Mitchell v. Zachry Company

• Decision Date: 04 April 1960
• Docket Number: No. 83,83
• Citation: 4 L.Ed.2d 753,362 U.S. 310,80 S.Ct. 739
• Parties: James P. MITCHELL, Secretary of Labor, etc., Petitioner, v. H. B. ZACHRY COMPANY
• Court: U.S. Supreme Court

362 U.S. 310

80 S.Ct. 739

4 L.Ed.2d 753

James P. MITCHELL, Secretary of Labor, etc., Petitioner,

v H. B. ZACHRY COMPANY.

No. 83.

Argued Feb. 25, 1960.

Decided April 4, 1960.

Miss Bessie Margolin, Washington, D.C., for petitioner.

Messrs. R. Dean Moorhead, Austin, Tex., and Chester H. Johnson, San Antonio, Tex., for respondent.

Mr. Justice FRANKFURTER delivered the opinion of the Court.

Once again we are presented with a nice question concerning the scope of the Fair Labor Standards Act, as amended. 63 Stat. 912, 29 U.S.C. § 207, 29 U.S.C.A. § 207. The respondent, a construction contractor, was engaged by the Lower Nueces River Water Supply District (hereafter to be called the District) to construct a dam and impounding facilities on the lower Nueces River in Texas at a cost of about $6,000,000, in order to increase roughly tenfold the District's then-existing reservoir capacity. The dam is not a multi-purpose project; its sole purpose is to create an expanded reservoir for the District. The water impounded by the District is supplied to consumers locally, within the State of Texas. The site of the new dam was chosen 1,400 feet downstream from the old, with the expectation that upon completion of the new construction the old dam would be inundated and thus replaced by the greatly expanded reservoir. In the interim until completion, the old facilities could serve to assure a continuing water supply.

The District, though for some purposes an independent governmental agency under Texas law, may here be dealt with simply as the water supply system of the included City of Corpus Christi. Its contract with the City requires it to supply the City with the entire water output; and the City in turn agrees to operate and maintain the completed dam and impounding facilities and to supply water to consumers within the District, but outside city limits. It is conceded that between 40% and 50% of all water consumption from the system is accounted for by industrial (as distinguished from residential, commercial, hospital, municipal and other) users, most of whom produce goods for commerce, and that water is essential to their operations. Nor is it contested that an unspecified amount of the water supplied by the District is consumed by facilities and instrumentalities of commerce.

It is agreed that as to the employees here involved—those actually engaged in construction work on the dam—the respondent failed to comply with the requirements of § 7 of the Act, if it is applicable.¹

On the basis of its applicability the Secretary of Labor sought an injunction in the United States District Court for the Southern District of Texas. That court granted the injunction, on two grounds of coverage: (1) since water from the system is supplied to facilities and instrumentalities of commerce, those engaged in building the dam are engaged in the production of goods—water—for commerce; and (2) since the water supplied is essential to industries in Corpus Christi producing goods for commerce, construction of the dam is an occupation 'closely related' and 'directly essential' to the production of goods for commerce. While the District Court conceded 'that Congress intended to narrow the scope of coverage' by the 1949 amendment of the statutory definition of 'produced' in § 3(j), 63 Stat. 911, 29 U.S.C.A. § 203(j),² it concluded that this employment remained within the coverage of the Act.

On appeal the Court of Appeals for the Fifth Circuit reversed. 262 F.2d 546, 550. It disposed of the first ground of the District Court's decision by holding that the building of a dam could not itself constitute the production of goods for commerce, whatever the use to which the impounded water might be put. In disposing of the second, it invoked a rule that 'those engaged in building a plant to be used for the manufacturing of goods do not even come within * * * the * * * statutory definiton * * *.' It concluded that under such a rule there could be no coverage of employees engaged in construction of a facility which was not to engage in, but merely to support, the manufacture of goods for commerce. It con- cluded further that the 'remoteness' of these jobs from production justified their exclusion from coverage. Both conclusions reflected its general view that 'the amendment of 1949 made even more restrictive the definition of production of goods' than it was under the Act of 1938, when it substituted the words 'directly essential' for the word 'necessary,' and added the requirement that the employment be 'closely related' to production.

We brought the case here, 361 U.S. 807, 80 S.Ct. 52, 4 L.Ed.2d 57, because of an asserted conflict between circuits. See Chambers Construction Co. v. Mitchell, 8 Cir., 233 F.2d 717, and Mitchell v. Chambers Construction Co., 10 Cir., 214 F.2d 515.

