sk SRL UE CUES pee ce PROT See 20

Pennsylvania Co. for Insurances, etc. v. Deckert, 123

POG Wt, WOO OOe ee ee 20

People of Puerto Rico v. Rubert Hermanos, 309 U.S.

en Ss WOO so eee 16

Public Utilities Com, v. United Fuel Gas Co., 317 US.

Se) Oe Ghee WO GUO oe eee a ee 13-14

Publicity Building Realty Corporation v. Hannegan,

Ree T.28 aee, S08 Ee eae 13

Puerto Rico v. Shell Co., 302 U.S. 253, 82 L.Ed. 235

PN as Se On RA OR ks ee ee 15, 16

Radio Station WOW, Inc. v. Johnson, 326 U.S. 120,

Oy iD: D008, MOT Oe 13

Rogers Cartage Co. v. Reynolds, 166 F.2d 317, 320-321 19

Role v. J. Neils Lumber Co., 74 F. Supp. 812, 814, aff’d

Se Pee PUR IS die A i ee eee 19

Sgambati v. U. S., 172 F.2d 297,298 ................ 20

Sterling v. Constantin, 287 U.S. 378, 77 L.Ed. 375, 383 14

Story Parchment Co. v. Paterson P. Paper Co., 282

US. 555, 75 L.Ed. 504, 552. eee 18

United States v. American Trucking Association, 310

U.S. 534, 84 L.Ed. 1345, 1350-1351 ................ 22

U.S.v. Crescent Amusement Co., 323 U.S. 173, 89 L.Ed.

160, 167, Reh.Den. 323 U.S. 818, 89 L.Ed. 650 .... 12-13

U.S. v. MacEvoy, 110 F.R.D. 323,325 .............. 20

United States v. Pelzer, 312 U.S. 399, 85 L.Ed. 913,915 22

Walling v. Halliburton Oil Well Cement Co., 331 US.

my oe Gin t9e 198 oe ee 21

by

iv Table of Contents.

Page

Walling v. Jacksonville Paper Co., 317 U.S. 564, 87

L.Ed. 460, 465-466 TS Oe ES OR ee 20, 22

Walters v. St. Louis, 347 U.S. 231, 98 L.Ed. 660, 664 13

Weber v. Anheuser-Busch, U.S. , 99 L.Ed.

(Advance pp. 368, 394) .. 20, 22-23

William Danzer & Co. v. Gulf & 1. R. Co., 268 U.S. 633,

69 L.Ed. 1126,1129 ....... . 20

W.U. Tel. Co. v. McComb, 165 F.2d 65, 73 oa “ae

Statutes:

Aet No, 8 of April 5, 1951 (Puerto Rico) 6

Act No. 289 of April 9, 1946 (Puerto Rico) . . 6

Act No. 379 of May 15, 1948 (Puerto Rico) 5, 7, 10, 13

Section 4(b) ........ eee es 5

SS ee Bihw ks Cm ‘4, ‘17, 21

Fair Labor Standards At eee 6, 7, 11, 13, 17; 19, 21

Section 18 (29 U.S.C. 218) .......... 3, 4,11, 20, 21, 22

CSE NE AOR ie ce

(Sai. See) es 22

Foraker Act (379 Stat. at L. 951) Sebi necin cna <a

Judiciary & Judicial Procedure

Sesten 1906-28 USC. ................ ¥SBWASB

Mandatory Decree No. 3, approved by Minimum Wage

ME PRUNE T: «Sek ees 6

TD ee eee ee 13, 18, 22

Congressional Findings and Declaration of Policy—

CMRI a AT 5 sc ee ee ee >

Section 6 (29 U.S.C., Seetion 255, 255(a)) 2, 3, 8, 9, 12,22

Seetion 6(a) . SEES AA Eee Seige eae eet ae

Section 7 (29 U. S. C., Section 207(a)) ee ox 2 ae

Miscellaneous:

House Report No. 71, February 25, 1947, U.S. Code

Congressional Service, 80th Congress, First Ses-

aims, Pes 10RD) 100G: . =... oe ee 18

Developments in the Law—Statute of Limitations, 63

Harv. L. Rev. 1177, 1186-7. ed Ses xk ea 19

In the

Supreme Court of the Anited States

Ocroser Term, 1955.

No.

EASTERN SUGAR ASSOCIATES (a Trust),

Petitioner,

v.

lod

JOSE A. PENA,

Respondent.

PETITION FOR WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS

FOR THE FIRST CIRCUIT

To the Honorable, The Supreme Court of the United States:

Petitioners pray that a writ of certiorari issue to review

the decision and judgment of the United States Circuit

Court of Appeals for the First Cirenit entered in the above

ease on May 25, 1955.

Opinions Below

The opinion of the Circuit Court of Appeals for the First

Circuit, handed down on May 25, 1955 (Record on Appeal,

pp. A91-A98)* is reported in 222 F. 2d 934. It is also

reproduced in the Appendix to this Petition starting at

page 24, infra.

* References are to the Record on Appeal in the First Circuy: Court

of Appeals, as supplemented with the proceedings in the said Court.

2

The opinion of the Supreme Court of Puerto Rico handed

down on March 15, 1954 (R. on A., pp. A59-A69) and

appealed to the Court of Appeals for the First Circuit, is not

as yet officially reported.

Jurisdiction

The judgment of the United States Court of Appeals for

the First Circuit which is sought to be reviewed herein was

entered on May 25, 1955 (R. on A., p. A99). Petitioners

applied for and obtained a retention of the mandate on

June 23, 1955 and filed a petition for rehearing on July 7,

1955 (R. on A., p. A107). Rehearing was denied on August

3, 1955. Upon application of petitioners, the Circuit Court

of Appeals on August 10, 1955 ordered a stay of the man-

date unti) September 12, 1955 for the filing of the petition

herein. (R. on A., p. A107.)

The Savladietion of this Court is invoked aie 28 U.S.C.

1245(1).

Questions Presented

1. Whether the United States Court of Appeals for the

First Cireuit can decline to decide the federal question on

which an appeal from a decision of the Supreme Court of

Puerto Rico is taken, and can dispose of the appeal by con-

sidering and deciding questions of Puerto Rican local law

not theretofore decided, and expressly left open for adjudi-

cation by the Supreme Court of Puerto Rico and not as-

signed on appeal.

2. Whether the statute of limitations provision of See-

tion 6 of the Portal-to-Portal Act (29 U.S.C., Section 255)

is substantive in nature, extinguishes the cause of action

and can be raised for the first time on appeal.

3. Whether the States or Puerto Rico have unrestricted

a

=e

authority under the provisions of Section 18 of the Fair

Labor Standards Act (29 U.S.C., Section 218) to enact

‘‘more favorable’’ legislation, even though contrary to the

provisions of the Fair Labor Standards Act and/or the

Portal-to-Portal Act and to the intent of Congress there-

under.

