Budd v. Mitchell

• Decision Date: 15 April 1955
• Docket Number: 15071.,No. 15016,15016
• Citation: 221 F.2d 406
• Parties: Joseph T. BUDD, Jr., and Florence W. Budd, co-partners, doing business as J. T. Budd, Jr. and Company, Appellants, v. James P. MITCHELL, Secretary of Labor, United States Department of Labor, Appellee. KING EDWARD TOBACCO COMPANY OF FLORIDA and May Tobacco Company, Intervenor, Appellants, v. James P. MITCHELL, Secretary of Labor, United States Department of Labor, Appellee.
• Court: U.S. Court of Appeals — Fifth Circuit

221 F.2d 406 (1955)

Joseph T. BUDD, Jr., and Florence W. Budd, co-partners, doing business as J. T. Budd, Jr. and Company, Appellants, v. James P. MITCHELL, Secretary of Labor, United States Department of Labor, Appellee.

KING EDWARD TOBACCO COMPANY OF FLORIDA and May Tobacco Company, Intervenor, Appellants, v. James P. MITCHELL, Secretary of Labor, United States Department of Labor, Appellee.

Nos. 15016, 15071.

United States Court of Appeals, Fifth Circuit.

April 15, 1955.

Case No. 15016:

Julius F. Parker, Caldwell, Parker, Foster & Wigginton, Tallahassee, Fla., for appellants Joseph T. Budd, Jr., and Florence W. Budd.

Harold C. Nystrom, Acting Asst. Solicitor Dept. of Labor, Bessie Margolin, Asst. Solicitor, Washington, D. C., Stuart Rothman, Solicitor, Joseph M. Stone, U. S. Dept. of Labor, Washington, D. C., Beverley R. Worrell, Regional Atty., Birmingham, Ala., for appellee.

Case No. 15071:

Edw. McCarthy, Jacksonville, Fla., Richard J. Gardner, Quincy, Fla., Mc- Carthy, Lane & Adams, Jacksonville, Fla., Gardner and Lines, Quincy, Fla., of counsel, for King Edward Tobacco Co. of Florida.

Poole, Shroyer & Denbo, Milton C. Denbo and Richard O. Michael, Washington, D. C., for May Tobacco Co.

Before HUTCHESON, Chief Judge, and RIVES and TUTTLE, Circuit Judges.

RIVES, Circuit Judge.

The opinion of the district Court in these cases is reported at 114 F.Supp. 865. The Budd case was the action first brought by the Secretary of Labor under Section 17 of the Fair Labor Standards Act¹ to enjoin the Budds from violating the minimum wage and record keeping provisions of the Act. At the conclusion of a pre-trial conference on that case, the district court was of the opinion that the Budd company operation was in violation of the Act, but, in order to avoid putting the small farmers, whose tobacco was processed by the Budds, at an economic disadvantage to the operators who processed their own tobacco exclusively, the court insisted that before decision in the Budd case, the issues be broadened to include such large operations. Accordingly, suit was brought against the King Edward Company and the May Company intervened.

The cases involve the definition of "Agriculture" under Title 29 U.S.C.A. § 203(f),² the agricultural exemptions under Section 213(a), clauses 6 and 10,³ and incidentally the exemption from the maximum hours provision under Section 207(c).⁴

All of appellant's processing operations are in connection with U. S. Type 62 Sumatra tobacco, which is a leaf tobacco grown and used entirely for cigar wrappers. This type of tobacco is grown exclusively in three counties in North Florida, and two counties in South Georgia contiguous to two of said Florida counties. Most of such tobacco is grown within an airline radius of thirty miles of Quincy, the County Seat of Gadsden County, Florida.

We quote from the opinion of the district court:

"Method of Growing, Harvesting and Marketing Type 62 Shade Leaf Tobacco

"Type 62 shade leaf tobacco requires special and painstaking cultivation, harvesting, curing and preparation for market. It grows in fields inclosed in a cheesecloth shade, which completely covers and incloses the tobacco field. The cheesecloth is supported by wires strung on posts placed at regular intervals through the fields. It is highly fertilized and intensively cultivated during the growing period. When each leaf reaches a certain stage of maturity it is promptly harvested. This harvesting process is known as `priming'. The lower leaves are picked first, perhaps not more than two or three from each stalk. This picking is repeated as the tobacco matures on up the stalk until all the marketable leaves have been removed. At each priming the tobacco is immediately taken to a tobacco barn located on the farm where it is strung on sticks and dried by means of heat. When the tobacco is almost completely dried the drying process is interrupted and it is permitted to absorb moisture and again dried. This drying process is repeated until the tobacco has reached a stage in the process of curing when it is ready for the packing house.

