Consolidated Timber Co. v. Womack, 10048.

• Citation: 132 F.2d 101
• Decision Date: 07 December 1942
• Docket Number: No. 10048.,10048.
• Parties: CONSOLIDATED TIMBER CO. v. WOMACK. WOMACK v. CONSOLIDATED TIMBER CO.
• Court: United States Courts of Appeals. United States Court of Appeals (9th Circuit)

132 F.2d 101 (1942)

CONSOLIDATED TIMBER CO. v. WOMACK.

WOMACK v. CONSOLIDATED TIMBER CO.

No. 10048.

Circuit Court of Appeals, Ninth Circuit.

December 7, 1942.

Robert W. Maxwell, of Seattle, Wash., Philip Chipman, of Portland, Or. (Hart, Spencer, McCulloch & Rockwood, of Portland, Or., of counsel), for appellant Consolidated.

Green & Landye, of Portland, Or., for appellant Womack.

Irving J. Levy, Acting Sol., Wage and Hour Division, Mortimer B. Wolf, Asst. Sol., and Edward J. Fruchtman, Atty., all of Washington, D. C., and Dorothy M. Williams, Regional Atty., of San Francisco, Cal., for Administrator of Wage and Hour Division, U. S. Department of Labor, amicus curiae.

Before GARRECHT, HANEY, and STEPHENS, Circuit Judges.

GARRECHT, Circuit Judge.

Consolidated Timber Company, a Washington corporation, is engaged in logging and lumbering in Oregon and has its headquarters at Glenwood, Oregon. It employs a logging crew and also has contracts with smaller companies which log part of its property and deliver logs to it at specified places. Some of the logs cut by Consolidated and its contracting companies are sold to mills in Washington County, Oregon, but the larger percentage of logs are sold to saw mills in Oregon and Washington. All sales are made and completed within the state of Oregon. The logs are then manufactured into lumber by the purchasing mills and in each instance at least 70 per cent. of the lumber manufactured from said logs moves in interstate commerce.

Between October 24, 1938, and June 28, 1940, Consolidated operated at Glenwood, Oregon, what is known in logging parlance as a cookhouse, which consisted of a kitchen and dining room in a building separate and apart from the other buildings of the Company. Cookhouse facilities were available to Consolidated's employees, to employees of contracting companies, and to the general public. Consolidated's employees were not, however, compelled to take their meals at the cookhouse; many of them lived in Glenwood and ate at home; further, the court found that the greater proportion of the Company employees took their meals elsewhere than at the Glenwood cookhouse. Many of the regular diners were employees of contracting companies, and an average of ten meals a day (that is, to an average of three plus persons) were served to strangers — the general public. There were, in addition, six persons who were employed in other businesses in Glenwood who regularly took their meals at this cookhouse. Meals served to these persons, to the general public, and to the employees of companies under contract to Consolidated were paid for in cash; those taken by Consolidated employees were paid for by deductions out of wages. Consolidated employees were charged approximately ten per cent. less per meal than were those who paid in cash. This is accounted for in an agreement between an employers' association, of which Consolidated was a member, and the employees' union, to the effect that cookhouses in the logging area be operated as self-sustaining, but without profit, that is, at cost.

The Company also operated another cookhouse, subsequent to June 10, 1940, at a point located approximately seventeen miles southwest of Glenwood, known as Camp 2. This cookhouse, which also consists of a dining room and kitchen, is also in a building separate from the other Company buildings at Camp 2. Its facilities are used by substantially all of Consolidated's employees at Camp 2, and it is the only practicable eating facility at said Camp. The employees are not, however, required to eat there, and occasionally, though rarely, some do go into Glenwood, seventeen miles distant. The cookhouse is used, as well, by employees of companies under contract to Consolidated and a few of the general public who might visit Camp 2. Meals are paid for at the same rates, and in the same manner, as at Glenwood.

Consolidated Timber Company employs from 275 to 315 employees, all of whom, except salaried employees, engage in its logging operations on a forty hour week basis (since October 24, 1938) and are paid at the rate of time and one-half for all time in excess thereof. A limited number of persons, including some employed in the cookhouses, are employed by the Company at an agreed monthly wage. Although logging operations are carried on only five days a week, the cookhouses are customarily kept open seven days a week, operated by a skeleton crew on the "off-days," for the convenience of those who use them even when logging operations are interrupted.

