Schroepfer v. AS Abell Co.

Decision Date17 January 1944
Docket NumberNo. 5097.,5097.
PartiesSCHROEPFER et al. v. A. S. ABELL CO., Inc.
CourtU.S. Court of Appeals — Fourth Circuit

I. Duke Avnet and William Taft Feldman, both of Baltimore, Md., for appellants.

William D. Macmillan, of Baltimore, Md. (Semmes, Bowen & Semmes, of Baltimore, Md., on the brief), for appellee.

Frederick U. Reel, Atty., U. S. Department of Labor, of Washington, D. C. (Douglas B. Maggs, Solicitor, and Bessie Margolin, Asst. Solicitor, both of Washington, D. C., Beverley R. Worrell, Regional Atty., of Richmond, Va., and Morton Liftin and Joseph I. Nachman, Attys., U. S. Department of Labor, both of Washington, D. C., on the brief), for Administrator of Wage and Hour Division, U. S. Department of Labor, amicus curiæ.

Before PARKER, SOPER, and NORTHCOTT, Circuit Judges.

Writ of Certiorari Denied January 17, 1944. See 64 S.Ct. 486.

PARKER, Circuit Judge.

This is an appeal in an action instituted under the Fair Labor Standards Act, 29 U.S.C.A. §§ 201-219, to recover unpaid minimum wages, overtime compensation, etc. Plaintiffs are two rackmen and a rackman's helper engaged in distributing newspapers to racks and stores in the City of Baltimore. The defendant is the company engaged in publishing the Baltimore Sun. The judge below held that plaintiffs were not employees of defendant within the meaning of the act, but that two of them were independent contractors and the third was employed by the others as a helper. He held also that plaintiffs were not engaged in commerce or the production of goods for commerce within the meaning of the act. Schroepfer v. A. S. Abell Co., D.C., 48 F.Supp. 88.

The facts bearing on the issue as to whether or not the plaintiffs were employees of defendant are voluminous and complicated and are fully and fairly stated in the opinion below. Whether upon these facts plaintiffs were employees of defendant within the meaning of the act is a question not free from difficulty. (Cf. Southern R. Co. v. Black, 4 Cir., 127 F.2d 280), but it is one which it is not necessary for us to decide, since we are of opinion that, even if considered employees of defendant, plaintiffs were not engaged in commerce within the meaning of the act. They had nothing to do with collecting news, assembling it, printing the paper, or any other activity in which interstate commerce was involved. Their only duties related to the retail sale of papers, or delivery thereof for retail sale, in the City of Baltimore. The pertinent facts with reference to this aspect of the case are thus stated by the court below:

"2. Two of the plaintiffs, Fred and Charles R. Schroepfer, brothers but suing separately and individually for deficiency in compensation, were during the period involved in this suit, October 24, 1938, to January 19, 1942, occupied as distributors of the defendant's newspapers, to street corner vending machines and to stores wholly located in portions of Baltimore City or the immediately adjacent county. The third plaintiff, Abraham Berry, was principally employed as a helper by the Schroepfers, part of the time by one and at other times by the other, and was paid by them respectively. On Saturday nights Berry was also directly employed by the defendant for about eight hours and for that work was paid by the defendant.

"3. The Schroepfers were known in the business as rack-men. Their relations with the defendant were not defined in writing and had existed for several years prior to October 24, 1938, when the Fair Labor Standards Act became effective. Each had a separate territory for the distribution and sale of newspapers. Their activities consisted in the delivery of the several successive editions of the daily newspapers to the street-corner vending machines, and of the Sunday papers to some stores in their respective territories. The vending machines were in the general form of metal racks placed on various street corners, holding a number of copies of papers, with a receptacle under lock and key for the deposit of coins to be made by the purchasers of the papers. The rack-men, of whom there were about fourteen for Baltimore City, collected the money daily from the vending machines. They were entitled to retain or be credited with the whole of the money so collected. Their accounting with the defendant was as follows: They were charged at wholesale rates, about 1¢ per paper less than the price paid by the purchaser, for the number of papers that they received from the plant of the defendant in Baltimore City, and also about $3.00 per week for so-called rack rental; and they were credited with the amount of currency collected from the vending machines and turned in to the defendant's office; and with the wholesale price of papers returned as not resold to the public; and were also credited with $25.00 per week for an allowance on account of the expenses of ownership and operation of their own automobiles used in distributing the papers, with a further allowance of $3.00 weekly for delivery of Sunday papers to various stores, since they received no personal profit from the sale of Sunday papers. * * *"

