EC Schroeder Co. v. Clifton

• Decision Date: 27 February 1946
• Docket Number: No. 3176,3178.,3176
• Citation: 153 F.2d 385
• Parties: E. C. SCHROEDER CO., Inc., v. CLIFTON et al. CLIFTON et al. v. E. C. SCHROEDER CO., Inc.
• Court: U.S. Court of Appeals — Tenth Circuit

153 F.2d 385 (1946)

E. C. SCHROEDER CO., Inc., v. CLIFTON et al. CLIFTON et al. v. E. C. SCHROEDER CO., Inc.

Nos. 3176, 3178.

Circuit Court of Appeals, Tenth Circuit.

January 24, 1946.

Rehearing Denied February 27, 1946.

Reuel W. Little, of Madill, Okl. (Jack H. Smith and Little & Smith, all of Madill, Okl., on the brief), for appellant and cross-appellee.

Louis A. Fischl, of Ardmore, Okl. (Thos. W. Champion, of Ardmore, Okl., on the brief), for appellees and cross-appellants.

Faye Blackburn, Atty., U. S. Department of Labor, of Washington, D. C. (William S. Tyson, Acting Solicitor, and Bessie Margolin, Assistant Solicitor, both of Washington, D. C., Earl Street, Regional Atty., of Dallas, Tex., and Joseph M. Stone, Atty., U. S. Department of Labor, of Washington, D. C., on the brief), for Administrator of Wage and Hour Division, U. S. Department of Labor, as amicus curiae.

Charles A. Horsky, of Washington, D. C. (Amy Ruth Mahin and Covington, Burling, Rublee, Acheson & Shorb, all of Washington, D. C., on the brief), for National Sand & Gravel Ass'n, as amicus curiae.

Before PHILLIPS, BRATTON and HUXMAN, Circuit Judges.

BRATTON, Circuit Judge.

M. L. Clifton, for himself and as agent for others, instituted this action against E. C. Schroeder Company to recover overtime compensation, liquidated damages, and attorney's fees pursuant to section 16(b) of the Fair Labor Standards Act, 52 Stat. 1060, 29 U.S.C.A. § 201 et seq. The overtime was (1) that of employees engaged at the quarry in mining, producing, and processing stone used for gravel cushion and riprap in the construction of relocated portions of a railroad and a highway, and (2) that of employees in rendering like service in connection with gravel cushion and riprap used in the construction of a dyke for the protection of oil wells from inundation and in hauling some of the rock from the quarry to the dyke. The question is whether employees engaged in work of that kind are within the coverage of the Act.

By the Act of June 28, 1938, 52 Stat. 1215, Congress authorized the construction of the Denison Dam and Reservoir on Red River for flood control and other purposes. It became apparent that water impounded by the completed dam would inundate a portion of the track of a railroad and a portion of a highway in Oklahoma, both arteries of interstate commerce. As a means of solving the problem, the United States entered into contracts with various contractors for the relocation of approximately 18.71 miles of trackage of the railroad and of approximately 3.8 miles of the highway. The relocated track has been connected with the existing track of the railroad company and has become a permanent part of it. The relocated portion of the highway when completed was or is to become a part of the existing highway but it had not been completed at the time of the trial of this case. The relocation sites for the track and the highway were upon raw, unimproved lands. It was necessary to survey, clear, grade, fill and excavate the sites. Piling was driven and concrete super-structures were erected. New road beds, one bridge for the relocated highway, and two for the relocated railroad track, were built. The plans and specifications called for the use of gravel cushion and riprap rock. The contractors acquired leases on property where approved rock and gravel could be produced, and they entered into contracts with the defendant in this case under which the defendant was to furnish all necessary machinery, equipment, labor, material, and other things necessary to produce and deliver the gravel cushion and riprap rock in the trucks of the contractors, f. o. b. the quarry. Before construction of the Denison Dam was commenced, the Cumberland Oil Field in Oklahoma had been discovered and oil was being produced. The field was so located that water impounded by the completed dam would flood part of it. As a part of the dam and reservoir project, the United States awarded a contract for the construction of a dyke for the purpose of preventing the field from being inundated. The contractor for the construction of the dyke sublet part of its contract and the subcontractor sublet to the defendant in this suit a part of its contract for the production of gravel cushion and riprap for use in the construction of the dyke. The terms of the contract were similar to the contracts relating to the railroad and the highway, except that the defendant agreed to and did haul a large quantity of stone from the quarry to the dyke site. Plaintiffs in this case were employed by the defendant as mechanics, laborers, and power shovel operators at the quarry. Their work consisted of mining, processing and producing stone used for gravel cushion and riprap; and, in addition, some of the plaintiffs hauled stone from the quarry to the dyke site where it was dumped from the truck either directly onto the dyke or into cranes which spread it on the dyke. Frequently, the rock dumped would not have to be placed or spread by others on the dyke but would fall into proper place. The distance between the quarry and the work site of the several projects averaged about twelve miles. None of the rock quarried and processed moved outside the state.

