598 F.2d 1033 (6th Cir. 1979), 77-3237, Amersbach v. City of Cleveland

Docket Nº:77-3237.
Citation:598 F.2d 1033
Party Name:Joseph C. AMERSBACH, Jr., et al., Plaintiffs-Appellants, v. CITY OF CLEVELAND et al., Defendants-Appellees.
Case Date:May 10, 1979
Court:United States Courts of Appeals, Court of Appeals for the Sixth Circuit

Page 1033

598 F.2d 1033 (6th Cir. 1979)

Joseph C. AMERSBACH, Jr., et al., Plaintiffs-Appellants,

v.

CITY OF CLEVELAND et al., Defendants-Appellees.

No. 77-3237.

United States Court of Appeals, Sixth Circuit

May 10, 1979

Argued Feb. 15, 1979.

Page 1034

Thomas C. Simiele, Arthur P. Lambros, Cleveland, Ohio, for plaintiffs-appellants.

Vincent C. Campanella, Malcolm C. Douglas, Norman S. Buckvar, Leonard Ehrenreich, Cleveland, Ohio, for defendants-appellees.

Before LIVELY and KEITH, Circuit Judges, and PHILLIPS, Senior Circuit Judge.

PHILLIPS, Senior Circuit Judge.

This appeal presents the question of whether employees of the City of Cleveland, Ohio, assigned to duties at the municipally-owned airport, are covered under the minimum wage and maximum hour provisions of the Fair Labor Standards Act, as amended (the Act), 29 U.S.C. § 201 Et seq. Resolution of this question turns on whether operation of the Cleveland Hopkins International Airport is an "integral government function" within the scope of National League of Cities v. Usery, 426 U.S. 833, 96 S.Ct. 2465, 49 L.Ed.2d 245 (1976).

We conclude that the operation of the municipal airport is an integral governmental function within the meaning of National League of Cities and affirm the decision of the district court dismissing the action.

I

The Act was amended in 1974, Pub.L.No.93-259, 88 Stat. 55, to extend its wage and hour provisions to virtually all state and local governmental employees. 29 U.S.C. § 203(d), (s)(5), (x). Appellants in the present case are all present or former employees of the Cleveland Department of Port Control, which operates the municipal airport. They filed this action in the district court on January 23, 1976, seeking to recover unpaid overtime, vacation pay, holiday pay, sick pay and wages under the Act. 29 U.S.C. §§ 206 and 207.

Appellants alleged in their complaint that the City is an "enterprise" under the Act, 29 U.S.C. § 203(r); that the City is engaged in interstate commerce under the Act, 29 U.S.C. § 203(s); and that at various times during the course of their employment they had worked in excess of 40 hours a week at rates of pay less than that prescribed under the Act, 29 U.S.C. § 206(a). Appellants prayed for damages and injunctive relief against appellees, the City, and Andrew Patka, Director of the Department of Port Control.

In their answer, appellees admitted that appellants were employees of the City and had not been paid for overtime as prescribed by the Act. While conceding that the City had not complied with the Act, appellees asserted two defenses: (1) that appellants were excluded from the general wage and hour provisions of the Act; 1 and (2) that as applied to the employees of the City's Department of Port Control, the wage and hour provisions of the Act are unconstitutional under National League of Cities.

At the close of the pleadings, appellees filed a motion for judgment on the pleadings pursuant to Fed.R.Civ.P. 12(c), relying on National League of Cities. Appellants responded that National League of Cities was inapplicable to employees of the City's Department of Port Control because operation of a municipal airport is a proprietary rather than a governmental function and, therefore, not within the scope of National League of Cities.

The district court rejected appellants' analysis of National League of Cities and dismissed the complaint as failing to state a claim upon which relief could be granted. This appeal followed.

II

For purposes of this appeal, the court must accept as true all well-pleaded allegations

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of the complaint. 5 Wright & Miller, Federal Practice and Procedure: Civil § 1367; 2A Moore's Federal Practice P 12.08. See also Shapiro v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 353 F.Supp. 264, 268 (S.D.N.Y.1972), Aff'd, 495 F.2d 228 (2d Cir. 1974). We, therefore, accept as true that the City is an employer under the definitions of the Act and has failed to comply with the wage and hour provisions prescribed by the statute. The question remaining is whether the City is correct in asserting, as a defense, the constitutional doctrine of governmental immunity enunciated in National League of Cities.

