Marshall v. Victoria Transp. Co., Inc., s. 77-2263

• Decision Date: 04 October 1979
• Docket Number: 77-2274,Nos. 77-2263,s. 77-2263
• Parties: 24 Wage & Hour Cas. (BN 373, 87 Lab.Cas. P 33,842 CA 79-3454 F. Ray MARSHALL, Secretary of Labor, United States Department of Labor, Plaintiff-Appellant, v. VICTORIA TRANSPORTATION COMPANY, INC. and Doro Besteiro, Defendants-Appellees. F. Ray MARSHALL, Secretary of Labor, United States Department of Labor, Plaintiff-Appellant, v. BROWNSVILLE TRANSPORTATION COMPANY, INC. and Jose Colunga, Defendants- Appellees.
• Court: U.S. Court of Appeals — Fifth Circuit

Page 1122

603 F.2d 1122

24 Wage & Hour Cas. (BN 373, 87 Lab.Cas. P 33,842

CA 79-3454 F. Ray MARSHALL, Secretary of Labor, United

States Department of Labor, Plaintiff-Appellant, v. VICTORIA TRANSPORTATION COMPANY, INC. and Doro Besteiro,

Defendants-Appellees.

F. Ray MARSHALL, Secretary of Labor, United States

Department of Labor, Plaintiff-Appellant, v. BROWNSVILLE TRANSPORTATION COMPANY, INC. and Jose Colunga,

Defendants- Appellees.

Nos. 77-2263, 77-2274.

United States Court of Appeals, Fifth Circuit.

Oct. 4, 1979.

Carin A. Clauss, Sol. of Labor, Kerry L. Adams, Atty., U.S. Dept. of Labor, Washington, D.C., for plaintiff-appellant in Nos. 77-2263, 77-2274.

Homero M. Lopez, Brownsville, Tex., for defendants-appellees in Nos. 77-2263, 77-2274.

Appeals from the United States District Court for the Southern District of Texas.

Before WISDOM, HILL and VANCE, Circuit Judges:

VANCE, Circuit Judge:

Defendants operate two city bus lines, each of which serves portions of Brownsville, Texas. Plaintiff sued defendants charging that they employed workers in commerce, as defined by the Fair Labor Standards Act of 1938, as amended, 29 U.S.C. §§ 201-219, at rates of pay less than the minimum wage required by the Act, 29 U.S.C. § 206. Plaintiff further charged that defendants violated the overtime provisions of the Act, 29 U.S.C. § 207, by failing to compensate their employees for employment in excess of forty hours per week at rates not less than one and one-half times the rate at which they were employed.

As used in the Act, " 'Commerce' means trade, commerce, transportation, transmission, or communication among the several States or between any State and any place outside thereof." 29 U.S.C. § 203(b). Brownsville is separated from the Republic of Mexico by the Rio Grande River. The "commerce" alleged in this case is the transportation of persons travelling between Brownsville, Texas, and Mexico.

The district court granted summary judgments for defendants holding that their employees were not employed in commerce and that the employees therefore were not within the coverage of the Act. In reviewing a summary judgment we must view all evidence and the inferences to be drawn from the evidence in the light most favorable to the party opposing the motion. United States v. Diebold, Inc., 369 U.S. 654, 82 S.Ct. 993, 8 L.Ed.2d 176 (1962); Time, Inc. v. Ragano, 427 F.2d 219 (5th Cir. 1970). Before we examine the facts, however, we must consider the controlling principles of law.

