Case Name: STATE OF MARYLAND, Plaintiff, and State of Colorado et al., Intervening Plaintiffs, v. W. Willard WIRTZ, Secretary of Labor, United States Department of Labor and Clarence T. Lundquist, Administrator of the Wage and Hour and Public Contracts Division of the United States Department of Labor, and William Hargadine, Jr., Regional Director, Third Region, Wage and Hour and Public Contracts Division, United States Department of Labor, Defendants
Court: United States District Court for the District of Maryland
Jurisdiction: United States
Decision Date: 1967-06-13
Citations: 269 F. Supp. 826
Docket Number: Civ. A. No. 18005
Parties: STATE OF MARYLAND, Plaintiff, and State of Colorado et al., Intervening Plaintiffs, v. W. Willard WIRTZ, Secretary of Labor, United States Department of Labor and Clarence T. Lundquist, Administrator of the Wage and Hour and Public Contracts Division of the United States Department of Labor, and William Hargadine, Jr., Regional Director, Third Region, Wage and Hour and Public Contracts Division, United States Department of Labor, Defendants.
Judges: Before WINTER, Circuit Judge, THOMSEN, Chief Judge, and NORTHROP, District Judge.
Reporter: Federal Supplement
Volume: 269
Pages: 826–855

Head Matter:
STATE OF MARYLAND, Plaintiff, and State of Colorado et al., Intervening Plaintiffs, v. W. Willard WIRTZ, Secretary of Labor, United States Department of Labor and Clarence T. Lundquist, Administrator of the Wage and Hour and Public Contracts Division of the United States Department of Labor, and William Hargadine, Jr., Regional Director, Third Region, Wage and Hour and Public Contracts Division, United States Department of Labor, Defendants.
Civ. A. No. 18005.
United States District Court D. Maryland.
June 13, 1967.
Francis B. Burch, Atty. Gen. of Maryland, Alan M. Wilner and Franklin Gold-stein, Asst. Attys. Gen. of Maryland (Robert F. Sweeney, Deputy Atty. Gen. of Maryland, and Loring E. Hawes, Asst. Atty. Gen. of Maryland, on brief), A. J. Carubbi, Hawthorne Phillips and Robert W. Norris, Asst. Attys. Gen. of Texas (Crawford C. Martin, Atty. Gen. of Texas, and Cecil A. Morgan, Fort Worth, Tex., for Ft. Worth Independent School District, on brief), William M. Hoiles, Asst. Atty. Gen. of Ohio, G. T. Blakenship, Atty. Gen. of Oklahoma, James Noble, Atty. Gen. of New Mexico, for plaintiffs.
Charles Donahue, Sol. of Labor, Thomas J. Kenney, U. S. Atty., Dist. of Maryland, James M. Miller, Deputy Associate 501., Dept, of Labor (Barefoot Sanders, Asst. U. S. Atty. Gen., Harland F. Leathers, William A. Gershuny, Attys., Dept, of Justice, Bessie Margolin, Associate 501., Dept, of Labor, Robert E. Nagle and William Fauver, Attys., Dept, of Labor, on brief), for defendants.
J. Albert Woll, Robert C. Mayer, Lawrence Gold and Thomas E. Harris, Washington, D. C., on brief for American Federation of Labor and Congress of Industrial Organizations, amici curiae.
Henry Kaiser, Ronald Rosenberg and Van Arken & Kaiser, Washington, D. C., on brief for American Federation of State, County and Municipal Employees, AFL-CIO, amicus curiae.
Before WINTER, Circuit Judge, THOMSEN, Chief Judge, and NORTHROP, District Judge.
Only counsel who participated in the hearing on the merits and who filed briefs are thus listed. Appearances for the intervening States were entered by their Attorneys General and one or more Assistant Attorneys General.

Opinion:
WINTER, Circuit Judge:
This is an action brought by the State of Maryland, in which twenty-five other States have intervened as parties plaintiff, asking the Court to declare unconstitutional the 1966 Amendments to the Fair Labor Standards Act (the "1966 Amendments") insofar as they apply to employees of the plaintiff States, and to enjoin enforcement of the Act, as amended, against the States. Although the 1966 Amendments extend the Act's coverage to employees of enterprises, whether public or private, engaged in the operation of schools, hospitals and related institutions, street, suburban or interurban electric railways, and local trolley and motorbus carriers, the States, in briefs and oral argument, challenge application of the Act only to public schools, hospitals and related institutions; and this Court will limit its consideration accordingly.
Defendants have filed a motion to dismiss or, in the alternative, a motion for summary judgment. Plaintiffs have filed cross-motions for summary judgment. The parties have entered into extensive stipulations of fact with regard to Maryland, Texas and Ohio. It is agreed that these data may be taken as representative of the situation in the other plaintiff States. Some objections to relevancy and materiality have been raised, but the Court is satisfied that the conclusions reached herein would not be affected by the exclusion of any of the stipulated evidence.
INTRODUCTION
The Fair Labor Standards Act, 29 U.S. C.A. § 201 et seq., was first enacted in 1938 as a result of Congressional findings, recited in § 2(a) of the Act, 29 U.S. C.A. § 202, that:
"the existence, in industries engaged in commerce or in the production of goods for commerce, of labor conditions detrimental to the maintenance of the minimum standard of living necessary for health, efficiency, and general well-being of workers (1) causes commerce and the channels and instrumentalities of commerce to be used to spread and perpetuate such labor conditions among the workers of the several States; (2) burdens commerce and the free flow of goods in commerce; (3) constitutes an unfair method of competition in commerce; (4) leads to labor disputes burdening and obstructing commerce and the free flow of goods in commerce; and (5) interferes with the orderly and fair marketing of goods in commerce."
