Opinion
No. 27999.
1945-05-1
SMITH et al. v. CORY RUBBER CO.
H. M. Rust, of Mansfield, for plaintiff. John H. Clark, of Marion, for defendant.
Action under the Fair Labor Standards Act by Emmett Smith, Jr., and others against the Cory Rubber Company to recover overtime compensation. On demurrers by defendant to plaintiffs' petition and interrogatories.
Demurrer to petition overruled and demurrer to interrogatories overruled in part and sustained in part.H. M. Rust, of Mansfield, for plaintiff. John H. Clark, of Marion, for defendant.
SMITH, Judge.
Briefs of counsel have been carefully read and studied by the court. This opinion goes at some length into the questions presented here.
The petition of plaintiff and the amendment to same states substantially that defendant manufactures certain rubber goods and that defendant's employees' services were required in producing and transporting the products of production in interstate commerce, as defined by the Fair Labor Standards Act, 29 U.S.C.A. § 201 et seq.; that this plaintiff was employed by defendant and suffered or permitted to work hours in excess of the maximum number of hours established by the Fair Labor Standards Act per week, and that he was not compensated according to the requirements of the Act, and that during the week of September 11, 1944, he was suffered or permitted to work six hours over the maximum number of hours permitted by said act without compensation therefor at one and one-half times his regular rate of pay; that he was suffered or permitted to work many weeks of overtime for which he has no record, but for which the defendant was required to keep complete records under Section 11 of said act. Plaintiff says that there were approximately thirty-nine (39) other persons employed by the defendant after October 24, 1938, under the same or similar circumstances, and are situated as he is, and plaintiff alleges there is due to himself and each of said employees as unpaid overtime with interest, a certain sum which he claims together with liquidated damages for each of said employees and a reasonable attorney fee, in each case.
Defendant's demurrer filed to plaintiff's petition reads as follows:
‘Now comes the defendant and demurs to the petition of plaintiff an the amendment to the petition, for the reason that said petition and amendment do not state a cause of action against said defendant. Defendant also demurs to the interrogatories annexed to the petition upon the ground that each and everyone of them are immaterial, impertinent and improper.’
It is elementary that facts well pleaded in a petition are to be considered as fact on demurrer. The demurrer to the petition is considered first. At the outset it must be made clear that the courts do not make laws, and are not responsible for determinations of the Congress or of the State Legislature. The courts are to try and interpret the law where that is necessary. This is accepted by all.
This problem is a new one to this court and being new, this court feels bound to go into the matter in some detail.
The plaintiff's petition must stand or fall on the Act of Congress of the United States known as the ‘Fair Labor standards Act of 1938’, United States Code Annotated, Title 29, Labor, Chapter 8, §§ 201 to 219.
So that the record may be clear, pertinent sections will be copied into this opinion.
Section 2 of the act, U.S.C.A., Labor, Title 29, § 202 reads:
‘The Congress hereby finds that the existence, in industries engaged in commerce or in the production of goods for commerce, of labor conditions detrimental to the maintenance of the minimum standard of living necessary for health, efficiency, and general well-being of workers (1) causes commerce and the channels and instrumentalitiesof commerce to be used to spread and perpetuate such labor conditions among the workers of the several States; (2) burdens commerce and the free flow of goods in commerce; (3) constitutes an unfair method of competition in commerce; (4) leads to labor disputes burdening and obstructing commerce and the free flow of goods in commerce; and (5) interferes with the orderly and fair marketing of goods in commerce.’
‘It is hereby declared to be the policy of sections 201-219 of this title, through the exercise by Congress of its power to regulate commerce among the several States, to correct and as rapidly as practicable to eliminate the conditions above referred to in such industries without substantially curtailing employment or earning power. June 25, 1938, c. 676, § 2, 52 Stat. 1060.’
Definitions of terms are made in the act, Section 203:
‘(a) ‘Person’ means an individual, partnership, association, corporation, business trust, legal representative, or any organized group of persons.'