4. Whether the statute of limitations provision of the

Portal-to-Portal Act applies to claims for wages in inter-

state commerce purportedly arising under local laws.

Statutes Involved

The statutes involved, or pertinent portions thereof, are

the following:

1. Section 1293, 28 U.S.C.

‘*F inal decisions of Puerto Rico and Hawaii Supreme

Courts

‘*The courts of appeals for the First and Ninth Cir-

cuits shell have jurisdiction of appeals from all final

decisions of the Supreme Courts of Puerto Rico and

Hawaii, respectively in all cases involving the Consti-

tution, laws or treaties of the United States or any

authority exercised thereunder, in all habeas corpus

proceedings, and in all other civil cases where the value

in controversy exceeds $5,000, exclusive of interest and

costs.”’

2. Section 6 of the Portal-to-Portal Act of 1947 (29 U.S.C.,

Section 255(a) ). Pak:

‘‘Statute of Limitations

‘‘Any action commenced on or after May 14, 1947,

to enforce any cause of action for unpaid minimum

4

wages, unpaid overtime compensation, or liquidated

damages, under the Fair Labor Standards Act of 1938,

as amended, the Walsh-Healey Act, or the Bacon-Davis

Act—

‘*(a) if the cause of action accrues on or after May

14, 1947—may be commenced within two years after

the cause of action accrued, and every such action shall

be forever barred unless commenced within two years

after the cause of action accrued.’’

3. Section 7 of the Fair Labor Standards Act (29 U.S.C.,

Section 207(a)).

‘*Maximum hours

‘“(a) Except as otherwise provided in this section,

no employer shall employ any of his employees who is

engaged in commerce or in the production of goods for

commerce for a workweek longer than forty hours,

unless such employee receives compensation for his

employment in excess of the hours above specified at

a rate not less than one and one-half times the regular

rate at which he is employed.”’

4. Section 18 of the Fair Labor Standards Act (29 U.S.C.,

Section 218).

‘*Relation to other laws

‘*No provision of sections 201-219 of this title or of -'

any order thereunder shall excuse noncompliance with

any Federal or State law or municipal ordinance estab-

lishing a minimum wage higher than the minimum

wage established under such sections or a maximum

workweek lower than the maximum workweek estab-

lished under such sections ... ”’

5

5. Sections 4(b) and 5, Puerto Rico Act No. 379, approved

May 15, 1948 (1948 Laws of Puerto Rico, pp. 1256, 1258,

1260).

‘*Section 4.—Extra hours of work are:

**(b) The hours that an employee works for his em-

ployer in excess of forty-eight hours during any week,

unless the hours worked daily in excess of eight are

paid double rates.

* . *

‘*Section 5.—Every employer who employes or per-

mits an employee to work during extra hours shall be

obliged to pay him for each extra hour a wage rate

equal to double the rate agreed upon for regular hours;

Provided, however, that every employer in any indus-

try in Puerto Rico covered by the provisions of the

Fair Labor Standards Act enacted by the Congress

of the United States of America on June 25, 1938, as

heretofore or hereafter amended, shall be under obliga-

tion to pay only for each hour of work in excess of the

legal eight-hour working day, or in excess of forty (40)

hours a week, a wage at the rate of not less than time

and a half the rate of wage agreed upon regular hours,

save when by a decree of the Minimum Wage Board

or by a collective labor agreement, other working and/

or compensation standard is heretofore or hereafter

fixed. To determine the wage rate agreed upon for

regular hours of work, the daily, weekly, or monthly

wages, or wages otherwise stipulated, shall be divided

by the number of regular hours worked during that

same period in accordance with the provisions of this

Act.”’

6

Statement of the Case

This case involv.s substantial questions relative to the

Fair Labor Standards Act and to the Portal-to-Portal Act

of 1947.

Respondent José A. Peja, a train dispatcher employed

on a railroad system owned and operated by your petition-

ers, who are engaged in ‘‘interstate commerce’’ (29 U.S.C.

Section 203 (b), (c)), brought an action against petitioners

pursuant to the provisions of Puerto Rico Act No. 379 of

May 15, 1948 and the Fair Labor Standards Act, on No-

vember 7, 1951, before the Superior Court of Puerto Rico,

Humacao Section, claiming the amount of $2,371.16 for

overtime compensation at the rate of time and a half, among

other things, for work performed from May 15, 1948 to

July 12, 1950 in excess of a 40-hour regular workweek.

(R. on A., pp. Al-A4.) Respondent alleged that your peti-

tioners were covered by the provisions of the Fair Labor

Standards Act and that a certain Belo-type employment

contract in effect between respondent and your petitioners

constituted a deliberate evasion and violation of (1) the

Fair Labor Standards Act, (2) Puerto Rico Act No. 289

of April 9, 1946, and (3) a certain Mandatory Decree No, 3,

approved by Puerto Rico’s Minimum Wage Board, pursuant

to the provisions of Puerto Rico Act No. 8 of April 5, 1951,

as amended. Your petitioners filed their answer to the

complaint on December 10, 1951, but then omitted to raise

the defense of limitations under the Portal-to-Portal Act.

(R. on A., pp. A13-A15.)

On April 30, 1952 the Superior Court entered judgment —

for respondent from which your petitioners took an appeal

to the Supreme Court of Puerto Rico, which latter Court

affirmed the judgment by opinion of August 7, 1953. (R. on

A., pp. A19-A35.) Your petitioners then filed a motion for .

reconsideration raising, among other things, the defcase of

a

limitations under the Portal-to-Portal Act and the Court,

having entertained the motion on the question of limitations,

invited the Secretary of Labor of Puerto Rico and the Ad-

ministrator of the Wage and Hour Division, United States

Department of Labor, to appear as ‘‘amici curiae.’’ (R. on

A., pp. A43-A45.)

On December 10, 1953, the Supreme Court of Puerto Rico

handed down an opinion and order denying your petitioners’

motion for reconsideration in which, after making reference

to the provisions of Puerto Rico Act No. 379 of 1948, which

provides for the payment of time and a half*for hours

worked in excess of a regular workweek of 40 hours to em-

ployees covered by the Fair Labor Standards Act, and

double time for hours worked in excess of a regular work-

week of 48 hours to those not covered, it held that it was

““amecessary ... to decide the question [of limitations

unter the Portal-to-Portal Act] . . . because we agree with

the plaintiff, the Secretary of Labor of the Commonwealth

of Puerto Rico, and the.Secretary of Labor of the United

States, that the claims involved herein are based not on

the Federal Act but on local laws ... ’’ (R. on A., pp.