In National League of Cities, the Supreme Court held the 1974 wage and hour provisions of the Act unconstitutional as they applied to state and local government employees generally because those sections of the Act "impermissibly interfere with the integral governmental functions of these bodies." 426 U.S. at 851, 96 S.Ct. at 2474. In reaching this conclusion, the Court distinguished federal regulation of private persons and business "necessarily subject to the dual sovereignty of the government of the Nation and of the State . . ." from similar regulation "directed, not to private citizens, but to the States as States." Id. at 845, 96 S.Ct. at 2471. Although the Court conceded that the wage and hour provisions at issue were within the scope of the powers of Congress under the commerce clause, it found that federal wage and hour determinations with respect to "functions . . . which (state and local) governments are created to provide, (involving) services . . . which the States have traditionally afforded their citizens," were matters essential to the separate and independent existence of those governments and hence beyond the reach of congressional power under the commerce clause. Id. at 851, 96 S.Ct. at 2474. 2 The court expressly overruled Maryland v. Wirtz, 392 U.S. 183, 88 S.Ct. 2017, 20 L.Ed.2d 1020 (1968), which had upheld extension of the Act to employees of state schools, hospitals and like public institutions.

In National League of Cities the court relied upon the tenth amendment as the source of a state sovereignty limitation upon congressional power under the commerce clause. 426 U.S. at 842-43, 96 S.Ct. 2465. The Court quoted Fry v. United States, 421 U.S. 542, 547 n. 7, 95 S.Ct. 1792, 44 L.Ed.2d 363 (1975), in support of the sovereignty limitation.

"While the Tenth Amendment has been characterized as a "truism," stating merely that 'all is retained which has not been surrendered,' United States v. Darby, 312 U.S. 100, 124, (61 S.Ct. 451, 85 L.Ed. 609) (1941), it is not without significance. The Amendment expressly declares the constitutional policy that Congress may not exercise power in a fashion that impairs the States' integrity or their ability to function effectively in a federal system."

426 U.S. at 842-43, 96 S.Ct. at 2470.

This court has viewed the holding in National League of Cities as creating an affirmative defense against compliance with congressional enactments or regulations which intrude into the protected area of state sovereignty. See Marshall v. Owensboro-Daviess County Hospital, 581 F.2d 116, 120 (6th Cir. 1978).

This affirmative state sovereignty limitation on congressional power under the commerce clause, as enunciated in National League of Cities, has been held to be limited to those situations where it can be shown that (1) a congressional enactment (in the exercise of commerce clause powers) operates to displace, regulate or significantly

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alter 3 (2) the management, structure or operation 4 of (3) a traditional or integral governmental function. 5

Clearly the first two of these elements are present in the instant case. The wage and hour provisions of the Act are direct mandates on the City. Implementation of the Act would necessarily alter the City's employer-employee relations and interfere with the operation of the Department of Port Control by regulating the hours of employees. Additionally, there is virtually no discretion allowed to an employer in implementing the provisions of the Act. The City would face the alternative either of increasing wages or reducing its complement of Port Control employees. In these respects, the present case is virtually identical to National League of Cities.

However, the Supreme Court confined the parameters of this sovereignty limitation to those public services or activities which involve traditional or integral governmental functions. Public Service Co. of North Carolina, Inc. v. Federal Energy Regulatory Commission, 587 F.2d 716, 721 (5th Cir. 1979); Marshall v. City of Sheboygan, 577 F.2d 1, 4 (7th Cir. 1978). The court spoke of those activities "(typically) performed by state and local governments in discharging their dual functions of administering the public law and furnishing public services." 426 U.S. at 851, 96 S.Ct. at 2474. See Tribe, Unraveling National League of Cities: The New Federalism and Affirmative Rights to Essential Government Services, 90 Harv.L.Rev. 1065 (1977); Michelman, States' Rights and States' Roles: Permutations of "Sovereignty" in National League of Cities v. Usery, 86 Yale L.J. 1165 (1977). The meaning of this limitation is the controlling question in the present case.

In National League of Cities the Court characterized the...

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