‘(b) ‘Commerce’ means trade, commerce, transportation, transmission, or communication among the several States or from any State to any place outside thereof.'
‘(c) ‘State’ means any State of the United States or the District of Columbia or any Territory or possession of the United States.'
‘(d) ‘Employer’ includes any person acting directly or indirectly in the interest of an employer in relation to an employee but shall not include the United States or any State or political subdivision of a State, or any labor organization (other than when acting as an employer), or anyone acting in the capacity of officer or agent of such labor organization.'
‘(e) ‘Employee’ includes any individual employed by an employer.'
‘(f) ‘Agriculture’ includes farming in all its branches and among other things includes the cultivation and tillage of the soil, dairying, the production, cultivation, growing, and harvesting of any agricultural or horticultural commodities (including commodities defined as agricultural commodities in section 1141j(g) of Title 12, as amended), the raising of livestock, bees, fur-bearing animals, or poultry, and any practices (including any forestry or lumbering operations) performed by a farmer or on a farm as an incident to or in conjunction with such farming operations, including preparation for market, delivery to storage or to market or to carriers for transportation to market.'
‘(g) ‘Employ’ includes to suffer or permit to work.'
‘(h) ‘Industry’ means a trade, business, industry, or branch thereof, or group of industries, in which individuals are gainfully employed.'
‘(i) ‘Goods' means goods (including ships and marine equipment), wares, products, commodities, merchandise, or articles or subjects of commerce of any character, or any part or ingredient thereof, but does not include goods after their delivery into the actual physical possession of the ultimate consumer thereof other than a producer, manufacturer, or processor thereof.’
‘(j) ‘Produced’ means produced, manufactured, mined, handled, or in any other manner worked on in any State; and for the purposes of this chapter an employee shall be deemed to have been engaged in the production of goods if such employee was employed in producing, manufacturing, mining, handling, transporting, or in any other manner working on such goods, or in any process or occupation necessary to the production thereof, in any State.'
‘(k) ‘Sale’ or ‘sell’ includes any sale, exchange, contract to sell, consignment for sale, shipment for sale, or other disposition.'
Minimum wage scales are set up in Section 206, pertinent parts reading:
‘(a) Every employer shall pay to each of his employees who is engaged in commerce or in the production of goods for commerce wages at the following rates
‘(1) during the first year from the effective date of this section, not less than 25 cents an hour,
‘(2) during the next six years from such date, not less than 30 cents an hour,
‘(3) after the expiration of seven years from such date, not less than 40 cents an hour, or the rate (not less than 30 cents an hour) prescribed in the applicable order of the Administrator issued under section 208 of this title, whichever is lower, and * * *.’
Maximum hours are set up in Section 207, pertinent parts reading:
‘(a) No employer shall, except as otherwise provided in this section, employ any of his employees who is engaged in commerce or in the production of goods for commerce
‘(1) for a workweek longer than forty-four hours during the first year from the effective date of this section,
‘(2) for a workweek longer than forty-two hours during the second year from such date, or
‘(3) for a workweek longer than forty hours after the expiration of the second year from such date, unless such employee receives compensation for his employment in excess of the hours above specified at a rate not less than one and one-half times the regular rate at which he is employed.’
‘(b) No employer shall be deemed to have violated subsection (a) by employing any employee for a workweek in excess of that specified in such subsection without paying the compensation for overtime employment prescribed therein if such employee is so employed-* * *.’
‘(1) in pursuance of an agreement, made as a result of collective bargaining by representatives of employees certified as bona fide by the National Labor Relations Board, which provides that no employee shall be employed more than one thousand hours during any period of twenty-six consecutive weeks,
‘(2) on an annual basis in pursuance of an agreement with his employer, made as a result of collective bargaining by representatives of employees certified as bona fide by the National Labor Relations Board, which provides that the employee shall not be employed more than two thousand and eighty hours during any period of fifty-two consecutive weeks, or
‘(3) for a period of periods of not more than fourteen workweeks in the aggregate in any calendar year in an industry found by the Administrator to be of a seasonal nature, and if such employee receives compensation for employment in excess of 12 hours in any workday, or for employment in excess of 56 hours in any workweek, as the case may be, at a rate not less than one and one-half times the regular rate at which he is employed.’