A46-A51.) Your petitioners then filed a second motion for

reconsideration on December 14, 1953 calling the attention

of the Court to respondent’s allegations invoking coverage

under the Fair Labor Standards Act, and to the nature of

respondent’s claim, i.e., time and a half for hours worked

in excess of a regular workweek of 40 hours.

The Supreme Court of Puerto Rico entertained the mo-

tion, set aside its former decision on the question of limita-

tions, and on December 14, 1954 handed down an opinion in

which, after comparing the provisions of Puerto Rieo Act

No, 379 of 1948 with those of the Fair Labor Standards Act

and deciding that both fixed ‘‘exactly the same standards for

minimum wages and maximum hours . . . ’’ and ‘‘the same

compensation,’’ it conceded that there was a ‘‘fairly formid-

8

able argument’’ against the validity of the local statute and,

therefore, against its applicability to the facts of the case

in that ‘‘Congress could not have intended to permit indi-

vidual states to reinstate for claims covered by the Federal

Act the vexatious situation of differing state statutes of

limitations which it had eliminated by § 6 of the Portal Act

through the device. of enacting local statutes embodying

exactly the same standards of minimum wages and maxi-

mum hours of work found in the Federal Act in order to

apply thereto the longer prescriptive periods provided by

local law.’’ (R. on A., pp. A62-A63.) The Court, however,

reasoned that ‘‘nothing in the language or legislative his-

tory of the Portal Act . . . indicates that Congress intended

to change the usual rule that statutes of limitations are

generally remedial rather than substantive,’’ and held that

the Portal-to-Portal limitations were remedial and could not

be raised for the first time on appeal (R. on A., pp. A6S-

A66), and that, in view of the result, it preferred ’’to leave

open the question of whether the Puerto Rican statute of

limitations rather than § 6 of the Portal Act applies to wage

claims for which the local and Federal Act provide exactly

the same compensation”’ (R. on A., p. A63), holding, theie-

fore, by inescapable implication, that it preferred to leave

open the question of the validity of the local statute.

Your petitioners then took an appeal to the United States

Court of Appeals for the First Circuit from the above judg-

ment and supplementary resolution (R. on A., p. A71), and

invoked the appellate jurisdiction of the Circuit Court of

Appeals for the revision of a federal question. (28 U.S.C.,

Section 1293.) They assigned as their only question on

appeal that the Supreme Court of Puerto Rico had erred in |

holding that the provisions of Section 6 of the Portal-to- —

Portal Act were remedial rather than substantive (R. on —

A., p. A7). The amount in controversy being less than —

$5,000, your petitioners could have appealed on no other

9

ground. Petitioners filed their brief and argued their case

before the Cireuit Court on that theory. Respondent did

not file a brief or argue his case. The ‘“‘amicus”’ Secretary

of Labor of the United States, basing his argument on is-

sues not raised on appeal, insisted, in a supplemental brief

on appeal, and in his argument, that respondent’s case arose

solely under local law.

On May 26, 1955 the Circuit Court affirmed the decision of

the Supreme Court of Puerto Rico on the grounds that ‘‘we

think that the Supreme Court (of Puerto Rico) rightly de-

cided in its second opinion thet the plaintiff's claims arose

under the local law rather than under the Federal Fair

Labor Standards Act and that it was not necessary for the

Court to consider the nature of the statute of limitations

contained in Section 6 of the Portal-to-Portal Act’’; that

although ‘‘the Legislature of Puerto Rico reduced, in the

case of industries covered by the Federal Act, the length

of the workwee": to conform to the Federal standard of 40

hours and provided in the case of such industries for the

payment of time and a half as provided in the Federal Act,

instead of double time, for excess hours worked, ...”’

that did not mean ‘‘as the Supreme Court in its opinion

assumed, that the amount of overtime compensation pro-

vided by the local and Federal acts is identical . . . be-

cause the two acts differ as to the manner in which the

employee’s regular rate is computed’’; that ‘‘in its first

spinion the Supreme Court [of Puerto Rico] pointed out

that the Puerto Rican act is more favorable to the employee

than the Federal act in that it provides that the guaranteed

weekly wage is to be divided by the number of ‘regular

hours’ worked, in this case 40, instead of by the actual num-

ber of hours worked, . . . ” and that the methods for the

computation of the ‘‘regular rate’’ under the Fair Labor

Standards Act ‘‘necessarily results in a lower hourly basic

rate than that computed under the Puerto Rican Meo

10

wherefore it followed ‘‘that the plaintiff’s entire claim is

necessarily based upon the local law and not upon the

Federal Fair Labor Standards Act ... ’’ (R. on A., pp.

A91-A98.)

Your petitioners applied for and obtained a retention of

the mandate on June 23, 1955 and filed a petition for re-

hearing on July 7, 1955 (R. on A., pp. A101-A106) request-

ing the Circuit Court to set aside its opinion on the grounds

that:

1. The Cireuit Court had no jurisdiction to enter into

and decide the question of local law, because

(a) The Supreme Court of Puerto Rico did not make

a final determination of the same.

(b) The appellate jurisdiction of the Circuit Court

had been invoked solely for the revision of a federal

question.

(c) The broad appellate jurisdiction of the Circuit

Court to review questions of local (Puerto Rican) law,

as originally defined in Municipality of Rio Piedras v.

Serra, Garabis & Co., 65 F.2d 691, was substantially

restricted by the decisions of this Court, in De Castro v.

Board of Commissioners, 322 U.S. 451, 88 L.Ed. 1384

and Sancho Bonet v. Yabucoa Sugar Co., 306 U.S. 505,

83 L.Ed. 946, and by the creation of the Commonwealth

of Puerto Rico.

(d) The decision of the Supreme Court of Puerto

Rico, in touching upon a local act and withholding final

construction of the same, was not reviewable under the

rule of the Sancho Bonet and De Castro cases.

2. Puerto Rican Act No. 379 of 1948, insofar as it pro-

vides for paymcat of overtime at the rate of time and a

half for hours worked in excess of 40 per week in indus-

tries engaged in interstate commerce and covered by the

11

Fair Labor Standards Act, is identical to the latter Act

and pro tanto, actions brought to recover for such overtime

are necessarily subject to the limitations of the Portal-to-

Portal Act.

3. Congress did not intend to permit the States to regu-

late the same employer-employee relations in interstate.

commerce with different and varying periods of limitations

throughout the nation by means of the approval of state

laws for better wages and/or hours.

4. Congress did not intend to sanction discrimination

against employees otherwise covered by the Fair Labor

Standards Act, but whose claims found no basis under local

statutes and in favor of empleyees also covered by the

above Act, merely because they could bring a similar claim

under local statutes.

5. The limitations provisions of the Portal-to-Portal Act

are applicable to any cause of action for wages in interstate

commerce, regardless of the statute giving rise to the same.

