Mid-Continent Petroleum Corporation v. Keen

Decision Date22 November 1946
Docket Number13267.,No. 13261,13261
Citation157 F.2d 310
PartiesMID-CONTINENT PETROLEUM CORPORATION v. KEEN. KEEN v. MID-CONTINENT PETROLEUM CORPORATION.
CourtU.S. Court of Appeals — Eighth Circuit

J. P. Greve, of Tulsa, Okl. (R. H. Wills, of Tulsa, Okl., on the brief), for Mid-Continent Petroleum Corporation.

Leslie L. Boomhower, of Mason City, Iowa (L. R. Boomhower, of Mason City, Iowa, on the brief), for C. R. Keen.

Frederick U. Reel, Sr. Atty., U. S. Department of Labor, of Washington, D. C. (William S. Tyson, Sol., Bessie Margolin, Asst. Sol., Reid Williams, Regional Atty., and Morton Liftin, Atty., all of the United States Department of Labor, all of Washington, D. C., on the brief), for amicus curiae, Administrator, Wage and Hour Division, U. S. Department of Labor.

Before SANBORN, WOODROUGH, and RIDDICK, Circuit Judges.

RIDDICK, Circuit Judge.

C. R. Keen brought this action against the Mid-Continent Petroleum Corporation under section 16(b) of the Fair Labor Standards Act of 1938, 29 U.S.C.A. § 216 (b), to recover unpaid overtime compensation, liquidated damages, and attorney's fees. From a judgment in favor of Keen both parties have appealed.

Mid-Continent is a producer and wholesale distributor of petroleum products. It distributes the products of its refinery at Tulsa, Oklahoma, as well as petroleum products purchased from others, in a number of States including Iowa, Minnesota, and Wisconsin. Its northern division which includes the States mentioned above is managed from a regional office at Waterloo, Iowa. All of the petroleum products distributed by Mid-Continent in these States are brought into them from other States, delivered to bulk plants maintained by the company, and from these bulk plants distributed to retail service stations handling the company's products. Within the States comprising its northern division, Mid-Continent maintains and operates approximately 150 bulk plants. The bulk plants supply several hundred retail service stations in the same territory. One hundred twenty-four of the bulk plants and many retail service stations are in Iowa, Minnesota, and Wisconsin.

The bulk plants are adjacent to railroad tracks. At all of them there are tanks for the reception and storage of gasoline, usually tanks for the handling of kerosene, and at some of them warehouses for the handling of lubricating oil. All of the bulk plants are equipped with the necessary pipes, electric motors, and gasoline engines used in unloading tank cars of gasoline and kerosene arriving at the storage plants by railroad, and in transferring the contents of the tank cars to the storage tanks of the bulk plants and from the storage tanks to tank trucks which deliver the gasoline and kerosene to the retail service stations.

All but a negligible number of the retail service stations are either owned by Mid-Continent or held by it under long-term leases and subleased by Mid-Continent to the station operators. Two or three of the retail service stations are operated by Mid-Continent. A few are privately owned. Mid-Continent maintains and keeps in repair the equipment in all of the service stations owned or held by it under lease and the equipment of some of the private stations.

Approximately ninety per cent of the gasoline distributed in Iowa and Minnesota is brought into those States from Oklahoma through the line of the Great Lakes Pipe Line Company, a common carrier of gasoline, owned by Mid-Continent and other oil companies. The pipe line company maintains a terminal at St. Paul, Minnesota, and terminals at three points in Iowa. When Mid-Continent delivers a quantity of gasoline to the pipe line company in Oklahoma, it receives from the pipe line company a credit for the same quantity of the same grade of gasoline at a designated terminal of the pipe line company. The gasoline at the terminals of the pipe line company is in one common mass from which the oil company owners withdraw gasoline to the extent of the credit maintained by them. Mid-Continent maintains sufficient credit at the pipe line terminals to take care of its anticipated needs for twenty to thirty days. It withdraws gasoline from the terminals and loads the gasoline into railroad tank cars in which it is transported to the various bulk plants within the State in which the terminal is located. Sometimes the gasoline while at the terminal is blended, seasoned, and dyed.

