Wirtz v. Powell Knitting Mills Co.
| Decision Date | 13 May 1966 |
| Docket Number | Docket 30457.,No. 415,415 |
| Parties | W. Willard WIRTZ, Secretary of Labor, Plaintiff-Appellant, v. POWELL KNITTING MILLS CO., Inc., Defendant. Meinhard Commercial Corp., Respondent-Appellee. |
| Court | U.S. Court of Appeals — Second Circuit |
John A. Hughes, Regional Atty., U. S. Dept. of Labor, New York City (Charles Donahue, Sol., Samuel Gorin and David Reines, Attys., U. S. Dept. of Labor, on the brief), for plaintiff-appellant.
John F. LeViness, III, New York City (Harlan R. Harrison, Robert M. Callagy, and Pell, Butler, Curtis & LeViness, New York City, on the brief), for appellee.
Before SMITH, KAUFMAN and FEINBERG, Circuit Judges.
The Secretary of Labor appeals from an order of the United States District Court for the Eastern District of New York, Joseph C. Zavatt, Chief Judge, vacating a temporary restraining order issued against Powell Knitting Mills, Inc. and against Meinhard Commercial Corp. Powell has not appeared.
As a general rule, it is true, the denying or vacating of a temporary restraining order is not appealable. Austin v. Altman, 332 F.2d 273 (2 Cir. 1964). But this is not always so. In the first place, the appellate court is not bound by what the parties or the District Court may call the order appealed from. That is not this case, for there is no doubt that the original ex parte order was a temporary restraining order. The order vacating it, therefore, though after a hearing, and contested, is an order vacating a temporary restraining order. Compare Austin; see also Grant v. United States, 282 F.2d 165 (2 Cir. 1960). But there is another reason in some cases for appealability of the granting, denial, or vacating of a temporary restraining order. Where dismissing the appeal may moot the underlying case for an injunction, the appeal should be heard. United States v. Wood, 295 F.2d 772, 776-778 (5 Cir. 1961), cert. den. 369 U.S. 850, 82 S.Ct. 933, 8 L.Ed.2d 9 (1962); Woods v. Wright, 334 F.2d 369, 373-374 (5 Cir. 1964); Dilworth v. Riner, 343 F.2d 226, 229-230 (5 Cir. 1965). The rationale of these cases is that the matter is appealable not under 28 U.S.C. § 1292, dealing with injunctions, but rather under § 1291, under the collateral order doctrine, Cohen v. Beneficial Industrial Loan Corp., 337 U.S. 541, 69 S.Ct. 1221, 93 L.Ed. 1528 (1949).
Here dismissing the appeal, together with refusing to continue the stay ordered by Judge Lumbard, could very well moot the whole case, for Meinhard could dispose of the sweaters before Judge Zavatt acted on the request for a preliminary injunction. Hence the matter is appealable quite apart from the fact that both parties were heard on the motion, and that a hearing occurred. Compare Dilworth, 343 F.2d at 229.
On the merits, we find no error, and affirm the order vacating the temporary restraining order.
The vacated order prohibited the sale in interstate commerce of certain sweaters, produced by Powell, and acquired by Meinhard, a factor, when it foreclosed its lien. The prohibition was grounded on an asserted violation of § 6 and § 7 of the Fair Labor Standards Act, 29 U.S.C. §§ 201, 206, 207, in that 86 employees of Powell were not paid wages for the weeks ending February 18, February 25, and March 5, 1966, so that the sale of the sweaters would be a violation of § 15(a) of the Act, 29 U.S.C. § 215, if applicable, and enjoinable under § 17, 29 U.S.C. § 217. Powell had made an assignment for the benefit of creditors and was said to be insolvent The unpaid wages totalled $8425. Section 15 makes it unlawful for "any person * * * to * * * sell in commerce * * * any goods in the production of which any employee was employed in violation of section 206 or section 207 of this title * * *"
Meinhard commenced financing Powell on September 2, 1965; cash advances said to have been around $700,000 were made, secured by inventory and equipment liens. Financing statements were filed. The liens covered inventory to be produced. Powell's financial condition worsened, and on about March 8, 1966, it ceased operations, and made an assignment for the benefit of creditors to the New York Creditmen's Adjustment Bureau, Inc. Meinhard foreclosed on its security, and the Secretary brought this action to prevent sale of the sweaters, some of which evidently were produced during the time when wages were not paid. Without deciding on the application for a preliminary injunction, Judge Zavatt vacated the restraining order he had previously signed ex parte. The Secretary applied for a stay pending appeal, which Judge Lumbard granted.
Under a literal, or, as Judge Zavatt called it, "wooden" reading of the Act, the government would be entitled to an injunction. Congress said "any person," not "any employer"; and it is also clear from that part of § 15 excepting from its scope some purchasers (those who relied in good faith on the written assurances of the producer that the goods were produced in compliance with the Act) that other persons than employers, including other purchasers, are within § 15.
Appellee's claim is that § 15 has no application to an insolvent concern, because the unlikelihood that it will continue to function means that no further violations are likely. We need not go so far; it is sufficient for this and similar cases to adopt a rule that frees from § 15 only a creditor foreclosing like Meinhard, for nonpayment of funds previously advanced. One purpose of making the sale illegal was to prevent adverse competitive effects on those who comply with the Act. Here there can be no connection between the asserted violation and any effects on competition. Another purpose of § 15 is to assure that the wage earners would be paid. With Powell insolvent and having made the assignment for the benefit of creditors, it is hardly possible that Powell may be forced to pay them. Hence the only way this purpose of the Act could be served would be to force Meinhard to pay them. But without some...
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Citicorp Industrial Credit, Inc v. Brock
...goods from interstate commerce. Id., at 1203. The Court of Appeals rejected the reasoning of the Second Circuit in Wirtz v. Powell Knitting Mills Co., 360 F.2d 730 (1966), which had held § 15(a)(1) inapplicable to secured creditors who take possession of goods produced in violation of the F......
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Bureerong v. Uvawas, CV 95-5958 ABC (BQRx).
...employers who suffer adverse competitive effects as a result of their compliance with wage-and-hour-laws. See Wirtz v. Powell Knitting Mills Co., 360 F.2d 730 (2d Cir.1966), overruled on other grounds, 483 U.S. 27, 107 S.Ct. 2694, 97 L.Ed.2d 23 (1987) (one purpose of the statute making it i......
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Donovan v. TMC Industries, Ltd.
...effect of driving down labor conditions in the importing States. id. at 189, 88 S.Ct. at 2020. See also Wirtz v. Powell Knitting Mills Co., 360 F.2d 730 (2d Cir. 1966). The concern with the health and welfare for the American worker, and the need to reduce labor strife is at the core of the......
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Brock v. Kentucky Ridge Min. Co., Inc.
...the coal involved in this action is excepted from operation of 29 U.S.C. § 215(a)(1) grounded on a reading of Wirtz v. Powell Knitting Mills Co., 360 F.2d 730 (2nd Cir., 1966). In the Wirtz case, a secured creditor was enjoined from selling goods that were allegedly produced in violation of......