author: J. F. T. O’CONNOR, District Judge.

text:
    BALLARD et al. v. CONSOLIDATED STEEL CORPORATION, Limited, et al.
    Civ. No. 3850.
    District Court, S. D. California, C. D.
    July 30, 1945.

      Arthur Garrett, of Los Angeles, Cal., for plaintiffs.
    Alfred Wright and Harold F. Collins, both of Los Angeles, Cal., for defendant Consolidated Steel Corporation, Limited.
   J. F. T. O’CONNOR, District Judge.

(1) Action under the Fair Labor Standards Act

This case was tried before the Court sitting without a jury, and thereupon ordered to stand submitted on briefs to be filed, which briefs have been filed and duly considered by the court. The opinion of the Court herein concerns exclusively twenty-one firemen or former firemen, and twenty-seven guards or former guards, of the Consolidated Steel Corporation, Ltd., a corporation, who, as plaintiffs, all members of the American Federation of Labor (known as Guards, Shipyard Firemen, Plant Protection Local Union No. 1155), have brought suit against said corporation, hereinafter referred to for brevity as the defendant, to recover pay and/or overtime pay and liquidated damages under the Fair Labor Standards Act of 1938, Act of June 25, 1938, Ch. 676, 52 Stat. 1060, 29 U.S.C.A. §§ 201 to 219 inclusive, under conditions which it will be necessary to enumerate somewhat in detail as a predicate for the conclusions herein reached by the Court.

The defendant contended that the plaintiffs herein were bound to first submit this controversy to arbitration under the terms of the collective bargaining contract entered into between the Union and the defendant. The plaintiffs contended that the Union had no authority to make such a contract, and that the collective bargaining agreement was null and void under the recent decision of the Supreme Court in Jewell Ridge Coal Corporation v. Local No. 6167, United Mine Workers of America, etc., 1945, 65 S.Ct. 1063, 1068.

In that opinion the Supreme Court said: “In fact, some of these statements expressly recognized the necessity of modifying or setting aside those collective agreements that did not conform with statutory standards.”

While it is true that a strong dissenting opinion was written by Mr. Justice Jackson, concurred in by the Chief Justice, Mr. Justice Roberts and Mr. Justice Frankfurter, who held that the Union had the authority to enter into a collective bargaining agreement, and that these agreements should be respected and their terms enforced, this Court is bound by the majority opinion; and, in view of this recent decision of the Supreme Court, this Court is of the opinion that the contention of the defendant is unsound.

At the time of the commencement of the suit the defendant was doing business as a shipbuilder engaged in the construction of ships in a shipyard at Wilmington, County of Los Angeles, California; and, in the operation of such business, and in the construction of such ships, the defendant used materials substantially all of which were manufactured, purchased and transported in interstate commerce from and through states other than the State of California, and the ships built and manufactured by the defendant have been transported and distributed not only in California but throughout the world.

The foregoing narration of the defendant’s business is one of the allegations of the plaintiffs, and is not substantially controverted by the defendant, except for the assertion that, in the latter part of the year 1941, during the construction of a new shipyard, certain employees of the defendant could not come within the purview of the Fair Labor Standards Act. This phase of the case will be alluded to later.

(2) Statute of Limitations applicable

Originally, this action was filed on Sep-‘ tember 8, 1944, by “Jesse W. Ballard, for himself and on behalf of all employees and former employees of the defendants similarly situated.” On motion of counsel for the defendants that this was not a class action, and that all plaintiffs bringing suit’ should be specifically named, the Court directed counsel for Jesse W. Ballard to specify the names of the plaintiffs; and thereupon, under date of November 15, 1944, counsel for the plaintiff Jesse W. Ballard filed a “First Amended Complaint” specifically naming one hundred and thirty-two individuals, as plaintiffs, more or less, including Jesse W. Ballard.

During the trial, on motion of counsel for the plaintiffs, the case was dismissed without prejudice as to all the plaintiffs in the case except twenty-one firemen or former firemen, and twenty-seven guards or former guards, of the defendant corporation, hereinafter to be specifically named for definiteness, and the opinion of the Court does not adjudicate the rights of the dismissed plaintiffs, if any, in any respect.

While the Court is satisfied that the three years’ statute of limitations applies to this suit to recover pay and/or overtime pay, and liquidated damages; and that all pay and/or overtime pay for services rendered prior to three years of bringing suit is barred by the three years’ statute of limitations, it will not be necessary to determine from which dates the three years’ statute of limitations begins to run, that is, from September 8, 1944, or November 15, 1944, in view of the fact that none of these forty eight plaintiffs now in the case entered the employment of the defendant corporation prior to December 7, 1941, and no claim is being made for compensation for time and/or overtime for services performed on and after May 1, 1944.

(3) Plaintiffs’ position

The names of the twenty-one firemen or former firemen, and of the twenty-seven

guards or former guards, now remaining in this case as plaintiffs, and who are solely concerned with the decision of this Court, are as follows:

Date of Employ-Firemen: ment: Captain Robert E. Dunn, March 11, 1942 ; Peter G. Findlay, November 16, 1942; Frederick C. Stock, April 15, 1942; Kenneth A. Arnold, October 7, 1942; John L. Hameetman, May 16, 1942; William J. Gerlach, October 30, 1942; Harold H. Ross, October 20, 1942; John F. Weigel, Jr., September 28, 1942 ; John Feely, January 26, 1943; John M. Davis, October 6, 1942; Clyde E. Morrison, June 1, 1943; Kenneth W. Moore, September 13, 1943; Harry Berman, May 12, 1943; Lester Roberts, December 20, 1942; Jack R. C. Gregory, April 3, 1942; David O’Leary, August —, 1943; Cecil Baggs, March 11, 1942; George H“. Langskov, July 20, 1942; B. B. Smedley, September 2, 1943; Roy R. Huckleberry, Ocober 28, 1943; Noble Reid, March 5, 1942;
Date of Employ-Guards or Policemen: ment: J. G. Lukomsky, December 7, 1941; Jesse W. Ballard, December 10, 1941; Paul J. Anderson, April 3, 1942; Frederick E. Rauh, February 2, 1943; J. Tate, March 15, 1943; Sel don K. Henry, March 25, 1942; Daniel J. Seiber, July 10, 1942; Clarence H. Dick, December 9, 1941; John W. B. Young, March 24, 1943; Mrs. Marjorie W. Gerlach November 22, 1943; Thomas Wilkie, January 24, 1944; Earl A. Arm, March 18, 1942; Charles A. Runyan, January 15, 1943; Thomas Vice, July 13, 1942; Herbert E. Rasmussen, July 14, 1942; William E. Hagood, February 14, 1944; John G. Lundgren,. April 10, 1942; Albert Dean, September 2, 1943; Lenn E. Sitz, August 14, 1943; P. H. Crutchfield, November 30, 1942; Frank Oliphant, July 22, 1943 ; Eldon N. Callaway, December 11, 1942; Samuel Bailey, May 5, 1942; Edward M. Harsh, February 9, 1943; W. E. Hunter, May 10, 1943; V. P. Kirk, July 13, 1943 ; A.. B. Cunningham, April 24, 1943.

These forty-eight plaintiffs contend that within the three years’ period immediately prior to the commencement of this action they were employed in an occupation necessary to the production of ships in California ; that is to say, as guards and watchmen to protect the said ships and materials of which they were made, and the facilities with which they were made, from theft and from damage by sabotage.

While there was some evidence in the case to the effect that during the latter part of the year 1941, and at least for several months immediately subsequent to December of 1941, the defendant was constructing a new shipyard and shipyard facilities at Wilmington, California, and that during this period numerous guards and firemen were assigned to posts located on the new construction sites, such as shipways, docks, piers and open areas, and that, therefore, guards and firemen engaged exclusively in guard and fire watching duties on this class of construction would not be employed in interstate commerce, the evidence is not clear to the Court that any of the present plaintiffs during this period of time were acting as firemen or guards on this type of construction; in fact, the earliest time that any of the remaining forty eight plaintiffs in this case entered the employ of the defendant corporation was December 7, 1941, being plaintiff J. G. Lukomsky.

The court has jurisdiction over the subject matter of this controversy by virtue of the provisions of Sec. 16(b) of the Fair Labor Standards Act, and also by virtue of the fact that this suit arose under a law regulating commerce, namely, the Fair Labor Standards Act of 1938, Sec. 41(8), 28 U.S.C.A. The Court finds as a fact that all of the plaintiffs now before the court were engaged in interstate commerce, as that term is understood and interpreted under the Act.

The amended complaint alleges that within a period of three years immediately prior to the commencement of this action the plaintiffs were employed for certain hours in excess of the work week established by Section 7, subdivision (a) of the Act, 29 U.S.C.A. § 207(a); but that the defendant has failed, neglected and refused to pay compensation, or the overtime compensation therefor.

The defendant originally maintained three shifts of eight hours each, the first shift commencing at 8 A. M.; the second shift (swing) commencing at 4 P. M.; and the third shift (graveyard) commencing at 12 midnight. Later, about December of 1941, the shift change time was advanced one hour so that the first shift started at 7 A. M.; the second shift started at 3 P. M.; and the third shift started at 11 P. M.

These plaintiffs are not contending that they have not been paid for their regular hours of duty between the regular shift change time, but they do vehemently contend that they were required to report for duty, at the fire station for instance, prior to beginning their regular shifts for the purpose of learning their assigned posts for the day, which changed from day to day; receiving their instructions from their superiors, obtaining their equipment which was to be issued to them, if any; and get to their assigned posts and properly relieve their predecessors on their particular posts of assignment by the regular shift change time; and it is for the purpose of being paid for this time and/or overtime, and for liquidated damages, that this suit is brought.

Sec. 207 of Title 29, U.S.C.A., provides that no employer shall, except as otherwise provided in that section, employ any of his employees who are engaged in commerce, or in the production of goods for commerce, for a work week longer than forty hours; and naturally whether the plaintiffs herein are entitled to be paid time and/or overtime compensation will depend upon the number of hours they have worked during that particular week. This determination, of course, will depend upon an audit of the records introduced into evidence in this case.

It is further alleged that the number of hours worked by, and the amount of compensation earned by, each of the forty eight plaintiffs is a matter recorded on the books and accounts kept and maintained by the defendant; that the plaintiffs have no accurate records of said number of hours worked, or the amount of compensation due them, and accordingly they ask for an accounting.