There is no question but that the defendant is engaged in interstate commerce with respect to the publication of its papers, the gathering of news therefor and the sale of the portion of its papers sent out of the state. N. L. R. B. v. A. S. Abell Co., 4 Cir., 97 F.2d 951, 954. That, however, is not the question before us, since the application of the act depends not upon the nature of the employer's activities, but upon the character of the employee's work. Kirschbaum v. Walling, 316 U.S. 517, 524, 62 S.Ct. 1116, 86 L.Ed. 1638; Warren-Bradshaw Drilling Co. v. Hall, 317 U.S. 88, 90, 63 S.Ct. 125, 87 L.Ed. ___. It is manifest that employees engaged in the local distribution of papers after they have been printed are not engaged in the production of goods, either for commerce or for any other purpose; and the question in the case is whether they are engaged in commerce which is interstate in character. We think that the question answers itself, if one's mind is allowed to deal with a common sense question in a common sense way.

The question is not whether interstate commerce is affected by the activities of plaintiffs, but whether plaintiffs themselves are engaged in such commerce. McLeod v. Threlkeld, 63 S.Ct. 1248, 1251, 87 L.Ed. 1538. As said in the case cited: "The test under this present act, to determine whether an employee is engaged in commerce, is not whether the employee's activities affect or indirectly relate to interstate commerce but whether they are actually in or so closely related to the movement of the commerce as to be a part of it. Employee activities outside of this movement, so far as they are covered by wage-hour regulation, are governed by the other phrase, `production of goods for commerce.'" One who merely delivers papers after they have been printed within the city to news racks or dealers for local sale is certainly not "actually engaged in" interstate commerce, nor is he "so closely related to the movement of the commerce as to be a part of it". As was well said by the learned judge below 48 F.Supp. 96: "There could hardly be a more purely intrastate activity than the sale of newspapers in a particular small part of a large city, especially where the newspaper is locally produced in the same city. If such an activity is interstate commerce, then seemingly the newsboy who buys and sells these papers on the street corner, and the drug store which buys and sells them to its customers, are likewise engaged in interstate commerce."

It is argued that what plaintiffs do is merely a part of the interstate gathering and distribution of news in which defendant is engaged; that the process which begins with the collection of news, admittedly an interstate activity, is not ended until the paper is placed in the hands of the customer or reader; and that plaintiffs' work is an integral part of the process. The fallacy of the argument consists in assuming that defendant is engaged in the sale of news. As a matter of fact it is engaged here in the sale of papers. It is news, of course, that makes the papers valuable; but it is the papers, not the news, that it is selling. If the sale of papers be regarded as the sale of news, it is news processed in the course of publication into an entirely new article of commerce. When papers are sold across state lines, interstate commerce is involved in such sale. When the news printed or the material used in the paper is transported across state lines interstate commerce is necessarily "affected" by anything that affects the publication and sale of papers. By no possible construction, however, can sale or transportation of papers within the state of their publication be said to be in itself interstate commerce. The publisher of a newspaper is a manufacturer of the printed papers. News reports, paper stock, ink and everything else that goes into the making of the papers are raw materials that he uses in their manufacture; and these raw materials lose their identity and the interstate character which may have attended them when given this new form. A sausage manufacturer who sells his product intrastate would hardly be said to be engaged in interstate commerce with respect to such intrastate sales merely because he purchases the materials that go into the sausages in interstate commerce. Yet this would be just as sensible as to say that local sales of a newspaper are in interstate commerce because news is acquired for publication in the paper through an interstate service.

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