The trial court determined that plaintiffs, in quarrying and processing rock for use in connection with the construction of the relocated portions of the railroad track and the highway, were not engaged in commerce but were engaged in the production of goods for commerce, within the meaning of the Act, and were entitled to recover; and that in quarrying and processing rock for use in connection with the construction of the dyke and in hauling rock from the quarry to the dyke site, plaintiffs were not entitled to the benefits of the Act and should not recover. Judgment was entered accordingly. The defendant appealed from that part of the judgment awarding recovery under the Act for services performed in connection with the gravel cushion and riprap used on the railroad and the highway. The plaintiffs perfected a cross appeal from that part denying them recovery under the Act for the services rendered in the processing of the gravel cushion and rock used in the construction of the dyke and in hauling rock from the quarry to the dyke site. The cross appeal also challenged the allowance made for attorney's fees.

Taking up the direct appeal, by its terms section 7 of the Act makes the provisions relating to maximum hours applicable to two classes of employees. They are those engaged in commerce and those engaged in the production of goods for commerce. And section 3(j) provides that "an employee shall be deemed to have engaged in the production of goods for commerce if such employee was employed * * * in any process or occupation necessary to the production" of goods for commerce. But it is the contention of the company that the employees here involved, while engaged in mining, producing and processing the gravel cushion and riprap for use in the construction of the relocated portions of the railroad and the highway, were not engaged in the production of goods for commerce, or in a process or occupation necessary to such production. No rule of thumb has yet been enunciated either by Congress or the courts by which it can be determined in every case whether the employee was engaged in the production of goods for commerce, within the meaning of the Act. Each case depends upon its own facts. However, certain general guides have been blue-printed. It is not necessary that the employee must himself take part in the physical process of the making of the goods. It suffices if his work constitutes a part of the integrated effort by which goods are produced for commerce. Stated otherwise, it is enough if the work of the employee has such "close and immediate tie with the process of production for commerce" that it is in effect a part of it. Kirschbaum Co. v. Walling, 316 U.S. 517, 62 S.Ct. 1116, 1121, 86 L.Ed. 1638; Warren-Bradshaw Co. v. Hall, 317 U.S. 88, 63 S.Ct. 125, 87 L.Ed. 83; Walton v. Southern Package Corp., 320 U.S. 540, 64 S.Ct. 320, 88 L.Ed. 298; Armour & Co. v. Wantock, 323 U.S. 126, 65 S.Ct. 165; The Borden Co. v. Borella, 325 U.S. 679, 65 S.Ct. 1223. But Congress did not intend in the enactment of the Act to exert the full measure of its commerce power. Instead, it was purposed to leave local business to the protection of the states, and courts are not free to absorb by judicial process essentially local activities which Congress in the exercise of its judgment did not see fit expressly or by fair implication to bring within the scope of the Act. Walling v. Jacksonville Paper Co., 317 U.S. 564, 63 S.Ct. 332, 87 L.Ed. 460; 10 East 40th Street Co. v. Callus, 325 U.S. 578, 65 S.Ct. 1227; Rucker v. First National Bank of Miami, 10 Cir., 138 F.2d 699, certiorari denied 321 U.S. 769, 64 S.Ct. 524, 88 L.Ed. 1065.

Section 3(b) of the Act defines commerce to mean "trade, commerce, transportation, transmission, or communication among the several States or from any State to any place outside thereof." This definitive provision is merely declaratory of the generally understood and accepted meaning of interstate commerce as applied to goods and products, namely their movement across state lines. It thus is manifest that every employee engaged in the production of goods, or in a process or occupation necessary to such production, is not necessarily within the coverage of the Act. In order to come within its coverage, an employee must be engaged in the production of goods for commerce, or in a process or occupation necessary to such production. The very language of the Act relating to the production of goods for commerce seems to make it clear that the particular work of the employee, or the integrated effort of which his service is a part, must have for its purpose the production of goods for transportation in commerce. Some goods or some commodities must be produced for...