They are also asking for liquidated damages and for a reasonable attorney’s fee to be fixed by the court and for costs of suit.

It has been stipulated that these plaintiffs have never been compensated for the time between the actual time of reporting, or the assembly call, and the regular shift change time.

(4) Travel and reporting time compensable

As the crux of this case hinges, in the first instance, upon the compensability for reporting time under the conditions previously enumerated, which necessarily preceded travel time, for instance, from the fire station to the different posts of duty, it may be stated, for a better picturization of the facts in the case, that the distance from the fire station to ship-way No. 1 covered approximately 320 feet; to shipway No. 2, 450 feet; to shipway No. 3, 570 feet; to shipway No. 4, 710 feet; to shipway No. 5, 830 feet; to ship-way No. 6, 980 feet; to shipway No. 7, 1110 feet, and to shipway No. 8, 1240 feet. Otho R. Allen, an adverse witness called for the plaintiffs, testified that from headquarters to shipway No. 1, the distance could be traveled in one minute, and that to reach shipway No. 8, it would require five minutes. Likewise the berths were located at walking distances from the places of reporting ranging from 810 feet to 1950 feet, and walking time varied from two minutes and forty second's to six minutes and thirty seconds.

This Court considers the case of Tennessee Coal, Iron & Railroad Company v. Muscoda Local No. 123, etc., et al., decided by the U. S. Supreme Court on March 27, 1944 (321 U.S. 590, 598, 64 S.Ct. 698, 88 L.Ed. 949, 152 A.L.R. 1014, et seq.) as authority for the Court’s position here that travel and reporting time from the time the plaintiffs checked in at the premises of the defendant, ready for work, until they left, are compensable.

In this case, supra, the Supreme Court decided that the miners were entitled to travel time in the mines. Both sides here in the instant case before the Court rely upon this Supreme Court case to strengthen their positions, the defendant contending that travel time was allowed only by reason of the peculiar facts in the case. As the Court views the facts, the plaintiffs in the case under submission are likewise entitled to compensation for their services from the time they entered the premises of the defendant and answered roll call, assembly, or clocked in, ready for work, even though ten, fifteen, twenty or thirty minutes intervened between their clocking in or receiving their daily instructions, and in their arriving at their posts of duty prior to shift change time; and the fact that their travel time to their posts of duty was undoubtedly under more favorable conditions than those of the miners would not seem to be the deciding factor in the case and could not change the Court’s opinion, for the plaintiffs were at that time on duty and subject to the instructions of the defendant.

There is no specific provision in the Fair Labor Standards Act which provides that travel time from “check-in” to “post-of-duty” in a shipyard shall or shall not be compensable; but the Supreme Court also stated in the Tennessee Coal, Iron & Railroad Company v. Muscoda Local, supra [321 U.S. 590, 64 S.Ct. 702], as follows:

“In determining whether this underground travel constitutes compensable work or employment within the meaning of the Fair Labor Standards Act, we are not guided by any precise statutory definition of work or employment. Section 7(a) [29 U.S.C.A. Sec. 207, 9 FCA Title 29, Sec. 207], merely provides that no one, who is engaged in commerce or in the production of goods for commerce, shall be employed for a workweek longer than the prescribed hours unless compensation is paid for the excess hours at a rate not less than one and one-half times the regular rate. Section 3(g) [29 U.S.C.A. Sec. 203(g), 9 FCA Title 29, Sec. 203(g)] defines the word ‘employ’ to include ‘to suffer or permit to work,’ while Section 3(j) states that ‘production’ includes ‘any process or occupation necessary to * * * production.’
“But these provisions, like the other portions of the Fair Labor Standards Act, are remedial and humanitarian in purpose. We are not here dealing with mere chattels or articles of trade but with the rights of those who toil, of those who sacrifice a full measure of their freedom and talents to the use and profit of others. Those are the rights that Congress has specifically legislated to protect. Such a statute must not be interpreted or applied in a narrow, grudging manner. Accordingly we view Sections 7(a), 3(g) and 3(j) of the Act as necessarily indicative of a Congressional intention to guarantee either regular or overtime compensation for all actual work or employment. To hold that an employer may validly compensate his employees for only a fraction of the time consumed in actual labor would be inconsistent with the very purpose and structure of those sections of the Act. It is vital, of course, to determine first the extent of the actual workweek. Only after this is done can the minimum wage and maximum hour requirements of the Act be effectively applied. And, in the absence of a contrary legislative expression, we cannot assume that Congress here was referring to work or employment other than as those words are commonly used — as meaning physical or mental exertion (whether burdensome or not) controlled or required by the employer and pursued necessarily and primarily for the benefit of the employer and his business.”

The ruling of this Court' must be, subject to proof to be discussed later, that from the time these plaintiffs answered assembly or roll call or “clocked in” at the corporation’s premises, ready for work, they were on the corporation’s time for its benefit, subject to its control, and they must be compensated therefor.

(5) Evidence in the case supports the plaintiffs’ position that they were required to report early and that they should be compensated therefor

Concerning the problem of proof faced by these plaintiffs, each plaintiff must, of course, prove his own case by a preponderance of the evidence, the same as in any other type of civil litigation. At this juncture, it may be helpful to break down the case into two periods of time, as follows:

(1) From December 7th, 1941, the earliest date on which any of the forty eight plaintiffs now in the case went to work for the defendant corporation, to June 28th, 1943, when the time clocks were installed, during which time the defendant maintained daily activity reports and assignment sheets;

(2) The period from June 28th, 1943, when the time clocks were installed, to April 30th, 1944, when letter dated April 29th, 1944 (plaintiffs’ Ex. 2) and Bulletins dated May 1st, 1944 (plaintiffs’ Exs. 1 and 3) hereinafter to be referred to, were effective.

The question is, were these plaintiffs instructed to report fifteen, twenty or thirty minutes prior to shift change time to answer assembly or roll call for the purposes heretofore discussed, every . day they were on duty, from the time they first entered the employment of the defendant to April 30, 1944, the Court having previously determined that such early reporting time would necessarily be for the corporation’s benefit and compensable, subject to proof of the time of reporting.

Chief O. R. Allen of the Fire Department, the first witness called to testify for the plaintiffs, stated that before the respective plaintiffs in the firemen group went to their respective posts of duty to commence their regular eight hour shifts they were required to report at the fire station, and therein read the daily work sheets to ascertain the location of their posts for that shift, sign the work sheet, receive any special instructions, and any special equipment to be issued, and then go to their posts, as shown by the work sheet, and relieve their predecessors not later than shift change time. Necessarily, unless each man arrived at his post promptly, his predecessor would be relieved late; and this change of shift on time could only be accomplished 'by the men arriving at the fire station, or wherever they clocked in or checked in and received their instructions for the day, at an earlier period.

The twenty-one firemen who testified, all stated that they were required to report early for these instructions, otherwise their predecessors on the immediately preceding shift would have been relieved late. Some stated they were instructed to report twenty and some thirty minutes early.

Witness E. K. Hunt, a witness for the plaintiffs, stated that roll call was always held before shift change time, and that commencing December 10, 1941, the practice of writing a daily activity report showing the men present and what occurred during the shift, was started; and that a separate report was made for each shift. The roll call was held at 7:30 A. M. for the 8 A. M. shift; 3:30 P. M. for the 4 P. M. (swing) shift; and 11:30 P. M. for the 12 P. M. (graveyard) shift. Later, in December of 1941, the roll call was held at 6:30 A. M. for the 7 A. M. shift; 2:30 P. M. for the 3 P. M. (swing) shift; and 10:30 P. M. for the 11 P. M. (graveyard) shift.

Quite a number of these daily activity reports, prepared and kept by the defendant corporation from December 10, 1941, through April 30, 1944, were introduced into evidence, some containing the names of the -plaintiffs, -as corroborating the reporting, time as alleged-by the plaintiffs.

The Daily Activity Report for December 20, 1941 (plaintiffs’ Ex. 18), indicates that assembly was called at 7:30 A. M.; the Daily Activity Report for December 21, 1941 (plaintiffs’ Ex. 20), indicates that assembly was called at 7:30 A. M.; the Daily Activity Report for December 21, 1941 (plaintiffs’ Ex. 21), indicates that assembly was called at 11:30 P. M.; the Daily Activity Report for December 22, 1941 (plaintiffs’ Ex. 22), indicates that assembly was called at 6:30 A. M.; and the Daily Activity Report for December 23, 1941 (plaintiffs’ Ex. 24), indicates that assembly was called at 6:30 A. M.

These foregoing documents, regardless of whether or not they designate the names of any of the foregoing plaintiffs in this suit, are strongly indicative and persuasive as to what the practice of the defendant corporation was with respect to requiring the plaintiffs to report prior to shift change time.

It is unconscionable for the Court to believe that this pre-reporting time was for the convenience of the plaintiffs, or at their request; on the other hand, they were instructed to report for the benefit of the corporation, and they are accordingly entitled to be compensated therefor accordingly.

These Daily Activity Reports were kept down through April 30, 1944, when O. R. Allen, Chief of the Fire Department, caused the following letter to be published, plaintiffs’ Exhibit 2:

“April 29th, 1944.
“To all officers and members:
“Subject: Discontinuance of reporting time.
“With reference to the bulletin regarding the reporting time which has been signed by me and approved by the Personnel Director and is posted on the Bulletin Board, the following rules and regulations will be followed:
“(1) All officers will prepare the work-assignment sheet, while they are on duty, for the following day.
“(2) Prior to the shift change the officer on duty will consult the ‘work assignment sheet’ for the on-coming shift and will then prepare slips and attach them to the time cards at Gate ‘G,’ showing the on coming men where' they are to report. Where there is no change in their assignment from the previous day, no slip will be made. Any on-coming member picking up his time card and finding no slip attached thereto will report to the same post that he occupied on the previous day. Officers will mark their work assignment sheet with an “ * ” asterisk behind the names of those men whose assignment is being changed. This is for the guidance of the officer on duty in preparing slips for the time cards.
“(3) At the change of shift, the oncoming Captain, or a member designated by him, will go to the time card rack and check to see whether all time cards have been picked up or not. Should he find any time card not picked up, he will know that man is absent and will make re-assignment to cover that post.
“(4) Off-going members will not leave their posts when not properly releived without first calling the Fire Station and will be guided by the orders received from the officer in charge. The officer in charge will adopt the following procedure in cases of this kind. Where the member whc-has not been releived is working on a ‘hot post’ you will hold that member on duty until a releif man can be sent out to relcive him. If the post is not hot, you will notify the member that he may leave and as soon as possible you will then send a man out to take over such post.
“(5) Immediately after the change of shifts, the Lieutenant and releif Lieutenant or other designated members, will make a round of the posts to check their being properly covered. Members working on the shipways will stay at the northwest corner of such shipway on the ground until such inspection has been made and will then go about their duties. Members assigned to ships in outfitting will remain at the foot of gangway on the dock or Finger Pier, until such inspecticf' has been made, and will then go about their duties. For the purpose of making this inspection, the posts will be divided as follows: one man to inspect Berths 1 and 2 and the eight ship ways; the other man to inspect Berths 3 and 10 inclusive. Both bicycles will be held at the Fire Station for this purpose.
“(6) Time cards for off-going members will be in the rack at Assembly Room of the Fire Station and off-going members will pick them up at this point, punch them out and may then leave.
“O. R. Allen,
“Chief, Fire Department,
“Dated: April 29th, 1944.”

