Moss v. Hawaiian Dredging Co.

• Decision Date: 31 January 1951
• Docket Number: No. 12571.,12571.
• Citation: 187 F.2d 442
• Parties: MOSS et al. v. HAWAIIAN DREDGING CO. et al. LARSEN et al. v. FLOOD BROS. et al.
• Court: U.S. Court of Appeals — Ninth Circuit

187 F.2d 442 (1951)

MOSS et al. v. HAWAIIAN DREDGING CO. et al. LARSEN et al. v. FLOOD BROS. et al.

No. 12571.

United States Court of Appeals Ninth Circuit.

January 31, 1951.

Gladstein, Andersen, Resner & Leonard, Herbert Resner, Richard Gladstein and Ewing Sibbett, all of San Francisco, Cal., for appellants.

H. G. Morison, Asst. Atty. Gen., Frank J. Hennessy, U. S. Atty., San Francisco, Cal., Edward H. Hickey, Marvin C. Taylor, Attys., Dept. of Justice, Washington, D.C., Antoinette E. Morgan, Asst. U. S. Atty., San Francisco, Cal., for appellees.

Gregory A. Harrison, Robert E. Burns, Richard Ernst, Brobeck, Phleger & Harrison, San Francisco, Cal., for Pacific Maritime Ass'n, as amicus curiae.

Before HEALY, ORR, and POPE, Circuit Judges.

POPE, Circuit Judge.

The appellants, some 1200 walking bosses and warehousemen employed in the longshore and stevedoring industry in the San Francisco Bay area, brought 32 actions against the appellees, their employers, to recover overtime compensation and liquidated damages claimed to be owing under § 16 of the Fair Labor Standards Act of 1938. 29 U.S.C.A. §§ 201-219. The cases were consolidated for trial.

The facts upon which the actions are predicated are that these workers were paid at an agreed hourly rate for a basic 30-hour workweek, consisting of the first six hours of work between 8 A.M. and 5:00 P.M. Mondays through Fridays. The same employment contracts provided that they should be paid "time and a half" for all work done outside this basic workweek. This included all work done after 5:00 P. M. and before 8:00 A.M., work done on Saturdays, Sundays and holidays, and work done after the first six hours of work between 8:00 A.M. and 5:00 P.M., Mondays through Fridays. This contract overtime pay was sometimes called "clock overtime", because applicable to certain hours during the day and week. In addition, special rates, even higher, were paid for handling dangerous or noxious cargo, or for work requiring special skill.

It was alleged in the complaints that the Fair Labor Standards Act required that overtime pay should be calculated on the basis of the average of the various rates of pay received and earned by plaintiffs during the first 40 hours of each week. This, said the employers, would be computing overtime on overtime. They asserted that the rates of pay were far in excess of those required by the Act. The minimum allowed by the Act permits 40 hours to be paid at straight time rate, and only requires overtime pay thereafter. But these employers, paying overtime at all times except the six hours mentioned, in each of the five days, Monday to Friday, a total of 30 hours, contended that they were more than meeting the Act's requirements.

The suits were instituted in 1945. When the cases came to trial in May, 1947, the Portal-to-Portal Act of 1947, 29 U.S.C.A. § 251 et seq., had become effective, and defendants were permitted to amend their answers to plead defenses under §§ 9 and 11 of the Act. The cases were then tried and submitted, but before they were decided, the Supreme Court on June 7, 1948, handed down its decision in Bay Ridge Co. v. Aaron, 334 U.S. 446, 68 S.Ct. 1186, 92 L. Ed. 1502. The effect of this decision was to uphold the plaintiff's contention as to how overtime should be computed, for it held that for hours worked after the first 40, pay should be one and one-half times the regular rate, which "regular rate" must be determined by dividing the total compensation received by the total number of hours worked. The court then, on March 31, 1949, filed an opinion holding that defendants had successfully maintained their defenses under §§ 9 and 11 of the Portal-to-Portal Act. Thereafter Congress passed Public Law 177, approved July 20, 1949. The substance of the provisions of that Act were carried forward into portions of Public Law 393, of October 26, 1949, which make up the present form of what is popularly known as the Overtime-on-Overtime Act. These acts provided, in substance, that payment of "contract overtime", in the manner in which these appellants had been paid, satisfied the requirements of the Fair Labor Standards Act. Section 2 of Public Law 177, provided that "No employer shall be subject to any liability * * * (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 said employer to pay an employee compensation for any period of overtime work performed prior to the date of enactment of this Act, if the compensation paid prior to such date for such work was at least equal to the compensation which would have been payable for such work had the amendment made by section 1 of this Act been in effect at the time of such payment." This is the section which made the amendments retroactive. Substantially the same provision is in § 16(e) of Public Law 393.

