author: JOHNSON, District Judge.

text:
    WILHOIT v. HIATT, Warden.
    No. 184.
    District Court, M. D. Pennsylvania.
    May 16, 1945.
    Petitioner, per se.
    Herman F. Reich, Asst. U. S. Atty., of Lewisburg, Pa., for William H. Hiatt, Warden.
   JOHNSON, District Judge.

The petition for writ of habeas corpus in this case was previously considered by this court which, in an order thereon pointing out the insufficiency of the petition, allowed the petitioner ten days to amend. An amendment has now been filed, which attempts to supply details in connection with the questions raised. The petitioner alleges that he was convicted and sentenced on three counts on an indictment charging violations, respectively, of 398, 399 and 400 o.f Title 18 United States Code Annotated, and was sentenced five years on count one and seven and one half years on count three, sentences on the first and third counts to run concurrently, and on count two a five year sentence which was suspended and petitioner was placed on probation for three years. He does not contend that he has served the seven and one half year sentence. His contention is that he has been sentenced three times for the same offense and that this would be double jeopardy.

So far as the suspended sentence is concerned, this is not a proper subject for a proceeding in habeas corpus. As to the sentences on the other two counts, they are concurrent and a possible invalidity of one of the two counts, on the contention of double jeopardy, would therefore not affect the legality of the restraint and consequently for the same reason would not be considered in a habeas corpus proceeding. Knight v. Hudspeth, 10 Cir., 112 F.2d 137; certiorari denied 311 U.S. 681, 61 S.Ct. 62, 85 L.Ed. 439; McNally v. Hill 293 U.S. 131, 55 S.Ct. 24, 79 L.Ed. 238; Roberts v. Hunter, 10 Cir., 140 F.2d 38.

In any event, the allegation that there cannot be separate sentences u'nder 18 U.S.C.A. §§ 398, 399 and 400 is without merit. Sections 398, 399 and 400 define separate and distinct offenses. Kavalain v. White, 10 Cir., 44 F.2d 49; United States v. Saledonis, 2 Cir., 93 F.2d 302; Sink v. Cox, 8 Cir., 142 F.2d 917.

The petitioner bases his contention on the case of Holiday v. Johnston, 313 U.S. 342, 61 S.Ct. 1015, 85 L.Ed. 1392, and the related cases dealing with the bank robbery statute —12 U.S.C.A. § 588b. These decisions are not in point. Under the bank robbery statute, Section 588b(b) is the same offense described in 588b (a) aggravated by the use of a deadly weapon and with a provision for a greater penalty for the additional aggravation. That is not the situation in connection with the Mann White Slave Act. Lockhart v. United States, 6 Cir., 136 F.2d 122.

The case of Holiday v. Johnston, supra, is moreover an authority against the petitioner’s seeking relief on the ground of double jeopardy, even though the sentences had been consecutive rather than concurrent as in the instant case. The Supreme Court there said [313 U.S. 342, 61 S.Ct. 1017]:

“The erroneous imposition of two sentences for a single offense of which the accused has been convicted, or as to which he has pleaded guilty, does not constitute double jeopardy. And if, as the petitioner contends, the first sentence of ten years is valid and the second void, he is no .better off. Conceding, without deciding, that he is right in saying the first sentence is the only valid one, he has not served that sentence and is not entitled now to be discharged from custody under it. He urges that if the second sentence is adjudged void he will not be entitled to apply for parole under the first. But we have recently decided that habeas corpus cannot be awarded to afford a prisoner such an opportunity. (McNally v. Hill, 293 U.S. 131, 55 S.Ct. 24, 79 L.Ed. 238).”

Petitioner also seeks relief on the ground of perjury upon the part of the government witness, alleging that in connection with testimony at the trial the witness testified that statements made before a United States Commissioner prior thereto were false. It is common knowledge that witnesses frequently change their stories and even change them in the course of the trial and that frequently during the course of the trial, under cross-examination, a witness’ story becomes changed; but where all these matters are before a jury in the trial of a case there is no concealed perjury. One of the purposes of a trial by jury is an attempt to arrive at facts and to decide which of the conflicting statements constitutes the truth. According to the petitioner’s allegations in the instant case) a witness testified before the United States Commissioner and later at the trial that witness testified differently, and at that time stated that the testimony before the United States Commissioner was false. It is quite evident therefore from the allegations of the petitioner that the facts were before the trial court. The situation therefore does not and cannot fall within the doctrine which he is attempting to invoke; namely, that the prosecution has contrived a conviction through the pretense of a. trial which in truth was but used as a means of depriving a defendant of liberty through a deliberate deception of court and jury by the presentation of testimony known to be perjured, which was the situation involved in Mooney v. Holohan, 294 U.S. 103, 55 S.Ct. 340, 79 L.Ed. 791, 98 A.L.R. 406. The mere fact that a witness has committed perjury in the trial of a case is not in itself a basis for habeas corpus. Hodge v. Huff, 78 U.S.App.D.C. 329, 140 F.2d 686; certiorari denied 322 U.S. 733, 64 S.Ct. 946, 88 L.Ed. 1567; Long v. Benson, 6 Cir., 140 F.2d 195. The petitioner’s allegations now before us refer to two contradictory statements of a witness, both of which were before the court and jury and as to which it was the province of the jury to determine the truth. There was, by his own averment, no deliberate deception and suppression by the prosecution.

Petitioner further alleges that at his trial the wife of the co-defendant testified against her husband and that such testimony was incompetent. The petition shows that the witness referred to was .the subject of the prostitution and debauchery in the instant case. Under such circumstances her testimony would have been admissible even as against her husband. United States v. Mitchell, 2 Cir., 137 F.2d 1006. Whether the testimony of the wife of a co-defendant was, under the circumstances in this particular case, competent, is in any event, a question of the competency of the evidence adduced at the trial, which is not reviewable on habeas corpus. Moore v. Aderhold, 10 Cir., 108 F.2d 729; Burall v. Johnson, 9 Cir., 134 F.2d 614; certiorari denied 319 U.S. 768, 63 S.Ct. 1327, 87 L.Ed. 1717; Rehearing denied 320 U.S. 810, 64 S.Ct. 30, 88 L.Ed. 490; Rehearing denied 320 U.S. 812, 64 S.Ct. 187, 88 L.Ed. 490.

The question is one of evidence and does not involve a deprivation of a constitutional right affecting due process of law. Funk v. United States 290 U.S. 371, 54 S.Ct. 212, 78 L.Ed. 369, 93 A.L.R. 1136. The petitioner seeks to review the evidence at his trial as bearing upon the question of his guilt or innocence. This was a problem for the jury at the time of trial and is not a proper subject of habeas corpus. Vicoretti v. Hill, D.C., 18 F.Supp. 337, affirmed, 3 Cir., 107 F.2d 1023. He further contends that the trial court was without jurisdiction, namely that the crime with which he was charged was not committed in that district. He was tried in the northern district of Tennessee. He alleges that there was not one continuous trip, but two trips; one from Tennessee to Michigan and one from Michigan to Illinois. Petitioner has not attached to the pleadings a copy of the material allegations of the indictment in this respect, but this is immaterial as the question is not a proper one for consideration in this court. Walsh v. Johnston, 9 Cir., 115 F.2d 806.

The petition for a writ of habeas corpus is dismissed and the writ is denied.


source: Caselaw Access Project

author: MILLER, District Judge.

license: Public Domain

text:
    UNITED STATES ex rel. WOODARD v. DEAHL, Commanding Officer, Camp Chaffee, Ark.
    Civ. No. 518.
    District Court, W. D. Arkansas, Fort Smith Division.
    May 25, 1945.
    Ben F. Roberts, of Shreveport, La., Robert H. Wimberly, of Arcadia, La., and Daily &Í Woods, of Fort Smith, Ark., for petitioner.
    Clinton R. Barry, U. S. Atty., and Thomas C. Pitts, Asst. U. S. Atty., both of Fort Smith, Ark., and George Red, of Dallas, Tex., and Wilbur P. Kramer, of Camp Chaffee, Ark., for respondent.
   MILLER, District Judge.

The petitioner has given notice of appeal from the judgment rendered herein discharging the writ of habeas corpus and dismissing his petition, and he' now moves for an order staying the judgment of the court during the pendency of this appeal and fixing the amount of the supersedeas bond.

The learned attorneys for the petitioner have filed a memorandum brief in support of the motion and earnestly contend that the judgment of the court should be stayed pending the appeal. The petitioner argues that unless the judgment of this court discharging the writ is stayed that he will be required to remain in the custody of the respondent or military authorities and be subjected to military training and subject to the orders of the military authorities; that if the writ should be sustained and the judgment of the trial court reversed on appeal, that the judgment of the appellate court would in effect be nugatory.

Section 461, Title 28 U.S.C:A., provides: “The court, or justice, or judge shall proceed in a summary way to determine the facts of the case, by hearing the testimony and arguments, and thereupon to dispose of the party as law and justice require.”

Reliance is placed upon Section 465, Title 28 U.S.C.A., but an examination of the provisions of this statute convinces the court that it is not applicable to the case now under consideration.

The Supreme Court of the United States has promulgated Rule 45, 28 U.S.C.A. following section 354, 306 U.S. 724. This rule was promulgated under the authority contained in Section 464 of Title 28 U.S.C.A. Section 1 of the rule is as follows: “Pending review of a decision refusing a writ of habeas corpus, the custody of the prisoner shall not be disturbed.”

It is true in the instant case that the writ was issued, but such procedure was adopted by the court only as an alternative to the issuance of a rule against the respondent to show cause why a writ should not have been granted, as appears to be the better procedure. Walker v. Johnston, Warden, 312 U.S. 275, 61 S.Ct. 574, 85 L.Ed. 830.

