Fleming v. Arsenal Bldg. Corporation

• Decision Date: 11 April 1941
• Parties: FLEMING, Administrator of Wage and Hour Division, United States Department of Labor, v. ARSENAL BLDG. CORPORATION et al.
• Court: U.S. District Court — Southern District of New York

38 F. Supp. 207

FLEMING, Administrator of Wage and Hour Division, United States Department of Labor, v. ARSENAL BLDG. CORPORATION et al.

District Court, S. D. New York.

April 11, 1941.

Gerard D. Reilly, Sol., and Irving J. Levy, Asst. Sol., Department of Labor, both of Washington, D. C. (Arthur E. Reyman, Acting Regional Atty., of Washington, D. C., and Irving Rozen, Senior Atty., and Helen E. Cottrell, both of New York City, of counsel), for plaintiff.

McLanahan, Merritt & Ingraham, of New York City (Walter Gordon Merritt, Henry Clifton, Jr., Martin J. Coughlin, and Kenneth C. Newman, all of New York City, of counsel), for defendants.

WOOLSEY, District Judge.

My decision in this cause is that the complaint should be dismissed, but, as the plaintiff is an agency of the United States, costs should not be allowed to the defendants.

I. My subject matter jurisdiction in this cause arises out of the fact that it is a suit in a civil nature brought by an officer of the United States authorized by law to sue, 28 U.S.C.A. § 41(1), and also because it is brought under the specific provisions of the Fair Labor Standards Act of 1938, Section 17, 29 U.S.C.A. § 217, by which I am given special jurisdiction to restrain violations of Section 15 of said Act, 29 U.S.C.A. § 215.

There is not any question of venue involved because suit is brought in the District wherein the defendants have their principal offices, and wherein only, suit for an injunction can be brought against them, and personal jurisdiction over them for the purposes of an injunction secured.

Furthermore, there is not any question whatever but that the defendants have been properly served by process, and have appeared, and that I have personal jurisdiction over them. I mention this for the following reason:

On a pre-trial hearing before Judge Knox, held February 28, 1941, the defendants raised the question of jurisdiction of the subject matter in this court and of their persons, and Judge Knox overruled their defense in so far as it challenged such jurisdiction. But no order was entered on his ruling. Consequently there is not any formalized rule of the case here.

The defendants, subsequently, at the pretrial hearing, withdrew their claim that the act was unconstitutional, generally speaking, and claimed merely that the Fair Labor Standards Act of 1938, 29 U.S.C.A. § 201 et seq., was not applicable to the defendants and their employees.

II. As is always the case, there are some preliminaries, of which disposal must be made, before we get down to the real gist of the case. These are as follows:

(1) During the argument I indicated that the third, or so-called partial defense, could not be invoked in an action for an injunction, but could only be invoked, if at all, in a claim for monetary damages.

Consequently, that defense was overruled as a matter of law, and is no longer in the cause.

(2) On motion of the plaintiff, Paragraph 9 of the complaint, reading as follows:

"The goods produced and sold by said tenants, as aforesaid, compete with similar goods produced and sold in other states and said tenants in their said business compete with manufacturers of ladies' garments and with persons selling silks, rayon, supplies and printed material at wholesale, as aforesaid, located in other states,"

was stricken out. Therefore it is no longer contained in the record.

(3) During the argument, in order to be certain that the defendants would not have to rely solely on their general denials of the applicability of the act, and in order to prevent any lacuna in the pleadings, I suggested to counsel for the defendants that they should plead as a special defense that the defendants were "service establishments" within the meaning of the exception contained in Section 13(a) (2) of the Fair Labor Standards Act.

Accordingly, the defendants moved to amend their answer by adding a fourth defense as follows:

"That the defendant, Arsenal Building Corporation, and the defendant, Spear & Company, Inc., as its agent, are engaged in the operation of a service establishment within the meaning of Section 13(a) (2) of the Fair Labor Standards Act, and are, therefore, exempted from the application of the Act."

I granted this motion over what to me seemed an unaccountable objection by counsel for the plaintiff.

