Kendall v. Keith Furnace Co.

• Decision Date: 04 August 1947
• Docket Number: No. 13446.,13446.
• Citation: 162 F.2d 1002
• Parties: KENDALL et al. v. KEITH FURNACE CO. et al.
• Court: U.S. Court of Appeals — Eighth Circuit

162 F.2d 1002 (1947)

KENDALL et al. v. KEITH FURNACE CO. et al.

No. 13446.

Circuit Court of Appeals, Eighth Circuit.

August 4, 1947.

J. R. McManus, of Des Moines, Iowa (W. F. Maley, H. W. Manson, and C. A. Royal, all of Des Moines, Iowa, on the brief), for appellants.

Guy A. Miller, of Des Moines, Iowa, for appellees.

Before SANBORN, WOODROUGH, and JOHNSEN, Circuit Judges.

JOHNSEN, Circuit Judge.

The question is whether the provisions of an Iowa statute of limitations constitute a valid bar to some causes of action for overtime compensation and liquidated damages under the Fair Labor Standards Act of 1938, as amended, 29 U.S.C.A. § 201 et seq. The suit was tried in the District Court and appealed here prior to the enactment of the Portal-to-Portal Act of 1947, Public Law 49, 80th Cong., approved May 14, 1947, 29 U.S.C.A. § 251 et seq.

The provisions in question were enacted by the Iowa legislature in 1945 (Acts Iowa 51st Gen.Assem., c. 222), as a new subsection to the general statute of limitations of that State (Code of Iowa 1939, § 11007).¹ They created a limitation of two years, after accrual of the right to sue, on all causes of action "for wages or for a liability or penalty for failure to pay wages," with a saving and clean-up clause that "Any present existing causes of action must be commenced * * * within six (6) months after the effective date of this act."²

The Act was approved March 29, 1945, and, since it contained no publication clause it became effective under Art. III, sec. 26 of the Iowa Constitution on July 4, 1945.

The claims for overtime compensation and liquidated damages that are involved had accrued prior to July 4, 1945. The action was commenced on March 7, 1946. The District Court for the Southern District of Iowa held that the suit was barred under the saving and clean-up clause of the Iowa Act, as not having been commenced within six months after July 4, 1945. It accordingly entered a summary judgment dismissing the action.

The District Court for the Northern District of Iowa had similarly upheld the validity of the Iowa Act and applied the limitation of the saving and clean-up clause in another Fair Labor Standards Act case, not now before us, Reid v. Solar Corporation, D.C.N.D. Iowa., 69 F.Supp. 626.

Some of the contentions made against the Iowa Act in its application to the present causes of action are sufficiently answered by the indication of congressional intent and policy contained in the recent Portal-to-Portal Act, Public Law 49, 80th Cong., approved May 14, 1947 (introduced as H.R. 2157).

On the question of limitations, section 6 of the Portal-to-Portal Act, 29 U.S.C.A. § 255, provides:

"Statute of limitations. Any action commenced on or after the date of the enactment of this Act to enforce any cause of action for unpaid minimum wages, unpaid overtime compensation, or liquidated damages, under the Fair Labor Standards Act of 1938, as amended, * * *

"(a) if the cause of action accrues on or after the date of the enactment of this Act — may be commenced within two years after the cause of action accrued, and every such action shall be forever barred unless commenced within two years after the cause of action accrued;

"(b) if the cause of action accrued prior to the date of the enactment of this Act — may be commenced within whichever of the following periods is the shorter: (1) two years after the cause of action accrued, or (2) the period prescribed by the applicable State statute of limitations; and, except as provided in paragraph (c), every such action shall be forever barred unless commenced within the shorter of such two periods;

"(c) if the cause of action accrued prior to the date of the enactment of this Act, the action shall not be barred by paragraph (b) if it is commenced within one hundred and twenty days after the date of the enactment of this Act unless at the time commenced it is barred by an applicable State statute of limitations."

The statement of the managers on the part of the House (House Report No. 326, 80th Cong., 1st Sess.), accompanying the Conference Report of the House and Senate conference committees on H.R. 2157, made the following explanation of these provisions (pp. 13, 14):

"Under the House bill and the Senate amendment there was a statute of limitations on actions commenced on or after the date of the enactment of the bill to enforce any cause of action for unpaid minimum wages, unpaid overtime compensation, or liquidated damages * * *. Under the House bill the period was one year and under the Senate amendment two years.