It was therefore declared to be the policy of Congress, through the exercise of its power to regulate commerce among the several States "to correct and as rapidly as practicable to eliminate the conditions above referred to in such industries without substantially curtailing employment or earning power." 29 U.S. C.A. § 202(b). Congress accordingly provided that employers must pay those employees who were "engaged in commerce or in the production of goods for commerce" a minimum hourly wage, 29 U.S.C.A. § 206(a), and one and one-half times their regular hourly rate for weekly hours over a specified maximum, 29 U.S.C.A. § 207(a) (1). States and their political subdivisions were excluded from the Act's definition of "Employer." 29 U.S.C.A. § 203(d).
The constitutionality of the original Act was sustained in United States v. Darby, 312 U.S. 100, 61 S.Ct. 451, 85 L.Ed. 609 (1941). The Court stated, inter alia, that the power of Congress over commerce "extends to those activities intrastate which so affect interstate commerce or the exercise of the power of Congress over it as to make regulation of them appropriate means to the attainment of a legitimate end, the exercise of the granted power of Congress to regulate interstate commerce." Id., at p. 118, 61 S.Ct., at p. 459.
The Act has been amended several times, but until the 1966 Amendments state employees were not brought within its coverage.
In 1961 the "enterprise" concept was introduced. 29 U.S.C.A. § 203(r), 75 Stat. 65. In addition to employees previously covered — those personally engaged in interstate commerce or in the production of goods for commerce — the Act was extended to cover "the related activities performed (either through unified operation or common control) by any person or persons for a common business purpose, and includes all such activities whether performed in one or more establishments or by one or more corporate or other organizational units including departments of an establishment operated through leasing arrangements, but shall not include the related activities performed for such enterprise by an independent contractor." An "enterprise engaged in commerce or in the production of goods for commerce," and therefore covered by the Act, was defined in terms of a minimum annual dollar volume of gross sales and, in some instances, the particular type of business involved. See 29 U.S.C.A. § 203(r) and (s). The validity and scope of the enterprise concept has not yet been decided by the Supreme Court.
The 1966 Amendments extended the enterprise basis of coverage and brought within the Act public as well as private enterprises engaged in operating schools, hospitals and related institutions, street, suburban or interurban electric railways, and local trolley or motorbus carriers. The definition of "Employer" in 29 U.S. C.A. § 203(d) was amended to eliminate the existing exclusion of States and their political subdivisions insofar as they engaged in those activities. In fitting employees first covered by the 1966 Amendments into the minimum wage and maximum hour scale of employees theretofore covered, the 1966 Amendments provide for an escalation of the minimum wage and of maximum hours over a period of five years.
The 1966 Amendments, which thus had the effect of extending the minimum wage and overtime provisions of the Fair Labor Standards Act to a portion of the labor market not theretofore covered, are attacked insofar as they extend coverage to certain employees of public schools, hospitals and related institutions. Despite the impression sought to be created by several of the plaintiff States, extension of the Act to certain groups of state employees was not a concept first advanced in the Second Session of the 89th Congress under circumstances which would have prevented the States from presenting their views in opposition to the proposal, had they sought to keep abreast of matters under consideration by Congress.
The first legislative effort to extend coverage to some state employees occurred in the First Session of the 89th Congress. During the Second Session of the 89th Congress, when H.R. 13712, which, as amended, was enacted as the 1966 Amendments, was introduced into the House of Representatives, it contained language which would have extended coverage (subject to the exemptions in § 13) to any person "in connection with the operation of a hospital, an institution primarily engaged in the care of the sick, the aged, the mentally ill or defecfive who reside on the premises of such institution, a school for mentally handicapped or gifted children, or an institution of higher education (regardless of whether or not such hospital, institution or school is public or private or operated for profit or not for profit) * (emphasis supplied) During legislative consideration of the bill, the only variation as to the extent of coverage, pertinent to this law suit, was whether public or private school employees covered should be limited to those employed by "an institution of higher education" or whether they should include persons employed by "an elementary or secondary school." The question was resolved by extending coverage to employees of elementary and secondary schools, as well as institutions of higher learning, subject, again, to the exemptions contained in § 13 of the Act, as also amended by the 1966 Amendments.
The plaintiff States attack the constitutionality of the 1966 Amendments on the ground that the activities of the States and various school districts in the operation of schools, hospitals and related institutions are not commerce, that the "enterprise" concept embodied in the Act by amendments adopted in 1961 is unconstitutional, and that the 1966 Amendments unconstitutionally impugn state sovereignty.
I conclude, for the reasons hereafter stated, that all three of these contentions should be resolved against the plaintiffs, that to the extent of the scope of this proceeding the 1966 Amendments should be declared valid and constitutional, and that injunctive relief should be denied.
COMMERCE POWER
Maryland and Texas argue that the activities of a State do not constitute "commerce" which may be regulated under the exclusive power vested in Congress to regulate interstate and foreign commerce. Maryland argues more specifically that, with respect to the operation of public schools, the State's activity has three attributes which remove it from any legitimate definition of commerce, i. e., the activity is non-profit, it is purely governmental, and there is no non-governmental system to compete with or substitute for it.
