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Timestamp: 2019-04-21 18:18:17+00:00

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GENERAL MOTORS CORPORATION. HOLLAND ET AL. V. GENERAL MOTORS CORPORATION. HILGER ET AL. V. GENERAL MOTORS CORPORATION. CASHEBA V. GENERAL MOTORS CORPORATION.
Four separate suits were brought against the appellee in the District Court for the Western District of New York by and in behalf of its employees to recover overtime pay in accordance with the provisions of the Fair Labor Standards Act of 1938,*fn1 as interpreted by the Supreme Court in Anderson v. Mt. Clemens Pottery Co., 328 U.S. 680, 66 S. Ct. 1187, 90 L. Ed. 1515. While these suits were pending without adjudication, Congress enacted the Portal-to-Portal Act of 1947, 61 Stat. 84-90, 29 U.S.C.A. §§ 251-262. The appellee then moved to dismiss each of the complaints, which for present purposes may be treated as identical, on the grounds that no cause of action was alleged and that the court was without jurisdiction by virtue of section 2 of the Portal-to-Portal Act.*fn2 As the appellants then questioned this statute upon constitutional grounds, notice of that was given the Attorney General and he was allowed to intervene in behalf of the government in support of the validity of the Act. The motions to dismiss were granted with leave to amend within a reasonable time fixed. The plaintiffs did not amend their complaints and after the expiration of their time to do so orders were entered granting the motions to dismiss each complaint. Appeals taken by the plaintiffs from each of those orders were consolidated for hearing.
In this way the issue of the constitutionality of this section of the Portal-to-Portal Act has been presented by these appeals. Though the appellants do not contend here, as they did below, that the question is premature since there was no trial on the merits, we deem it necessary to determine this point on our own motion, We think that the issue of constitutionality was properly raised by motion in each case before trial. Rule 12(b), Federal Rules of Civil Procedure, 28 U.S.C.A. following § 723c. It was the duty of the court to ascertain whether it had jurisdiction before proceeding to hear and decide the case on the merits. Emmons v. Smitt, 6 Cir., 149 F.2d 869, certiorari denied, 326 U.S. 746, 66 S. Ct. 59, 90 L. Ed. 446; Ex parte McCardle, 7 Wall. 506, 19 L. Ed. 264; see Smith v. McCullough, 270 U.S. 456, 459, 46 S. Ct. 338, 70 L. Ed. 682; Rule 12(h), Federal Rules of Civil Procedure, 28 U.S.C.A. following § 723c. The allegation of facts to show jurisdiction in the district court is a prerequisite to the trial of an action on the merits. McNutt v. General Motors Acceptance Corp., 298 U.S. 178, 56 S. Ct. 780, 80 L. Ed. 1135; Donnelly Garment Co. v. International Ladies' Garment Workers' Union, 8 Cir., 99 F.2d 309, 316, certiorari denied, 305 U.S. 662, 59 S. Ct. 364, 83 L. Ed. 430; 28 U.S.C.A. § 380. Unlike the situation in Ward Baking Co. v. Holtzoff, 2 Cir., 164 F.2d 34, 36, where we said that, "It is inexpedient to attempt to decide a constitutional question such as this in vacuo," there were no allegations of fact which if proved would have permitted recovery whether or not the Portal-to-Portal Act were valid. If subdivision (d) of section 2 of that Act is valid the lack of jurisdiction is clear and if subdivisions (a) and (b) of section 2 are valid it is equally apparent that no cause of action on the merits was alleged. We think the dismissal of each cause of action right, for the following reasons.
