MITCHELL v. H. B. ZACHRY CO.
Legal provision: Fair Labor Standards
Argument of Bessie Margolin
Chief Justice Earl Warren: Number 83 Mitchell, Secretary of Labor, Petitioner, versus H. B. Zachry Company.
Ms Bessie Margolin: Mr. Chief Justice, may it please the Court.
This case involves two questions under the Fair Labor Standards Act, the Federal Fair Labor Standards Act.
One relating to the -- in coverage -- a coverage question and the other relating to the injunction remedy provided to restrain violations of the Act.
The coverage question is whether employees engaged in the construction of a dam and reservoir designed to replace and greatly enlarge the water supply system of the -- it's for the City of Corpus Christi and vicinity -- Corpus Christi, Texas and serving the industrial users as well as other water users in that area many of -- of whom are interstate instrumentalities and industries engaged in production of goods for interstate commerce.
Admittedly, practically, all of the major industries in Corpus Christi are engaged in the production of goods for interstate commerce.
Justice John M. Harlan: Was this dam on navigable waters?
Ms Bessie Margolin: I wouldn't undertake to say what is navigable.
We certainly do not rely upon any navigability question being involved here.
It's a question as to whether or not the enlargement and improvement of this water supply system which concededly serves substantially, interstate instrumentalities and interstate producers of goods for commerce and is essential to the functioning of those instrumentalities and to the productive processes of the interstate producers, whether that is a production of goods for commerce within the statutory definition.
Now, the District Court held relying primarily on this Court's decision in the Vollmer and the -- and the Alstate and I assume they -- Cleveland had been down that would've been another one of the decisions.
On the principles of those decisions, that the construction project here was so vitally and directly related and essential to the continued operation and functioning of interstate instrumentalities and the producers of goods for commerce in Corpus Christi and vicinity, that the -- that the employees actually constructing the dam and reservoir were engaged in production of goods for commerce on two grounds.
One, he said, “They were engaged in the actual production of goods under the principle of the Alstate decision.”
That is the production of water which was to be used and was essential to the operation of interstate instrumentalities.
And the second ground was that it was -- they were engaged in occupations of processes closely related and directly essential to the production of goods for commerce.
Now, the Court of Appeals, but the -- although the court ruled in favor of the coverage of these employees, the District Court, it issued an injunction.
It declined to issue the injunction requested by the Government and limited in its injunction restraining violations to this particular project which was virtually completed at the time of -- of judgment.
Chief Justice Earl Warren: And how broad did the Government ask the injunction to be?
Ms Bessie Margolin: We asked for an injunction restraining violations in the future on projects which -- will end the coverage or within the coverage of the Act, are in the alternative, we suggested that at least we should have an injunction enjoining the violations on the similar projects within the -- within the coverage of the Act.
The Court of Appeals reversed on the coverage issue and therefore, did not reach the question raised by the Government's cross-appeal, which was whether the court had -- had not transcended its legal discretion, its judicial discretion.
And so -- and so limiting the relief granted.
Justice Potter Stewart: Was the sole -- was the sole asserted ground of coverage that this was the production of goods for commerce rather than that these employees were in commerce?
Ms Bessie Margolin: Well, that was the sole basis for asserting coverage here.
But on -- on two grounds, the definition of production as -- is in two parts.
One is production, actual production which is manufacturing, mining, I think, it's on page -- it's in our appendix, quoted in our appendix page -- pardon me.
Page 82 and the courts have pointed out and so has Congress itself that this is in two parts.
The first part, which is primary our actual production, includes manufacturing, mining, handling or in any manner working on goods.
And the second part is engaged in any closely related process or occupation directly essential to production thereof.
That becomes important because only that part of the definition of production was amended by the 1949 amendments.
Both the House and the Senate pointed out they were leaving untouched the primary production, so that, the part of our case that rests on primary production was fully unaffected by the 1949 amendment.
Justice Potter Stewart: And on that part of your case, you're talking about the production of water --
Ms Bessie Margolin: Talking about the production of water that its --
Justice Potter Stewart: -- which itself entered into goods or interstate commerce?
Ms Bessie Margolin: That is itself -- well, we don't rely primarily on the ingredient point because that wasn't developed here, but which is produced for an essential interstate use for the functioning of interstate instrumentalities just as the broad materials were produced in -- in the Alstate case for in quotes, “for” commerce, for use in the -- in repairing and improving interstate highways and interstate instrumentalities.
We say --
Justice William J. Brennan: Now, what is the best part of that be -- that's water and locomotive, things like that point?
Ms Bessie Margolin: Well it's -- for locomotives, were used by our freight transportation companies, for such operations as they need water part at airports, fire protection or -- or it's within going to the details as to the uses of the waters, to the functioning of the interstate instrumentalities because it was conceded and the judge in -- in an effort to cut down the amount of evidence that went in -- seek -- got counsel to concede that large quantities of water were used by the interstate instrumentalities for their functioning, for purposes of functioning, carrying on their functions and it was essential to their use.
Justice William J. Brennan: Now, how do you distinguish the second part, closely related process?
Ms Bessie Margolin: Now, on the second part, we also say that although not developed in this record, unquestionably, some of this water went out the State.
We have not placed reliance on that, we did not in the court below, but we felt that the Court -- the argument should be presented to the Court because it is unquestionably so that some of these -- some water goes out the State.
Chief Justice Earl Warren: We'll recess now.
Argument of Bessie Margolin
Ms Bessie Margolin: -- the scope of the production.
It also -- it went further and held that the 1949 amendment to production coverage was intended to exclude construction projects or as local enterprises.
We think it's significant that it's admitted here by respondent that if this were -- were just simply to repair or maintain the existing water system that it would still be within the coverage of the Act, as closely related and directly essential.
At least, I don't understand them to deny that and as I shall later point out the -- the cases, the decisions have long since settled that and the legislative history shows that Congress expressly approved the coverage of -- of maintenance and repair of this type of utility.
Respondents also assert that they -- they don't put any special -- attach any special importance to the new construction doctrine.
I think it's fair to say that they come pretty close to abandoning the Fifth Circuit's reliance on that doctrine.
They say that certainly, the language, at least the language of Vollmer and Alstate and Lublin should be applied as much to production coverage as in commerce coverage.
And that in general, the liberal construction doctrine should apply.
But they also say that if -- if this were a case where the water -- the dam and reservoir were being constructed solely or primarily for interstate producers and interstate instrumentalities, then they concede that there would be a forceful case for holding that the employees here were closely related and directly essential to production of goods by the producers within the area.
Their argument turns largely, if not entirely, on their construction of the amendment to the production coverage of the Act in 1949.
And respondent like the Court of Appeals below doesn't spend much time on the other grounds on which the District Court upheld coverage the Alstate ground.
The Court of Appeals dismissed that as -- said -- assumed that the Government wasn't relying on it mistakenly and their only comment was that the employees here certainly weren't producing any goods for commerce when they were construction the dam that they were -- they were simply producing the dam.
Our -- our answer to that is that this is the way you produce waters to construct the dam.
It's an engineering fact that you produce water by constructing a dam and a reservoir.
Just like --
Justice John M. Harlan: You gather water, don't you?
Ms Bessie Margolin: You impound it and they've -- and -- and producing is very broadly defined in the Act, actual producing it's -- is like you drill -- drill wells for oil or you mine -- dig and mine for coal and that this is as much producing water as the mining of coal is producing coal of a digging -- drilling of oil wells is producing oil so that the -- we don't need to minimize that ground of coverage when we direct most of our brief in answering the arguments of the Court of Appeals and respondents.
They do not give any answer to that and that is still, we think, a -- a sufficient basis of coverage.
Coming though to there -- in -- to the interpretation of the legislative history of the 1949 amendment to production, the Court of Appeals said that it didn't have to look to the legislative history to decide that Congress intended to expand the local enterprises that it was removing from the Act and it obviously assumed that what it did was to extract a part of the reasoning from this Court's office building case in Callus and relating to the performing activities of -- of rendering services for a miscellany of customers.
And relying heavily on -- on that reference to Callus, the Court said that this type of service to a miscellany of customers was intended to be excluded as local enterprise.
And this, in effect, is respondents' argument as I think is evident from their -- from their admission that if -- if this facility was designed primarily as solely deserved interstate producers and interstate instrumentalities, then it could forcefully be contended that the employees were covered as closely related and directly essential.
Both the Court of Appeals and respondents' argument rest on the assumption that it was a legislative intent in 1949 to very substantially curtail the scope of coverage.
They -- respondents said so in so many words.
Now, he -- respondent does look to some of the legislative history just the House Report and only parts of the House Report.
The Court of Appeals below didn't look at any of the legislative history.
Respondents, however, interpret what legislative history they looked at in the same way that apparently the court below interpreted it.
And I did want to say a word in answer to the Court of Appeals reliance on the new construction doctrine since the Court clearly relied pretty heavily on it.
It was the only basis on which it differed from the Eighth Circuit in the Chambers case, where the Eighth Circuit had pointed out that the Vollmer decision didn't establish anything new, it was just asserting the principle that had applied generally to the Act's coverage, and that this type of improvement are enlargement of an existing facility.
It had always been ruled within the coverage of the Act.
That original construction which had previously been thought to be by some outside the scope of that -- of the Act in which the administrator had earlier thought might be a basis for determining coverage on this Act meant something quite different from improvement and enlargement or expansion.
Now, the Fifth Circuit obviously treated this as new construction.
And our position is that whatever remains of the new construction doctrine in either phase of coverage, it clearly -- this Court's rulings have established that this does not apply to an improvement or an enlargement or -- or an expansion if that falls in the same category as repair and maintenance.
Now, there is nothing in the legislative history at all to -- relating to new construction.
The legislative reports did make clear both House and Senate reports stated in no uncertain terms that it was not the intent to make any drastic change in -- in the scope of coverage.
The House Report, I should point out that there was a divergence of -- between the House and Senate proposals originally.
The Senate didn't want to make any change in the definition of coverage, production coverage.
The House had proposed a more drastic language of closely related and indispensable.
The language, if the Act is enacted was a -- a compromise, and the reports of the Senate and House, I think, are the best evidence of what that compromise was intended to accomplish.
The House Committee Report stated explicitly, the amended section gives the courts a more specific guide as to the intention of Congress.
It does not, however, radically revise the coverage of the Act as it has been interpreted by the courts in the past.
And this -- and the Senate conferees report also stated that it was not intended to substantially change and limit the decisions construing the prior necessary to production language but rather to provide more certainty in this field.
And the Senate report specifically stated that the amended language adopts the standard of closely related which the Supreme Court has supplied in most of its decisions interpreting coverage.
Justice Hugo L. Black: Are those quoted in your brief?