At the outset, it is well to note that these arguments are based upon a more restrictive premise than the decided cases will support. United States v. Darby, supra, upholding the constitutionality of the Fair Labor Standards Act generally, is only one of many decisions which holds that the power of Congress over interstate commerce includes not only that which in itself is interstate commerce but also "extends to those activities intrastate which so affect interstate commerce or the exercise of the power of Congress over it, as to make the regulation of them appropriate means to the attainment of a legitimate end." Id., 312 U.S. at p. 118, 61 S.Ct. at p. 459. See also, United States v. Wrightwood Dairy Co., 315 U.S. 110, 119, 62 S.Ct. 523, 86 L.Ed. 726 (1942) ; Heart of Atlanta Motel, Inc. v. United States, 379 U.S. 241, 258, 85 S.Ct. 348, 13 L.Ed.2d 258 (1964); Katzenbach v. McClung, 379 U.S. 294, 300-301, 85 S.Ct. 377, 13 L.Ed.2d 290 (1964). Among the decided cases, the most extreme example of the reach of the commerce power of Congress to regulate local activity is Wickard v. Filburn, 317 U.S. 111, 63 S.Ct. 82, 87 L.Ed. 122 (1942), where a farmer's consumption of wheat raised on his own farm was held within the reach of Congress to regulate under the commerce clause because that consumption, and its counterpart on other farms, exerted a substantial economic effect on interstate commerce. Accord: United States v. Ohio, 385 U.S. 9, 87 S.Ct. 66, 17 L.Ed.2d 8 (1966)
Thus, the proper inquiry is not limited to a consideration of whether the activities of the States in operating public schools, schools of higher education or hospitals, are "commerce" as such. The proper inquiry is much broader. It is whether such activities are commerce or affect commerce, even though local in nature, and hence within the power of Congress to regulate commerce.
Maryland's claims that public schools are non-profit, purely governmental and not in direct competition with non-governmental systems are not shibboleths to determine what is and what is not commerce. "Commerce" is not confined to "business" activity in a conventional sense; it includes non-business and non-profit activities, whether private or governmental in nature and irrespective of whether they compete with or may be substituted for by private enterprise. Powell v. United States Cartridge Co., 339 U.S. 497, 70 S.Ct. 755, 94 L.Ed. 1017 (1950); Mitchell v. Lublin, McGaughy & Associates, 358 U.S. 207, 79 S.Ct. 260, 3 L.Ed.2d 243 (1959); United States v. Ohio, 385 U.S. 9, 87 S.Ct. 66, 17 L.Ed.2d 8 (1966); Wirtz v. R. E. Lee Electric Company, 339 F.2d 686 (4 Cir. 1964); Mitchell v. Owen, 292 F.2d 71 (6 Cir. 1961); Goldberg v. Nolla, Galib & Cia., 291 F.2d 371 (1 Cir. 1961), cert. den. Five Boro Construction Corp. v. Goldberg, 368 U.S. 900, 82 S.Ct. 179, 7 L.Ed.2d 95 (1961); N. L. R. B. v. Central Dispensary & Emergency Hospital, 79 U.S.App.D.C. 274, 145 F.2d 852 (1945), cert. den., 324 U.S. 847, 65 S.Ct. 684, 89 L.Ed. 1408 (1945). In Public Building Authority of City of Birmingham v. Goldberg, 298 F.2d 367, 370 (5 Cir. 1962), the Court, in holding that federal employees engaged in processing claims for the payment of social security benefits and preparing government checks for beneficiaries were producing goods for commerce, summarized prior holdings by declaring that "there need be no private parties or profit motive present to constitute commerce." It will be noted that this was said in a case in which all of the factors urged by Maryland to render her activities not within the commerce power of Congress were present: the activity was governmental, non-profit, and could not be performed by private enterprise.
The fact is that under the stipulations before us there is abundant evidence that the States, in the performance of the functions where certain employees are covered by the Act, as amended by the 1966 Amendments, are not only engaging in commerce, or in the production of goods for commerce, but are engaging in activities, local in nature, which have a substantial effect on commerce. A brief recital of some of the stipulations between the parties is sufficient to demonstrate.
In the current fiscal year an estimated $38.3 billion will be spent by State and local public educational institutions in the United States. In the fiscal year 1965, these same authorities spent $3.9 billion operating public hospitals. Expenditures of this magnitude are bound to have an enormous impact on interstate commerce.
For Maryland, which was stipulated to be typical of the plaintiff States, 87% of the $8 million spent for supplies and equipment by its public school system during the fiscal year 1965 represented direct interstate purchases. Over 55% of the $576,000 spent for drugs, x-ray supplies and equipment and hospital beds by the University of Maryland Hospital and seven other state hospitals were out-of-state purchases. With respect to seven other state hospitals which spent $875,000 on such items during the comparable period, the parties have stipulated that all or "the most part" of such items were manufactured outside of Maryland.
In Ohio, also stipulated to be typical of all of the plaintiff States, there are 708 school districts, 3 of which (stipulated to be typical of the other school districts) purchased a total of $323,000 in supplies in the fiscal year 1966. Approximately 50% of these purchases were directly from outside of the state. Ohio's six state universities spent $9 million on certain specified supplies in that year, over 42% of which were purchased directly from out-of-state, with an undetermined portion of the remainder being manufactured outside the state.
