Northwestern-Hanna Fuel Co. v. McComb

• Decision Date: 10 March 1948
• Docket Number: No. 13513.,13513.
• Citation: 166 F.2d 932
• Parties: NORTHWESTERN-HANNA FUEL CO. v. McCOMB.
• Court: U.S. Court of Appeals — Eighth Circuit

166 F.2d 932 (1948)

NORTHWESTERN-HANNA FUEL CO. v. McCOMB.

No. 13513.

Circuit Court of Appeals, Eighth Circuit.

March 10, 1948.

COPYRIGHT MATERIAL OMITTED

Pierce Butler, of St. Paul, Minn. (Edgar G. Vaughan, of St. Paul, Minn., on the brief), for appellant.

Morten Liftin, Chief Appellate Section, U. S. Dept. of Labor, of Washington, D. C. (William S. Tyson, Sol., Bessie Margolin, Asst. Sol. and Irving M. Herman, Atty., all of Washington, D. C., and William A. Lowe, Regional Atty., U. S. Dept. of Labor, of Chicago, Ill. on the brief), for appellee.

Before GARDNER, THOMAS and JOHNSEN, Circuit Judges.

JOHNSEN, Circuit Judge.

The suit is one against Northwestern-Hanna Fuel Company by the Administrator of the Wage and Hour Division, to enjoin further violations of the overtime and record-keeping requirements of section 15(a) (2) and 15(a) (5) of the Fair Labor Standards Act, 29 U.S.C.A. § 215 (a) (2) and 215(a) (5). The trial court granted an injunction and the Fuel Co. has appealed.

Involved are operations at the two coal yards of appellant in St. Paul, Minnesota, one known as "Yard 8" and the other as the "River Dock". One of the issues in the trial court was coverage under the Act, but that question is not argued here, since appellant concedes that one of the grounds on which the finding of coverage rested cannot be contended to be clearly erroneous for review purposes.¹ Another issue was whether the exemption of section 13(a) (2) of the Act, 29 U.S. C.A. § 213(a) (2), was applicable to the operations, as those of a "retail or service establishment the greater part of whose selling or servicing is in intrastate commerce". The trial court's determination of non-exemption as to each yard is sought to be reviewed. Appellant has also filed a motion to remand the case, should its claim of exemption fail on the appeal, to allow it to attempt to escape the injunction under the provisions of section 9 of the Portal-to-Portal Act of 1947, 29 U.S.C.A. § 258, enacted since the appeal was taken.

On appellant's claim to exemption, the trial court found and concluded that the sales of coal at each yard, under appellant's own classification of its operations, consisted of three general types — "domestic", "steam" and "dealer"; that domestic sales were those made to dwelling houses, duplexes, apartment buildings and small stores or shops, whose total consumption of coal was less than 25 tons annually and the deliveries to which were characteristically made on adjusted load weights; that steam sales were those made to industrial or commercial establishments, large apartment buildings, schools, churches, institutions and governmental subdivisions or agencies, whose total consumption of coal was 25 tons or more annually (whether obtained from appellant or not), which bought coal of a kind and size not generally suited to the heating equipment of ordinary dwelling houses and in any event on a lower price basis than such coal normally would have been sold for to a domestic customer, and the deliveries to which were characteristically made in lots of three tons or more on unadjusted load weights; that dealer sales were those made to other dealers or to peddlers for resale by them; that, during the two fiscal years covered by the evidence as to Yard 8, 44.6 per cent and 37.5 per cent of appellant's total sales of coal at that yard, for those years respectively, had been steam and dealer sales; that similarly, during the one fiscal year covered by the evidence as to the River Dock,² 96.6 per cent of appellant's total sales at that yard had been steam and dealer sales; that, if Yard 8 and the River Dock were considered together as a unit, instead of as separate establishments, the general percentage of steam and dealer sales at both yards, for appellant's last fiscal year, would be 49.1 per cent; that the steam and dealer sales were not operations which appellant was entitled to have classified as those of a "retail establishment" in attempting to qualify for exemption under section 13(a) (2) of the Act, 29 U.S.C.A. § 213(a) (2); that, also, the special trade concept in the coal industry, of a "wholesaler" as one whose sales were made in carload lots, and of a "retailer" as one whose sales were made in lots of less than a carload, was not determinative in the present case of the content of the term "retail establishment", in the general industrial reach of the Fair Labor Standards Act; that, furthermore, the fact that this concept of the coal industry had been accepted and adopted in other statutes relating to that business, or in administrative regulations promulgated under such legislation, similarly did not make it necessarily controlling or indicative of congressional intent under the Fair Labor Standards Act; that the courts had the right and would consider, beyond the special trade concepts of particular industries, the general recognized meaning of the term "retail" in common usage and would view the question against the background of the general remedial purposes of the Fair Labor Standards Act and also in the light of any previous reasonable administrative interpretations of it, in arriving at the signification of the term "retail establishment" in the immediate statute; that on the basis of these considerations, as previously indicated, appellant's steam and dealer sales were not entitled to be regarded as "retail" operations within the meaning of the Fair Labor Standards Act; and that these steam and dealer sales constituted such a substantial part of the business at each of the two coal yards as to disqualify each yard for general exemption as a "retail or service establishment". See Walling v. Northwestern-Hanna Fuel Co., D.C.Minn., 67 F.Supp. 833, 837.

