Bracey v. Luray

• Citation: 138 F.2d 8
• Decision Date: 16 September 1943
• Docket Number: No. 5096.,5096.
• Parties: BRACEY et al. v. LURAY.
• Court: United States Courts of Appeals. United States Court of Appeals (4th Circuit)

138 F.2d 8 (1943)

BRACEY et al. v. LURAY.

No. 5096.

Circuit Court of Appeals, Fourth Circuit.

September 16, 1943.

Harry E. Goertz and Joseph Loeffler, both of Baltimore, Md. (Bernard J. Medairy, of Baltimore, Md., on the brief), for appellants.

William Saxon, of Baltimore, Md. (Louis Samuels, of Baltimore, Md., on the brief), for appellee.

Douglas B. Maggs, Sol., and Bessie Margolin, Asst. Sol., both of Washington, D. C., Beverly R. Worrell, Regional Atty., of Richmond, Va., and Morton Liftin and Frederick U. Reel, Attys., U. S. Department of Labor, both of Washington, D. C., on the brief), for Administrator of Wage and Hour Division, U. S. Department of Labor, as amicus curiae.

Before PARKER, SOPER, and NORTHCOTT, Circuit Judges.

PARKER, Circuit Judge.

This is an appeal from a judgment for defendant in actions instituted by workmen to recover unpaid minimum wages, overtime compensation, etc., under section 16(b) of the Fair Labor Standards Act, 52 Stat. 1069, 29 U.S.C.A. § 216(b), and consolidated for trial in the court below. The defense was that defendant was a retailer and not subject to the provisions of the act and that plaintiffs were not engaged in commerce or in the production of goods for commerce within the meaning of the act. The court below held that defendant was not a retailer within the meaning of the act but that only 4% of the business done by defendant was "in commerce" within its meaning and that plaintiffs had failed to show what portion of their time was devoted to such business. As to the remainder of defendant's business, the holding was that what was done by plaintiffs was not "in commerce" or in the production of goods for commerce within the meaning of the act.

Defendant is a dealer in scrap iron doing a gross business of from $125,000 to $150,000 per year. His purchases are almost entirely within the state of Maryland and only about 4% of his sales is to purchasers outside the state. Approximately 96% of his sales are to scrap dealers for delivery to shipbuilding plants, where the scrap is fabricated into material used in the manufacture of ships that operate in interstate and foreign commerce. Plaintiffs handle the scrap for defendant, unloading, assorting, cutting, and loading it into railroad cars in the course of defendant's business. The facts as specifically found by the court below, are as follows:

"The defendant company did a gross business of from $125,000 to $150,000 a year, on the average, during the period in suit. During this period — approximately four years, — its total business, involving sales that were directly interstate, that is to say, sales which it itself made to parties outside the State of Maryland, amounted to something less than $20,000. Therefore, these gross sales averaged per year only approximately $5,000, or less than 4% of the defendant's total annual gross business. During this entire period the defendant bought at points outside of the State and hauled into the State only about $1,000 worth of scrap which the various plaintiffs handled in one way or another, that is, they piled, cut and assorted it, and reloaded it into cars and trucks. * * *

"We now turn to consider whether the plaintiffs are also entitled to invoke the Fair Labor Standards Act with respect to the other, and by far the larger part of defendant's business in which they were involved, as follows: scrap iron and other metals of all kinds were delivered to the defendant in small lots by peddlers, all such deliveries being from points within the State of Maryland. The plaintiffs assorted and otherwise prepared — which sometimes required cutting,—the scrap for loading and assisted in loading it into railroad cars, for the most part, which were spotted either in defendant's yard or on Pennsylvania Railroad sidings near by, and occasionally in trucks, — for shipment to twelve firms that were wholesalers of scrap-iron and metal. There was no "processing" of the scrap as that term is generally understood. In addition, there are occasionally small sales to individual consumers, which did not exceed in all $3,500 a year during the period in question. All of these latter consignees, that is to say, these small individual consumers, and also all of the twelve firms just referred to, were located within the State of Maryland. They always paid the freight, deducting it from the purchase price paid to the defendant who had no dealings with the railroad with respect to these shipments. The bills of lading read: `shipper's load and count.' Most of them contained the notation: scrap iron for remelting purposes only,' and some `scrap iron for export only,' and the shipments were consigned to large industrial or shipbuilding plants, all within the State of Maryland. There were no billings to any points beyond the State."

We agree with the court below that the defendant was not a retailer within the meaning of the act. The exact language of the exemption, 29 U.S.C.A. § 213 (a) (2), is "any employee engaged in any retail or service establishment the greater part of whose selling or servicing is in intrastate commerce". It is elementary in the construction of statutes that words are to be given their "natural, plain, ordinary and commonly understood meaning", unless it is clear that some other meaning was intended (59 C.J. 975); and it would never occur to anyone, we think, to classify the business of a junk dealer as a "retail or service establishment." Junk dealers such as defendant buy in small quantities and sell in larger quantities, either to some other dealer or to a manufacturer or importer. A retailer is one who sells in small quantities to the ultimate consumer. 37 Words & Phrases, Perm.Ed., p. 502 et seq. "Typical retail establishments are grocery stores, drug stores, hardware stores and clothing shops." Fleming v. A. B. Kirschbaum Co., 3 Cir., 124 F.2d 567, 572. The history of the act shows that it was in this sense that retail establishment was used. The exemption was not contained in the bill as originally introduced into Congress. S. 2475, H.R. 7200, 75th Cong. 1st 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, grocers, retail clothing stores, department stores", located near and making occasional sales across state lines. 83 Cong.Rec. 7437-7438. Walling v. American Stores Co., 3 Cir., 133 F.2d 840, 843.

We think, however, that the lower court was in error in holding that plaintiffs were not engaged in the production of goods for commerce. They were engaged in handling scrap iron which was intended to be used and was used in the fabrication of ships. "Goods" as defined in the statute includes ships "or any part or ingredient thereof". Sec. 203(i). And "handling" is by express terms included in "production". Sec. 203(j). Plaintiffs handled scrap iron, an ingredient which was used in the manufacture of ships, and were therefore engaged in the production of goods within the statutory definition. There can be no question, we think, but that the production of ships to operate in interstate and foreign commerce is a production for commerce, within the meaning of the statute. See Newport News Shipbuilding & Dry Dock Co. v. N. L. R. B., 4 Cir., 101 F.2d 841, 843.

It makes no difference that the scrap iron handled by plaintiffs was sold by defendant to other scrap dealers before coming into the hands of the steel and shipbuilding companies by whom it was fabricated into ships. This was the destination expected and intended by defendant; and "the act extends at least to the employer who expects goods to move in interstate commerce". Warren-Bradshaw Drilling Co. v. Hall, 317 U.S....