Bartels v. Birmingham, 294
| Decision Date | 05 January 1945 |
| Docket Number | No. 294,328.,294 |
| Citation | 59 F. Supp. 84 |
| Parties | BARTELS et al. v. BIRMINGHAM, Collector of Internal Revenue (WILLIAMS et al., Intervenors). GEER et al. v. BIRMINGHAM, Collector of Internal Revenue. |
| Court | U.S. District Court — Southern District of Iowa |
Clyde B. Charlton and Thomas B. Roberts (of Brammer, Brody, Charlton & Parker), both of Des Moines, Iowa, for claimants.
Harold D. Cohen, Sp. Asst. to the Atty. Gen., Cloid I. Level, Asst. U. S. Atty., of Des Moines, Iowa, and Maurice F. Donegan, U. S. Atty., of Davenport, Iowa, for the United States.
Joseph A. Padway and Robert A. Wilson, both of Washington, D. C., and Chauncey A. Weaver, of Des Moines, Iowa, for intervenors.
The above entitled actions came on for hearing on their merits on December 11, 1944, at Des Moines. Evidence was introduced, arguments had and the cases submitted on their merits, with additional written briefs.
The two actions were consolidated for trial and one opinion and one findings of fact will be applicable to each case.
The actions were brought by certain operators of ballrooms in Iowa against the Collector of Internal Revenue to recover taxes paid to him under the Federal Insurance Contributions Act, 26 U.S.C.A. Int. Rev.Code, § 1400 et seq., and the Federal Unemployment Tax Act, 26 U.S.C.A.Int. Rev.Code § 1600 et seq., upon a claim by the Commissioner of Internal Revenue that such operators were the employers of certain orchestra leaders and their "sidemen" (members of the orchestras) on the dates of their respective engagements.
Such orchestras and their leaders and the dates of their respective engagements for the plaintiffs, in civil action No. 294, are as follows:
Griff Williams and his orchestra Sept. 1, 1941
Bill Carlson and his orchestra Aug. 17, 1941
Tiny Hill and his orchestra Sept. 28, 1941
Boyd Raeburn and his orchestra Oct. 5, 1941
Buddy Fisher and his orchestra Nov. 23, 1941
Paul Moorhead and his orchestra Jan. 18, 1942.
Such orchestras and their leaders and the dates of their respective engagements for the plaintiffs in civil action No. 328, are as follows:
Al Menke and his orchestra Oct. 12, 18, 1941.
Nov. 8, 26, 1941.
Nov. 26, 1942.
Les Hartman and his orchestra Feb. 5, March 5,
Apr. 2, May 7,
June 4, July 2,
Aug. 6, Sept. 3 &
Oct. 1, 1942.
Jimmy Barnett and his orchestra Jan. 1, 5, 24,
Apr. 25, June 16,
July 2, 3, 4, Aug. 1,
8, Sept. 12, Oct. 4,
Nov. 7, 14, 15, 17,
Dec. 5, 6 & 22, all
in 1942.
Paul Moorhead and his orchestra Feb. 17, 22, March
21, 22, Apr. 18,
May 2, 9, 16, 28 &
31, June 2, 30,
July 11, 12, 14, 16,
Oct. 10, 11, 12, 24,
all in 1942.
Blue Barron and his orchestra Aug. 26, 1941, &
July 4, 5, and 9,
1942.
Doc Lawson and his orchestra July 4, 1942.
In civil action No. 294 the leaders of the orchestras have intervened and filed answers designating themselves as defendants.
Plaintiffs claim that they were not the employers of the leaders and the sidemen within the meaning of the taxing statutes, but that each leader was an independent contractor and the sidemen were solely his employees.
