Walling v. Mutual Wholesale Food & Supply Co.

• Decision Date: 08 March 1944
• Docket Number: No. 12618.,12618.
• Citation: 141 F.2d 331
• Parties: WALLING, Administrator of the Wage and Hour Division, United States Department of Labor, v. MUTUAL WHOLESALE FOOD & SUPPLY CO. et al.
• Court: U.S. Court of Appeals — Eighth Circuit

141 F.2d 331 (1944)

WALLING, Administrator of the Wage and Hour Division, United States Department of Labor, v. MUTUAL WHOLESALE FOOD & SUPPLY CO. et al.

No. 12618.

Circuit Court of Appeals, Eighth Circuit.

March 8, 1944.

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George B. Searls, Supervising Atty., U. S. Department of Labor, of Washington, D. C. (Douglas B. Maggs, Sol., Irving J. Levy, Associate Sol., Bessie Margolin, Asst. Sol., all of Washington, D. C., James M. Miller, Regional Atty., of Minneapolis, Minn., and Morton Liftin and Morton H. Rowen, Attys., United States Department of Labor, both of Washington, D. C., on the brief), for appellant.

R. H. Fryberger, of Minneapolis, Minn., and George M. Burditt, of Chicago, Ill., for appellees.

Before STONE, THOMAS, and JOHNSEN, Circuit Judges.

STONE, Circuit Judge.

The Administrator of the Wage and Hour Division of the Department of Labor filed a bill to enjoin alleged violations of Sections 15(a) (2), 15(a) (5) and 11(c) of the Fair Labor Standards Act, 29 U.S. C.A. §§ 215(a) (2, 5) and 211(c), against Mutual Wholesale Food & Supply Co., C. Thomas Stores Sales System (name changed to C. Thomas Stores, Inc.), Merchandise Terminal Warehouse, Lawrence Warehouse Co., and Bailey Food Merchandising Co., all of which were corporations. The violations claimed under § 15 (a) (2) had to do with minimum wages and with maximum hours. The violations of §§ 15(a) (5) and 11(c) concerned keeping of proper records. Answers made the issues of whether the different defendants were engaged in interstate commerce within the meaning of the Act and as what employees were within the Act.

The court filed a painstaking opinion (46 F.Supp. 939), findings of fact and conclusions of law. A decree was entered dismissing as to C. Thomas Stores, Lawrence Warehouse Company and Bailey Food Merchandising Company; granting injunction as to designated classes of employees of Mutual Wholesale Food & Supply Company and Merchandise Terminal Company; denying injunction as to other classes of employees of those two companies, and directing those two companies to make, keep and preserve proper records of employees as required by section 11 of the Act and regulations pursuant thereto.

The Administrator appeals from the conclusion of law excluding the "`cello' or packaging department" employees of Merchandise Terminal Company; from the exclusion, in the decree, of certain named classes of employees of the Mutual Wholesale Food & Supply Company; and from the dismissal as to C. Thomas Stores and as to Lawrence Warehouse Company.

Moot Case.

After brief of appellant had been filed, the clerk of this court received a letter from one of counsel for the trustee in bankruptcy of C. Thomas Stores, Inc., stating: that the bankrupt was a merger of C. Thomas Markets, C. Thomas Stores and Mutual Wholesale Food & Supply Company; that "the defendants in the above action this appeal have been liquidated in bankruptcy, and as a result the questions at issue are now moot as far as the defendants are concerned;" and that, consequently, no brief would be filed for appellees. In a later letter, such counsel stated these companies "are out of existence for all intents and purposes, although it is true that the corporate shells still remain, and undoubtedly will until their existence ceases by operation of law for no one connected with the corporations are concerned at all about dissolving same." On call of this case, counsel for appellant argued the merits of the appeal and was given leave to file brief on the question of whether the cause had become moot, with leave to counsel for appellees to reply thereto. Such brief has been filed for appellant and counsel for such appellees has indicated that no reply will be filed.

We think the controversy has not become moot so that this appeal should be dismissed. Whatever may have happened to their business, these companies are yet in existence. Ceasing an illegal practice (by going out of business or otherwise), after institution by a public agency of a proceeding to prevent future violations, does not make the controversy moot. Consolidated Edison Co. v. National Labor Relations Board, 305 U.S. 197, 230, 59 S.Ct. 206, 83 L.Ed. 126; Federal Trade Comm. v. Goodyear Tire & Rubber Co., 304 U.S. 257, 260, 58 S.Ct. 863, 82 L.Ed. 1326; National Labor Relations Board v. Pennsylvania Greyhound Lines, 303 U.S. 261, 271, 58 S.Ct. 571, 82 L.Ed. 831, 115 A.L.R. 307; Southern Pac. Terminal Co. v. Interstate Commerce Commission, 219 U.S. 498, 514-516, 31 S.Ct. 279, 55 L.Ed. 310; United States v. Trans-Missouri Freight Ass'n, 166 U.S. 290, 307, 17 S.Ct. 540, 41 L.Ed. 1007; Federal Trade Comm. v. Wallace, 8 Cir., 75 F.2d 733, 738. This rule has been applied in suits for injunctions under this Act. Walling v. Haile Gold Mines, 4 Cir., 136 F.2d 102, 105; Fleming v. Cincinnati Union Terminal Co., 6 Cir., 117 F.2d 1012. This rule is reenforced if the situation presents a necessity for decision as a guide to the public agency in future similar matters. Walling v. Haile Gold Mines, supra, 136 F.2d at page 105; Gay Union Corporation v. Wallace, 71 App.D.C. 382, 112 F. 2d 192, 195; Boise City Irr. & L. Co. v. Clark, 9 Cir., 131 F. 415, 418, 419. Further emphasis is placed on this rule where there has been a decision in a lower court which may be used as a precedent in future activities of a public agency. Walling v. Haile Gold Mines, supra, 136 F.2d at page 105, a case under this Act. We proceed to the merits.