Thereupon, on May 1, 1944, O. R. Allen prepared a Bulletin, plaintiffs’ Ex. 5, as follows:

“May 1, 1944.
"Bulletin Fire Department,
“(1) It will no longer be necessary to report 20 minutes before actual starting time of the shift for roll call and assignment of post.
“(2) Notice of your post assignment for the shift will be by memo on your time card.
“(3) You are required to be at your assigned post at the starting time of your respective shifts.
“(4) You are not to leave your post until properly relieved.
“Signed: O. R. A.
“effective date May 1, 1944.
“Approved:
“C. W. Giegerich,
“Personal Director.”

Under .date of May 1, 1944 (plaintiffs’ Ex. 1), there was also prepared a Bulletin for the Guard Force reading as follows:

“(1) It will no longer be necessary to report 20 minutes before actual starting time of the shift for roll call and assignment of posts.
“(2) Your post assignment for the shift will be posted by the time clock.
“(3) You are required to be at your assignment post at the starting time of your respective shift.
“(4) You are not to leave your post until properly releived.
“Signed E. K. Hunt,
“Chief of Police,
“Effective Date May 1, 1944.
“Approved: C. W. Giegerich, personnel director.”

After May 1, 1944, when reporting time, for assembly or roll call, prior to shift change time was expressly discontinued by the defendant, as reflected by the foregoing exhibits, no claim is being made for reporting time by the plaintiffs, but the Gourt is convinced that the plaintiffs have proved, by a preponderance of the evidence, that such a practice did exist up to that time. As further corroboration of plaintiffs’ evidence that they were required to report early for assembly or roll call prior to May 1, 1944, witness Clarence H. Dick, one of the plaintiffs, testified that on one occasion, when he was late for assembly, he was reprimanded and criticized by Sergeant Kling; and witness Marjorie W. Gerlach, another plaintiff, testified that, as guard, she was assigned to the second shift and told to be at assembly at 2:45 P.M.; that she punched the time clock at five or seven minutes before three, and was asked by Sergeant Houchen why she was late.

The testimony of the plaintiffs, generally, was to the effect that prior to the installation of the time clocks on June 28, 1943, it was necessary for them to report for assembly and roll call thirty minutes before the new shift started; and, after the installation of the time clocks on June 28, 1943, to and including April 30, 1944, the time of the roll call, as shown by the Daily Activity Reports, was fifteen minutes before shift change time, instead of the thirty minutes as before, although E. K. Hunt indicated in his letter of April 29, 1944, that the reporting time had been twenty minutes instead of thirty minutes.

The Court is of opinion that the oral testimony and the documentary evidence in this case clearly establishes, by a preponderance of the evidence, that it was the practice of the defendant to require the plaintiffs to report about thirty minutes prior to shift change time for assembly and assignment of duties from December 7, 1941, to June 28, 1943, when the time clocks were installed; and thereafter, that is, from June 28, 1943, to report fifteen minutes prior to shift change time for assembly and assignment through April 30, 1944, as shown by the Daily Activity Reports.

Subject to proof from an analysis of the records, time cards, cancelled pay checks, Daily Report sheets and other documentary records introduced into evidence by an auditor that the plaintiffs reported early, and were on duty at the defendant’s shipyard on the days indicated, they will be allowed for this time and/or overtime.

The Court cannot asume that this reporting time was for the benefit of the plaintiffs, they were there for the purpose of receiving instructions pertaining to their duties. Naturally, it is not the intent of the Court that any employee arriving at the plant earlier than necessary, and to suit his own convenience, should be compensated for that time.

Under the Fair Labor Standards Act there is no duty devolving upon the plaintiffs to keep records; they did not keep any; and, with a few exceptions, they could not remember any particular day on which they were on duty, except perhaps the day they were employed, and necessarily they could not be any more specific as to assembly and roll call. However, there is this duty devolving upon the defendant. Counsel for the defendant seems to attach some significance to the fact that, prior to May of 1944, no plaintiff herein made complaint to defendant regarding uncompensated reporting time, or demand for such compensation, but this fact cannot take away any right the plaintiffs have under the Act.

(6) An arbitrary formula for computing the average time that an employee has worked over a period of time is not permissible

In the case of Mt. Clemens Pottery Co. v. Anderson et al., decided by the Circuit Court of Appeals for the Sixth Circuit on May 21, 1945, 149 F.2d 461, 464, a case involving the Fair Labor Standards Act, where a special master had facts and principles of law to deal with very similar to those in the instant case, and came to the conclusion that: “ * * * a computation of overtime on the basis of a finding that the employees worked more than the time credited to them, but less than the time shown by the entries on the cards would * * * be speculative, inasmuch as the witnesses for the plaintiffs had kept no record of their time and admitted that, apart from the time clock cards, they could not tell on any particular day when they arrived at their departments or commenced preliminary work,” and the District Court, 60 F.Supp. 146, notwithstanding the findings of the special master, applied an arbitrary formula, as follows:

“2. The Court finds that some of the plaintiffs started work before the regular starting time at the beginning of the work day and at the resumption of work after the lunch period. Plaintiffs are not entitled to pay from the minute they punched the time clock; but in computing their hours of work there should be allowed 5 minutes for punching the clock plus an additional 2 minutes to go from the clock to their place of employment, or a total of 7 minutes, before the beginning of work in the morning. There should be allowed a total of 5 minutes at the resumption of work after the lunch period.
“3. In computing the hours of work of plaintiffs as employees of defendant Mt. Clemens Pottery Company there should be included in addition to the hours of work as computed by the company the following:
“ ‘(a) In cases where an employee punched his time clock card more than 7 minutes before his regular starting time at the beginning of a shift, there shall be computed as part of his hours of work the number of minutes by which the punch-in time shown on his time card preceded 7 minutes before the regular starting time.
“ ‘(b) In cases where an employee punched his time clock card more than 5 minutes before his regular starting time after his lunch period, there shall be computed as part of his hours of work the number of minutes by which the punch-in time shown on his time card preceded 5 minutes before the regular starting time.’ ” 149 F.2d 461, 464.

The Circuit Court, supra, in reversing the District Court said:

“The district court concluded as a matter of law that the ‘plaintiffs have established that work was done by some of them which the Company did not give them credit for, and the computation thereof, on the basis above stated, forms a basis for recovery of overtime pay. * * *
“The arbitrary formula applied by the district judge, in lieu of acceptance of the master’s findings, produced a judgment based upon surmise and conjecture, which cannot be sustained. See Townsend v. New York Cent. R. Co., 7 Cir., 141 F.2d 483. * * * To uphold a judgment based on such uncertain and conjectural evidence would be to rest it upon speculation.” (cases cited.)

This Court accepts the decision in the Clemens Pottery Co. case, supra, in the absence of a contrary decision from the Circuit Court of Appeals for the Ninth Circuit, or the Supreme Court, as a correct enunciation of the law applicable to a formula for computing the amount due the plaintiffs, in the absence of competent evidence, as persuasive authority, and such a formula will not be applied in this case. Relative to using formulas, the Supreme Court in the Jewell Ridge Coal Corporation v. Local No. 6167, United Mine Workers of America, etc., 1945, 65 S.Ct. 1063, said:

“Nor do we make any intimations at this time concerning the validity of agreements whereby, in a bona fide attempt to avoid complex difficulties of computation, travel time is averaged or fixed at an arbitrary figure and underground miners are paid on that basis rather than according to their individual travel time.”

(7) Recapitulation and reference to a Master

In order that there may be no misunderstanding of the Court’s decision in this case, the Court will recapitulate its conclusions as follows:

(1) The defendant will not be permitted to offset relief periods against reporting time;

(2) Reporting time for assembly or roll call is compensable under the Fair Labor Standards Act;

(3) Such reporting for assembly or roll call in this case was at the express request of the defendant and for the sole benefit of the defendant; and not for the benefit of the plaintiffs;

(4) Very few witnesses for the plaintiffs in this case were able to be specific as to the days they answered assembly or roll call, and the number of minutes consumed on those occasions; but, in those instances where the testimony along this line was specific and not contradicted, they will be allowed time and/or overtime compensation therefor. While the court expresses doubt that any witness, without records, could state that he had always arrived at a certain time prior to shift change time, yet, in the absence of any testimony to contradict the witness, the court does not feel that such testimony should be disregarded, in view of the many other corroborative witnesses to the general plan;

(5) From the time the plaintiffs entered the employ of the defendant to the installation of the time clocks on June 28, 1943, they will be allowed time and/or overtime compensation, computed in minutes, from the time they answered assembly or roll call to shift change time, as reflected by the Fire Department logs; weekly assignment sheets; daily activity reports or other documentary evidence, but in no event to be over thirty minutes for each day;

(6) From and after June 28, 1943, through April 30, 1944, the plaintiffs will be allowed time and/or overtime compensation, computed' in minutes, from the tim.e they answered assembly or roll call to shift change time, as reflected by the daily activity reports, time clock cards, or' other documentary evidence, but in no event to be over fifteen minutes for each day.

