Keen v. Mid-Continent Petroleum Corporation

• Decision Date: 21 November 1945
• Docket Number: No. 131.,131.
• Parties: KEEN v. MID-CONTINENT PETROLEUM CORPORATION.
• Court: U.S. District Court — Northern District of Iowa

63 F. Supp. 120

KEEN v. MID-CONTINENT PETROLEUM CORPORATION.

No. 131.

District Court, N. D. Iowa, Central Division.

September 28, 1945.

On Motion for New Trial November 21, 1945.

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Leslie L. Boomhower and L. R. Boomhower, both of Mason City, Iowa, for plaintiff.

J. P. Greve, of Tulsa, Okl., for defendant.

Douglas B. Maggs, Sol., and Archibald Cox, Associate Sol., both of Washington, D.C., and Reid Williams, Regional Atty., of Kansas City, Mo., for Administrator of Wage and Hour Division, United States Department of Labor, amicus curiae.

GRAVEN, District Judge.

Case under Fair Labor Standards Act, 29 U.S.C.A. § 201 et seq., involving questions relating to statute of limitations, "engaged in commerce", interstate shipments coming to "rest", a "substantial" part of work week, mixture of intrastate and interstate duties, illness, waiver of claim, attorney's fee and interest. The question of the statute of limitations in the instant case was previously argued at length in connection with the defendant's motion to strike and for summary judgment. The opinion of this Court in overruling that motion appears in Keen v. Mid-Continent Petroleum Corporation, D.C.N.D.Iowa, 1945, 58 F.Supp. 915. The briefs and arguments of the amicus curiae in this case had to do with the question of the statute of limitations. In connection with the trial of the case on its merits the parties have re-argued and submitted additional briefs on the question of the statute of limitations. The plaintiff in this action seeks to recover "unpaid overtime compensation" and "liquidated damages" during his employment by the defendant as maintenance man for the period commencing October 24, 1938, to July 15, 1941. This action was commenced on October 5, 1944, or 3 years, 2 months and 20 days after the termination of plaintiff's employment.

During the period of plaintiff's employment and for a long time prior thereto there was in effect Section 11007, Subsection (5) of the 1939 Code of Iowa, which prescribes a five year period of limitation for actions "founded on unwritten contracts", and Subsection (6) of the same section provides a ten year period for actions "founded on" written contracts. Both of these subsections are still in effect. On March 19, 1943, the Iowa Legislature enacted Chapter 267 of the Laws of the 50th General Assembly, Section 1 of which provides as follows: "In all cases wherein a claim or cause of action has arisen or may arise pursuant to the provisions of any Federal statute wherein no period of limitation is prescribed, the holder of such claim or cause of action may commence action thereon within but not after a period of six months after March 1, 1943, if such claim or cause of action arose prior to March 1, 1943, or within but not later than six months after the accrual of such claim or cause of action if such claim or cause of action arose after March 1, 1943."

At the 1945 session of the Iowa Legislature there was enacted Senate File No. 94, which appears as Chapter 222 of the Laws of the 51st General Assembly. That Chapter repealed Chapter 267 of the Laws of the 50th General Assembly referred to, and added a new subsection to Section 11007 of the 1939 Code of Iowa, which reads as follows: "9 Those founded on claims for wages or for a liability or penalty for failure to pay wages, within two years. Any present existing causes of action must be commenced in any court of competent jurisdiction within six (6) months after the effective date of this act." The Act not bearing a publication clause went into effect as provided by the Constitution of Iowa on July 4, 1945. Iowa Constitution, Article III, Section 26. Hence Chapter 267 above referred to was repealed as of July 4, 1945. Chapter 222 is the first Iowa general statute of limitation referring specifically to wages, and actions for the recovery of wages in Iowa in the past were in general governed by the statutes of limitation relating to unwritten or written contracts. It was and is the defendant's claim that the plaintiff's action is barred by Chapter 267 heretofore referred to. While Chapter 267 has been repealed since July 4, 1945, yet it was in effect at the time the defendant filed its answer raising the defense of the statute of limitations. It is the Iowa rule that the statute of limitation in effect at the time the plea is filed that governs. Sleeth v. Murphy, 1844, Morris 321, 41 Am.Dec. 232. Thus if Chapter 267 is valid and applicable to this action, the plaintiff's action is barred. It was and is the contention of the plaintiff (1) that actions for the recovery of unpaid minimum compensation and liquidated damages under the Fair Labor Standards Act do not fall within the scope of Chapter 267, because they are actions "founded on" contract and not actions arising "pursuant to the provisions" of a Federal statute; and (2) that, if actions under the Fair Labor Standards Act are held to be actions arising "pursuant to the provisions" of a Federal statute, that Chapter 267 was invalid because (a) it discriminates against the rights bestowed by Federal statutes; (b) it, in effect, prevents the enforcement of rights bestowed by an Act of Congress and is, therefore, in conflict with the supreme law of the land; and (c) it unreasonably shortens the time within which suits may be brought and thus denies due process of law to the plaintiff.