Ms Bessie Margolin: On page 45 of our brief.
And then the Senate report went on and said that the amendatory language is descriptive of activities which although not an integral part of productive operations have a relationship to production which may reasonably be considered close as distinguished from a remote entanglers and contemplates activities which are directly a production in a practical sense by providing something essential to carrying on in an effective, efficient and satisfactory manner of operations which are a part of an integrated effort for the production of goods.
Now, we say that that language comes very close to the test this Court has established for determining whether activities are within the in commerce coverage.
In the Vollmer case, the Court stated that the test was whether the work is so directly and vitally related to the functioning of an instrumentality or facility of interstate commerce as to be in practical effect a part of it rather than isolated local activity.
And in the Lublin case, I'm relating to the plans and specifications for improvement of interstate instrumentalities, the Court say -- stated that it was whether the work is directly and vitally related to the functioning of those interstate facilities.
Now, that language, I think -- we think parallel so closely the -- the Senate and House or the legislative statements as to what they intended by this closely related and directly essential language that it follows that work which is just as vitally and directly and closely related to production of goods for commerce as where the lock in dams and -- and the lock in dam and the lock in canal and the plans and specifications in the Vollmer and Lublin cases that there's no more reason for more restrictive they are -- more restrictive interpretation of the production coverage as amended in 1949.
Now, the -- prior to 1949 as the Eighth Circuit pointed out, it was settled that the production coverage was much more flexible and broader than the in commerce coverage.
So that the position of respondent and of the court below is that by the 1949 amendment, Congress reversed the situation that production coverage now is not even coextensive with the in commerce coverage that it's narrower and more rigid.
In addition to the general statements in both House and Senate reports stating that they did not intend to have such a drastic change in their scope of production -- production coverage, the specific cases were mentioned -- were listed in both reports more in the Senate than in the House state -- stating what they specifically did not intend to change as to the scope of production coverage.
And significantly, most significantly among those cases were the public utility cases producing and supplying electricity, gas, fuel, water, specifically mentioning water among those, the manufacturing of tools and dies and machinery to be used by other producers of goods and production of other goods for commerce and custodial and maintenance service furnished by an independent firm that might be serving customers generally.
In fact all of these -- these -- in these three areas which both House and Senate reports endorsed and stated specifically would remain within the coverage of the Act, our typical examples of -- of facilities serving a general miscellany of customers but also well-known to be vitally essential -- vitally and substantially essential to the production of any goods for commerce.
Ignoring all of these specific examples approved by both Houses, respondent relies primarily if not entirely on a few examples in the House Report which the House said it understood that the language would exclude from the coverage in two cases that respondents rely on, particularly the Super-A Fertilizer case and which was a decision of the First Circuit.
I might point out that except for the window washing case, neither House nor Senate report disapproved any decision of this Court.
They specifically approved the test of Kirschbaum.
They said they intended -- both Houses said they intended to adopt the immediate -- close and immediate trial test of Kirschbaum.
And -- that only -- not the Senate but the House said that it objected to holding at an industrial window washing company was within the coverage of the Act.
Now, the -- in strictest logic some of the things the -- the House said would be excluded by the language if you apply it in constrict logic, it might be hard to reconcile those cases with the cases they explicitly said they intended to remain within the coverage of the Act.
But the -- certainly, that is no grounds for overwriting the joint intent as to the types of cases, both Houses intended to retain under the Act.
And there certainly no reason for extending those cases, beyond what even the House suggested, they should go in order to narrow the coverage of the Act.
Moreover, the cases are distinguishable.
The Super-A Fertilizer case was the production of fertilizer used by farmers to produce sugarcane -- to fertilize the soil for production of sugarcane.
And it's hard to reconcile that with a specific approval of the Reynolds water case which the Senate report specifically said they intended to endorse and would continue within the coverage.
But apparently, the -- they could be reconciled and are distinguishable on the basis that fertilizer, although useful in the production of goods is not thought to be as vitally essential as water and fuel and electricity and gas and heat and tools and dies and machinery.
The other case on which respondent relies and which is cited in the House Report is the Schroeder case, the production -- the quarrying of rock for the construction of a dike which was to protect an oil field from being flooded by a government project.
The respondent emphasizes that case because he says it's like this one because it's a construction of a dam.
But the -- the purposes are obviously quite different.
But apart from that, it's significant that the House Report just says they disapproved of holding the quarry employees.
The employees quarrying the rock and significantly, did not say that they disapproved of covering the employees engaged in the actual construction of the dike.
And of course, we are concerned here with the employees engaged in the actual construction of this dam and reservoir.
The window washing case in the same way -- in fact all of these -- all of these supplies and materials, the fertilizer and the rock and window washing could be said to be services or supplies which are not vitally essential to the productive process whereas plainly water, live electricity, gas and -- and coal and fuel and tools and dies and machinery is absolutely vital and essential to the production to -- of any goods for interstate commerce.
We want to spend a few minutes on the injunction point and then reserve --
Justice John M. Harlan: Could I ask you one question?
What do you conceive to be the strongest case in your favor that's been decided by this Court?
Ms Bessie Margolin: I conceive our strongest argument to be that the utility cases that Congress expressly approved cases like the Florida Power and Light, the -- also the McCrady case which was a new -- construction of new plants for an existing steel company and some of these were new plants and was related to that particular company.
I think the utility cases, the maintenance and repair cases and the custodial cases and the West Kentucky-Florida Power and Light, the coal company, gas case and electric cases and the Reynolds Water and Farmers Reservoir cases which were approved by Congress.
Now, those were cases where the water was being furnished to exclusively, almost exclusively for farmers.
But our point is that obviously that was not the -- a determinative factor with Congress in approving these cases because the general utilities do not furnish exclusively or even primarily to industries.
In this case, it's submitted that some 40% to 50% of this water supply, of the existing water supply was devoted to industrial uses.
And that practically, all the industrial users in Corpus Christi produced goods for interstate commerce.
And it's been settled and generally and consistently held and, as I say, the legislative history of that 1949 amendment approved it obviously that it's the substantial and regular need and use of the facility for interstate commerce and not that it must be primarily or solely devoted to that use that invokes the coverage of the Act.
So that I say that all these utility cases and the repair and maintenance holding, that the repair and maintenance and protection of utilities, facilities that unless you adopt a new construction give the broad interpretation to the new construction doctrine and apply it technically, you cannot distinguish this between the repair, maintenance and protection of the existing facility which has been consistently held covered.
That the fact that it's a large and a big -- a big plant and a large construction project does not make it any less closely related or directly essential to supplying that absolutely essential and directly necessary facility for the production of goods for commerce.
And that the same principles of the -- we -- we rely on the principles of the of Vollmer and Lublin case and with respect to the practical considerations which show that this is vital and essential.
And that what is vital and essential to the functioning of interstate instrumentalities under those decisions is equally closely related and directly essential to the production of goods for commerce under the production coverages.
And that or neither the court below nor respondent has taken issue with -- with the fact that -- that this water supply is just as closely related and directly essential and vital to the producers of goods for commerce and interstate instrumentalities as was the construction of the lock and canal in -- in Vollmer to the interstate traffic on that water-way or the plans and specifications in Lublin were to the interstate uses of the instrumentalities there being improved.
No issue has been taken with the -- with practical fact that the relationship and the -- and the vital essentiality of this water supply is equally close and direct as -- as the facilities in those cases.
Coming then to the injunction point, we recognize, of course, that the issuance of injunctive relief is largely discretionary with the trial court.
But we believe this case illustrates that what is becoming or something of a problem in the lower courts particularly in this region where most the violations of -- large proportion have been appear that they're taking a mistaken view of the purpose and nature of the injunction and thus really obstructing enforcement and compliance rather than encouraging it or helping to deter violation.
The attitude has been that the employer should be absolutely unfettered in -- in contesting doubtful coverage questions, questions which he in good faith thinks may be doubtful or if he relies in good faith on advice of -- of counsel.
And that this is sufficient reason not to give any relief and in effect relief was denied here because that one project was virtually completed.
This attitude, we think, just encourages employers to contest and litigate or take or decide not to comply until they have an opportunity to litigate because they have absolutely nothing to lose not even the -- they can be even pretty sure they're not going to be enjoined for the future.
And meanwhile, they're underpaying their employees if it's later determined that they held covered -- covered.
And they stand to retain in -- permanently, again they acquired during -- during this period if they're litigating.
Well, it is true that the Congress in Section 17 when it denied the courts the power to grant restitution for past violations apparently, intended to give the employer at least one bite of the -- the apple free if he wants to contest coverage, then they would leave it just to the employee remedy.
But in enacting that provision, Congress made it clear that it was not saying that in a contempt action, the Court couldn't compel compliance by ordering past payment of wages.
But the only way that the Court can really compel that type of compliance is if it first issues an injunction.
Now, the courts have also said something about employ -- employers should not be required to act if they're peril to -- in the future.
And this is what they conceive the injunction is doing apparently.
Well, all of the -- I think they overlook the peculiar nature of the injunction under this Act which is not like and extraordinary equity injunction.
It requires nothing except that they comply with what the Act -- the duties the Act imposes on them in any event.
And they're not subject to any peril of criminal contempt if they in good faith believe they are not covered -- it -- because criminal contempt has to be a willful violation.
And they have every opportunity to present to the Court after an injunction has been issued any doubtful coverage questions.
Justice Felix Frankfurter: Are you suggesting that the injunction must issue automatically?
Ms Bessie Margolin: No, I'm not suggesting it's -- what I'm suggesting is that the courts -- the trial courts should give more consideration to public interest and the burdens and that when cause has been shown for the -- for the issuance of an injunction, where there has been a prior record of considerable investigations and finding of violations there were a total of eight investigations here within -- this is our second law suit with this company.
And this case illustrates, I think, what -- of what can happen by -- to these narrow injunctions.
We had a case in New Mexico against the same company.
They were building runways at the Holloman Airfield in New Mexico.
And we got an injunction in that case.
They were litigating on what we thought was a rather frivolous grounds but it was -- that it was an instrumentality of war and not of commerce and they distinguished this Court's decision in Powell where -- where the Court held that the fact that production of ammunitions was for war, it mean it couldn't be for commerce.
They distinguished that case on the same grounds they're urging here.
That in commerce coverage is quite different from production and therefore Powell didn't apply to.
Justice Felix Frankfurter: Well if -- if --
Ms Bessie Margolin: Powell being a production of a case they said it didn't apply to in commerce.
Well, we thought it was a frivolous grounds but this is what the denial of injunction encouraged it -- them to litigate on -- on every ground possible.
Justice Felix Frankfurter: Well, we've jumped at -- at this stage of your argument, we assume, that all those substantive question are out of the way when we get to the question of remedies.