(7) Liquidated damages under the Act and a reasonable attorney’s fee to be hereafter determined by the Court will likewise be allowed. ' •

The reason the Court has limited the pre-reporting time to not more than thirty and fifteen minutes for each day in sections (5) and (6) respectively, is because such pre-reporting time was requested in the Daily Activity Reports; and because the Court concludes that earlier reporting, if any, was for the convenience of the plaintiffs themselves and not compensable.

The motion of the plaintiffs for a reference to a special master is hereby granted and his fee and expenses shall be borne by both sides of the case equally. The Court suggests that both sides, through their counsel, confer with each other immediately and try to agree upon the special master to be appointed by the court and present an Order to the court for his appointment; and, if counsel are unable to agree upon a special master to be appointed, the Court will make the appointment.

The reference to a Special master will be under Rule 53(c) of the Rules of Federal Procedure, 28 U.S.C.A. following section 723c, and his powers will be limited for the sole purpose as stated in this Opinion. He will be authorized to take evidence and have an audit made of the records, time clock cards, daily assembly or activity reports, cancelled pay checks and all other documents introduced into evidence in this case and to make findings and conclusions therefrom for his report and audit, not inconsistent with this Opinion. The Findings and Conclusions of the Special Master and his audit showing his method of computing the time and/or overtime for each plaintiff now in the case will be specific as to dates and amount determined to be due, and will be filed in the case.

The Court heretofore dismissed this case against all defendants' except the Consolidated Steel Corporation, Ltd., a corporation ; and at this time the Court orders that the counterclaim of the said defendant against all the plaintiffs now in the case, including those plaintiffs who were heretofore dismissed from the case at the request of the plaintiffs’ counsel, be likewise dismissed, the Court having duly considered the said counterclaim.

Counsel for the plaintiffs will prepare Findings of Fact and. Conclusions of Law and a judgment in accordance with this Opinion, supplemented by the additional Findings and Conclusions of the Special Master, not inconsistent with this Opinion, including therein the amounts due each plaintiff for time and/or overtime compensation, and for liquidated damages, in accordance with the Fair Labor Standards Act, and the audit, and present same to the court for signature, leaving space therein for the attorney’s fees of plaintiffs, which will be allowed by the court, and costs of suit, after having presented same to counsel for the defendant for approval as to form.

       See. 338 Cal.Code of Civil Procedure; Culver et al. v. Bell & Loffland, Inc., 9 Cir., 1944, 146 F.2d 29; see also Abram et al. v. San Joaquin Cotton Oil Co., D.C. S.D.Cal., 1942, 46 F.Supp. 969.

       For a discussion of the interpretation of Rule 15(c) of Federal Rules of Civil Procedure, 28 U.S.C.A. following section 723e, “Relation Back of Amendments. Whenever the claim or defense asserted in the amended pleading arose out of the conduct, transaction, or occurrence set forth or attempted to be set forth in the original pleading, the amendment relates back to the date of the original pleading.” See Sec. 1926, et seq. of Cyclopedia of Federal Procedure (2d Ed.) vol. 5.

       Barbe v. Cummins Const. Corporation, 4 Cir., 1943, 138 F.2d 667; Brue et al. v. J. Rich Steers, Inc., D.C.S.D.N.Y., 1945, 60 F.Supp. 668, 9 Labor Cases, Par. 62614; Ritch et al. v. Puget Sound Bridge & Dredge Co., D.C.W.D.Wash., 1945, 60 F.Supp. 670, 9 Labor Cases, Par. 62651, and to employees engaged in guard and fire watching duties. Noonan v. Fruco Const. Co., 8 Cir., 1943, 140 F.2d 633.

       Frank J. Edmondson et al. v. Yellow Truck and Coach Company, U.S.D.C., East. Dist. of Mich., So. Div., No. 3067 (Feb. 8, 1945); 9 Labor Cases (C.C.H.) Par. 62,543.

       “The miners begin their day by arriving on the company property at a scheduled hour and going to the bath house, where they change into working clothes. They then walk to the tally house near the mine entrance or portal; there they check in and hang up individual brass checks, furnished by petitioners, on a tally or check-in board. This enables the foreman and other officials to tell at a glance those individuals who have reported for work and those production and service crews that are incomplete and in need of substitutes. Vacancies are filled and the head miners and crews receive any necessary instructions. In addition, each miner either rents a battery lamp for the day or buys a can of carbide each day or two for underground illumination purposes. And at some of the mines, many miners stop at a tool box or tool house on the surface to pick up other small supplies and tools necessary for their work. These activities consume but a few minutes.
      “The miners thereupon are required to report at the loading platform at the mine portal and await their turn to ride down the inclined shafts of the mines. Originally the miners could reach the working faces entirely by foot, but as the shafts increased in length petitioners provided transportation down the main shafts. The miners accordingly ride part of the way to the working faces in ore skips or regular man trips, which operate on narrow gauge tracks by means of cables or hoisting ropes. The operation of the skips and man trips is under the strict control and supervision of the petitioners at all times and they refuse to permit the miners to walk rather than ride. Regular schedules are fixed; loading and unloading are supervised; the speed of the trips is regulated ; and the conduct of the miners during the rides is prescribed----The length of the rides in the dark, moist, malodorous shafts varies in the different mines from 3,000 feet to 12,000 feet. The miners then climb out of the skips and man trips at the underground man-loading platforms or “hoodlums” and continue their journeys on foot for distances up to two miles. These subterranean walks are filled with discomforts and hidden perils. The surroundings are dark and dank. The air is increasingly warm and humid, the ventilation poor. Odors of human, sewage, resulting from a complete absence of sanitary facilities, permeate the atmosphere.” (Italics supplied.)


source: Caselaw Access Project

author: SMITH, District Judge.

license: Public Domain

text:
    UNITED STATES v. KOPPELMAN.
    No. 10786 C. D.
    District Court, M. D. Pennsylvania.
    June 19, 1945.
    Frederick V. Follmer, U. S. Atty., of Scranton, Pa., and Max H. Goldschein and Boris Kostelanetz, Sp. Assts. to Atty. Gen., for the United States.
    J. Julius Levy, Stanley F. Coar, and Robert E. Scragg, all of Scranton, Pa., for defendant.
   SMITH, District Judge.

The defendant was tried and convicted on four counts of an indictment, each of which charged him with a violation of Section 47 of the Criminal Code, 18 U.S. C.A. § 100, the embezzlement of property of the United States. Thereafter, on July 29, 1943, pursuant to the provisions of the Probation Act, 18 U.S. C.A. §§ 724-728, the imposition of sentence on three of the four counts was suspended and the defendant was placed upon probation for one year. This period of probation expired on July 29, 1944.

The defendant is before the Court at this time accused of a breach of the conditions of his probation. It is specifically charged: First, that the defendant, a partner in the Lackawanna Pants Manufacturing Company, “with intent to defeat or evade the assessment intended to be made,” filed with the collector of internal revenue a partnership return for the taxable year 1943 “which he did not believe to be true and correct as to every material matter,” in violation of the Internal Revenue Code; and, second, that the defendant, a member of a copartnership, received money “otherwise than in payment to him of a just debt,” and, “with intent to defraud,” omitted “to make a full and true entry thereof in the books and accounts” of the partnership, in violation of the laws of Pennsylvania.

These charges are based wholly upon evidence that two business transactions of the partnership, the Lackawanna Pants Manufacturing Company, were handled by the defendant in an unusual manner. It appears from the evidence that these transactions, contrary to established business practice, were not entered in the usual books of account and the proceeds therefrom were deposited in a bank account, the existence of which was likewise not recorded in the usual books of account. The transactions had their inception and were completed prior to the entry of judgment in the instant case.

This complete absence of proper entries in the books of accounts, however, was ultimately reflected in the partnership return for the taxable year 1943, filed by the defendant within the period of probation. The partnership therein reported a gross-income of $3,461,579.48, a gross profit of $790,795.05, and a net income of $430,-085.43. The gross income was incorrectly stated, at least in the amount of the omission, by approximately $12,000. This fact, as reprehensible as it may seem, properly considered in the light of the related facts, will not support an inference that the understatement of gross income was either “materially” false or “wilfully” made, the criteria prescribed by the statute. This conclusion is confirmed by the complete absence of any proof that the individual return of either the defendant or his partners was “materially” affected by the understatement of gross income, a fair test of materiality.

Section 3616(a) of the Code prohibits, as an offense against the United States, the delivery or disclosure to the collector of internal revenue of “any false or fraudulent * * * return * * * with intent to defeat or evade the * * * assessment intended to be made.” A mere understatement of income, although false, is not an offense, within the meaning of this Section, in the absence of an “intent to-defeat or evade the * * * assessment”" of a tax. It is clear, upon a reading of the statute, that an “intent to defeat or evade the * * * assessment” of a tax is an essential element of the offense therein defined.

It cannot be successfully urged, under the evidence in the instant case, that the omission of $12,000 from the “gross income,” as reported in the partnership return, was prompted by an intent to defeat or evade the tax imposed on either the defendant or his partners. The record is devoid of any evidence that this omission was ultimately reflected in an understatement of income in the return of either the defendant or his partners. It cannot be inferred, in the absence of such evidence, that the partnership return was fraudulently made, with intent to defeat or evade the assessment of a tax imposed by the statute.

The second charge urged against the defendant rests on the same proof. It is contended that the failure of the defendant to make full and true entry of the said transactions in books of the partnership was a violation of the laws, of Pennsylvania. There is, however, no proof that this failure was prompted by an “intent to defraud,” an essential element to the offense defined in the statute. The partners had full knowledge of the transactions, and there is no suggestion that others were, or could be, affected by their omission from the books of account.

The evidence, considered in its entirety and properly evaluated, will not sustain a finding that defendant was guilty of any of the charges or of conduct violative of the conditions of his probation. The evidence, as it now stands, will not sustain an inference consistent with guilt and inconsistent with innocence, the standard which must be applied in the evaluation of the evidence. The doubt engendered by either the proof or the absence of it must be resolved in favor of the defendant.

The Probation Act invests the court with the power “to suspend the imposition or execution of sentence and to place the defendant upon probation for such period and upon such terms and conditions as (it) may deem best,” when “the ends of justice and the best interests of the public, as well as the defendant, will be subserved thereby.” The power of the court to “revoke or modify any condition of probation” is equally coextensive and is limited only by the same criteria.