In Texas, all text books originate outside the state, and it is stipulated that "the major portion" of drugs and hospital equipment is either purchased directly from out of the state or is at least manufactured in other states.
The interstate flow of school and hospital supplies and equipment is, in large part, inevitable because of the nondiffusion of manufacturing supplies. For example, there are no Maryland suppliers for fourteen out of eighteen major categories of school supplies and equipment. Even larger States, such as Ohio and Texas, have no producers, or very few producers, of text books, science equipment and physical education equipment.
Not only do public schools and hospitals give rise to a large interstate flow of supplies and equipment, having a correspondingly substantial effect upon interstate commerce, public schools and hospitals are directly engaged in commerce and the production of goods for commerce by virtue of federal aid to education and health, involving billions of dollars. Over $4 billion is spent each year in federal grants, of which over $2 billion goes for elementary and secondary public education, 50% of which is granted directly to local school districts under programs requiring extensive communications between local schools and regional and national facilities of the United States Office of Education. In the area of health services, federal expenditures during fiscal year 1965 amounted to $5 billion, while State and local government expenditures amounted to $4.9 billion. Included in the total of federal expenditures, are annual federal assistance of $260 million for the construction and enlargement of hospitals and other health facilities, annual medical research grants of over $600 million, and public health grants of $65 million to support State and local health agencies, both in operating costs and in programs for the control of disease. Additionally, the Social Security Administration during fiscal 1967 will pay out $2.35 billion for hospital services under the Medicare program, in which 94% of the hospitals in the country, both public and private, currently participate. Another $1 billion will be spent for direct reimbursement to hospitals and physicians for services to eligible patients. These programs create a regular interstate flow of funds to participating hospitals, extensive interstate communication and preparation of materials for interstate transmission by both local hospitals and state agencies, including engineering and architectural plans for hospital construction and enlargement, research data and reports, medical benefits claims, and numerous other types of reports and records.
"Ideas, wishes, orders and intelligence" are "subjects of commerce," Western Union Tel. Co. v. Lenroot, 323 U.S. 490, 502-503, 65 S.Ct. 335, 89 L.Ed. 414 (1945), and the preparation of written documents and other materials for out-of-state transmission, as well as the actual interstate transmission of funds, documents and other communications, are all activities in commerce. Beneficial Finance Co. of Wisconsin v. Wirtz, 346 F.2d 340 (7 Cir. 1965); Willmark Service System, Inc. v. Wirtz, 317 F.2d 486 (8 Cir. 1963), cert. den., 375 U.S. 897, 84 S.Ct. 170, 11 L.Ed.2d 125 (1963); Public Building Authority of City of Birmingham v. Goldberg, 298 F.2d 367 (5 Cir. 1962); Mitchell v. Kroger Company, 248 F.2d 935 (8 Cir. 1957); Aetna Finance Co. v. Mitchell, 247 F.2d 190 (1 Cir. 1957). Thus, from these activities, as well as the out-of-state purchases and the receipt of interstate shipments which are either stipulated or inescapably must be inferred from the facts stated, the conclusion is inevitable that the activities of the states are "in" commerce, constitute the production of goods for commerce, or substantially affect commerce, although local in nature. Leaving aside for the moment the question of state sovereignty, I conclude that these activities are clearly within the power of Congress to regulate commerce.
THE ENTERPRISE CONCEPT
The only authorities to pass on the constitutionality of the enterprise concept, Wirtz v. Edisto Farms Dairy, 242 F.Supp. 1 (D.S.C.1965), and Goldberg v. Ed's Shopworth Supermarket, 214 F.Supp. 781 (W.D.La.1963), have both sustained its validity. From my examination of the pertinent authorities, I am in accord with the result reached in those decisions and conclude that the enterprise concept embodied in the Fair Labor Standards Act in 1961, 29 U.S.C.A. § 203 (r), represents a constitutionally valid exercise of the power of Congress to regulate commerce.
As I have recited, prior to 1961 the Fair Labor Standards Act applied only to those employees who themselves engaged in commerce or in the production of goods for commerce. By the provisions of the 1961 Amendments, all employees of various enterprises whose activities related to the movement of goods in commerce, including those engaged in selling, distributing or using goods that had previously moved in commerce became subject to the Act, subject of course, to the exemptions contained in § 13 of the Act, 29 U.S.C.A. § 213.
Translated into a concrete example, the enterprise concept, as amended by the 1966 Amendments, means that in a private or public hospital the nurse's aid or maintenance worker, even though not engaged in commerce or in the production of goods for commerce, is subject to the minimum wage and overtime provisions of the Act if some employee of the hospital is engaged in commerce or in the production of goods for commerce, or handling goods in commerce. That Congress may constitutionally so extend coverage seems clear from the decided cases, of which Congress was fully aware when it first adopted the enterprise concept in 1961. Indeed, it may properly be concluded that in adopting the enterprise concept Congress did not exercise to the limit its full power to regulate commerce, because application of the enterprise concept is conditioned upon the presence of some employee directly engaging in commerce, producing goods for commerce or handling goods in commerce. From the authorities it may be concluded that the enterprise concept could have been conditioned upon some employee engaging in local activity "affecting commerce" short of the actual interstate activity previously mentioned.