Section 2 of the rule is as follows: “Pending review of a decision discharging a writ of habeas corpus, after it has been issued, the prisoner may be remanded to the custody from which he was taken by the writ, or detained in any other appropriate custody, or enlarged upon recognizance with surety, as to the court or judge rendering the decision may appear fitting in the circumstances'of the particular case.”

Rule 23 of the Rules of the United States Circuit Court for the Eighth Circuit is very similar to Rule 45 of the Supreme Court of the United States. If the court should grant a supersedeas and stay the operation of its judgment herein, it would be tantamount to sustaining the writ and the petitioner would be relieved of service in the armed forces pending the appeal, notwithstanding the judgment of the court that the petitioner was legally inducted into the armed forces of the United States. In other words, the petitioner could obtain the same relief by granting a supersedeas as he would have obtained had the writ been sustained. It has been suggested by learned counsel for petitioner that the judgment of the court could be superseded to the extent necessary to retain the custody of the petitioner in the commanding officer at Camp Chaffee where he is now located. The court does not think such a suggestion is feasible or practicable and does not seem to be authorized by law. To enter such an order would be equivalent to entering an injunction against the removal of the petitioner from Camp Chaffee, notwithstanding the exigencies of war might require his removal elsewhere by the military authorities.

In Ex parte Endo, 323 U.S. 283-306, 307, 65 S.Ct. 208, 220, the court said: “The statute upon which the jurisdiction of the District Court in habeas corpus proceedings rests (Rev.Stat. § 752, 28 U.S.C. § 452, 28 U.S.C.A. § 452) gives it power ‘to grant writs of habeas corpus for the purpose of an inquiry into the cause of restraint of liberty/ That objective may be in no way impaired or defeated by the removal of the prisoner from the territorial jurisdiction of the District Court. That end may be served and the decree of the court made effective if a respondent who has custody of the prisoner is within reach ,of the court’s process even though the prisoner has been removed from the district since the suit was begun.”

The court should not undertake to invade jurisdiction of the military authorities, and it is apparent that the court should not permit the release of the petitioner upon bond pending an appeal.

Therefore, an order is being entered overruling the motion and the exception of the petitioner is being noted.


author: GODDARD, District Judge.

text:
    BRUE et al. v. J. RICH STEERS, Inc., et al.
    District Court, S. D. New York.
    April 21, 1945.
    Gay & Behrens, of New York City (Edward J. Behrens, of New York City, of counsel), for plaintiffs.
    John F. X. McGohey, U. S. Atty., of New York City (Louis Mansdorf, Asst. U. S. Atty., of New York City, of counsel), for defendants.
   GODDARD, District Judge.

Donoghue, one of the plaintiffs in this suit for overtime. wages under the Fair Labor Standards Act of 1938, 29 U.S.C.A. § 201 et seq., has moved for summary judgment. The defendants are four contracting companies who were joint venturers on a contract with the United States to construct new dry docks at the Brooklyn Navy Yard. It is conceded that the plaintiffs were inspectors and do not come within the provisions of the Davis-Bacon Act, 40 U.S.C.A. § 276a, or of 40 U.S.C.A. §§ 324 — 326. The moving plaintiff has submitted affidavits describing his part in the construction work, and has also included pictures of the dry docks under construction.

The complaint alleges that the plaintiffs were the employees of the defendants; that the defendants were engaged in interstate and foreign commerce, and in the production of goods for interstate and foreign commerce, and that each of the plaintiffs, as an employee of the defendants, was engaged in the production of goods for interstate and foreign commerce. The complaint goes on to allege that the plaintiffs were engaged in the construction of marine equipment, to wit — two dry docks in an arm of the East River; that the materials for the construction .of the dry docks were brought to the site of the work by ships traveling in interstate commerce from Pennsylvania and New Jersey. The plaintiffs, while employed by the defendants, worked weeks of more than forty hours; that they were paid for their time over the forty hours at a rate less than time and a half. They are suing for the alleged balance due them, for an equal sum as liquidated damages, and for reasonable attorneys’ fees, in accordance with the provisions of the Fair Labor Standards Act. 29 U.S.C.A. §§ 207, 216(b).

The answer of the defendants denies that the plaintiffs were employed by them, and in one affirmative defense alleges that the plaintiffs were employed by the government. It also denies that the plaintiffs were engaged in the production of goods for interstate commerce.

On this motion, the defendants have withdrawn all of their defenses, except the defense denying that the moving plaintiff was engaged in interstate commerce or in the production of goods for interstate commerce and that the plaintiff was not covered by the Fair Labor Standards Act.

According to the affidavit and exhibits of the moving plaintiff, Donoghue, channels were first dredged out of the East River in the location of the proposed dry docks. Steel piles were sunk into the bottom of each channel and cut off to proper length. Steel forms were then brought by boat from New Jersey and placed underwater on the steel piles. Tremie boats were then brought to the site, and were used to chute tremie cement from the mixing plant ashore into the steel forms underwater. The last step of pouring the concrete into the forms under water was a difficult one and Donoghue’s service consisted in watching and inspecting this operation. He had to see that the proper grade of concrete was sent down into the underwater forms, to see that the forms were evenly filled, and he had to see that the concrete was poured without any leaks — either of unwanted water into the forms, or of concrete out of the forms.

When the first dry dock was partially completed, Donoghue devoted part of his time to supervising the placing of the two-foot coat of concrete on that portion of the dry dock. Then he supervised the task of putting the fill-in around the dry dock so as to join the dry dock in with the rest of the Navy Yard. As soon as a section of the dry dock had been finished, the Navy started constructing a ship there.

Several reasons are urged in behalf of plaintiff in support of the contention that he was engaged in commerce (interstate) or in producing goods for commerce as defined in the Fair Labor Standards Act.

It is apparently contended that as he was working on a float anchored in the East River — navigable waters — he was engaged in commerce. This would be relevant if the question of admiralty jurisdiction were involved. However, it is to be remembered that a seaman is expressly excluded from coverage under the Fair Labor Standards Act, 29 U.S.C.A. § 213(a) (3), and that it is not the location but the nature of plaintiff’s occupation which is determinative. Anderson et al. v. Manhattan Lighterage Corporation, 2 Cir., 148 F.2d 971. The decision turns not upon whether an employee’s activities affect or indirectly relate to interstate commerce, but whether they are actually in or so closely related to the movement of commerce as to be a part of it. The character of the work of the employee is the decisive factor — not whether his employer was engaged in interstate commerce. McLeod v. Threlkeld et al., 319 U.S. 491, 63 S.Ct. 1248, 87 L.Ed. 1538.

It is further contended by plaintiff that he was engaged in the production of goods for interstate commerce as he was handling materials which had been shipped in interstate commerce, including steel forms, stone, sand, tremie cement and structural steel. This argument must be eliminated for these materials had passed into the actual physical possession of the ultimate consumer. See Fair Labor Standards Act, 29 U.S.C.A. § 203(i).

It is also argued in behalf of plaintiff that in helping to construct a dry dock to be used in the building of vessels for interstate commerce, he was engaged in the production of goods for interstate commerce. A completed dry dock when used for the building and repair of vessels may be so closely related to interstate commerce that its employees might be regarded as being engaged in interstate commerce. But a distinction must be made between the original construction of a dry dock before it is erected and used and after it is erected. Barbe v. Cummins Construction Co., D.C., 49 F.Supp. 168, affirmed 4 Cir., 138 F.2d 667.

One employed as an inspector of concrete work in the original construction of a new building is not himself engaged in interstate commerce or in the production of goods which pass into interstate commerce, nor do his services directly relate to interstate commerce, although the building, when finished, is intended for use for the production of goods for interstate commerce. Noonan v. Fruco Const. Co., 8 Cir., 140 F.2d 633; Scott v. Ford, Bacon & Davis, D.C., 55 F.Supp. 982; Wells et al. v. Ford, Bacon & Davis, 7 Labor Cases, Par. 61,929, affirmed 6 Cir., 145 F.2d 240. See also Dollar v. Caddo River Lumber Company, D.C., 43 F.Supp. 882. Such is the interpretation by the Wage and Hour Division of the Department of Labor in Bulletin No. 5, Paragraph 12, which says that — “The question arises whether the employees of builders and contractors are entitled to the benefits of the Act. The employees of local construction contractors generally are not engaged in interstate commerce and do not produce any goods which are shipped or sold across state lines. Thus, it is our opinion that employees engaged in the original construction of buildings are not generally within the scope of the Act, even if the buildings when completed will be used to produce goods for commerce. There may be particular employees of such construction contractors, however, who engage in the interstate transportation of materials or other forms of interstate commerce and are for that reason entitled .to the benefits of the Act”.

This administrative interpretation is entitled to great weight. United States v. American Trucking Associations, 310 U.S. 534, 549, 60 S.Ct. 1059, 84 L.Ed. 1345; Skidmore v. Swift & Co., 323 U.S. 134, 140, 64 S.Ct. 161; Callus v. 10 East Fortieth Street Building, 2 Cir., 146 F.2d 438.

The plaintiff urges that as he was engaged in constructing a dry dock on the river front, he was engaged in interstate commerce and cites in his support Walling v. Patton-Tulley Transportation Co., 6 Cir., 134 F.2d 945, 946, where it was held that employees working on the construction of dikes and revetments in the Missouri and Mississippi rivers were engaged in interstate commerce; the court holding that these rivers were highways of interstate commerce and that “the purpose of the dike and revetment work is to direct and channelize the current of the river in order to prevent erosion and to maintain the minimum depth required by commercial navigation.” In its decision the court applied the settled rule that a workman employed in the improvement or repair of an interstate highway is engaged in interstate commerce.