This amendment, which I regard as wholly within my discretion as trial judge under the circumstances of this cause, in my opinion, made the pleadings conform to the proofs.

III. I now turn to the merits of this cause.

The facts, briefly summarized, are as follows:

(1) The two defendants, Arsenal Building Corporation and Spear & Company, Inc., are corporations of New York State, having their principal places of business in the City, County and State of New York, and within this District.

The Arsenal Building Corporation is the owner of a twenty-two story basement and loft building located at the corner of Thirty-fifth Street and Seventh Avenue, in the City of New York. The building is known as 463 Seventh Avenue.

The defendant, Spear & Company, Inc., is the agent of the defendant, Arsenal Building Corporation, in the management and operation of the building above referred to, and has and exercises control and supervision of the building service employees employed in the said building.

With the exception of a retail clothing store, a barber shop and a cigar stand on the ground floor, the space in the loft building is leased, through Spear & Company, Inc., by the Arsenal Building Corporation, to approximately forty-two tenants, of whom forty are engaged in manufacturing various types of ladies garments for sale not only in New York, but in other States, and of whom two tenants are engaged in the sale, at wholesale, within and without the State of New York, of silks, artificial silks, — such as rayon — and print goods, to manufacturers, wholesalers and contractors in the ladies garment industries.

The sole business of the Arsenal Building Corporation is that of a real estate owner whose activities are limited to the leasing of space in its building to tenants, the maintenance of its building in good order and condition, and rendering to its tenants the ordinary type of service customary in the operation of a loft or office building.

(2) The defendant Arsenal Building Corporation employs and pays wages to twenty-six service and maintenance employees, including the superintendent of the building.

These employees are engaged, under various occupational classifications, in the performance of various duties about the building.

The duties of these maintenance and service employees are to supply the ordinary service above summarized, incident to the operation and maintenance of a loft or office building leased to tenants: namely, to service and maintain the building as a whole, but not to render service to individual tenants thereof, except as a landlord; to operate the elevators to carry passengers and the goods of the tenants; only to enter the premises of the tenants in the case of emergencies which threaten to damage the building outside the leased premises by leaks, fire, or otherwise, and to repair the window cords and window weights when windows do not work, or to open windows which have become stuck after the painting of window frames.

The keys to the doors of the respective leased premises are solely in the custody of the tenants and none of the service employees has access to the keys or to the leased premises except on the occasion of the emergencies to which reference has been above made.

None of the employees of the Arsenal Building Corporation produces, manufactures, handles, processes, or in any other manner works or touches for the purpose of production, or works in any manner upon the goods produced by any of the tenants of the Arsenal Building Corporation, and none of such employees transports said goods in any proper sense, although some of them, as incidental to their building service, operate elevators which carry goods which are always in the custody of the representatives of the tenants, or their employees, or of employees of persons whom the tenants have engaged to transport the goods, or of the employees of carriers from whom they are receiving goods.

It may, therefore, be stated generally, on the unchallenged evidence, that the duties of the building service and maintenance employees of the Arsenal Building Corporation are limited to heating the building, keeping it in repair, protecting it from damage wherever damage is threatened, cleaning the public halls, stairways, toilets and other spaces occupied by the various common utilities of the building, and operating freight and passenger elevators for the tenants, their employees and the persons who carry the goods of tenants to and from the building.

(3) Generally speaking, the Arsenal Building Corporation and its employees, make no changes, alterations, repairs or renovations in the leased premises, except where the corporation agrees, at the time of signing or renewing the lease, to make certain specific changes or renovations of a definite limited character in order to make the leased premises conform to the requirements of the tenant as stated in the lease, or otherwise agreed upon with the corporation. All substantial alterations, renovations or changes of such character are usually made not by the maintenance and service employees of the Arsenal Building Corporation, but by outside independent contractors hired for such purpose by the Arsenal Building Corporation.

It is not a part of the duty of any maintenance or service employee of the Arsenal Building Corporation to perform any work of any kind within the leased...