St. John v. Brown, Civil No. 227.

• Decision Date: 28 March 1941
• Docket Number: Civil No. 227.
• Citation: 38 F. Supp. 385
• Parties: ST. JOHN et al. v. BROWN et al.
• Court: U.S. District Court — Northern District of Texas

38 F. Supp. 385

ST. JOHN et al. v. BROWN et al.

Civil No. 227.

District Court, N.D. Texas, Fort Worth Division.

March 28, 1941.

Davidson, McMahon & Smart, of Abilene, Tex., for plaintiffs.

Curtis E. Hill, of Dallas, Tex., for defendants.

Gerard D. Reilly, Sol. of Labor, Irving J. Levy, Asst. Sol., Llewellyn B. Duke, Regional Atty., and George B. Searls, Sr. Atty., all of Washington, D.C. (David Persinger and Walter T. Nolte, both of Washington, D.C., of counsel), for Philip B. Fleming, Administrator of Wage & Hour Division, U.S. Department of Labor.

WILSON, District Judge.

The questions to be decided arise under the Fair Labor Standards Act, Title 29 U. S.C.A. § 201 et seq. It really involves, as to hours and wages, whether ordinary oil field workers came under Federal control, upon the effective date of the Act.

The plaintiffs, St. John-Choate et al. and St. John-Choate Gathering System, separate partnerships composed practically of the same personnel, primarily filed this suit under the Declaratory Judgments Act, Title 28, Sec. 400, U.S.C.A., Judicial Code Section 274d. The former owned and operated a small oil property known as the Amity Oil Field, located in Comanche County, Texas. The latter owned a pipe line gathering system, by which it took this oil, as produced, from the tanks on the lease, and delivered it some five miles distant to the pipe line of Humble Oil & Refining Company, the purchaser of same, which in turn through its pipe line transported it to the Texas Gulf Coast. There it was refined into various products, and ultimately a considerable percentage of it passed out of the State as interstate commerce.

There are seven of the defendants. They constituted the entire field crew depended upon by the partnerships to get the oil out of the ground and into commerce. They are called roughnecks, roustabouts, pumpers and gaugers. Some of them do a combination of work, such as might be implied from those titles. In any event, they do all of the work necessary to produce the oil and get it to market. Plaintiffs, to prevent a multiplicity of suits and possible penalties, sought to have this Court declare the rights of the respective parties under the said Hours and Wages Act. The idea was if the law was held to be applicable to such work, they could then amicably arrange any matter of payment of overtime, etc., thereby avoiding penalties, attorneys fees, etc.

A very fair picture of the plaintiffs' view is given in the fifth paragraph of their complaint, as follows: "Said plaintiff alleges that said Amity Oil Field in Comanche County, Texas, comprehends approximately 240 acres under production; that same has approximately 40 wells located thereon; that all of said wells are what is known in oil field parlance as `stripper wells'; that is to say they produce less than 10 barrels of oil per day each; that the gathering system owned by said plaintiff consists of approximately five miles of two inch pipe, which runs from storage tanks located in said Amity field and runs to storage tanks approximately five miles away erected in close proximity to the pipe line system of Humble Oil & Refining Company; that said gathering system is privately owned and no oil is transported therein or permitted to enter therein except oil in which the plaintiffs filing this suit have an interest; that said gathering system does not enjoy the status of a common carrier under the laws of the State of Texas and is not subject to regulation or control by the Railroad Commission of the State of Texas as a pipe line; that the total volume of oil transported and carried by said gathering system is approximately 200 barrels per day, and its existence was necessary in order that the oil in which plaintiffs have an interest might readily be transported and carried to a point where same would be available for purchase by Humble Oil & Refining Company which owns a pipe line at the termination of said gathering system, and results in saving plaintiffs the cost and expense of trucking and otherwise transporting said oil to a point where same can be sold; that said gathering system is equipped with pumps to force the oil through the same, and in order that a proper accounting as to the amount and quality of said oil may be kept it is necessary that the storage tanks at each terminal of said gathering system be gauged so that the amount of oil going into said pipe line, its gravity and quality, and the amount of oil taken from the storage tanks at the end of said gathering system and its quality as received by the Humble Oil & Refining Company and purchased by it may readily be determined; that all of said transactions occur within the territorial limits of the State of Texas, and said plaintiff, upon disposal and sale of said oil to said Humble Oil & Refining Company, the purchasing pipe line company, loses all control over the same, same being a completed sale and transaction in Comanche County, Texas, and entirely within the territorial limits of the State of Texas; that all of the operations of said gathering system are private and intrastate in character, and on account of the small scale operations of said gathering system, due to the character of said wells and small production therefrom and small volume of oil transported and carried by said gathering system, and the fact that same is wholly owned by plaintiffs herein in various interests, the operations of said plaintiff in regard to said gathering system do not constitute a burden upon commerce and are not essential to the proper maintenance of commerce and, accordingly, do not constitute the production of goods for commerce and do not constitute engaging in commerce within the purview of what is commonly referred to as the Wages and Hours Law of the United States of America."