Ms Bessie Margolin: That's right.
Justice Felix Frankfurter: Your answer to my question was not automatic but they should consider the public -- public report --
Ms Bessie Margolin: -- sorry --
Justice Felix Frankfurter: -- incident.
Well, that's no different than in the case of other injunctions.
Ms Bessie Margolin: Well, except that I'm --
Justice Felix Frankfurter: What is that?
You said this is different from other injunctions.
Ms Bessie Margolin: Because this injunction does not compel them to do anything, it doesn't compel them to restore any past benefits they have.
They just go to any advantages they may have acquired at the expense of competitors to -- to make restitution to employees.
It doesn't require anything except that in the future, they -- they assume the risk of doubt as to coverage.
And all that risk is -- all that risk is, is that they paid the employees in accordance with the Act.
They can -- the Court is then in the position to order them to comply really.
It's the first time the Court gets in the position to order them to comply is after it issues an injunction.
And what we say is when there have been a past record of violations, where we'd have to inspect several times that the burden and expense to the Government is a consideration which the trial court has said it wasn't impressed with the fact that we'd already made eight investigations and had two lawsuits and that the employer had been found to have owed some $4000 and the other lawsuit which there was never any indication he ever paid off.
And admittedly here, if this coverage here, it's admitted that there's been some $50,000 underpayments in overtime.
Justice Felix Frankfurter: Does it mean -- what the Court -- does it mean or do you imply that the Court have said doubtfully although they may decide for you?
Maybe to them -- for them a doubtful or arguable question where they come down on your side of the fence and that being so, if they still come here and therefore they move enjoined, is that it?
Ms Bessie Margolin: No.
We say that if it's ultimately determined that they're covered and they have a past record of -- of leaning over backwards to resolve doubts in their favor and they've already acquired certain considerable financial advantage from that, at -- at that time, the Court ought to step in and help us enforce this Act because otherwise, they're just encouraging untenable litigation and contest.
Justice Felix Frankfurter: What would they be doing if they decide for you substantively then the question of remedy and they say, “What are the reasons why they wouldn't give an injunction?”
Ms Bessie Margolin: They say -- well, we think there's some basis -- basis for thinking they weren't covered and we don't -- this is the standards that they have seen --
Justice Felix Frankfurter: But they still decide for you although they --
Ms Bessie Margolin: They ruled that we were right.
That the employer gets wrong.
Justice Felix Frankfurter: But they -- is it that they say that they can come up on a petition for certiorari and -- and show them wrong?
Ms Bessie Margolin: No, they say that --
Justice Felix Frankfurter: I don't understand what they --
Ms Bessie Margolin: -- they don't think there's any need for an injunction because --
Justice Felix Frankfurter: It would have bear any hope, is that it?
Ms Bessie Margolin: They -- they say they don't think there's any need for one and that they -- if there is -- there's no need for one where there's clear coverage they say.
And if -- where there's doubtful coverage, they should be able to go into court unfettered by any injunction.
And that they obviously regard this -- the injunction as being two burdens among the employer without --
Justice Felix Frankfurter: You mean if -- if it's clear that they are -- it comes within the Act and they don't need an injunction on the theory that they will -- the part of (Voice Overlap) --
Ms Bessie Margolin: Complying.
Justice Felix Frankfurter: -- they will --
Ms Bessie Margolin: Yes.
Justice Felix Frankfurter: -- none has even instructed.
Ms Bessie Margolin: No.
The employee usually tells the Court that if you hold uncover and I'm willing to comply.
And -- and the Court -- the trial courts have been accepting that pretty readily without considering what the meaning of the injunction in the effect of it is.
Justice Felix Frankfurter: Now, what has been the experience of the department regarding the obedience of employers who do not taken a -- who do not seek to get review here, stop with the Court of Appeals.
And after having the case decided against them, they say “Very well, Your Honors, now, we'll obey,” what is the experience of the department?
Ms Bessie Margolin: Well, we've had considerable recurrence of violations by and we've had had to go back and -- and try to get another.
Justice Felix Frankfurter: Question -- questioning the obligation or contesting particular employee.
Ms Bessie Margolin: Oh, no, not particular, and that -- this is the point.
They'll contest as to some other employees or some other activity or raise an exemption question.
I mean it -- you can always distinguish cases.
Justice Felix Frankfurter: Well, the -- the -- suppose you get an injunction --
Ms Bessie Margolin: If we -- the injunction --
Justice Felix Frankfurter: And -- and the cases that you last put, other cases of distinguishing or something else, you wouldn't then go in and ask for a contempt order, would you, if they -- if --
Ms Bessie Margolin: Well, if it -- we would go in and --
Justice Felix Frankfurter: If it's an arguable question, you wouldn't.
Ms Bessie Margolin: Oh, we would not --
Justice Felix Frankfurter: I would have been (Voice Overlap) --
Ms Bessie Margolin: -- certainly, not a criminal contempt.
We'd simply go in and -- and ask for contempt action and -- a civil contempt to require fines.
Justice Felix Frankfurter: Construction of the injunction practically.
Ms Bessie Margolin: And practically, it amounts to construction of the injunction but it puts the Court in a position to give us some -- some real relief and to get real compliance which is -- which you can't get if -- if without the injunction.
Justice Felix Frankfurter: Well, I can put in a single word.
What I want to know is whether the Government is arguing that when it comes to relief by way of injunction, in these fair labor standards case, you would deny, you would say, “No, it isn't -- it is no -- it does not permit to have a case, that an injunction after all is an extraordinary remedy.”
Ms Bessie Margolin: Well, I don't think that under this Act, it is a very extraordinary remedy because all it requires is not like the antitrust acts, where you may have -- you may enjoin legal and illegal acts because of their context.
Here, you've just got something straight statutory duty and that's all the injunction requires.
Justice Felix Frankfurter: Well, maybe I don't, if you let me say so, I don't see why you don't answer my question that if the substantive claim of the Government was staged, then an injunction should follow as a matter, of course, calling for obedience.
Why don't you give that answer?
Ms Bessie Margolin: Well --
Justice Felix Frankfurter: You must have a reason.
Ms Bessie Margolin: I have -- the reason I have is because the -- because the decisions of this Court and other courts have pointed out that if there is a great deal of discretion here, that there maybe some good reasons why a particular --
Justice Felix Frankfurter: Indicate the kind of discretions that -- that legitimately may govern a judge.
Ms Bessie Margolin: I -- I think that we have had cases where we have an appeal, where we ourselves were convinced that the employer would comply as soon as he got a coverage issue determined.
And there had been no other record.
He'd always shown cooperation in the past, and we had not had any expense and -- and litigation wherein many have passed.
We -- we asked for an injunction but we don't appeal a denial under those circumstances.
But we do think that where -- where there's been a record of -- of noncompliance in the past and we're all forced to -- they may contest and litigate every point to the bitter end and put the Government to that extent.
At that time, we need -- we need some court assistance in the enforcement.
And certainly, the -- the -- we need some guarding standards that don't encourage employers --
Justice Felix Frankfurter: Well, that's the substantive issue.
That's on the subsequent --
Ms Bessie Margolin: No.
This is on the question as to when an injunction -- what are the standards for determining the exercise of sound discretion.
Now, the courts -- these -- the courts in this region have been ignoring any -- any burden on the Government to have to constantly investigate and -- or go to the expense of litigating.
Justice Felix Frankfurter: I'm not talking about this particular case.
But I might to infer, as I do infer as you correctly -- that with rare exception or under whole is the -- it's the exception rather than the rule that if a court, the District Court finally rules, clearly rules that a -- that conduct comes within all transactions and here comfort in the Fair Labor Standards Act, and that the -- and that the parties say if not the ruling of the Court, we should obey that on the hold --
Ms Bessie Margolin: Well --
Justice Felix Frankfurter: -- there is not a respect for that undertaking?
Ms Bessie Margolin: Well --
Justice Felix Frankfurter: I'm asking -- the reason I ask what is in my mind is I've noticed the great interest that the English court which now has something comparable to our Sherman law restrictive practice of that, after they had find that the behavior of the association usually these are collective price rates and so on.
When the Court ruled that it is against the statute, they invariably say, we do not think it is necessary to issue an injunction because the parties will now avail.
And I should just like to think that American employers having decided cases against him unequally law abiding as the English (Voice Overlap) --
Ms Bessie Margolin: Well, I'll -- I'll say -- well, I -- I say that in -- in --
Justice Felix Frankfurter: I'm not saying they are.
I just want to know.
Ms Bessie Margolin: -- in some areas of the country, I'm afraid they're not.
Justice Felix Frankfurter: All right.
Justice Charles E. Whittaker: Ms. Margolin.
Ms Bessie Margolin: Because they're -- particularly, under the standards which the courts -- which some of the courts have announced.
And that is that you -- you have perfect freedom to litigate.
If -- if you have a case you think distinguishable from the one that's been decided, you -- you can -- you have -- we don't want to put any -- any restriction on you.
You can go into court and litigate it and you shouldn't be in any way restrain.
Justice William J. Brennan: Well, Ms. Margolin, are you suggesting from your professional standards governing the exercise of this discretion, what do you suggest the standards might include?
Ms Bessie Margolin: Well, I -- I would say that -- I could say some that it should not include which are -- are being followed in this District.
And apparently --
Justice William J. Brennan: As for the Fifth Circuit (Voice Overlap) --
Ms Bessie Margolin: Some of the Fifth Circuit standards.
The good faith reliance on -- on -- by advice of counsel encourages counsel to give the advice that the employer wants and we have a lot of experience of that, it's become a stock excuse that I relied on advising of counsel.
Justice Charles E. Whittaker: Ms. Margolin --
Ms Bessie Margolin: -- are good -- or to say that just the fact that there might be a doubt as to coverage is not enough, is not a sufficient reason for denying an injunction that the interest of the public and the -- the extent to which employees have been deprived of their rages in the past, the effect of this on complying --
Justice William J. Brennan: Well, you mean -- what do you mean --
Ms Bessie Margolin: -- competitors.
These are affirmative standards.
Justice William J. Brennan: What do you mean by interest of the public?
Ms Bessie Margolin: The interest of the public in -- in inducing enforcement of the Act.
We find -- we find that there's much more likelihood of much greater litigation in areas where the courts will not grant injunctions.
In this region, for example, there's much more litigation because the employee feels what about to loose.
I'll go litigate and meanwhile I'm not complying and I'm not even going to have an injunction issued against it.
Justice William J. Brennan: Well, would you start with --
Ms Bessie Margolin: So it encourages -- it encourages contest and -- we think on -- on tenuous grounds.
