Allesandro v. CF Smith Co., 9424.

• Decision Date: 03 June 1943
• Docket Number: No. 9424.,9424.
• Parties: ALLESANDRO et al. v. C. F. SMITH CO.
• Court: U.S. Court of Appeals — Sixth Circuit

149 ALR 382, 136 F.2d 75 (1943)

ALLESANDRO et al. v. C. F. SMITH CO.

No. 9424.

Circuit Court of Appeals, Sixth Circuit.

June 3, 1943.

Vincent P. Dacey, of Detroit, Mich., for appellants.

H. T. Ellerby, of Detroit, Mich., for appellee.

Irving J. Levy and Bessie Margolin, of Washington, D. C., Charles A. Reynard, of Cleveland, Ohio, Morton Liftin, of Washington, D. C., George L. Clarke, of Baltimore, Md., and Frederick U. Reel, of Washington, D. C., for Administrator of Wage and Hour Division, United States Department of Labor, amicus curiae.

Before SIMONS, MARTIN and McALLISTER, Circuit Judges.

SIMONS, Circuit Judge.

In this case involving the coverage of the Fair Labor Standards Act, 29 U.S.C.A. § 201 et seq. are 80 plaintiffs, suing for extra compensation, all employees of a chain grocery operating in Detroit, Michigan, and vicinity, 70 of them drivers of delivery trucks, 3 mechanics servicing such trucks, and 2 painters. But one witness, a truck driver, was sworn for the plaintiffs, and upon inquiry as to whether others would disclose a substantially different character of employment in respect to interstate commerce, and the receipt of a negative reply, the court directed a verdict for the defendant on the ground that the plaintiffs were not engaged in interstate commerce or in the production of goods for commerce.

Appellee operates a grocery chain with several hundred retail grocery and meat stores all within the State of Michigan. For efficient and economic servicing of its retail stores it maintains a number of warehouses, its principal warehouse consisting of several buildings occupying a city block through which runs a spur track upon which are shunted freight cars bringing goods from out of the State. In addition, the appellee receives shipments at other railroad sidings and depots. The goods thus received either are transported directly by trucks to the units of the chain, or placed in the warehouses for later distribution to the stores. Goods move out of the warehouse pursuant to orders of individual store managers. Upon receipt of such orders from the stores, the stock clerks in the warehouse set aside the merchandise called for. It is then sent down chutes to the main floor where the various items are assembled in piles under appropriate store numbers, to be loaded on trucks for delivery to the stores. Some of the appellants are engaged in delivering goods directly from the box cars to the stores, others make deliveries from the warehouse to the stores, as need arises, and some do both. Generally it is perishable goods, such as fruits and vegetables, that are delivered directly to the stores after being unloaded from the box cars on to the trucks. There is no dispute that all of the employees here involved were paid at rates below those required by the Fair Labor Standards Act.

The court was of the view that in respect to all of the merchandise handled or transported by the appellants, interstate movement ceased upon the arrival of the cars at the siding of the appellee, or upon other railway sidings from which the trucks received the goods and distributed them. While there is support for such conclusion in some of the earlier cases, notably Jewel Tea Co. v. Williams, 10 Cir., 118 F. 2d 202; Jax Beer Co. v. Redfern, 5 Cir., 124 F.2d 172, and in our dictum in General Tobacco & Grocery Co. v. Fleming, 6 Cir., 125 F.2d 596, 601, 140 A.L.R. 783, wherein it was observed that "from the description of the conduct of its (appellant's) business detailed in its answer, the defendant was, in no particular, engaged in interstate commerce or in the production of goods for interstate commerce," the court's conclusion, in the light of later and controlling authority, is clearly erroneous.

As early as 1923 the Supreme Court in Baltimore & Ohio S. W. R. R. v. Burtch, 263 U.S. 540, 544, 44 S.Ct. 165, 166, 68 L. Ed. 433, had said "it is too plain to require discussion that the loading or unloading of an interstate shipment by the employees of a carrier is so closely related to interstate transportation as to be practically a part of it." That the doctrine is not limited in its application to employees of an interstate carrier is demonstrated by Puget Sound Co. v. State Tax Comm., 302 U.S. 90, 58 S.Ct. 72, 82 L.Ed. 68, wherein it was held that a stevedoring company engaged in unloading ships was in foreign commerce. These cases have been followed in Super-Cold Southwest Co. v. McBride, 5 Cir., 124 F.2d 90, and Walling v. Goldblatt Bros., 7 Cir., 128 F.2d 778. It is perfectly clear from these adjudications and those later to be discussed, as well as from the observation in Kirschbaum Co. v. Walling, 316 U.S. 517, 519, 62 S.Ct. 1116, 1118, 86 L.Ed. 1638, that operators who run freight elevators in a loft building "start and finish the interstate journeys of goods going from and coming to the tenants," that all of the appellants who are employed in unloading interstate cars and moving merchandise into warehouses, or from the cars to the stores, are engaged in interstate commerce and within the coverage of the Act.

A different question, however, arises in respect to those employed in the movement of goods after they have been stored in the warehouses. In Walling v. Goldblatt Bros., supra, it was thought in the Seventh Circuit that warehouse employees of a chain department store are not covered by the Act. This decision was reached prior to the adjudications in Walling v. Jacksonville Paper Co., 317 U.S. 564, 63 S. Ct. 332, 87 L.Ed. ___, and Higgins v. Carr Bros. Co., 317 U.S. 572, 63 S.Ct. 337, 87 L. Ed. ___, both decided January 18, 1943. Conceiving it to be in response to the Jacksonville case, the Third Circuit Court of Appeals in Walling v. American Stores Co., 133 F.2d 840, reached a contrary conclusion in respect to an intrastate activity bearing marked resemblance to that here involved. It dismissed the Goldblatt case as one in which the court was without the guidance of the Jacksonville and Carr Bros. cases.

The Jacksonville case dealt with the activities of the employees of a wholesaler which purchased goods in interstate commerce for distribution within the State, and held it to be clear that the purpose of the Fair Labor Standards Act was to extend federal control in this field throughout the farthest reaches of the channels of interstate commerce, and that there was no indication...