United States Cartridge Co. v. Powell

• Decision Date: 07 May 1949
• Docket Number: No. 13663.,13663.
• Citation: 174 F.2d 718
• Parties: UNITED STATES CARTRIDGE CO. v. POWELL et al.
• Court: U.S. Court of Appeals — Eighth Circuit

174 F.2d 718 (1949)

UNITED STATES CARTRIDGE CO. v. POWELL et al.

No. 13663.

United States Court of Appeals Eighth Circuit.

April 12, 1949.

As Modified on Denial of Rehearing May 7, 1949.

R. H. McRoberts, Rhodes E. Cave and Marion S. Francis (of Bryan, Cave, McPheeters & McRoberts), all of St. Louis, Mo., for appellant.

Thomas Bond, of St. Louis, Mo., for appellees.

William S. Tyson, Sol., Bessie Margolin, Asst. Sol., and William A. Lowe and E. Gerald Lamboley, Attys., Dept. of Labor, all of Washington, D. C., and Reid Williams, of Kansas City, Mo., amici curiae.

Before GARDNER, Chief Judge, and SANBORN, WOODROUGH, THOMAS, JOHNSEN, RIDDICK and COLLET, Circuit Judges.

COLLET, Circuit Judge.

This is an action brought by a group of fifty-nine plaintiffs who were employed during World War II at the St. Louis Ordnance Plant to recover overtime compensation, liquidated damages, attorney fees, and costs, under the Fair Labor Standards Act of 1938. On trial the court found all the issues in favor of plaintiffs and entered judgment aggregating $246,251.44 (twice the amount of overtime claimed), plus $24,625.00 as attorney fees and costs. The parties will be referred to as they were designated in the District Court.

Defendant was engaged in the operation of a large munitions plant near St. Louis, Missouri, manufacturing small arms ammunition for use by the military forces of the United States under a cost-plus-a-fixed-fee contract with the United States and under the supervision of the Ordnance Department of the War Department. It is admitted by the pleadings that plaintiffs were all employees of defendant. Plaintiffs allege that defendant was engaged in interstate commerce and in the production of goods for interstate commerce within the meaning of the Fair Labor Standards Act of 1938,¹ and that they were employed in the production of goods for interstate commerce at agreed salaries for a 40-hour week, with the understanding that for all hours which they worked over 40 per week they would be compensated at the rate provided by that Act of one and one-half times the regular rate of pay. Plaintiffs were all employed in defendant's Safety Department.

Defendant denied and still denies that it was engaged in interstate commerce or in the production of goods for interstate commerce, denied that plaintiffs were so employed or at agreed salaries for a 40-hour week or that they were entitled to overtime pay for time worked in excess of 40 hours per week. The defendant alleged and continues to contend that each of the plaintiffs was employed in a bona fide administrative capacity as that term is defined in the Fair Labor Standards Act with the result that that Act did not apply with respect to them. The defendant furthermore set up certain provisions of the Missouri Statute of Limitations as an affirmative defense. After judgment was entered a motion for rehearing was filed, requesting among other things that the cause be reopened to permit defendant to plead and prove the defenses made available to it under the Portal-to-Portal Act, 29 U.S.C.A. § 251 et seq., which had become effective subsequent to the trial and shortly prior to the judgment. This motion was accompanied by an affidavit stating certain facts deemed relevant to those defenses. Plaintiffs answered this affidavit with a counter affidavit. The motion was denied. This appeal followed. We held the case under submission pending the determination of Kennedy v. Silas Mason Co., 1948, 334 U.S. 249, 68 S.Ct. 1031, because of the similarity of certain important issues in both cases. Upon the remand of the Kennedy-Silas Mason case we set aside the submission of this cause and set it for reargument before this court en banc. The parties were granted leave to file supplemental briefs particularly directed to the applicability, if any, of either the Fair Labor Standards Act of 1938, supra; the Act of July 2, 1940, 54 Stat. 712, 50 U.S.C.A. Appendix, §§ 1171, 1172, and 5 U.S.C.A. § 189a; or the Walsh-Healey Public Contracts Act of June 30, 1936, 49 Stat. 2036, 41 U.S.C.A. § 35 et seq. Pursuant thereto the cause was re-argued and supplemental briefs bearing upon the applicability of the above-mentioned Acts were filed.