"Section 6 of the bill as agreed to in conference provides for a two-year statute of limitations (regardless of the period of limitation provided by any State statute) with respect to any action commenced on or after the date of enactment of the bill to enforce any cause of action for unpaid minimum wages, unpaid overtime compensation, or liquidated damages, * * * if the cause of action accrues on or after the date of the enactment of the bill. If the action is not commenced within two years after the cause of action accrued, it is to be forever barred.

"If the cause of action accrued prior to the date of the enactment of the bill, action thereon may be commenced within two years after the cause of action accrued or, in the case of a State having a shorter statute of limitations, the period prescribed by the applicable State statute of limitations; but if such action is commenced within one hundred and twenty days after the date of the enactment of the bill, the applicable State statute of limitations (whether longer or shorter than two years) will apply to such action. In other words, in such latter case, if a State statute of limitations, applicable to such cause of action, has run, no action on such claim may be commenced within such 120-day period. If the applicable State statute of limitations has not run, action may be so commenced within such 120 days, and may go back as far as permitted by the applicable State statute of limitations whether more or less than two years. * * *."

The provisions of section 6 of the Portal-to-Portal Act certainly make it unnecessary to discuss such contentions as that Congress never intended that the varying state statutes of limitation should apply to the Fair Labor Standards Act as rules of decision under 28 U.S.C.A. § 725, for the reason that uniformity in the right to enforce minimum-wage, overtime-compensation and liquidated-damage claims is essential to the achievement of the fundamental national purpose of the Act, or that the application of the Iowa statute of limitations in the present case would effect an improper interference with the scope of the regulation of commerce which Congress had designed to make in enacting the Fair Labor Standards Act. And we might add that, even without the answer which section 6 of the Portal-to-Portal Act has thus specifically provided, these general contentions could hardly have been taken too seriously, for it must be borne in mind that "to no class of state legislation has the rules of decision statute been more steadfastly and consistently applied than to statutes prescribing the time within which actions shall be brought within its jurisdiction."³ Campbell v. City of Haverhill, 155 U.S. 610, 614, 15 S.Ct. 217, 219, 39 L. Ed. 280.

There also would seem to be no need to pause long on the contention that the Iowa statute is invalid as an attempt to discriminate against rights arising under federal laws, either directly or in comparison with rights arising under state laws. The language of the statute does not single out rights arising under federal laws, such as did a previous Iowa Act which we held invalid in Republic Pictures Corporation v. Kappler, 8 Cir., 151 F.2d 543, 162 A.L.R. 228, affirmed 327 U.S. 757, 66 S.Ct. 523, 90 L.Ed. 991, and no such legal effect can be said to be produced by its operation. The limitation has application to all claims for wages in the State of Iowa, no matter in what industry occurring, and to all liabilities or penalties for failure to pay wages, whether created by some provision in an employment contract or by some state or federal law. And Iowa has long had a state statute providing a liability for failure to pay certain wages, upon which the limitation operates.

Thus, Code of Iowa 1939, § 1322, Code of Iowa 1946, § 82.112, applicable to the coal mining industry in the State, provides: "All wages shall be paid in money upon demand semimonthly, by paying the amount earned during the first fifteen days of each month not later than the first Saturday after the twentieth of said month, and for those earned after the fifteenth of each month not later than the first Saturday after the fifth of the succeeding month. A failure or refusal to make payment within five days after demand shall entitle the laborer to recover the amount due him, and one dollar per day additional, not exceeding the amount due, for each day such payment is neglected or refused, and in any action therefor the court shall tax as a part of the costs a reasonable attorney fee to plaintiff's attorney."

As we have said, there is no discrimination against rights arising under federal laws either by the terms of the Iowa statute of limitations or in its operative effect. And so, unless the period of limitations itself is clearly unreasonable when applied to Fair Labor Standards Act claims, there further can be no room to argue that the statute was enacted "in manifest hostility to federal rights." In a legal sense, as a basis for challenging a state statute, "manifest hostility to federal rights" is not a question of the...