The facts in the case at bar distinguish it frdm Walling v. Patton-Tulley Transportation, for in the present case, while the structure fronts the river and extends into the river, it was not intended as an aid to commercial navigation; has no relation to river traffic; has no more effect on the current or flow than any building fronting on the river. The facts do not support a finding that the plaintiff was employed in improving or repairing an interstate highway.

My conclusion is that the plaintiff was not covered by the Fair Labor Standards Act, and his motion for summary judgment must be denied.

Motion denied. Settle order on notice.


author: BOWEN, District Judge.

text:
    RITCH et al. v. PUGET SOUND BRIDGE & DREDGING CO., Inc., et al.
    No. 970.
    District Court, W. D. Washington, N. D.
    May 14, 1945.

      Florence Mayne, of Seattle, Wash., for plaintiffs.
    W. E. Evenson, Skeel, McKelvy, Henke, Evenson & Uhlman, and Robert F. Sandall, all of Seattle, Wash., and J. Charles Dennis, U. S. Atty., and Herbert O’Hare, Asst. U. S. Atty., both of Seattle, Wash., for defendants.
   BOWEN, District Judge.

Both sides have most exhaustively presented this matter to the Court, both on the facts and the law.

Doubtless the fact is well appreciated by all that the Congress has power to deal with this subject only in so far as it relates to interstate commerce. In enacting the Fair Labor Standards Act, 29 U.S.C.A. § 201 et seq., under which this action was brought, Congress was exercising that power given to it under the Commerce Clause of the Constitution to regulate interstate commerce; and unless plaintiffs’ work and that of their assignors affected interstate commerce, their claims for overtime work against defendant are not protected by the Fair Labor Standards Act.

So the right of these plaintiffs and their assignors involves the inquiry whether the new Navy dock structures they were constructing were to be instruments of commerce and whether or not any materials they were handling were handled by them as a part of the movement of those materials in interstate commerce.

Judge Goddard’s decision in the case of Joseph A. Brue et al. v. J. Rich Steers, Inc., et al., 60 F.Supp. 668, decided recently in the Southern District of New York, is in its facts almost on all fours with the facts in the case at bar. Judge Goddard in that case has very carefully reasoned the matter out and stated the principles and law applicable to the situation, and I am unable to find any fault with anything he has said.

It is, of course, possible that the law as we now know it might later be changed. Congress might possibly declare more certainly an intention to make the Fair Labor Standards Act apply to such work as these employees were doing. Or conceivably the United States Supreme Court might change its view of the nature of the instrumentality being here built so as to include it in interstate commerce instrumentalities or so as to include as interstate commerce the services which these plaintiffs were performing in connection with the materials in question; but so far the Congress and the Supreme Court have taken no such action, and this Court at this time has to act in the light of the congressional and judicial authority now known to us.

I am convinced that the dock and dock structures which were being built by these plaintiffs as employees of the defendant were not instrumentalities of commerce, that they were intended only to be a Navy dock for the exclusive use of the United States Navy, and that such dock was not intended to be used by all commercial vessels which might wish to do so in the ordinary course of trade and commerce.

I entertain no doubt that the dock was not to be an instrumentality of commerce. I am convinced that the work done by the plaintiffs and their assignors in connection with the materials which had previously moved in interstate commerce, all of which was done only after the materials came to rest on the premises of the Navy Department in B”remerton, after the materials had completed their movement in interstate commerce, does not affect, relate to, or constitute a part of, the movement in commerce of those materials. It is clear that these plaintiffs did nothing that had any causal connection with, or in any way affected, or related to, the movement in commerce of these materials. It is true that in certain ways they interested themselves in the materials. Some of the plaintiffs kept track of the materials to see where they went when they were put into the structures that were being built as a part of the dock. One of the plaintiffs or assignors kept a progress map showing the final disposition of the material in the course of construction, and there were various other services on the construction work done by various assignors with respect to those materials; but such work as was done by the plaintiff’s assignors had no relation to and did not affect the movement of these materials in interstate commerce.

I am not aware of any present judicial authority which upon facts like these here upholds the plaintiffs’ 'claims under the Fair Labor Standards Act, and the announced opinions of the Administrative Office of the Fair Labor Standards Act are against plaintiffs’ contentions. The Congress has not expressly provided that the work that these men were doing shall be covered by the Act.

I think the case of Walling v. Patton-Tully Transportation Co., 6 Cir., 134 F.2d 945, is not in point because there it was clear that the facilities which were being constructed were facilities in aid of navigation and commerce along two navigable rivers upon which was hauled much of the nation’s general interstate commerce. The facilities there being constructed by the employees claiming the protection of the Act were intended to directly aid the movement of interestate commerce; whereas, as I have previously observed, in the case at bar the dock structures were for the exclusive use of the United States Navy. They were not for general commerce or for any commerce except the use of the Navy.

There is no judicial precedent and there is no rational basis, sound in law, on which the Court could sustain the contention of the plaintiffs and their assignors in this case.

The question of uniformity among all these employees is, however, a very important thing, and if I had any doubt in the matter as to the legal right of the plaintiffs and their assignors to maintain this action, it certainly would be resolved in favor of them, because I feel all employees, irrespective of union membership or kind of work, whether manual, clerical or professional work, should be treated alike as far as this Act is concerned. I believe the question of uniformity in dealing with the employees in this kind of a case is a matter properly to be considered by the Court, and the Court has considered it, and I emphasize that if I felt that there was any doubt as to the facts or applicable legal principles, that doubt would certainly by the Court be resolved in favor of these plaintiffs and their assignors.


author: WYZANSKI, District Judge.

text:
    O’HARA VESSELS, Inc., v. HASSETT, Collector of Internal Revenue.
    No. 1079.
    District Court, D. Massachusetts.
    April 23, 1942.

      Joseph N. Welch, of Boston, Mass., for plaintiff.
    Edmund J. Brandon, U. S. Atty., and George F. Garrity, Asst. U. S. Atty., both of Boston, Mass., Samuel O. Clark, Jr., Asst. Atty. Gen., and Andrew D. Sharpe and Joseph W. Burns, Sp. Assts. to the Atty. Gen., for defendant.
   WYZANSKI, District Judge.

(1) The plaintiff is O’Hara Vessels, Inc., a Massachusetts corporation, with a principal office in Boston, Massachusetts. The defendant is Thomas B. Hassett, Collector of Internal Revenue for the District of Massachusetts.

(2) This is an action under 28 U.S.C.A. § 41(5), brought to recover taxes paid by the plaintiff on its own account to the defendant under the provisions of Chapter IX, sub-chapter A, of the Internal Revenue Code, as amended, 26 U.S.C.A. Int.Rev.Code, § 1410. The taxes for which recovery is sought were laid on account of employment in the first quarter, that is, January, February and March of 1940. During that period the plaintiff was the owner of the schooners Lark, Gossoon, Mary E. O’Hara, Gertrude deCosta, and the Shamrock. The plaintiff owned three-fourths of the Lark and the Gossoon and was the sole owner of the other boats. Captain Ernest J. Parsons was the owner of one-fourth of the Lark, and another person was the owner of one-fourth of the Gossoon. Each of the boats was an American vessel of over 10 net tons, engaged in commercial fishing.

(3) These fishing schooners were then operated on what is known as the “quarter lay” basis. Under that system when fish are brought in from a trip they are sold through an auctioneer on the Fish Exchange at such time as the captain of the vessel determines. That auctioneer is an employee of the Exchange and receives a stipulated fee for selling each catch. From the total amount received at the auction there are subtracted discount, wharf-age, and a fee for scales, and the resulting amount is called the “gross stock”. Thereafter there is deducted from gross stock amounts for gear, oil, engineer’s “per”, light, sounding machine, and watch, and the resulting amount is called the “net stock”. The net stock is then divided into quarters and distributed by the captain or purser. Three-quarters are subjected to charges for food, bait and the like and are then distributed to the captain and the crew, each person receiving the same fraction -of that three-quarters. The other quarter is distributed to the owner. The owner pays one-fifth of that quarter, or 5 per cent, of the net stock, to the captain as “skipperage”. The owner keeps the balance of that quarter, or 20 per cent, of the net stock.

(4) The engineer is a member of the crew but unlike other members of the crew is guaranteed $10 per trip. The engineer also receives $25 a month on account of duties which he performs at times when the vessel is in port.

(5) The compensation of the captain in his role as captain and not as owner includes a share equivalent to that of any member of the crew’s share in the net stock and also his skipperage which amounts to 5 per cent, of the net stock.

(6) In procuring supplies for the trip, such as fuel oil, gear, food, and bait, the captain places the necessary orders in his own name or the name of the boat but on the credit of the captain.

(7) The captain assembles such crew as seems to him appropriate. He has the power to refuse a person who comes as a member of the crew or as a substitute for a member of the crew., He has the power to hire and fire. When the crew is at sea he has the usual captain’s power to direct the men, to determine the watches they shall serve, and to exercise in other ways a master’s authority.

(8) The captain determines where the vessel shall go to fish and when it shall return from its voyage. He does not customarily communicate with the plaintiff or with others on shore except for the purpose of inquiring as to the then current prices for fish. In case of accident he communicates if necessary with the Coast Guard. He does not customarily communicate directly with the plaintiff.

(9) The crew were covered by a labor contract during all times material to this suit. That contract (Plaintiff’s Exhibit 4), made on June 16, 1939, was executed in like form for each of the boats involved in this litigation. It was executed on behalf of the plaintiff corporation by one of its officers, Frederick J. O’Hara. It was executed on behalf of the Atlantic Fishermen’s Union by Patrick McHugh. The captains of the vessels did not participate in the collective bargaining negotiations which led to the labor contract. The captain of each of the five vessels was instructed by the plaintiff that, in connection with the voyages taken by that vessel, the terms of this labor contract were to be followed.