A few of the district court decisions sustaining section 2 of the Portal-to-Portal Act have done so on the ground that since jurisdiction of federal courts other than the Supreme Court is conferred by Congress, it may at the will of Congress be taken away in whole or in part.E.g., Boehle v. Electro Metallurgical Co., D.C. Or., 72 F.Supp. 21; Story v. Todd Houston Shipbuilding Corp., D.C.S.D. Tex., 72 F.Supp. 690; Johnson v. Park City Consol. Mines Co., D.C.E.D. Mo., 73 F.Supp. 852; Quinn v. California Shipbuilding Corp., D.C.S.D. Cal., 76 F.Supp. 742; Grazeski v. Federal Shipbuildings & Dry Dock Co., D.C. N.J., 76 F.Supp. 845.Relying upon a statement of the Supreme Court in Kline v. Burke Construction Co., 260 U.S. 226, 234, 43 S. Ct. 79, 67 L. Ed. 226, 24 A.L.R. 1077, and on cases like Norris v. Crocker, 13 How. 429, 14 L. Ed. 210; Ex parte McCardle, 7 Wall. 506, 19 L. Ed. 264; and Assessors v. Osbornes, 9 Wall. 567, 19 L. Ed. 748, these district court decisions would, in effect, sustain subdivision (d) of section 2 of the Act regardless of whether subdivisions (a) and (b) were valid. We think, however, that the exercise by Congress of its control over jurisdiction is subject to compliance with at least the requirements of the Fifth Amendment. That is to say, while Congress has the undoubted power to give, withhold, and restrict the jurisdiction of courts other than the Supreme Court,*fn4 it must not so exercise that power as to deprive any person of life, liberty, or property without due process of law or to take private property without just compensation. Graham & Foster v. Goodcell, 282 U.S. 409, 431, 51 S. Ct. 186, 75 L. Ed. 415; cf. Brinkerhoff-Faris Trust & Savings Co. v. Hill, 281 U.S. 673, 682, 50 S. Ct. 451, 74 L. Ed. 1107; see also Lynch v. United States, 292 U.S. 571, 580, 54 S. Ct. 840, 78 L. Ed. 1434; Louisville Joint Stock Land Bank v. Radford, 295 U.S. 555, 589, 55 S. Ct. 854, 79 L. Ed. 1593, 97 A.L.R. 1106. Thus, regardless of whether subdivision (d) of section 2 had an independent end in itself,*fn5 if one of its effects would be to deprive the appellants of property without due process or just compensation, it would be invalid. Under this view, subdivision (d) on the one hand and subdivisions (a) and (b) on the other will stand or fall together. We turn then to a consideration of the question whether the appellants have been unconstitutionally deprived of any substantive rights.
It is contended that, while the employees' rights to overtime compensation*fn6 ultimately flow from the Fair Labor Standards Act, they are also in some sense "contractual" in nature and hence were vested. And it is well settled that contracts made by private parties must necessarily be construed in the light of the applicable law at the time of their execution. See 3 Williston on Contracts (Rev.Ed.) Sec. 615.These appellants' contracts of employment with the appellee were made before the Fair Labor Standards Act was enacted.*fn7 Thus it cannot be said that the contracts were "made," as the appellants put it, with reference to the provisions of that Act. Perhaps it can be argued, however that upon the enactment of that Act, it was adopted by the parties as a part of their agreement. See Roland Electrical Co. v. Black, 4 Cir., 163 F.2d 417, appeal pending. If this be true, then the contracts would, of course, have to be read in connection with, among other provisions, section 7, 29 U.S.C.A. § 207, providing for payment of one and one-half times the regular rate for hours worked in excess of a "work-week" of forty-four hours during the first effective year of the Act, forty-two hours the second year, and forty hours thereafter.
At the same time, if it can be said that the contracts of employment were modified upon the enactment of the Fair Labor Standards Act, perhaps it also can be said that when those decisions were made, the contracts of employment were again modified so as to take the judicially established law into consideration. Were this the case, even if the rights of the employees were purely statutory up to the time of those decisions, thereafter they were based upon contract.
Finally, while the liabilities may have been wholly "unexpected" in the sense that neither employer nor employee anticipated that they would accrue, it might be contended that the original contracts were modified in reliance upon section 7, however it might be construed in futuro by the courts.
