Wisbey v. American Community Stores Corporation

• Decision Date: 30 August 1968
• Docket Number: Civ. No. 1210L.
• Citation: 288 F. Supp. 728
• Parties: William W. WISBEY, Plaintiff, v. AMERICAN COMMUNITY STORES CORPORATION, a Corporation, Defendant.
• Court: U.S. District Court — District of Nebraska

288 F. Supp. 728

William W. WISBEY, Plaintiff, v. AMERICAN COMMUNITY STORES CORPORATION, a Corporation, Defendant.

Civ. No. 1210L.

United States District Court D. Nebraska.

August 30, 1968.

Robert T. Grimit, Lincoln, Neb., for plaintiff.

Joseph R. Moore, Omaha, Neb., for defendant.

MEMORANDUM AND ORDER

VAN PELT, District Judge.

This case involves an alleged violation of the Fair Labor Standards Act, and in particular, Section 216(b) of 29 U.S. C.A. dealing with unpaid overtime compensation and providing for liquidated damages therein. Plaintiff's complaint was filed March 28, 1967. In the original complaint, plaintiff claimed that wages for overtime work were due to him from the period beginning on March 29, 1965, and ending with (March 28, 1967) the present. An amount of liquidated damages equaling the amount of wages allegedly due the plaintiff were also asked for in the complaint.

Until 1967, the statute of limitations for the Fair Labor Standards Act read as follows:

"Any action commenced on or after May 14, 1947, to enforce any cause of action for unpaid minimum wages, unpaid overtime compensation, or liquidated damages, under the Fair Labor Standards Act of 1938, as amended * * *

(a) if the cause of action accrues on or after May 14, 1947—may be commenced within two years after the cause of action accrued, and every such action shall be forever barred unless commenced within two years after the cause of action accrued * * *." 29 U.S.C.A. § 255(a)

A 1966 amendment to subsection (a) of § 255, which became effective on February 1, 1967, added to subsection (a) the following words: "except that a cause of action arising out of a willful violation may be commenced within three years after the cause of action accrued." This additional clause comes immediately after the word "accrued" which had previously ended subsection (a). The addition is the only change in subsection (a). As is readily apparent, prior to the time the 1966 Amendment became effective, the Fair Labor Standards Act did not categorize violations into willful and non-willful. The statutory time within which to commence a cause of action was two years after the cause had accrued, and this was without regard to the conduct of the alleged violator.

On March 6, 1968, the plaintiff filed a motion for leave to amend the complaint (filing No. 22). The purpose of the motion was to collect for overtime compensation and liquidated damages from March 29, 1964 to March 28, 1965, alleging that the violation during this period of time at least, was a willful violation and therefore under the three year statute of limitations that became effective on February 1 of 1967.

At the time that the 1966 Amendment became effective on February 1, 1967, the prior statute of limitations, of two years duration, had already run on the plaintiff's claim for wages and damages between the time of March 29, 1964 and January 31, 1965. Thus, in the words of the statutory provision before the amendment, the claim for this period of time would have been "forever barred" because the action had not been "commenced within two years after the cause of action accrued." In addition to this time period is the time between February 1, 1965 and March 28, 1965. When the 1966 Amendment became effective on February 1 of 1967 the cause of action in existence for the time between February 1, 1965 and March 28, 1965, had not been barred by the prior statute of limitations. Thus, the 1966 Amendment extended the time limitation before the statute had run on the cause of action for the last mentioned period of time.

In addition, defendant also suggests that under Rule 15(c) the plaintiff's amendment should not be related back to the filing of the original complaint. If defendant is correct in his contention that the plaintiff's motion to amend is not within the purview of Fed.R. of Civ.P. 15(c) and is not to be related back to the time of the filing of the original complaint, then plaintiff has not commenced his cause of action in regard to the willful violation until March 6, 1968. If this be the case, then even with the three year statute of limitations now in effect, the only period of time that would be covered by the new action, if it is such, that is not covered under the original complaint, which did not allege a willful violation, would be the period of time between March 6, 1965 and March 28, 1965.