(10) Ordinarily, the captains receive from the company no detailed directions with respect to the handling of the crews. However, in addition to being instructed to follow the labor contract, recently the captains were instructed by the plaintiff not to employ aliens. Moreover the plaintiff hired the engineers who served on the boats. The plaintiff also retained the power to hire and fire the captain and to substitute for already existing captains other captains of the plaintiff’s choice.

(11) The members of the crew received no guaranty from the plaintiff as to the amounts that they would earn on a voyage. However, in rare cases in which there were what are known as “brokers”, that is to say, completely unsuccessful trips, the plaintiff at different times gave to the members of the crew approximately $5 each.

(12) The captain’s skipperage, as above stated, is paid out of the owners’ quarter. Sometimes the captain deducts that skipperage prior to turning the quarter over to the owners; at other times the full quarter is turned over to the owners, the captain runs up an account for his skipperage and ultimately receives payment either by check or in cash from the company.

(13) The plaintiff has taken out liability insurance policies with respect to each of these vessels. The plaintiff has set forth in the policies and has paid premiums upon the number of persons, including the captain, estimated to be engaged in connection with a normal voyage of each of the vessels. At various times in the past claims have been made on account of accidents to members of the crews of these vessels; these claims have been presented to the insurance company under these policies; and such claims have been settled by the insurance company.

(14) The captain and the members of the crew understand that except where they are personally at fault they do not undertake any liability for collisions which the vessel may have with other vessels or for injury which may be sustained by other members of the crew.

(15) The captains of the vessels have not reported themselves as employers under the Federal Insurance Contributions Act, 26 U.S.C.A. Int.Rev.Code, § 1400 et seq., and the Social Security Act, 42 U.S. C.A. § 301 et seq., and like statutes.

(16) The captains regard themselves as in the employ of the plaintiff company.

(17) I find as an ultimate fact and I conclude as a matter of law that the members of the crews are “employees” engaged in “employment” subject to the taxing provisions of the Federal Insurance Contributions Act and the Social Security Act.

(18) I find as an ultimate fact and I conclude as a matter of law that the captain is an “employee” engaged in “employment” subject to the taxing provisions of the Federal Insurance Contributions Act and the Social Security Act.

(19) I find as an ultimate fact and I conclude as a matter of law that the plaintiff is the “employer” of the captains and of the members of the crews within the meaning of the applicable provisions of the Federal Insurance Contributions Act and the Social Security Act. I also find and conclude that the plaintiff is liable for taxes on account of the “employment” of the captains and members of the crews of the five vessels here in controversy for the period of time covered by the complaint.

(20) I conclude as a matter of law that the plaintiff is not entitled to recover any amount from the defendant.


text:
    THE DIRIGO FIRST.
    No. 1100.
    District Court, D. Massachusetts.
    March 29, 1945.
    Solomon Rosenberg and Fisher Abram-son, both of New Bedford, Mass., for libelant.
    Bartlett E. Cushing, of Wareham, Mass., for intervening petitioner Frank L. Sample, Jr., Inc.
    George P. Ponte, of New Bedford, Mass., for Stanley Oil Co., Inc.
    Thomas H. Walsh, of Boston, Mass., for Harbor Supply Oil Co., Inc.
    J. B. Weitzman, of New Bedford, Mass., for Seaview Fish Co., Inc., and others.
   WYZANSKI, District Judge.

The single issue is whether the Act of June 5, 1920, c. 250, Sec. 30, subsec. P, 41 Stat. 1005, 46 U.S.C.A. § 971, gives a maritime lien to persons who supply gas, oil, coal, other fuel, funds for taxes on fuel, batteries and engine wiping rags to a vessel fishing on the lay system.

The applicable statute provides that “Any person furnishing repairs, supplies, towage, use of dry dock or marine railway, or other necessaries, to any vessel, whether foreign or domestic, upon the order of the owner of such vessel, or of a person authorized by the owner, shall have a maritime lien on the vessel, which may be enforced by suit in rem, and it shall not be necessary to allege or prove that credit was given to the vessel.”

The vessel here involved is the oil screw fishing vessel, Dirigo First. At the time the supplies were furnished, the vessel was not subject to a preferred mortgage. It was owned by Henry W. Gallant, who also acted as master and captain. The vessel was being operated as a fishing vessel on the lay system or, as it is sometimes called, on shares. It is agreed that this system is substantially similar to that described in the unreported opinion in O’Hara Vessels, Inc. v. Thomas B. Hassett, Collector of Internal Revenue, D.C.Mass., 60 F.Supp. 672. Under this system, as in many other forms of running vessels, the owner-master, Gallant, hires a crew as his employees, directs them, determines the direction and length of the vessel’s voyage and runs the risks of loss of the vessel, damage to or by the vessel, taxes on the vessel, social security taxes and liability for injury suffered by the crew. But the unique characteristic of the system is the method by which the crew is paid. When the fishing vessel returns to port, the captain arranges to have the fish sold at auction and the proceeds of the auction are than divided according to a formula called the lay. Pursuant to this formula, there are first subtracted from the total amount received at auction charges for discount, wharfage and a fee for scales. The balance is called the “gross stock”. From gross stock, there are then deducted charges for gear, oil, light, sounding machine, watch and sometimes a special fixed compensation for the engineer known as “engineer’s per.” The balance is called the “net stock.” A fraction, generally one-quarter, of the net stock is paid to the owner of the vessel (who in turn pays to the master, if he be other than the owner, a fifth of that quarter as compensation or “skipperage”). From the remaining fraction, generally three-quarters of the net stock, there are deducted charges for food, bait and the like. What remains is then distributed to the captain and the crew, each person receiving an equal share of that remainder. If no fish is caught or for some other reason there are no proceeds -from a fish auction, the voyage is called “a broker”. Then there is no gross stock, no net stock, and no remainder to be divided on shares, so that the members of the crew go unpaid, unless the owner or master chooses to make a gratuitous distribution.

In the case at bar, as is usual under this system, the owner-master or someone acting under his direction placed the orders for the supplies.

In the case at bar those who supplied the gas, oil, coal, other fuel, funds for taxes on fuel, batteries and engine wiping rags supplied them on the credit of the vessel and charged the supplies accordingly on their books. At the time these supplies were furnished, the suppliers knew'that the Dirigo First was operating on a lay system, although they did not know the details.

If this vessel had not been operated on the lay system it is conceded that the lien statute, above quoted, would apply. What was furnished constituted in the words of the statute “supplies * * * or other necessaries.” And these were furnished “upon the order of the owner of such vessel, or of a person authorized by the owner.” But it is argued that this case falls outside the ordinary rule since under the lay system, here involved, the charges for supplies are used in computing the compensation of the captain and the crew. From this, it is said to follow that the supplier does not get a lien.

That argument cannot prevail. No part" of the lay system and no rule of law subjects a member of the crew to liability for supplies. Under the lay system a member of the crew will not get paid, it is true, until certain charges are first met. But he has not given anyone power to order supplies for his account. He runs merely a risk of non-payment for the time he spent fishing, — not a risk of being out-of-pocket. His risk of non-payment is no concern of third parties. They must continue to look for payment elsewhere. And in this case they looked to the vessel for payment.

In short, the fact that the owner-master has agreed with the crew upon a method of calculating the crew’s wages with reference to the costs of the vessel’s operations and supplies and with reference to the sales proceeds of such fish as are caught does not alter the owner-master’s status in ordering supplies and does not take either the vessel or those who supply necessaries outside the scope of Act of June 5, 1920 c. 250, Sec. 30, Subsec. P, 41 Stat. 1005^ 46 U.S.C.A. § 971.

If the meagre report of Nellie B. Fitzpatrick v. Trawler Nina B., 1935 (D.Mass.) be to the contrary, I decline to follow it. The other case cited to me, The Francis J. O’Hara, Inc., D.C., 229 F. 312, is plainly distinguishable from the case at bar. There the master and the owner were different persons. Without authority from the owner, the master bought salt. It was held that the seller did not acquire a lien because the salt had not been supplied upon the order of the owner or of a person authorized by the owner. No such problem arises in the instant case where the owner .himself ordered the supplies.

A decree may be prepared in favor of the lien claimants.

       No opinion for publication.


author: LEIBELL, District Judge.

text:
    UNITED STATES ex rel. WEINSTEIN v. BRESSLER et al.
    District Court, S. D. New York.
    April 20, 1945.

      John F. X; McGohey, U. S. Atty., of New York City (Francis M. Shea, Asst. Atty. Gen., and Joseph M. Friedman, Daniel M. Sandomire, and Lester S. Jayson, Sp. Assts. to Atty. Gen., of counsel), for the United States.
    Louis Waldman, of New York City (Louis Waldman and Edward Kurland, both of New York City, of counsel), for defendant. Unions.
   LEIBELL, District Judge.

Certain of the defendants, United Hatters, Cap & Millinery Workers International Union and Local No. 2 of the International Union (both hereinafter referred to as “Union”), together with Max Zaritsky, Jacob Roberts and Samuel Deckler, officials of the International Union or Local No. 2, have joined in moving for an order dismissing the complaint on the ground that the complaint fails to state a claim against defendants upon which relief can be granted, or, in the alternative for summary judgment.

The action was brought under what is commonly known as the Informer’s Act, 31 U.S.C.A. §§ 231 — 235. It was instituted on August 26, 1943, by the relator, Albert Weinstein, for himself and for the United States. The statute was amended December 23, 1943, and pursuant to § 232(C), one of the amendments, the United States entered an appearance in the suit on March 4, 1944, and undertook to carry on the suit.

