McGuire v. United States

• Citation: 349 F.2d 644
• Decision Date: 05 August 1965
• Docket Number: No. 19898,19899.,19898
• Parties: Melvin McGUIRE and Alvina McGuire, Appellants, v. UNITED STATES of America, Appellee. RAHIER TRUCKING, INC., Appellant, v. UNITED STATES of America, Appellee.
• Court: U.S. Court of Appeals — Ninth Circuit

349 F.2d 644 (1965)

Melvin McGUIRE and Alvina McGuire, Appellants, v. UNITED STATES of America, Appellee.

RAHIER TRUCKING, INC., Appellant, v. UNITED STATES of America, Appellee.

Nos. 19898, 19899.

United States Court of Appeals Ninth Circuit.

August 5, 1965.

John S. Moore, Velikanje, Moore & Countryman, Yakima, Wash., for appellants.

John B. Jones, Jr., Acting Asst. Atty. Gen., Lee A. Jackson, I. Henry Kutz, Robert I. Waxman, Harry Marselli, Attys., Dept. of Justice, Washington, D. C., Frank R. Freeman, U. S. Atty., Ronald Hull, Asst. U. S. Atty., Spokane, Wash., for appellee.

Before ORR, KOELSCH and DUNIWAY, Circuit Judges.

ORR, Circuit Judge:

Taxpayers' unsuccessful suit for refund of federal withholding, unemployment, and social security taxes paid for the years 1959-1962 is the basis for this appeal. The District Court sitting without a jury dismissed the suit and denied motions for judgment notwithstanding the verdict and for a new trial.

The single question before us is whether the District Court correctly sustained the determination of the Commissioner of Internal Revenue that certain workers were taxpayers' employees and hence taxpayers were liable for taxes under the Federal Insurance Contributions Act, Federal Unemployment Tax Act, and withholding tax provisions pursuant to sections 3101-3125, 3301-3308 and 3401-3404 of the Internal Revenue Code of 1954.

Taxpayers were owners and operators of non-scheduled motor freight carriers engaged in hauling produce and fruit between the Yakima Valley in Washington and various points in California, chiefly the Los Angeles area. Taxpayers' operations consisted of picking up goods and transporting them to appointed destinations. Under the usual contract with its customers taxpayers were required to deliver their cargo to the loading dock of the receiver and unload it. The unloading operation was an integral part of taxpayers' contractual obligation, and taxpayers were responsible for the condition of the cargo during the unloading.

To perform the unloading phase of its operations taxpayers were required to engage the services of individuals other than their drivers because of Teamster Union policy forbidding drivers to unload. Taxpayers' drivers were given authority and were generally responsible for hiring these individuals, colloquially referred to as "swampers." While procedures at various destinations varied in minor details, drivers generally hired one or two unloaders at specific areas near the destination of their cargo where unloaders were known to congregate. Drivers were free to engage the services of any of the unloaders present. In most areas where taxpayers delivered their cargoes fees were set by agreement between the Teamsters Union and the California Trucking Association. These fees were standard and not subject to negotiation. They were usually paid in cash by the driver on a per-job basis from a travel advance provided by taxpayers.

Once engaged, unloaders would accompany taxpayers' trucks to their first destination. If more than one destination was involved, the unloaders usually remained with the truck. Where destinations were widely separated, however, drivers might find it necessary to hire other unloaders because union policy provided that unloaders were to work only within a defined territory and not cross territorial boundaries.

After a truck was backed into the loading dock at a delivery point unloaders would unload that portion of the cargo to be delivered at that destination. Drivers were in a position to supervise the unloading if necessary, but were also free to sleep or leave the truck for meals. Otherwise, they sat and watched the unloading operation. Evidence of actual supervision by drivers was minimal, but little supervision was required because the nature of the work was uncomplicated and because unloaders were generally familiar with the procedures of the job. Drivers could dismiss unloaders at any time for inefficiency or negligence though there was no showing that this had ever been...