6. Section 5 of Act 379 of 1948 of Puerto Rico, insofar as

it applies to employers also covered by the Fair Labor

Standards Act, is identical to the provisions of the Fair

Labor Standards Act and therefore null and void, because

(a) It transcends the legislative field reserved or

granted to the States under Section 18 of the Fair

Labor Standards Act.

{b) It attempts to establish a different mechanism

for the computation of the regular rate of pay than that

established under the Fair Labor Standards Act.

(c) The power to change the Federal formula for

regular rate of pay would trench upon the provisions

of the Fair Labor Standards Act and could potentially

be construed and used as a general power by the States

to accomplish, by legislative scheme, purposes not con-

teniplated by Congress under Section 18 of the Fair

12

Labor Standards Act and to justify the same on the

sole ground that it might yield a higher take-home pay.

7. The danger and inadvisability of adjudicating on ap-

peal a question left open by the lower court (ie., the Su-

preme Court of Puerto Rico) in this case is illustrated by

its possible implications and premature impact upon other

issues now pending before the Supreme and lower Courts

of Puerto Rico.

Rehearing was denied by the Cireuit Court of Appeals

on August 3, 1955, without opinion. (R. on A., p. 107.)

Reasons for Granting the Writ

1. Tae Unurmiren Appretiate Jurispiction AsseRTED BY

THE Unrrep States Circuit Court or APPEALS FOR THE |

Fiest Crrcurt in Reviewrne Decisions oF THE SuPREME

Court oF Purrto Rico on Questions or Loca Law

Ovent To Be Revisep py THis Court 1n a MANNER Con-

sistent With General FeperaL APPELLATE J vURISDIC-

TION, Witu tHe Decisions or Tuis Court ConcerNninG

Puerto Rico’s Lecistative, Srate-Like, AvTONOMOUS

Conprrion anp Wits Puerto Rico’s Newiy Acqumerp

CoMMONWEALTH Status.

(a) General Limitations of Appellate Jurisdiction of Cir-

cuit Court of Appeals

The appeal below solely raised a federal question. (28

U.S.C. 1293.) The only question brought up on appeal,

briefed, argued and submitted to the Cireuit Court was that

concerning the nature of the limitations of Section 6 of

the Portal-to-Portal Act. The scope of the appeal, there-

fore, was necessarily limited to that issue. U.S. v. Crescent

Amusement Co., 323 U.S. 173, 89 L.Ed. 160, 167, Reh.Den.

13

323 U.S. 818, 89 L.Ed. 650. The Circuit Court, however,

decline? to decide the question on the ground that re-

spondent’s cause of action arose under local law No. 379

of 1948 and was, therefore, not subject to the limitations

of the Portal-to-Portal Act. In arriving at that result, the

Cireuit Court (1) construed the local law in a manner

different and opposite to the Supreme Court of Puerto Rico

and concluded that the provisions of the local act for the

payment of time and a half over a regular workweek of

forty hours and for the computation of regular rate of pay

by dividing total pay by a week of forty hours—yielded a

_ “more favorable’’ result than the Fair Labor Standards

Act, and (2) therefore assumed the validity of the local law.

The first question was decided by the Supreme Court con-

trary to the decision of the Circuit Court and the same was

not raised on appeal. The second was left open by the

Supreme Court of Puerto Rico. The Circuit Court, under

well established general principles of appellate jurisdiction,

should have been precluded from going into and/or deciding

the same (Waiters v. St. Louis, 347 U.S. 231, 98 L.Ed. 660,

664; Radio Station WOW, Inc. v. Johnson, 326 US. 120,

89 L.Ed, 2092, 2097; Grayson v. Harris, 267 U.S. 352, 69

L.Ed, 652, 696; Helvering v. Hormel, 111 F.2d 1, 5, aff'd

Hormel v. Helvering, 312 U.S. 552, 85 L.Ed. 1037; Publicity

Building Realty Corporation v. Hannegan, 139 F.2d 583, _

587; Consolidated Royalties vy. Ashton, 132 F.2d 226, 229),

the decision of the Supreme Court of Puerto Rico not con-

stituting a deliberate evasion of a federal question by a

decision on a local law ground (Radio Station WOW, Inc. v.

Johnson, supra, L.Ed. p. 2100; Nickel v. Cole, 256 U.S, 222,

65 L.Ed. 900, 905; Nevada-California-Oregon R. Co. v. Bur-

rus, 244 U.S. 103, 61 L.Ed. 1019, 1022; Atlantic C.L.R. Co. v.

Mims, 242 U.S. 532, 61 L.Ed. 476, 478); nor being the deci-

sion of the questions imperative to dispose of the federal

question brought up on appeal. Public Utilities Com. v.

14

United Fuel Gas Co., 317 U.S. 456, 87 L.Ed. 396, 400;

Sterling v. Constantin, 287 U.S. 378, 77 L.Ed. 375, 383.

(b) Scope of Asserted Appellate Jurisdiction of the Court

of Appeals for the First Circuit on Questions of Local

Laws of Puerto Rico

The Circuit Court of Appeals for the First Cireuit, how-

ever, has consistently reiterated that its appellate jurisdic-

tion is not subject to the limitations under (a) above, on

appeals from decisions of the Supreme Court of Puerto

Rico holding that in such cases, regardless of amount in

controversy or the appellate ground invoked, it can examine

the whole record and decide questions of Puerto Rican local

laws. Mercado Riera v. Mercado Riera, 152 F.2d 86, 92;

Gelpi v. Tugwell, 123 F.2d 377, 382; Municipality of Rio

Piedras v. Serra, Garabis & Co., 65 F.2d 691, 700-702.

The Serra case, decided in the year 1933, in construing

28 U.S.C. 1293, broadly asserted this unlimited and peculiar

appellate jurisdiction stating that Congress ‘‘in conferring

jurisdiction [on the Court of Appeals for the First Circuit]

to review the final decisions of the Supreme Court of Puerto

Rico, placed no such limitation upon its scope of review .

and left it unrestricted,’’ and that ‘‘it cannot reasonably be

contended that the People of Puerto Rico stand like a State

and that questions of local law decided by the Supreme

Court of Puerto Rico are not subject to review here...

The people of Puerto Rico and its courts are the creatures

of Congress—not so a State court and its agencies.’’ Munic- :

ipality of Rio Piedras v. Serra, Garabis & Co., supra, pp.

