Shew v. Southland Corporation (Cabell's Dairy Div.)

• Decision Date: 28 December 1966
• Docket Number: No. 23311.,23311.
• Citation: 370 F.2d 376
• Parties: J. E. SHEW, Appellant, v. The SOUTHLAND CORPORATION (CABELL'S DAIRY DIVISION), Appellee. The SOUTHLAND CORPORATION (CABELL'S DAIRY DIVISION), Appellant, v. J. E. SHEW and William J. Rogers, Appellees.
• Court: U.S. Court of Appeals — Fifth Circuit

370 F.2d 376 (1966)

J. E. SHEW, Appellant, v. The SOUTHLAND CORPORATION (CABELL'S DAIRY DIVISION), Appellee.

The SOUTHLAND CORPORATION (CABELL'S DAIRY DIVISION), Appellant, v. J. E. SHEW and William J. Rogers, Appellees.

No. 23311.

United States Court of Appeals Fifth Circuit.

December 28, 1966.

Douglas Riley, Jr., Dallas, Tex., for J. E. Shew.

John Bacheller, Jr., Charles Kelso, Atlanta, Ga., Howard L. Abramson, Dallas, Tex., for Southland Corp.

Bessie Margolin, Associate Sol., Robert E. Nagle, Atty., Washington, D. C., for Department of Labor.

Before BROWN, COLEMAN and AINSWORTH, Circuit Judges.

AINSWORTH, Circuit Judge.

Southland Corporation, plaintiff, filed this suit seeking a declaratory judgment against its employee, J. E. Shew, and William J. Rogers, Regional Director of the Wage and Hour Division of the United States Department of Labor, defendants, contending that it was not liable to its truck driver-employee, Shew, for overtime wages under the Fair Labor Standards Act, Section 7 (29 U.S.C. § 207), because it was exempt from the overtime requirements of the Act under Section 13(b) (1) (29 U.S.C. § 213(b) (1)).¹ This section provides that Section 7 relating to overtime compensation shall not apply to any employee with respect to whom the Interstate Commerce Commission has power to establish qualifications and maximum hours of service under Section 204 of the Motor Carrier Act (49 U.S.C. § 304(a) (3)). The latter subsection provides that the Interstate Commerce Commission shall prescribe qualifications and maximum hours of service of employees for private carriers of property by motor vehicle in interstate commerce.

The trial judge held that Southland was entitled to the 13(b) (1) exemption because Shew's driving was subject to Interstate Commerce Commission regulations as a private carrier truck driver in interstate commerce. Prior to trial, on motion to dismiss, the district judge dismissed the suit as to the defendant Rogers.

According to the stipulated facts, Southland owns a plant at Dallas, Texas, where it processes and packages milk for distribution to its various branches in Texas through a system of its own regularly scheduled private transport trucks. It also receives various products at its Dallas plant which it purchases from producers located outside of the State of Texas and which are distributed to plaintiff's branches in the same scheduled transport trucks. These products include butter, oleo and whipping cream which are processed and packaged in Iowa, Illinois and California, respectively, and which, after receipt at the Dallas plant, are transshipped to Southland's branches in Odessa and Midland, Texas, by means of its trucks. Butter is ordered every other day by the branches in anticipation of specific needs of their customers. Orders are consolidated in the Dallas office and an order is then placed with out-of-state producers. There is no alteration or processing of these products at the Dallas plant. Ordering of whipping cream is similarly done. Shew is regularly employed in driving Southland's trucks from Dallas to plaintiff's Odessa, Texas, and Midland, Texas, branches transporting these products. The parties stipulated that transportation of such out-of-state items constituted transportation of goods in interstate commerce within the meaning of the Fair Labor Standards Act, but defendant Shew contends that his duties as a driver do not furnish a jurisdictional basis for regulation of his employment by the Interstate Commerce Commission pursuant to the Motor Carrier Act.

There were two questions presented to the district court for decision: first, whether Southland is exempt from the overtime requirements of the Fair Labor Standards Act, Section 7, because of the exemption provisions in Section 13(b) (1); and, two, whether defendant Rogers, who is the Regional Director of the Wage and Hour Division, may be sued individually under the allegations of plaintiff's petition.

On our own motion, we requested counsel for Shew, Southland and the Department of Labor to file memoranda covering the following questions:

(1) District court's jurisdiction over an Executive Department's official actions under 28 U.S.C.A. § 1391(e) and cf. § 1361; and

(2) Whether it is advisable to refer the matter initially to the Interstate Commerce Commission under the doctrine of primary jurisdiction.