It is established by the taxing statutes, the common law and the regulations of the Commissioner of Internal Revenue that in order to constitute an employment within the meaning of the taxing acts the legal relationship of employer-employee must exist between the person for whom the services are performed and the individual who performed them and that an independent contractor and his men are not such employees. Sec. 1001 et seq., 42 U.S. C.A. §§ 1400, 1410, 1600, 1607, 26 U.S.C.A. Int.Rev.Code; Sec. 402.204, Internal Revenue Regulation 106; Texas Company v. Higgins, 2 Cir., 118 F.2d 636; Indian Refining Co. v. Dallman, 7 Cir., 119 F.2d 417; Williams v. United States, 7 Cir., 126 F.2d 129; Anglim, Collector, v. Empire Star Mines, 9 Cir., 129 F.2d 914; Radio City Music Hall Corp. v. United States, 2 Cir., 135 F.2d 715; American Oil Co. v. Fly, 6 Cir., 135 F.2d 491; Fahs v. Orange State Oil Co., 5 Cir., 138 F.2d 743; Glenn v. Beard, 6 Cir., 141 F.2d 376; United States v. Mutual Trucking Co., 6 Cir., 141 F.2d 655; Jones v. Goodson, 10 Cir., 121 F.2d 176.
In the last cited case, 121 F.2d 176, a definition of what constitutes an independent contractor is set forth, page 179, as follows:
Orchestras of this type known as "name orchestras" or "name bands" originate by some individual who believes that he can create an organization which will be employed for entertainment purposes by dancehall operators, hotels, radio programs and public and private parties.
The leader is highly individualistic, featuring his own name as leader, and his success or failure to a great extent depend upon his musical ability, power to create an outstanding, or, at least, a distinctive or specialized, style and method of rendering music and his showmanship. He uses every adroit means of advertising available to him and to please his customers. Organization and success mean an expenditure of sums of money for music and accessories, salaries or promise of rewards during the formation of the orchestra, for rehearsals, and the musicians must be suitably and distinctively dressed.
Appearances are usually for one night but there may be repeats. The business is highly competitive. Many fall by the wayside, others attain phenomenal success. Success or failure depends to a great extent upon the leader, although the ability of the individual members should not be decried. The orchestras here in controversy are primarily dance orchestras. When an orchestra has been built up so that a demand is created for its services, the leaders generally employ booking agents to secure appearances in ballrooms or other places seeking their particular form of entertainment.
The evidence establishes that the leaders at all times exercised the entire direction and control over their orchestras and the method and manner of doing the work. They, of course, exercised the right to engage such members of the orchestra and to dispense with their services as they saw fit, to arrange for and pay their wages, to keep all profits and sustain and pay such losses as might occur, pay transportation and incidental expenses and direct and control the orchestra during engagements. None of the musical instruments are furnished by the customer, except the piano, which is part of the equipment of the establishment in which they perform. The leader created and established and had for sale an independent business and the ballroom operator was interested only in the result of the performance.
This situation creates and shows that the orchestra leaders were independent contractors and at the time of their engagements the members of the orchestras were employees of such independent contractors. Griff Williams v. United States, 7 Cir., 126 F.2d 129, certiorari denied 317 U.S. 655, 63 S.Ct. 52, 87 L.Ed. 527; Aberdeen Aerie No. 24 v. United States, D.C., 50 F.Supp. 734; In re Ten Eyck Co., Inc., D.C., 41 F.Supp. 375; Longo v. Glenn, D. C.N.D.Ky., November 20, 1943;1 Biltgen v. Reynolds, D.C.Minn., 58 F.Supp. 909; Spillson v. Smith, D.C.N.D.Ind.,1 affirmed 7 Cir., 147 F.2d 727; Los Angeles Athletic Club v. United States, D.C.S.D.Cal., 54 F. Supp. 702.
The Commissioner of Internal Revenue evidently would accept this conclusion were it not for a contract between the parties, known in the record as "Form B", as he has refunded to the plaintiffs in civil action No. 294 all such taxes collected where the contract form B was not used.
This form B contract has a history. Sometime ago the American Federation of Musicians had prepared and required all orchestra leaders and their booking agents to use when arranging for engagements a contract providing in general terms that the owners of the establishments or persons engaging their services were employers and the musicians of the orchestras their employees. A trial court found that this position was correct, but on appeal it was held that this contract did not change the relationship from that of an independent contractor to that of employer and employee. See Griff Williams v. United States, 7 Cir., 126 F.2d 129. The finding by the court that under such a...
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Birmingham v. Bartels
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