700-701. Later decisions of the Cireuit Court of Appeals

have reaffirmed this principle. —

28 U.S.C. 1293, though not in specific language denying

such broad assumption of appellate jurisdiction, does not

warrant or require that the Court of Appeals, motu proprio,

15

enter into questions of local laws not raised on appeal and

not adjudicated by the Supreme Court of Puerto Rico. The

power to review judgments of the Supreme Court of Puerto

Rico on questions of local law does not call for its exercise

without regard to the issues brought up on appeal and to

the usual rules of appellate practice. Following the princi-

ples controlling the appellate jurisdiction of other Courts

of Appeals will not detract from such power. Examining

the whole record on appeal without heed to the errors as-

signed, adds nothing to such power of review and only

brings confusion and uncertainty into appeals to the First

Cireuit, where a party is never sure of the grounds upon

which his case will be decided, and is constantly subjected

to the risk of having his appeal disposed of on grounds not

assigned on appeal and, therefore, not adequately briefed or

properly discussed.

(c) Limitation of the Serra Doctrine by Subsequent Deci-

stons of this Court

Assuming, arguendo, that the Serra case constituted a

correct exposition of the appellate jur‘sdiction of the Cir-

cuit Court of Appeals for the First Circuit in eases coming

from Puerto Rico, its scope has been effectively limited by

subsequent decisions of this Court. The Serra case was

decided in the year 1933. Puerto Rico v. Shell Co., 302 US.,

253, 82 L.Ed. 235, decided by this Court in the year 1938,

held that the Congress, in enacting the Foraker Act (39

Stat. at L. 951), intended ‘‘to give Puerto Rico full power

of local self-determination, with an autonomy similar to

that of the States and incorporated territories’’; that ‘‘the

effect was to confer upon the territory many of the attri-

butes of quasi-sovereignty possessed by the States’? and

that ‘‘so far as local matters are concerned .. . legislative

powers were conferred nearly, if not quite, as extensive as

an

16

those exercised by the state legislatures.’’ Puerto Rico vy.

Shell, supra, L.Ed. pp. 242-243. To the same effect see

People of Puerto Rico v. Rubert Hermanos, 309 U.S. 543,

84 L.Ed. 916. Thus, the very foundation of the Serra

doctrine, Puerto Rico’s subservience, was seriously ques-

tioned, for if Puerto Rico enjoys a position similar to that

of a State for legislative purposes, there is no legitimate or

practical justificat‘on for the Serra doctrine.

Furthermore, the political mutation of Puerto Rico from

® non-incorporated, organized territory into a Common-

wealth would also seem to detract from the necessity of such

broad revisionary power.

(d) Limitation of the Serra Doctrine by the ‘‘Patently

Erroneous’’ or ‘‘Inescapably Wrong’’ Requirement

This Court has further restricted the appellate jurisdic-

tion of the Circuit Court of Appeals for the First Circuit

in dealing with decisions of the Supreme Court of Puerto

Rico bearing on questions of local laws. Bonet v. Yabucoa

Sugar Co. (1939), 306 U.S. 505, 83 L.Ed. 946, 949, and De

Castro v. Board of Commissioners, (1944), 322 U.S. 451, 88

L.Ed. 1384, 1392, while not restricting the occasions for the

exercise of the revisionary power of the Court of Appeals

for the First Circuit, have laid down the rule that judg- |

ments of the Supreme Court of Puerto Rico on questions

of local law must be deferred to unless inescapably wrong

or patently erroneous, thus practically assimilating revision

of judgments of the Supreme Court of Puerto Rico to that

of State judgments bearing on State laws. De Castro v.

Board of Commissioners, supra, L.Ed. p. 1393.

Petitioners submit that after De Castro, the rule of Serra

was inapplicable to appeals from Puerto Rican judgments

on questions of local laws. The broad rule in Serra is

incompatible witli the restrictions in De Castro. Thus, under

17

Serra and De Castro, the Circuit Court could at any time

examine the whole record on appeal, if only to affirm on

questions of local law, a power which has not, up to the

present, yielded, as far as petitioners know, a single re-

versal.

(e) The Circuit Court of Appeals for the First Circuit

Circumvented the De Castro Rule and the Provisions

of 28 U.S.C. 1293

The Cireuit Court entered into, laid down the construction

and upheld the validity of Section 5 of Puerto Rico Act No.

379 of 1948 in a manner inconsistent with the decision of the

Supreme Court of Puerto Rico, in leaving the questions open

for future decision. With no ‘‘final decision’’ of the Su-

preme Court of Puerto Rico on the question of the validity

of the local act (Ocean Park Development Corp. v. People

of Puerto Rico, 204 F.2d 371, 373), and with no showing of

patently or manifestly erroneous in the reasoning of the

Supreme Court of Puerto Rico, the Circuit Court undertook

to decide, contrary to the said Supreme Court, that the

local act was different from the Fair Labor Standards Act

and, therefore, by implication, that the same was valid.

Thus, by deciding in advance a question of local law left

open for decision, the Circuit Court sought to avoid the

inescapably wrong sine qua non of revision of Puerto Rican

final decisions on questions of local law and the provisions

of 28 U.S.C. 1293, granting review only of ‘‘final decisions’’

of the Supreme Court of Puerto Rico.

(f) This Court Can Decide the Questions Left Undecided

by the Circuit Court of Appeals

The issues are clear on the record and nothing would be

gained, if this Court shall reverse the Circuit Court, by

18

sending the case down for further proceedings. In all like-

lihood, the case will again be brought to this Court for final

determination. Furthermore, the questions posed are of

such importance that they warrant a decision by this Court

in order to settle them at the first available opportunity,

Kiefer-Stewart v. Seagram, 340 U.S. 211, 95 L.Ed. 219, 224;

Ecker v. Western Pacific R. Corp., 318 U.S. 448, 87 L.Ed.

892, 940; Story Parchment Co. v. Paterson P. Paper Co., 282

U.S, 555, 75 L.Ed. 544, 551.

2. Tur Statute or Limitation Provision or Section 6 or

THE PortaL-To-PortaL Act 1s SusstTaNnTIve In Nature

Both the intent of the Congress in framing the Portal-to-

Portal Act and the language in which the Act is couched,

warrant the conclusion that the same was designed as a

means to terminate and extinguish the causes of action for

wages in interstate commerce not exercised within the time

allotted by it.

Congress intended to establish a uniform statute of limita-

tions in order to relieve interstate commerce of the difficul-

ties arising from the potential retroactive liability which —

might have been imposed upon employers under the

different State statutes of: limitations. (House Report

No. 71, February 25, 1947, U.S. Code Congressional

Service, 80th Congress, First Session, pp. 1029, 1036;

Portal-to-Portal Act, Congressional Findings and Dee-

laration of Policy, 29 U.S.C., Section 251.) “The intent

of Congress could be made futile and academic if the

statute approved were remedial in nature and, there-

fore, subject to the various and different State statutes

bearing upon the manner in which statutes of limitations

may be tolled.