Section 215, reads in part:
‘(a) After the expiration of one hundred and twenty days from the date of enactment of sections 201-219 of this title, it shall be unlawful for any person
‘(1) to transport, offer for transportation, ship, deliver, or sell in commerce, or to ship, deliver, or sell with knowledge that shipment or delivery or sale thereof in commerce is intended, any goods in the production of which any employee was employed in violation of section 206, or section 207 of this title, or in violation of any regulation or order of the Administrator issued under section 214 of this title; except that no provision of this chapter shall impose any liability upon any common carrier for the transportation in commerce in the regular course of its business of any goods not produced by such common carrier, and no provision of this chapter shall excuse any common carrier from its obligation to accept any goods for transportation;
‘(2) to violate any of the provisions of section 206 or section 207 of this title, or any of the provisions of any regulation or order of the Administrator issued under Section 214 of this title; * * *.’
Section 216, reads as follows:
‘(a) Any person who willfully violates any of the provisions of section 215 of this title shall upon conviction thereof be subject to a fine of not more than $10,000, or to imprisonment for not more than six months, or both. No person shall be imprisoned under this subsection except for an offense committed after the conviction of such person for a prior offense under this subsection.
‘(b) Any employer who violates the provisions of section 206 or section 207 of this title shall be liable to the employee or employees affected in the amount of their unpaid minimum wages, or their unpaid overtime compensation, as the case may be, and in additional equal amount as liquidated damages. Action to recover such liability may be maintained in any court of competent jurisdiction by any one or more employees for and in behalf of himself or themselves and other employees similarly situated, or such employee or employees may designate an agent or representative to maintain such action for and in behalf of all employees similarly situated. The court in such action shall, in addition to any judgment awarded to the plaintiff or plaintiffs, allow reasonable attorney's fee to be paid by the defendant, and costs of the action.’
The first question which occurs to this court is the question of whether a state court has jurisdiction of the subject matter here, that is, duties and penalties raised by a Federal Statute. This question is not answered by briefs of counsel.
The Constitution of the state of Ohio, Article IV, Section 4, reads:
‘The jurisdiction of the courts of common pleas and of the judges thereof shall be fixed by law.’
Turning to the Legislature Enactments, Ohio General Code, § 11215, reads:
‘Jurisdiction in civil cases. The court of common pleas shall have original jurisdiction in all civil cases where the sum or matter in dispute exceeds the exclusive original jurisdiction of justices of the peace; and appellate jurisdiction from the decision of county commissioners, justices of the peace, and other inferior courts in the proper county, in all civil cases, subject to the regulations provided by law.’
Section 11237, reads:
‘An action is an ordinary proceeding in a court of justice, involving process, pleadings, and ending in a judgment or decree, by which a party prosecutes another for the redress of a legal wrong, enforcement of a legal right, or the punishment of a public offense.’
Section 11241, reads:
‘An action must be prosecuted in the name of the real party in interest, except as provided in the next three succeeding sections. When a party asks that he may recover by virtue of an assignment, the right of set-off, counterclaim, and defense, as allowed by law, shall not be impaired.’
Section 11244, reads:
‘An executor, administrator, or guardian, a trustee of an express trust, a person with whom, or in whose name, a contract is made for the benefit of another, or a person expressly authorized by statute, may bring an action without joining with him the person for whose benefit it is prosecuted. Officers may sue and be sued in such name as is authorized by law.’
Section 11254, reads:
‘Joinder of plaintiffs. All persons having an interest in the subject of the action, and in obtaining the relief demanded, may be joined as plaintiffs except as otherwise provided.’
Section 11257, reads:
‘One or more can sue or defend for all. When the question is one of a common or general interest of many persons, or the parties are very numerous, and is impracticable to bring them all before the court, one or more may sue or defend for the benefit of all.’