The complaint alleges that between January and November of 1941, the United States War Department circulated “Requests for Informal Bids” for contracts for the manufacture and sale to the Government of an aggregate of 6,000,000 army field hats and caps, “with the intention and purpose that free, unrestricted and competitive bids would be submitted,” and that contracts would be awarded to the lowest bidders possessing the proper qualifications. It is further alleged that the defendant manufacturers and labor unions and their officers and others conspired to secretly allocate among themselves the entire quantity of hats and caps required by the Government and “to designate certain manufacturers to bid upon arbitrarily limited quantities of said hats and cap's”; “to secretly fix arbitrary, non-competitive, unfair, excessive, identical and fraudulent prices in response to the ‘Request"for Informal Bids’ ”; to hinder and prevent the submission of bids by others not in the conspiracy; to deceive and defraud the United States War Department by representing that the collusive, arbitrary, unfair, excessive, non-competitive bids were honest and competitive bids based upon fair and competitive prices and that the manufacturers submitting such bids were rival bidders ; to thus secure the award of contracts at the non-competitive, collusive, fraudulent and excessive prices; to obtain and aid in obtaining the payment by the United States War Department of “false, fictitious, fraudulent and excessive claims” based upon the collusive and fraudulent prices fixed by defendants and their co-conspirators; and to restrain interstate trade and commerce in violation of the Sherman Anti-Trust Act, 15 U.S.C.A. §§ 1-7, 15 note.

The complaint then sets forth how the defendants and their co-conspirators allegedly carried out the aforesaid agreement of conspiracy, • so that the bids of the alleged conspirators on the first request for bids (February) were 700 per hat, on the second request (June) were 650 per hat, and on the third request (September) were 500 per hat.

It is also alleged that the United States War Department was defrauded, misled and deceived, by the acts of the defendants and their co-conspirators into the belief that the bids were fairly and competitively submitted and that the prices were fair, reasonable and competitive prices and that the United States, without knowledge of the collusive agreements, awarded contracts to the defendants and their co-conspirators and paid their bills, vouchers and claims for the hats manufactured under the contracts, and that the said bills, claims and vouchers were false and fraudulent by reason of the fixed, fraudulent, non-competitive and excessive prices submitted on the collusive bids. It is also alleged that a fair price at the time of these requests for bids was 450 per hat. [The Government furnished the material; the manufacturers made the hats.] The amount of damages alleged is $900,000, which per statute (31 U.S.C.A. § 231) is doubled to $1,800,000, plus specified forfeits.

As appears from the affidavits before the Court, and from the discussion of counsel on the motion, the Government does not contend that there was any fraud in the bidding for or the award of the contract for the 2,000,000 hats and caps in February and for another 2,000,000 in September 1941. The transactions attacked by the Government relate to bids for and the awarding of contracts in June 1941 for about 2,000,000 hats and caps, of which a total of 175,000 were awarded to two of the defendant manufacturers, Bell Cap Company and Ribbon Narrow Fabric Co., Inc.

The Government’s affidavits show that contracts for one-half the 2,000,000 hats on which bids were sought in February 1941 were awarded to certain low bidders, other than the defendant manufacturers, at prices between 450 and 650 (at an average of 550); that the defendants and other union shops which had submitted much higher bids agreed with the Government to reduce their prices so that for hats manufactured west of the Mississippi the price would be 650, while in the East the price would be 700. Thus the one-half of the February contracts which went to low bidders within the range of 450 to 650 were awarded on bids that admittedly were submitted without any collusion, and the other one-half of the February contracts went to the defendant manufacturers and other union shops at the revised 650 and 700 prices, under what were in fact negotiated contracts.

The Government’s affidavits and briefs also support defendants’ contention that there was no collusion in the bids submitted for the September requirement of 2,000,000 hats. The average price paid by the Government in September 1941 was 470. The Government intimates that the reason that there was no collusion in the September bidding was because the Department of Justice had started an investigation of the June bidding. But, regardless of the motive, the September bidding was not collusive. In fact there was a great variance in the prices bid.

As to the June bidding, it is clear that the bids submitted by the defendant manufacturers were collusive and that the defendant unions and their officers were active in bringing about the agreement of the manufacturers to submit similar bids of 650 per hat and to allocate quantities among themselves. The defendants contend that they thought their plan to bid that price and allocate the quantities met with the approval of at least one of the Government’s representatives. That is disputed; but one thing is certain, the Government officials knew of the defendants’ plans to submit identical bids of 650 before the bids were submitted. It is the Government’s position that the defendants were warned that any such conduct would be illegal. But there could not have been the warning without the knowledge. When the bids were submitted Colonel Jones took a firm stand and recommended that all bids of 650 per hat be rejected as, collusive. In all 46 bids were submitted in June; only 25 of them were at the collusive price of 650. The Colonel reported to the Quartermaster General at Washington, as follows :

“In addition to the above, the interview detailed in Exhibit A, established the fact that a group of manufacturers have entered into a collusive arrangement whereby the price to be bid on Government contracts is fixed. Such collusion constitutes a fraud on the Government, whether it be instigated by a labor union, one of its officials, or by an association of manufacturers, since in any case the bidder has acquiesced in or concurred in this collusive arrangement. The fact that twenty-five of the bids submitted are identical in price (65$) indicates that the plan outlined by the labor union official was followed in this instance. As the making of an award to any of the Government contractors who were involved in this fraudulent collusion would be condoning of this flagrant violation of the Government’s right to purchase in a free and open market, and in view of the fact that this Depot has been put on notice that this collusive plan of bidding is in operation and would thus constitute an approval of this system of price fixing, it is strongly recommended that all twenty-five bids submitted under this invitation at 65be rejected. Further, it is recommended that this situation be brought to the attention of the Department of Justice for appropriate action.”

Mr. Jayson, the Special Assistant to the Attorney General, states in his affidavit on this motion:

“It was found, however, that if all of the 65^ bidders were rejected, the Army would be unable to order all of the two million hats, and because the need for the hats was urgent, it was necessary to include 4 such bidders in the awards, two of whom are defendants in the instant case: Bell Cap Company received an award for 75,000 hats, and Ribbon Narrow Fabric Company received an award for 100,000 hats.

“Representatives of the union and manufacturers whose bids had been rejected thereupon went to Washington and proposed negotiation, offering to lower their bids, and various manufacturers sent telegrams and letters reducing their bids but with the entire authorized quantity already procured, the Government refused.”

This present suit thus comes down to a claim that in the June award of contracts the' Government was defrauded to the extent of the two contracts above mentioned for 175,000 hats. The motion for summary judgment squarely presents the question whether, taking the facts as set forth in the Government’s affidavits, there is any basis for concluding that the Government has a claim under the statute, 31 U.S.C.A. § 231. In deciding that question we must not base the decision on whether or not the defendants’ conduct was a violation of the Sherman Anti-Trust Act. That is something that was the subject of an indictment under the Sherman Act in the Federal Court in Philadelphia, which has been disposed of. It might be noted here that the federal grand jury investigated defendants’ acts in relation to all three requests for bids, those sent out in February, in June and in September 1941, and found an indictment only in relation to the June bids. Under United States v. Cooper Corporation, 312 U.S. 600, 61 S.Ct. 742, 85 L.Ed. 1072, the United States is not a “person” entitled to sue civilly for treble damages (15 U.S.C.A. § 15) sustained as a result of a defendant’s unreasonable restraint of trade in connection with a Government contract.

The present suit is under the Informer’s Act, 31 U.S.C.A. § 231, and in order to sustain the suit facts must be shown that the defendants’ conduct falls within that statute, which provides:

“§ 231. Liability of persons making false claims

“Any person not in the military or naval forces of the United States, or in the militia called into or actually employed in the service of the United States, who shall make or cause to be made, or present or cause to be presented, for payment or approval, to or by any person or officer in the civil, military, or naval service of the United States, any claim upon or against the Government of the United States, or any department or officer thereof, knowing such claim to be false, fictitious, or fraudulent, or who, for the purpose of obtaining or aiding to obtain the payment or approval of such claim, makes, uses, or causes to be made or- used, any false bill, receipt, voucher, roll, account, claim, certificate, affidavit, or deposition, knowing the same to contain any fraudulent or fictitious statement or entry, or who enters into any agreement, combination, or conspiracy to defraud the Government of the United States, or any department or officer thereof, by obtaining or aiding to obtain the payment or allowance of any false or fraudulent claim, * * * shall forfeit and pay to the United States the sum of $2,000, and, in addition, double the amount of damages which the United States may have sustained by reason of the doing or committing such act, together with the costs of suit; and such forfeiture and damages shall be sued for in the same suit. (R.S. §§ 3490, 5438.)”

The Circuit Court of Appeals for this Second Circuit discussed the statute in United States ex rel. Brensilber v. Bausch & Lomb Optical Co., 2 Cir., 131 F.2d 545, 546 (later affirmed by the Supreme Court by an equally divided court, 320 U.S. 711, 64 S.Ct. 187, 88 L.Ed. 417) and held that “the statute certainly makes fraud of some sort the basis of the liability, and uses the word in its accepted sense of deceit. * * * deceit is a sine qua non; it will not serve that he secured it by any other kind of wrong.” The Court then proceeded to show how in the case of United States ex rel. Marcus v. Hess, 3 Cir., 127 F.2d 233, the successful bidder obtained his contract through a form of deceit, as a result of a conspiracy of a group who so arranged their bids that one of them, personally agreed upon, would get the contract from the P.W.A. In the Hess case the authorities did not know of the conspiracy of the bidders and awarded the Hess contract thinking he was a genuine honest bidder in an open competitive bidding. The Third Circuit denied relief because the contract was awarded by a local authority and not by the United States. The Supreme Court reversed the Third Circuit and held that the Government contributed funds to the P.W. A. which together with local funds were used to pay Hess under the contract, and so the fraud was a fraud on the Government and came under the Informer’s Act.

