Walling v. Miller, 12574.

• Citation: 138 F.2d 629
• Decision Date: 09 November 1943
• Docket Number: No. 12574.,12574.
• Parties: WALLING, Adm'r of Wage and Hour Division, U. S. Dept. of Labor, v. MILLER et al.
• Court: United States Courts of Appeals. United States Court of Appeals (8th Circuit)

138 F.2d 629 (1943)

WALLING, Adm'r of Wage and Hour Division, U. S. Dept. of Labor, v. MILLER et al.

No. 12574.

Circuit Court of Appeals, Eighth Circuit.

November 9, 1943.

Bessie Margolin, Asst. Sol., U. S. Dept. of Labor, of Washington, D. C. (Douglas B. Maggs, Sol., of Washington, D. C., James M. Miller, Regional Atty., of Minneapolis, Minn., Morton Liftin, Joseph L. Nachman, and H. Michele Olsson, Attys., U. S. Dept. of Labor, all of Washington, D. C., on the brief), for appellant.

George W. Pryor, of Washington, D. C. (Pierce Butler and Doherty, Rumble, Butler, Sullivan & Mitchell, all of St. Paul, Minn., and Feldman, Kittelle, Campbell & Ewing, of Washington, D. C., on the brief), for appellees.

Before WOODROUGH, THOMAS, and JOHNSEN, Circuit Judges.

THOMAS, Circuit Judge.

On July 17, 1941, the Administrator of the Wage and Hour Division, United States Department of Labor, filed a complaint in the district court demanding judgment enjoining and restraining the defendants from violating the provisions of § 15(a) (1), (2), and (5) of the Fair Labor Standards Act of 1938, June 25, 1938, 52 Stat. 1060, 29 U.S.C.A. § 201 et seq.

On the same day the petition was filed a stipulation of the parties was filed and a consent decree was entered. In the stipulation the defendants waived answer and any defenses to the complaint, and consented to the entry of a final judgment, "incorporating this stipulation as a part thereof, and granting the relief demanded in said complaint." The stipulation provided that the defendants agree to pay to all their employees, employed since October 24, 1938, "a sum of money equal to the difference between the amounts of wages actually paid each such employee for his employment during the said period and the amounts each such employee should have been paid had he been compensated for his said employment at the minimum and overtime rates of pay as required by Sections 6 and 7 of the Fair Labor Standards Act of 1938."

The decree, entered with the express consent of all the defendants, granted the relief demanded and included a provision incorporating the stipulation, making it a part thereof, and adjudging that the defendants do and perform each and every act and thing set forth in the stipulation.

On January 14, 1942, the defendants filed a motion to vacate the decree "in whole, or in such part as the Court finds the facts and the law justify." The motion was based upon several grounds, one of which was that the Act does not authorize the plaintiff to maintain a suit for restitution of wages that may be due by virtue of any violation of § 15, but that such power is granted solely to employees by § 16 of the Act, and that, therefore, the court was without jurisdiction in an injunction suit brought by the plaintiff under § 17 to order restitution of wages even though consented to by defendants.

The motion was resisted by the plaintiff. After a hearing, the court, on November 14, 1942, found that it had jurisdiction over the general subject matter of the action and over the parties and held that for this reason any defect in the form of the decree or the inclusion in it of restraints not asked for by the complaint does not require a change in the decree.

The foregoing parts of the court's ruling on the motion were unfavorable to the defendants, and they have not appealed. But the court further found and held that:

"Because Section 16 (b) of the Fair Labor Standards Act gives to the employees a right to recover their wages and because Section 17 does not expressly permit the recovery of wages in an action brought under Section 17, any incidental powers which the court might have under that section are withdrawn, for when a statute creates a right (or liability) and gives a special remedy for its enforcement, that remedy is the exclusive one. Therefore, the court lacked jurisdiction to grant restitution in this action.

* * * * * *

"In view of the above conclusions the only relief to which defendants are now entitled is a vacation of the decree's order to make restitution of the back wages to their employees, and to that extent there will be a vacation and modification.

"It is so ordered * * *".

From the part of the ruling granting "a vacation of the decree's order to make restitution of the back wages to their employees" the administrator has appealed.

The able opinion of the district court is reported in Fleming. Administrator, etc., v. Miller et al., 47 F.Supp. 1004, 1012.

The plaintiff contends that the court erred in holding that it lacked jurisdiction to grant restitution in a consent decree entered in a suit commenced by the administrator.

The law is that a decree entered by consent may be reviewed upon appeal or bill of review where there is a claim of lack of actual consent to the decree as entered; or of fraud in its procurement; or that there was lack of federal jurisdiction. But "a decree, which appears by the record to have been rendered by consent is always affirmed, without considering the merits of the cause." All errors going to the merits and remediable on appeal are waived by consent to the decree. If the court entering the decree had jurisdiction both of the general subject matter and of the parties, any objection to the merits is reviewable on appeal and is not open on a motion to vacate. Swift & Co. v. United States, 276 U.S. 311, 324, 326, 327, 48 S.Ct. 311, 314, 72 L.Ed. 587.

One reason for the rule is obvious. A court which, having jurisdiction of the parties and of the subject matter, renders a consent decree, if it sustains a motion of one of the parties to vacate such decree, not only sanctions the breach of a contract but in effect becomes a party to the breach. On the other hand, if the court lacks power to adjudicate such a cause of action in the first instance, it lacks power also to sanction a stipulation of settlement by entering a consent decree.

There is no claim here that the parties were not competent to contract; or that there was lack of consent; or that there was fraud in the procurement of the decree. Neither can it be doubted that the court at the time the decree was entered had general jurisdiction of the subject matter and of the parties. The court so found, and no appeal was taken by the defendants from that finding. The court had power to enforce and to adjudicate disputes arising under the Fair Labor Standards Act. Under § 17 it has power to restrain violations of § 15. Under § 16(a) it has power to punish by fine or imprisonment those who willfully violate § 15; and under § 16(b) it has power to award restitution of wages and liquidated damages to employees against employers who violate §§ 6 and 7 of the Act.

The defendants, however, challenge the jurisdiction of the court here, as they did in the lower court, on the ground that the Fair Labor Standards Act does not authorize the administrator to maintain a suit for restitution of wages that may be due by virtue of any violation of § 15 because such power is granted solely to employees by § 16 of the Act. We think the defendants confuse the power of the court to adjudicate a controversy under the Act with the capacity of the parties to maintain the action. Assuming, but not deciding, that the administrator is not authorized in the first place to maintain a suit for restitution and that only the employees may do so, the inclusion of the order for restitution in the consent decree did not go to the jurisdiction or power of the court but to the merits only. General Inv. Co. v. New York Central R. R., 271 U.S. 228, 230, 231, 46 S.Ct. 496, 70 L.Ed. 920; Illinois Central Railroad Co. v. Adams, 180 U.S. 28, 34, 35, 21 S.Ct. 251, 45 L.Ed. 410; Venner v. Great Northern Railway, 209 U.S. 24, 34, 28 S.Ct. 328, 52 L.Ed. 666. In the General Inv. Co. case, a suit in equity was brought by a minority stockholder against the railroad company to enjoin it from dominating and controlling through stock ownership certain other railroad companies. The suit was dismissed by the district court for want of jurisdiction on the ground that a private litigant was without capacity to maintain the bill because such right was lodged exclusively by the Acts of Congress in others. The Court held that the suit was dismissed on an untenable ground and that the question pertained to the merits, not to...