Furthermore, State courts, if the statute be held remedial

in nature, will not be bound to apply its provisions and will

19

apply the law of the forum in deciding claims under the

Fair Labor Standards Act, thus thwarting the Congres-

sional Policy of uniformity and limited retroactive liability

in wage claims in the interstate commerce field. Bindczyck

v. Finucane, 342 U.S. 76, 96 L.Ed. 100, 110; Angel v. Daven-

port, 271 U.S. 33, 70 L.Ed. 813, 817-818; Arnson v. Murphy,

109 U.S. 238, 27 L.Ed. 920, 922; Developments in the Law—

Statute of Limitations, 63 Harv. L. Rev. 1177, 1186-7.

The rights emanating from the Fair Labor Standards Act

are creative rights, unknown to the common law. Rogers

Cartage Co. v. Reynolds, 166 F.2d 317, 320-321; Local 626,

etc. v. General Motors Corporation, 76 F.Supp. 593, 594; ©

Role v. J. Neils Lumber Co., 74 F.Supp. 812, 814, aff’d 171

F.2d 706. Statutes limiting the time within which such

rights may be exercised are construed as substantive limits

on the right or as a condition precedent to their exercise.

Midstate Horticultural Co. v. Pennsylvania R. Co., 320 US.

356, 88 L.Ed. 96, 100; A. J. Phillips Co. v. Grand Trunk W.

R. Co., 236 U.S. 662, 59 L.Ed. 774, 776. The limitations of

the Portal-to-Portal Act, furthermore, form part of the

. Fair Labor Standards Act (Jackson v. Northwestern Air-

lines, 76 F.Supp. 121, 125, reversed on other grounds, 185

F.2d 74, cert. den. 342 U.S. 812, 96 L.Ed. 614) and must be

taken as an integral part of the same in the statute and not

form part of the general law of limitations.

Finally, the language in which the limitations are couched

point to the conclusion that the statute is substantive .in

nature. Section 6(a) of the Portal-to-Portal Act refers to

‘causes of action’’ and expressly provides that ‘‘every such

action’’—obviously meaning. the ‘‘causes of action’’—not

brought within the stated time ‘‘shall be forever barred.’’

This language is not usual in remedial limitations and its

positive declaration, in keeping with the intent of the Con-

gress in framing the same and the historical medium in

which it was adopted, lead to no other result than that the

20

limitation is substantive. (Wiliam Danzer & Co. v. Gulf

€ I.R. Co., 268 U.S. 633, 69 L.Ed. 1126, 1129; A. J. Phillips

Co. v. Grand Trunk W.R. Co., supra; Finn v. United States,

123 U.S. 227, 31 L.Ed. 128, 130; Sgambati v. U. S., 172 F.2d

297, 298; Joint Council, etc. v. Delaware, L. & W. R. Co.,

157 F.2d 417, 420; Pennsylvania Co. for Insurances, etc. v.

Deckert, 123 F.2d 979, 984-985; John F. Jelke Co. v. Smie-

tanka, 86 F.2d 470, 471, 473; De Bonis v. U. S., 103 F.Supp.

123, 126; Paschal v. North Atlantic € Gulf S.S. Co., 95 F.

Supp. 293, 295; Adams v. Albany, 80 F.Supp. 876, 880-882;

Berry v. Heller, 79 F.Supp. 476, 477; O’Neill v. Cunard

White Star Ltd., 69 F.Supp. 948, 945; Awad v. Durant, 69

F.Supp. 921; U. 8. v. MacEvoy, 110 F.R.D. 323, 325.

3. Tue Provistons or Section 18 or tHe Fam Lasor

Sranparps Act (29 U.S.C. 218) po nor ConstrruTE a

**Carte Buancue’’ To THE STATES AND TO Pverto Rico

To Enact Aux Sorts or Locat LecisLation THAT WovLp

OVERRIDE THE PRovisIONS OF THE F'ark Lasor StTanparps

Act AND oF THE PortaL-To-PortaL Act

Section 18 of the Fair Labor Standards Act recognizes

State action in two clearly defitied fields, a lower maximum

workweek and a higher minimum salary. By the same

token, the other particulars of the employer-employee rela-

tion in interstate commerce are exeluded from State action

(Weber v. Anheuser-Busch, U.S. ,99 L.Ed. (Advance

pp. 368, 394) ), especially in view of the Congressional intent

to establish uniform legislation on a national level. Walling

v. Jacksonville Paper Co., 317 U.S. 564, 87 L.Ed. 460, 465-

466. The States were not, therefore, allowed by Section 18

to approve legislation identical to the provisions of the

Fair Labor Standards Act or, as pointed by the Circuit

Court, ‘‘to conform to the Federal Standards >f 40 hours.”’

Moreover, such legislation would not only be outside the

21

scope of that permitted by Section 18, but would also coin-

cide with the provisions of the Federal Act and would there-

fore be null and void. Bethlehem Steel Corp. v. New York

Labor Rel. Bd., 330 U.S. 767, 91 L.Ed. 1234, 1247; Missouri

P. R. Co. v. Porter, 273 US. 341, 71 L.Ed. 672, 675; Charles-

tond W.C. R. Co. v, Varnville Furniture Co., 237 U.S. 597,

59 L.Ed. 1137, 1140. The provisions of Section 5 of Puerto

Rico Act No. 379 of 1948 insofar as they coincide with the

federal wage and hour standards are, therefore, invalid.

The Cireuit Court found, however, that such provisions,

when taken together with those other of the said Section 5

establishing a different mechanism to arrive at ‘‘regular

rate of pay’’ made the local act ‘‘different’’ from the Feder-

al Act, in that-it yielded a ‘‘more favorable’’ result to the

employee and therefore presumably established a higher

wage. But this mathematical result does not warrant the

conclusion reached by the Court, nor does it sustain the

validity of Section 5. The States were not left free to adopt

any kind of legislation, and by devious means to override the

provisions of the Fair Labor Standards Act, provided it

yielded a better take home pay to the employee. If such

were the case, the States would be free to “‘establish a

higher minimum wage’’ by trenching upon the exemptions

granted by the Federal Act, or as in this case, altering the

method for the computation of the regular rate of pay,

which also forms part of the Federal Act. Bayridge Oper-

ating Co. v. Aaron, 334 U.S. 446, 92 L.Ed. 1502, 1517; Wall-

ing v. Halliburton Oil Well Cement Co., 331 U.S. 17, 91 L.Ed.

1312, 1318.

Furthermore, an interpretation of Section 18 of the Fair

Labor Standards Act, as would allow the States to leave

without effect the exemptions of the Federal Act and to

change its mechanism for the computation of regular rate of

pay, would leave the applicability of those provisions to the

discretion of the States and would lead to differentiations in

22

interstate commerce not contemplated by the Act (29 U.S.C.,

Section 208(6)). (Walling v. Jacksonville Paper Co., supra,

L.Ed. pp. 465-466 ; Jerome v. United States, 318 U.S. 101, 87

L.Ed. 640, 643; United States v. Pelzer, 312 U.S. 399, 85

L.Ed. 913, 915; Knickerbocker Ice Co. v. Stewart, 253 U.S.