All seven of the defendants appeared and took issue with the plaintiffs as to the law not being applicable and in addition, each filed cross-claims for varying amounts of overtime. For convenience they will be referred to as defendants.

If one of the defendants was engaged in producing commerce, as defined by the Act, all were. Since the Supreme Court, February 3, 1941, held the Act to be constitutional in the case of United States v. Darby, 61 S.Ct. 451, 85 L.Ed. ___, it will only be necessary for this Court to consider whether it was the intent of Congress, as that may be gathered from the words of the Act, to embrace this kind of labor under its terms. Also the case decided the same day of Opp Cotton Mills, Inc., et al. v. Administrator of the Wage and Hour Division of the Department of Labor, 61 S.Ct. 524, 85 L.Ed. ___, is important.

The character of work done and the capacities in which defendants here served brings none of them under the exemptions of the Act. A mere reading of the statute makes it clear that such was the intent of Congress. It is not questioned that the plaintiffs are employers, the defendants employees, and the oil business an industry, as defined by the Act, if it is otherwise applicable. The pertinent provisions of the Act are as follows (I shall italicize those provisions of special importance):

"§ 206.(a) Every employer shall pay to each of his employees who is engaged in commerce or in the production of goods for commerce wages at the following rates — * * *." Then provides for the first year not less than 25 cents per hour, the following six years not less than 30, for the following seven years not less than 40, or as may be prescribed by the Administrator, etc.

"§ 207.(a) No employer shall, except as otherwise provided in this section, employ any of his employees who is engaged in commerce or in the production of goods for commerce — * * *." Then provides for a workweek not more than forty-four hours during the first year, forty-two the second year and not longer than forty hours after the expiration of that time, unless the employee receives compensation, for work in excess of such hours, "at a rate not less than one and one-half times the regular rate at which he is employed," etc.

To determine the meaning of the terms "engaged in commerce" and "production of goods for commerce" we have only to look to the definitions prescribed in the Act. They are found in Sec. 203, the pertinent ones being:

"(b) `Commerce' means trade, commerce, transportation, transmission, or communication among the several States or from any State to any place outside thereof. * * *

"(i) `Goods' means goods (including ships and marine equipment), wares, products, commodities, merchandise, or articles or subjects of commerce of any character, or any part or ingredient thereof, but does not include goods after their delivery into the actual physical possession of the ultimate consumer thereof other than a producer, manufacturer, or processor thereof.

"(j) `Produced' means produced, manufactured, mined, handled, or in any other manner worked on in any State; and for the purposes of this chapter 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."

The reason those oil wells of the Amity field are called "stripper wells" is because about 10 barrels of crude oil seeps into them each twenty-four hours and is pumped out. To argue that these defendants as a group or organization, or individually, who pumped the oil and handled it, in a standardized way, to get it to a market, were not producing goods for commerce, is equivalent to arguing that a miner with his pick and lamp, who goes down to the end of the shaft and there knocks or blasts the already uncovered coal out of its bed and shovels it into a push car to be conveyed to the surface, is not producing goods for commerce. The only remaining essential is that, the crude oil or "parts or...