The general counsel of the Interstate Commerce Commission was invited by us to file a memorandum amicus as to these issues. We made our request because of our awareness of an intramural conflict between the Department of Labor and Interstate Commerce Commission as to jurisdiction over an employee such as Shew, which will ultimately have to be clarified and resolved by Congress itself.² Regional Director Rogers had apparently acted under the authority of a Wage and Hour Division interpretative bulletin on this subject,³ though his position is that his opinion was based on an understanding of the facts which differed from the facts stipulated.⁴ Both the Secretary of Labor and the Interstate Commerce Commission (as well as Southland and Shew) have responded to our request and stated that they do not feel the doctrine of primary jurisdiction is involved under these circumstances.

We now agree, for we believe the position of the Interstate Commerce Commission as to the principles involved is sufficiently clear⁵ and the answer should properly be determined by the judicial process. Pyramid Motor Freight Corporation v. Ispass, 330 U.S. 695, 67 S.Ct. 954, 91 L. Ed. 1184 (1947). Further discussion of the district court's jurisdiction over an Executive Department's official action under 28 U.S.C.A. § 1361 and § 1391(e) is unnecessary in view of our present holding and reliance on our past decisions in such matters.⁶

There is no concurrent jurisdiction between the Fair Labor Standards Act and the Motor Carrier Act, Morris v. McComb, 332 U.S. 422, 68 S.Ct. 131, 92 L.Ed. 44 (1947). Thus if Shew is a motor carrier employee under the jurisdiction of the Interstate Commerce Commission he is excluded from the benefits of the overtime provisions of the Fair Labor Standards Act. Levinson v. Spector Motor Service, 330 U.S. 649, 67 S.Ct. 931, 91 L.Ed. 1158 (1947). Since the Interstate Commerce Commission has asserted jurisdiction and prescribed regulations relative to qualifications and maximum hours of service for truck drivers employed by private carriers engaged in interstate commerce (see Motor Carrier Safety Regulations-Private Carriers, 23 M.C.C. 1 (1940)), the remaining question is whether Shew's duties were those of a truck driver engaged in the transportation of commodities in interstate commerce under the Motor Carrier Act. We believe the facts establish a substantial movement of commodities in interstate commerce, which originate outside of the state, are transported to Dallas and then distributed by Southland's trucks, sometimes the same day or the next day, to points in Texas, pursuant to pre-existing orders from Southland's branches. Though the transportation by Southland from Dallas to points in Texas is between points in the same state, these shipments originate out of the state and are part of a continuous movement in interstate commerce. See United States v. Western Pacific Railroad Co., 352 U.S. 59, 77 S.Ct. 161, 1 L.Ed.2d 126 (1956). In the memorandum which the Solicitor of Labor filed in this matter after oral argument, the Department concedes "that Shew's driving was subject to regulation by the Interstate Commerce Commission and within the Section 13(b) (1) exemption to the Fair Labor Standards Act." We agree.

As to the dismissal of the suit against Rogers, Regional Director, we have already ruled twice on this question, adversely to Southland's contention, in Rogers v. Skinner, 5 Cir., 1953, 201 F.2d 521, and Rogers v. B & B Vending Company, 5 Cir., 1957, 250 F.2d 120. In these cases, the same Regional Director Rogers was sued in declaratory actions as to the applicability of the Fair Labor Standards Act to plaintiff's employees. In Skinner, the Court held that the action was "a suit against a subordinate official, in his official capacity, to secure an adjudication binding upon his superior and in fact binding upon the Government in the execution of the statute," and that the Secretary of Labor was an indispensable party. B & B Vending Company reaffirmed the Skinner ruling. Here, it is true that Rogers is sued in his individual or personal capacity under alleged conduct claimed to be outside the scope of his delegated authority, but the allegations in B & B Vending Company where Rogers was said by the employer to be guilty of "willful oppression under color of law in connection with the enforcement of said Act" and in Skinner where the employer was said to be aggrieved, harrassed and persecuted by Rogers in advising employees of their rights to sue for overtime compensation, present no substantial factual difference. It is obvious that the actions complained of in the present case were performed by Rogers in his official capacity in advising the employee Shew, as a member of the public, of his rights under the Act, and we see no distinction between the facts here and those in our prior two decisions to which we have referred. By this ruling we are not undertaking to say that actions may not be taken against the Secretary himself in injunction and declaratory suit.⁷ Here we are dealing with Rogers, the Regional Director, under...