Section 11304, reads:
‘What pleading must contain. Every pleading must contain the name of the court and the county in which the action is brought, and the names of the parties, followed by the name of the pleading.’
Section 11305, reads:
‘What petition must contain. The first pleading shall be the petition by the plaintiff, which must contain:
1. A statement of facts constituting a cause of action in ordinary and concise language;
‘2. A demand for the relief to which the plaintiff claims to be entitled. If the recovery of money is demanded, the amount shall be stated; and if interest is claimed, the time for which interest is to be computed shall be stated.’
The Supreme Court of the United States has had the question before it on several occasions. In Mondou v. New York, New Haven & Hartford Railroad Company, 223 U.S. 1, 55-58, 32 S.Ct. 169, 170, 56 L.Ed. 327, 38 L.R.A.,N.S., 44, Syllabus Nos. 8 and 9 of the last citation reads:
‘8. The enforcement of rights under the employers' liability act of April 22, 1908 [45 U.S.C.A. § 51 et seq.], regulating the liability of interstate railway carriers for the death or injury of their employees while engaged in interstate commerce, cannot be regarded as impliedly restricted to the Federal courts, in view of the concurrent jurisdiction provision of the judiciary act of August 13, 1888, * * * § 1 [28 U.S.C.A. § 41], and of the amendment made by the act of April 5, 1910, to the original employers' liability act, which, instead of granting jurisdiction to the state courts, presupposes that they already possess it.’
‘9. Jurisdiction of an action to enforce the rights arising under the employers' liability act of April 22, 1908, regulating the liability of interstate railway carriers for the death or injury of their employees while engaged in interstate commerce, may not be declined by the courts of a state whose ordinary jurisdiction as prescribed by local laws is adequate to the occasion, on the theory that such statute is not in harmony with the policy of the state, or that the exercise of such jurisdiction will be attended by inconvenience and confusion because of the different standards of right established by the congressional act and those recognized by the laws of the state.’
The decision supports the statements of the syllabus.
The United States Supreme Court in an Ohio Case, Grubb v. Public Utilities Commission of Ohio, 281 U.S. 470, 50 S.Ct. 374, 74 L.Ed. 972, Syllabus No. 4 of the last citation reads:
‘State and Federal courts have concurrent jurisdiction of suits of a civil nature arising under the Constitution and laws of the United States, save in exceptional instances where the jurisdiction has been restricted by Congress to the Federal courts.’
This syllabus is also supported by a series of cases.
The case of Hargrave v. Mid-Continent Petroleum Corporation, D.C., 36 F.Supp. 233, 234, reads in part as follows:
‘The term ‘any court of competent jurisdiction’ is not limited to federal courts. State and federal courts have concurrent jurisdiction of suits of a civil nature arising under the laws of the United States except where jurisdiction has been restricted by Congress to the federal courts. Grubb v. Public Utilities Commission of Ohio, 281 U.S. 470, 476, 50 S.Ct. 374, 74 L.Ed. 972;Claflin v. Houseman, 93 U.S. 130, 136, 137, 23 L.Ed. 833. The term fairly includes within its meaning state courts possessing the jurisdiction to determine the action created by federal statute. Galveston, Harrisburg & San Antonio Railway Co. v. Wallace, 233 U.S. 481, 32 S.Ct. 205, 56 L.Ed. 516;Robb v. Connolly, 111 U.S. 624, 4 S.Ct. 544, 28 L.Ed. 542;Emerson v. Mary Lincoln Candies, 174 Misc. 353, 20 N.Y.S.2d 570;Cox v. Lykes Brothers, 237 N.Y. 376, 143 N.E. 226. The district court of Seminole county had jurisdiction of this action prior to removal. * * *
‘Conceding that the rule of the forum controls as to matters pertaining to remedial as distinguished from substantive rights, Sec. 144 of Oklahoma Statutes 1931, 12 Okl.St.Ann. § 223, is an exception referred to in the preceding section and permits ‘a person expressly authorized by statute’ to bring an action without joining with him the person for whose benefit the action is prosecuted. Oklahoma Statutes 1931, Sec. 154, 12 Okl.St.Ann. § 233, provides that when the action is one of common or general interest to many persons, or where the parties are very numerous and it may be impractical to bring them all before the court, one or more may sue or defend for the benefit of all.
