Lorenzetti v. American Trust Co., No. 21826

CourtUnited States District Courts. 9th Circuit. United States District Courts. 9th Circuit. Northern District of California
Writing for the CourtCharles R. Garry, of San Francisco, Cal., for plaintiff Semeria et al
Citation45 F. Supp. 128
PartiesLORENZETTI v. AMERICAN TRUST CO. et al. SEMERIA et al. v. WELLS FARGO BANK & UNION TRUST CO. et al.
Decision Date19 May 1942
Docket Number21889.,No. 21826

45 F. Supp. 128

LORENZETTI
v.
AMERICAN TRUST CO. et al.
SEMERIA et al.
v.
WELLS FARGO BANK & UNION TRUST CO. et al.

Nos. 21826, 21889.

District Court, N. D. California, S. D.

May 19, 1942.


45 F. Supp. 129
COPYRIGHT MATERIAL OMITTED
45 F. Supp. 130
Picard & McCarty and Francis McCarty, all of San Francisco, Cal., for plaintiff Lorenzetti

Charles R. Garry, of San Francisco, Cal., for plaintiff Semeria et al.

Brobeck, Phleger & Harrison, of San Francisco, Cal., for defendant American Trust Co.

Heller, Ehrman, White & McAuliffe, of San Francisco, Cal., for defendant Wells Fargo Bank & Union Trust Co.

Keyes & Erskine, of San Francisco, Cal., for defendant American Bldg. Maintenance Co. et al.

Warner W. Gardner, Sol., Irving J. Levy, Associate Sol., and Jacob D. Hyman, Principal Atty., all of Washington, D. C., and Dorothy M. Williams, Regional Atty., of San Francisco, Cal. (Abner Brodie and Erwin B. Ellmann, both of Washington, D. C., of counsel), for Wage & Hour Division, United States Department of Labor, Amicus Curiae.

ST. SURE, District Judge.

Plaintiffs each brought action under the Fair Labor Standards Act of 1938, 29 U.S. C.A. § 201 et seq., for overtime compensation, liquidated damages, costs, and attorneys' fees, under Section 16(b) of the

45 F. Supp. 131
Act,1 on the ground that they are employees engaged in interstate commerce or the production of goods for commerce, within the meaning of the Act. Plaintiff Lorenzetti and other parties in interest whom he represents in Action No. 21889-S, worked as janitors in the building of the defendant American Trust Company. In Action No. 21826-S plaintiff Semeria represents himself and others who did the janitorial work for the defendant Wells Fargo Bank and Union Trust Company. The American Building and Maintenance Company, which is a defendant in both actions, contracted with defendant banks to furnish to them all janitorial service and equipment on a flat monthly basis, and pursuant to its contracts, employed and paid the janitors to work at the banks. The actions, which involve similar questions, were tried together

The court will first consider whether the banks are engaged in interstate commerce.

The banks are California corporations. During the period covered by the actions some of the out-of-state dealings of the American Trust Company were as follows: It maintained accounts in banks in other states and in foreign countries, and out-of-state and foreign banks had accounts with it. It conducted business and communicated with many other banks outside of California. It mailed commercial paper representing several million dollars to points outside of California. It received for deposit transfer checks, promissory notes, bonds, coupons, letters of credit, certificates and warrants, from outside the state. It loaned millions of dollars to borrowers outside the state. It loaned money on canned goods and dried fruit which was shipped out of California. It issued commercial letters of credit covering importations from foreign countries and other states, and received letters of credit for goods being shipped out of California, involving large amounts of money. The amount of drafts with bills of lading attached sent out of the state and received from points outside the state totalled many millions of dollars. The bank purchased and sold bonds outside the state, and acted as agent for banks in other states for the purchase and sale of securities. Credit information was obtained from outside the state by wire and mail. The bank had daily contact with dealers in securities, by wire, teletype or telephone. It rendered an investment service to persons not residents of California. Its trust department managed estates for beneficiaries outside the state. It acted as transfer agent for nonresidents of the state, and mailed the stock certificates to the new holders. It prepared new issues of stock in its trust departments, and received stock from customers and banks outside the state for the purpose of issuing new certificates. In connection with the probate of estates, the bank sometimes bought and sold real property in other states. It mailed checks and other negotiable instruments for collection out of state, and also acted as collection agent for other banks. It was a member of the Federal Reserve System, and was enabled by such membership to transmit credit throughout the United States. It frequently collected commercial items for the Federal Reserve System. The bank sold travelers' checks to its customers for use all over the world, and received commissions for such sales. It took security title in goods which moved in interstate and foreign commerce, and bought and sold foreign exchange. It advertised occasionally in national publications and in a foreign banking directory. In its activities the bank constantly employed the channels of interstate communication.