The Merits.

Appellant states the issues on appeal concisely as follows:

"This appeal is from the refusal to hold that all employees of Thomas Stores, Mutual, and Merchandise Terminal whose activities related to the handling of goods after receipt in the warehouse and their distribution from the warehouse to Thomas Stores are within the coverage of the Act and from the dismissal of the complaint as to Lawrence."

These issues are presented under two points: "I. Goods shipped to Mutual's warehouse from outside the State remain in interstate commerce until they reach the Thomas Stores" and "II. Lawrence should be enjoined from violating the Act." In the determination of these issues, it will be useful to state the pertinent rules of law and, in the light thereof, to examine the factual situation to which those rules are to be applied.

As to minimum wages (Title 29 U.S.C.A. § 206), maximum hours (same, § 207) and keeping of records (same, § 211), the statutory scope of the Act is declared to cover each employee "who is engaged in commerce¹ or in the production of goods for commerce." Since none of these companies is producing goods, our concern is with the "engaged in commerce" provision (except as to one matter, later discussed herein, affecting Merchandise Terminal Warehouse).

Under this Act, "it is the work of the employee which is decisive" (McLeod v. Threlkeld, 319 U.S. 491, 497, 63 S.Ct. 1248, 1252, 87 L.Ed. 1538; Overstreet v. North Shore Corporation, 318 U.S. 125, 132, 63 S.Ct. 494, 87 L.Ed. 656; Warren-Bradshaw Drilling Co. v. Hall, 317 U.S. 88, 90, 63 S.Ct. 125, 87 L.Ed. 83; Walling v. Jacksonville Paper Co., 317 U.S. 564, 571, 63 S.Ct. 332, 87 L.Ed. 460; Kirschbaum Co. v. Walling, 316 U.S. 517, 524, 62 S.Ct. 1116, 86 L.Ed. 1638) and the test to be applied to such work "is not whether the employee's activities affect or indirectly relate to interstate commerce but whether they are actually in or so closely related to the movement of the commerce as to be a part of it". McLeod v. Threlkeld, supra, 319 U.S. at page 497, 63 S.Ct. at page 1251, 87 L.Ed. 1538. Such "commerce" extends "throughout the farthest reaches of the channels of interstate commerce" (Overstreet v. North Shore Corporation, 318 U. S. 125, 128, 63 S.Ct. 494, 496, 87 L.Ed. 656; Walling v. Jacksonville Paper Co., 317 U.S. 564, 567, 63 S.Ct. 332, 87 L.Ed. 460) and its presence or absence is determined "by practical considerations." Overstreet v. North Shore Corporation, supra, 318 U.S. at page 128, 63 S.Ct. at page 496, 87 L.Ed. 656; Walling v. Jacksonville Paper Co., supra, 317 U.S. at page 570, 63 S.Ct. at page 336, 87 L.Ed. 460.

While there is no "dependable touchstone by which to determine whether employees are `engaged in commerce'" (Kirschbaum Co. v. Walling, 316 U.S. 517, 520, 62 S.Ct. 1116, 1118, 86 L.Ed. 1638) but the meaning is to be defined in the applications to cases as they arise by "the gradual process of inclusion and exclusion" (Id., 316 U.S. at page 526, 62 S.Ct. at page 1121, 86 L.Ed. 1638), yet the determination of these "inclusions" and "exclusions" in judicial decision tends to narrow boundaries of inquiry by establishing rules of decision as to certain recurring fact situations — just that is occurring in the definition of "in commerce" as used in this Act. McLeod v. Threlkeld, 319 U.S. 491, 63 S.Ct. 1248, 87 L.Ed. 1538; Overstreet v. North Shore Corporation, 318 U.S. 125, 63 S.Ct. 494, 87 L.Ed. 656; Walling v. Jacksonville Paper Co., 317 U.S. 564, 565, 63 S.Ct. 332, 87 L. Ed. 460; Higgins v. Carr Bros. Co., 317 U.S. 572, 63 S.Ct. 337, 87 L.Ed. 468; Kirschbaum Co. v. Walling, 316 U.S. 517, 62 S.Ct. 1116, 86 L.Ed. 1638; Overnight Motor Transp. Co. v. Missel, 316 U.S. 572, 62 S.Ct. 1216, 86 L.Ed. 1682.² Through these cases, there is developing definition as to two classes of fact situations: the first deals with employees having to do with the maintenance or operation of instrumentalities of commerce — transportation (the McLeod, Overstreet and Overnight Motor Transportation Co. cases, supra); the second deals with employees of customers of transportation whose duties bring them into touch with interstate shipments. The Jacksonville Paper Co. and Higgins cases, supra. The fact situation here more nearly fits into the second of these classes and, therefore, we are particularly guided by the Jacksonville Paper Co. and Higgins cases. To apply these two cases — as well as pertinent...