The court below, in applying its rule excluding 'construction,' relied on our per curiam decision in Murphey v. Reed, 335 U.S. 865, 69 S.Ct. 105, 93 L.Ed. 410, and distinguished the more detailed decision in Mitchell v. C. W. Vollmer & Co., 349 U.S. 427, 75 S.Ct. 860, 99 L.Ed. 1196, which expressly rejected the 'new construction' rule and held construction of a new lock on the Gulf Intracoastal Waterway to be covered employment. It did so by holding that Vollmer concerned only coverage under the 'in commerce' provision of the Act. The Vollmer decision cannot be so confined. It rejected an inflexible 'new construction' rule, which had developed in cases under the Federal Employers' Liability Act, 45 U.S.C.A. § 51 et seq., see 349 U.S. at pages 429, 431—432, 75 S.Ct. at pages 861, 862—863, as inconsistent with the more pragmatic test of coverage under the Fair Labor Standards Act, 29 U.S.C.A. § 201 et seq. As early as Kirschbaum Co. v. Walling, 316 U.S. 517, 62 S.Ct. 1116, 86 L.Ed. 1638, we recognized that the penetrating and elusive duty which this Act casts upon the courts to define in particular cases the less-than-constitutional reach of its scope, cannot be adequately discharged by talismanic or abstract tests, embodied in tags or formulas. No exclusion of construction work from coverage can be derived from the per curiam disposition of Murphey v. Reed, supra. There, as here, whether construction work is covered depends upon all the circumstances of the relation of the particular activity to 'commerce' in the statutory sense and setting, the question to which we now turn.

By confining the Act to employment 'in commerce or in the production of goods for commerce,' Congress has impliedly left to the States a domain for regulation. For want of a provision for an administrative determination, by an agency like the National Labor Relations Board, the primary responsibility has been vested in courts to apply, and so to give content to, the guiding yet undefined and imprecise phrases by which Congress has designated the boundaries of that domain.

Before 1949 the boundary of 'production' coverage was indicated by the statutory requirement that to be included an activity not 'in' production must be 'necessary' to it. 52 Stat. 1061. The interaction and interdependence of the processes and functions of the industrial society within which these definitions must be applied, could easily lead courts to find few activities that were discernibly related to production not to be 'necessary' to it, in a logical sense of that requirement. The statute, as illuminated by its history, see Kirschbaum Co. v. Walling, supra, 316 U.S. at page 522, 62 S.Ct. at page 1119, demanded that such merely logical deduction be eschewed. Courts were to be on the alert 'not to absorb by adjudication essentially local activities that Congress did not see fit to take over by legislation.' 10 East 40th St. Bldg. v. Callus, 325 U.S. 578, 582—583, 65 S.Ct. 1227, 1229, 89 L.Ed. 1806.

In Kirschbaum Co. v. Walling, supra (316 U.S. 517, 62 S.Ct. 1121), we added what was deemed a compelled gloss to suggest the limitations of 'necessary.' We found that the jobs of building-maintenance employees, ranging in responsibility from electrician to porter, of a loft building locally owned but tenanted by production facilities of producers for commerce, had 'such a close and immediate tie with the process of production for commerce, and (were) therefore so much an essential part of it,' that the employees' occu- pations were 'necessary' to production. In Borden Co. v. Borella, 325 U.S. 679, 65 S.Ct. 1223, 89 L.Ed. 1865, precisely the same formulation expressed our conclusion that maintenance employees of a producer-owned office building which was tenanted in part by the producer's central offices, but not by any production facilities, were also within the Act's coverage. In 10 East 40th St. Bldg. v. Callus, 325 U.S. 578, 65 S.Ct. 1227, 1229, 89 L.Ed. 1806, however, maintenance employees of an office building were held not to be covered. Although the building contained offices of some producers, it was locally owned, held out for general tenancy, and in fact tenanted by a miscellany of tenants. Regardful of the governing principle that coverage turns upon the nature of the employees' duties, and not upon the nature, local or interstate, of the employer's general business, we held the case distinguishable from Borden and Kirschbaum because the employment, since part of an enterprise which 'spontaneously satisfies the common understanding of what is local business,' was itself sufficiently different, despite identical employee duties, from prior cases to justify regarding it as separate from the 'necessary parts of a commercial process' which are within the Act. These decisions and distinctions were not exercises in lexicography. No niceties in phrasing or formula of words could do service for judgment, could dispense with painstaking appraisal of all the variant elements in the different situations presented by successive cases in light of the purpose of Congress to limit coverage short of the exercise by it of its...