Thus, three questions are before the court for resolution before it can be determined whether and how much of the motion is to be granted or denied. They are:

a) Whether the motion is of such a nature that it can, under Fed.R.Civ.P. 15 (c) be related back to the time of the original complaint?

b) Whether an amendment to the statute of limitations contained in the Fair Labor Standards Act, 29 U.S.C.A. § 255 (a) is to be applied retroactively at all?

c) If the amended § 255(a) is to be applied retroactively then whether it can be applied so as to revive a claim that had already been barred under the prior statute of limitations contained in the Fair Labor Standards Act?

I.

15(c) of the Fed.R.Civ.P., 28 U.S.C.A. provides in applicable part:

"Whenever the claim or defense asserted in the amended pleading arose out of the conduct, transaction, or occurrence set forth or attempted to be set forth in the original pleading, the amendment relates back to the date of the original pleading."

The test of relation back is, therefore, whether the claim "arose out of the conduct, occurrence or transaction, set forth, or attempted to be set forth in the original pleading." Kimbro v. United States Rubber Co., 22 F.R.D. 309 (D. of Conn. 1958). Pleadings, under the Federal Rules, serve a notice-giving function, and the cases are legion that hold Rule 15(c) is to be used in a liberal fashion. Defendant, in his brief, at page 7, concedes that 15(c) is to be given a liberal interpretation. Yet, defendant asserts that the plaintiff's motion to amend is not an amendment at all, but rather the statement of a new cause of action based on "a provision of law which did not exist at the time of the alleged violation." (Page 8 of def. brief)

Defendant cites United States ex rel. Flynn's Camden Electric Supply Co. v. Home Indemnity Ins. Co., 246 F.Supp. 27 (E.D.Pa.1965) as authority for his position. The case involved a suit under the Miller Act against the surety of a payment bond for unpaid for materials. The materialman had given materials to one Hytron, who was performing the work for the government. Unknown to the materialman, Hytron was using the materials on five different government projects. The Miller Act has a statute of limitations which provides that the materialman must bring suit for unpaid for materials against the surety within one year from the time the last material was supplied by the materialman. Failure to bring suit within that time releases the surety. The material used on several of the projects that Hytron had been working on had been furnished to him more than a year before the materialman brought suit. Consequently, he sought to amend his complaint so as to include projects for which material had been received more recently and thus keep his suit open against the surety. The court refused to allow 15(c) Fed.R.Civ.P. to be used in this fashion. The court, relying on the Miller Act, stated that a cause of action is created on each individual payment bond for an express period of time and that the commencement of an action within the time limitation is a condition precedent to an action by a materialman under the Miller Act.

Home Indemnity Ins. Co., supra, is readily distinguishable from the present case, however, for in that case several of the claims had been cut off entirely by the statute of limitations, and the plaintiff sought to use those that had not been cut off to salvage those that had. The court felt that this would work an undue prejudice to the opposing party by allowing him to amend, for the defendant could plead the statute of limitations if the claims that were barred were the only ones that were plead. Such is not the case in the present situation, for to say that the defendant can plead the statute of limitations to the periods of time in dispute would be to beg the question. For those periods of time that are determined to be barred by the statute of limitation then the rationale of Home Indemnity Ins. Co. is applicable. In other words, in Home Indemnity Ins. Co., the statute of limitations had already run on the plaintiff at the time that he originally filed his complaint. He then sought to use an amended complaint to tie still viable claims to those on which the statute had run. In the present case, the statute of limitations had not run on any of the claimed wages in the original complaint. Later the plaintiff became aware of an amendment that made it possible for him to allege violations, willful in nature, for a longer period of time. There was no difference in the facts plead, but only that the plaintiff claimed a willful violation for a period of time antedating two years from which the original complaint had been commenced. It would have been folly for plaintiff to have complained of a willful violation when there was no statutory provision for one and when it is obviously more difficult to show a willful violation as opposed to any type of violation, willful or not. It would thus appear that the "claim * * * arose out of the conduct, transaction, or occurrence set forth * * * in the original pleading. * * *" That the conduct need be willful under one statutory provision and need not be willful under another statutory provision, does not necessarily change the conduct itself, for it may have all been willful, despite the fact that there need be no showing of intent under the applicable statutes. There is nothing to indicate that the conduct, if any, that will show a willful violation is in any way different than the conduct, if any, that will show...