Republic Pictures Corporation v. Kappler

Decision Date26 November 1945
Docket NumberNo. 13109.,13109.
PartiesREPUBLIC PICTURES CORPORATION v. KAPPLER.
CourtU.S. Court of Appeals — Eighth Circuit

Paul Ahlers, of Des Moines, Iowa (E. D. Perry, Robert J. Bannister, and E. B. Carpenter, all of Des Moines, Iowa, on the brief), for appellant.

Walter F. Maley, of Des Moines, Iowa (Ted E. Hartung, of Des Moines, Iowa, on the brief), for appellee.

Before GARDNER, SANBORN, and THOMAS, Circuit Judges.

GARDNER, Circuit Judge.

This was an action brought by appellee as plaintiff to recover for overtime pay, under the provisions of the Fair Labor Standards Act of 1938, Title 29, U.S.C.A. § 201 et seq., for a period of time between February, 1941, and June, 1943. He was employed by the manager of the Iowa state branch of Republic Pictures Corporation, at its Des Moines office. At all times here material defendant was engaged in the moving picture business, with its principal place of business in New York City. It maintained a branch distributing agency at Des Moines, Iowa, and it owned, handled, possessed, marketed and shipped moving picture films to points both in the State of Iowa, and to points outside of that state. After the films were shipped from either New York or New Jersey to Des Moines, Iowa, they were leased or sold to exhibitors within and without the State of Iowa. Defendant employed about ten people, including plaintiff, at its branch office in Des Moines. Plaintiff was known as a booker, and it was his duty to book the films shipped from New York and New Jersey on the dates the pictures would fit into the booking situation, and it was his duty to see that the films were kept in uniform order, and to see that they were booked in proper order so that the films reached the exhibitors in time for their theater use and to see that the films were returned on time so as to be forwarded to other points designated by him, and to establish a booking arrangement fixing the sequence in which pictures were released, and to assist in handling and keeping the contractual obligations of the exhibitor with defendant. He also had to see that the films were forwarded by the exhibitor to the next nearest exhibitor leasing or renting the films, or arrange for their return to the branch office at Des Moines. He directed the transportation companies and other agencies to whom the films might be delivered for transportation to the points designated. This directing work was done largely by telephone, telegraph, and through the mails. The trial court concluded as a matter of law, "That plaintiff was during the time of his employment engaged in interstate commerce and that the principal part of his activities was in such employment."

As an affirmative defense defendant pleaded a special statute of limitations limiting time for commencing actions on claims arising pursuant to any federal statute to a period of six months after the accrual of such claim. The action was commenced in September, 1944, more than six months after its accrual, but the trial court held the state statute of limitations ineffectual as being an attempt by the state to invoke power belonging exclusively to the federal government.

On this appeal defendant contends, as it contended in the trial court, that (1) plaintiff was not engaged in commerce; (2) the Iowa statute of limitations bars recovery.

Defendant admits that it is engaged in interstate commerce, but it denies that the evidence shows that plaintiff was so engaged. It admits too that plaintiff's activities are necessary to its interstate commerce.

Section 6 of the Fair Labor Standards Act of 1938, Title 29 U.S.C.A. § 206, provides for the payment of minimum wages to employees "engaged in commerce or in the production of goods for commerce." Section 3 of the Act, Title 29 U.S.C.A. § 203, defines commerce as follows: "`Commerce' means trade, commerce, transportation, transmission, or communication among the several States or from any State to any place outside thereof."

The same section of the Act provides that for the purposes of the Act "an employee shall be deemed to have been engaged in the production of goods if such employee was employed in producing, manufacturing, mining, handling, transporting, or in any other manner working on such goods, or in any process or occupation necessary to the production thereof, in any State."

