United States v. Lovknit Mfg. Co., 13361.

• Decision Date: 01 June 1951
• Docket Number: No. 13361.,13361.
• Citation: 189 F.2d 454
• Parties: UNITED STATES v. LOVKNIT MFG. CO., Inc., et al.
• Court: U.S. Court of Appeals — Fifth Circuit

189 F.2d 454 (1951)

UNITED STATES v. LOVKNIT MFG. CO., Inc., et al.

No. 13361.

United States Court of Appeals Fifth Circuit.

June 1, 1951.

Morton Liftin, Joseph Kovner, Attorney, Dept. of Justice, Washington, D. C., Frank B. Potter, U. S. Atty., O. Morris Harrell, Asst. U. S. Atty., Dallas, Tex., for appellant.

Harry I. Freedman, Dallas, Tex., Welborn B. Cody (as amicus curiæ), Atlanta, Ga., Franklin E. Spafford, Dallas, Tex., for appellee.

Before HUTCHESON, Chief Judge, and SIBLEY and STRUM, Circuit Judges.

SIBLEY, Circuit Judge.

The suit in the District Court was brought by the United States expressly under the Walsh-Healey Act, 41 U.S.C.A. §§ 35 to 45, against Lovknit Manufacturing Company, Inc., and two of its officers to recover for breaches of 12 contracts for the manufacture of garments and mosquito bars, which contracts were made and goods delivered, the first in 1942 and the last in 1945. The breaches alleged consisted in the failure to pay proper overtime wages to numerous employees, and in the employment of four persons who were too young, by reason of all which a total of $6796.90 was claimed to be due to the United States as liquidated damages. It was alleged that on January 8, 1947, the Secretary of Labor had formulated a complaint specifying these claims in detail and appointed a Hearing Examiner under Section 5 of the Act, 41 U.S.C.A. § 39, who had rendered a decision on December 29, 1947 from which an appeal was taken to the Administrator of the Wage and Hour Public Contracts Division of the Department of Labor who, on March 21, 1949, affirmed the findings of the Hearing Examiner. Suit was filed by the direction of the Attorney General on December 28, 1949.

One of the defenses pleaded was that the suit is barred under the limitation provisions of the act of May 14, 1947 called the Portal to Portal Act, 29 U.S.C.A. § 255. At the trial the proceedings before the Hearing Examiner and the Administrator were put in evidence, and a motion for summary judgment made. The court held the suit barred and also that the merits of the claim were with the defendants. This appeal followed. We find it necessary to consider only the question of bar by limitation.

The words of the Act of May 14, 1947, 29 U.S.C.A., § 255, so far as they need be quoted are: "Any action commenced on or after the date of the enactment of this Act to enforce any cause of action for unpaid minimum wages, unpaid overtime compensation, or liquidated damages, under the Fair Labor Standards Act of 1938, as amended, the Walsh-Healey Act, or the Bacon-Davis Act —

"(a) if the cause of action accrues on or after the date of the enactment of this Act—may be commenced within two years after the cause of action accrued, and every such action shall be forever barred unless commenced within two years after the cause of action accrued." (Emphasis added.)

By Paragraph (b) a two year limitation is fixed in similar words as to causes of action accruing before the enactment of the Act, unless an applicable State statute fixes a shorter time, in which case the shorter time applies. Paragraph (c) allows 120 days after the date of enactment to file actions falling under Paragraph (b) unless when commenced they are already barred by a State statute. The present suit is clearly one "to enforce causes of action * * * for liquidated damages under * * * the Walsh-Healey Act." The date of accrual of the causes of action is disputed, the United States saying that they accrued only after the investigation and findings of the Hearing Examiner and Administrator ended on March 21, 1949, and that the suit was brought within two years thereafter on December 28, 1949 and was timely. Appellees say that the causes of action accrued as to each contract on its breach and not later than the completion of that contract, and all accrued more than four years before suit. No State statute is brought forward as applicable. Further the United States contends that the limitation Act does not apply to the sovereign at all because not named in it.

1. We consider the last question first, and have no doubt that the Act applies. Congress can and often has fixed time limitations applying to the United States without specially so saying. Note those affecting taxes, the very life of the government. There is no need to name the United States in a statute if the intent to affect the United States is clear otherwise, as from the subject matter dealt with. A general statute ordinarily is applied to citizens only and not to Government, and this would perhaps have been true of this Act except for the fact that all causes of action under the Walsh-Healey Act are named expressly and that Act relates only to government business; and as we shall see, the United States alone has causes of action under it. Particular mention of the Walsh-Healey Act in the limitation Act in effect writes the limitation into the Walsh-Healey Act as a part of it. "Any cause of action" under that Act is expressly limited and they all are about public contracts with the United States: the whole is Government legislation. The Government is clearly intended to be affected.

2. Let us look closely at the Walsh-Healey Act, 41 U.S.C.A. §§ 35-45, to see what it deals with and what rights it defines and in whom they are vested. It was enacted in 1936 before the Fair Labor Standards Act, 29 U.S.C.A. § 201 et seq. The first section requires that any contract made by an agency of the United States for manufacture or furnishing of materials and equipment in excess of $10,000 shall contain certain stipulations, including one for the payment of wages on a scale to be determined by the Secretary of Labor, and one for the restriction of work hours to eight in any day and forty in any week; and that no male under sixteen years or female under eighteen years of age, and no convict labor, will be employed in the work. We do not inquire whether these stipulations must be actually expressed in the contract or whether the statute writes them in, nor whether it is shown that they were actually in these contracts, the contracts not being in the record. No issue about this was made in the hearing before the examiner and we assume they contained what the Act required. The claim investigated there and the suit here allege that there were specified "breaches of the contract" and the suit is one expressly for breaches of the contracts and for the liquidated damages fixed in the next Section, 41 U.S.C.A. § 36: "Any breach or violation of any of the representations and stipulations in any contract for the purposes set forth in section 35 * * * shall render the party responsible therefor liable to the United States of America for liquidated damages" (which alone are claimed here), at ten dollars per day as to each person misemployed or worked overtime, besides other damages named. A right also is given to cancel the contract and procure what was contracted for elsewhere at the contractor's cost. "Any sums of money due to the United States of America by reason of any violation of any of the representations and stipulations of said contract set forth in section 35 of this title may be withheld from any amounts due on any such contracts or may be recovered in suits brought in the name of the United States of America by the Attorney General thereof." There is a further provision that sums recovered or withheld as rebates or for underpayment of wages shall be held in a special deposit account and paid by the Secretary of Labor directly to the employees who have been paid less than minimum rates of pay as set forth in the contract and on whose account such sums were withheld or recovered, if claimed by them within one year.

It is clear to us that no one may sue for a breach of these contracts in any respect except the United States through the Attorney General. The contracts are public contracts to which only the United States and the contractors are parties. No one can interfere in court for a breach except the Attorney General. To permit interference by others might impede the public business. The Section 36 does permit the United States to retain or recover rebates and underpayments of wages which are a breach of the public contract, and requires this money to be paid to the employees concerned, if they ask for it within a year, but this does give them a right to sue anybody. This benevolent provision is the only relief the Congress provides for an employee under this Act. The employee can have no cause of action for unpaid wages under this Act. In the present case only a cause of action for liquidated damages is asserted, and in such damages no one but the United States can have any interest in any way. We know of no case in which an employee has recovered under the Walsh-Healey Act, though we are told that some members of Congress in considering the Portal...