DOCKET NO.: 278
DECIDED BY: Warren Court (1955-1956)
LOWER COURT: United States Court of Appeals for the Fifth Circuit
ARGUED: Feb 29, 1956 / Mar 01, 1956
DECIDED: Mar 26, 1956
Audio Transcription for Oral Argument – February 29, 1956 in Mitchell v. Budd
Number 278 James P. Mitchell, Secretary of Labor, versus Joseph T. Budd Jr., and Florence W. Budd, Co-Partners.
May it please the Court.
The — this case which is really two cases consolidated was instituted by the Secretary of Labor to enjoin the three respondents from violating the minimum wage and record-keeping provisions of the Fair Labor Standards Act and the suits were brought against just two of these respondents, King Edward and Budd companies and the May company intervened on the ground that the same issues in fact and law are similar issues of fact and law were involved.
Our three plaintiffs operate tobacco-bulking plant in Quincy, Florida.
The cases present several issues relating to the very complex exemptions in a Fair Labor Standards Act for employees engaged in farming and practices incidental to farming and to certain agricultural operations and one of the sections, which is not raised here, a third one relates to certain processing operations.
The three — the three sections with which the cases is primarily concerned are printed in the separate appendix of the Government and starting on page one.
And I think I should briefly point out the differences in those sections at the background to the facts here.
The agriculture exemption with which this Court has some familiarity, it was concerned with that in the Waialua case last term, is a complete wage hour and child labor, minimum wage, overtime and child labor exemption for farming and this Court described their practices which are really incident to farming.
The Section 13 (a) (10) exemption is also related to operations that are — but which are performed on agricultural or horticultural commodities and it is also from the minimum wage and overtime provisions not the child labor however.
But it is restricted to the operations — operations carried on within the area of production as the defined by the Administrator.
This Court has recognized that Section 13 (a) (6) is related to the agriculture exemptions as the two were designed to meet to equalize the situation between the agriculture exemption, their farming activity and operations which — which might be close to the farming.
Now, it does — Section 13 (a) (10) does include some processing operations but not the word processing which we think is significant.
It doesn’t include processing generally, but it does specify certain things which are processing operations.
Section (c) which is the other exemption in 7 (c) which is the other exemption in the Act which has something to do with operations on agriculture on agriculture commodity, Section (c) — 7 (c) is just from the overtime provisions of the Act.
That is not the minimum wage.
William O. Douglas:
And that Section is on —
William O. Douglas:
7 (c) is on page — starts on page 1 of their separate appendix.
William O. Douglas:
This is (Inaudible) exemption.
This is an exemption.
These are all three exemptions which has some relation to agriculture or agricultural operations.
But 7 (c) is — is quite different from the agriculture exemptions which is 3 (f), the definition, quite different from that in Section 13 (a) (10).
Section 7 (c) has — is just from the overtime as I state and it is full of the word “processing.”
We think that’s quite significant and I’ll come back to it.
The other two sections have nowhere used the word “processing.”
Section 7 (c) is just full of the word.
And Section 7 (c) so far as agricultural and horticultural of commodities are concerned also limits the exemption to the area of production as defined by the Administrator.
Now, the two other exemptions, the ones that were commented on by this Court in the Waialua case, their purpose is to exempt things that are essentially farming or practices incident to farming.
I think the legislative history makes that clear that that was the purpose and although Section 13 (a) (10) did cover some other operations and some processing operations.
The apparent reason for it was because there were some representation that sometimes those things were performed that — frequently that they were characteristic of farming activities enclosed to them.
In Section 7 (c), on the other hand, which is just the overtime exemption, is not particularly concerned with farming.It is frankly and candidly a processing exemption.
It is not particularly concerned with farming and its purpose was not to — was not particularly for farming.
Its purpose was to relieve processes, the processes there mentioned, of the overtime provision during peak seasons of their operations.
It was not peculiarly concerned with — with farming.
Now, the reason we think that is important, the significant of that, is that if the exemption is construed, as the court below construed it and respondents urged here that it’d be construed, the agriculture exemption in 13 (a) (10), then 7 (c) is meaningless because the other two exemptions, they have a complete exemptions from overtime and minimum wages, and Section 7 (c) which covers processing operations gives only an overtime exemption.
And if those processing operations are included under either one of the others, there would be no rhyme or reason for Section 7 (c).