“There is no suggestion in the statute that the scope of the discretion conferred for the purpose of making the grant is narrowed in providing for its modification or revocation. The authority for the latter purpose immediately follows that given for the former, and is in terms equally broad. * * * No criteria for modification, or revocation are suggested which are in addition to, or different from, those which pertain to the original grant. The question in both cases is whether the court is satisfied that its action will subserve the ends of justice and the best interests of both the public and the defendant. The only limitation and this applies to both the grant and any modification of it, is that the total period of probation shall not exceed five years.” Burns v. United States, 287 U.S. 216, 221, 53 S.Ct. 154, 156, 77 L.Ed. 266.

It is not to be assumed, however, that this discretionary power is so free of limitation as to vest in the court the right to do as it pleases. The power is circumscribed by the most binding of limitations, those imposed by a right conscience responsive to moral obligations and principles of justice. Its exercise implies conscientious judgment, not arbitrary action. “It takes account of the law and the particular circumstances of the case and is ‘directed by the reason and conscience of the judge to a just result.’ * * * While probation is a matter of grace, the probationer is entitled to fair treatment, and is not to be made the victim of whim or caprice.” Burns v. United States, supra, 287 U.S. at page 223, 53 S.Ct. at page 156, 77 L.Ed. 266.

The original judgment in this case, to wit, the suspending of the imposition of sentence and the placing of the defendant on probation, was entered by another judge. It is not within my power to revoke or modify that judgment, except as provided by statute, even though I, on the same evidence, but guided by the principles herein-above stated, might have pursued a different course and arrived at a different result.

The warrant on which the defendant was arraigned is quashed and these proceedings are dismissed.

       26 U.S.C.A. Int.Rev.Code, § 145(e) and § 8616(a).

       18 P.S. 4845.

       § 145(c) “Any individual who willfully makes and subscribes a return which he does not believe to be true and correct as to every material matter, shall be guilty of a felony, * * * .” (Emphasis by the Court.)

       § 8616. “Whenever any person—
      “(a) False returns. Delivers or discloses to the collector or deputy any false or fraudulent list, return, account, or statement, with intent to defeat or evade the valuation, enumeration, or assessment intended to he made; * * *
      “(b) * * * he shall be fined * * * or be imprisoned * * * (Emphasis by the Court.)

      § 4845. “Whoever, being a member of any copartnership, or association, and as such, receives or possesses himself of any money or other property of such co-partnership, * * * otherwise than in payment to him of a just debt or demand, and, with intent to defraud, omits to make or to cause or direct to be made a full and true entry thereof in the books and accounts of such copartnership, * * * is guilty of a misdemeanor. * * *” (Emphasis by the Court).

       18 U.S.C.A. § 734.


author: BARD, District Judge.

text:
    CAMPOS v. CURTIS BAY TOWING CO. OF PENNSYLVANIA et al.
    No. 59.
    District Court, E. D. Pennsylvania.
    July 20, 1945.
    William K. Given, Jr., and Samuel B. Fortenbaugh, Jr., of Shields, Clark, Brown & McCown, all of Philadelphia, Pa., for libellant
    Joseph W. Henderson and Harrison G. Kildare (of Rawle & Henderson), all of Philadelphia, Pa., for respondent Curtis Bay Towing Co.
    Otto Wolff, Jr., of Philadelphia, Pa., for Moran Towing & Transp. Co.
   BARD, District Judge.

This is a libel in admiralty brought by Julio Ribeiro Campos, owner of the bark Foz do Douro, against Curtis Bay Towing Company of Pennsylvania, operator of the Tug H. S. Falk, and Moran Towing and Transportation Company, Inc., operator of the Tug Nancy Moran, for damages caused by collision of the Nancy Moran with the Foz do Douro on April 10, 1943 on the Delaware River off the entrance of the Delaware and Chesapeake Canal. At the conclusion of libellant’s testimony the Court of its own motion directed that the libel be dismissed as to the Curtis Bay Towing Company of Pennsylvania, operator of the H. S. Falk.

On the afternoon of April 10, 1943 the Portuguese bark Foz do Douro, after having been aground on the Pea Patch Shoal, in the Delaware River, was floated by the combined efforts of the tugs Nancy Moran and H. S. Falk. Under the direction of Commander Eugene C. Kelly, a Delaware River pilot on board the Foz do Douro, the tugs began a towing operation to place the bark at a safe anchorage.

The Nancy Moran took a hawser approximately 200 feet in length from her stern towing bitt to a bitt on the starboard bow of the Foz do Douro and the H. S. Falk took a line from the stern of the bark. The line from the stern was thrown off shortly after the towage began and the H. S. Falk did not participate thereafter in the towage. The course was east southeast with the bark following the course of the Nancy Moran on a hawser. A brisk following wind from the northwest striking the masts, rigging and furled sails of the bark provided enough motive power to permit the bark to maneuver independently of the tug.

The towage continued uneventfully for about twenty minutes, the Nancy Moran dead ahead of the Foz do Douro, with the two vessels following a straight course at about four miles per hour. Suddenly the Foz do Douro began to gather headway and sheered to the starboard. In an attempt to correct this sheer, the Nancy Moran ported her rudder and hooked up her engines full speed ahead. This maneuver brought the towing hawser across the bow of the bark and placed the tug off the port quarter. Despite these efforts, the sheer remained unbroken and the bark began to pull ahead of the tug. As the bark pulled ahead, the Nancy Moran swung on the taut hawser in an arc centered at the bow of the bark until the stern of the tug collided with the port quarter of the bark about 60 feet from her stern. The master of the tug ordered the towing hawser cut while there was still about 60 feet between the vessels. The deckhand slipped when he swung the axe and he was unable to cut the hawser until the very moment when the collision occurred or just prior thereto. Upon severance of the hawser, the tug sprang away from the bark. The Foz do Douro then maneuvered to a safe anchorage without further assistance from the Nancy Moran.

An action by a tow against her tug for injuries caused by the tug is a suit ex delicto and not ex contractu. The Syracuse, 12 Wall. 167, 79 U.S. 167, 20 L.Ed. 382; The J. P. Donaldson, 167 U.S. 599, 17 S.Ct. 951, 42 L.Ed. 292, and, as in the ordinary tort action, the burden of proving negligence and that this negligence was a proximate and contributing cause of the iniury rests unon libellant. Stevens v. The White City. 285 U.S. 195, 52 S.Ct. 347, 76 L.Ed. 699; The Lizzie D. Shaw, 3 Cir., 47 F.2d 820; The Clarence L. Blakeslee, 2 Cir., 243 F. 365. The tug is not an insurer of the safety of her tow, but has the duty to exercise such reasonable care and maritime skill as prudent navigators employ in the performance of similar services. Stevens v. The White City, supra; The Lizzie D. Shaw, supra ; Delaware Dredging Co. v. Graham, D.C.E.D.Pa., 43 F.2d 852.

The fueled sails, masts and rigging of the bark offered considerable resistance to wind, and the brisk following wind over the stern enabled the bark to proceed at approximately five knots per hour independently of the motive power of the tug. Under these circumstances it was recognized that if the H. S. Falk would take a line from the stern of the bark or if the bark would be permitted to proceed stern-first under the motive power of the wind with the Nancy Moran taking a line from the bow of the bark and following it to the anchorage, that the towage could be made with greater safety. These alternative methods of towage would have permitted the tugs to control, to a greater degree, any sudden movement of the bark which might be caused by the wind.

Commander Kelly, the pilot on board the Foz do Douro, was in charge of the towing operation, The Civilta and The Restless, 103 U.S. 699, 26 L.Ed. 599, and it was his duty to direct the operation of the bark and to interfere and direct the operation of the tug if the tug failed to use reasonable care or exercise proper maritime skill under the circumstances. The Shubert, D.C.E.D.Pa., 45 F. 497. The Foz do Douro was not a dumb tow. It had a full crew and a competent pilot on board and had independent motive power. It was therefore the duty of the bark’s pilot to use every available facility of the bark to assist in breaking the sheer. The Willowpool, 2 Cir., 65 F.2d 385; The Jacob Brandow, D.C.S.C., 39 F. 831. Yet the helmsman on the bark testified that Kelly gave no order after the sheer began to port the rudder of the bark which would have materially assisted the tug in its efforts to break the sheer.

Commander Kelly’s failure to adopt one of the alternative methods of towage, presumably in the interest of economy or speed, and his failure to direct the use of the bark’s rudder to help break the sheer may have been negligence having material relationship to the collision for which the Foz do Douro should assume responsibility. The China, 7 Wall. 53, 19 L.Ed. 67; The Helen, 2 Cir., 5 F.2d 54; Standard Oil Co. of New Jersey v. United States, S.D. Ala., 27 F.2d 370. However, a determination whether Commander Kelly was negligent and whether this negligence, if any, was a proximate cause of the collision is not necessary in this opinion.

Libellant urges that, without regard to the cause of the backward arc movement of the tug, the master of the tug did not exercise reasonable care and the maritime skill of a prudent navigator in that he failed to cut the hawser in time to avoid the collision. When the sheer of the bark began, it was incumbent upon the Nancy Moran to correct the sheer by turning to port and pulling full speed ahead, and it was her duty to continue these efforts so long as it was possible to do so and still avoid the collision. It was apparent that the tug, with her engines running full speed ahead, would forge ahead clear of the bark the instant the hawser could be cut. The master of the Nancy Moran gave the order to cut the hawser when the tug was approximately 60 feet from the port quarter of the bark. While in the act of cutting the hawser with an axe the deckhand slipped and fell to the deck and the hawser was thereupon cut at or about the moment when the collision occurred. Libellant urges that the master of the tug should have anticipated the possibility that the deckhand might slip and that he was negligent in not allowing sufficient time for cutting the hawser in the light of that possibility.

Precisely when the moment had arrived for cutting the hawser was a question for the master of the Nancy Moran to determine in the exercise of his judgment as an experienced navigator. The narrow line of demarcation between negligent and non-negligent error of judgment is expressed in The Eli B. Conine, 2 Cir., 233 F. 987, at page 988: “ ‘Lack of care under the circumstances/ which is negligence, is rarely willful or reckless; it is usually error of judgment. But 'the converse is not true — that every error of judgment is negligence. The error must be measured by the standards of conduct and business knowledge furnished by the evidence and by the experience of which even courts can take cognizance without direct testimony. If the error, viewed from that standpoint, is such as. would not have been committed by a reasonable man, reasonably skilled in his occupation, it is negligence.” When thus tested, the delay in ordering the cutting of the hawser cannot be considered negligence. The exercise of judgment by the master of the Nancy Moran in determining the exact moment when the order should be given was that of a reasonable man skilled as a mariner. If the deckhand had not slipped and the hawser cut immediately after the order was given, no one could have quarreled with the timeliness of the master’s decision. It was only in the light of after events and in the exercise of hindsight that libellant charges the master with negligence.

