Fishman v. Marcouse

• Decision Date: 29 March 1940
• Docket Number: No. 738.,738.
• Citation: 32 F. Supp. 460
• Parties: FISHMAN v. MARCOUSE.
• Court: U.S. District Court — Western District of Pennsylvania

32 F. Supp. 460

FISHMAN v. MARCOUSE.

No. 738.

District Court, E. D. Pennsylvania.

March 29, 1940.

M. Herbert Syme, of Syme & Simons, of Philadelphia, Pa., for plaintiff.

Peter P. Zion, of Philadelphia, for defendant.

Geo. A. McNulty, Gen. Counsel, and Irving J. Levy, Asst. Gen. Counsel, both of Washington, D. C., and J. M. Gallagher, Regional Atty., of Philadelphia, Pa., for Harold D. Jacobs, amicus curiæ.

BARD, District Judge.

Upon motion of the plaintiff, Morris Fishman, for discovery and production of documents and things for inspection, copying or photographing, the Court is urged to enter an order directing the defendant employer, in accordance with Rule 34 of the Rules of Civil Procedure, 28 U.S.C.A. following section 723c, to produce the records, payroll books, checks and other books and records indicating the number of hours of employment of, and the payments to Edith Marie DeFelice and others similarly situated for work done by them for the defendant. This suit was brought pursuant to the Fair Labor Standards Act.¹

The complaint alleges that Edith Marie DeFelice is employed by the defendant; that she has designated Morris Fishman of the International Ladies' Garment Workers' Union as agent or representative for and on her behalf to institute proceedings for herself and all other employees similarly situated and affected; that the product manufactured in defendant's plant is shipped among the several states of the United States; that defendant failed to comply with the minimum wage provision of the Act of June 25, 1938, c. 676, § 6, 52 Stat. 1062, 29 U.S.C.A. § 206; that as a result of the violation there became due and owing unto her at least $49.64; that she is unable to determine the exact amount because all records and books are maintained by the defendant; and in addition to the amount due her and others similarly situated, an equal amount is claimed for liquidated damages and a request is made for a reasonable attorney's fee.

Since the argument of the motion, counsel for the plaintiff has amended his motion setting forth that the plaintiff has been authorized to represent Phyllis Araco, Edythe D'Alonzo, Jeannette Paolini, Antoinette Paolone, Antoinette DiEnna, Dorothy Zink and Amelia Weihrauch, whose claims are similar in nature to that of Edith Marie DeFelice.

Defendant contends that (1) this Court has no jurisdiction; (2) granting jurisdiction, the employee has no right to inspect the books of the employer; (3) granting the employee or his representative such a right, it must be limited to an examination of the records pertaining solely to the party or parties bringing the suit; (4) production of the records violates the employer's constitutional right against self-crimination.

1. In support of lack of jurisdiction the defendant maintains: There is no allegation of diversity of citizenship; the amount involved is less that $3,000, 28 U.S.C.A. § 41; and that "liquidated damages" as used in Section 16(b) of the Fair Labor Standards Act of 1938 are not "penalties" that bring it within the excepting clause of the jurisdictional statute which provides that $3,000 jurisdictional provision shall not apply to "suits and proceedings for the enforcement of penalties and forfeitures incurred under any law of the United States."

Is an action under Section 16(b) of the Fair Labor Standards Act of 1938 a suit arising under a law regulating commerce? Citations of other pertinent sections of the Fair Labor Standards Act of 1938 are set forth in the note below.² In Andrews v. Montgomery Ward & Co., Inc., D.C., 30 F.Supp. 380, 384, the Court said: "Certainly it cannot be maintained now that Congress may not, in the interests of the general welfare of the country, prohibit the shipment in interstate commerce of the products of under paid and sweated labor.³ * * * Regulations of wages and hours of labor is a proper exercise of police power. * * * It is not necessary for me to determine whether all the provisions of the Act are within the power of Congress. I am of the opinion that Congress has power to prohibit the transportation in interstate commerce of goods produced in violation of the Act. * * *"

The holding of District Court Judge Robert A. Cooper in Eastern Sugar Associates (Bowie) v. Claiborne, (decided September 26, 1939), is to the same effect: "1. The Fair Labor Standards Act of 1938 is a valid and constitutional exercise of the power of the Congress to regulate commerce."

The Federal District Courts have jurisdiction of all suits arising under laws regulating interstate commerce, regardless of the citizenship of the parties or the sum or value in controversy. Section 24, subsections (1) and (8) of the Judicial Code, Title 28 U.S.C.A. § 41, subsections (1) and (8).

In Davis, Director General of Railroads v. Age-Herald Pub. Co., 5 Cir., 293 F. 591, at page 592, the Court said: "We think the first ground of attack upon the jurisdiction of the court must fail, because District Courts are given jurisdiction, regardless of the amount involved, of all suits or proceedings arising under any law regulating commerce. Judicial Code, § 24, par. 8 (Comp.St. § 991(8) 28 U.S.C.A. § 41(8); Illinois Central Railroad Co. v. S. Segari & Co. (D.C.) 205 F. 998; New York Central Railroad Co. v. Mutual Orange Distributors 9 Cir. 251 F. 230, 163 C.C.A. 386. It is true that in Yazoo & Mississippi Valley Railroad Co. v. Zemurray 5 Cir. 238 F. 789, 151 C.C.A. 639, doubt was expressed by this court as to jurisdiction where the amount involved was less than $3,000, but it was stated that no question arose under any interstate commerce laws, and the case was affirmed upon the merits."

In Mulford v. Smith, 307 U.S. 38, at page 46, 59 S.Ct. 648, at page 651, 83 L.Ed. 1092, the Court said: "Though no diversity of citizenship is alleged, nor is any amount in controversy asserted so as to confer jurisdiction under subsection (1) of Section 24 of the Judicial Code, the case falls within subsection (8) which confers jurisdiction upon District Courts `of all suits and proceedings arising under any law regulating commerce.'"

The Fair Labor Standards Act of 1938 is a law of the United States regulating commerce and the instant case is a suit or proceeding under that law. I therefore find that this Court has jurisdiction regardless of the citizenship of the parties and the amount involved.

2. Unquestionably Rule 34 of the Federal Rules of Civil Procedure has extended the rights of parties to a suit to examine the books and records of the other party before trial. It was aptly phrased by Judge Maris in C. F. Simonin's Sons, Inc. v. American Can Co., D.C., 24 F.Supp. 765: "An examination of these rules discloses that they afford the plaintiff facilities for discovery from the defendant which are more liberal than it could obtain in a suit in equity for discovery. Furthermore it is clear that those rules may be invoked in aid of a civil action at any time after its commencement."

With what standard must the movent comply to gain the right to examine his adversary's books and records?

This question has been considered by Judge Kirkpatrick of this District in the case of C. F. Simonin's Sons, Inc. v. American Can Company, D.C., 30 F.Supp. 901. He promulgates the following standard, 30 F.Supp. at page 902: "Searching for guidance in reported decisions under the old practice, and avoiding `restrictive formulas,' the only general rule having `the capacity of flexible adjustment to changing groups of facts' which I can discover is that a plaintiff, before he is granted sweeping discovery, must somehow convince the Court that there is, at least, reasonable ground to believe that a cause of action exists, and can be proved if the necessary facilities are afforded him."

In the instant...