Justice William J. Brennan: Well, would you start with the presumption that the -- an injunction should issue whatever violation standard?
Ms Bessie Margolin: I start thought with -- I think that the statute says the Court shall have jurisdiction for cause shown.
I say that for cause shown, you showed cause when you've shown that they have covered and they're violated.
And that in -- in the absence of special reasons for not granting the injunction --
Justice William J. Brennan: That it --
Ms Bessie Margolin: -- that it should be --
Justice William J. Brennan: -- would start with the presumption.
Ms Bessie Margolin: -- that is should be granted.
Justice Potter Stewart: Another fact is that an injunction did issue in this case.
Is that correct?
Ms Bessie Margolin: Limited to this completed project.
Justice Potter Stewart: Limited to these facts, is that right?
Ms Bessie Margolin: To -- no, just --
Justice Potter Stewart: These employees.
Ms Bessie Margolin: -- this one project --
Justice Potter Stewart: For these employees and these facts.
Ms Bessie Margolin: These employees.
Justice Potter Stewart: Now, this company, this -- this respondent is a general construction company, isn't it?
And it's your contention that in, what, 185 jobs that the record shows that they've done, that they automatically were within the coverage of this federal statute on every single job --
Ms Bessie Margolin: No.
Justice Potter Stewart: -- no matter what these employees --
Ms Bessie Margolin: No.
They conceive that they have --
Justice Potter Stewart: -- were doing?
Ms Bessie Margolin: They conceive that about 90 -- over 90% of their projects have been subject to the act.
Justice Potter Stewart: And -- and there was no contest about that, isn't that correct?
Ms Bessie Margolin: No contest.
They have -- we have found violations occasionally on some of them and sometimes they made restitutions, sometimes they haven't.
Justice Charles E. Whittaker: You found the --
Ms Bessie Margolin: Well, this is of course a -- this was a two or three-year project of $6.5 million so it's -- it's a big --
Justice Potter Stewart: And -- and an injunction --
Ms Bessie Margolin: -- piece of business.
Justice Potter Stewart: -- did issue, didn't it?
An injunction did issue, is that correct?
Ms Bessie Margolin: But not -- but not -- but it has no effect.
Justice Hugo L. Black: What -- what would you have --
Ms Bessie Margolin: It has no effect.
Justice Potter Stewart: What would you wanted the Court to do?
Ms Bessie Margolin: We would say that the -- to enjoin them from -- from doing this again on another project --
Justice Potter Stewart: Well --
Ms Bessie Margolin: -- a similar -- at least, a similar project or on other projects which are -- which are within the coverage of the Act.
And there are a number of decisions which, I think, established coverage pretty clearly.
Now, there maybe some cases where you be -- have perplexing situations.
But I -- I think as this Court said in an employee suit where a question of liquidated damages was concerned.
Justice Potter Stewart: Now, you --
Ms Bessie Margolin: If that's -- if that's perplexing -- if -- if that is perplexing, there should be no reason why that burden shouldn't be put an employer who is -- shown some tendency to -- to resolve doubts in its favor and it's in the (Inaudible).
Justice Potter Stewart: Now, the burden of what?
You've told us in -- in (Voice Overlap) --
Ms Bessie Margolin: The burden -- the burden --
Justice Potter Stewart: Excuse me.
Just let me finish.
Ms Bessie Margolin: The burden of --
Justice Potter Stewart: Let me (Voice Overlap) --
Ms Bessie Margolin: -- of getting right as to whether he's covered -- covered or not.
Justice Potter Stewart: Well, now you've told us, as I understand it that this injunction isn't very burdensome that -- that the respondents are complaining about something else.
Ms Bessie Margolin: Well --
Justice Potter Stewart: It merely isn't very much to complain with --
Ms Bessie Margolin: But I say --
Justice Potter Stewart: -- because all the injunction tells them to do is to obey the Act.
They have that duty with or without an injunction, don't they?
Ms Bessie Margolin: That's right.
Justice Potter Stewart: So what -- what would the difference be?
Ms Bessie Margolin: Well, it -- they would comply -- they -- they would pay the wages as required by the Act.
Justice Charles E. Whittaker: Well, I can tell you what the difference will be.
I have too much experience with this.
You then live under a penalty of citations for contempt whereas your competition lives under the law of the land, isn't that it?
Ms Bessie Margolin: Well, that's what Your Honors stated in the Lublin dissent but I think you may have been misunderstood what happens.
We have extremely few contempt actions under this Act.
And very few could count on one hand, I think, the criminal contempt.
Justice Felix Frankfurter: This -- this Court --
Unknown Speaker: What would have --
Justice Felix Frankfurter: -- has held -- this Court has held that you couldn't issue an injunction saying you should obey the law.
This Court said that on more than one occasion that you cannot merely issue an injunction that people should obey the law.
Ms Bessie Margolin: Well, but you should obey specific requirements --
Justice Felix Frankfurter: Well, I'm not -- I'm not saying --
Ms Bessie Margolin: -- of the law.
Justice Felix Frankfurter: -- what I want to know is what -- what would be term of your injunction which -- which should avoid the condemnation to which I've referred.
Ms Bessie Margolin: Well, our injunctions usually specifically provide that you shall pay the minimum wage and overtime as required by the law.
It's spelled out to employees engaged in the production of goods for commerce or in commerce or in the production of goods for commerce.
Justice Felix Frankfurter: Not (Voice Overlap) --
Ms Bessie Margolin: And some of them specified the particular types of activities.
Justice Felix Frankfurter: Well, isn't that necessary otherwise -- otherwise you issue an injunction which would lead help you as to whether you are on interstate commerce.
Ms Bessie Margolin: They mentioned the specific sections which have been violated in the past.
It's limited to those.
Justice Felix Frankfurter: But you know --
Ms Bessie Margolin: And I --
Justice Felix Frankfurter: -- even better than I do that these -- nice distinctions are being made in this field.
And if you just say, you should obey the law, you should pay them these, these and these amounts if they're engaged in commerce.
That is often the controversy whether on some other job, the (Voice Overlap) --
Ms Bessie Margolin: Well, I think --
Justice Felix Frankfurter: -- did he or are therefore engaged in commerce or not.
Ms Bessie Margolin: I think that certainly in -- in some cases, there is some further explicit specification of the types of work that you're enjoining violation.
But the fact remains that if it's not within the coverage of the Act, they're not violating the injunction.
Justice Felix Frankfurter: I know but the -- but that isn't automatically determinable -- determinable question.
Ms Bessie Margolin: I think it is under this Act.
Justice Felix Frankfurter: Well, I've had to write opinions that different (Inaudible) --
Ms Bessie Margolin: Well, how would -- how would they ever be -- how would they ever be required to -- they -- if -- if they don't believe they covered, always, they do is they don't -- they don't pay, and we have to come in and ask for civil contempt if it's not.
If it's willful, that's where the coverage is clear.
And that's the only kind of case where you can get any criminal contempt.
But if -- if they doubt that they're covered by the Act, they don't have to pay their employees.
They can -- they can sit back and wait until we come to court and say, “We think they've violated the injunction,” or they can go in the court and asked the court can -- they can go in and say “The Government tells us that this project is covered, we'd like you to (Voice Overlap) --
Justice Felix Frankfurter: You mean a --
Ms Bessie Margolin: -- construe.”
Justice Felix Frankfurter: -- prayer or a judgment?
Ms Bessie Margolin: No, to construe your -- your injunction.
Justice Felix Frankfurter: Well, even --
Ms Bessie Margolin: -- does your injunction intended to cover this project?
Justice Felix Frankfurter: I shouldn't think that it's a desirable thing to issue an injunction and say the relief of whether you're within this or not is to come in -- as to have you hail them up the --
Ms Bessie Margolin: Well, that's --
Justice Felix Frankfurter: -- civil contempt.
Ms Bessie Margolin: That's -- well, civil contempt just ordering them to pay the wages due.
Justice Felix Frankfurter: You say --
Ms Bessie Margolin: That's inherent in this Act.
The coverage isn't --
Justice Felix Frankfurter: All depends (Voice Overlap) --
Ms Bessie Margolin: -- isn't that clear.
Justice Felix Frankfurter: All depends the particularity of the injunction.
I don't --
Ms Bessie Margolin: I don't -- I don't see how you could get such a particular injunction and I refer the Court to the Jacksonville paper which involved a contempt action.
That you can't get it so particular that it couldn't -- you couldn't distinguish a -- every other particular case from it.
Justice Felix Frankfurter: That's what they used to say (Inaudible) --
Ms Bessie Margolin: So you have to have --
Justice Felix Frankfurter: -- injunction from labor cases, and I used to think that was a great evil to have such dubious provision in a labor injunction.
Ms Bessie Margolin: Well, but this is --
Justice Felix Frankfurter: I know the difference.
Ms Bessie Margolin: -- a very restricted statute.
This covers simply payment of wages and -- and overtime compensation and --
Justice Felix Frankfurter: But, Ms. Margolin, as to whether you're within --
Ms Bessie Margolin: The coverage --
Justice Felix Frankfurter: -- the coverage of this Act is not a simple thing.
Justice Felix Frankfurter: Otherwise, you wouldn't be here so often.
Ms Bessie Margolin: Well, that -- I didn't -- certainly didn't mean to say that I thought that was simple.
And -- and many cases, obviously, it isn't.
But I think that's a reason why you can't restrict these injunctions to just particular kinds of activities.
It's too easy to change the nature of the employee's activities.
Justice Felix Frankfurter: Well --
Ms Bessie Margolin: And then you say, well, that's not covered by the injunction.
You make a slight change in his -- his overtime contract.
Or you -- or you make a change in his duties and try to come within one of the exemptions.
Now, I think our injunctions are to protect this against that sort of -- of thing.
Justice Felix Frankfurter: The order to protects this -- an injunction order would protect two interest, one, you ought not to -- the injunction ought not to be so that -- that it can be invaded or avoided whatever word you plea by a difference that isn't a difference, by a differentiation that isn't a difference.
On the other hand, it shouldn't be fair scope for -- for such doubts that the only answer is to hit him up for contempt.
Ms Bessie Margolin: Well, I'll say this that this case certainly, I'll leave you with this, that it's so narrow that --
Justice Felix Frankfurter: Well, I'm --
Ms Bessie Margolin: -- that -- it's -- it's nothing.
Justice Felix Frankfurter: That's what I wanted from you, the answer as to whether you think an injunction is automatic.
You said no to that.
You've indicated however that it would be so weighted that on the whole, you an injunction because of the nature of the subject matter that if violation is found, then an injunction if issued, except -- except to circumstances.
That's your view.