One of the leading authorities pointing to the conclusions just stated is National Labor Relations Board v. Reliance Fuel Oil Corp., 371 U.S. 224, 83 S.Ct. 312, 9 L.Ed.2d 279 (1963), in which the National Labor Relations Board's jurisdiction over unfair labor practices committed by a retail distributor of fuel oil, all of whose sales were local, where the retailer obtained the oil from a wholesaler who imported it from another state, was upheld. The conclusion resulted from the Court's construction of the National Labor Relations Act to vest in the Board " the fullest jurisdictional breadth constitutionally permissible under the Commerce Clause" (Id., at p. 226, 83 S.Ct. at p. 313), and the citation of Wickard v. Filburn, supra, to support, the conclusion that the distributor's activities affected commerce and were within the constitutional reach of Congress to regulate. Reference was also made to Polish National Alliance, etc. v. N. L. R. B., 322 U.S. 643, 64 S.Ct. 1196, 88 L.Ed. 1509 (1944), for the proposition that in enacting the National Labor Relations Act " Congress has explicitly regulated not merely transactions or goods in interstate commerce but activities which in isolation might be deemed to be merely local but in the interlacings of business across state lines adversely affect such commerce." Id., at p. 648, 64 S.Ct. at p. 1199.
Similarly, in N. L. R. B. v. Denver Bldg. & Constr. Trades Council, 341 U.S. 675, 71 S.Ct. 943, 95 L.Ed. 1284 (1951) ; Building Trades Council v. Kinard Constr. Co., 346 U.S. 933, 74 S.Ct. 373, 98 L.Ed. 423 (1954); and Plumbers, etc., Local 298, A. F. of L. v. Door County, 359 U.S. 354, 79 S.Ct. 844, 3 L.Ed.2d 872 (1959), the use of materials from out-of-state provided the basis for National Labor Relations Board jurisdiction with respect to the construction, respectively, of an office building, a court house and a housing project. See also, San Diego Building Trades Council v. Garmon, 353 U.S. 26, 77 S.Ct. 607, 1 L.Ed.2d 618 (1957); Amalgamated Meat Cutters, etc., Local No. 427, AFL v. Fairlawn Meats, Inc., 353 U.S. 20, 77 S.Ct. 604 (1957). See also, Howell Chevrolet Co. v. N. L. R. B., 346 U.S. 482, 74 S.Ct. 214, 98 L.Ed. 215 (1953).
If the National Labor Relations Board may regulate the acts of the employer toward each employee of the fuel oil retail distributor and every construction worker on a building project without regard to whether that employee is directly engaged in interstate commerce simply because some goods are bought by the company out-of-state, it cannot be doubted that the nurse's aid or hospital maintenance worker likewise may be brought under the coverage of the Fail-Labor Standards Act when someone employed by the hospital purchases drugs and equipment out-of-state, or purchases from local sources drugs and equipment which were produced out-of-state, or handles drugs and equipment originating from out-of-state, or the hospital engages in commerce in administering and carrying out a federal health grant or the program of Medicare, even though the nurse's aid or maintenance worker himself does not carry on such activities. The same is true in regard to employees of schools, elementary, secondary, or institutions of higher learning, and specialized hospitals engaged in treatment of the mentally ill, those suffering from contagious diseases, the aged, or the handicapped.
It is a matter of elementary logic that the hospital and the school function as a result of the sum of all of the activities of all of their employees. The hospital administrator or the superintendent of education (himself exempt from the provisions of the Act), or his secretary, or some other employees, would have no occasion to engage in commerce, or the production of goods in commerce, if the services of the employees covered by the Act under the 1966 Amendments were permanently withdrawn. Their services are essential to the operation of the hospital or the school and, hence, their activities, although local in nature, substantially affect commerce, so that Congress may regulate the minimum wages to be paid them as well as the maximum hours they may be required to work without payment of overtime.
STATE SOVEREIGNTY
The precise claim of unconstitutional interference with state ' sovereignty made in this case has not been adjudicated by any court, because Congress has not heretofore attempted to regulate minimum wages and maximum hours (without overtime) for state employees. But from what has been decided in numerous other contexts analogous to the ease at bar, and from the basis of those decisions, I can only conclude that the 1966 Amendments are valid and constitutional in their entirety. I have already referred to the cases in which the full extent of the power of Congress generally to regulate commerce has been developed. In every instance in which the exercise of this power has. been applied to some state activity, the validity of the exercise has been upheld in language and on reasoning which, I am satisfied, sustains the validity of the 1966 Amendments. Because it is on this aspect of the case that the States most vigorously attack the validity of the 1966 Amendments, I am constrained to discuss these authorities fully.
Since the States are most vociferous in conjuring up the possible "horribles" of an adverse adjudication to them, it is necessary, at the outset, to define what is — and what is not — presently before us. Before me is only the question of whether Congress may prescribe minimum wages and overtime for non-executive, non-professional and non-administrative employees of private and public hospitals, schools and related institutions. Congress has singled out this group which, experience has proved, is often underpaid and subjected to unreasonable work schedules and has required that its members be paid a minimum sum which, measured by the standards of contemporary society, is deemed a decent wage and that they not be compelled to work longer hours in a work period without payment of overtime than, by those standards, are deemed proper. These standards have been made applicable to private and public employees, alike. Congress has not sought to cover doctors, nurses, principals, teachers, research assistants, or the like. Nor has Congress sought to cover the governors, attorneys general, legislators, judges or policemen, who, some of the States assert, could eventually be covered if we upheld the validity of the 1966 Amendments.
