Waialua Agr. Co. v. Maneja

• Citation: 97 F. Supp. 198
• Decision Date: 03 May 1951
• Docket Number: Civ. No. 787.
• Parties: WAIALUA AGR. CO., Ltd. v. MANEJA et al.
• Court: U.S. District Court — District of Hawaii

97 F. Supp. 198

WAIALUA AGR. CO., Ltd. v. MANEJA et al.

Civ. No. 787.

United States District Court Honolulu D. Hawaii. First D.

May 3, 1951.

COPYRIGHT MATERIAL OMITTED

COPYRIGHT MATERIAL OMITTED

Rufus G. Poole, Washington, D. C., Livingston Jenks and Anderson, Wrenn & Jenks, all of Honolulu, T. H., Milton C. Denbo, Washington, D. C., Ernest C. Moore, Jr. and Pratt, Tavares & Cassidy, all of Honolulu, T. H., for plaintiff.

Gladstein, Anderson & Leonard, and Richard Gladstein, all of San Francisco, Cal., for defendant.

METZGER, Chief Judge.

Part I.

Statement and Findings.

I.

Nature of Action, Controversy Involved, and Jurisdiction.

This action arises under the Fair Labor Standards Act of 1938, the Act of June 25, 1938, 52 Stat. 1060, 29 U.S.C.A. § 201 et seq. Plaintiff sought a declaratory judgment, and the defendants filed a counter-claim under Section 16(b) of the Act to recover unpaid overtime compensation for work performed by them as employees of plaintiff, and to recover liquidated damages, costs and attorneys' fees.

Following an earlier trial herein, a decision and judgment of this court, reported at 77 F.Supp. 480, and an appeal to the United States Court of Appeals for the Ninth Circuit, this action was remanded to this court for further proceedings by a judgment of the Court of Appeals rendered November 10, 1949, reported at 178 F.2d 603.

Following the remand, all pleadings heretofore filed in this action were amended by the parties, so as to drop certain parties defendant from the litigation, to eliminate the representative character of the case, and to limit the action to the period from November 20, 1946, to and including September 14, 1947.

Under the amended pleadings, the following issues arise with respect to that period of time:

A. Were the defendants or any of them exempt from the overtime provisions of the Act by virtue of Sections 13(a)(6), 7(c), or 13(a)(2), during all or any workweeks falling within the aforementioned period?

B. Were certain of the defendants, while performing work of repairing and maintaining plaintiff's dwelling houses, and while furnishing related facilities and services to plaintiff's employees and others occupying such dwelling houses, engaged in commerce or in the production of goods for commerce, within the meaning of Section 3(j) of the Act?

C. What, if any, amounts are any of the defendants entitled to recover from plaintiff pursuant to Sections 7(a) and 16 (b) of the Act?

These issues are raised by (a) the amended complaint of plaintiff and defendants' answer thereto; and (b) defendants' counterclaim, cross-claim, and cross-complaint under Section 16(b) of the Act, and plaintiff's reply and answer thereto. In addition, defendants seek awards of liquidated damages and recovery of costs and attorneys fees, pursuant to Section 16(b). By its reply and answer, plaintiff seeks to defeat the request for liquidated damages, as well as overtime wages due for the period prior to May 14, 1947, by appealing to the good faith defenses contained in Sections 9, 10 and 11 of the Portal-to-Portal Act of 1947, Act of May 14, 1947, Public Law 49, c. 52, 80th Cong., 1st Sess., 61 Stat. 84, 29 U.S. C.A. §§ 251-262.

All issues have been presented and tried in a single trial. The evidence consists of a lengthy stipulation to certain facts, the testimony of plaintiff's office manager, the testimony of 22 of the defendant employees of plaintiff, and certain exhibits received in evidence, to which reference will be made later.

This case does not involve waiting time, clean-up time, travel time, or any of the types of activity whose consideration occasioned in part the passage of the Portal-to-Portal Act of 1947. Defendants have alleged, it is not disputed by plaintiff, and it is found by the court, that the work performed by defendants for plaintiff, for which recovery is sought in the counterclaim, was the principal work performed by them, was compensable both under an express contract and under custom and practice within the establishments and places where the defendants performed such work, and was performed during portions of the days with respect to which the same was so made cempensable; that all such work was in fact paid for by plaintiff, but the dispute between the parties is whether the amounts so paid were sufficient to discharge plaintiff's obligations under the Act for overtime compensation.