And there's the next question as to the writ of the injunction not with such particularity that can easily escape from it but also not with so much room that it needs a fair measure of doubt in view of the difficulties of having in court case by case beside this premise.
Ms Bessie Margolin: Well, I -- I say it's inherent in the situation that these cases have to be decided case by case --
Justice Felix Frankfurter: Yes, I know.
Ms Bessie Margolin: -- that it's difficult to have -- to draft a --
Justice Felix Frankfurter: Why?
Ms Bessie Margolin: -- a -- a limited injunction that has any effect.
But I also say that I don't think this imposes any burden on the employer because he's never compelled to do anything on the injunction until it is decided that the work is covered.
And that to -- to have him carry some of the burden of the doubt, if he guess he's wrong, I don't think it should be ruled out.
Justice Felix Frankfurter: There is the decree in this case, where was the -- the original?
There was an injunction, wasn't it?
Ms Bessie Margolin: There -- there was an injunction.
Justice Felix Frankfurter: Where -- where -- why don't we turn, Ms. Margolin?
Ms Bessie Margolin: It's limited to this particular employees engaged on this particular project.
Justice Felix Frankfurter: And -- and you -- you think that it (Inaudible) in Court of Appeals in the case that had been passed to the District Court but the Court also indicate that the injunction should be broaden.
Ms Bessie Margolin: In the Court of Appeals?
Justice Felix Frankfurter: No.
Ms Bessie Margolin: No.
I think that it probably should --
Justice Felix Frankfurter: Were you satisfied with the District Court's injunction?
Ms Bessie Margolin: No, we weren't.
Justice Felix Frankfurter: All right.
Ms Bessie Margolin: -- we think we ought to -- probably ought to be remanded to the Court of Appeals to have the Court of Appeals determine whether the -- whether the District Court exceeded it.
Justice Felix Frankfurter: But I'm afraid we'd have to get very particular structures of the Court of Appeals --
Ms Bessie Margolin: There, the Court of --
Justice Felix Frankfurter: -- in case like this is covered not only that the injunction was all right but they should make it broader.
I think we'd have to be very specific --
Ms Bessie Margolin: Well --
Justice Felix Frankfurter: -- almost draw the injunction here.
Ms Bessie Margolin: Well, I don't know.
Justice Felix Frankfurter: (Voice Overlap) --
Ms Bessie Margolin: -- I might say this in behalf -- I might say this in behalf of my own Fifth Circuit, as I think, that they're all coming a little round to realize that what we've been trying to tell them all these years requires some aid on their part.
And they have been in the last two or three cases, I think, saying, well, maybe we've -- we've gone too far in saying the good faith reliance on advice of counsel on good faith, feeling that you're not covered is not -- is ground enough for denying an injunction.
And they have reversed two or three limited denials of injunction.
Justice Felix Frankfurter: What do you --
Ms Bessie Margolin: That also --
Justice Felix Frankfurter: -- think is it's not the law but the judgement should be amended?
Ms Bessie Margolin: Oh, I think that the Court of Appeals with -- with some general guidance from this Court would -- would remedy the problem or do much remedy.
Justice Hugo L. Black: Does the department been utilizing the avenue of filing suits against these companies or the employees who have had been worked in violation of the law?
Ms Bessie Margolin: Yes, we have.
We filed quite a number of them but they can only be filed on the request of the employees.
Justice Hugo L. Black: Of the employees.
Many of the employees filing suits?
Ms Bessie Margolin: Very few of those now.
They -- I think that -- that disapproved around a fruitless remedy because -- well, the Portal Act this -- had some -- caused some trouble with that.
They discouraged the attorneys from -- from taking those cases because --
Justice Hugo L. Black: (Voice Overlap) --
Ms Bessie Margolin: -- some of them one in the Supreme Court and then had Congress reverse them.
Justice Hugo L. Black: What -- what was that?
Ms Bessie Margolin: I said --
Justice Hugo L. Black: That you picked on it, I didn't understand you.
Ms Bessie Margolin: It's discouraged attorneys from taking those cases.
Justice Hugo L. Black: I see.
Ms Bessie Margolin: Of the employee suits.
Justice Hugo L. Black: What -- what discouraged them from taking?
Ms Bessie Margolin: I think that -- I think the fact that the fees are too -- or very low and that --
Justice Hugo L. Black: What are the fees?
Fixed by the Act, you mean?
Ms Bessie Margolin: No, they're not fixed by the Act.
The -- the Act provides that a reasonable attorney's fee should be awarded.
Justice Hugo L. Black: Then you say the difficulty (Voice Overlap) --
Ms Bessie Margolin: And the amounts are small, you see, the amounts are small and the question -- the questions maybe very long drawn out.
Also a lot of these cases have to be tried to a jury so that it become -- and this Act is kind of complicated and it gets to the jury and the employee frequently is not able to prove coverage.
And they'll all sorts of burdens on that remedy.
And -- and since the Portal Act, particularly, I think --
Justice Hugo L. Black: You mean the juries are taking your position that you say the court are --
Ms Bessie Margolin: Is what?
Justice Hugo L. Black: I understood -- no, you're saying that the juries won't give verdicts?
Ms Bessie Margolin: Well, I think that they don't get a quick understanding of these coverage questions and exemptions.
There are so many coverage and exemption questions that I think that these cases get quite confused when they go to the jury.
This is one of the difficulties they find in two in the 16 (c) remedy where the administrators requested to sue on behalf of the employee.
They have to be -- they tried before a jury too.
And it's extremely difficult even though there suppose to be no unsettled question of law in those cases, and I supposed to bring them unless no unsettled question of law.
Just talking to -- just having the Court charged the jury and having the employers counsel talk to the jury about the coverage and exemption questions here involved confuses them.
And it's -- it's also very long drawn out in expensive process.
In fact, one of the judges had just told us in Alabama that these cases involved so little money and this is so burdensome to try.
He was going to refer them all to a master.
He didn't want to bother with it.
Justice Hugo L. Black: Decided
Ms Bessie Margolin: Now --
Justice Hugo L. Black: by the -- to the -- before the judge without a jury, you mean.
Ms Bessie Margolin: This was the judge's attitude, and I must say when -- with over crowded courts on it, I'm sympathetic with it [Laughs] because they involved -- each individual case involves relatively small amount.
This is why we feel that the injunction remedy is so important because then you can establish a basis for getting recovery for all employees, complains for all employees in -- in one action.
Justice Hugo L. Black: Are you --
Ms Bessie Margolin: And --
Justice Hugo L. Black: -- limited to --
Ms Bessie Margolin: And to the injunction remedy, I think --
Justice Hugo L. Black: -- one employee when you filed -- when a suit is filed?
Ms Bessie Margolin: Do we what?
Justice Hugo L. Black: Can a suit be filed for more than one employee against an employer?
Ms Bessie Margolin: Yes, but it has to be at the request of the employees.
Justice Charles E. Whittaker: They're not (Voice Overlap) --
Ms Bessie Margolin: -- and -- and only -- usually only a few of them were willing to request it, ex-employees mostly.
If they're still working for the employer, they're -- are not very likely to want to antagonize him.
Justice Charles E. Whittaker: Do you need their consent, Ms. Margolin, to file an injunction action under -- under 17 (c)?
Ms Bessie Margolin: Your --
Justice Charles E. Whittaker: Do you need the consent of employees --
Ms Bessie Margolin: No.
Justice Charles E. Whittaker: -- to file this injunction action?
Ms Bessie Margolin: No.
This is in wholly under public --
Justice Charles E. Whittaker: Oh, I understand --
Ms Bessie Margolin: -- enforcement basis.
Justice Charles E. Whittaker: -- in this case, this respondent has had one former piece of litigation involving the wage or the law.
Is that right?
Ms Bessie Margolin: That's right.
Justice Charles E. Whittaker: And you say there comes a time when the courts must come to the aid of the Government, isn't not?
And that that time is here with respect to this respondent who has had one piece of litigation involving this Act and you asked therefore an injunction against this respondent from “violating the provisions of the Fair Labor Standards Act”, isn't that what you ask?
Ms Bessie Margolin: Oh, we've had two litigations and this has been a very long drawn outline here.
Justice Charles E. Whittaker: This is the second, isn't it?
Ms Bessie Margolin: This is the second.
Justice Charles E. Whittaker: Is this the second?
Just answer my question, please.
Isn't it --
Ms Bessie Margolin: Yes.
Justice Charles E. Whittaker: -- the second one?
Ms Bessie Margolin: This is the second.
Justice Charles E. Whittaker: And this -- does that -- that's the relief you asked in this case, isn't it?
Ms Bessie Margolin: That's the -- that's our --
Justice Charles E. Whittaker: All right.
Now, then --
Ms Bessie Margolin: -- general prayer for relief.
Justice Charles E. Whittaker: Now, then, since when has not a citizen as well as the Government the right to have with his rights litigated within the courts of the land?
Ms Bessie Margolin: I wouldn't deny anybody a right to litigate.
And certainly, they -- they're freely been litigating.
I don't think what I'm asking denies them any right whatsoever to litigate any question of coverage even if it's been pretty easily settled if they think they have a basis for thinking it might be changed.
What I say is that they -- they can litigate after the injunction is issued to the heart's content.
Justice Charles E. Whittaker: Well then --
Ms Bessie Margolin: And if --
Justice Charles E. Whittaker: -- what good is the injunction to you?
You want --
Ms Bessie Margolin: Because --
Justice Charles E. Whittaker: -- the injunction.
Ms Bessie Margolin: No.
The injunction does this, and this is -- if -- if they weren't -- if an injunction had been issued here, for example, preliminary injunction when we ask for it.
The trial court said, “Well, I don't think I need to issue a preliminary injunction because the respondent here is -- is perfectly solvent, and he'll be able to pay and respondent was all giving that his employees might take the money and he's never be able to get it back if it will later determined he was covered.”
Well, the Court didn't issue the injunction although, he could've -- he could've required -- the District Court didn't issue preliminary injunction although he could've required them to put up a bond or something in the event that they were ultimately held entitled to have money and because it was admitted that some $50,000 would be due if they were covered.
Justice Charles E. Whittaker: I hope --
Ms Bessie Margolin: -- continued --
Justice Charles E. Whittaker: Let me just make this statement to you.
Ms Bessie Margolin: Can I just --
Justice Charles E. Whittaker: (Voice Overlap) --
Ms Bessie Margolin: -- tell you what happened here?
Justice Charles E. Whittaker: -- is not pretending.
I -- I realized the position you're in.
I just don't agree with it.
It's all but it's not first.
Ms Bessie Margolin: [Laughter] I appreciate that, Justice -- Mr. Justice Whittaker.
I've never thought it was.
But the -- what happened here was that the Court said, “I'm convinced on this preliminary injunction that you're covered by this Act.”
