Fleming v. Miller

Decision Date14 November 1942
Docket NumberNo. 255.,255.
Citation47 F. Supp. 1004
PartiesFLEMING, Administrator of Wage and Hour Division, United States Department of Labor, v. MILLER et al.
CourtU.S. District Court — District of Minnesota

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Warner W. Gardner, Sol., and Roy C. Frank, Asst. Sol., both of Washington, D. C., Donald M. Murtha, Regional Atty., of Minneapolis, Minn., and Lester M. Levin, Principal Atty., of Washington, D. C., all of Wage and Hour Division, United States Department of Labor, for plaintiff.

Doherty, Rumble, Butler, Sullivan & Mitchell, of St. Paul, Minn., and Feldman, Kittelle, Campbell & Ewing, of Washington, D. C., for defendants.

JOYCE, District Judge.

This matter is before the court on a motion by defendants to vacate, suspend or modify a consent decree entered herein on July 17, 1941, and to permit defendants to defend the proceeding on the merits.

The consent decree in question was entered against defendants pursuant to a stipulation between them and plaintiff. It ordered defendants to refrain from violating the Fair Labor Standards Act and to pay to their employees an amount of money which was equal to the difference between what the employees received as wages and what they would have received if defendants had complied with the Act since it became effective. However, the parties agreed that the entry of the consent decree did not constitute an admission by defendants that they had violated the Act.

Defendants' counsel informed the court when the decree was entered that his clients were fully aware of their responsibility under the decree. Since its entry various things have taken place which defendants claim entitle them to relief from the decree:

1. The United States Supreme Court has affirmed the case of Walling v. A. H. Belo Corporation, 316 U.S. 624, 62 S.Ct. 1223, 86 L.Ed. 1716; Fleming v. A. H. Belo Corp., 5 Cir., 121 F.2d 207, which defendants claim is in point in the instant case and which they have discovered since entry of the decree.

2. On October 6, 1941, the Interstate Commerce Commission held that the employees of Addison Miller, Inc. (Minn.), were employees of a "carrier" under Part I of the Interstate Commerce Act, 49 U.S. C.A. § 1 et seq. (I.C.C.Docket, Ex Parte No. 72, Sub. No. 1), reversing the decision of the Examiner and Third Division of the I.C.C. made prior to the decree.

3. In 1941 the Emergency Mediation Board, operating under the provisions of the Railway Labor Act, 45 U.S.C.A. §§ 151-163, exercised jurisdiction over Addison Miller Company subsequent to the entry of the decree.

4. The Railroad Retirement Board, which is created by the Railroad Retirement Act, 45 U.S.C.A. § 228a et seq., is apparently preparing to exercise jurisdiction over some of the defendants.

5. Several employees of the Addison Miller Company and employees of Addison Miller, Inc. (Ill.) are now bringing suit against those defendants under Section 16 (b) of the Fair Labor Standards Act, 29 U.S.C.A. § 216(b), seeking back wages and the damages allowed by the Act.

Since entry of the decree defendants have employed new counsel who are pressing the motion here involved. The motion is based upon several grounds, to-wit:

(1) The decree is defective.

(2) The court lacked jurisdiction to order restitution of any wages due under the Fair Labor Standards Act.

(3) Defendants' former counsel was probably mistaken with respect to defendants' liability under the Fair Labor Standards Act, and therefore defendants are entitled to at least a modification of the decree because of Rule 60(b) of the Rules of Civil Procedure, 28 U.S.C.A. following section 723c.

(4) The change in circumstances since the entry of the decree requires that the court exercise its equitable power and grant defendants relief from the decree, for otherwise "inconsistent liabilities" would exist under the Railway Acts and the Fair Labor Standards Act.

Plaintiff contests all of defendants' arguments, and urges that the decree stand.

(1) IS THE DECREE SO DEFECTIVE THAT IT SHOULD BE CHANGED?

Defendants contend that the decree should be modified, vacated or suspended because it enjoins any violations of the Act, whereas the complaint asks that only certain specified violations be enjoined.

This case involves the enforcement of the Wage and Hour Law. Section 17 of that Act, 29 U.S.C.A. § 217, invests in United States District Courts jurisdiction to restrain violations of Section 15, 29 U.S.C.A. § 215. Since the complaint asked that the defendants be ordered to comply with the Act and that an injunctive decree so ordering be granted, this court obviously possessed jurisdiction over the subject matter of the action. The defendants all appeared by counsel so that the court also possessed jurisdiction over the persons involved. In fact, no question was raised in that respect. Consequently, the fact that the court granted a greater degree of relief than the complaint requested seems immaterial, for the statute empowered the court to grant injunctive decrees to restrain violations of the act. The error, if it is an error, is not one going to the question of the court's possessing jurisdiction over the subject matter; it goes to the question of the exercise of that jurisdiction, and the attack should be by appeal rather than by a motion to vacate, modify or suspend.