‘The Fair Labor Standards act of 1938, Sec. 16(b), 29 U.S.C.A. § 216(b), permits actions created thereby to be maintained by the agent or representative designated by employees in behalf of such employees and all others similarly situated. The act, being remedial in nature, should be construed liberally so as to afford relief within the legislative intent. When so construed, and in the light of the sections of the Oklahoma statutes authorizing suits to be brought by persons expressly authorized by statute, and further allowing class actions to be brought, an agent who is designated by employees to bring an action in their behalf is ‘a person expressly authorized by statute’ to bring an action. The plaintiff in this case has the right to bring such action in behalf of the employees, who have designated him as their agent, and all others similarly situated, in either the state or federal court.
‘It is also urged that the action can not be maintained for the following reasons:
‘(a) That it is one for a penalty or forfeiture incurred under the laws of the United States, of which the United States courts have exclusive jurisdiction, 28 U.S.C.A. § 371;
‘(b) That the Oklahoma District Court in which this action was filed may not enforce penalties arising under the laws of the United States and this court will not, on removal, enforce the same here;
‘(c) That an action for a penalty is barred by the Oklahoma statute of limitations of one year. Okla.Stat.1931, Sec. 101, subsec. 4, 12 Okl.St.Ann. § 95, subd. 4.
‘The answer to these contentions depends upon whether the action is for a penalty. Counsel for defendants assert that the action is one for a penalty and controlled by Gardner v. Rumsey, 81 Okl. 20, 196 P. 941, 25 A.L.R. 1411. The case of Kramer v. Eysenbach, 186 Okl. 234, 96 P.2d 1049, limits the effect of Gardner v. Rumsey, supra, so as to exclude this action from the rule announced therein; the action is not penal in its nature but is one primarily for compensation of an employee. See, also, Huntington v. Attrill, 146 U.S. 657, 13 S.Ct. 224, 36 L.Ed. 1123. Under 16(b) of the Act an employer who violates the provisions thereof is liable to an employee affected thereby in the amount of the unpaid wage and an additional equal amount as ‘liquidated damages'. The chief purpose of such section is compensation to the employee and not punishment. The additional equal amount is ‘liquidated damages' and not a penalty. Cox v. Lykes Brothers, 237 N.Y. 376, 143 N.E. 226,Moreno v. Picardy Mills, 173 Misc. 528, 17 N.Y.S.2d 848,Emerson v. Mary Lincoln Candies, 174 Misc. 353, 20 N.Y.S.2d 570.’
The case of Clint v. Franklin Bargain House, Inc., 6 Ohio Supp. 299, Common Pleas Court, Lucas county, Ohio, also holds that the Common Pleas Court has jurisdiction and that a class action may be maintained, by a plaintiff.
In the reply brief of counsel for defendant, stress is placed on the contention that plaintiff has not brought himself within Section 16 of the Act, that is, in his petition makes a statement in the caption only, that he brings the action for himself and all others similarly situated. This is defendant's contention.
Paragraph two on page two of plaintiff's petition reads as follows:
‘The plaintiff says that there were approximately thirty nine other persons employed by the defendant after October 24, 1938, under the same or similar circumstances and are similarly situated as he is, and for all of whom the defendant was and is required to keep full and complete records of their employment under Section 11 of said Act, and for want of knowledge, plaintiff alleges that three is due each of said employees the sum of $1,000.00 as unpaid overtime with interest from the respective dates thereof, which he claims together with liquidated damages for each said employee in the sum of $1,000.00 and a reasonable attorney fee for each said employee in the sum of $500.00.’
The court is of the opinion that the above is sufficient under Ohio General Code, § 11257, in connection with Section 216, Title 29 U.S.C.A. The plaintiff does not claim to be the agent, but that the action is brought on behalf of the other employees. The Fair Labor Standards Act makes mandatory the keeping of records by the defendant.