After Public Law 177 was passed, its provisions were set up as supplemental defenses, and thereafter, in a "supplemental opinion and findings", the court added to its previous holding, a finding that under this Act the plaintiffs' actions were barred.

The judgment denying the appellants' claims is therefore based upon two independent grounds: one the good faith defense under the Portal-to-Portal Act; the other the defense under the Overtime-on-Overtime Act. Since the judgment must be affirmed if either defense be sustained, it was stipulated by the parties, with the approval of the court, that the court should first hear argument upon those issues of the appeal raised by appellants' contention that the retroactive provisions of the Overtime-on-Overtime Act are unconstitutional.

The argument is that such retroactive enactment is void (1) as an attempt by Congress to exercise judicial power in violation of Article III of the Constitution,¹ and (2) as a deprivation of property without due process of law in violation of the Fifth Amendment.

These are the same two grounds of invalidity upon which the retroactive features of the Portal-to-Portal Act were attacked in Seese v. Bethlehem Steel Co., 4 cir., 168 F.2d 58. As well pointed out in that case, we have no occasion to consider the contention that the questioned enactment involved the improper exercise of judicial power, for if the provision is not in violation of the Fifth Amendment, it is no more outside the proper field of Congressional legislation than other laws which contain retroactive features.² As we view it, the sole question here is whether the challenged provisions operate to deprive appellants of property without due process of law.

Appellants say that when they did the work for which additional compensation is here sought they acquired rights to overtime compensation under the Fair Labor Standards Act, the measure of which overtime compensation was required to be as stated in the Bay Ridge decision. These, they say, were vested rights, contractual in nature. They cite such cases as Coombes v. Getz, 285 U.S. 434, 52 S.Ct. 435, 76 L.Ed. 866, and Ettor v. City of Tacoma, 228 U.S. 148, 33 S.Ct. 428, 57 L.Ed. 773, in support of their contention that the overtime provisions of the Fair Labor Standards Act, as they stood when the work was done, became part and parcel of their employment contracts, and hence immune to retroactive legislation modifying those provisions.

This is the line of argument presented in challenging the constitutionality of the retroactive provisions of the Portal-to-Portal Act. Appellees say that the decisions, such as that of this court in Lassiter v. Guy F. Atkinson Co., 176 F.2d 984, upholding the Portal-to-Portal provisions,³ are controlling here. Plainly our decision here must depend upon whether this case may be distinguished from those just mentioned.

Appellants argue that the Portal-to-Portal cases present a very different situation from that now before us. They say that the result of the Supreme Court decision in the Anderson v. Mt. Clemens Pottery Co. case, 328 U.S. 680, 66 S.Ct. 1187, 90 L.Ed. 1515, was that many employees were seeking pay for activities which theretofore had never been regarded as requiring compensation. These involved such things as changing clothes, walking in the plant to place of work, and the like, none of which had been considered work activity. Hence the right to collect for these things was property called a windfall. Here, on the other hand, the claim made is for real work, and for doing the things appellants were hired to do and for which they were intended to be paid. Therefore, since the question is merely one of determining from the Fair Labor Standards Act, what amount should be paid for that work, the decision in the Bay Ridge case did not bring about any similar windfall. Furthermore, it is said the suits against which the retroactive provision of the Portal-to-Portal Act was directed, were, on the whole, started after the Mt. Clemens decision, thus demonstrating the fact of a windfall. Here, on the other hand, these particular suits were filed in 1945, and sought recovery for a three year period preceding.

What is here sought, it is said, is no windfall result of a surprise decision in the Bay Ridge case. Attention is called to a letter written by the Wage-Hour Administrator on October 15, 1943, in line with what appellants allege in their complaints, that the "regular rate" upon which overtime must be computed must be determined by dividing total earnings by total hours. So appellants say their actions cannot be called attempts to recover a windfall.

Finally, it is said, the claims which were made on industry as a result of the Mt. Clemens decision were so great, and so numerous, as to create a national economic emergency. Here the claims are limited to those of walking bosses and terminal employees, and if every possible claim of persons affected by the Bay Ridge decision were considered, the total could not exceed two million dollars. Although the Senate Report on the bill...