This Court in ruling on this question in preliminary proceedings was of the view as set forth in 58 F. Supp. 915, that the plaintiff's action was essentially "founded on" contract, and was governed by the Iowa statute of limitations relating to unwritten and written contracts, and that the action was not within the scope of Chapter 267. The parties have submitted additional briefs and arguments on the question, citing a number of additional cases on the question including a number of decisions decided since the filing of the original opinion in this case. The absence of a Federal statute of limitations relating to actions under the Fair Labor Standards Act has resulted in employees included thereunder having periods of limitation from one year in Louisiana (see Loggins v. Steel Const. Co., 5 Cir., 1942, 129 F.2d 118) to twelve years in Maryland (see Bright v. Hobbs, D.C.Md.1944, 56 F.Supp. 723) in which to bring their actions. Such absence has also resulted in a contrariety of judicial opinions as to which particular statute of limitation of a particular state is applicable and as to the validity of certain such statutes. It has also resulted in a difference of views as between federal courts and state courts in the same state. See Cannon v. Miller, Wash.1945, 155 P.2d 500, and Cunningham v. Weyerhauser Timber Co., D.C.Wash.1943, 52 F.Supp. 654.

In the case of Kappler v. Republic Pictures Corporation, D.C.S.D.Iowa 1945, 59 F.Supp. 112, the District Court for the Southern District of Iowa held that Chapter 267 was not a bar to this type of action. The Court in that case in reference to Chapter 267 states commencing on page 116 of 59 F.Supp.: "It will be noted that this is a very peculiar statute as it is not a general statute of limitations but is directed only to the provisions of federal statutes. * * * The Legislature of the State of Iowa had no more right therefore to tack on this provision to the federal statutes than a city would have by ordinance to add a provision to acts of the state Legislature. It is not a question of constitutionality, but it is an attempt on the part of the Legislature of the State of Iowa to enter a field of legislation exclusively within the authority of the Congress of the United States. It is true that where there is no limitation of time in which a federal statute can be enforced the federal judiciary turns to the general statute of limitations of a state to determine the question of laches. But this rule and these decisions have nothing to do with the determination of the question of whether the Legislature of the State of Iowa had a right or authority to add to federal statutes provisions with reference to limitations on the time when actions might be maintained thereon."

In the case of Kurth v. E. H. Clark Lumber Co., Cir.Ct.Or., Dec. 18, 1944, an Oregon statute limiting to 90 days actions for "overtime or premium pay accrued or accruing, including penalties thereunder, required or authorized by any statute" was held unconstitutional because of interference with the Fair Labor Standards Act. In the case of Cannon v. Miller, Wash.1945, 155 P.2d 500, 507, the Supreme Court of Washington held that an action to recover overtime compensation and liquidated damages under the Fair Labor Standards Act is not governed by the Washington statute, Rem.Rev.Stat.Supp. § 159, subd. 3, providing a three year period of limitations for actions "upon a contract or liability, expressed or implied, which is not in writing, and does not arise out of any writing", but is an action arising from "a liability created by statute" and governed by the statute of limitations relating to such liability. The Washington Court states that there is a distinction between its present holding and its holdings in the prior cases of Oregon-Washington R. & Nav. Co. v. Seattle Grain Co., 106 Wash. 1, 178 P. 648, 185 P. 593, and Chicago Milwaukee & St. Paul R. Co. v. Frye & Co., 109 Wash. 68, 186 P. 668, wherein suits to recover undercharges for transportation where the charges were fixed by law were held not to be actions upon a liability created by statute, but were held to be contractual in nature so far as the statute of limitations was concerned.

The Eighth Circuit Court of Appeals held in the case of New v. Denison Clay Co., 1919, 260 F. 70, that an action by a carrier to recover undercharges for transportation where the bills of lading did not specify the rate, but the rate was in effect inserted by federal stat...