There remains only the question of whether negligence can be imputed to the Nancy Moran from the fact that her deckhand slipped and fell when he first attempted to cut the hawser. The stern deck of the Nancy Moran was wet from spray thrown over the three foot freeboard by the brisk wind and the pull of the hawser caused by the starboard sheer of the bark gave the Nancy Moran a sharp list to the starboard. There is no evidence to indicate that the deckhand, who had adequate experience or anyone else on board the tug was guilty of any negligent act contributing to his fall. His fall must be regarded as a fortuitous and unexpected event which, although it directly contributed to the accident, cannot form the basis of a compensatory action.

Libellant has not sustained its burden of proving any negligence on the part of respondent which was a contributing factor in the collision. Stevens v. The White City, supra. The libel must therefore be dismissed as against Moran Towing and Transportation Company, Inc., respondent.

I make the following special findings of fact:

1. Libellant Julio Ribeiro Campos, a citizen and resident of the Republic of Portugal, was on April 10, 1943, and still is, owner of the Bark Foz do Douro, of Portuguese registry.

2. Respondent Moran Towing and Transportation Company, Inc., is a corporation existing under the laws of the State of New York, having its office and principal place of business at 17 Battery Place, in the City and State of New York, and was at all times pertinent hereto operator of the Tug Nancy Moran.

3. The Foz do Douro is a steel hulled, four masted bark measuring 260 feet in length by 43 feet in breadth, without motive power of any kind other than her sails On April 10, 1943 her top-masts were un-stepped and her sails furled. She was in all respects seaworthy, properly manned by a Portuguese crew, and properly equipped and supplied. She was heavily loaded, down 13 feet at the bow and 17 feet 3 inches at the stern.

4. The Tug Nancy Moran is a modern diesel electric tow boat with engines of 1000 horsepower capable of a forward speed of at least eleven knots per hour. She is 94 feet long, 22 feet wide and dOVz feet deep. ’

5. On the afternoon of April 10, 1943, the Foz do Douro was floated by the Nancy Moran and the H. S. Falk from the place where she lay fast aground by the stern on the southern edge of Pea Patch Shoal in the Delaware River off the mouth of the Delaware and Chesapeake Canal.

6. After the Foz do Douro had been floated, the Nancy Moran and the H. S. Falk undertook to tow the bark from the southern edge of the Pea Patch Shoal to a prescribed anchorage nearby.

7. The operation of towing the bark to the anchorage was under the direction of Commander Eugene C. Kelly, a Delaware River pilot, who was on board the bark and acting as her pilot.

8. At the commencement of the towing operation the H. S. Falk, upon orders from Commander Kelly, took a line from the stern of the bark and made it fast to her bow. Shortly after the towing operation began this line was cast off at Kelly’s direction. The H. S. Falk did not participate thereafter in the towing operation but continued to follow the bark and was about 500 feet off her stern until after the collision occurred.

9. The Nancy Moran took the Foz do Douro in tow upon a towing hawser approximately 200 feet in length attached to the stern towing bitt of the Nancy Moran and to a bitt on the starboard bow of the Foz do Douro. The course was east southeast.

10. During the entire course of the tow-age the wind velocity was 28 to 30 miles per hour from the northwest following over the stern quarter of the bark. The tide was flood either at low speed in the northwest direction or at slack.

11. Approximately twenty minutes after the towing operation began the Foz do Douro suddenly sheered to her -starboard. The Nancy Moran endeavored to correct the sheer of the bark by porting her rudder and then by increasing her forward speed.

12. The Foz do Douro continued to sheer and ran ahead of the Nancy Moran. The Nancy Moran swung in an arc at the end of the taut towing hawser until the stern of the Nancy Moran collided at an angle with the port quarter of the bark about 60 feet from the stern about five minutes after the sheer began, causing damage to the plates of the bark.

13. At all times between the moment the bark began to sheer and the collision the towing hawser was taut and the engine of the Nancy Moran was running ahead.

14. When the stern of the Nancy Moran was approximately 60 feet from the port quarter of the bark, the master of the Nancy Moran ordered her deckhand to cut the towing hawser. The deckhand slipped on the wet steel deck when he swung the axe to cut the hawser. He immediately regained his footing and cut the hawser just at the time or immediately before the tug struck the Foz do Douro. The interval of time between the master’s order to cut the hawser and the actual cutting of the hawser was but a few seconds.

15. When the towing hawser was severed the Nancy Moran pulled away sharply from the bark.

16. After the collision and severance of the hawser the Foz do Douro proceeded under her own headway for about ten minutes and maneuvered to a proper anchorage without assistance.

Conclusions of Law.

1. The master of the tug Nancy Moran was not negligent in his determination of the moment when' the order tci cut the hawser connecting his vessel and the Foz do Douro should be given under the circumstances.

2. The delay in cutting the hawser due to the fall of the deckhand after the order was given was not caused by negligence of the Nancy Moran or of any member of her crew.

3. Libellant has not sustained the burden of proving that the collision of the Nancy Moran and the Foz do Douro was caused to any degree by negligence of the Nancy Moran.

4. The libel should be dismissed as against Moran Towing and Transportation Company, Inc., operator of the Tug Nancy Moran.


author: SWEENEY, District Judge.

text:
    UNITED FRUIT CO. v. HASSETT.
    Civil Action No. 2777.
    District Court, D. Massachusetts.
    Aug. 2, 1945.

      Sam G. Baggett, 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 Philip R. Miller, Sp. Assts. to Atty. Gen., for defendant.
   SWEENEY, District Judge.

This is an action for the recovery of income taxes for the year 1938 paid by the plaintiff to the defendant on June 16, 1941, together with interest thereon. The question presented is whether, in calculating the proportion of a foreign subsidiary’s income tax which a domestic parent corporation may claim as a credit for foreign taxes paid, the dividends received by the parent and the subsidiary’s accumulated profits from which they were paid, should include income which was free from foreign taxes. The applicable statutory provisions are found in Section 131 of the Revenue Act of 1938, 52 Stat. 447, 26 U.S.C.A. Int.Rev.Acts page 1068. All of the essential facts have been stipulated.

The plaintiff, United Fruit Company, the domestic parent, is a New Jersey corporation which owns all of the stock of a British corporation, Elders & Fyffes, Ltd. (hereinafter referred to as the subsidiary). In the year 1938 the foreign subsidiary had a taxable income under the laws of Great Britain of $397,475.09 on which it paid income taxes aggregating $100,931.24. In addition, it derived a profit of $76,476.71 from casual capital gains not included in taxable income under British law. The Bureau of Internal Revenue adjusted the foreign subsidiary’s income to a United States income tax basis and determined that the total profits of the foreign subsidiary for 1938 were $434,879.49, including the $76,-476.71 of capital gains. After deduction of the income tax paid to Great Britain, $100,931.24, there remained a profit of the foreign subsidiary amounting to $333,948.-25.

During 1938 the plaintiff received from its subsidiary dividends aggregating $1,-421,500, of which $331,200.03 was determined by the Revenue Agent to have been paid out of the subsidiary’s profits of 1938. The remainder of the dividend was determined to have been paid out of profits for the years 1937 and 1919. In 1938 the plaintiff had a total taxable income of $9,270,-629.88, including the entire dividend received from the foreign subsidiary. On this basis the plaintiff filed a tax return on June 15, 1939, indicating a total tax liability of $986,641.21 against which a foreign tax credit of $350,678.38 was claimed, reducing its net income tax liability, as shown by the return, to $635,962.-83. This smn was paid during 1939.

On June 16, 1941, the Commissioner of Internal Revenue made a deficiency assessment against the plaintiff which resulted in the payment on that date by plaintiff to the defendant of the sum of $20,967.02. Among the items on account of which the assessment was made was an increase of $8,150.17 due to the disallowance of a portion of the credit claimed because of payment of foreign income taxes by plaintiff’s subsidiary. The 'disallowance was due to the exclusion of the $76,476.71 in untaxed foreign profits from the ratios prescribed by statute to determine the fair share of its subsidiary’s taxes to which plaintiff was entitled as a credit against dividends received from the subsidiary.

Claim for refund was duly made by the plaintiff and denied by the defendant. This suit involves only the item of $8,150.-17 disallowed as credit for foreign taxes paid together with interest thereon.

Section 131 (f) of the Revenue Act of 1938, supra, which authorizes the credit to the parent corporation for foreign taxes paid by the subsidiary from which it received its dividends, sets forth the following method to determine the fair share of the tax for which the parent may claim credit:

(1) The foreign tax credit which the parent may claim is limited to that proportion of the tax paid by the subsidiary upon its accumulated profits which the dividends received bear to the amount of such accumulated profits. Reducing this restriction to a mathematical formula, the proportion of the foreign tax deemed to have been paid :is determined by the following equation:

Dividends received by parent X Accumnlated profits of subsidiary Foreign tax paid by subsidiary Tax deemed to- have been paid by parent

The Supreme Court in American Chicle Co. v. United States, 316 U.S. 450, 62 S.Ct. 1144, 86 L.Ed. 1591, held that the multiplicand in this formula should not be the total tax paid but only that portion of the tax which was paid upon or with respect to the accumulated profits. Since taxes are ordinarily paid on income before taxes, and “accumulated profits” is defined in the statute as income remaining after taxes, the taxes paid on accumulated profits is arrived at by multiplying the total tax paid by a fraction, the numerator of which is the accumulated profits and the demoninator of which is the total profits. Inserting this so-called “middle fraction” the formula becomes:

Dividends recived by parent X Accumulated profits of subsidiary Accumulated profits of subsidiary x Total profits of subsidiary Foreign tax paid by subsidiary Tax deemed to have been paid by parent

By canceling the denominator of the first fraction against the numerator of the second fraction the formula may be simplified:

Dividends received by parent Total ' profits of subsidiary Tax deemed X Foreign Tax t0 haTe paid by = been paid subsidiary by parent

(2) The second limitation imposed by the statute provides that the maximum foreign tax deemed to have been paid by the parent for which credit may be claimed may not exceed that proportion of the parent’s total income taxes which its dividends from the foreign subsidiary bears to its total net income from all sources. The formula which results from this limitation may be stated as follows:

Dividends received by parent x Entire net income of parent for the year Total tax of parent for the year before credit Maximum tax deemed — to have been paid

Both plaintiff and defendant agree as to-the formulae stated. The point of departure comes in the interpretation of certain elements in the formulae. The plaintiff maintains that the amounts representing dividends received and the subsidiary’s accumulated and total profits may be computed without reference to the question-whether untaxed income of the foreign subsidiary is included therein. The defendant contends, however, that, in determining the proportion of the taxes paid upon income abroad which the parent is entitled to claim as a credit, the “dividends” for which tax credit is sought, as well as “subsidiary’s accumulated profits”' and “subsidiary’s total profits” should include only amounts upon which taxes were paid by the subsidiary.