In the Bausch & Lomb case by reason of certain exclusive market or monopoly arrangements with others, who otherwise might have been competitors, Bausch & Lomb was the sole bidder. As the Circuit Court of Appeals remarked: “That was a wrong, but it was not a ‘fraud’ unless Bausch & Lomb represented at some stage of the negotiations that they had. not secured an unlawful monopoly of the market. Plainly a bidder who bids for a contract makes no representation, express or implied, as to the reasons which have led him or enabled him to put in his bid. He does, indeed represent that he can perform, but he does not represent that there is an open market, or that his bid is ‘normal’ or ‘reasonable,’ or ‘competitive.’ If he has been guilty of unlawful conduct in eliminating competitors, he can be called to account as Bausch & Lomb have been, but not because by bidding he has said anything about competition.” The two defendants, Bell Cap Co. and Ribbon Narrow Fabrics Co. Inc., made no representation in their bids that the bids were competitive. Indeed, the contrary was known to the Government officials to be the fact.

Among the exhibits, made part of the Zaritsky affidavit and submitted in support of this motion, is a copy of the June proposals, here in issue. Under Exhibit A is a notice to bidders dated June 10, 1941 and signed by Col. Jones. It contains the following heading:

“Amendment No. L. — Request for Informal Bids (Negotiated Contract) No. 669-41-NEG-73 — for Mfg. of Hats, Herringbone Twill.”

The form of contract annexed is likewise headed “Negotiated Contract.” Nowhere in the form is there any specific representation made on the part of a bidder that the bid entered was free, competitive and non-collusive.

The decision in the Bausch & Lomb case, affirmed by the United States Supreme Court, sets forth the law to be applied to the case at bar.

There was no deceit in the case at bar because on the admitted facts the Government knew in advance the plan of the defendant manufacturers to submit a uniform price of 650. Further, the Government rejected the 65^ bids, because they were collusive. The exhibits show that all but 365,000 of the 2,000,000 hats went to bidders who bid less than 65‡. The Government explains its award of four contracts at the 65‡ price to four of the alleged' 25 collusive bidders, as having been made necessary because the lower bidders could not supply the full requirement of 2,000,000 hats. Assuming that to be the fact, the Government officials were not acting under any misapprehension; they were not deceived; they knew how the 65{! bid came to be submitted by 25 of the 46 bidders; and with that knowledge they awarded 4 of the 25, contracts for part of the required amount. Where was the fraud? Further, it does not appear that the Government made any effort to have those four reduce the 650 bid price. And none of the other 65^ bidders were asked to reduce their price. Indeed, the Government’s affidavits show that when the 650 bids were rejected, the collusive bidders “sent telegrams and letters reducing their bids but with the entire authorized quantity already procured, the Government refused.” Who was deceived? Applying the language of the Circuit Court of Appeals in the Bausch & Lomb case to the submission of the 25 collusive bids, we may say: The submission of the collusive bids was a wrong, but it was not a fraud unless the 25 bidders represented at some stage of the negotiations that their bids were competitive and not the result of collusion and that the Government was deceived thereby.

Since there was no fraud practiced upon the Government in the inception of the contracts awarded to two of the defendants (Bell Cap Co. and Ribbon Narrow Fabric Co., Inc.) in June 1941, no fraud attached to any claims presented by them for payment of the hats they manufactured at the 65 rate. There being no fraud in the claims presented, there is no cause of action based upon the statute in question, 31 U.S.C.A. § 231, and defendants’ motion for summary judgment should be granted.

It is unnecessary to discuss the other points made by the moving defendants in support of their motions. Settle order accordingly.


author: BOYD, District Judge.

text:
    WALLING v. WEST KENTUCKY COAL CO.
    Civ. A. No. 612.
    District Court, W. D. Tennessee, W. D.
    Dec. 1, 1944.

      George W. Jansen, of Washington, D. G, and Jeter S. Ray and Glen M. Elliott, both of Nashville, Tenn., for plaintiff.
    James G. Wheeler, of Paducah, Ky., and Burch, Minor & McKay and C. O. Franklin, all of Memphis, Tenn., for defendant.
   BOYD, District Judge.

This cause came on for trial before me at Memphis, Tennessee, on the 24th, 25th and 26th days of October, 1944. George W. Jansen of Washington, D. G, Jeter S. Ray and Glen M. Elliott of Nashville, Tennessee, appeared on behalf of the plaintiff; James G. Wheeler of Paducah, Kentucky, Lucius E. Burch, Jr., and C. O. Franklin, both of Memphis, Tennessee, appeared on behalf of the defendant.

Upon consideration of the pleadings filed herein, the testimony adduced at the trial, including documentary evidence, and the entire record in the case, and after hearing arguments of counsel, the Court makes and files the findings of fact, conclusions of law and order for judgment hereinafter set forth.

Findings of Fact

I. Defendant is, and at all times since the effective date of the Fair Labor Standards Act of 1938, Act of June 25, 1938, c. 676, 52 Stat. 1060, 29 U.S.C.A. § 201 et seq., has been, a corporation organized under the laws of the State of New Jersey, having its home offices in Earlington, Kentucky, domesticated, and doing business in the State of Tennessee at Memphis.

II. Since the effective date of the Fair Labor Standards Act, defendant has owned and operated coal mines in the State of Kentucky producing approximately 15,-000 tons of coal per day. It has owned and operated a railroad in Kentucky running from its mines to the Ohio River, used in transporting the coal produced by it. On the Ohio and Mississippi Rivers it owns a number of barges used in transporting its coal to various points upon these rivers, as well as loading, unloading and screening equipment at strategic points. The West Kentucky Coal Company of New Jersey has two wholly owned subsidiary corporations, the West Kentucky Coal Company of Delaware and the St. Bernard Coal Company. The parent and subsidiary corporations maintain branch offices and sales outlets through which coal, mined by the parent corporation, is sold and distributed in a number of states, including Kentucky, Tennessee, Arkansas, Louisiana, Mississippi, Wisconsin, Illinois, Missouri, Nebraska and Indiana. One of such branch establishments is located at Memphis, Tennessee, and with defendant’s operations at the Memphis establishment this action is primarily concerned.

III. At Memphis defendant regularly employs thirty-five to forty persons in ordering, receiving, unloading, screening, selling, and distributing coal, in processes and occupations necessary thereto, in performing commercial tug boat services on the Mississippi River, and in the keeping and transmission of records covering all such operations. In carrying on its operations at Memphis, the defendant maintains an up-town office at 14 North Second Street, a barge fleet landing on the Arkansas side of the Mississippi River, a tug boat on the Mississippi River, Yard No. 1 located at the foot of Butler Avenue and physically connected with unloading equipment on the Tennessee side of the Mississippi River, and Yard No. 2 located on Heistan Street.

All coal distributed by defendant at Memphis is ordered and received from points outside Tennessee, and is received both by railroad and river barge. Defendant receives by rail substantially all coal delivered from Yard No. 2, while coal delivered from Yard No. 1 is received by barge to the extent that navigation and transportation facilities will permit. Rail shipments received at both Yards No. 1 and No. 2 are unloaded by defendant’s employees at Memphis.

All coal received by barge, being in excess of ninety percent of the total volume delivered from Yard No. 1, is mined by the defendant at its mines in Western Kentucky, transported on its railroad to the Ohio River, loaded upon its barges and towed down the Ohio and Mississippi Rivers to Memphis, where the barges are received by defendant’s tug boat and moored at defendant’s fleet landing in Arkansas until needed. As coal is needed at Yard No. 1, defendant’s tug boat tows the barges across the Mississippi to a steam shovel or digger, owned and operated by defendant, mounted upon a barge hull moored to the Tennessee bank of the Mississippi. Defendant’s employees operate the steam shovel in unloading barges, placing the coal in a hopper which feeds it onto a conveyor. The conveyor, consisting of a series of endless belts, lifts the coal over Riverside Drive and carries it approximately 1500 feet to the top of an elevator located on Yard No. 1. This elevator consists of eight bins with a capacity of sixteen carloads, eight hundred' tons, of coal. Four of the bins are equipped with power-driven machinery for screening the coal, the screenings thus obtained being designated and sold by defendant as pea and slack coal. Truck deliveries from Yard No. 1 are principally of screenings or pea and slack coal and the greater portion of such coal is obtained by the screening process.

Whereas the sale of screenings by defendant at Memphis comprises a large percentage of its total sales, it is established that screenings and the sale thereof constitute a minor, incidental and undesirable part of the sales of the retail coal dealer, as the term is generally understood. Domestic consumers do not generally purchase pea and slack coal, and sales of such coal to domestic consumers by defendant at Memphis comprise an inconsequential percentage of its business.

In addition to activities in connection with the sale and distribution of coal, defendant owns and operates at Memphis a tug boat on the Mississippi River, performing commercial tug service for boats and barge fleets moving in interstate commerce between all points on the Mississippi River.

Defendant is the only coal dealer in Memphis with equipment and facilities for handling and unloading barge lot shipments, making sales on the river to boats, performing tug boat service, and an elevator with power driven machinery to perform the screening process.

IV. All defendant’s operations and employees at Memphis are under the general supervision and control of a local manager stationed in the up-town office. Employees are transferred from job to job and from one site of operations to another, spending a substantial part of their time doing each kind of work during the same workweek, as occasion demands. For example, it is established both by defendant’s time and payroil records, and the testimony of employees, that various employees during the same workweek have been transferred between two or more such jobs as laborer on the steam shovel, conveyor, elevator, unloading coal from freight cars at either Yard No. 1 or No. 2, acting as night watchman at the steam shovel or at the fleet landing in Arkansas, performing services on the tug, making truck deliveries from either or both yards, and maintaining and repairing the equipment used in unloading and screening coal at Yard No. 1. Records in connection with all operations at Memphis are cleared through the up-town office where a stenographic and bookkeeping force is employed.

