Schmidt v. Peoples Telephone Union of Maryville, Mo., 12510.

• Decision Date: 29 September 1943
• Docket Number: No. 12510.,12510.
• Citation: 138 F.2d 13
• Parties: SCHMIDT v. PEOPLES TELEPHONE UNION OF MARYVILLE, MO.
• Court: U.S. Court of Appeals — Eighth Circuit

138 F.2d 13 (1943)

SCHMIDT v. PEOPLES TELEPHONE UNION OF MARYVILLE, MO.

No. 12510.

Circuit Court of Appeals, Eighth Circuit.

September 29, 1943.

Robert L. Jackson, of Kansas City, Mo. (Hale Houts, of Kansas City, Mo., on the brief; Hogsett, Trippe, Depping & Houts, of Kansas City, Mo., of counsel), for appellant.

L. L. Livengood and Livengood & Weightman, all of Maryville, Mo., for appellee.

Before THOMAS and JOHNSEN, Circuit Judges, and VOGEL, District Judge.

VOGEL, District Judge.

This is an appeal from a judgment in favor of the appellee in a suit based on the Fair Labor Standards Act of 1938, 29 U.S. C.A. §§ 201-219. For the purpose of convenience the appellant shall be designated as the employee and the appellee as the employer.

The employer, Peoples Telephone Union of Maryville, Missouri, is a voluntary association of individuals maintaining a telephone service primarily for the individuals who are members of the association. The association was not incorporated during any of the time referred to in the complaint. The employer had approximately eleven hundred subscribers. It was permitted to a subscriber of the employer, in consideration of the amount charged him by the employer, to talk without additional cost to other subscribers, also members of the association, and to talk without additional cost to any subscriber of similar associations in a number of towns in the vicinity of Maryville, Missouri, which is the headquarters of the employer. Among these towns are six which are within the State of Iowa, near the Missouri-Iowa line. The employer, in its telephone book furnished to its subscribers, advertised "Free service to the following towns". Thereafter were listed the towns in Missouri to which free service was given, and also six towns in Iowa to which free service was given. Any subscriber of the employer could talk without additional charge to a subscriber of some one of these similar associations in Iowa, in the six towns referred to. During the period covered by the complaint it was the practice of the employer to make a charge of ten cents to any person not a subscriber who used the facilities of the employer in talking to any other town, including the towns in Iowa.

The employee and those for whom she has instituted the present suit are switchboard operators employed by the employer in its general office in Maryville, Missouri. Their duties consisted of switchboard operation in handling calls made by the employer's subscribers and by non-subscribers for the ten cent charge. Their duties included receiving calls from any one of the six towns in Iowa for Maryville, Missouri, or the surrounding territory, and also handling calls from the Maryville, Missouri, territory to any one of the said towns in Iowa. The handling of such interstate calls was a regular course of business of the employee and those for whose benefit the present suit was instituted.

After filing its answer the employer moved the District Court to render judgment on the pleadings against the employee, making such motion upon the ground that the Court lacked jurisdiction, the employer being a voluntary cooperative or mutual association which, under the laws of the State of Missouri, could not be sued or summoned as an entity. The District Court properly over-ruled the motion on the ground that if, by an act of Congress, the employer was a suable entity, then it was a matter of no concern whether in the state courts of Missouri the employer might sue or be sued. In connection therewith we call attention to Rule 17(b) of the Federal Rules of Civil Procedure, 28 U.S.C.A. following section 723c: "(b) Capacity to Sue or Be Sued. The capacity of an individual, other than one acting in a representative capacity, to sue or be sued shall be determined by the law of his domicile. The capacity of a corporation to sue or be sued shall be determined by the law under which it was organized. In all other cases capacity to sue or be sued shall be determined by the law of the state in which the district court is held; except that a partnership or other unincorporated association, which has no such capacity by the law of such state, may sue or be sued in its common name for the purpose of enforcing for or against it a substantive right existing under the Constitution or laws of the United States." (Italics supplied.) See also the opinion of Mr. Chief Justice Taft in United Mine Workers of America et al. v. Coronado Coal Co. et al., 259 U.S. 344, 42 S.Ct. 570, 66 L.Ed. 975, 27 A.L.R. 762; also, National Association of Industrial Insurance Agents v. Committee for Industrial Organization, et al., D.C., 25 F.Supp. 540. The District Court was correct in over-ruling the employer's motion.

The main problem in the case is whether the employee and those for whom she has instituted the present suit were shown to be engaged in interstate commerce within the purview of the Fair Labor Standards Act, and, if so, whether any of the exemptions provided for in the Act were so applicable as to exclude coverage therefor The District Court was of the opinion that the Fair Labor Standards Act was not intended to cover such situation as is disclosed by the evidence and findings herein. Accordingly, it gave judgment for the employer.

The District Court appears to have based its decision upon the amount or percentage of revenue derived by the employer from interstate calls and upon the small number of interstate calls handled, although the latter...