It was stipulated at the trial that the interstate transactions of the Wells Fargo Bank during this period were substantially the same as those of the American Trust Company.

45 F. Supp. 132

Defendants say that although banking affects commerce it does not constitute commerce.

No cases have been found which directly hold that banks are or are not engaged in interstate commerce. Defendants cite as authority that private banks are not so engaged, Engel v. O'Malley, 219 U.S. 128, 31 S.Ct. 190, 55 L.Ed. 128, and Musco v. United Surety Co., 196 N.Y. 459, 90 N.E. 171, 134 Am.St.Rep. 851. The first case held that a state statute regulating the receipt of deposits did not burden interstate or foreign commerce though the receipt of the money might later lead to its transmission over state lines. The language used by Mr. Justice Holmes would indicate that he considered some aspects of banking might be interstate commerce:

"When, as in this matter, the Constitution takes from the states only a portion of their otherwise absolute control, there may be expected difficulties in drawing the dividing line, because where it shall be put is a question of more or less. The trouble is inherent in the situation, but it is the same in kind that meets us everywhere else in the law. The question is whether the state law creates a direct burden upon what it is for Congress to control, and the facts of the specific case must be weighed." 219 U.S. 128, 31 S.Ct. 193, 55 L.Ed. 128.

This case did not hold that interstate banking would not constitute interstate commerce, but that the regulation by the state of a local phase of banking did not infringe the commerce clause.

The case of Musco v. United Surety Co., supra, involved a similar statute, regulating the taking of deposits by institutions other than transatlantic steamship companies, banks, and trust companies. The court held the statute valid, but said (196 N.Y. at pages 467 and 468, 90 N.E. at page 174, 134 Am.St.Rep. 851):

"It is doubtless true that this statute regulating the receipt of deposits may incidentally and indirectly affect the business of transmitting moneys abroad. But it is well settled that the law, although in a limited degree affecting interstate commerce, is not for that reason a needless intrusion upon the federal jurisdiction or strictly a regulation of interstate commerce, but is to be considered as an ordinary police regulation, and therefore not invalid. Hennington v. Georgia, 163 U.S. 299, 16 S.Ct. 1086, 41 L.Ed. 166."

The field of interstate commerce is an ever broadening one. It was said in Kentucky Whip & Collar Co. v. Illinois Cent. R. Co., D.C., 12 F.Supp. 37, 41, 44, affirmed 299 U.S. 334, 57 S.Ct. 277, 81 L.Ed. 270:

"New necessities, new evolutions of society into more complex conditions, evoke the exercise of an old power in a new way. The control of new things does not require new power if the old power still exists. * * *

"The economic tide is inevitably forcing on the courts the need for giving ever expanding latitude to the commerce clause of the Constitution. Any other course will unerringly lead to a retardation of our civilization."

In 1824, in Gibbons v. Ogden, 9 Wheat. 1, 229, 6 L.Ed. 23, holding that Congress had exclusive jurisdiction over navigable waters, Mr. Justice Johnson defined commerce as follows:

"Commerce, in its simplest signification, means an exchange of goods; but in the advancement of society, labor, transportation, intelligence, care, and various mediums of exchange, become commodities, and enter into commerce; the subject, the vehicle, the agent, and their various operations, become the objects of commercial regulation."

In Adair v. United States, 208 U.S. 161, 177, 28 S.Ct. 277, 281, 52 L.Ed. 436, 13 Ann.Cas. 764, the phrase "commerce among the several states" was defined as comprehending "traffic, intercourse, trade, navigation, communication, the transit of persons, and the transmission of messages by telegraph, — indeed, every species of commercial intercourse among the several states * * *."

The tendency of the courts in recent years, particularly in the case of remedial and social legislation, has been to give an even more liberal construction to the words "interstate commerce", and to hold constitutional Federal laws covering matters over which the states have had exclusive jurisdiction. They also tend to apply these laws over a wide field.

The Fair Labor Standards Act is remedial, with a humanitarian end in view, and therefore is entitled to a liberal construction. See Bowie v. Gonzalez, 1 Cir., 117 F.2d 11; Lefevers v. General Export Iron & Metal Co., D.C., 36 F.Supp. 838; Fleming v. Hawkeye Pearl Button Co.,

45 F. Supp. 133
8 Cir., 113 F.2d 52; Tennessee Coal, Iron & R. Co. v. Muscoda Local No. 123, D.C., 40 F.Supp. 4; Divine v. Levy, D.C., 39 F.Supp. 44

Interstate commerce "is not a technical legal conception, but a practical one, drawn from the course of business." Swift & Co. v. United States, 196 U.S. 375, 398, 25 S.Ct. 276, 280, 49 L.Ed. 518.