In terms of the first limiting fraction the plaintiff makes the following calculation with reference to income received by the subsidiary in 1938:

331,200.03 x 333,918.25 x $100,931.24 333,948.25 - 434,879.49“ ~ i76'868-25’

The defendant excludes from "dividends received” and also from “accumulated profits” and “total profits” the $76,476.71 which was determined to have been paid out of casual capital gains which had not been subjected to the British income tax. He maintains that “accumulated profits” and “total profits” as. used in the statute includes only such profits as were subjected to tax in the foreign country and that hence “dividends received” includes only the portion of the dividends paid out of the profits of the year which were subjected to income tax in Great Britain. The-defendant therefore contends that the correct calculation is as follows:

254,723.32 X 257,471.54 257,471.54 858,402.78 $100,931.24 $71,733.65

The plaintiff’s position is that “total profits” as used in the statute means the total amount of the foreign subsidiary’s g'ains, profits on income determined in accordance with, the tax laws of the United States and that “accumulated profits” means the total amount of the foreign subsidiary’s gains, profits or income, so determined, in excess of the foreign income, war-profits and excess profits taxes imposed upon or with respect to such profits ■or income. The plaintiff therefore asserts that casual capital gains which would form .a part of the taxable income of the foreign subsidiary computed in accordance with the revenue laws of the United States should be included in “total profits” and “accumulated profits” even though such gains were not taxed in Great Britain. In the present case under either interpretation of the first limiting fraction the tax deemed to have been paid would be greater than the maximum credit allowed under the .second limiting fraction. The latter formula thus governs the allowable credit in the instant case. However, the question of the inclusion of the casual capital gains in the second limiting fraction rests upon the same considerations involved in the first fraction.

In determining the maximum credit ■available under the second limitation stipulated in the proviso of Section 131 (f) the defendant again excludes from the numerator of the limiting fraction that part of the dividends determined to have been paid out of casual capital gains which had not been subjected to income tax in Great Britain. Defendant makes the following calculation with regard to the second fraction:

254,723.32 x $987,977.70 '9,270,629.88* ~ S27.*46-®

The plaintiff contends that the numerator of this second limiting fraction should be the entire dividend paid out of profits for the year 1938 unreduced by the amount determined to have been paid out of casual capital gains not subjected to income tax in Great Britain. Plaintiff makes this calculation :

331,200.02 $987,977.70*

Since the second limiting fraction results in the lower amount, it is the effective maximum applicable here. If plaintiff’s contention that $35,296.22 is the proper maximum foreign tax credit is correct, then •the plaintiff is entitled to recover $8,150.17 with interest thereon.

Whatever may be the rule with regard to the resolution of doubts in construing the provisions of taxing statutes in general, it seems to have been established that exemptions from taxation, as a matter of legislative grace, must be strictly construed in favor of the taxing authority. They are not to be extended by implication beyond the clear import of the language granting the exemptions. Trotter v. Tennessee, 290 U.S. 354, 356, 54 S.Ct. 138, 78 L.Ed 358; Burroughs Adding Machine Co. v. Terwilliger, 6 Cir., 135 F.2d 608, 610. The plaintiff has urged that the instant case involves primarily, not the construction of the exemption itself, which is granted in Section 131 (a), but the limitations on the exemption in Section 131 (f), and particularly the limitation contained in the proviso of that section. He maintains that a proviso should not be extended to accomplish an objective not clearly within its purpose, or to take a case out of a general enacting clause which does not fall fairly within its terms. United States v. Dickson, 15 Pet. 141, 165, 10 L.Ed. 689; United States v. McElvain, 272 U.S. 633, 639, 47 S.Ct. 219, 71 L.Ed. 451. The Government contends that Section 131 (f) more properly has reference to methods of calculation of the foreign tax credit. Even if the plaintiff’s view as to the operation of this section is the correct one, he is not entitled to take advantage of the rule of construction laid down by Mr. Justice Story in United States v. Dickson, supra. The proviso in Section 131 (f) relates to, and limits, the amount of the credit for foreign taxes deemed to have been paid by the parent. If any rule of construction exists in favor of the Government as to the exemption provisions, the same rule may be called upon when the issue relates to the scope of the exemption granted.

However, I am not persuaded that a careful reading of the statutory text itself, or a review of its legislative history compels the acceptance of the construction of Section 131 (f) which has been advanced by the defendant, even when aided by the rule of strict interpretation of provisions for exemptions. Of greater import in the solution of the problem at hand is the history of administrative practice, and the successive reenactments by Congress of the provisions of Section 131 (f) after the administrative practice had become crystallized.

The provisions relating to the credit for taxes paid by a foreign subsidiary first appeared in Section 240(c) of the Revenue Act of 1918, 40 Stat. 1081. Section 238 (e) of the Revenue Act of 1921, 42 Stat. 258, contained language substantially similar to that in Section 131 (f) of the Revenue Act of 1938. Until the issuance of Regulations 77 under the Revenue Act of 1932, the regulations for the application of Section 131 (f) were little more than repetitions of the statute. Article 697 of Regulations 77, however, gives detailed instructions with respect to the computation of the tax deemed to have been paid under Section 131 (f). The third example given in Article 697 follows the formula as construed by the plaintiff in computing the foreign tax credit. There is no provision in this example for the exclusion of any part of the income of the French subsidiary which was not subjected to income tax in France. It is conceivable that the example given comprehends only the situation where the taxable income was the same under both United States and French law. However, Article 693 of Regulations 77 requires the domestic corporation claiming the foreign tax credit to support its claim by filing Form 1118. As a note to Item 5, Schedule B, of Form 1118, for 1938 calling for the total profits of the foreign corporation before the deduction for taxes paid, the following instruction was given:

“The amount to be shown as total profits under Item 5 of Schedule" B should be the profits from all sources whatsoever (whether or not subjected to foreign tax) from which, after the deduction of the foreign tax shown in Item 7, the dividends may be deemed to have been paid by the foreign corporation.”

This serves as a clarification of Example (3) of Regulations 77, and must be taken as administrative approval of the method of computation used by the plaintiff. The illustrative formulae provided in Regulations 77 have been repeated without material change in Regulations 86 issued under the 1934 Act, Regulations 94 under the 1936 Act, and Regulations 101 under the 1938 Act.

In the interim Congress reenacted the provisions of Section 238(e) of the Revenue Act of 1921 in the Revenue Act of 1932 with certain minor changes which are not relevant here, 26 U.S.C.A. Int.Rev. Acts, page 530. The foreign tax provisions were grouped under Section 131. Successive reenactments were made in the Revenue Acts of 1934, 1936 and 1938.

If the full implications of the so-called reenactment rule are adopted, the administrative interpretations have acquired the “force of law” by virtue of the subsequent Congressional action. Helvering v. Winmill, 305 U.S. 79, 83, 59 S.Ct. 45, 83 L.Ed. 52; Helvering v. R. J. Reynolds Tobacco Co., 306 U.S. 110, 116, 59 S.Ct. 423, 83 L.Ed. 536. In this light the administrative construction becomes, as it were, a direct statutory provision. Although the language of the cases cited warrants the literal application of the reenactment rule to the instant case, a more realistic and workable approach to the regulations problem is possible. Under this view the regulations are not made a part of the statute. They retain their interpretative character to provide essential flexibility in tax administration. However, they are to be given great weight in the construction of the statutory provisions which they interpret, particularly where the regulations are issued contemporaneously with the enactment of the statute, and represent a long continued administrative practice. United States v. Hill, 120 U.S. 169, 182, 7 S.Ct. 510, 30 L.Ed. 627; Norwegian Nitrogen Products Co. v. United States, 288 U.S. 294, 315, 53 S.Ct. 350, 77 L.Ed. 796; Smythe v. Fiske, 23 Wall. 374, 382, 23 L.Ed. 47; Robertson v. Downing, 127 U.S. 607, 613, 8 S.Ct. 1328, 32 L.Ed. 269. See, Griswold, A Summary of the Regulations Problem, 54 Harv.L.Rev. 398.

Inasmuch as Section 131 (f) appeared substantially in its present form in the Revenue Act of 1921, and Regulations 77 were not issued until 1932, the element of contemporaneousness is not significant here. However, administrative interpretation with reference to Section 131 (f) has continued unchanged since 1932 even though subsequent regulations have been issued. This is sufficient to establish a definiteness of administrative practice upon which a taxpayer may justifiably rely.

The argument may be put still more strongly. A taxpayer, in computing his tax liability, follows the statutory provisions and the interpretative regulations issued pursuant thereto. When the amounts due are determined, provisions are made for payment. The taxpayer should then be able to plan the normal operations of his business without the risk of being subjected to additional tax demands based upon changes in administrative interpretation. It has been suggested that after the formative stage has passed, and a regulation has become seasoned, the Commissioner should not have the power retroactively to amend the regulation, at least where the taxpayer’s interest is adversely affected. Gris-wold, supra, pp. 413-419.

In the instant case there is involved no problem of an amended regulation, but an additional tax demand based upon a theory at variance with established administrative interpretation. The Government equally should be restrained here from taking an inconsistent position to the taxpayer’s detriment. The virtues of certainty and predictability are too little apparent in the field of tax administration. Having followed scrupulously both legislative and administrative directions in filing its return, the plaintiff should be secure in its belief that its tax obligations have been net.

