Miller v. Howe Sound Min. Co.

• Citation: 77 F. Supp. 540
• Decision Date: 11 May 1948
• Docket Number: Civil Action No. 628.
• Parties: MILLER et al. v. HOWE SOUND MIN. CO. (UNITED STATES, Intervener).
• Court: U.S. District Court — Eastern District of Washington

77 F. Supp. 540

MILLER et al. v. HOWE SOUND MIN. CO. (UNITED STATES, Intervener).

Civil Action No. 628.

District Court, E. D. Washington, N. D.

May 11, 1948.

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R. Max Etter, of Spokane, Wash., Leif Erickson, of Helena, Mont., and H. L. Maury and A. G. Shone, both of Butte, Mont., for plaintiffs.

Randall & Danskin, of Spokane, Wash., and Bogle, Bogle & Gates, of Seattle, Wash., for defendant.

Tom C. Clark, Atty. Gen., Peyton Ford, Asst. Atty. Gen., Enoch E. Ellison, Sp. Asst. to Atty. Gen., Johanna M. D'Amico, Atty., Department of Justice, of Washington, D. C., and Harvey Erickson, U. S. Atty., of Spokane, Wash., for the United States.

DRIVER, District Judge.

Plaintiffs brought this action against their common employer to recover overtime pay under the Fair Labor Standards Act of 1938, 52 Stat. 1060, 29 U.S.C.A. §§ 201-219. The complaint was filed on January 20, 1947. The defendant has moved to dismiss the complaint upon a number of grounds, but only one is now under consideration, namely, that the action is barred by paragraphs (a) and (d) of Section 2, Part II, of the Portal-to-Portal Act, Public Law 49, 80th Congress, approved May 14, 1947, 29 U.S.C.A. § 252(a, d). In pertinent part, they read as follows: "(a) No employer shall be subject to any liability or punishment under the Fair Labor Standards Act of 1938, as amended * * * (in any action or proceeding commenced prior to or on or after the date of the enactment of this Act), on account of the failure of such employer to pay an employee minimum wages, or to pay an employee overtime compensation, for or on account of any activity of an employee engaged in prior to the date of the enactment of this Act, except an activity which was compensable by either — (1) an express provision of a written or nonwritten contract in effect, at the time of such activity, between such employee, his agent, or collective-bargaining representative and his employer; or (2) a custom or practice in effect, at the time of such activity, at the establishment or other place where such employee was employed, covering such activity, not inconsistent with a written or nonwritten contract, in effect at the time of such activity, between such employee, his agent, or collective-bargaining representative and his employer. * * * (d) No court of the United States, of any State, Territory, or possession of the United States, or of the District of Columbia, shall have jurisdiction of any action or proceeding, whether instituted prior to or on or after the date of the enactment of this Act, to enforce liability or impose punishment for or on account of the failure of the employer to pay minimum wages or overtime compensation under the Fair Labor Standards Act of 1938, as amended, * * * to the extent that such action or proceeding seeks to enforce any liability or impose any punishment with respect to an activity which was not compensable under sections (a) and (b) of this section."

The complaint does not allege that the activities for which overtime compensation is claimed are based upon either an express contract or a custom or practice, and plaintiffs concede that the motion to dismiss should be granted unless both sections (a) and (d), quoted above, are adjudged to be unconstitutional. They contend that in its retroactive aspects, the Portal-to-Portal Act violates the due process clause of the Fifth Amendment. The United States has intervened pursuant to the Act of August 24, 1937, 50 Stat. 751, 28 U.S.C.A. § 401.

Section 2(d) should first be considered since it sets up a direct and positive jurisdictional bar and if it is valid, the instant action must be dismissed without further ado. In support of its constitutionality, defendant and intervenor point out that no Court in the Federal system, except the Supreme Court, derives its jurisdiction directly from the Constitution, that all of the others depend upon the authority of Congress for their jurisdiction, and that jurisdiction, conferred upon an inferior Federal Court, may, at the will of Congress, be taken away in whole or in part. See Kline v. Burke Const. Co., 260 U.S. 226, on page 234, 43 S.Ct. 79, 67 L.Ed. 226, 24 A.L.R. 1077, and cases cited.

In the present case, however, we do not have a simple, straightforward regulation by Congress of the jurisdiction of inferior Federal Courts. The purpose of Congress, plainly apparent on the face of the statute, was to use withdrawal of jurisdiction as a means of striking down pending actions for overtime pay. In Section 2(a), Congress directly barred recovery on pre-existing claims by relieving employers of liability therefor. In Section 2 (d), to make assurance doubly sure, it deprived all courts, both Federal and State, of jurisdiction to enforce the claims. Here the real question is whether Congress, under the guise of exercising its authority over the jurisdiction of inferior Federal Courts, can validly destroy constitutionally protected private rights by removing every possible means for their judicial enforcement. If it can do so, that is the end of the present case, so far as this Court is concerned; otherwise, the question of the constitutionality of Section 2(a), designed to directly bar recovery on pre-existing claims for overtime compensation, should be considered.