Plaintiff attached the following interrogatories to his petition, to wit:
‘Interrogatories to be Answered by the President of the Defendant under oath.
‘1. When and where were you incorporated?
‘2. What products do you produce principally?
‘3. Where do you sell or dispose of your products?
‘4. Do you consign or ship them to points outside of the State of Ohio?
‘5. Are your products or any part of them delivered to points in Ohio for transfer or delivery to points outside of Ohio?
‘6. What is the complete record of the names and addresses of all your employees since October 24, 1938 as shown by your records?
‘7. What is the complete statement of the hours worked each week, rate per hour or piece work (if piece the amount produced each week by the employee), and the amount paid each employee per week since October 24, 1938?
‘8. What is the complete statement of the amounts that should have been paid each employee each week, computed according to the requirements of the Fair Labor Standards Act since October 24, 1938?
‘9. Are there any weeks since October 24, 1938 in which you have not produced or transmitted any goods in interstate commerce as defined by the Fair Labor Standards Act, and if so state the weeks?
‘10. Are there any of your products used in the state of Ohio for the production of goods which are transported or transmitted outside of the state of Ohio?’
In the case of Russell v. Lake Shore &c. Railway Compnay, 6 Ohio N.P., N.S., 353, the court held that the right to annex interrogatories does not extend to where the information sought is necessarily not within the personal knowledge of the party addressed; nor when not pertinent to the pleading to which the questions are attached; nor when a responsive answer would be mere opinion, and not fact.
The court in the Russell case above quoted the Supreme Court of Ohio in the case of Chapman v. Lee, 45 Ohio St. 356 at page 365,13 N.E. 736, 740, as follows:
‘Suits for discovery were, in equity practice, auxiliary proceedings, brought not to obtain any equitable remedy, nor to establish any equitable right, but to aid in maintaining a legal right, and in prosecuting actions pending, so as to be brought in a court of law. If a party could not succeed without the aid of facts within the personal knowledge of his adversary, he might file his bill setting forth all the facts within his knowledge, and adding interrogatories which the other party was required to answer fully under oath. No relief beyond the answer desired need be asked, and no decree made, and as soon as the answer was complete the function of the equity court ordinarily was ended; but the answer, so far as responsive could be used by either party in the trial at law. We will not be understood as meaning that it was not common for a court of equity, having taken cognizance of a case for one purpose, to retain it for all purposes, and award complete relief though the final remedy was of the kind which might be conferred by a court of law. Such result often followed where discovery was sought as an incident to equitable relief covering the whole controversy. But, where a court of law had ample power to award full relief, a court of equity ordinarily refused to take cognizance of the case, and there clearly is more conclusive reason for such refusal, in a case like the one at bar, under our present practice. All the aid which a suit for discovery would give is now given by our Code in the case at law itself. The party may attach to his pleading interrogatories which, so far as pertinent, the other party is bound to answer, and those answers may be used by either party as evidence. He may also take the deposition of the opposite party, or put him on the stand as a witness at the trial. The doctrine and rules concerning the subject-matter of discovery established by courts of equity are believed to be still in favor, and to control the same matters in the new procedure; but the bill of discovery, as a separate action, is practically obsolete in this state.’
In the opinion of this court the questions by interrogatories in Numbers 1, 2, 3, 4, 5, 6, 7, and 10, are proper questions for defendant to answer, if it knows the answers to the questions propounded.
The court is of the opinion that questions Numbers 8 and 9 are improper, and for the defendant to give a responsive answer would require it to give an answer involving its opinion and an interpretation of The Fair Labor Standards Act, which in the opinion of this court, is not required of the defendant.
Therefore, the demurrer of defendant to the petition of the plaintiff is overruled; the demurrer of defendant as to interrogatories Numbers 1, 2, 3, 4, 5, 6, 7, and 10, is overruled, as to interrogatories Numbers 8 and 9, is sustained.
Defendant given leave to plead further and to answer the interrogatories on or before May 26, 1945.