Source: https://openjurist.org/350/us/473
Timestamp: 2019-04-26 12:02:46+00:00

Document:
Joseph T. BUDD, Jr., and Florence W. Budd, Co-Partners, Doing Business as J. T. Budd, Jr. and Company; King Edward Tobacco Company of Florida, and May Tobacco Company.
Argued Feb. 29 and March 1, 1956.
See 351 U.S. 934, 76 S.Ct. 786.
Bessie Margolin, Washington, D.C., for petitioner.
Mr. Milton C. Denbo, Washington, D.C., for respondents Budd, and King Edward Tobacco Co.
Mr. Mark F. Hughes, New York City, for respondent May Tobacco Co.
These are actions brought by the Secretary of Labor under § 17 of the Fair Labor Standards Act, 52 Stat. 1060, 63 Stat. 910, 29 U.S.C. § 201 et seq., 29 U.S.C.A. § 201 et seq., to enjoin respondents from violating the minimum wage, § 6, and record-keeping provisions, § 11, of the Act. The employees concerned work in tobacco-bulking plants operated by respondents in Quincy, Florida, which has a population in excess of 2,500. Respondents claim these employees are exempt from the Act. The District Court ruled against the respondents. 114 F.Supp. 865. The Court of Appeals reversed. 221 F.2d 406. We granted certiorari 350 U.S. 859, 76 S.Ct. 103, because of the importance of the problems presented and of the apparent conflicts between the decision below and Tobin v. Traders Compress Co., 10 Cir., 199 F.2d 8, and Maneja v. Waialua Agricultural Co., 349 U.S. 254, 75 S.Ct. 719, 99 L.Ed. 1040.
The processing operations involve U.S. Type 62 Sumatra tobacco, a leaf tobacco used exclusively for cigar wrappers. This type of tobacco requires special cultivation. It is grown in fields that are completely enclosed and covered with cheesecloth shade. The leaves of the plant are picked in stages, as each matures. The leaves are taken immediately to a tobacco barn, located on the farm, where they are strung on sticks and dried by heat. Before the drying process is completed, the leaves are allowed to absorb moisture. Then they are dried again. There is some fermentation at this stage. But the treatment in the tobacco barns is essentially a drying operation during which the moisture content is reduced to between 10% and 25%.
At the end of the drying operation, the leaves are packed in boxes and taken from the farm to a bulking plant for further processing. At the bulking plant, the leaves are placed in piles, known as 'bulks,' aggregating from 3,500 to 4,500 pounds of tobacco. This is the 'sweating' or fermentation process, which requires carefully controlled regulation of temperature and humidity. Proper heat control includes, among other things, breaking up the bulk, redistributing the tobacco, and adding water. Proper fermentation or aging requires the bulk to be reconstructed several times. The bulking process lasts from four to eight months, after which the tobacco is baled. The bulking process requires a large amount of equipment, including a steam-heated plant, platforms, thermometers, bulk covers, baling boxes and presses, baling mats and packing, sorting and grading tables. The bulking process substantially changes the physical properties and chemical content of the tobacco, improving the color, increasing combustibility, and eliminating the rawness and harshness of the freshly cured leaf.
Respondent Budd grows no tobacco itself and confines its operations to processing the tobacco grown on 263 acres by 52 farmers. Budd employs about 108 workers for bulking, sorting, grading, and baling tobacco.
'any individual employed within the area of production (as defined by the Administrator), engaged in handling, packing, storing, ginning, compressing, pasteurizing, drying, preparing in their raw or natural state, or canning of agricultural or horticultural commodities for market, or in making cheese or butter or other dairy products'.
The Court of Appeals, following its earlier decisions in Jenkins v. Durkin, 5 Cir., 208 F.2d 941, and Lovvorn v. Miller, 5 Cir., 215 F.2d 601, held that the regulation was invalid. It concluded that once 'geographic lines of the area of production have been established, the act makes the exemption effective within that area', and that any qualification by reason of size of the town where the establishment is located is invalid. 215 F.2d at page 603. For that conclusion the Court of Appeals found comfort in Addison v. Holly Hill Fruit Products, Inc., 322 U.S. 607, 64 S.Ct. 1215, 88 L.Ed. 1488.
Holly Hill involved one of the alternative definitions of 'area of production'. That alternative defined 'area of production' in geographic terms and then added another standard whether the employee was in an establishment having no more than seven employees. We held that '* * * Congress did not leave it to the Administrator to decide whether within geographic bounds defined by him the Act further permits discrimination between establishment and establishment based upon the number of employees.' Id., 322 U.S. 616, 64 S.Ct. 1220. We said that the phrase "area of production" had 'plain geographic implications' with which the size of a plant within the area was not consistent. Id., 322 U.S. 618, 64 S.Ct. 1221. That definition, therefore, was struck down. But its alternative, substantially the one that is involved here, was not passed upon. In fact, we reserved decision in Holly Hill as to whether the population criterion, now presented for decision, was valid. Id., 322 U.S. 610, 64 S.Ct. 1217.