Coverage depends on the special circumstances of the particular business involved. Walling v. Jacksonville Paper Co., 317 U.S. 564, 63 S.Ct. 332, 87 L.Ed. 460 (1943). The Supreme Court has recognized that the Act's purpose " ' . . . was to extend federal control in this field throughout the farthest reaches of the channels of interstate commerce.' And in determining what constitutes 'commerce' or 'engaged in commerce' we are guided by practical considerations." Overstreet v. North Shore Corp., 318 U.S. 125, 128, 63 S.Ct. 494, 496, 87 L.Ed. 656 (1943) (quoting Walling v. Jacksonville Paper Co., 317 U.S. at 567, 63 S.Ct. 332). This court is committed to giving the Act a broad, liberal construction. Brennan v. Wilson Building, Inc., 478 F.2d 1090 (5th Cir.), Cert. denied, 414 U.S. 855, 94 S.Ct. 156, 38 L.Ed.2d 105 (1973); Hayden v. Bowen, 404 F.2d 682 (5th Cir. 1968), Cert. denied, 395 U.S. 933, 89 S.Ct. 1995, 23 L.Ed.2d 448 (1969). No De minimis rule applies to the Act; any regular contact with commerce, no matter how small, will result in coverage. Mabee v. White Plains Publishing Co., Inc., 327 U.S. 178, 66 S.Ct. 511, 90 L.Ed. 607 (1946); Schultz v. Kip's Big Boy, Inc., 431 F.2d 530 (5th Cir. 1970); Mitchell v. Independent Ice & Cold Storage Co., 294 F.2d 186 (5th Cir. 1961), Cert. denied, 368 U.S. 952, 82 S.Ct. 394, 7 L.Ed.2d 386 (1962). We must determine whether the work of defendants' employees is actually in commerce or is so closely related to the movement of commerce that it is for practical purposes a part of it rather than an isolated local activity. Mitchell v. C. W. Vollmer & Co., 349 U.S. 427, 75 S.Ct. 860, 99 L.Ed. 1196 (1955).

Both defendants maintain downtown terminals a short distance from the International Bridge that crosses the Rio Grande. ¹ Defendant Brownsville Transportation operates five regular fare paying routes in the western part of the city. Defendant Victoria operates four regular fare paying routes in the eastern part. Under contractual arrangements with merchants and shopping center operators, each defendant also operates a route providing free bus service to the vicinity of Amigoland Mall, a shopping center.

The routes of both defendants are within walking distance of the bridge that connects Texas to Mexico. In addition, Mexican passengers can be delivered to the terminals of both companies by private automobile as well as Mexican bus. Eighteen and seven-tenths percent of all fare paying passengers on defendant Brownsville Transportation's buses either originate or terminate their journeys in Mexico. The comparable figure for defendant Victoria is 14.2%. Defendants convey these international travelers to and from widely distributed locations in Brownsville. Approximately a half million passengers per year ride the free buses to Amigoland. A large number of those passengers entered Texas by walking across the bridge from Mexico. ² The evidence before the district court demonstrates that, although defendants' employees do not cross into Mexico, a substantial, regular and recurring part of their work consists of transporting persons that are making international journeys.

Defendants argue that this activity is not sufficient to result in coverage because their business is essentially local and is only incidentally related to the international journeys of their passengers. The defense contentions rest on United States v. Yellow Cab Co., 332 U.S. 218, 67 S.Ct. 1560, 91 L.Ed. 2010 (1947) and Mateo v. Auto Rental Co., 240 F.2d 831 (9th Cir. 1957).

Reliance on Yellow Cab raises two immediate problems. First, it is an anti-trust suit in which the broader Fair Labor Standards Act coverage precedents are not applicable. See Gulf Oil Corp. v. Copp Paving Co., 419 U.S. 186, 95 S.Ct. 392, 42 L.Ed.2d 378 (1974). Second, in Yellow Cab the taxi service provided to passengers travelling to and from the railroad terminal was found to be only casual and incidental. By contrast, every bus route of each defendants' company carries a substantial percentage of international travelers every day.

The ninth circuit opinion in Mateo supports defendants' position, but it was decided on the incorrect assumption that Yellow Cab was controlling authority in a Fair Labor Standards Act case.

We believe that the correct rule in this situation derives from United States v. Capital Transit Co., 338 U.S. 286, 70 S.Ct. 115, 94 L.Ed. 93 (1949). In that case the transit company did not cross state lines, ³ but transported passengers to a point within the District of Columbia where they were picked up by other buses that took them into Virginia. In deciding that the transit company was engaged in interstate commerce, the Supreme Court said,

Our previous holding was that all of Transit's intra-District carriage of passengers bound to and from the Virginia establishments was part of an "interstate" movement and therefore subject to Commission regulation throughout, upon proper Commission findings. United States v. Yellow Cab Co., supra, does not conflict with our prior holding that Transit's transportation was part of a continuous...