Brennan v. Jaffey, Civ. A. No. 74-7.

• Decision Date: 07 August 1974
• Docket Number: Civ. A. No. 74-7.
• Parties: Peter J. BRENNAN, Secretary of Labor, U. S. Department of Labor, Plaintiff, v. Donald H. JAFFEY, Individually and trading as Colony North Enterprises, Defendant.
• Court: U.S. District Court — District of Delaware

380 F. Supp. 373

Peter J. BRENNAN, Secretary of Labor, U. S. Department of Labor, Plaintiff, v. Donald H. JAFFEY, Individually and trading as Colony North Enterprises, Defendant.

Civ. A. No. 74-7.

United States District Court, D. Delaware.

August 7, 1974.

Ralph F. Keil, U. S. Atty., and John H. McDonald, Asst. U. S. Atty., Wilmington, Del., for plaintiff.

Steven D. Goldberg, Theisen, Lank & Mulford, Wilmington, Del., for defendant.

OPINION

STEEL, Senior District Judge:

This action is brought by plaintiff, the Secretary of Labor, to enjoin the defendant, Donald H. Jaffey, individually and trading as Colony North Enterprises, from allegedly continuing to violate the minimum wage (29 U.S.C. §§ 206 and 215(a) (2)), overtime (29 U.S.C. §§ 207 and 215(a) (2)), and record keeping (29 U.S.C. §§ 211(c) and 215(a)(5)), provisions of the Fair Labor Standards Act, and to restrain the defendant from withholding wages and compensation alleged to be past due. The defendant has moved for summary judgment upon the ground that:

"This Court lacks jurisdiction as defendant has no employees engaged in commerce or in the production of goods for commerce or employed in an enterprise engaged in commerce or in the production of goods for commerce within the meaning of the Act."

The contention that the Court lacks jurisdiction is without merit. 29 U.S.C. § 217 confers jurisdiction upon the Court to decide the controversy. Whether or not summary judgment should be granted is the real issue which this Court, in the exercise of its jurisdiction, must resolve.

The motion is before the Court upon the unverified pleadings, an affidavit of Donald H. Jaffey in support of the motion and an affidavit of Thomas C. Samworth, an official of the Department of Labor, in opposition to the motion.

Whether the defendant is entitled to summary judgment must be determined as a matter of law by accepting as true any facts, whether denied or admitted, stated in the Samworth affidavit, by accepting as true any undenied facts stated in the Jaffey affidavit, and by accepting as true any facts alleged in the complaint which are admitted in the answer. On this premise, the following facts must be accepted as true for the purpose of the motion:

The defendant is engaged in the business in Delaware of leasing and operating apartments which he conducts from a central location and for a common business purpose. The business has had an annual dollar volume of rental income of not less than $250,000. The defendant employs a maintenance supervisor who oversees a number of maintenance workers. Most of the latter are assigned to a particular apartment complex although a few are assigned to apartment complexes as the need arises. Paragraphs 5-13 of the Jaffey affidavit read:

"5. The maintenance supervisor is responsible for purchasing cleaning supplies such as soap, mops and brooms, hammers, nails, screws, screwdrivers and similar impliments. (sic) The supplies are purchased from local retail and wholesale outlets, some supplies are purchased directly from manufacturers. From time to time maintenance workers also purchase these supplies from local retailers as needed.

6. Maintenance workers clean apartments at the end of tenancies and prepare them for new tenants. They occasionally do touch-up painting, but major painting is done by independent contractors.

7. Maintenance workers perform minor plumbing repairs such as unblocking pipes and drains or changing washers. Major plumbing work is presently done by independent contractors. Before October 1, 1973 most plumbing including minor plumbing repairs was done by independent contractors.

8. Maintenance workers perform minor carpentry such as replacing doors and other minor repairs including dry wall and tile. Before October 1, 1973 most carpentry work including minor carpentry work was done by independent contractors.

9. Maintenance workers perform minor electrical repairs such as changing light switches. Major electrical work is presently done by independent contractors. Before October 1, 1973 most electrical work including minor electrical repairs was done by independent contractors.

10. Maintenance workers clean sidewalks, parking lots, swimming pools, cut grass and do other work commonly done by apartment maintenance workers.

11. Major repairs to heaters and air conditioners are now generally done by independent contractors, while maintenance workers do some minor repairs. Before October 1, 1973 most heating and air conditioning work including minor repairs to heaters and air conditions (sic) was done by independent contractors.

12. All maintenance supplies which come into the hands of maintenance workers are used by the workers to maintain and repair defendant's properties.

They are not given or sold to any third party.

13. In 1973 the defendant spent approximately $10,700 on maintenance supplies."

The Samworth affidavit states that the affiant conducted a full investigation of the business activities of the defendant, and that his efforts revealed that:

". . . Defendant's maintenance employees regularly handled cleaning supplies, replacement fixtures, and other goods and materials regularly purchased from two suppliers located in Philadelphia, Pennsylvania — Stan Martin Building Maintenance Supplies, Haworth and Edgmont Streets, Philadelphia, Pennsylvania, and Pier-Angeli Co., Inc., 550 Church Lane, materials so ordered and handled by Yeadon, Pennsylvania. The plumbing Defendant's employees included but were not limited to plumbing fixtures, shower heads, splash guards, toilet seats, repair kits, faucets, ballcocks, aerators, solder and plunger assemblies. Such supplies were installed in tenants' apartment units. The cleaning supplies so ordered and handled by Defendant's employees included but were not limited to rug shampoo, key blanks, caulking, acrylic floor finish, wax stripper, deodorant, sponges, Spic & Span, wood and furniture polishes, flood lamps, light bulbs, glues, window clearners, ice cube trays, oven sprays, and insecticides. . . .

The total dollar cost of the cleaning supplies and plumbing fixtures purchased from Philadelphia suppliers was $3185.64 in 1973."

In an earlier case, Brennan v. Apartment Communities Corporation, 360 F. Supp. 1255 (D.Del.1973)¹, this Court had before it the question whether the Act applied to the owner of several apartment complexes whose maintenance employees purchased and handled supplies which were used in the apartment operations. All the purchases were charged directly to the defendant employer. The supplies consisted of articles used for cleaning, such as soap, mops, and brooms and occasional supplies of paint, paint brushes, hammers, nails, screws, screwdrivers and similar instruments and were acquired from hardware stores located near the apartments but generally had origins outside of the state.

When Apartment Communities was decided, and at present, the minimum wage, overtime and record keeping provisions of 29 U.S.C. §§ 206, 207 and 211 applied to employers who employed employees in an "enterprise engaged in commerce or in the production of goods for commerce." In Apartment Communities, as here, the employees were employed in an "enterprise" within the meaning of 29 U.S.C. § 203(r).

The question in Apartment Communities, as here, was whether the enterprise (apartment house operation) was one which had employees "engaged in commerce or in the production of goods for commerce" within the meaning of 29 U.S.C. § 203(s). That section includes employees engaged in "handling, selling, or otherwise working on goods that have been moved in or produced for commerce."² When the Apartment Communities case was decided, as at the present time, a critical word in § 203(s) was the meaning of "goods". "Goods" are defined in 29 U. S.C. § 203(i) as:

". . . goods (including ships and marine equipment), wares, products, commodities, merchandise, or articles or subjects of commerce of any character, or any part or ingredient thereof, but does not include goods after their delivery into the actual physical possession of the ultimate consumer thereof other than a producer, manufacturer, or processor thereof."

This definition of "goods" has continued without change since its original enactment in 1938.

In Apartment Communities this Court held that because the supplies were purchased on the account of the defendant and were handled by his agents, the maintenance personnel, the supplies had come into the actual physical possession of the defendant who was their "ultimate consumer", and since he was not a "producer, manufacturer or processor" of the supplies, they were not "goods" as defined in § 203(i). Upon the basis of this reasoning the Court concluded that the provisions of the Fair Labor Standards Act were not applicable to the defendant. Contrary to the argument of plaintiff, nothing in the legislative history prior to 1974 suggests a construction of the Act at variance with the conclusion arrived at in the Apartment Communities case.

The plaintiff at bar concedes that the Apartment Communities decision was rendered on "virtually identical facts" to those involved in the present case (PB 6)³, but argues that the decision must be reevaluated because of a "trend of authoritative precedent" (PB 9) in conflict with it. Two of plaintiff's cited decisions, Brennan v. Dillion, 483 F.2d 1334 (10th Cir. 1973) and Brennan v. State of Iowa, 494 F.2d 100 (8th Cir. February 26, 1974) were rendered after this Court's opinion dated May 22, 1973 in Apartment Communities.

Dillion theorizes that because an apartment house owner acquires supplies from out of state sources which are handled and used by his employees for the benefit of the tenants, who pay rent for their apartments, the apartment owner thereby resells the supplies to the tenants and they, and not the owner, are the "ultimate consumers" of the supplies. This approach led the Court to conclude that the maintenance...