And with -- even with that, although respondent said that it was relying on advice of counsel that it wasn't covered, but the judge told him at that time, “I think you've covered.
I'm convinced I don't see what other evidence you could bring in that would change my mind.”
But respondent still went on -- went on with his noncompliance.
He wasn't willing to accept the judge's tentative view.
He preferred to accept his own doubts or his counsel's advice, and he went on and didn't went on with his noncompliance in those circumstances.
And when the final order came down, the judge was in no position to -- to make him pay employees even for the period after he had decided that there was coverage.
Justice Charles E. Whittaker: I've had (Voice Overlap) in this view, citations issued against clients of mine, there are number of cases by your department under just this kind of a business.
And I tell you it's not fair, it's not right to deny once that has any right to live under the law of the land since (Inaudible) it had one piece of litigation with the Government and then its competitors or make him live under citation of contempt and his competitors live on the law of land.
Ms Bessie Margolin: Well, as -- can -- can I just put this question to you.
Is it right or fair that employees should not be paid what -- their rights on this?
Now, this Act is 20 years old now, that the employees should loose their wages under this Act every time there's a doubt as to coverage --
Justice Charles E. Whittaker: Not at all.
Ms Bessie Margolin: -- even though they're ultimate --
Justice Charles E. Whittaker: It goes to open to them just like they argued the employers but the weight of the Government shouldn't be told either way.
Ms Bessie Margolin: Oh, you think that this law was intended to put them on an equal basis?
Justice Charles E. Whittaker: The more ones --
Ms Bessie Margolin: As to minimum wages?
Justice Charles E. Whittaker: -- but -- but not (Inaudible) the Government loose its weight to one side.
Ms Bessie Margolin: Well, I think in Government -- certainly Congress intended the Government to throw its weight on the side of the -- of the minimum -- the substandard wage earners in this country when it passed this law, I think that is certainly clear beyond doubt, Mr. Justice Whittaker.
Chief Justice Earl Warren: Thank you, Ms. Margolin.
Argument of R. Dean Moorhead
Mr. R. Dean Moorhead: Mr. Chief Justice, may it please the Court.
In view of the colloquy which has just ensued the temptation is strong to again discussing immediately the question of the scope of the injunction in this case.
However, Mr. Johnson and I have reached a draft apportionment whereby subject to questions of the Court.
I was to discuss primarily the question of coverage which, of course, is the fair amount question as far as we're concerned.
And again, subject to the questions of the Court, he proposes to deal with the injunctive feature.
So I will mention at the beginning, the question of coverage in this case which we feel is a most serious one and certainly is, by no means, as clear as counsel for the Government has indicated that she believes it is.
Now, we start and we've tried to start throughout this litigation with the proposition as this Court has several times stated that in a coverage case of this kind, the problem that faces all of us, that faces the Court in rendering its decisions, that faces those of us in private practice in advising our clients, our -- our joint problem, our mutual problem is to try to decide where to draw the line in these coverage cases.
And this Court, of course, has observed in the past that looking for a dependable touchstone as a guide in attempting to draw that line is, as I think the Court put it, about as rewarding as attempting to square the circle.
We have no quick answer.
We have no easy answer to urge upon the Court as far as coverage is concerned under the facts of this particular case.
All that we think we can do is to marshal to the Court, as we've tried to do in our briefs and as I shall try to do in argument, the factors which we think will assist us and assist the Court in drawing the line of coverage in this case.
And we began, of course, in setting both -- for those factors with the actual facts in the case.
We have a dam here built on a non-navigable river located solely within the boundaries of the State of Texas.
The dam was not constructed for flood control purposes unlike other dams that have been before this Court in other context.
It was not constructed to aid navigation.
No federal funds were used in the construction of the dam.
The dam produces no hydroelectric energy.
It's merely a dam on the Nueces River approximately 42 miles above the City of Corpus Christi which was built by the respondent here in the H. B. Zachry Company pursuant to contract between it and the Lower Nueces River Water Supply District.
And the actual outline contractually speaking and also physically speaking of the facts in the case are these.
Zachry, the respondent contracted with the District for the construction of the dam and built the dam.
And of course the activities of his employees in constructing the dam are what are before this Court for review.
The District in turn and the District is no coextensive with the City of Corpus Christi and under the laws of the State of Texas, the District is an entirely different animal than a municipality such as the City of Corpus Christi.
The District entered into a contract whereby it agreed to sell to the city the water impounded by the dam.
And as far as the flow of the water is concerned, once my client, the respondent built the dam, once his employees left the scene, water began to be impounded and is still being impounded behind the dam.
When that water is impounded, it's the property of the District.
But the District has, by contract, sold it to the City of Corpus Christi.
And as water is released through this dam, it's metered, the City takes title there, that water is discharged into the bed of the Nueces River where it flows down the old riverbed 26 miles downstream to a little town called Calallen.
And the City of Corpus Christi has constructed a treatment plant, a purification plant at Calallen.
The water goes through the treatment plant.
It then goes downstream another 16 miles for a total of 42 miles where it enters in to the old distribution system, water distribution system of the City of Corpus Christi.
And once it enters that distribution system and is sold and distributed by the -- the City, it sold, of course, to the usual miscellany of customers that any sizeable city sells water to.
And among those customers are numerous industries in the City of Corpus Christi which use water in connection with the production of goods which they manufacture for commerce.
So, we have a question here whether a basic question, the -- the Government has -- has interjected a few tangential factors but basically, this lawsuit begin with this question, and I think it's the principle question now before the Court.
The question is simply this.
When respondent's employees built the dam up the Nueces River, were they, in some way, performing some kind of activity which was tied so closely to the production of goods for commerce by the manufacturing plants in Corpus Christi as to make it possible for the courts to say that the workers upon that dam were, in fact, connected with the production of goods for commerce and that therefore, coverage should obtain under the Fair Labor Standards Act.
Justice Felix Frankfurter: May I, without breaking the architecture of your argument, ask you this question.
Would the employee who actually delivered the -- the drivers on the truck, that's the way it's done and I'm going to disclose a big deal of ignorance my question on that phase.
Would the drivers of a truck that brings water out of this reservoir or dam to the industry in question, would they, in your opinion, be under the Act?
Mr. R. Dean Moorhead: I -- you're --
Justice Felix Frankfurter: I'm not saying that therefore yours, I just want to --
Mr. R. Dean Moorhead: They -- they --
Justice Felix Frankfurter: -- pre-crawl towards this answer.
Mr. R. Dean Moorhead: I was on the verge of saying what Your Honor and the remainder of the Court knows that in trying to decide where to draw the line, we have to consider the relationship and the essentiality of the services.
And certainly, we think if you had a case where water was transported by tank trucks --
Justice Felix Frankfurter: Yes.
Mr. R. Dean Moorhead: -- to a manufacturing plant and -- and put in to a cooling tower or a boiler or something there, certainly, the man that drove up to the plant and emptied the water --
Justice Felix Frankfurter: Do you think that was clear?
Mr. R. Dean Moorhead: -- the Government -- no.
I do not think it's clear that coverage would obtain but I say that the Government would have a far better case there than we have in our case.
Justice Felix Frankfurter: And you don't -- you don't think -- you -- you have doubts about that.
Mr. R. Dean Moorhead: I wouldn't --
Justice Felix Frankfurter: -- I don't think that is the case before us but I just wondered.
Mr. R. Dean Moorhead: I -- I have doubts to this extent, Your Honor, if it be true as counsel for the Government argues that the Eighth Circuit in its Chambers case decision, there are two Chambers cases as the Court may know and we -- we will be talking about both of them.
The one by the Eighth Circuit is the one which is the strongest or the stronger of the two against us, if it be true that what the Court for the Eighth Circuit held in the Chambers case is that an employee who works on the actual distribution system who's part and parcel of parcelling out the water is covered by the Act, then your driver in your case would -- would be -- would be covered and have conceded.
Justice Felix Frankfurter: I want to say that I'm -- I'm most sympathetic to anybody who finds it difficult to draw a line.
I don't think you can jump from one thing to another, nice distinctions have to be made, and Congress vested the trust of making those distinctions in courts instead of an administrative agency.
But I want to be -- to care to differentiate the relation, the word “nexus”, I think has been used in this case, of the relation, the tie-in between my -- tank trucks or truck drivers and the window washer and -- and the Kirschbaum case.
Mr. R. Dean Moorhead: In the Kirschbaum case, of course, Your Honor, was dealing with maintenance workers including window washers, as I recall, who worked on buildings which released to persons engaged in the actual production of commerce.
Probably, I would say that as a matter of physical causation tie in between what a man's doing and the furnished goods that your man driving the tank truck is closer than the man.
He is certainly more directly essential --
Justice Felix Frankfurter: Than the window cleaner.
Mr. R. Dean Moorhead: -- I say, than the window cleaner, yes, sir.
Justice Hugo L. Black: May I ask you one question if you mind?
Suppose, in the -- all this had been done by the City itself, it had built the dam, it had conducted the canal and sold the water, would that change the situation, or does your different relationship because you are not the ultimate seller though it would make a great distinction in your mind?
Mr. R. Dean Moorhead: We are mentioning and we think it is proper to mention as -- as we have done the fact that as a matter of contract, we are at least one stage further removed from the actual production then it would be true if the employees involved were the employees of the City of Corpus Christi who built the dam.
I think we would be on very thin ice if we have to appear before the -- this Court saying that that fact that we are one contract farther back is the dividing line between coverage and -- and a lack of average.
Justice Hugo L. Black: (Voice Overlap) at its functions.
Mr. R. Dean Moorhead: That is correct.
Chief Justice Earl Warren: Well, I suppose on the fact that this dam is some miles away from the -- from a situs of these industries would make no difference, would it?
Mr. R. Dean Moorhead: That, my answer, Mr. Chief Justice, would be almost exactly the answer that I gave to Mr. Justice Black.
We don't think geography is the solution to the matter in the –- the Borden Company versus Borella which this Court decided after the Kirschbaum case.
There was quite a distance there between the building involved and the physical manufacture.
There again, if -- if we had to rely upon that 42 miles, we -- we would have a slender reed.
But we do say that the Court cannot ignore or should certainly, can it -- it perhaps should not ignore the factors of distance and contractual connection in considering the whole of the picture and deciding where to draw the line.
And I was going to elude and I might just make brief reference to it now to the fact that in trying to find touchstones, in trying to decide where to draw this line, the Labor Department itself has named a series of factors which we have set forth at two places in our brief and they're also contained in the regulations which are copied verbatim in the appendix.
They have set -- set forth at least six factors.
We list them seriatim on page 58 of our brief.