"It is then taken from the barns in the field, placed in appropriate containers and carried to the packing house where it is placed in piles known as `bulks' for curing. Each bulk consists of more than 3000 lbs. of tobacco. The packing houses are equipped with machinery for the appropriate humidification and curing of the tobacco. During the curing period the temperature within each bulk is closely watched from day to day and at regular intervals, when the appropriate time has arrived, the bulk is broken up, the tobacco leaves shaken out and those on the outside placed on the inside of the new bulk and those on the inside placed on the outside for further curing. This process is continued until the tobacco is ready for market when it is bailed (sic) for shipment." Durkin v. Budd, D.C., 114 F.Supp. 865, 866-867.

After such processing, this type tobacco falls into eight main classifications, and none of those classifications can be determined prior to the processing. Primarily, because it cannot be graded until it has been processed, there is no market at an earlier stage for this type tobacco. The market variation dependent upon grading is considerable, ranging from a high of approximately $2.40 per pound down to as low as $.40 per pound.

Some 300 farmers in the Quincy area grow this type of tobacco with about 80% growing and harvesting less than 25 acres per year, and a majority producing only 1½ to 10 acres per year. As has been noted, the natural heating, fermentation, and curing of this tobacco requires bulks of more than 3000 lbs. of tobacco. The small farmers do not grow the tobacco in such quantities, and hence, cannot process their own tobacco. For the year 1950, some 52 of such small farmers cultivating a total of 263 acres had their tobacco processed by the Budd Company. That company grows no tobacco of its own but processes tobacco grown by others.

During 1950, the King Edward Tobacco Company cultivated 206 acres, and the May Company 90 acres of this type tobacco, and those two companies processed their own tobacco, and did not handle the tobacco of any other person at the packing houses here involved. Those packing houses are located in the town of Quincy, which, according to the 1950 census had a population of 6,586, and the Budds' packing house is also in that town. At the height of the packing season, May employs approximately 70 employees in its packing plant, King Edward some 120 employees, and Budd approximately 108 employees. The majority of all such employees work also on the farms when not engaged in work at the packing plants. Other pertinent facts appear in the opinion of the district court.

King Edward and May claim that their employees are exempt from the provisions of the Act under Section 213(a) (6) because they are employed in agriculture. As to King Edward and May, the appellee concedes that:

"Appellants are admittedly `farmers\' in their growing operations, and admittedly the mere fact that they are large growers does not affect the availability of the exemption to them insofar as they are in fact farmers.⁵ But obviously appellants are also something else in addition to being growers — they are also operating separate and extensive commercial enterprises, of the same character as similar independently owned and operated packing houses."

The district court held "that upon the record in this case the farming exemption ends when the tobacco reaches the receiving platform of the packing house * * *." 114 F.Supp. 868. We cannot agree. It seems clear to us that a farmer cannot function without a market, that everything done by these farmers was essential for the marketing of their crops, and that the work of their packing house employees, in the preparation for market of the leaf grown exclusively on their farms, constitutes "practices performed by a farmer as an incident to or in conjunction with such farming operations, including preparation for market," within the meaning of Section 203(f)⁶

All of the appellants claim that their employees are exempt from the Act by virtue of Section 213(a) (10) see footnote 3, supra, because their operations are one of those enumerated in that section and necessary for the marketing of their crops, and because the Administrator exceeded his authority in excluding from the "area of production", "any city, town or urban place of 2,500 or greater population." Appellee concedes, as it must, that this Circuit has already held that the Administrator did so exceed his authority.⁷ Appellee insists, however, that after it reached the packing house, the tobacco was no longer an "agricultural or horticultural commodity", and that the processing operation was not one of those enumerated in the section. The legislative history of Section 213(a) (10) makes clear that its primary purpose was to prevent discrimination against the small farmer.⁸ When it is considered that admittedly the processing was essential for the marketing of the tobacco, again it seems clear to us that the employees of all of the appellants are exempt under Section 213(a) (10). Since we are of the opinion that the employees are exempt under Section 213(a) (10), we do not feel called upon to discuss the respective fields of operation of the total exemption in that section and of the partial exemption in Section 207(c) further than to say that we agree with the Ninth Circuit that such exemptions overlap and are not alternative or mutually exclusive. Waialua Agricultural Co. v. Maneja, 9 Cir., 178 F.2d 603, 609.⁹

Appellee insists, however, that Section 213(a) (10) is inoperative until the Administrator makes a valid definition of the area of production. That much may be granted, but in a case like this, otherwise within the exemption, and which might likely fall with a valid definition of the area of production, the appellee is in no position to...