V. Defendant’s operations at Memphis since the effective date of the Fair Labor Standards Act have been carried on for the purpose of distributing its coal throughout the territory adjacent thereto, such territory consisting of portions of the States of Tennessee, Arkansas, Louisiana and Mississippi. Prior to approximately October 1942 a salesman, stationed in Memphis, traveled throughout this territory, but since that time sales outside the immediate vicinity of Memphis have been solicited largely by telephone and mail from the Memphis office. Sales of coal since the effective date of the Act have been in barge lots delivered on the Mississippi River, carload lots delivered as such in Memphis and throughout the territory above, as well as deliveries made directly from defendant’s barges to boats on the Mississippi River, and by truck delivery in both interstate and intrastate commerce.

The employee at Memphis designated by defendant as its “wholesale salesman” is a part of defendant’s Memphis staff. He has no separate telephone nor quarters, and utilizes all the facilities of the Memphis office. His correspondence is received, prepared and mailed by the clerical staff; all orders and contracts sold or negotiated, by him are prepared in, clear through, and are filed in this office. In addition to his activities in connection with quantity sales, he solicits and receives domestic orders and performs various other duties, such as supervising employees at the yards, weighing coal and writing delivery tickets on truck deliveries.

VI. Sales and deliveries have regularly been made to individual and domestic consumers in small quantities at established prices, and to apartment houses, institutions, governmental agencies and commercial and industrial customers in quantities materially in excess of the quantities purchased by home consumers and at discounts from the regular price charged home consumers. A discount of 75 cents per ton under the domestic price is automatically given to an apartment of four or more units or to any person who purchases in quantities of or in excess of thirty tons, regardless of the type customer. Prices charged to commercial and industrial customers, institutions and governmental agencies are, in each case, determined by type of customer, quantity, frequency with which customer will accept delivery, duration of dealings between the seller and purchaser, prospect of re-order, type of delivery and competition.

VII. Defendant’s sales to large commercial and industrial customers are made either by formal written contract or verbal commitment or understanding, under which the purchaser agrees, for a specified time, to purchase all his fuel requirements from the defendant, and the defendant agrees to satisfy the purchaser’s fuel requirements for such time at a specified price. The purchaser’s requirements for the entire term and the frequency with which it will accept delivery are estimated when the contract is executed or the commitment made. Negotiations with purchasers leading up to execution of formal contracts are carried on by defendant’s local manager and “wholesale salesman.” The contracts are typed by clerical personnel in the Memphis office. Prior to 1943 such contracts were formally executed on behalf of defendant either by the local manager or “wholesale salesman” alone affixing the company’s signature, or by one such Memphis representative and a home office representative signing on behalf of the company. In 1943 and 1944 such contracts, after being negotiated and prepared in Memphis, and the purchaser’s signature being obtained thereto, have been forwarded to the defendant’s home office in Earlington, Kentucky, for execution by a home office representative, and returned to the Memphis office for filing.

Some of these formal written contracts, such as the current contract with the Perkins Oil Company covering the purchaser’s estimated requirements of 10,800 tons per year for its Memphis plant, leave the method of delivery, i.e., whether in carload lots or by truck delivery, optional with the seller, whereas other such contracts, as in the case of the current contract with the American Snuff Company, specify delivery in carload lots. Under each type contract, however, the defendant makes deliveries both in carload lots and by truck at its option.

The oral commitments under which defendant, at Memphis, supplies large commercial and industrial customers, are negotiated entirely at. Memphis by either defendant’s local manager or its “wholesale salesman.”

VIII. Sales to institutional and governmental purchasers, such as the various departments of the City of Memphis and the Federal Housing Authority, are made either by formal contract or commitment covering the purchasers’ requirements for a specified time at a specified price. In either type sale the contract or commitment is entirely negotiated and solely executed on behalf of the company by personnel at defendant’s Memphis office. Representative of such commitments is one renewed for a number of years, to furnish the Board of Education of the City of Memphis with its requirements for the period of one year, estimated at 5,000 tons, at a price substantially less than the domestic price, such commitment having been made by defendant’s Memphis manager. Representative of such contracts is one with the City of Memphis, to supply the estimated fuel requirements of its miscellaneous departments for the period of one year, requirements estimated at 1,000 tons, such contract having been entirely negotiated and executed in Memphis each year for a number of years by defendant’s local manager.

IX. Substantial quantities of coal are regularly sold at discounts under commitments executed by defendant’s Memphis manager to boats and barge lines operating in interstate commerce on the Mississippi River. Such sales are made either by the tug boat captain or the foreman at the steam shovel, the coal being delivered directly from defendant’s barges to the boats by defendant’s employees. The delivery tickets and records on such sales are transferred through Yard No. 1 to the up-town office, entered upon defendant’s records by its Memphis office employees who prepare invoices and statements thereon and receive and deposit remittances therefor. Such are sales and deliveries of goods in interstate commerce.

X. Sales to apartments and to purchasers of quantities .in excess of thirty tons, at established discounts of seventy-five cents per ton less than the domestic price, are made both under commitments and in the regular course of business.

XI. Quantities of coal are regularly sold during the winter months to peddlers for resale. Such sales go through the records as cash transactions, and the exact quantity thus sold is not ascertainable. It is established, however, that peddlers have been so numerous as to interfere with traffic at defendant’s yards to the extent that during periods the defendant has found it necessary to bar them therefrom.

XII. Where purchasers wish deliveries under contracts or commitments, either by truck or in carload lots, they contact any person in defendant’s Memphis office. In all cases where delivery is by truck, whether under contract or commitment, and in some instances when delivery is in carload lots direct to the purchaser’s siding, the records thereon are kept by defendant’s employees in Memphis. Where such deliveries are by truck from No. 1 yard, the coal is received in defendant’s barges, unloaded, screened and delivered by its employees. Its employees at Yard No. 1 weigh and write delivery tickets thereon, such tickets being transferred to defendant’s up-town office, tabulated, and the charges therefor entered upon defendant’s ledger. Statements and invoices covering such deliveries are sent from the Memphis office and remittance in payment therefor received at the Memphis office. In some instances carload shipments under such contracts or commitments are entered upon the records at Memphis, invoiced from and collected for at Memphis.

XIII. Large quantities of coal are regularly sold at substantial discounts from the domestic price to the United States Engineers at West Memphis, Arkansas, and delivered in barge lots to various points on the Mississippi River. At least since January 1943, all such sales have been made by personnel in defendant’s Memphis office, orders therefor being placed by telephone with either the local manager, bookkeeper or “wholesale salesman.” Formal purchase orders are later received at Memphis, the accounts carried upon the Memphis accounts receivable ledger, invoices and statements rendered from Memphis, and collection therefor made at Memphis. Such sales constitute an integral and substantial part of defendant’s Memphis operations.

XIV. Large quantities of coal are regularly sold and delivered in carload lots at substantial discounts from the domestic price to commercial, industrial, governmental and institutional purchasers throughout the area surrounding Memphis in the states of Tennessee, Arkansas, Louisiana and Mississippi. Some of such sales and deliveries are made as a result of single orders, while others are made pursuant to formal written contracts negotiated by personnel in defendant's Memphis office. A portion of these contracts have been signed on behalf of the defendant solely by the Memphis “wholesale salesman,” others by the local Memphis manager, while others have had the signature of a home office representative attached. In either event, the negotiations with the purchaser resulting in the execution of such contracts have been carried on by defendant’s Memphis employees, the contracts prepared in the Memphis office, and there filed after execution.

Both under such contracts and individual carload orders 100 to 285 carload sales and deliveries were made during each six months of the period in proof. In substantially each instance the purchaser made his request by mail or telephone to defendant’s Memphis office. Mail orders were received and given to the Memphis “wholesale salesman” by clerical personnel, and telephone orders were received by the various type personnel in the Memphis office. Orders for carload deliveries were prepared in sales books located in the Memphis office, either by the local manager, clerical personnel or the “wholesale salesman” for his signature, the original thereof transmitted to the company’s home office and a copy filed in Memphis. The defendant advertises to the public its willingness to accept such orders at Memphis and such sales constitute an integral part of defendant’s Memphis operations.

XV. Defendant’s sales during the period January 1, 1943 through June 30, 1944 were, upon the trial of the cause, considered by both parties as representative. Analysis of such sales discloses that the defendant sold from 35,000 to 44,000 tons of coal during each period of six months, receiving therefor approximately $164,000 to $202,000, and that during each such period it received approximately $6,800 to $7,-800 from the operation of its tug boat on the river.

Sales and deliveries from Yard No. 2, substantially all of which were domestic sales, constituted only a small percentage of total sales, as, for example, during the period January 1 through June 30, 1944, they totaled in dollar value approximately seven percent of total sales and approximately ten percent of the combined truck delivery sales from both Yards No. 1 and No. 2.

Truck deliveries made from Yard No. 1 to as few as fifteen to eighteen commercial and industrial customers (exclusive of institutional, governmental and apartment customers) made pursuant to written contracts or verbal commitments at substantial discounts, during each six month period constituted more than fifty percent, both in tons and dollar value, of truck deliveries from Yard No. 1, as during the period January 1, 1943, through June 30, 1943, when the deliveries to this number of customers from Yard No. 1 constituted 68.9 percent in tons and fifty-nine percent in dollar value, of all truck deliveries from this yard. It was conceded by the defendant during the trial that a substantial percentage of the goods manufactured by each of these customers, designated in the summary of sales as commercial and industrial customers, was produced for interstate commerce and that the coal delivered to them by defendant was used in the production thereof.

Combining truck deliveries during this period to commercial and industrial, governmental, institutional and apartment customers, made from Yard No. 1 pursuant to contract or verbal commitment, their total constitutes 81.6 percent in tons and 75.4 percent in dollar value of all truck deliveries made from this yard.