All of the gasoline and kerosene handled at the bulk plants in Wisconsin and all of the kerosene handled at the bulk plants in Minnesota and Iowa is delivered to the bulk plants in railroad tank cars coming from other States. The proportion of the gasoline and kerosene received at bulk plants in Minnesota and Iowa by railroad tank cars direct from other States is approximately thirty-five to forty per cent of the total of such products handled through the plants. The ordinary bulk plant has a storage capacity of 50,000 to 60,000 gallons of gasoline. Mid-Continent maintains a sufficient supply of gasoline at the plants to meet the anticipated demands of the retail service stations for a period of twenty to thirty days. The plants' supply of kerosene and lubricating oil is sufficient to meet anticipated demands for a somewhat longer period. Shipments of petroleum products to the bulk plants are not pursuant to prior specific orders, but are based on anticipated customer needs. Mid-Continent's customer retail service stations constitute a large and stable group.

During the period for which Keen was allowed to recover he was employed under an oral contract in the capacity of maintenance man for a work week of fluctuating hours. For the first part of the period his regular paydays were the first and fifteenth of the month, and for the latter part, the fifth and the twentieth. He was charged with the maintenance of 63 bulk plants located in Iowa, Minnesota, and Wisconsin, and with the maintenance of the equipment of the retail service stations served by these plants. As required by his contract of employment he maintained his residence in Mason City Iowa. Much of his time in Mid-Continent's employment was spent in traveling from Mason City to the bulk plants and service stations where his services were required, and from bulk plant to bulk plant and service station to service station. For this purpose he was furnished with a truck equipped with tools and supplied with parts and materials usually required in his maintenance and repair work. His work required him to drive his truck across State lines. On infrequent occasions he carried across State lines materials especially ordered for use at his destination. He maintained the truck and kept it in operating condition. At the bulk plants Keen inspected and maintained the engines, motors, pumps, and other equipment used in unloading gasoline and kerosene from railroad tank cars into the bulk plant tanks. Broken or worn out equipment was repaired or replaced by him. He was also charged with installation work at the bulk plants. In general, his duty during the period in question in connection with bulk plants was to keep the facilities functioning, so that gasoline and kerosene could be safely and efficiently unloaded from railroad tank cars into the bulk plants storage tanks, and from them transferred to the tank trucks which distributed the gasoline and kerosene to service stations. He was also required to inspect and keep in repair and in safe operating condition pumps, air compressors, air lines, and gasoline lines in use in service stations, and, when necessary, the tanks at the service stations into which gasoline from the bulk stations was delivered by the company's tank trucks. By far the greater part of his work was done in Iowa and Minnesota.

Keen was required by his contract of employment to make out daily reports of his activities. In general these reports listed the hours spent by him in traveling by motor truck, the time spent by him at each plant or service station, and a statement of what he did while there. As printed in the record, however, the evidence does not give the latter information except in the case of the bulk stations.

The unloading of gasoline and kerosene from the railroad tank cars at the bulk plants was a vital and indispensable part of Mid-Continent's business operations and an essential and component part of the transportation of the products distributed by it. Keen had no part in the work of unloading the petroleum products received at the bulk plants.

The District Court concluded that the interstate transportation of the petroleum products distributed by Mid-Continent was not completed "until the gasoline and kerosene were inside the reception tanks at Mid-Continent's bulk plants"; that Keen, when engaged in work at the bulk plants, was engaged in commerce within the meaning of the Fair Labor Standards Act, and not so engaged when working at the retail service stations; that under the facts and circumstances in this case one-half hour or more spent by Keen in any work week at a bulk station constituted a substantial portion of such week, entitling him to the benefit of the Act as to all hours worked in that work week. The court was also of the opinion that Keen was not engaged in commerce when driving his truck across State lines in the absence of a showing that the crossing of State lines was done to perform work in commerce, or that when crossing State lines during the period in suit he transported materials or supplies in his truck.

This action was commenced in the District Court on October 5, 1944. Keen sought to recover overtime compensation for all hours in any work week in excess of the maximum permitted by the Fair Labor Standards Act for the period beginning October 24, 1938, and ending July 15, 1941. The court ruled that Keen's claim for overtime compensation based on overtime hours prior to October 1, 1939, was barred by the Iowa Statute of...

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