Our consideration of the constitutional issue presented here cannot deal with hypothetical projections by the States of regulations yet to come. Our consideration of the States' contention that their sovereignty is impaired, and my conclusion that the 1966 Amendments are valid and constitutional, are limited to the 1966 Amendments and only those employees to which they extend, as are my previous conclusions that the power to regulate under the commerce clause exists and that the enterprise concept is constitutional. No court, and in particular no lower federal court, should attempt to adjudicate that which is not justiciable; all must steadfastly follow the rules set down by the Supreme Court governing the process of constitutional adjudication:
"The very foundation of the power of the federal courts to declare Acts of Congress unconstitutional lies in the power and duty of those courts to decide cases and controversies properly before them. This was made patent in the first case here exercising that power — 'the gravest and most delicate duty that this Court is called on to perform.' Marbury v. Madison (US) 1 Cranch 137, 177-180, 2 L.Ed. 60, 73, 74. This Court, as is the case with all federal courts, 'has no jurisdiction to pronounce any statute, either of a State or of the United States, void, because irreconcilable with the constitution, except as it is called upon to adjudge the legal rights of litigants in actual controversies. In the exercise of that jurisdiction, it is bound by two rules, to which it has rigidly adhered : one, never to anticipate a question of constitutional law in advance of the necessity of deciding it; the other, never to formulate a rule of constitutional law broader than is required by the precise facts to which it is to be applied.' Kindred to these rules is the rule that one to whom application of a statute is constitutional will not be heard to attack the statute on the ground that impliedly it might also be taken as applying to other persons or other situations in which its application might be unconstitutional. In Barrows v. Jackson, 346 U.S. 249, 73 S.Ct. 1031, 97 L.Ed. 1586, this Court developed various reasons for this rule. Very significant is the incontrovertible proposition that it 'would indeed be undesirable for this Court to consider every conceivable situation which might possibly arise in the application of complex and comprehensive legislation.' Id., 346 U.S. at page 256, 73 S.Ct. at page 1035. The delicate power of pronouncing an Act of Congress unconstitutional is not to be exercised with reference to hypothetical cases thus imagined." (emphasis supplied; footnote eliminated) United States v. Raines, 362 U.S. 17, 20-22, 80 S.Ct. 519, 522, 4 L.Ed.2d 524 (1960).
As a first step in the decision of the limited question before me, it is necessary to put to rest any argument based upon the Tenth Amendment, as such. The Tenth Amendment is but a "truism" —"that all is retained which has not been surrendered." United States v. Darby, supra, 312 U.S. at p. 124, 61 S.Ct. at p. 462. Besides stating this self-executing formula, the decided cases are clear that the Tenth Amendment neither adds to nor detracts from the essential question to be decided in this case. United States v. Sprague, 282 U.S. 716, 733-734, 51 S.Ct. 220, 75 L.Ed. 640 (1931); United States v. Appalachian Electric Power Company, 311 U.S. 377, 428, 61 S.Ct. 291, 85 L.Ed. 243 (1940); State of Oklahoma ex rel. Phillips v. Guy F. Atkinson Co., 313 U.S. 508, 534, 61 S.Ct. 1050, 85 L.Ed. 1487 (1941); Fernandez v. Wiener, 326 U.S. 340, 362, 66 S.Ct. 178, 90 L.Ed. 116 (1945); Case v. Bowles, 327 U.S. 92, 101-103, 66 S.Ct. 438, 90 L.Ed. 552 (1946); United States v. Oregon, 366 U.S. 643, 649, 81 S.Ct. 1278, 6 L.Ed.2d 575 (1961).
I turn directly to the cases where federal regulation under the Commerce Clause has been upheld, even when applied to an "essential" state activity. The principal authorities which must be considered are Sanitary District of Chicago v. United States, 266 U.S. 405, 45 S.Ct. 176, 69 L.Ed. 352 (1925); Board of Trustees of University of Illinois v. United States, 289 U.S. 48, 53 S.Ct. 509, 77 L.Ed. 1025 (1933); Case v. Bowles, 327 U.S. 92, 66 S.Ct. 438, 90 L.Ed. 552 (1946); and the four related cases of United States v. State of California, 297 U.S. 175, 56 S.Ct. 421, 80 L.Ed. 567 (1936); State of California v. United States, 320 U.S. 577, 64 S.Ct. 352, 88 L.Ed. 322 (1944); State of California v. Taylor, 353 U.S. 553, 77 S.Ct. 1037, 1 L.Ed.2d 1034 (1957); and Parden v. Terminal Ry. of Alabama State Docks Dept., 377 U.S. 184, 84 S.Ct. 1207, 12 L.Ed.2d 233 (1964). Also of interest, because it posed an issue of state sovereignty dispositive of this litigation, is United States v. Ohio, 385 U.S. 9, 87 S.Ct. 66, 17 L.Ed.2d 8 (1966).
The oldest and one of the most important cases is the Sanitary District case. This was a suit by the Attorney General of the United States to enjoin the Sanitary District of Chicago from diverting a volume of water from Lake Michigan in excess of that allowed by federal statute, although a state statute set a higher limit. The federal government asserted the taking to conflict with the power of Congress to regulate inter state and foreign commerce, and with a treaty with Great Britain concerning boundary waters of the Dominion of Canada; the Sanitary District defended on the grounds, inter alia, that public health required the taking of the additional quantity of water in accordance with the state statute, because otherwise it would be impossible to carry the city's sewage downstream.