Ivan Womack, plaintiff below, was employed as a baker in one of the aforesaid cookhouses at a monthly salary of $125, plus room and board of a reasonable value of $45 a month. Womack filed a complaint in the district court against Consolidated Timber Company, under the provisions of the Fair Labor Standards Act of 1938, 52 Stat. 1060, 29 U.S.C.A. §§ 201-219, claiming that from October 30, 1938, to the date of the complaint he did work or was compelled to work overtime hours in excess of number of hours prescribed in said Act as the length of the workweek; that he was not informed of the precise number of overtime hours he was compelled to work, but that such information was in the possession of the defendant. He prayed judgment for the overtime pay which he alleged he was entitled to as liquidated damages, and also for attorney fees.

The complaint was framed in five causes of action. The first we have just outlined; the remaining four were similar in allegation and prayer, save that in each instance the named employee was a different person, although the employer was the same. The amount sought to be recovered varied in each cause of action. Each of the individuals named in each of the latter four causes of action had assigned his claim to the plaintiff, Ivan Womack.

The answer of the defendant, Consolidated Timber Company, admitted the employment, operation of the logging business, and maintenance of the cookhouses, but denied that the plaintiff or his assignors were engaged in the production of goods for commerce within the meaning of the provisions of the statute sued under. It further alleged that if the employment was within the Act, it was specifically exempted by Section 13(a) (2) thereof.

The facts were stipulated to prior to trial, which was had before the court without a jury. The trial judge rendered an opinion (D.C., 43 F.Supp. 625), as a result of which he determined that the cookhouse located in the town or village of Glenwood was a retail or service establishment and, therefore, exempt, but that the cookhouse at Camp 2 was "an adjunct to the production of goods and employees therein are assisting in that process" and within the Act. Findings of fact and conclusions of law were entered, and decree filed in accordance therewith.

Consolidated appeals, contending, first, that the employees in a logging camp cookhouse are not engaged in the production of goods for commerce within the meaning of Section 7(a) (2) of the Fair Labor Standards Act and, secondly, that the logging camp cookhouse at Camp 2 is a retail or service establishment within the meaning of Section 13(a) (2) of the Act and that the provisions of Sections 6 and 7 of the said Act, relating to hours of labor, are not applicable.

Cross appeal is taken by Womack, who urges that the cookhouse at Glenwood is not a retail or service establishment and that the provisions of Sections 6 and 7 of the Act apply.

It is perhaps unnecessary for us to comment that both parties appear desirous of upholding that part of the decision of the lower court which is in their favor.

For the record, and solely in the interest of clarity, we pause here to observe that the amount in controversy in each cause of action falls far below the ordinary minimum jurisdictional amount of $3,000 exclusive of interest and costs prescribed by 28 U.S.C.A. § 41(1); when aggregated the claims total approximately $2,600, also under the required amount. Subdivision (8) of said Section 41, however, vests in the District Court original jurisdiction of "all suits and proceedings arising under any law regulating commerce." This subdivision confers jurisdiction in the said court of the instant case, regardless of the amount involved, or of diversity of citizenship, for that matter. Mulford v. Smith, 307 U.S. 38, 46, 59 S.Ct. 648, 83 L. Ed. 1092.

Section 6 of the Fair Labor Standards Act of 1938, 52 Stat. 1060, 1062, prescribes the minimum wages which may be paid an employee. Section 7 of said Act sets out the maximum hours which an employer shall employ any of his employees "engaged in commerce or in the production of goods for commerce" during a workweek, "unless such employee receives compensation for his employment in excess of the hours * * * specified at a rate not less than one and one-half times the regular rate at which he is employed." Section 13(a) (2) provides: "The provisions of sections 6 and 7 sections 206 and 207 of this title shall not apply with respect to * * * (2) any employee engaged in any retail or service establishment the greater part of whose selling or servicing is in intrastate commerce; * * *."

The first question to be answered is whether the employees here involved were engaged in commerce or in the production of goods for commerce as that phrase is used in Section 7(a) of the Fair Labor Standards Act of 1938, 52 Stat. 1060. Section 3(j) of the said Act, after defining the word "produced" as meaning "produced, manufactured, mined, handled, or in any other manner worked on in any State," provides that "for the purposes of this Act chapter an employee shall be deemed to have been engaged in the production of goods if such employee was employed in producing * * *, or in any other manner working on such goods, or in any process or occupation necessary to the production thereof, in any State."

Since a high percentage of the goods handled or "produced" by Consolidated is destined...