Plaintiff does not contend that he was engaged in the actual production of goods for commerce. As has been observed, he kept records which were essential to the movements of the goods of the employer in commerce. It must be conceded that the test as to whether an employee is engaged in commerce is somewhat more exacting than the test as to whether his occupation is necessary to production for commerce. Armour & Co. v. Wantock, 323 U.S. 126, 65 S.Ct. 165. The words, however, should not be so limited by construction as to defeat the purpose of Congress, but should be interpreted in a manner consistent with their practical meaning and effect in the particular situation. Overstreet v. North Shore Corporation, 318 U.S. 125, 63 S.Ct. 494, 87 L.Ed. 656. The practical test to be applied is whether, without the particular service, interstate commerce would be impeded or abated. Overnight Motor Transp. Co. v. Missel, 316 U.S. 572, 62 S.Ct. 1216, 86 L.Ed. 1682; Overstreet v. North Shore Corporation, supra. Great remoteness, however, renders the act inapplicable. McLeod v. Threlkeld, 319 U.S. 491, 63 S.Ct. 1248, 87 L.Ed. 1538. Such cases as Fox Film Corporation v. Trumbull, D.C.Conn., 7 F.2d 715, involving the power of a state to regulate or tax the exhibition of moving picture films brought into the state through interstate commerce have, we think, no bearing here on the question of the meaning of a federal statute passed by Congress in the exercise of its control over interstate commerce. As said by the Supreme Court in Binderup v. Pathe Exchange, 263 U.S. 291, 44 S.Ct. 96, 100, 68 L.Ed. 308: "It does not follow that because a thing is subject to state taxation it is also immune from federal regulation under the Commerce Clause."

In adopting the Fair Labor Standards Act of 1938, Congress clearly indicated its purpose to leave local business to the protection and regulation of the state, but a mere temporary break in the interstate transportation of goods by placing them in a warehouse awaiting final delivery, or, as in the instant case, a series of deliveries and transmission to and from the place of temporary rest, does not remove the goods from commerce within the meaning of the Act. Walling, etc., v. Jacksonville Paper Co., 317 U.S. 564, 63 S.Ct. 332, 335, 87 L.Ed. 460. As said in the last cited case: "* * * if the halt in the movement of the goods is a convenient intermediate step in the process of getting them to their final destinations, they remain `in commerce' until they reach those points. Then there is a practical continuity of movement of the goods until they reach the customers for whom they are intended."

Defendant was not shipping the films to Des Moines to be stored nor for final delivery, but its business depended upon these films being kept in circulation. Plaintiff was an active factor in keeping the films in such circulation and use. We think it clear that the transportation of the films and their use must be viewed as a continuity, embracing shipments from New York and New Jersey to Des Moines, Iowa, and the shipment of them to and from Des Moines to other parts of Iowa and other states. Plaintiff's contact with and participation in interstate commerce were substantial. His services were essential to the movement of commerce, and hence he was engaged in commerce within the meaning of the Act. United States v. Darby, 312 U.S. 100, 61 S.Ct. 451, 85 L.Ed. 609, 132 A.L.R. 1430; Schmidt v. Peoples Telephone Union, 8 Cir., 138 F.2d 13.

Was plaintiff's action barred by the Iowa special statute of limitations? The statute relied upon is embodied in Section 1, Chapter 267, Acts of the 50th General Assembly, which became effective March 23, 1943. This section reads as follows: "Section 1. In all cases wherein a claim or cause of action has arisen or may arise pursuant to the provisions of any Federal statute wherein no period of limitation is prescribed, the holders of such claim or cause of action may commence action therein within but not after a period of six months after March 1, 1943, if such claim or cause of action arose prior to March 1, 1943, or within but not later than six months after the accrual of such claim or cause of action if such claim or cause of action arose after March 1, 1943."

The Fair Labor Standards Act of 1938 contains no provision limiting the time for commencing actions thereunder. Ordinarily, in the absence of legislation by Congress, the courts of the United States apply the statute of limitations of the state in law actions. The state statutes of limitations are considered as rules of decision and binding on federal courts. Thus, in the absence of a provision in the federal statute prescribing a limitation, the statute of the particular state in which the action may be brought is applicable to an action to enforce a liability under a particular statute. Payne v. Ostrus, 8 Cir., 50 F.2d 1039, 77 A.L.R. 531; Chicago & N. W. R. Co. v. Ziebarth, 8 Cir., 245 F. 334; Harrison v. Remington Paper Co., 8 Cir., 140 F. 385, 3 L.R.A.,N.S., 954, 5 Ann.Cas. 314; Rawlings, Receiver v. Ray, 312 U.S. 96, 61 S.Ct. 473, 85 L.Ed. 605; McDonald v. Thompson, 184 U.S. 71, 22 S.Ct. 297, 46 L.Ed. 437; McClaine v. Rankin, 197 U.S. 154, 25 S.Ct. 410, 49 L.Ed. 702, 3 Ann.Cas. 500.

Title 28, U.S.C.A. § 725, provides that, "The laws of the several States, except where the Constitution, treaties, or statutes of the United States otherwise require or provide, shall be regarded as rules of decision in trials at common law, in the courts of the United States, in cases where they apply."...

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