Mateo v. Auto Rental Company, 15227.

• Citation: 240 F.2d 831
• Decision Date: 23 January 1957
• Docket Number: No. 15227.,15227.
• Parties: Ernest MATEO, Joseph Oku, Joseph K. Nakila, Joseph Acello, Wade H. Redmon, Harry L. Perry, Herman K. Kapule, Kenton Aichele, William T. Ahia, and James B. Jay, on behalf of themselves and on behalf of other employees of the defendants similarly situated, Appellants, v. AUTO RENTAL COMPANY, Ltd., and Thacker Transportation Co., Ltd., Appellees.
• Court: United States Courts of Appeals. United States Court of Appeals (9th Circuit)

240 F.2d 831 (1957)

Ernest MATEO, Joseph Oku, Joseph K. Nakila, Joseph Acello, Wade H. Redmon, Harry L. Perry, Herman K. Kapule, Kenton Aichele, William T. Ahia, and James B. Jay, on behalf of themselves and on behalf of other employees of the defendants similarly situated, Appellants, v. AUTO RENTAL COMPANY, Ltd., and Thacker Transportation Co., Ltd., Appellees.

No. 15227.

United States Court of Appeals Ninth Circuit.

January 23, 1957.

Gill, Kokubun, Doi & Shim, Thomas P. Gill, Honolulu, Hawaii, for appellant.

Ernest C. Moore, Jr., Honolulu, Hawaii (Moore, Torkildson & Rice, Honolulu, Hawaii, of counsel), for appellee.

Stuart Rothman, Sol., Bessie Margolin, Asst. Sol., Sylvia S. Ellison, Atty., U. S. Dept. of Labor, Washington, D. C., Kenneth C. Robertson, Reg. Atty., U. S. Dept. of Labor, San Francisco, Cal., for James P. Mitchell, as amicus curiae.

Before ORR, CHAMBERS and BARNES, Circuit Judges.

BARNES, Circuit Judge.

This appeal raises primarily a question relating to the scope of coverage of the Fair Labor Standards Act of 1938, as amended, 29 U.S.C.A. § 201 et seq. The District Court held that appellants were not employees "engaged in commerce" within the meaning of the Act. Accordingly, it denied recovery on appellants' alleged claim for overtime compensation and attorney's fees under Section 16(b) of the Act and dismissed the action.

Appellants were all employed by appellee, Auto Rental Inc., Ltd., during the period in controversy as drivers of so-called "airporter" vehicles in Honolulu, Hawaii. The airporter is an eleven passenger "stretchout" limousine, converted from a standard automobile chassis to provide accommodations for additional passengers. Appellants were engaged principally in transporting airline and steamship passengers to and from the Honolulu International Airport or the Port of Honolulu and the downtown and Waikiki districts. In addition, they occasionally drove the airporters on sightseeing tour trips. By far the major portion of appellants' work was the servicing of airline passengers. These passengers can be classified broadly into four general categories.

First, prepaid or pre-booked passengers. These persons had prearranged their local transportation prior to leaving their departure point. This group constituted approximately 30% of the incoming airline travellers and about 50% of Auto Rental's customers. A far smaller percentage prearranged transportation from Honolulu to the International Airport. Those who reserved space before arriving in Honolulu received coupons good for carriage. These coupons were redeemable for cash or exchangeable for tour trips. They were obtainable from travel agents or from various airlines such as Pan-American, United, and Northwest, which functioned as travel agents for this purpose. No contractual agreement existed between any of the airlines and Auto Rental to guarantee or encourage passenger use of the airporters.

Second, cash passengers. These were the casual or walk-in passengers, who rode the stretchouts without prearrangement, when space was available, in preference to other modes of local transportation. The majority of trans-ocean travellers were included in this group. They paid a fare of $1.50 each. This amount was fixed by the company, uncontrolled and uninfluenced by the airlines, upon the advice of local authorities.

Third, credit passengers. These persons were members of tour groups whose fare was charged to individual travel agents. Their transportation was not prearranged.

Fourth, crew members, of various airlines, also used the airporters. In respect to them, Auto Rental had executed contracts with several, but not all, airlines for their local transportation on a per car charge basis.

The only contractual agreements involving passengers were those negotiated between Auto Rental and Pan-American Airlines and United Airlines. These agreements applied only to deplaning passengers who had not made prior arrangements. The manifest purpose of these agreements, which were negotiated with local airline officials, was to avert the stranding of arriving passengers. In actual practice, there was little need for the agreements. Furthermore, the Hawaii Aeronautics Commission refused to recognize such agreements.

Our analysis of the applicable law must of necessity commence with the statutory language. We note initially that Congress has not legislated to the constitutional limits of the commerce power, but has instead restricted the purview of the Act to those "engaged in commerce."¹ It is not enough that the activity affect commerce; the employee must actually be engaged in interstate commerce. We therefore set aside considerations which govern the determination of those cases dealing with the broader "affect" concept. Neither do we regard as relevant those cases involving the "production of goods for commerce" provision. Of these three different phrases used in connection with the commerce power, the one with which we are concerned is the narrowest in scope.

In substance, appellants urge us to disregard the clear intent of Congress to thus limit the application of the statute. This we cannot do. It is not for us to extend where Congress has chosen to retract. Nor do we believe the rules applicable to shipment of merchandise are applicable to transportation of passengers.² Accordingly, we have no difficulty in differentiating the case of Walling v. Jacksonville Paper Co., 317 U.S. 564, 63 S.Ct 332, 87 L.Ed. 460.

The issue here presented is a factual one. Its determination must be guided by practical considerations, not technical conceptions. Mitchell v. C. W. Vollmer & Co., 349 U.S. 427, 429, 75 S.Ct. 860, 99 L.Ed. 1196. The ultimate test is whether the local transportation service is an "integral step in the interstate movement." United States v. Yellow Cab Co., 332 U.S. 218, 229, 67 S.Ct. 1560, 1566, 91 L.Ed. 2010. Economic factors and common understanding are important considerations to be weighed in resolving this question. Such factors as the nature and extent of the work claimed to be part of interstate commerce, the structure and operations of the company, the competitive status of the firm, the relationship with those clearly engaged in interstate transportation, and the geographical location of the local termini are all relevant. The decision must rest on the particular facts of each case.

For this reason, other cases are of little assistance. However, in this area there are two situations, each more extreme than that at bar, which have come before the Supreme Court of the United States. Both situations were presented by the Yellow Cab case, supra. That decision, involving the scope of the Sherman Act 15 U.S.C.A. §§ 1-7, 15 note, held that local taxicabs which merely transport persons from railroad stations to homes and vice versa as part of their regular operations are not in interstate commerce, whereas the Parmelee system which operated shuttle service from railroad station-to-station in Chicago for transferring through passengers under exclusive contractual arrangements with railroad companies were engaged in interstate commerce. In the twilight zone between these polarized situations the Supreme Court has not had occasion to speak. It is in this area that the instant case falls. The task which confronts this court, as it so often does, is where to draw the line. Two other courts, the Fourth Circuit in Airlines Transportation, Inc., v. Tobin, 198 F.2d 249, and a district court in Cederblade v. Parmelee Transportation Co., D.C.N.D.Ill., 94 F.Supp. 965, affirmed on other questions, 7 Cir., 166 F.2d 554, have addressed themselves to somewhat similar factual situations as that at bar and have reached contrary results. The Tobin decision held that the employees were engaged in commerce; the Cederblade opinion held they were not.

We are not required to choose between these conflicting views since there are significant factual differences which serve to distinguish...