Walling v. Armbruster

• Decision Date: 10 August 1943
• Docket Number: Civ. No. 345.
• Citation: 51 F. Supp. 166
• Parties: WALLING v. ARMBRUSTER et al.
• Court: U.S. District Court — Western District of Arkansas

51 F. Supp. 166

WALLING v. ARMBRUSTER et al.

Civ. No. 345.

District Court, W. D. Arkansas, Fort Smith Division.

August 10, 1943.

Douglas B. Maggs, Solicitor, Department of Labor, Irving J. Levy, Associate Solicitor, Department of Labor, of New York City, and Llewellyn B. Duke, Regional Atty., Department of Labor, and Harry Campbell, Jr., Associate Atty., Department of Labor, both of Dallas, Tex., for plaintiff.

Hugh M. Bland, of Fort Smith, Ark., for defendants.

MILLER, District Judge.

Able counsel for the parties have filed most excellent briefs in support of their contentions. Counsel for plaintiff state the issues as follows:

(1) Whether the defendants are engaged in the production of goods for interstate commerce within the meaning of the Act.

(2) Whether the defendants are operating a service establishment within the exemption granted by Section 13(a) (2) of the Act.

These questions will be discussed in the order stated.

(1) In Kirschbaum Co. v. Walling, Administrator of the Wage and Hour Division, United States Department of Labor, 316 U.S. 517, 524, 62 S.Ct. 1116, 1120, 86 L.Ed. 1638, the court said: "But the provisions of the Act expressly make its application dependent upon the character of the employees' activities. And, in any event, to the extent that his employees are `engaged in commerce or in the production of goods for commerce', the employer is himself so engaged."

In Fleming, Administrator of the Wage and Hour Division, United States Department of Labor, v. A. B. Kirschbaum Co., 3 Cir., 124 F.2d 567, 570, the court said: "We conclude that it was the intention of Congress to make the act applicable to all those who are employed in commerce or in the production of goods in commerce without regard to the nature of their employer's business and that this intention was given apt expression in Sections 6 and 7 of the act."

The term "goods" is defined in Section 3(i) of the Act, U.S.C.A. Title 29, Section 203(i) and the term "produced" is defined in Section 3(j) of the Act, U.S.C.A. Title 29, Section 203(j).

The statutory definition of these terms are sufficiently broad to include the converted automobiles and there is no doubt that the finished buses were goods produced for commerce.

In the case of United States v. Darby, 312 U.S. 100, 118, 657, 61 S.Ct. 451, 459, 85 L.Ed. 609, 132 A.L.R. 1430, in which the constitutionality of the Act was sustained, it is said: "The recognized need of drafting a workable statute and the well known circumstances in which it was to be applied are persuasive of the conclusion, which the legislative history supports, S. Rept. No. 884, 75th Cong. 1st Sess., pp. 7 and 8; H. Rept. No. 2738; 75th Cong. 3rd Sess., p. 17, that the `production for commerce' intended includes at least production of goods, which, at the time of production, the employer, according to the normal course of his business, intends or expects to move in interstate commerce although, through the exigencies of the business, all of the goods may not thereafter actually enter interstate commerce."

The facts disclose that the employees of defendants were engaged in work necessary to the production of goods (buses) in Arkansas. At the time such work was being done the defendants knew that the goods (buses) were destined to move in interstate commerce to the state where they were to be used. In such operations the defendants were and are subject to the provisions of the Act, unless exempted therefrom by Section 13(a) (2), U.S.C.A. Title 29, Section 213 (a) (2). See Enterprise Box Co. v. Fleming, 5 Cir., 125 F.2d 897; Warren-Bradshaw Drilling Co. v. Hall, Agent, et al., 317 U.S. 88, 63 S.Ct. 125, 87 L.Ed. ___.

(2) Were and are the defendants operating a service establishment within the exemption granted by Section 13(a) (2) of the Act?

The section reads: "The provisions of sections 206 and 207 of this title shall not apply with respect to * * * any employee engaged in any retail or service establishment the greater part of whose selling or servicing is in intrastate commerce." U.S.C.A. Title 29, Section 213(a) (2).