Thus, there are, we think, three ways in which the employees' rights to compensation for these activities may be viewed: first, as wholly statutory up to the time the Portal-to-Portal Act was enacted; second, as purely statutory up to the time of the Supreme Court decisions*fn9 and contractual thereafter; and finally, as wholly contractual from the beginning. We need not now decide whether to consider the Congressional findings as determinative, or to take some other view of the situation, for we think that however appellants' rights are considered, the Portal-to-Portal Act is constitutional.
This seems plain enough, if we take the view that the claims rested purely on statute up to the time the Portal-to-Portal Act was enacted. Clearly, the general rule is that "powers derived wholly from a statute are extinguished by its repeal." Flanigan v. County of Sierra, 196 U.S. 553, 560, 25 S. Ct. 314, 315, 49 L. Ed. 597. The Supreme Court, moreover, has told us that rights granted to employees under the Fair Labor Standards Act have a "private-public character" and has indicated that they are "charged or colored with the public interest." See Brooklyn Savings Bank v. O'Neil, 324 U.S. 697, 704, 709, 65 S. Ct. 895, 903, 89 L. Ed. 1296. Congress has also found that it "is in the national public interest and for the general welfare, essential to national defense and necessary to aid, protect, and foster commerce" that the Portal-to-Portal Act be enacted. 29 U.S.C.A. § 251(a). This being true, so long as the claims, if they were purely statutory, had not ripened into final judgment, regardless of whether the activities on which they were based had been performed, they were subject to whatever action Congress might take with respect to them. Western Union Tel. Co. v. Louisville & Nashville R. Co., 258 U.S. 13, 42 S. Ct. 258, 66 L. Ed. 437; see also Norris v. Crocker, 13 How. 429, 14 L. Ed. 210; Ewell v. Daggs, 108 U.S. 143, 151, 2 S. Ct. 408, 27 L. Ed. 682; Campbell v. Holt, 115 U.S. 620, 6 S. Ct. 209, 29 L. Ed. 483; Pearsall v. Great Northern R. Co., 161 U.S. 646, 673, 674, 16 S. Ct. 705, 40 L. Ed. 838; West Side Belt. R. Co. v. Pittsburgh Const. Co., 219 U.S. 92, 31 S. Ct. 196, 55 L. Ed. 107; Chase Securities Corp. v. Donaldson, 325 U.S. 304, 65 S. Ct. 1137, 89 L. Ed. 1628; Fleming v. Rhodes, 331 U.S. 100, 109, 67 S. Ct. 1140, 91 L. Ed. 1368; United States ex rel. Rodriguez v. Weekly Publications, 2 Cir., 144 F.2d 186; National Carloading Corp. v. Phoenix-El Paso Express, 142 Tex. 141, 176 S.W.2d 564, 569, 570, certiorari denied, 322 U.S. 747, 64 S. Ct. 1156, 88 L. Ed. 1578.
If however, the rights were statutory up to the time of the Supreme Court decisions and contractual thereafter, or if they were founded upon contract from the time of the enactment of the Fair Labor Standards Act, the problem is not so simple,*fn10 for there are a number of cases holding that it is a violation of due process to deprive an individual of previously vested contractual rights.Lynch v. United States, 292 U.S. 571, 54 S. Ct. 840, 78 L. Ed. 1434; Pacific Mail S.S. Co. v. Joliffe, 2 Wall. 450, 17 L. Ed. 805; Ettor v. City of Tacoma, 228 U.S. 148, 33 S. Ct. 428, 57 L. Ed. 773; Forbes Pioneer Boat Line v. Board of Commissioners of Everglades Drainage District, 258 U.S. 338, 42 S. Ct. 325, 66 L. Ed. 647; Coombes v. Getz, 285 U.S. 434, 52 S. Ct. 435, 76 L. Ed. 866.

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