Now, to get back to the facts in this particular case, all three of the respondents here operate tobacco-bulking plant in Quincy, Florida.
Tom C. Clark:
What’s — what does Section 13 (a) (10) refer to, the employer or the individual?
Well, if any individual —
Tom C. Clark:
It’s — so it’s the individual who’s working and his work is excluded?
It’s — of all the — the exemptions read any employee or any individual and then engaged in certain — engaged in certain operation, but it is the exemption of the employee who is engaged —
Hugo L. Black:
Section 7 includes the employer.
Section 7 (c) indicates of any employer.
Hugo L. Black:
If he gets a complete exemption to that.
Well, its just — that’s just from the overtime and its very carefully restricted and I might point put that the area of production definition is in 7 (c) (2) for — for horticultural and agricultural commodity.
Some of the other things are exempted without reference to area of production, but the horticultural and agricultural commodity is all subject even in 7 (c) to the area of production definition.
The three respondents here are all operating so far as physical characteristics of their plant and their process is concerned.
Their plant, their tobacco-bulking plants are all pretty much alive.
Those plants process, what is known as Type 62 Sumatra tobacco, which is used exclusively for cigar wrappers.
That type of tobacco, like all of types of tobacco, requires some pretty extensive curing.
This type requires to somewhat different kind of curing and fermentation, but our tobacco require some — some kind of very long term curing when it comes from the farm.
This type of tobacco is — has to be a special agent called (Inaudible) pick and it is put it in the barn as it’s picked and goes through a preliminary barn curing process which is, as — as we read the evidence on it and the expert description of it, it’s primarily a drying operation wherein the moisture content is reduced between 85% and 80% down to 25% to 10%.
When it reaches a — the stage where it is ready for the bulking plant, the farmer takes it to the bulking plant and this tobacco is located, I think, from 13 to 30 miles from the various bulking plants.
It all comes within a 30-mile distance from the plant.
It’s taken by the farmers to the bulking plants which is located in the town of Quincy in this case.
The bulking plant is a large scale industrial plant.
It’s not a simple adjunct like a farm or like barns or like silos or packing ship.
The respondent’s description which seems to imply the contrary is plainly refuted by their own testimony.
Respondent, Budd, asked for an admission of fact and we are somewhat surprise that their assertion that this — that the plants do not require tremendous amount of industrial machinery because they specifically asked for an admission — requested an admission, and I’m quoting, “That tremendously large amount that these plants require a tremendously large amount of valuable and expensive equipment.”
And that’s on — on — in their request for admissions.
Now, the Government objected to admitting that because we said we didn’t know what the facts were in that respect at the beginning of the trial.
The Court overruled the Government’s objection and that was left and then — then the Government admitted it.
So that is undisputed that these — these plants require a tremendously and I’m quoting, “A tremendously large amount of valuable and expensive equipment.”
Now, it suggested that that would not apply to the other two respondents.
The trial court found otherwise.
The trial court found that these plants judging from the description of the process and from the similarity of it that there was a sufficient evidence to — to infer that the same kind of equipment was required in all three of the plants and I think from reading the — virtually identical affidavits of the various respondents as to the nature of the process, it will become evident that — that that is true of all three plants and we have put in our supplemental appendix a quotation from the Department of Agriculture bulletin which specifically states that this type of — of operation does require large scale equipment and that is why it’s usually done as an independent large scale business by the bulking plants.
Now, the bulking process itself requires the placing of the leaves in bulks of some 3000 to 4000 pounds.
This much is needed in order to retain and generate sufficient heat for the sweating and fermentation process.
It’s obvious therefore that the ordinary small farmer is not in a position to do that bulking on his own tobacco.
It requires, according to the admitted evidence or about 100 — not less than 100 acres or not much less than 100 acres a year, to acquire that much tobacco to put in the bulking process.
The bulks must be — the temperature of the bulks must be closely controlled and watched at all times.
The whole process is quite an extended one requiring from six to 12 months or more.
It’s the bulking process.
It requires the breaking down and rebuilding of the bulks at regular intervals every six or eight days.
The piles — the bulks are turned completely inside out, although in a sense, and I might mentioned here too that the Budd request for admission also asked for an admission, that above all this process requires a skill — special skill and experience that I mentioned that point in connection with the contention that this is ordinary farm labor which I will come back to later, although in a sense, this is — there — the bulking process is somewhat a continuation of the barn curing process because it’s believe that some of the fermentation starts in this preliminary barn curing.
