Walling v. Peoples Packing Co., No. 2571.

• Court: United States Courts of Appeals. United States Court of Appeals (10th Circuit)
• Writing for the Court: PHILLIPS, HUXMAN, and MURRAH, Circuit
• Citation: 132 F.2d 236
• Parties: WALLING v. PEOPLES PACKING CO., Inc.
• Docket Number: No. 2571.
• Decision Date: 16 December 1942

132 F.2d 236 (1942)

WALLING
v.
PEOPLES PACKING CO., Inc.

No. 2571.

Circuit Court of Appeals, Tenth Circuit.

December 16, 1942.

132 F.2d 237

COPYRIGHT MATERIAL OMITTED

132 F.2d 238

Milton C. Denbo, Atty., U. S. Dept. of Labor, of Washington, D. C. (Warner W. Gardner, Solicitor, and Mortimer B. Wolf, Asst. Solicitor, both of Washington, D. C., and Llewellyn B. Duke, Regional Atty., U. S. Dept. of Labor, of Dallas, Tex., on the brief), for appellant

Solon W. Smith, of Oklahoma City, Okl. (James S. Twyford, of Oklahoma City, Okl., on the brief), for appellee.

Before PHILLIPS, HUXMAN, and MURRAH, Circuit Judges.

PHILLIPS, Circuit Judge.

The Administrator brought this action against the Peoples Packing Company, Inc.,¹ to enjoin it from violating the provisions of Sections 15(a) (1) and 15(a) (2) of the Fair Labor Standards Act of 1938, 52 Stat. 1060, 29 U.S.C.A. §§ 201-219.

From a judgment denying the relief sought, the Administrator has appealed.

The Peoples Company owns and operates a plant in Oklahoma City, Oklahoma, at which it engages in the slaughter of cattle and hogs and the manufacture of beef and pork products. The average number of its employees is approximately 45. From 4 to 7 are employed in the slaughtering department. The work in that department may be described as follows: Hogs are driven into the slaughtering pen. A hog is shackled and hung on hooks. It is then slaughtered, scalded, shaved, and washed. The carcass is then opened and the intestines and other inedible portions of the carcass are removed. The carcass is then sent to the cooling room. Cattle are driven into a chute, slaughtered, and allowed to bleed thoroughly. The hide is removed, the carcass is opened, and the inedible portions are removed from the carcass. The carcass is then split and sent to the cooling room. When a carcass is sent to the cooling room, the work of the department is completed.

While the primary object of the work of the employees in the slaughtering department is to produce edible meat and meat products, the major portion of their manual efforts is exerted in the removal of the hides and the inedible portions from the carcasses, thereby producing valuable by-products.

All of the Peoples Company's edible meat products are sold in Oklahoma for local consumption. Since February, 1940, all the offal, consisting of the heads, head bones, horns, feet, hoofs, and intestines of the slaughtered animals, has been sold to the Butcher Packing Company² of Oklahoma City. Its plant is located about 150 feet from the plant of the Peoples Company. The Butcher Company commingles the offal with offal purchased from others and produces tankage and grease therefrom. Offal from animals slaughtered by the Peoples Company amounts to many thousand pounds monthly and constitutes about 20 per cent of the offal handled by the Butcher Company. The Butcher Company ships large quantities of grease out of the state to the Procter & Gamble Company, a large soap manufacturer. There are no soap factories in Oklahoma. The out-of-state shipments of grease are carried in tank trucks to a railroad siding located about one block from the plants of the Peoples Company and the Butcher Company, and the grease is pumped into railroad tank cars.

The Butcher Company also sells large quantities of grease to the Cato Oil & Grease Company³ in Oklahoma City. The Cato Company uses such grease to make lubricants and ships the major portion of such lubricants out of Oklahoma.

Prior to February, 1940, the Peoples Company sold its offal to the Oklahoma Rendering Company.⁴ It constituted 8 to 10 per cent of the offal handled by the Rendering Company. The Rendering Company shipped 80 per cent of its tankage and 100 per cent of its grease to purchasers located outside of Oklahoma.

The Peoples Company sells its hides to E. W. Gruendler & Company⁵ of Oklahoma City. The hides are removed from the Peoples Company's plant daily in their original green condition and transported by truck of the Peoples Company to Gruendler. Gruendler pays for the hides on delivery. There is only one leather tannery in Oklahoma. Gruendler purchases hides from slaughtering plants all over Oklahoma and ships 90 to 95 per cent of the hides out of the state.

The hides and offal represent from 3 to 4 per cent of the value of the carcasses

132 F.2d 239

and constitute about 45 per cent thereof in weight

The Peoples Company's gross income from the inedible portions of slaughtered animals was approximately $26,000 in each of the years 1939 and 1940, and approximately $19,000 for the first seven months of 1941.

The Act prescribes minimum wages and maximum hours for employees engaged in the production of goods for commerce.

It defines commerce as "trade, commerce, transportation, transmission, or communication among the several States or from any State to any place outside thereof."

The Supreme Court has set at rest any question as to the constitutionality of the Act.⁶ The question here presented is whether a particular phase of industrial activity is within the scope of the Act. Specifically it is whether the Peoples Company's employees engaged in the slaughtering of livestock and in removing the inedible portions of the carcasses are engaged in the production of goods for commerce.

The wide scope of the Act is demonstrated by two decisions of the Supreme Court handed down after the decision was rendered below.

In Kirschbaum Co. v. Walling, 316 U.S. 517, 62 S.Ct. 1116, 1121, 86 L.Ed. 1638, the question was whether employees engaged in the operation and maintenance of buildings leased to tenants principally engaged in the production of clothing for interstate commerce were engaged in the production of goods for...