It may be conceded that the primary objective of Congress in making provision for the foreign tax credit was the avoidance of double taxation. It may also be conceded that this objective will be but imperfectly accomplished under the plaintiff’s construction of Section 131 (f) since part of the dividend received by the parent will not have been subjected to tax. Such a condition, however, does not justify this Court in sanctioning a retroactive change in the obligations of this taxpayer. It is for Congress to adjust the revenue laws to effectuate more completely its declared purposes.

The plaintiff is entitled to judgment in the amount of $8,150.17 with interest thereon.

         “Sec.. 131. Taxes of foreign countries and possessions of United States.
      “(a) Allowance of credit. — If the taxpayer signifies in his return his desire to have the benefits of this section; the tax imposed by this title shall be credited with: (1) Citizen and domestic corporation. — In the case of a citizen of the United States and of a domestic corporation, the amount of any income, war-profits, and excess-profits taxes paid or accrued during the taxable year to any foreign country or to any possession of the United States; and * * * (f) Taxes of foreign subsidiary. — For the purposes of this section a domestic corporation which owns a majority of the voting stock of a foreign corporation from which it receives dividends in any taxable year shall be deemed to have paid the same proportion of any income, war-profits, or excess-profits taxes paid by such foreign corporation to any foreign country or to any possession of the United States, upon or with respect to the accumulated profits of such foreign corporation from which such dividends were paid, which the amount of such dividends bears to the amount of such accumulated profits: Provided, That the amount of tax deemed to have been paid under this subsection shall in no case exceed the same proportion of the tax against which credit is taken which the amount of such dividends bears to the amount of the entire net income of the domestic corporation in which such dividends are included. The term ‘accumulated profits’ when used in this subsection in reference to a foreign corporation, means the amount of its gains, profits, or income in excess of the income, war-profits, and excess-profits taxes imposed upon or with respect to such profits or income; and the Commissioner with the approval of the Secretary shall have full power to determine from the accumulated profits of what year or years such dividends were paid; treating dividends paid in the first sixty days of any year as having been paid from the accumulated profits of the preceding year or years (unless to his satisfaction shown otherwise), and in other repects treating dividends as having been paid from the most recently accumulated gains, profits, or earnings. In the case of a foreign corporation, the income, war-profits, and excess-profits taxes of which are determined on the basis of an accounting period of less than one year, the word ‘year’ as used in this subsection shall be construed to mean such accounting period.”

       All sums are in terms of American dollars although transposition from English pounds has been necessary in some cases. The parties have stipulated as to the applicable rate of exchange ($4.-7383333).

       These figures include slight increases over the income tax return originally • filed by the plaintiff, representing adjustments made by the Bureau of Internal Revenue,

       The parties have stipulated that that part of Form 1118 relating to taxes paid by a foreign subsidiary has undergone no substantial change since the issuance of Regulations 77.

       Since the average foreign tax rate was considerably in excess of the domestic rate, the foreign tax on the taxed portion of the dividend was greater than the comparable United States tax on the entire dividend. In this quantitative sense the avoidance of double taxation objective has been realized, although it remains true that a portion of the dividend has gone untaxed.


author: McCOLLOCH, District Judge.

text:
    WALLING, Adm’r of Wage and Hour Division, U. S. Dept. of Labor, v. SMITH WOOD-PRODUCTS, Inc.
    Civil Action No. 2670.
    District Court, D. Oregon.
    July 27, 1945.
    Dorothy M. Williams, of San Francisco, Cal., and Karl M. Rodman, of Portland, Or., for plaintiff.

      Charles A. Hart, of Portland, Or. (Hart, Spencer, McCulloch & Rockwood, of Portland, Or.), for defendant.
   McCOLLOCH, District Judge.

From the outbreak of the war until now, the Wage and Hour Administrator refrained from raising the Travel Time issue in the lumber industry, because of the abnormal conditions created by the war. I stated at the trial that the same reasons made me hesitate to employ the injunctive power to unsettle a situation which, up until now, it had been thought best to leave undisturbed, until war time restrictions were removed%

Now it appears that whatever is done, particularly if a decision favoring travel time is rendered, will have to be submitted to the War Labor Board, acting through the West Coast Lumber Commission, to determine the effect of the decision on the Government’s wage stabilization policy and other war time policies. What the Commission might feel was true travel time, it is indicated, the Commission will allow, what it might feel was not true travel time, it will disallow.

I think the Courts are entitled to have some administrative exploration of this difficult field, before being called on to decide a test case, which everyone seems to feel will have enormous consequences throughout the industry. The Wage and Hour Administrator is the moving party here. He is acting in his statutory capacity as representative of the public, and it entirely accords with modern practise to ask him to have the important practical questions here involved, of effect on other national policies, studied with care by the government agencies to whom such questions have been committed by the war time statutes and regulations. In short, I suggest that the effect of Travel Time on the national government’s wage policy and allied policies be considered before I pass on the purely legal question raised, instead of afterward. It is not uncommon for courts to stay their hands until pertinent administrative investigations are completed and determinations made. Indeed, we are enjoined not to act until administrative remedies have been exhausted.

Aside from all. other considerations, I feel the personal need of thorough administrative exploration of the field. What will be the effect on wage stabilization, the effect on labor supply, the effect on price control (only lately undertaken in this field by the Office of Price Administration), and perhaps equal in importance to all else, what will be the effect on needed production of logs and lumber and lumber products in this new crisis of the war?

The lumber industry does not present the simple problem of passage from entrance to entrance of a mine. The distances to forest and mill, and the means of getting there, are as varied as the wide range of topography and climate in the five western states involved.

The injunction will be denied and the complaint dismissed, both without prejudice.

       Ispass v. Pyramid Motor Freight Corp., D.C., 54 F.Supp. 565, an opinion rendered by my scholarly colleague, Judge James Alger Fee, while sitting in the Southern District of New York.
      See also Perkins v. Endicott Johnson Corp., 2 Cir., 128 F.2d 208, 217, 225, note 69; Guiseppi v. Walling, 2 Cir., 144 F.2d 608, note 49, 155 A.L.R. 761.

       42 Am.Jur., Public Administrative Law, § 197.

       Tennessee Coal, Iron & R. Co. v. Muscoda Local No. 123, 321 U.S. 590, 64 S.Ct. 698, 88 L.Ed. 949, 152 A.L.R. 1014; Jewel Ridge Coal Corp. v. Local No. 6167, 65 S.Ct. 1063.

       The citations in notes 1, 2 and 3 have been “looked up” since the memorandum opinion was filed. Many District Judges are not provided with law clerks and do not have the time when they decide a case to search for the book and page of authority, which they know to exist.


author: ST. SURE, District Judge.

text:
    CORY v. JOHNSTON, Warden.
    No. 24972-S.
    District Court, N. D. California, S. D.
    Aug. 23, 1945.
    William Frank Cory, in pro. per.
    Frank J. Hennessy, U. S. Atty., and Joseph Karesh, Asst. U. S. Atty., both of San Francisco, Cal., for respondent.
   ST. SURE, District Judge.

Petitioner by writ of habeas corpus seeks his release from Alcatraz Penitentiary alleging that because he was sentenced to one year for escape from a federal prison, 18 U.S.C.A. § 753h, he is entitled under 18 U.S.C.A. § 753f, to choose the type of institution in which he is to serve.

Section 753f, 18 U.S.C.A., provides that all persons convicted of an offense against the United States shall be committed to the custody of the Attorney General who shall designate the place of confinement, “Provided, That any sentence of imprisonment for an offense punishable by imprisonment for a term of one year or less shall not be served in a penitentiary except with the defendant's consent.” (Emphasis supplied) Escape is a crime punishable “by imprisonment for not more than five years or by a fine of not more than $5,000, or both.” It is apparent from the language of 18 U.S.C.A. § 753h that petitioner does not come within the proviso of Section 753f, 18 U.S.C.A.

The other point raised by petitioner, that he is not being given the correct amount of good time allowance, is premature, for by his own computation he would not be eligible for release until May 11, 1946.

Respondent’s motion to dismiss is granted. The petition for writ of habeas corpus is denied and the order to show cause discharged.


author: GIBSON, District Judge.

text:
    UNITED STATES ex rel. FORINO v. BROMBERG, Acting Officer in Charge, Immigration and Naturalization Service.
    No. 129.
    District Court, W. D. Pennsylvania.
    Aug. 9, 1945.

      Joseph A. Cirillo, of Pittsburgh, Pa., for relator.
    Charles F. Uhl, U. S. Atty., and Edward C. Boyle, Asst. U. S. Atty., both of Pittsburgh, Pa., for respondent.
   GIBSON, District Judge.

Lenzi Forino entered the United States at the Port of New York on September 17, 1928. At Numbers 57 and 58 October Sessions, 1932, Court of Oyer and Terminer of Allegheny County, Pennsylvania, he was convicted of the crime of murder in the second degree and on December 5, 1932, was sentenced to a term of not less than eight years and not more than sixteen years.

On April 18, 1933, the Assistant Secretary of Labor, after hearing, issued an order for the deportation of the relator. The warrant charged that the relator had been sentenced to a term of one year or more for a crime in this country, involving moral turpitude committed within five years after entry. A few days prior to July 17, 1945, the relator was ordered to submit himself for deportation, and thereupon filed his petition for a Writ of Ha-beas Corpus.

The basis of the claim of the writ is that the petitioner had received a pardon for the offense upon which he was sentenced by virtue of the provisions of the law of the State of Pennsylvania.

Section 181 of the Act of March 31, 1860, Public Laws of Pennsylvania 382 (Section 893 of Title 19 of Purdon’s Statutes) provides in part: “Where any person hath been or shall be convicted of any felony, not punishable with death, or any misdemeanor punishable with imprisonment at labor, and hath endured or shall endure the punishment to which such offender hath been or shall be adjudged for the same, the punishment so endured shall have the like effects and consequences as a pardon by the governor, as to the felony or misdemeanor whereof such person was so convicted * *

The claim of a statutory pardon is unfounded. The defendant was released from his prison confinement at the end of his minimum sentence, but remained under the supervision of the court which imposed judgment during the maximum sentence period. Therefore, not having fully satisfied the judgment, he cannot claim that he is entitled to claim the statutory pardon granted by statute. Perkins v. United States ex rel. Malesevic, 3 Cir., 99 F.2d 255.

The Writ of Habeas Corpus will be vacated, and the relator ordered to surrender to the Immigration Officer.