On the statute, the previous indicative decisions, and the evidence in record, we think appellant is unable to so escape these findings and conclusions as to entitle it to have held on this appeal that it is within the exemption.

The Supreme Court has said in Roland Electrical Co. v. Walling, 326 U.S. 657, 666, 675, 66 S.Ct. 413, 417, 421, 90 L.Ed. 383, that the exemption of section 13(a) (2) of the Act, 29 U.S.C.A. § 213(a) (2), "reaches employees of only such retail or service establishments as are comparable to the local merchant, corner grocer or filling station operator" and that for purposes of the exemption "the meaning of the word `retail' may properly be restricted to sales made in small quantities to ultimate consumers to meet personal rather than commercial and industrial uses of those articles * * *." The opinion, by quotation from various sources of definition, emphasizes that the term "retail" in basic general concept implies sales of goods in small quantities, with the purchases made for personal or household consumption and not for business purposes. The Court takes occasion to add also that the views expressed in the opinion are reinforced by the interpretations made by the Administrator of the Wage and Hour Division in his Interpretative Bulletin No. 6, and that these administrative interpretations of the Act "are entitled to great weight." 326 U.S. at pages 676, 677, 66 S.Ct. at pages 421, 422, 423.

Interpretative Bulletin No. 6, issued by the Administrator, provides in paragraphs 50 and 51 as follows: "Generally, sales of coal for private-home consumption will be considered retail sales. Sales to business or commercial users will also be considered retail if made in approximately the same quantity or at approximately the same price as that charged the ordinary home consumer. On the other hand, sales of coal to hotels, apartment houses, office buildings, factories, railroads, public utilities, Federal, State, or municipal governments, etc., will not be considered retail if such sales involve quantities of coal materially in excess of the quantity purchased by home consumers and a discount from the regular retail price charged home consumers is granted. If regular and recurring deliveries of coal are made as in the case of a hotel daily receiving deliveries of coal and a discount is given, the transactions will not be considered retail even though the separate deliveries may be in quantities not materially larger than those normally made to private homes. In determining whether a coal yard is a retail establishment the Administrator will examine the types of sales made. If a substantial portion of the selling is nonretail, the exemption will be defeated."

The practical tests set out in paragraphs 50 and 51 of Interpretative Bulletin No. 6, as a guide to administrative enforcement, in dealing with the exemption of coal yards as retail establishments, can hardly be regarded as being more restrictive than the definition of the term "retail" declared in the Roland Electrical case to be implied by the Act. Under the definition of that case, as above indicated, in considering whether the operations of a business are entitled to exemption as those of a "retail establishment", the courts properly may view as nonretail such types of sales as are not characteristically made (1) in small quantities, (2) to ultimate consumers, (3) for personal or household uses. These are, of course, all primary earmarks and are not to be taken to mean that other helpful indicia of the nonretail character of sales may not also exist, such as some of those which the Administrator has suggested as administrative guides.

The trial court regarded the steam and dealer sales here, under appellant's own classification of its operations, as alone sufficient to indicate that the two coal yards involved were not entitled to exemption generally as retail establishments. Appellant argues that it was error to treat all of its steam sales as nonretail, since a considerable portion of them, such as those to governmental subdivisions or agencies, schools, churches and other institutions, could not be said to be purchases for commercial purposes.

Under the definition in the Roland...