Smith v. Cudahy Packing Co., Civil Action No. 935.

• Decision Date: 15 September 1947
• Docket Number: Civil Action No. 935.
• Parties: SMITH v. CUDAHY PACKING CO.
• Court: U.S. District Court — District of Minnesota

73 F. Supp. 141

SMITH v. CUDAHY PACKING CO.

Civil Action No. 935.

District Court, D. Minnesota, Third Division.

September 15, 1947.

George W. Colburn, of Minneapolis, Minn., and John Edmund Burke, of St. Paul, Minn., for plaintiff.

Loring M. Staples and John S. Pillsbury, both of Minneapolis, Minn., for defendant.

William S. Tyson, Sol., and Jeter S. Ray, Associate Sol., U. S. Department of Labor, both of Washington, D. C., and James M. Miller, Regional Atty., and Richard R. Converse, Atty., of that Department, both of Minneapolis, Minn., for Administrator of the Wage and Hour Division. amicus curiae.

DONOVAN, District Judge.

Plaintiff, individually, and as agent and representative of other employees, commenced suit on October 19, 1945, to recover overtime compensation, liquidated damages and attorneys' fees from defendant, pursuant to the Fair Labor Standards Act of 2938, § 1 et seq., 29 U.S.C.A. § 201 et seq., hereinafter referred to as the Act.

Following motions by defendant (Smith v. Cudahy Packing Co., 5 F.R.D. 298), all unnamed employees herein were allowed twenty days to intervene or file written evidence of plaintiff's authority to represent them in this proceeding. Defendant filed an amended answer, pleading three statutes of limitation:

(1) The two-year statute;

(2) The six-year statute;

(3) The three-year statute;

And also (4) The right to deduct fourteen weeks in each calendar year in which the largest amounts of overtime accrued to said employees, as provided by section 207 (c) of said Act.

Plaintiff moved to strike the foregoing pleas (1), (2), (3) and (4), which are set forth in paragraphs 9, 10, 11 and 12, respectively, of said answer.

The motions will be discussed in the order set forth by plaintiff, and as above outlined. The two-year, and the six-month retroactive, limitations will be referred to as pleaded, i. e., Chapter 513, Laws 1945, M.S.A. §§ 541.07(5), 541.071.

First. Does Chapter 513 apply to the claims of employees in the instant case? The two-year statute of limitations, 32 Minnesota Statutes Annotated, 541.07(5), with its companion six-month retroactive statute, 32 Minnesota Statutes Annotated, 541.071, pleaded in bar by defendant in paragraph 9 of its answer, reads as follows:

"541.07 TWO year limitations. The following actions shall be commenced within two years:

* * * * * *

"(5) For the recovery of wages, overtime, damages, fees or penalties accruing under any federal or state law respecting the payment of wages, overtime, damages, fees or penalties, (the term `wages' as used herein shall mean all remuneration for services or employment, including commissions and bonuses and the cash value of all remuneration in any medium other than cash, where the relationship of master and servant exists)."

"541.071 LAWS 1945, CHAPTER 513, retroactive; limitation. Causes of action accruing prior to the date of Laws 1945, Chapter 513 and barred by the provisions thereof, shall be commenced within six months after passage of Laws 1945, Chapter 513, provided that nothing contained therein shall affect any action or suit for the recovery of wages, overtime, damages, fees, or penalties pending at the time of the passage of said chapter 513".

Arguing against the application of Chapter 513 to the instant case, plaintiff contends (a) Chapter 513 is unconstitutional; (b) that in any event, the two-year statute, with its six-month saving clause, did not become law until April 23, 1945, and did not become effective until April 24, 1945, and hence "plaintiff's and `other employees'' cause of action was commenced within six months after said Chapter 513 was effective as law"; and (c) the claims of all named and unnamed employees who complied with the order of the Court relate back to the commencement of plaintiff's action on October 19, 1945.

The claims we are here concerned with accrued during a time when the Act was without a statute of limitation. Under the circumstances, recourse must be had to Minnesota law, for in the absence of a federal statute of limitation affecting the claims in the present case, it is well settled that applicable state statutes of limitation may be invoked by defendant. 28 U.S.C.A. § 725; Republic Pictures Corporation v. Kappler, 8 Cir., 151 F.2d 543, 162 A.L.R. 228, affirmed 327 U.S. 757, 66 S.Ct. 523, 90 L.Ed. 991; Caldwell et al. v. Alabama, etc., Co., 5 Cir., 161 F.2d 83.