No case has been cited, or otherwise brought to my attention, in which it has been held that Congress, by destroying every possible remedy, can deprive a person of vested property rights without due process of law. In the cases cited by defendant and intervener either there was not a complete denial of every judicial remedy, or the right involved was not a constitutionally protected one. Thus, in some cases, jurisdiction was withdrawn from Federal District Courts, but was left undisturbed in the State Courts (Assessors v. Osbornes, 9 Wall. 567, 76 U.S. 567, 19 L.Ed. 748; Insurance Co. v. Ritchie, 5 Wall. 541, 72 U.S. 541, 18 L.Ed. 540; Levering & Garrigues Co. v. Morrin, 2 Cir., 71 F.2d 284; Id., 293 U.S. 595, 55 S.Ct. 110, 79 L.Ed. 688) or in the Court of Claims (Sherr v. Anaconda Wire & Cable Co., 2 Cir., 149 F.2d 680; Id., 326 U.S. 762, 66 S.Ct. 143, 90 L.Ed. 458). In other cases, there was only a procedural change, without complete deprivation of remedy, such as the requirement that before bringing suit against a collector for refund of illegally collected taxes, the taxpayer must prosecute an appeal to the Commissioner of Internal Revenue (Collector of Internal Revenue v. Hubbard, 12 Wall. 1, 79 U.S. 1, 20 L.Ed. 272), or the statutory provision depriving the District Court for Puerto Rico of jurisdiction to enjoin the collection of taxes (Smallwood v. Gallardo, 275 U.S. 56, 48 S.Ct. 23, 72 L.Ed. 152). In other cited cases, no constitutionally protected right was involved. Baltimore and Potomac Railroad Co. v. Grant, 98 U.S. 398, 25 L.Ed. 231 (withdrawal of the right of appeal from one court to another); In re Hall, 167 U.S. 38, 17 S.Ct. 723, 42 L.Ed. 69 (withdrawal of a gratuity).

Plaintiffs, on the other hand, cite a number of cases, which hold that substantial impairment of the remedy for the enforcement of a contract right is tantamount to impairment of the right, itself. In Lynch v. United States, 292 U.S. 571, 580, 54 S. Ct. 840, 844, 78 L.Ed. 1434, Mr. Justice Brandeis said: "Contracts between individuals or corporations are impaired within the meaning of the Constitution (art. 1, § 10, cl. 1) whenever the right to enforce them by legal process is taken away or materially lessened."

In Worthen Co. v. Thomas, 292 U.S. 426, 54 S.Ct. 816, 78 L.Ed. 1344, 93 A.L.R. 173, the Supreme Court held that an Arkansas statute, exempting from liability or seizure, under judicial process of any court, the benefits of a life insurance policy, received by a beneficiary, was void under the contract clause of the Federal Constitution (Article I, Section 10) as to indebtedness contracted prior to the enactment of the statute.

Other cases cited by plaintiffs as supporting the same principle are: Bronson v. Kinzie, 1 How. 311, 42 U.S. 311, 11 L.Ed. 143 (a state statute changing the procedure for the foreclosure of mortgages to the disadvantage of mortgagees), and Edwards v. Kearzey, 96 U.S. 595, 24 L.Ed. 793 (a state statute increasing the personal exemption allowance of debtors). The following quotation from the opinion in Bronson v. Kinzie expresses the rule upon which the plaintiffs rely: "Whatever belongs merely to the remedy may be altered according to the will of the state, provided the alteration does not impair the obligation of the contract. But if that effect is produced, it is immaterial whether it is done by acting on the remedy or directly on the contract, itself. In either case it is prohibited by the Constitution. * * * But it is manifest that the obligation of the contract, and the rights of a party under it, may, in effect, be destroyed by denying a remedy altogether; or may be seriously impaired by burdening the proceedings with new conditions and restrictions, so as to make the remedy hardly worth pursuing. And no one, we presume, would say that there is any substantial difference between a retrospective law declaring a particular contract or class of contracts to be abrogated and void, and one which took away all remedy to enforce them, or encumbered it with conditions that rendered it useless or impracticable to pursue it."

Again, in Brinkerhoff-Faris Trust & Savings Co. v. Hill, 281 U.S. 673, 682, 50 S.Ct. 451, 74 L.Ed. 1107, it was held that a State may not, consistent with due process, deprive a person of all existing remedies for the enforcement of a right, which the State has no power to destroy.

Defendant and intervener contend that the cases cited above are not in point because they deal with denial of remedies by State action and, as to many of them, for the further reason that the constitutional safeguard involved was the contract clause of the Federal...