In addition to defendant’s receipts from such interstate transactions as the sale and delivery of coal to points outside Tennessee in carload and barge load lots, sales to boats moving in interstate commerce on the river, and tug boat services to such boats (the returns from all of which amount to approximately 25 percent to 40 percent of defendant’s total receipts for respective six month periods), from its yards in Memphis, the defendant regularly and customarily sells substantial quantities of coal for delivery to points outside Tennessee both in its trucks and trucks of its purchaser. Frequently such transactions go through the records as cash items and the total volume of such sales cannot be accurately determined. It is definitely established, however, that, as in the period July 1, 1943 through December 31, 1943, defendant received from such deliveries at Yard No. 1 alone the sum of $8,905.54, or 9 percent of its total receipts from truck deliveries at this yard.

XVI. At least since October 24, 1940, defendant has failed and refused to compensate employees in its Memphis office, working foreman of -the steam shovel crew, maintenance man, and clerks, all of whom have been employed upon the basis of fixed monthly salaries, for hours worked in excess of forty per workweek at a rate not less than one and one-half times the regular rates at which they were employed. As to some such employees hourly rates and a number of hours as hours worked have been entered upon defendant’s time and payroll records purporting to reflect the payment of overtime compensation. Such entries are inaccurate, and the system is a mere bookkeeping device employed by defendant to show payment of overtime compensation when such was not, in fact, being paid.

XVII. Since at least October 24, 1940 the defendant has failed and refused to compensate numerous persons employed upon the basis of hourly rates or rates per ton, engaged in interstate commerce or the production of goods for interstate commerce within the meaning of the Fair Labor Standards Act, for hours worked by them in excess of forty per week at a rate not less than one and one-half times the regular rates at which they were employed, including persons employed by it in and about its operations at Memphis as watchmen, in the unloading of carloads of coal, maintenance and operation of the steam shovel, conveyor, elevator, and in making intrastate deliveries of coal to industrial consumers for use in the production of goods for commerce. Although in some instances the defendant has paid to some such employees one and one-half times their regular rate of pay for hours worked in excess of eight per day upon specified jobs, it has not paid such overtime compensation for hours over forty per week upon these jobs, and has frequently suffered and permitted employees, engaged in interstate commerce or the production of goods for interstate commerce, as above, to work upon different jobs hours aggregating more than ninety per week without the payment of any compensation other than the employees’ regular hourly rate of pay.

XVIII. At no time since the effective date of the Fair Labor Standards Act has the defendant kept any record of the hours worked by persons employed by it in its office at Memphis, Tennessee, of the hours worked by persons engaged in delivering coal by truck from its yards in Memphis, nor an accurate record of the hours worked by persons employed by it as foreman of the steam shovel crew, watchmen, or scale clerks. As to some such employees merely a record of days worked per week has' been kept, as to others punching time cards actual hours worked as reflected thereby have been ignored, and in both instances inaccurate entries of hours worked have been entered by defendant upon its time and payroll records. Such entries have been made at the direction of defendant’s local manager. In no instance have defendant’s records contained the home address of persons employed by it at Memphis.

XIX. Truck drivers employed by defendant frequently spend a substantial portion of their hours worked engaging in other activities. Two of such drivers made occasional deliveries across state lines. A major portion, frequently all, of the hours worked by drivers delivering coal from Yard No. 1 was spent in making intrastate deliveries to industrial customers engaged in the production of goods for commerce, such coal being necessary to such production.

XX. Representative of employees as to whom the Section 13(a) (1) exemption is claimed are the foreman of the steam shovel and the scale clerk. Ezra Stacey, foreman of the steam shovel, working under the direction of the local manager, receives a salary of less than $200 per month and his hours of work of the same nature as that performed by nonexempt employees exceed twenty percent of the number of hours worked in the workweek by the nonexempt employees under his direction; R. G. Sutton, scale clerk at Yard No. 1, receives a salary of less than $200 per month, neither Customarily nor regularly directs the work of any employee, and although spending less than one hour each day at Yard No. 2 performing activities incidental to retail sales, engages in making retail sales or performing work immediately incidental thereto for less than twenty percent of the number of hours worked each workweek by employees exempt by reason of their activities in making retail sales and performing work immediately incidental thereto. He ■ regularly and customarily each workweek spends a substantial number of hours worked in preparing defendant’s Memphis time and payroll records.

XXI. The words “retail” and “wholesale” have an established meaning in the coal trade which in substance has been adopted by several agencies of the United States Government. They define the terms as follows: “Retailing” is the selling or selling and delivering of solid fuel in other than railroad cars or cargo vessels without regard to quantity, price, or frequency of delivery. “Wholesaling” is the selling, or selling and delivering, of solid fuel in railroad cars or cargo vessels.

Conclusions of Law

I. The Court has jurisdiction of the parties hereto and of the subject matter of this action.

II. The employees engaged in and about defendant’s establishment at Memphis, Tennessee, in ordering, receiving, unloading, handling and otherwise participating in the receipt of coal from other states and in performing similar duties in connection with sales to customers in states other than Tennessee are engaged in commerce within the meaning of the Fair Labor Standards Act.

III. Defendant’s employees engaged in the screening of coal and in other processing activities are engaged in the production of goods for commerce within the meaning of the Fair Labor Standards Act. Likewise, defendant’s employees engaged in connection with the supplying of coal for use by defendant’s customers in the production of goods for interstate commerce are themselves engaged in a process or occupation necessary to the production of goods for interstate commerce.

IV. Sales and deliveries to peddlers for resale, and to commercial and industrial customers, institutions, governmental agencies, including United States Engineers located at West Memphis, Arkansas, river sales, apartment sales, and sales at quantity discounts, in quantities substantially larger and at prices substantially less than prices charged and quantities delivered the domestic consumer are nonretail sales, as the term is generally understood, and an establishment making a substantial portion of its sales to such purchasers is not a retail establishment within the meaning of Section 13(a) (2) of the Fair Labor Standards Act.

V. An establishment engaged in processing the goods sold by it cannot be considered to be a “retail establishment” irrespective o'f the character of the sales of the establishment where such processing is not merely incidental to such retail sales as may be made.

VI. In determining coverage under the provisions of the Fair Labor Standards Act of 1938, the workweek is the standard, and an employee engaged in the performance of work covered under the Act and work of an exempt nature or noncovered work during the same workweek, must be compensated for all work during the week in accordance with the standards prescribed in the Act.

VII. Excessive hours are compensated for under the Fair Labor Standards Act of 1938 at a rate not less than one and one-half times the regular rate at which a person is employed.

VIII. Under the Fair Labor Standards Act of 1938 where employees work for a fixed weekly salary and a fluctuating number of hours each week, the regular rate of pay is determined by dividing the weekly salary by the actual hours worked.

IX. A truck driver for a nonretail concern who spends a major portion of his time during any workweek making intrastate deliveries of coal to commercial and industrial consumers engaged in the production of goods for commerce, such coal being necessary for such production, is not such an employee as would come within the scope of the exemption afforded by Section 13(b) (1) of the Fair Labor Standards Act, and therefore is subject to the provisions of the Fair Labor Standards Act.

X. Generally speaking, a truck driver for a wholesale or nonretail concern who makes deliveries into states outside of Tennessee, and is engaged in interstate or foreign commerce within the meaning of the Motor Carriers Act, 49 U.S. C.A. § 301 et seq., is subject to the exemption of the Fair Labor Standards Act, Section 13(b) (1).

Where, however, such driver makes only an occasional trip into another state and the major portion of his time during the workweek is taken up with activities of his employer which have to do with the production of goods for commerce, he would not be subject to the exemption afforded by Section 13(b) (1).

XI. Under the facts of this case, it cannot be said that the defendant’s employees in question are within the scope of Section 13(a) (1) of the Fair Labor Standards Act, which exempts employees employed in a bona fide executive, administrative, professional, or local retailing capacity, or in the capacity of outside salesman.

XII. Under the facts of this case, the defendant’s employees on the tug boat performing commercial tug service for boats and barge fleets moving in interstate commerce are within the scope of Section 13(a) (3) of the Fair Labor Standards Act, and are exempt as seamen.

XIII. Under the facts of this case, watchmen are covered under the Fair Labor Standards Act and have not been compensated for overtime work in accordance therewith. Nor do the company records reflect the necessary data on these employees under the regulations pursuant to the Act.

XIV. A definition of the term “retail dealer” evolved and accepted 'by the coal industry and by certain governmental agencies, may be considered by the Court in determining whether or not a given business comes within the retail exemption 13(a) (2) of the Fair Labor Standards Act along with other considerations, but same is not controlling on the question of Congressional intent as to what constitutes a retail establishment under the terms of the Act. The exemptions afforded “retail establishments” under the Act must be applied uniformly to all engaged in commerce or the production of goods for commerce, and it is not for the different industries or others to devise and promulgate definitions which might exempt its members from the terms and provisions of the Act.

XV. By paying to certain of its employees who were engaged in commerce and in the production of goods for commerce compensation at rates less than one and one-half times the regular rate of pay for hours in excess of forty per week, defendant has violated Sections 7 and 15 (a) (2) of the Fair Labor Standards Act.

XVI. The defendant has violated Sections 11(c) and 15(a) (5) of the Fair Labor Standards Act by its failure to make, keep and preserve records setting forth the information required by the duly promulgated regulations of the Administrator of the Wage and Hour Division.

XVII. Violations of the overtime and record keeping provisions of the Fair Labor Standards Act constitute cause for the granting of an injunction.

XVIII. Upon the whole record, plaintiff is entitled to the relief for which prayer in the complaint is'made.

Order for Judgment

It is ordered that the judgment be entered in accordance with the foregoing findings of fact and conclusions of law.