Is Chapter 513, Laws of Minnesota 1945, constitutional? It was passed by the Legislature on April 18, 1945, and signed by the Governor on April 23, 1945. Unlike the situation created by the Iowa statute in Republic Pictures Corporation v. Kappler, supra, and Caldwell et al. v. Alabama, etc., Co., supra, the Minnesota statute does not single out federal claims or causes of action alone, but includes any such claim or cause of action under "any federal or state law." While it is true Minnesota has no law identical to the Act that gives rise to the instant case, there is nothing to prevent the Legislature from adopting such legislation. It pursued such a course by adopting its Railroad Act, M.S.A. § 219.77 et seq., patterned after the Federal Employers' Liability Act, 45 U.S.C.A. § 51 et seq. Continuing this line of reasoning, it should be noted that the Minnesota statute, in addition to limiting the time in which actions under the federal Act may be brought, also governs Minnesota laws and actions having to do with subject matter akin to the Act, such as, for example, the Minnesota statute relative to minimum wages, 13 Minnesota Statutes Annotated § 177.15; the Minnesota statute requiring the payment of discharged employees within twenty-four hours, 13 Minnesota Statutes Annotated § 181.11; and the Minnesota statute providing a penalty for failure to pay employees promptly, 13 Minnesota Statutes Annotated § 181.13. It cannot be said that it is arbitrary and unreasonable, because it treats claims arising under "federal or state law" exactly the same. Manifestly, said Chapter 513 does not discriminate against rights claimed under the Act of Congress creating liability here.

That the Minnesota law-making body exercised its legislative discretion to enact a two-year statute of limitation affecting actions commenced to recover overtime compensation, liquidated damages and attorneys' fees, without disturbing the six-year limitation applying to actions by employees against employers for wages based on contract, does no violence to any article of our federal constitution. Since the instant case was launched, Congress recently passed the so-called Portal-to-Portal Act, 29 U.S.C.A. § 251 et seq., containing a two-year limitation on claims under the Act like those relied on in the case at bar. This will make the application of the two-year statute uniform throughout the states without effect upon longer statutes of limitation of any jurisdiction, and which may be applicable to actions for wages based on contract. The Minnesota legislature is primarily the judge of what constitutes a reasonable period of limitation for the commencement of actions under circumstances here existing, and the wisdom of that law-making body in so doing will not be questioned by the Court unless the time allowed is so inadequate as to deny justice. Kendall et al. v. Keith Furnace Co. et al., 8 Cir., 162 F.2d 1002; Terry v. Anderson, 95 U.S. 628, 24 L.Ed. 365; Chase Securities Corp. v. Donaldson, 325 U.S. 304, 65 S.Ct. 1137, 89 L. Ed. 1628; Caldwell v. Alabama, etc., Co., supra; Kozisek v. Brigham, 169 Minn. 57, 210 N.W. 622, 49 A.L.R. 1260.

Plaintiff earnestly insists that actions permitted under the Act arise ex contractu, citing the Kappler case, supra; Overnight Motor Transp. Co. v. Missel, 316 U.S. 572, 62 S.Ct. 1216, 86 L.Ed. 1682, and Brooklyn Savings Bank v. O'Neil, 324 U.S. 697, 65 S.Ct. 895, 89 L.Ed. 1296. Analysis of the two last-cited cases distinguishes them from the claims described in the complaint of the instant case. In the present case plaintiff employees are before the Court pleading that their claims are based on a federal statute. Opposing their contention that this case must be based unconditionally on contract are the words of the Court in McClaine v. Rankin, 197 U.S. 154, at page 162, 25 S.Ct. 410, at page 412, 49 L.Ed. 702, 3 Ann.Cas. 500, as follows:

"It is true that in particular cases the liability has been held to be, in its nature, contractual, yet, it is nevertheless conditional, and enforcible only according to the Federal statute, independent of which the cause of action does not exist; so that the remedy at law in effect given by that statute is subject to the limitations imposed by the state statute on such actions".

Obviously, any duty of the employer to pay the employees in this proceeding exists by virtue of the Act. The rights of the employees are created by the Act. In my opinion, the complaint makes the instant case an action based upon a liability created by statute, rather than one upon an express or implied contract. Lorenzetti v. American Trust Co., D.C., 45 F.Supp. 128; Bright v. Hobbs, D.C., 56 F.Supp. 723; Cannon v. Miller, 22 Wash.2d 227, 155 P.2d 500, 157 A.L.R. 530; Fullerton v. Lamm, 177 Or. 655, 163 P.2d 941, 165 P.2d 63. To arrive at any other conclusion would necessitate the choice of a fictitious theory of contract, as opposed to an obligation created by statute. The statute in my opinion is constitutional, and, if applicable, is a good defense.

In view of the foregoing, there is no occasion to further consider plaintiff's motion to strike paragraph 10 (pleading the six-year statute of limitation) and paragraph 11 (pleading the three-year statute of limitation). If the Court should be wrong in the conclusion arrived at, consideration may be given the remaining statutes of limitation pleaded by defendant.

The parties' oral arguments and briefs extensively emphasized two interesting questions that I think are premature. As stated above, the summons was...