Swift & Co. v. United States, 276 U.S. 311, 48 S.Ct. 311, 316, 72 L.Ed. 587, cited by plaintiff, supports the conclusion that an attack upon a consent decree which affords plaintiff a greater degree of relief than that for which plaintiff petitioned cannot be made by a motion to vacate or modify if the court entering the decree had jurisdiction over the parties and the subject matter. The court said. "Obviously the generality of a court's decree does not render it subject to a motion to vacate."

This case has been followed by the lower Federal Courts in Securities and Exchange Comm. v. Jones, D.C.S.D.N.Y., 15 F.Supp. 321, affirmed in 2 Cir., 85 F.2d 17; Bullard v. Com'r of Internal Revenue, 7 Cir., 90 F.2d 144; Smyth v. United States, 10 Cir., 92 F.2d 900, 901. The rule seems sound in view of the doctrine that parties may litigate by consent issues not raised by the pleadings if the court has jurisdiction over the subject matter.

In opposition to the Swift case defendants rely upon National Labor Relations Board v. Express Publishing Co., 312 U.S. 426, 61 S.Ct. 693, 85 L.Ed. 930; Fleming v. Salem Box Co., D.C., 38 F.Supp. 997; and Milk Wagon Drivers Union v. Meadowmoor Farms, 312 U.S. 287, 61 S.Ct. 552, 85 L.Ed. 836, 132 A.L.R. 1200. However, the first case involved a contested decree which was before the court on an appeal, and the cases relied upon by the court in that case, including the Swift case, are the same kind. No courts, so far as I am advised, have applied the rule of that case to a consent decree. The Salem Box Company case involves a consent decree, but the question of the generality of the decree appears to have been raised by the court when the decree was made. Whether the parties could raise the question, or when it could be raised, was not involved. The fact that plaintiff consented to the modification of that decree seems immaterial here. The Meadowmoor case involved the review of a decree directing a permanent injunction against acts of violence and picketing by a labor union. The warning of the misuse of an appropriate injunction had to do with encroachments on free discussion, and the court's availability to correct finds no analogy in the instant facts.

Therefore, in view of the general rule that a court's decree cannot be collaterally attacked if the court possessed jurisdiction over the subject matter and the parties, I am of the opinion that the decree should not be modified because of its generality and broadness.

Neither do I agree with defendants' contention that plaintiff was estopped from bringing this action because of plaintiff's employee informing them their practices were not violative of the Act, for the United States Government cannot be estopped from enforcing a statute because of the interpretation placed upon it by its "officers or agents". United States v. San Francisco, 310 U.S. 16, 60 S.Ct. 749, 757, 84 L.Ed. 1050.

Defendants also contend that the decree violates Rule 65(d) of the Rules of Civil Procedure. This rule pertains to the form of the decree. 3 Moore's Federal Practice 3324, which cites Lawrence v. St. Louis-San Francisco R. Co., 274 U.S. 588, 47 S.Ct. 720, 71 L.Ed. 1219, and Druggan v. Anderson, 269 U.S. 36, 46 S.Ct. 14, 70 L.Ed. 151, holds that the failure to comply with a provision like Rule 65(d) does not render the decree void. The Lawrence case interprets 28 U.S.C.A. § 383 and the Druggan case interprets a Prohibition Act, 27 U.S.C.A. § 34, provision. Both provisions are similar to Rule 65(d), and Moore declares that no distinction can really be drawn. Such provisions were held to be not mandatory. Defendants cite no cases in support of their contention and did not press their argument that the rule has been violated.

Defendants further contend that "in view of the probable application of the Railroad Labor Acts" they are exempt from Section 7 of the Fair Labor Standards Act, 29 U.S.C.A. § 207, and that therefore the court did not have jurisdiction to grant the decree. I am of the view, however, that the defendants' liability under the railway acts (if they are liable) would not affect the court's power to enjoin violations of the Wage and Hour Act. It would go only to the question of whether the court should exercise its power with respect to them.

(2) DOES THE COURT POSSESS JURISDICTION TO ORDER RESTITUTION IN THIS CASE?

This is an equitable action based upon Section 17 of the Fair Labor Standards Act. Since Section 17 does not authorize the court expressly to order the payment of back wages in actions brought under that section, those awards can be granted only as a result of the equity court's power to...

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