Mr. Justice Holmes, speaking for a unanimous Court, held that the injunction should issue. He declared, basing the right to relief on the power of the federal government to regulate interstate and foreign commerce:
"The main ground is the authority of the United States to remove obstructions to interstate and foreign commerce. There is no question that this power is superior to that of the states to provide for the welfare or necessities of their inhabitants. In matters where the States may act the action of Congress overrides what they have done." (emphasis supplied) Id., 266 U.S. at p. 426, 45 S.Ct. at p. 178.
Following this he recited the evidence in detail, including that which clearly showed the sanitary needs of Chicago for the additional water, and concluded the opinion by stating:
" a large part of the evidence is irrelevant and immaterial to the issues that we have to decide. Probably the dangers to which the City of Chicago will be subjected if the decree is carried out are exaggerated, but in any event we are not at liberty to consider them here as against the edict of a paramount power." (emphasis supplied) Id., at p. 432, 45 S.Ct. at p. 181.
Maryland argues that Chicago did not need the water for an "essential state function," but I conclude it difficult to think of something more essentially sovereign or necessary to the welfare of the State and its people than sewage disposal; sewage disposal is as much a part of public health as hospitals for contagious diseases, and hospitals for the mentally ill. Yet, the Court stated in this context that when Congress exercised its power over interstate and foreign commerce, the welfare or needs of the inhabitants of the State could not even be considered. Maryland also argues that the case is distinguishable because it concerned a direct burden on commerce. The answer is that Congress has found that substandard wages and nonpayment of overtime are also burdens on commerce and this finding has been judicially approved. United States v. Darby, supra.
Board of Trustees of University of Illinois v. United States, supra, was a case in which the alleged conflict between the exercise of the power of Congress to regulate commerce and the concept of state sovereignty arose where the State was exercising its sovereignty to provide higher education. The University of Illinois imported scientific apparatus for use in one of its educational departments, and it sued to obtain a refund of duties exacted on the importations. For a unanimous Court, Chief Justice Hughes held that the power of the federal government over goods moving in foreign commerce is plenary, that the State in the performance of state functions might not limit the exercise by Congress of its power, and that the duties were properly laid.
In arriving at this result, the Court recognized that the federal government has the power to tax, including the power to lay duties, and that it has the power to regulate commerce. The existence of the taxing power was stated not to foreclose Congress from laying duties in the exercise of its power to regulate commerce, and the Court concluded that the duties in question were laid in the exercise of the power to regulate commerce and not in the exercise of the taxing power. Having reached that conclusion, the Court then dealt with the argument that in the exercise of the commerce power, Congress was limited by notions of state sovereignty as it was when it exercised its taxing power:
"The principle invoked by the petitioner, of the immunity of state instrumentalities from federal taxation, has its inherent limitations. It is a principle implied from the necessity of maintaining our dual system of government. Springing from that necessity it does not extend beyond it. Protecting the functions of government in its proper province, the implication ceases when the boundary of that province is reached. The fact that the state in the performance of state functions may use imported articles does not mean that the importation is a function of the state government independent of federal power. The control of importation does not rest with the state but with the Congress. In international relations and with respect to foreign intercourse and trade the people of the United States act through a single government with unified and adequate national power. There is thus no violation of the principle luhich petitioner invokes, for there is no encroachment on the power of the state as none exists with respect to the subject over which the federal poiver has been exerted. To permit the states and their instrumentalities to import commodities for their own use, regardless of the requirements imposed by the Congress, would undermine, if not destroy, the single control which it was one of the dominant purposes of the Constitution to create. It is for the Congress to decide to what extent, if at aU, the states and their instrumentalities shall be relieved of the payment of duties on imported articles." (emphasis supplied) Id., 289 U.S. at p. 59, 53 S.Ct. at p. 510.
Significant also for the case at bar, is the earlier statement of the Court in which it described the power of Congress over interstate and foreign commerce:
"It is an essential attribute of the power that it is exclusive and plenary. As an exclusive power, its exercise may not be limited, qualified, or impeded to any extent by state action. •»
" The principle of duality in our system of government does not touch the authority of the Congress in the regulation of foreign commerce." (emphasis supplied) Id., at pp. 56-57, 53 S.Ct. at p. 509.
Maryland seeks to escape the language in this opinion by the apparent argument that the case involved Congress' power over foreign commerce and the express argument that the power of Congress over commerce would not be limited if recognition were given to state sovereignty over public schools and hospitals. Of course, the Court was writing in the field of foreign commerce, but the power of Congress over foreign commerce is no more plenary and no more exclusive than its power over commerce between the states, the latter including the power to regulate local activities which have a substantial effect on interstate commerce. Wickard v. Filburn, supra. The States lack any power to regulate commerce as such; it follows that there can bé no interference with state sovereignty over interstate commerce because none exists. Where Congress had extended the Act to certain employees of public schools and hospitals, to hold that Congress may not validly do so necessarily limits the power of Congress. The opinion's specific and peremptory rejection of the assertion that "state functions" can isolate a state or its instrumentalities from federal regulation surely goes a long way to support the validity of the 1966 Amendments. The specific and peremptory rejection of the argument that the principle of duality in our system of government may limit in any way the authority of Congress to regulate commerce is dispositive of the present case.