The process is very obviously quite a different one.
It requires quite a different sort of control machinery and skill.
I might also point that entirely different wage scales are maintained for the bulking plant employees from what is maintained for the farm labor.
The fact that the farmer does not ordinarily do this for himself is — is undisputed.
There some 300 growers of this type of tobacco in the — in the neighborhood of Quincy and only five or 1.6 operate — 1.6% operate bulking plants which bulk only their own tobacco.
The three respondents, as I say, all their plants are all engaged in pretty much the same operation.
They differ in this respect that Budd purchases all of the tobacco it bulks.
It grows no tobacco itself.
The respondent King Edward and May in the plants involved in this litigation, bulk only tobacco grown — their own grown tobacco.
King Edward, although in the plants that’s in this litigation, bulks only its own grown tobacco in that plant.
Also operates two other plants in which it bulks tobacco or purchased from other farmers.
And the amount of tobacco it purchases from — from other farmers that it bulks is substantially greater than the amount of its own that it bulks.
So there’s no question that King Edward is also engaged in a large-scale tobacco bulking business which we — we think the fact show is separate and apart from its farming operations.
The — all three respondents in the court below claimed that they were exempt on the both, the agriculture exemption and the 13 (a) (10) exemption.
The respondent, Budd, has abandoned that petition in this Court and admits that it is not entitled to the agriculture exemption.
The trial court held that none of the respondents were entitled to either one of these exemptions because they were not engaged in agriculture as define in the statute and they were not engaged in any of the — any agricultural operation covered by Section 13 (a) (10).
The Court of Appeals in reversing ruled that King Edward and — respondents, King Edward and Budd, were — were engaged in agriculture and because — merely because they process only their own grown crop and — that all three of the respondents might be entitled to the exemption under 13 (a) (10) if the Administrator would issue a valid definition but held that the administrative definition was invalid.
That decision was before the Waialua.
That decision was before the Waialua case.
So that it’s conceded that if the Administrator’s definition of area of production if this is regulation defining area of production is valid.
Concededly, Budd is not entitled to the exemption.
None of them are entitled to the 13 (a) (10) exemption.
That will then leave the question as to whether the exact same kind of processing plant of King Edward and — and respondent, May, whether their exact — precisely the same processing plant can be said to be exempt as a mere incident to farming activity.
(Inaudible) is concededly, conceded what?
It’s conceded that if the area of production definition by the Administrator —
— is valid, if it’s valid.
Does it conclude to be defined (Inaudible)
Well, if they’re under 13 (a) (6) at all, they — they are subject to irrespective of — and even assuming they are under 13 (a) (6), that any of them come within those operation.
Assuming they are, they still would not be entitled to the exemption if the Administrator’s definition of area of production is valid because none of the three meet the area of production requirement of the administrative definition.
They’re all located in the town of Quincy which has a population of 6500 or more.
And under the — one of the criteria and I — when it come to this, I don’t think I’ll have much time to discuss it today, under the — one of the criteria of the administrative definition is that the plant to be exempt must be located in a rural area which for purposes of the definition is defined as if a town of not more than 2500 population.
So that if that is valid, then definitely the respondent Budd is not entitled to any exemption even assuming its operation is one of those mentioned in 13 (a) (10).
Now, the other two respondents would not be entitled to that exemption, but then the question is whether they — they can exempt under the definition of agriculture on the theory that this bulking plant operation is really an incident to farming.
I barely have time to just call attention to the — well, my help is to summarize the Government’s contention.
The Government’s contention is that none — none of these respondents are entitled to either exemption that they are — they are not engaged that this bulking operation is not an incident to farming, that it is not one of the operations enumerated in Section 13 (a) (10) and that even if it is one of those operations, none — none of the respondents meet the area of production requirement.
So far as the (Inaudible)
Well, we — I think we would say it is a — a fortiori recognizing that the Court did — did replace some qualifications on that dictation, but we think considering the whole analysis of the decision, this is a fortiori case.
The only difference, I would say that could be found in the two cases, is it that there was an express mention of sugar milling in Section 7 (c) which the Court suggested might make that sui generis.
But I think the — the general opinion in the Waialua case would certainly a fortiori lead to the conclusion that hereto this is not a mere incident to farming And that certainly, it — it’s analogous in the sense that this Court has held that the mere fact, the mere fact that the grower is processing only his own crop is not enough to make it agricultural.