This court has jurisdiction of this action and of the parties hereto pursuant to (a) Section 24 of the Judicial Code as amended, 28 U.S.C.A. § 1337; (b) Section 274d of the Judicial Code, 28 U.S.C.A. § 2201; and (c) Section 16(b) of the Fair Labor Standards Act of 1938.

Parties and Period of Time Involved.

Plaintiff is a corporation organized under the laws of the Territory of Hawaii on December 14, 1948. This action was instituted on April 9, 1947, by a predecessor corporation to the plaintiff, bearing the same name. On December 14, 1948, plaintiff acquired certain of the assets and business, and assumed certain of the liabilities, of the predecessor corporation, including all rights, interests and liabilities in, or which might arise out of, this action. By stipulation, plaintiff has been substituted as the party plaintiff in this action for the predecessor corporation. All subsequent references to "plaintiff" refer either to the predecessor corporation or to the new corporation substituted herein, depending on whether the matters to which they relate occurred prior or subsequent to December 14, 1948.

Defendants are 42 individuals who were employed by plaintiff during the period from November 20, 1946, to September 14, 1947, inclusive. Each of them appears in this proceeding on his separate behalf only, and in no way as representative of any other persons or legal entities. Unless otherwise specified, each performed his work on the plantation.

Summary of Plaintiff's Business.

Plaintiff operates a sugar plantation located in the District of Waialua, City and County of Honolulu, Island of Oahu, Territory of Hawaii. In 1945, it was the third largest producer of raw sugar in the Territory. At the present time the plantation grows and produces sugar cane on 9,663 acres of land owned or leased by it. Substantially all of the land now devoted to sugar cane production has been owned or leased by the plantation and used by it for this purpose since 1910.

As of approximately the commencement of the period covered by this litigation, plaintiff had a total of 959 non-supervisory employees.

Plaintiff's business consists of (a) growing, cultivating, and harvesting sugar cane on the lands owned or leased by it; (b) operating a system of railroad transportation over which harvested cane is hauled to plaintiff's mill; (c) processing such cane into raw sugar and molasses at the mill; (d) shipping such raw sugar to a refinery situated in the continental United States, where such raw sugar is refined and subsequently sold under the circumstances later discussed herein; (e) shipping molasses in bulk to the continental United States; (f) operating a series of shops for the purpose of maintaining, repairing and overhauling plaintiff's buildings, machinery, equipment, vehicles, and rolling stock; (g) maintaining mill villages and housing in which plaintiff's employees and their families dwell.

Plaintiff processes no cane except that grown by itself on its plantation. Neither does it directly engage in any sugar refining operation. However, plaintiff and 30 other companies engaged in the production of raw sugar in the Territory, constitute the total membership of an association called California & Hawaiian Sugar Refining Corporation, Ltd. (C & H), a California corporation. C & H is qualified as a cooperative marketing association under the federal Capper-Volstead Act, 7 U.S. C.A. §§ 291, 292, and under the applicable laws of the State of California. During the period involved in this litigation the members of C & H, including plaintiff, were under contract to deliver, and did deliver, to C & H, all of the raw sugar produced by them in the Territory, except for inconsequential amounts sold for consumption as raw sugar in the Territory.

In this same period, C & H operated a sugar refinery at Crockett, California. Under the mentioned contract, C & H was entitled to process all raw sugar delivered to it by its members, and to sell the refined sugar resulting therefrom, as well as to sell in the form of raw sugar any quantities delivered by the members of C & H. Actually, C & H processed into refined sugar more than 90% of the raw sugar delivered to it by its members, selling the balance as raw sugar.

The proceeds received by C & H from its sale both of refined sugar and of raw sugar, as well as any by-products produced by it, were distributed in the following manner. After first deducting the operating expenses of C & H, the remainder was paid over to the members of C & H, including plaintiff, partly in the form of dividends at 6% on the shares of capital stock of C & H, all of which were owned by the aforementioned 31 Hawaii companies —"substantially in the same proportion as the tonnage of raw sugar which they ship to C & H" (Def. Ex. 2)—and the balance was paid over to the same companies, in direct proportion to the amounts of raw sugar delivered by them to C & H.

Plaintiff's Plantation Operations.

Sugar cane is highly perishable. To avoid serious losses it is processed into sugar, syrup or molasses within a relatively short time after being harvested—usually, as the record shows, the practice of processing is between 4 and 16 hours. It "cannot be stored more than 2 or 3 days without spoiling" (Def. Ex. 3B, p. 36).¹ It does not move into interstate commerce in its natural state. Except for small amounts which are used as seed cane, it is grown for the purpose of producing sugar, syrup and molasses. It is these products, which result from the processing of cane, that become ar...