And the very first of those factors that the Labor Department itself lists is where -- where, when and how the activity in question is performed in relation to the production to which it relates.
We think the 42 miles is at least pertinent to the where, the when enters into in the sense certainly that our employees perform their activities months ago from the standpoint of time.
Their -- their labors have in effect upon the production of goods for commerce today only and whenever a man in one of these factories who was over to take a drink of water or put water in a boiler or a cooling tower.
How the activity is performed?
Well, of course, we have a totally different activity performed here, the building of the dam being utterly dissimilar to the manufacturing of selling these or the other products that are manufactured in the City of Corpus Christi.
They go on down the line.
The Labor Department doesn't say and we don't say that the answers to when, where and how determine this, but -- but they have to be considered.
The Labor Department then says another factor to consider is whether the activity is performed within or without the productive enterprise.
Well, certainly, the answer to that consideration is in our favor because here, the building of the dam was utterly outside the various productive enterprises that you find in the City of Corpus Christi.
Chief Justice Earl Warren: Well, would that -- would that apply to any public utility?
Mr. R. Dean Moorhead: I -- I think my answer would have to be yes, any public utility such as we know in a -- a city of any size, yes.
Chief Justice Earl Warren: Yes.
Mr. R. Dean Moorhead: And I think the answer to the next factor here, the third factor where the Labor Department says consideration should be held of whether its performance is with the primary view of aiding production or is for some other purpose.
We say there that we were interested as the trial court recognized not in aiding this handful of industries down on the waterfront.
We were interested rather in aiding the whole of the Corpus Christi area, the residential consumers, the schools, the other customers as well as the industrial ones.
Chief Justice Earl Warren: What -- what --
Mr. R. Dean Moorhead: And yet, that -- that answer too would apply equally to all public utilities.
Chief Justice Earl Warren: What percentage of this water is used by the industries?
Do you know?
Mr. R. Dean Moorhead: Volume was the -- the original records of the water department are in evidence and are before this Court in original form with 40% approximate of Ms. Margolin.
Unknown Speaker: (Inaudible)
Mr. R. Dean Moorhead: The -- the Government's estimation is 40% to 50% and we could have no quarrel with that.
Justice Potter Stewart: Of course, in -- in many public utilities cases, wouldn't it be true that the -- that the -- what was -- what was produced by the public utility itself would be the goods for commerce --
Mr. R. Dean Moorhead: That --
Justice Potter Stewart: -- towards the gas and the electricity.
Mr. R. Dean Moorhead: That, Your Honor, is -- is a point that I certainly was going to make in a -- a large variety of cases, public utilities cases, it's -- it's your electric energy itself, that is a -- a -- if you can call electric energy, a good or a product that moves in commerce.
And that's certainly true of -- of gas at least in -- in (Voice Overlap) --
Justice Potter Stewart: It's the alternative or an alternative argument made by the Government here of course that the water itself is the goods for commerce.
Mr. R. Dean Moorhead: Now, I -- I'm glad, Your Honor, that you mentioned that because that -- and I mean no criticism, I'm trying to be factual when I say this, that is an 11th hour argument.It is one that we did not hear in the District Court.
The only support the Government confined for that argument that that our workers were really producing water and that the water itself was the good lies in the fact that in a bunch of string citations which it gave on -- on an elementary proposition, the trial court cited this Court's decision in the Alstate case.
If it be true that our people in building the dam were producing water, and I might add that that kind that the Government has said at great length in its both brief that this case should, pursuant to the admonition of this Court in Vollmer, be decided upon practical considerations rather than technical conceptions.
If we use those tests and if we assume that it is practical to say that in building a dam, we are producing water.
I don't see where -- where that argument avails the Government in this case.
They, themselves, admit that they made no attempt to develop any theory that the water so produced if such it is becomes an ingredient in -- in any good that is produced for commerce.
And if the Court will look at the only portion of the record on that point which is set forth verbatim in our brief in a footnote on page 44, the only evidence on the point was that nobody knew of any case where water becomes an ingredient in any product.
And as a matter of fact, the -- the counsel for the Government, they even interjected a helpful quip there to the effect that he didn't know of any at least in the case of petroleum products.
I don't see where -- where the -- the theory that by building the dam, we produce water and that the water is the particular goods in this case can't avail the Government at all.
And certainly, the case has been tried and argued and the brief below almost 99% and 4400% upon the theory that the goods involved are not the dam, of course, because the dam can't be a good, but rather are the products of the industrial plants in the Corpus Christi area, and the question has been, what's your relationship between the route picker out here who's working on the dam and selling this becomes out of -- for a factory of Corpus Christi.
Justice John M. Harlan: Could I ask you a question?
Do you see in this case a -- do you -- or do you see this case as involving a difference between you and the Government on general principles of law as distinguished on the application of existing principles to a particular state of facts?
Mr. R. Dean Moorhead: No, sir.
I -- I think that the only new law that might be involved in this case in any sensitive word would be that the case, I believe, affords this Court its first square opportunity to write upon the possible effect and we think very significant effect of the 1949 amendments to the Fair Labor Standards Act which changed at least in wording and we think insignificant tenure, the tests to be used in -- in drawing the line.
And I -- I was about to -- to come to that because I think it is highly important because it is practically the only new law within this case.
Now, a question was asked counsel for the Government as to what case she relied upon strongest in support of her position on coverage.
And I believe she gave the -- the Court a large number of samples to choose from.
I have no hesitancy in saying that as far as logic and rationale are concerned, we rely strongest upon the decision of this Court in the Callus case which was another one of the building cases following upon the hills of -- of Kirschbaum and Borella.
And we think the -- the Callus case ties directly in to what was accomplished by the 1949 amendments.
And since I haven't mentioned those amendments yet, I'd like to get to them now.
As the Court notes, prior to 1949, in the case involving goods -- production of goods for commerce where the activity in question was, as we think is true in this case, not an activity involving actual production but rather if it was anything at all was an activity in a closely -- in a related process or occupation.
Where that type of situation was before the courts prior to 1949, the portion of the Act which governed that situation said that the activity was covered if it was in a related process or occupation necessary to the production of goods for commerce.
And of course, under the necessary test, although this Court said that not everything that was indispensable was necessary, certainly, under the necessary language, there were reasons for extending the bounds of coverage quite broadly.
I believe one of the judges some years ago complained saying that the extensions were getting to the point where under the necessary tests, it was like tossing a pebble into a pond, and then because of the infinite ripples that went out saying that -- that everything that occurred beyond the point of impact was in -- in some way caused by the pebble.
It's certainly under the necessary language, there was a basis for this Court and the lower courts saying that coverage was quite broad in these related occupation or process cases.
However, in 1949, Congress by deliberate act inserted the word "closely" before the words "related process or occupation" and deleted the word “necessary” and substituted therefore the words “directly essential”.
With the result since 1949, that portion of the statute has provided that coverage obtains only where the activity in question is in a closely related process or occupation directly essential to the physical production of goods for commerce.
Justice Potter Stewart: The Callus case was decided under the old necessary case.
Mr. R. Dean Moorhead: The Callus case was decided under the old necessary case.
And yet, we think we've learned much from the language of the Callus case even -- even under the old test.
And certainly, the -- the logic there employed we think becomes even more pertinent under the 1949 amendments.
In the Callus case, for example, this Court said that remoteness of a particular activity from the physical process of manufacturing while not decisive of the question is certainly a relevant factor to aid in drawing the line.
And if remoteness was a relevant factor even under the necessary test, we think it's even more a -- a relevant factor under the closely related and directly essential test.
Now, the Government has argued both in brief and here today that actually, the 1949 amendments with this change in language were of but little effect.
The Department of Labor has not said so in its own regulations on the contrary.
In the regulation which we've quoted at the bottom of page 79 of our brief and at the top of page 80, the Labor Department itself has said that the legislative history shows that the new language, and I'm quoting here, “In the final clause of Section 3 (j) of the Act is intended to narrow and to provide a more precise guide to the scope of its coverage in exactly the type of case that we have here at the bar."
The Fifth Circuit, I mean the Fifth Circuit of course in our case has so construed the -- the 1949 amendments, but in addition to the fact that the Fifth Circuit has construed these amendments as having a limited effect, the Sixth Circuit has so construed them in Mitchell versus Moore, which we have cited and -- and discussed in our brief, and the 1949 amendments have been given such a construction also by the Seventh and the Tenth Circuits in two additional cases which we referred to as the hospital cases in their briefs.
Justice Charles E. Whittaker: May I ask you, sir, is that -- can be found in the Secretary's own construction and his own regulation?
Mr. R. Dean Moorhead: As I read, Your Honor, the Secretary's own construction and his own regulation at the bottom of page 79 and at the top of page 80 in -- in our appendix, he says precisely what the courts have held in -- in those cases to wit that it is intended to narrow the scope of its coverage in this type of case.
And I might add, he goes further than that.
He says some employees whose work might meet the necessary test are now outside the coverage of the Act because their work is not closely related and directly essential to such production.
We are willing to meet him in his own arena.
On that point, we think that the 1949 amendments were written into the Act purposefully that they should be given effect and that their effect, as applied to this case, is simply that when our employees were out on the dam building that dam, they were too remote to be considered as being in an occupation or process closely related and directly essential to the production of goods for commerce.
Justice Potter Stewart: This case is only the construction employees, am I right about that?
Mr. R. Dean Moorhead: There is a serious question about that which we -- we did not attempt to bring that when this case came here on certiorari.
The record shows that the respondent had over 300 employees working in and about this dam.
This Court has said all the way from Kirschbaum down to Lublin that the test is not the business of the employer it's the activity of the particular employee.
The Government made not a single attempt to set forth in the record what a single want of these 300 people was doing on the dam.
Now, we -- we can take it for granted, I assume, that dams don't build themselves.
And so in someway, somehow, it was before building the dam.
But there has been, and we complained, we raised this in the Court of Appeals but because of its disposition in the case, it did not come to it, there is not an iota of evidence in this record showing what any single, what activity, any single employee or respondent performed on this dam.
We have gone into greater detail in our brief on other factors the details that the legislative history where Congress itself at least the house managers stated.
Now, they were trying to -- to limit the scope of the Act and how they in effect were repudiating some of the decisions in the lower courts.
We have gone into detail in discussing the six criteria in the Labor Department's own regulation.
And we're prepared to meet them with the test of those six criteria in determining whether remoteness is or is not --
Justice William J. Brennan: (Voice Overlap) that the trial judge take the view that the 1949 amendments have made no effect or change?
Mr. R. Dean Moorhead: The -- there were two opinions, Your Honor, written in this case.
There was a preliminary opinion where the Court expressed the tentative view that coverage existed.