Defendant contends (1) that plaintiffs were not engaged in the production of goods for interstate commerce within the meaning of the Fair Labor Standards Act, and were not included within the coverage of that Act, (2) that it was not engaged in interstate commerce or in the production of goods for interstate commerce within the meaning of the Fair Labor Standards Act, (3) that the ammunition produced by defendant for the United States was for use in the war and was not "goods" within the meaning of that Act, (4) that plaintiffs were not engaged in interstate commerce or in the production of goods for commerce, (5) that the burden was on plaintiffs to plead and prove the coverage of the Act, the hours worked, and that they were engaged in the production of "goods" as defined in the Fair Labor Standards Act, which burden was not sustained, (6) that plaintiffs were employed in a bona fide administrative capacity and were exempt from the provisions of the Fair Labor Standards Act, (7) that the judgment of the trial court is in any event excessive in that it (a) is based on the erroneous assumption that the salaries paid plaintiffs were base pay for a 40-hour week instead of a variable or 48-hour week, (b) includes in the computations of hours worked a one-half hour lunch period, and (c) includes as hours worked, time prior to the beginning of and following the ending of plaintiffs' regular work shifts, (8) that the claims of certain plaintiffs were barred by Sections 1012 and 1015, R.S.Mo. 1939, Mo.R.S.A., (9) that the provisions of the Portal-to-Portal Act of 1947 are binding in this case and defendant should have been given the opportunity to plead and sustain the defenses made available to it under the Act, and (10) that two of the plaintiffs died while the cause was under submission and there has been no proper substitution and revival.

The trial court found that defendant was engaged in interstate commerce and in the production of goods for commerce within the meaning of the Fair Labor Standards Act and gave judgment for plaintiffs under that Act, including, as heretofore noted, the overtime claimed, liquidated damages, and attorney fees.

There is no serious dispute concerning the underlying facts. Defendant entered into a cost-plus-a-fixed-fee contract with the United States Government to operate and maintain the munitions plant in suit and to produce therein and thereat small arms and ammunition in huge quantities for the United States Government. The Government acquired the site for the plant, erected all of the buildings and installed all of the machinery, to all of which it retained title. The Government furnished defendant with all raw materials or the funds with which to acquire them. The title to all raw materials and finished munitions remained in the Government. A large part of those materials were shipped to the plant from outstate, some by the Government and some on defendant's orders consigned to defendant. All those materials were unloaded at the plant by defendant's employees. Defendant manufactured those raw materials into arms and ammunition at the plant in Missouri. In doing so it had the actual physical possession of the material and products thereof, but all operations were under the direct supervision of representatives of the United States Government. All completed products were carefully inspected by the Government. And all of those products were shipped upon the order of the Government to places specified by it. Predominately, if not entirely, those destinations were beyond the confines of the State of Missouri. Those shipments were usually on Government bills of lading, but occasionally they were made on defendant's bills of lading. All of the finished products with one exception were shipped at Government expense to points for use by it in the war. That exception consisted of small quantities of test ammunition sent to Purdue University and a point in Pennsylvania for test purposes. A by-product, scrap copper or brass, resulting from the making of shells, appears to have been transported in defendant's trucks to a nearby cartridge company on defendant's commercial bill of lading. This appears to be the only product resulting from defendant's manufacturing process which left the plant on other than Government bills of lading. The title to this by-product appears to have remained in the Government. All shipments from the plant were crated and loaded by defendant. Bills of lading and shipping papers were prepared by defendant's employees. The defendant by the terms of the contract was required to do all things necessary to the operation of the plant, to hire all employees, to inspect and check all materials by its own inspectors before submitting the goods to the Government for acceptance, to keep records and books of account showing the cost of all labor, material and other expenditures, to pay employee contributions under the Federal Social Security Act, 42 U.S. C.A. § 301 et seq., and to pay all state and local taxes, licenses or fees required by state law, including state compensation laws. Extensive railroad switching facilities were constructed on the plant site (which was a military reservation). These facilities were also owned by the Government, as well as the switch engines and similar equipment. This equipment was stated by defendant to have been manned and operated by defendant's employees. The defendant was designated in the contract as an independent contractor² but the Government had, as heretofore noted, the right to make any changes its representatives deemed necessary in the method of performing the work and, as heretofore inferred, it paid all operating costs. Defendant's fixed fee was based upon the...