149, 64 L.Ed. 834, 840-841.)

4. Tue Statute or Lrurtations Provision or Secrion 6

oF THE Portat-To-PortaL Act Appuigs To ALL CLAIMS

For Waces 1x Interstate COMMERCE REGARDLESS OF

Tuer Oriern Unper Loca Laws

The evil sought to be remedied by the Portal-to-Portal

Act was of a national character (Northwestern-Hanna Fuel

Co. v. McComb, 166 F.2d 932, 939; W. U. Tel. Co. v. McComb,

165 F.2d 65, 73), and it is to be presumed that the remedy

adopted was in the same order. (United States v. American

Trucking Association, 310 U.S. 534, 84 L.Ed. 1345, 1350-

1351.) The Portal-to-Portal Act—if it is to be effectively

operative in interstate commerece—must govern and limit all

eauses of action for wages in the said commerce. To hold

otherwise would lead to the conclusion that even after the

enactment of 1947 the States were left free, under the pro-

visions of Section 18 of the Fair Labor Standards Act, or

otherwise, to adopt legislation that would render the Act

academic and which would stand as an obstacle to the ac-

complishment of the objectives of Congress. This result is

more necessary if the States, in enacting legislation within

the scope of the limits of Section 18 of the Fair Labor

Standards Act, raise the minimum wages and/or lower the

maximum workweek of the Federal Act, with the result, if

the employer-employee relation be then controlled by the

State statute of limitations, of reproducing, perhaps in

worse form, the conditions which prompted Congress to

enact the Portal-to-Portal Act. Weber v. Anheuser-Busch,

23

supra, L.Ed. p. 386; Amalgamated Ass’n v. Wisconsin Emp.

Rel. Bd., 340 U.S. 383, 95 L.Ed. 364, 375; Hill v. Florida, 325

U.S. 538, 89 L.Ed. 1782, 1784-1785; Hines v. Davidowitz,

312 U.S. 52, 85 L.Ed. 581, 587.

Conclusion

For the above stated reasons, it is respectfully submitted

that this petition for a writ of certiorari be granted.

Earnie T. Frppier

Counsel of Record

P. O. Box 3507

San Juan 17, Puerto Rico

Attorney for Petitioner

JosE G. GonzaLEz

Tomas I. Nipo

Cartos J. Faure

Of Counsel

P. O. Box 3507

San Juan 17, Puerto Rico ,

August , 1955.

24

APPENDIX

SE UEEEEEnEEEEEEEEE

Opinion Below

Oprnton OF THE CouRT.

May 25, 1955..

Maris, Circuit Judge. This is a suit by the plaintiff,

Jose A, Pena, against his employers, the defendants East-

ern Sugar Associates, a trust, for unpaid overtime com-

pensation which he alleges is due him under the provisions

of Act No. 379, Laws of Puerto Rico, 1948. The suit was

brought in the former insular district court. The defense

was that the parties had entered into an employment cor-

tract of the so-called Belo type? which precluded the claim.

The district court overruled the defense and entered judg-

ment for the plaintiff. From this judgment both parties

appealed to the Supreme Court of Puerto Rico. That court,

upon the appeal of the defendant, upheld the conclusion

of the district court that the contract between the parties

was not a Belo type contract and that the plaintiff was

therefore entitled to recover overtime compensation. Upon

the appeal of the plaintiff the Supreme Court modified the

judgment so as to award the plaintiff overtime compensa-

tion computed on the basis of a regular workweek of 40

hours instead of 48 hours, the figure used by the district

court. P.R.R.

The defendants asked the Supreme Court to reconsider

its decision on the ground, then asserted for the first time,

that the statute of limitations contained in section 6 of the

Federe! Portal-to-Portal Act of 1947? barred the portion

of the claim in suit which arose prior to November 7, 1949,

two years before the suit was begun. The Supreme Court

1See Walling v. Belo Corp., 1942, 316 U.S. 624.

229 U.S.C.A. § 255.

25

denied the motion in an opinion holding that the plain-

tif’s claim arose exclusively under the local l.w of Puerto

Rico and not under the Federal Fair Labor Standards

Act and that the statute of limitations contained in section

6 of the Portal-to-Portal Act did not apply to suits brought

to enforce claims io overtime compensation arising under

local law. P.R.R.

Upon a second motion by the defendants, however, the

Supreme Court gave further consideration to the defend-

ants’ contentions, filing a third opinion in which it con-

sidered the question whether the suit was not in fact for

overtime wages due under the Federal Fair Labor Stand-

ards Act and whether in such a suit the issue of the bar

of the statute of limitations or prescription under section

6 of the Portal-to-Portal Act could be raised for the first

time on appeal. Concluding that section 6 was a procedural

statute which barred the remedy but did not extinguish

the right the court held that since this defense had not

been raised at the trial it had been waived and could not be

raised on appeal. Stating that in view of this conclusion it

preferred to leave open the question whether the Puerto

Rican statute of limitations rather than section 6 of the

Portal-to-Portal Act applied to wage claims for which both

the Federal and the local law provide exactly the same

standards, the Supreme Co: :t again denied reconsideration.

P.R.R. . The present appeal by the defendants

followed. .

We think that the Supreme Court rightly decided in its

second opinion that the plaintiff’s:elaims arose under the

local law rather than under the Federal Fair Labor Stand-

ards Act and that it was not necessary for the court to

consider the nature of the statute of limitations contained

in section 6 or the Portal-to-Portal Act.

Section 18 of the Fair Labor Standards Act provides

that no provision of that act ‘‘shall excuse non-compliance

26

with any Federal or State law or municipal ordinance

establishing a minimum wage higher than the minimum .

wage established under this Act or a maximum workweek

lower than the maximum workweek established under this

Act’’.? Thus the States, and this undoubtedly includes the

Commonwealth of Puerto Rico, are given freedom of action

to establish higher standards than those established by the

Federal act. Puerto Rico has done so by Act No. 379, Laws

of Puerto Rico, 1948, under which this suit was brought.

The pertinent portions of that act follow:

‘*Section 2. Eight hours of work constitute the legal

working day in Puerto Rico.

Forty-eight hours of werk constitute a working week,

Two hundred and eight hours of work constitute a

working month.

Section 3. Regular hoars of work are eight hours

during any period of twenty-four consecutive hours,

forty-eight hours during any week, and two hundred

and eight hours during any month; .. .