The Circuit Court of Appeals for the Eighth Circuit in its opinion in the case of Musteen et al. v. Johnson et al., 8 Cir., 133 F.2d 106, 108, after referring to the cases of A. B. Kirschbaum Co. v. Walling, 316 U.S. 517, 62 S.Ct. 1116, 86 L.Ed. 1638; Overnight Motor Transp. Co., Inc., v. Missel, 316 U.S. 572, 62 S.Ct. 1216, 86 L.Ed. 1682; Warren-Bradshaw Drilling Co. v. Hall, 317 U.S. 88, 63 S.Ct. 125, 87 L.Ed. ___; and Walling v. Jacksonville Paper Co., 317 U.S. 564, 63 S.Ct. 332, 87 L.Ed. ___, said: "These decisions indicate that the Fair Labor Standards Act must be liberally construed to include all employees (not expressly excepted from the Act) who reasonably may be deemed to be within its purview."

The plaintiff contends that the conversion of automobiles into buses is manufacturing and that the business as operated by defendants is not a service establishment.

The defendants on their brief state: "If the defendants were manufacturing buses from the ground up and selling them to customers at their place of business, knowing that they were to take them into other states, then the defendants would be covered by the Act, but, in the case at bar, we have a pure service establishment rendering a service to owners of automobiles desiring that they be converted into buses."

Learned counsel for defendants has displayed great industry in the preparation of the brief for defendants, but most of the cases cited and relied upon arose under the various tariff and taxing statutes. The same is true of most of the cases cited by able counsel for the plaintiff. None of the cited cases seem to be decisive of the question and the court in its investigation of the precedents has not found any case that fully determines the question. The Supreme Court of the United States, speaking through Mr. Justice Blatchford in the case of Hartranft v. Wiegmann, 121 U.S. 609, 615, 616, 7 S.Ct. 1240, 1243, 30 L.Ed. 1012, said: "We are of opinion that the shells in question here were not manufactured, and were not manufactures of shells, within the sense of the statute imposing a duty of 35 per centum upon such manufactures, but were shells not manufactured, and fell under that designation in the free list. They were still shells. They had not been manufactured into a new and different article, having a distinctive name, character, or use from that of a shell. The application of labor to an article, either by hand or by mechanism, does not make the article necessarily a manufactured article, within the meaning of that term as used in the tariff laws. Washing and scouring wool does not make the resulting wool a manufacture of wool. Cleaning and ginning cotton does not make the resulting cotton a manufacture of cotton. In Schedule M of section 2504 of the Revised Statutes (p. 475, 2d Ed.) a duty of 30 percent. ad valorem is imposed on `coral, cut or manufactured;' and in section 2505 (p. 484) `coral, marine, unmanufactured,' is made exempt from duty. These provisions clearly imply that, but for the special provision imposing the duty on cut coral, it would not be regarded as a manufactured article, although labor was employed in cutting it. In Frazee v. Moffitt 18 F. 584, 20 Blatchf. 267, it was held that hay pressed in bales, ready for market, was not a manufactured article, though labor had been bestowed in cutting and drying the grass and bailing the hay. In Lawrence v. Allen, 7 How. 785 12 L.Ed. 914, it was held that India-rubber shoes, made in Brazil, by simply allowing the sap of the India-rubber tree to harden upon a mould, were a manufactured article, because it was capable of use in that shape as a shoe, and had been put into a new form capable of use and designed to be used in such new form. In United States v. Potts, 5 Cranch, 284 3 L. Ed. 102, round copper plates turned up and raised at the edges from four to five inches by the application of labor, to fit them for subsequent use in the manufacture of copper vessels, but which were still bought by the pound as copper for use in making copper vessels, were held not to be manufactured copper. In the case of United States v. Wilson, 1 Hunt, Mer. Mag. 167, Judge Betts held that marble which had been cut into blocks for the convenience of transportation was not manufactured marble, but was free from duty, as being unmanufactured."

In the case at bar the defendants with the use of machinery, materials and labor changed and converted four-door sedan automobiles into buses. When the operation performed by defendants was concluded the product delivered to the customer was not an automobile as that term is commonly understood even though it was driven by the same motor and steered by the same apparatus. It had a destinctive name, character and use from that of the automobile. It is clear that the defendants were and are engaged in manufacturing operations and not as repairers.

In the case of Cullum v. Stevens, D.C.N. D. Texas, 46 F.Supp. 73, 75, the court said: "Plaintiff for months was principally engaged in the work of making these pumps and was very efficient. In doing the work, his hands, suitable tools, dies and machinery were used. With this picture of work and materials furnished before us, if it was servicing, what did the plaintiff service? Plainly it was not servicing, but certainly producing, and I say manufacturing, under any and all definitions, goods for commerce. It was a tiny electric motor and sheet metal fan material when it came to defendant, and was a...