In the case at bar, more...

To continue reading

Request your trial
27 practice notes
  • Hitchcock v. Union & New Haven Trust Co.
    • United States
    • Supreme Court of Connecticut
    • December 17, 1947
    ...v. Bell & Loffland, Inc., 9 Cir., 146 F.2d 29; see Cal.Code Civ.Proc. Deering, 1941, §§ 338, 339; Lorenzetti v. American Trust Co., D.C., 45 F.Supp. 128, 140; Abram v. San Joaquin Cotton Oil Co., D.C., 46 F.Supp. 969, 975; Fullerton v. Lamm, 177 Or. 655, 661, 163 P.2d 941, 165 P.2d 63; Wals......
  • Cannon v. Miller, 29384.
    • United States
    • United States State Supreme Court of Washington
    • January 26, 1945
    ...by virtue of the statute and is therefore to be classified as a liability created by statute. Lorenzetti v. American Trust Co., D.C.Cal., 45 F.Supp. 128; Abram v. San Joaquin Cotton Oil Co., D.C.Cal., 46 F.Supp. 969; Drenne v. Mutual Life Ins. Co. of New York, Sup., 42 N.Y.S.2d 259; Walsh v......
  • Smith v. Cudahy Packing Co., Civil Action No. 935.
    • United States
    • United States District Courts. 8th Circuit. United States District Court of Minnesota
    • September 15, 1947
    ...based upon a liability created by statute, rather than one upon an express or implied contract. Lorenzetti v. American Trust Co., D.C., 45 F.Supp. 128; Bright v. Hobbs, D.C., 56 F.Supp. 723; Cannon v. Miller, 22 Wash.2d 227, 155 P.2d 500, 157 A.L.R. 530; Fullerton v. Lamm, 177 Or. 655, 163 ......
  • Walling v. Block, No. 10281.
    • United States
    • United States Courts of Appeals. United States Court of Appeals (9th Circuit)
    • November 19, 1943
    ...Wood v. Central Sand & Gravel Co., D.C., 33 F.Supp. 40, 43, quoted from by the appellee himself; Lorenzetti v. American Trust Co., D.C., 45 F.Supp. 128, 132, Conversely, the exemptions in an humanitarian statute should be strictly construed, to the end that only those persons clearly and sp......
  • Request a trial to view additional results
27 cases
  • Hitchcock v. Union & New Haven Trust Co.
    • United States
    • Supreme Court of Connecticut
    • December 17, 1947
    ...v. Bell & Loffland, Inc., 9 Cir., 146 F.2d 29; see Cal.Code Civ.Proc. Deering, 1941, §§ 338, 339; Lorenzetti v. American Trust Co., D.C., 45 F.Supp. 128, 140; Abram v. San Joaquin Cotton Oil Co., D.C., 46 F.Supp. 969, 975; Fullerton v. Lamm, 177 Or. 655, 661, 163 P.2d 941, 165 P.2d 63; Wals......
  • Cannon v. Miller, 29384.
    • United States
    • United States State Supreme Court of Washington
    • January 26, 1945
    ...by virtue of the statute and is therefore to be classified as a liability created by statute. Lorenzetti v. American Trust Co., D.C.Cal., 45 F.Supp. 128; Abram v. San Joaquin Cotton Oil Co., D.C.Cal., 46 F.Supp. 969; Drenne v. Mutual Life Ins. Co. of New York, Sup., 42 N.Y.S.2d 259; Walsh v......
  • Smith v. Cudahy Packing Co., Civil Action No. 935.
    • United States
    • United States District Courts. 8th Circuit. United States District Court of Minnesota
    • September 15, 1947
    ...based upon a liability created by statute, rather than one upon an express or implied contract. Lorenzetti v. American Trust Co., D.C., 45 F.Supp. 128; Bright v. Hobbs, D.C., 56 F.Supp. 723; Cannon v. Miller, 22 Wash.2d 227, 155 P.2d 500, 157 A.L.R. 530; Fullerton v. Lamm, 177 Or. 655, 163 ......
  • Walling v. Block, No. 10281.
    • United States
    • United States Courts of Appeals. United States Court of Appeals (9th Circuit)
    • November 19, 1943
    ...Wood v. Central Sand & Gravel Co., D.C., 33 F.Supp. 40, 43, quoted from by the appellee himself; Lorenzetti v. American Trust Co., D.C., 45 F.Supp. 128, 132, Conversely, the exemptions in an humanitarian statute should be strictly construed, to the end that only those persons clearly and sp......
  • Request a trial to view additional results

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT