Chapman v. Home Ice Co.

• Decision Date: 27 January 1942
• Docket Number: No. 254.,254.
• Citation: 43 F. Supp. 424
• Parties: CHAPMAN et al. v. HOME ICE CO.
• Court: U.S. District Court — Western District of Tennessee

43 F. Supp. 424

CHAPMAN et al. v. HOME ICE CO.

No. 254.

District Court, W. D. Tennessee, W. D.

January 27, 1942.

COPYRIGHT MATERIAL OMITTED

Anthony Aspero, of Memphis, Tenn., for plaintiff.

Julian C. Wilson and Bertrand W. Cohn, both of Memphis, Tenn., for defendant.

BOYD, District Judge.

This case is filed as a class action under the Fair Labor Standards Act of June 25, 1938, c. 676, 52 Stat. 1060, 29 U.S.C.A. § 201 et seq. The plaintiffs are entitled to recover in varying amounts for a period of time between April 17, 1939, and November 22, 1940, if they were engaged in commerce, or in the production of goods for commerce within the meaning of the Act.

The defendant has, since April 17, 1939, operated a number of ice plants in the City of Memphis, manufacturing ice which is sold and delivered in Memphis, and Shelby County, Tennessee.

During the time covered by this law suit, approximately nineteen months, the company has manufactured and sold 121,846 tons of ice.

Ice is sold and delivered from defendant's platforms at retail and fifteen to twenty per cent of its total production, designated by it as "wholesale business" is sold to peddlers who resell same over various routes in the City of Memphis. In addition to these sales, the defendant, during the period in question, has sold to railroad companies 1,404 tons of ice, or 1.15% of the total amount manufactured, which defendant placed, in crushed form, in refrigerator cars for the purpose of preserving shipments of perishable commodities to other states. 2,605 tons, or 2.13% of the defendant's total output went to railroad companies to cool passenger cars which crossed state lines. 4,283 tons of the defendant's product, or 3.51% of its total output, was delivered for the purpose of car refrigeration to Memphis merchants, who shipped in interstate commerce dressed poultry, meats and fruits. This total of 6.79% of ice manufactured by the defendant with which we are mainly concerned in this case includes approximately 2% of so-called "white ice" which is not ordinarily merchantable ice, but ice which can be and is used by the defendant in car icing operations. It may be termed a by-product, or ice that the defendant does not intend to make but which, nevertheless, comes out in the process.

The plaintiffs, under the proof, were engaged in the manufacture of ice in its various steps, and claim coverage under the Act because, as they say, this making and delivery of ice to the railroads and others who use same in the refrigeration of cars, put them "in commerce or in the production of goods for commerce." The proof shows in connection with these particular operations that the ice was manufactured, sold, delivered and paid for in Memphis, Tennessee, and defendant, therefore, claims this particular phase of its business is local in nature, and an activity which is not covered by Sections 6 and 7 of the Fair Labor Standards Act.

Section 6 of the Act requires every employer to pay each of his employees who is engaged "in commerce or in the production of goods for commerce" wages at certain rates.

Section 7 of the Act provides that no employer shall employ any of his employees who is engaged "in commerce or in the production of goods for commerce" for more than a certain number of hours during a workweek, and for compensation at a rate of not less than one and one-half times the regular rate for employment in excess of the hours specified.

Plaintiffs claim coverage under the Act even though the activities in question are considered as wholly intrastate in character. They say in this connection, the manufacture and delivery of ice to the railroads and others for the purpose of preserving perishable commodities in interstate shipments is commingled with and is a burden on interstate commerce and is regulated under the Act. More particularly, they say they are entitled to the benefits if it affects, facilitates, or is a part of "transportation" in commerce. The Act defines commerce as follows:

"Sec. 3 § 203. * * * (b) `Commerce' means trade, commerce, transportation, transmission, or communication among the several States or from any State to any place outside thereof."

It is contended on behalf of the defendant, not only that plaintiffs are not engaged "in commerce or in the production of goods for commerce" within the meaning of the Act, but that we are not dealing with an article, the trade or commerce in which, is included under the Act. In this connection, the defendant insists the Court should give effect to the definition of the word "goods" as set out in the Act, which would exclude the particular commodity (ice) in question from the provisions of the Act. "Goods" is defined in Section 3(i) of the Act as follows:

"As used in this Act sections 201-219 of this title * * * `goods' means 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."

In other words, defendant says the ice involved here had been delivered into the actual physical possession of the ultimate consumers, who were not producers, manufacturers or processors thereof, and, therefore, the goods (ice) so delivered was no longer subject to be dealt with under the Act.

Further, defendant contends Congress has not legislated in this instance to protect interstate commerce, by regulating intrastate matters which may be commingled with or are a burden on or affect interstate commerce, as defined in the Act.

To determine the question, it will be necessary to consider the meaning and scope of the phrase "in commerce or in the production of goods for commerce" employed in Sections 6 and 7 of the Act, and the intent of Congress with respect to the use of these words.

Putting plain, everyday construction on the language employed, and there is no ambiguity which makes it necessary to refer to the purpose clause of the Act or its legislative history, I am constrained to the view that we are dealing in this case with an act which deals with things or commodities only, which are subject to trade and traffic in the business world, and the employees' connection with the production of same. The words "for commerce" clearly are employed in this restricted sense. The Supreme Court in the case of United States v. Darby Lumber Co., 312 U.S. 100, 61 S.Ct. 451, 457, 85 L.Ed. 609, 132 A.L.R. 1430, speaks of shipments of goods and commodities, distribution of goods, and competition in the sale of goods, etc. It was said in that case:

"The motive and purpose of the present regulation are plainly to make effective the Congressional conception of public policy that interstate commerce should not be made the instrument of competition in the distribution of goods produced under substandard labor conditions, which competition is injurious to the commerce and to the states from and to which the commerce flows. The motive and purpose of a regulation of interstate commerce are matters for the legislative judgment upon the exercise of which the Constitution places no restriction and over which the courts are given no control. McCray v. United States, 195 U.S. 27, 24 S.Ct. 769, 49 L.Ed. 78, 1 Ann.Cas. 561; Sonzinsky v. United States, 300 U.S. 506, 513, 57 S.Ct. 554, 555, 81 L.Ed. 772, and cases cited."

We are not dealing with interstate commerce in its broad sense, but rather in a limited way under a particular act. Congress did not see fit to fix the coverage too broadly. It seems to have given consideration to those things which are reserved to the states under the Constitution. It might have used the phrase "affecting commerce" as in the National Labor Relations Act, Act of July 5, 1935, 29 U.S.C.A. § 151, had it not intended there should be a definite line drawn. The coverage here is limited to those employees who are engaged "in commerce" per se, or are engaged in the production and handling of goods and merchandise intended for sale and distribution in the business world across state lines. The Labor Relations Act empowered the Labor Board to prevent unfair labor practices "affecting" commerce, not "in commerce," and not "in the production of goods for commerce."

The Fair Labor Standards Act does not deal with all goods or goods generally and, of course, Congress had no power to do so, but only those goods produced which it is intended will move into interstate commerce. United States v. Darby, supra. There could be no competition in the sale of this ice in other states and no restriction on the free flow of it among the states as it is wholly consumed in its use.

Had Congress considered the activity in question here a burden on interstate commerce, or that it was so commingled with it as to be a part of it, it had the right and power to regulate same; that is, provided it did not involve transactions which would be classed as having only an indirect or remote bearing on interstate commerce, but it did not see fit to do so.

Here the words "production for commerce," denotes an intention to deal in a restricted way with the question of coverage in connection with those employed directly in the production of articles to be sold, shipped or transported across state lines "in commerce." Producing goods "for" a certain purpose naturally infers a direct relation, while producing something which only "affects" a certain purpose implies an indirect relation. For legislative history on intended coverage of the Act, see Jewel Tea Co. v. Williams et al., 10 Cir., 118 F.2d 202, note #5; Fleming, Adm'r, v. A. B. Kirschbaum Co., 3 Cir., 124 F.2d 567, decided December 17, 1941.

There is no question but that the icing of cars to preserve interstate shipments "affects" the transportation of perishables. Indeed, there could be...