He did that almost entirely upon the basis of this Court's ruling in the Vollmer case.
Justice William J. Brennan: Well, I mean did he address himself particularly to the question with the 1949 amendments had narrow the old test?
Mr. R. Dean Moorhead: I -- I was coming to -- to that -- that point.
After writing that first opinion, we -- there had been no -- no actual brief submitted to the trial judge.
So, by the end of the second hearing, the question had been briefed substantially as -- as it now appears.
And the trial judge in his second opinion in the case, the opinion which terminates at least on page -- which begins on page 71 of the record.
When faced with the distinction which was argued, and you'll find this on page 72 of the record, faced with the distinction which we urged between the in commerce cases and production of goods for commerce cases and also with the terms of the 1949 amendment, which, I say, the Court itself italicized here, did give consideration to them stating on the top of page 73 that he too believe that they undertook to narrow the scope of the coverage, but then he, in effect said he didn't think that they narrowed it this far.
Now, we -- we do to Your Honors and less I trespass on all of my -- my colleague's time.
I merely say that even under the old necessary test in the Callus case, this Court concluded with the holding that the activity there involved was in the -- the Court's words too many steps removed from the actual physical process of the production of goods.
We think we have precisely that type of situation here that there are too many steps --
Justice William J. Brennan: Well, does your disagreement with the trial judge is application of what he now says or to narrower test after the 1949 amendment to these facts or that he construed the statute as amended in 1949 more broadly than you think it should've been, what Congress intended that it should.
Mr. R. Dean Moorhead: I am not sure I understand the question.
I believe my answer would be that we say that he gave it too broad in effect.And --
Justice William J. Brennan: That -- has he given up the interpretation, do you think Congress intended by the 1949 amendments, he could not have reached the result he did on these facts?
Mr. R. Dean Moorhead: That is correct.
We are not so much, however, invading against the District Court as we are upholding the analysis used by the Court from the Fifth Circuit in applying the -- the test of close relationship and direct essentiality.
Justice Potter Stewart: Although, you don't rely very heavily on anything about new construction.
Mr. R. Dean Moorhead: No, sir.
We -- we did not.
I think that whether -- I don't think you can decide a case of this kind by -- by the label new or old construction.
I -- I think that the nature of the construction has to be based with the test with the 1949 amendment.
Justice John M. Harlan: Do you read the Court of Appeals' opinion as putting a great stress on new construction?
Mr. R. Dean Moorhead: I -- I believe to begin that I would have to say yes.
Chief Justice Earl Warren: Mr. Moorhead, suppose the Court should decide against you on the question of coverage, what -- what your opinion should be the disposition of this case?
Mr. R. Dean Moorhead: If the Court decides against to some question of courage, certainly, I do not think the Court should disturb or broaden the injunction granted by the trial court.
The trial court had a variety of factors before including the past record of this employer the magnitude of the work that it does both in terms of jobs and dollars, the very few instances where even the Government has even contended that we have stepped over the line.
The only other case that we've ever been in on the coverage was a complicated case, which Your Honor cited in your decision in the Lublin case, a -- a war, a -- an army type of -- of construction job.
And in deciding that case against us, the district judge in Albuquerque said that in his opinion, the question was extremely close but he was deciding against us.
If we -- if we've done anything wrong, I think all we've done wrong is to get involved in two of the closed cases.
Chief Justice Earl Warren: Well, my -- the only reason I asked that question is because the -- you -- you raised the question on the Court of Appeals.
The Court of Appeals did not decide it.
Mr. R. Dean Moorhead: Did not reach it and --
Chief Justice Earl Warren: Now, should we -- should we follow the -- the procedure that Ms. Margolin suggested of sending it back to the -- to the Court of Appeals for determination of -- of whether the action was appropriate or -- or do you ask us here to -- to make a decision that it was or was not?
Mr. R. Dean Moorhead: In the event that Your Honors should hold against us on the question of coverage, the most that we would ask and all that we think we could ask would be that the Court leave intact against us the injunction issued by the District Court which was an injunction limited to this one particular job which it is true that during the -- the months that this litigation has been in process, the job is now pleaded.
Under no circumstances though, we think, this Court should broaden that -- that injunction.
And that is, as I mentioned at the outset, is something that Mr. Johnson has prepared himself especially on, and if I may, I would --
Chief Justice Earl Warren: You may.
Mr. R. Dean Moorhead: -- turn --
Chief Justice Earl Warren: You may, Mr. Moorehead.
Argument of Chester H. Johnson
Mr. Chester H. Johnson: Mr. Chief Justice, may it please the Court.
I had prepared to make a few remarks in connection with the injunction feature but in the light of the questions that were propounded from the bench, I'm going to make them very brief.
Now, I do hope to say this at the outset that my -- my colleague here we subscribe to the statement contained in the -- the Kirschbaum case that, and I'm footnoting Mr. Moorhead's statement with the permission of the Court that we do subscribe to the statement in Kirschbaum versus Walling that to search for this dependable touchstone is by which to determine coverages as we -- rewarding as the attempt to square the circuit.
Now, we, therefore, recognize the problem -- the test that is before the Court.
And -- but however, we feel and sincerely feel that the problem here presented in this case, in the case at bar, is a little further removed from any other case that has thus far been presented to the Court.
And we start, of course, with the building of a dam of a local stream in the State of Texas which when completed will impound water which will in turn to be sold to a municipal corporation which will in turn sell and distribute that water to a miscellany of some 200,000 people among whom are some little and thus some large industrial consumers who, in turn, produce goods for commerce.
Now, there is a considerable distance between the building of the dam and the actual production of goods for commerce, and I think Mr. Moorhead has covered that very nicely.
Now, the collateral question comes up at -- in the event this Court determines coverage.
And that is that the trial court has abused his discretion in limiting or attenuating the effect of the injunction so granted.
Now, to -- I -- I believe I should address myself to the -- the cases cited by petitioner rather than to talk about the cases --
Unknown Speaker: Right.
Mr. Chester H. Johnson: -- that we have cited.
And I want to direct the Court's attention to page 72 of petitioner's brief wherein the McComb versus Jacksonville Paper Company case is cited for the proposition -- I believe it is cited from the proposition that a mere violation of the Act of the -- of the Fair Labor Standards Act entitles the -- the petitioner to an injunction without further redo.
The point I want to make here is that the -- the Jacksonville Paper Company case was strictly -- it wasn't a contempt case.
And there is simply -- there is simply a great distinction between a hearing on a contempt order than a hearing or an application for an injunction.
Now, further pursuing the point, petitioner cites this Court to the Union Tool Company and the Overnight Motor Company case at pages, I believe, at 67 or 68 of the brief.
Likewise, the Union Tool Company case was -- it was a contempt case.
Now, it issued out of a patent infringement.
And the -- the Overnight Motor Company case was a liquidated damage case.
The employee, the facts being clear, the employee was entitled to recover the liquidated damages as a matter of law.
There -- there was nothing left in either of those cases for the Court's discretion to be applied to the facts were clear so that it was more or less mandatory that remedial relief follow.
It only had to do was to draw the order.
Further pursuing the point, petitioner would cite the Court, and I'm trying to group these cases rather than to take them -- as I've cited them on numerous cases.
So I'm just going to talk about two cases, I believe, that -- that were injunction cases.
The -- for instance, we cite the (Inaudible) case out of the Fifth Circuit, the Circuit which is so condemned.
And that was a -- a child labor violation case, a very flagrant case.
The only reason the -- the trial court did not wrap the injunction was that he believe the defendant to be a law-abiding citizen.
And he didn't believe that he would violate the law anymore.
The Fifth Circuit said, “That's not sufficient to withhold the grace of the Court.”
That injunction should issue -- had so many further excuses.
In that connection, the petitioner cites another injunction case called the -- the Walling versus Youngerman-Reynolds Hardwood Company case.
And -- and another with like case was Southwest Engineers case which is a very recent one.
And they hold to -- as about the same effect.
Now, further pursuing the point in there's -- for you to overcome the decision of the Fifth Circuit.
They condemned the Hodges case and they condemned the -- the Bland case.
Now, the Hodges case reminds me very much of -- of the situation that we are confronted with.
There, Hodges was a contractor.
He had 11 -- he performed 1100 contracts.
The administrator selected five of those contracts to test.
The trial court found that -- that three of those cases, there was no coverage.
That -- I believe that three, that there was no coverage and two that they were -- that there was coverage or may -- might have been vice versa, but an appeal was taken.
The court though withheld the injunction, did not grant it.
In that connection, the -- the defendant had a labor counselor who it had hired from -- that used to work for the -- for the Labor Department or the Wage and Hour Department to counsel with it to help it to -- along its way to keep to -- keep down the infractions of the labor laws.
So that case -- those cases, in other words, the -- the -- are in keeping with the general trend or the general line of decisions of all the courts that say that -- that if the facts are clear and if the cause has been shown, he maybe entitled to his injunction absent any mitigating factors, but it's usually always within the discretion of the Court.
Now, I want to point to page 73 of petitioner's brief, and I'm going to conclude.
They complained that bitterly of the prohibitive cost of carrying on the program and maintaining a constant vigilance over these employers.
I especially point to that in the light of the record and the record here shows that -- that respondent had a legal department and it also has, in its employer, pages 64 and 65 of the record, a man whose job it is to police all jobs in an effort to keep the -- the workers on the payroll in a proper classification even under Davis-Bacon and Walsh-Healey as well as the Fair Labor Standards Act, and to minimize any infractions.
Now, in spite -- in spite of all these efforts, they say that they need a broad blanket injunction.
I'm going to agree with them that it is costly program.
I'm further saying that -- that we're doing our part to minimize that cost and we're doing the best we can.
Justice Hugo L. Black: May I ask you what effect do you think have on the case that the injunction that was entered will no longer have any effect?
Mr. Chester H. Johnson: The injunction --
Justice Hugo L. Black: I understand the work has been completed.
Mr. Chester H. Johnson: The work has now been completed and that -- that injunction then would die with the exploration of the job.
That is correct.
Justice Hugo L. Black: Well, it -- it enjoined merely with underpayment, merely with reference to that one job.
Mr. Chester H. Johnson: It -- it enjoin the -- the defendant from violating the overtime provisions only with reference to that specific project.
Justice Hugo L. Black: And how long has that job been over?
Mr. Chester H. Johnson: It's been over about a year and a half, I guess, Your Honor.
Justice Charles E. Whittaker: (Inaudible)
Mr. Chester H. Johnson: Two years.
Justice Charles E. Whittaker: (Inaudible)
Mr. Chester H. Johnson: I -- I don't know whether they would or not, Your Honor.
Chief Justice Earl Warren: Very well Mr. Johnson, thank you.
That would be all.