Section 4. Extra hours of work are:

(a) The hours that an employee works for his em-

ployer in excess of eight hours during any period of

twenty-four consecutive ours;

(b) The hours that ar employee works for his em-

ployer in excess of forty-eight hours during any week,

unless the hours worked daily in excess of eight are

paid at double rates;

(e) The hours that ar employee works for his em-

ployer during the day o! rest heretofore or hereafter

fixed by law in the case of businesses and industries

not subject to the closing of their establishments;

399 U.S.C.A. § 218.

27

Section 5. Every employer who employs or permits

an employee to work during extra hours shall be

obliged to pay him for each extra hour a wage rate

equal to double the rate agreed upon for regular hours;

Provided, however, That every employer in any indus-

try in Puerto Rico covered by the provisions of the

Fair Labor Standards Act enacted by the Congress of

the United States of America on June 25, 1938, as

heretofore or hereafter amended, shall be under obli-

gation to pay only for each hour of work in excess of

the legal eight-hour working day, or in excess of forty

(40) hours a week, a wage at the rate of not less than

time and a half the rate of wage agreed upon for

regular hours, save when by a decree of the Minimum

Wage Board or by a collective labor agreement, other

working and/or compensation standard is heretofore

or hereafter fixed. To determine the wage rate agreed

upon for regular hours of work, the daily, weekly, or

monthly wages, or wages otherwise stipulated, shall be

divided by the number of regular hours worked during

that same period in accordance with the provisions of

this Act.

Section 7. If an employee works for a weekly wage,

the wage stipulated shall cover solely the payment of

the regular working hours during each week.

“S: aee Ko ees

Section 13. Any employee who receives a compensa-

tion less than that fixed by this Act for regular hours

and extra hours of work shall be entitled to recover

from his employer, through civil action, the sums un-

paid, plus an equal sum as liquidation of damages, in

addition to the costs, expenses, and attorney’s fees of

the proceeding.’’

28

It will thus be seen that the local law authorizes suits

by employees for the recovery of unpaid overtime compen-

sation plus an equal sum of liquidated damages. It is quite

clear from the record that the present suit was brought

under the authority of this act. The plaintiff was paid

under his employment contract a guaranteed weekly wage

of $34.00. The contract also specified hourly rates. But

since the Supreme Court held that these rates were ficti-

tious and arbitrary and its ruling in this regard is not :

here appealed from we need not consider them. The plain.

tiff’s claim is for overtime pay predicated upon daily work ~

after 8 hours, work on days of rest, and in some weeks

work for more than 40 hours but not more than 8 hours

on any one day or at all on a day of rest.

With respect to the first two bases for the plaintiff’s

claim, that is, daily work after 8 hours and work on days

of rest, he claims time and a half and double time, respec-

tively, under section 5 of Act No. 379. Since there is no

similar provision in the Federal law it is perfectly clear

that this part of his claim is solely under the local law.

With respect to the portion of the plaintiff’s claim based

on work for more than 40 hours in one week but not more

than 8 hours in any one day or at all on a day of rest the

matter is more complicated. For this claim is based on the

proviso in section 5 of Act No. 379 ‘‘That every employer

in any industry in Puerto Rico covered by the provisions

of the Fair Labor Standards Act . . . shall be under obliga-

tion to pay only for each hour of work . . . in excess of

forty (40) hours a week, a wage at the rate of not less than

time and a half the rate of wage agreed upon for regular

hours ... ’’ Thus the Legislature of Puerto Rico reduced,

in the case of industries covered by the Federal act, the

length of the workweek to conform to the Federal standard

of 40 hours and provided in the case of such industries for

the payment of time and a half as provided by the Federal

29

act, instead of double time, for excess hours worked.* But

this does not mean, as the Supreme Court in its third

opinion assumed, that the amount of overtime compensation

provided by the local and Federal act is identical in the

case of one who works more than 40 hours a week but not

more than 8 hours in any one day or at all on a day of rest.

This is because the two acts differ as to the manner in

which the employee’s regular rate is computed for overtime

purposes. In its first opinion the Supreme Court pointed

out that the Puerto Rican act is more favorable to the

employee than the Federal act in that it provides that the

guaranteed weekly wage is to be divided by the number of

“regular hours’’ worked, in this case 40, instead of by the

actual number of hours worked, in determining the ‘‘rate

agreed upon for regular hours’? which is the basis for com-

puting time and a half for extra hours worked. We agree

with the Supreme Court that this conclusion is compelled

by the last sentence of section 5 and by section 7 of Act No.

379. Under the Federal Fair Labor Standards Act, how-

ever, the ‘‘regular rate at which he is employed’’ which is

the basis for the overtime compensation of an employee

who. works more than 40 hours in a week is to be found by

dividing the weekly compensation by the total number of

hours actually worked in that week® This necessarily

results in a lower hourly basic rate than that computed

under the Puerto Rican act. Accordingly in every case in

* Section 7(a) of the Federal Fair Labor Standards Act, as amended,

provides as follows:

“(a) Except.as otherwise provided in this section, no employer

shall employ any of his employees who is engaged in commerce

or in the production of goods for commerce for a workweek longer

than forty hours, unless such employee receives compensation for

his employment in excess of the hours above specified at a rate

not less than one and ene-half times the regular rate at which

he is employed.” 29 U.S.C.A. § 207(a).

* Overnight Motor Co. v. Missel, 1942, 316 USS. 572; Bay Ridge

Co. v. Aaron, 1948, 334 U.S. 446.

30

which the plaintiff worked for more than 40 hours for his ©

weekly wage of $34.00 the overtime compensation to which |

he was entitled under the Puerto Rican act was greater than j

that provided for by the Federal act, regardless of whether ~

or not he worked on a rest day or for more than 8 hours on —

any other day. q

It follows that the plaintiff’s entire claim is necessarily ©

based upon the local Jaw and not upon the Federal Fair ~

Labor Standards Act. The statute of limitations imposed —

by section 6 of the Portal-to-Portal Act by its terms, how- ©

ever, applies only to suits to enforce causes of action ‘‘under —

the Fair Labor Standards Act of 1938, as amended, the —

Walsh-Healey Act, or the Bacon-Davis Act’’. It does not ©

purport to apply to similar causes of action arising under q

state law® and was not intended to do so, as the legislative ~

history clearly shows.” It is, therefore, unnecessary for us ©

to determine whether section 6 of the Portal-to-Portal Act ~

is substantive or procedural or to consider what its effeet |

might be under other circumstances than those at bar. :

The judgment of the Supreme Court will be affirmed.

6 Whether it could constitutionally be applied to bar suits for the ~

enforcement of purely state causes of action we need not consider. >

7 “The limitation herein provided applies only to the statutory actions ~

or proceedings set forth in the acts enumerated in Section 5 of H.R. —

2157 [which became the Portal-to-Portal Act]. Actions under the ~

common law, or under State statutes for recovery of wages are not ~

affected.” _H. Rept. No. 71, 80th Cong., 1st Sess., p. 7. 4