Fleming v. Easton Pub. Co.

• Decision Date: 19 March 1941
• Docket Number: No. M-936,M-935.,M-936
• Citation: 38 F. Supp. 677
• Parties: FLEMING v. EASTON PUB. CO. SAME v. PLAIN DEALER PUB. CO.
• Court: U.S. District Court — Western District of Pennsylvania

38 F. Supp. 677

FLEMING v. EASTON PUB. CO.

SAME v. PLAIN DEALER PUB. CO.

Nos. M-936, M-935.

District Court, E. D. Pennsylvania.

March 19, 1941.

Gerard D. Reilly, Sol. Dept. of Labor, Irving J. Levy, Ass't. Sol. Dept. of Labor, and Vernon C. Stoneman, Senior Atty., Dept. of Labor, all of Washington, D. C., John M. Gallagher, Regional Atty. Wage Hour Division, of Philadelphia, Pa., and Robert Erdahl, Principal Wage Hour Division, and David Persinger, Atty. Wage Hour Division, both of Washington, D. C., for plaintiffs.

Elisha Hanson, of Washington, D. C., George F. Coffin, Jr., of Easton, Pa., and H. P. McFadden, of Bethlehem, Pa., for defendants.

GANEY, District Judge.

Philip B. Fleming, Administrator of the Wage and Hour Division, made application by petition for a rule to show cause why the Easton Publishing Company and the Plain Dealer Publishing Company, Inc., should not produce certain documents and records of their employees to certain inspectors of the Wage and Hour Division of the Department of Labor, designated by the Regional Director for the Wage and Hour Division. A motion to dismiss was filed by counsel for both respondents and without waiving any rights with respect thereto in order that the court may have the whole matter under consideration, the averments under the petition for the rule were answered by both respondents.

The allegations in the petitioner's applications for a rule to show cause are substantially identical except in Paragraph 6 of the application with respect to the Plain Dealer Publishing Company, Inc., it avers that one Joseph Landow, a representative of the Administrator of the Wage and Hour Division, had reasonable grounds to believe that the Company was violating certain sections of the Fair Labor Standards Act of 1938, Title 29, U.S.C.A. § 201 et seq., and in the application with respect to the Easton Publishing Company, it avers that the Administrator had reasonable grounds to believe the Company was violating the Act. Accordingly, with these minor exceptions, since the questions raised by the respondents' motion to dismiss and the answer of the respondents to the petitioner's application concern themselves wholly with the same questions and since the actions both in oral argument and in the brief are treated as one, we will so consider them here.

Briefly, the petitioner avers that on April 2, 1940, Joseph Landow, an Inspector of the Wage and Hour Division of the Department of Labor, pursuant to instructions of his superior, visited the offices of each respondent and requested the right to make an inspection of their records as provided in Section 11 (a) of the Fair Labor Standards Act; that the companies refused to permit him to make an inspection; that Frank J. Dorsey, Regional Director of the Wage and Hour Division at Philadelphia, under power delegated to him by the Administrator on June 18, 1940 issued a written order of investigation for each company and designated his representatives, among whom was Robert M. Anderson, for the purpose of making the investigation; that pursuant to the making of the investigation, Robert M. Anderson caused to be issued and served a subpoena duces tecum, upon respective officers of each respondent, pursuant to the authority conferred in the order of the Regional Director aforesaid; that said subpœna duces tecum fixed the time for hearing as June 21, 1940 and set forth the production of certain specific books, papers, documents and records to be produced on that date; that each of the respondents failed to appear at the time designated in the subpoena and the inspectors who were present for the hearing were advised by letter by counsel for the respondents, that the respondents would not appear as the subpoena violated certain constitutional rights.

On August 13, 1940 the Administrator, Philip B. Fleming, made application for an order on the respondents to show cause on or before the 28th of August, 1940 why the respondents should not make production of the books and records applied for in the subpoena. To this a motion to dismiss was filed by the respondents averring that (1) the Administrator, Philip B. Fleming, lacked jurisdiction under the statute since under Sections 4 and 9 thereof, he was prohibited from bringing action and (2) that the purported subpoena duces tecum was a nullity without warrant or authority of law, and was not issued or served by the petitioner as required by the statute.

The questions raised under the motion to dismiss will be disposed of separately, the first being the alleged lack of jurisdiction on the part of the Administrator.

The subpoena here concerns itself with the proposed inspection of the respondents' books and other records as provided in Section 11 (a) of the Fair Labor Standards Act, as it is averred in the petitions that there was reasonable grounds to believe that the companies had been violating provisions of Sections 7, 11 (c), 15(a) (1), 15(a) (5), respectively, of the Act. That Congress, in the public interest, has the power to regulate and supervise the conduct of any particular business under the commerce clause, Const. art. 1, § 8, cl. 3, and that an administrative agency may be authorized to inspect books and records regardless of whether there is any pre-existing probable cause for believing that there has been a violation of the law, can no longer be doubted. Fleming v. Montgomery Ward & Co., 7 Cir., 114 F.2d 384.

For the purpose of any hearing or investigation as provided for in Section 11 of the Act, Section 9 thereof makes applicable the provisions of Sections 9 and 10, relating to the attendance of witnesses and the production of books, papers and documents, of the Federal Trade Commission Act of September 26, 1914, as amended, U.S.C.A. Title 15, §§ 49 and 50, to the jurisdiction, powers, and duties of the Administrator. Section 9 of the Federal Trade Commission Act, after giving the Commission or its agents the right to examine any documentary evidence of a corporation being investigated or proceeded against, says in Paragraph 2 thereof: "Such attendance of witnesses, and the production of such documentary evidence, may be required from any place in the United States, at any designated place of hearing. And in case of disobedience to a subpœna...