No definition of 'area of production' could produce complete equality, for the variables are too numerous. The Administrator fulfills his role when he makes a reasoned definition. See Gray v. Powell, 314 U.S. 402, 411, 62 S.Ct. 326, 332, 86 L.Ed. 301. On no phase of this problem can we say that the Administrator proceeded capriciously or by the use of inadmissible standards. Experts might disagree over the desirability of one formula rather than another. It is enough for us that the expert stayed within the allowable limits. We think he did here and that the definition of 'area of production' under § 13(a)(10) is a valid one.
Agriculture.—The Court of Appeals held that the employees in the bulking plants of King Edward and May were exempt under § 13(a)(6) which covers 'any employee employed in agriculture'. It relied on the broad definition of 'agriculture' contained in § 3(f) of the Act which provides, in relevant part, that the term 'includes farming in all its branches and among other things includes * * * any practices (including any forestry or lumbering operations) performed by a farmer or on a farm as an incident to or in conjunction with such farming operations, including preparation for market, delivery to * * * market or to carriers for transportation to market.' The work in the bulking plants, the court ruled, was 'preparation for market' within the meaning of § 3(f).
The exemption of § 13(a)(6) read with § 3(f) covers large operators as well as small ones, as we recently said in Maneja v. Waialua Agricultural Co., supra, 349 U.S. 260, 75 S.Ct. 723, 99 L.Ed. 1040. It also includes 'extraordinary methods' of agriculture as well as the more conventional ones. Id., 349 U.S. 261, 75 S.Ct. 723. The question in the Waialua case was whether sugar milling was included in the agriculture exemption of § 13(a)(6). We said that it was necessary to look to all the facts surrounding the process to determine whether that process was incident to farming. Id., 349 U.S. 264—265, 75 S.Ct. 725. We held that sugar milling was not, even when done by the grower. We think like considerations indicate that in this case the agriculture operation does not extend through the bulking plants but ends, as the District Court ruled, with the delivery of the tobacco at the receiving platform of the bulking plant. That is the 'delivery * * * to market' within the meaning of § 3(f) of the Act.
Second, the bulking operation is a process which changes the natural state of the freshly cured tobacco as significantly as milling changes sugar cane. As indicated above, the bulking process changes and improves the leaf in many ways and turns it into an industrial product. What we said in Waialua concerning sugar milling is apt here: a process that results in such important changes is 'more akin to manufacturing than to agriculture.' 349 U.S. at page 265, 75 S.Ct. at page 726.
(iv) With respect to the compressing and compress-warehousing of cotton, and operations on tobacco, grain, soybeans, poultry or eggs—50 miles.
(iii) Five air-line miles of any city with a population of 500,000 or greater according to the latest available United States Census.
(3) The period for determining whether 95 percent of the commodities are received from normal rural sources of supply shall be the last preceding calendar month in which operations were carrier on for two workweeks or more, except that until such time as an establishment has operated for such a calendar month the period shall be the time during which it has been in operation.
The entire regulation is set forth in the Appendix to this opinion, 76 S.Ct. 532.
'Although it is clear that any line attempting to distinguish between 'urbanindustrial' and 'rural-agricultural' communities on the basis of population can at best be only an approximation, it is equally clear that none of the proposals advanced at the hearing would accomplish the objectives of such a test with as much accuracy as the 2,500 population test. As a class, places of 2,500 population or more are predominantly industrial, while places with populations of less than 2,500 are predominantly agricultural. A population limit of 2,500, moreover, has for over 35 years been the official dividing line between 'rural' and 'urban' employed by the Bureau of the Census in its studies. This dividing line has also been accepted and used in studies made by the Bureau of Agricultural Economics, the Federal Emergency Relief Administration, the Works Progress Administration and other government agencies. It has furnished the definition of 'rural' communities which has been the basis of studies of rural and urban communities by many sociologists. It has been incorporated into statute by the Congress of the United States in special legislation for rural communities.* To a very great extent the handling and processing of agricultural and horticultural commodities is carried on in the open country or in towns of less than 2,500. For example, only about 10% of grain elevators are located in towns of 2,500 or more. Only about 11% of cotton gins are located in such populated places. About two-thirds of all fresh fruit and vegetable canning and packing, cheese manufacturing and poultry and egg assembling are carried on in the open country on in towns of 2,500 or less.
The references were to 39 Stat. 356, 40 Stat. 1200.

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