Case v. Bowles, supra, only repeats the clear implications of the Sanitary District and Board of Trustees cases. In Case, a suit for injunction was brought to restrain the State of Washington from selling timber on school lands at prices in excess of those fixed by regulation adopted under the Emergency Price Control Act. The State alleged, in defense of the action, that price controls could not be applied to it because the sale was "for the purpose of gaining revenue to carry out an essential governmental function- — -the education of its citizens." Id., 327 U.S. at p. 101, 66 S.Ct. at p. 443.
This argument was rejected and price controls held applicable to the State in the following language:
"We now turn to petitioner's Constitutional contention. Though as we have pointed out petitioners have alleged that the Act applied to setting a maximum price for school-land timber violates the Fifth and Tenth Amendments, the argument here seems to spring from implications of the Tenth Amendment only. The contention rests on the premise that there is a 'doctrine implied in the Federal Constitution that the two governments, national and state, are each to exercise its powers so as not to interfere with the free and full exercise of the powers of the other.' It is not contended, and could not be under our prior decisions, that the ceiling price fixed by the Administrator is Constitutionally invalid as applied to privately owned timber. Nor is it denied that the Administrator could have fixed ceiling prices if the state had engaged in a sales business 'having the incidents of similar enterprises usually prosecuted for private gain.' But it is argued that the Act cannot be applied to this sale because it was 'for the purpose of gaining revenue to carry out an essential governmental function — the education of its citizens.' Since the Emergency Price Control Act has been sustained as a Congressional exercise of the war power, the petitioners' argument is that the extent of that power as applied to state functions depends on whether these are 'essential' to the state government. The use of the same criterion in measuring the Constitutional power of Congress to tax has proved to be unworkable, and we reject it as a guide in the field here involved." (footnote eliminated: emphasis supplied) Id., at p. 101, 66 S.Ct. at p. 443.
*
"Where as here, Congress has enacted legislation authorized by its granted powers, and where at the same time, a state has a conflicting law which but for the Congressional Act would be valid, the Constitution marks the course for courts to follow. Article VI provides that 'This Constitution and the Laws of the United States made in pursuance thereof shall be the supreme Law of the Land .' " (footnote eliminated) Id., at pp. 102-103, 66 S.Ct. at p. 443.
Case v. Bowles may not be summarily rejected, as it is by Maryland, on the ground that "the real sovereignty of the State was not infringed" and the case arose under the war power of Congress. The power of Congress to regulate commerce is no less plenary and no less exclusive than the power to make war under which the Emergency Price Control Act was adopted. While price limitation on the sale of timber to support public education, in degree, might be less discommoding than fixing wages of certain state employees, the Court's rejection of the "essential" functions argument is of extreme significance; the rejection goes to the very heart of this case.
The line of cases beginning with United States v. State of California, supra, may appear to be distinguishable from the instant case on the ground that each involved state activities which do not fall within the concept of essential governmental functions. Yet the essential nature of the state activity and the sovereignty of the state was interposed as a defense in each of them and rejected by the Court, not on the ground that the activity was not essential but on the ground that the "essential" concept was not a good defense. Thus, the cases are additional authority for concluding that the States' argument here is lacking in merit.
In United States v. State of California the question was whether a terminal railroad owned and operated by a State for the purpose of facilitating the commerce of a port, all of the revenues of which were used to improve port facilities, could be subjected to the Federal Safety Appliance Act, so that the penalty prescribed by that Act for its violation could be recovered from the State of California.
California urged these activities were not subject to the Act because " it is said that as the state is operating the railroad without profit, for the purpose of facilitating the commerce of the port, and is using the net proceeds of operation for harbor improvement it is engaged in performing a public function in its sovereign capacity and for that reason cannot constitutionally be subjected to the provisions of the federal act." Id., 297 U.S. at p. 183, 56 S.Ct. at p. 423. Mr. Justice Stone (later Chief Justice), speaking for a unanimous Court, specifically rejected this argument and sustained the imposition of the penalty, stating:
" we think it unimportant to say whether the state conducts its railroad in its 'sovereign' or in its 'private' capacity. That in operating its railroad it is acting within a power reserved to the states cannot be doubted. The only question we need consider is whether the exercise of that power, in whatever capacity, must be in subordination to the power to regulate interstate commerce, which has been granted specifically to the national government. The sovereign power of the states is necessarily diminished to the extent of the grants of power to the federal government in the Constitution. In each case the power of the state is subordinate to the constitutional exercise of the granted federal power." Id., at pp. 183-184, 56 S.Ct. at p. 424.
In addition to announcing the absolute supremacy of the power of Congress to exercise its authority to regulate commerce despite the defense of state sovereignty, the Court rejected an argument that the commerce power is circumscribed by state sovereignty, as is the taxing power. It said:
"The analogy of the constitutional immunity of state instrumentalities from federal taxation, on which respondent relies, is not illuminating. That immunity is implied from the nature of our federal system and the relationship within it of state and national governments, and is equally a restriction on taxation by either of the instrumentalities of the other. Its nature requires that it be so construed as to allow to each government reasonable scope for its taxing power which would be unduly curtailed if either by extending its activities could withdraw from the taxing power of the other subjects of taxation traditionally within it. Hence we look to the activities in which the states have traditionally engaged as marking the boundary of the restriction upon the federal taxing power. But there is no such limitation wpon the plenary power to regulate commerce. The state can no mpre deny the power if its exercise has been authorized by Congress than can an individual." (emphasis supplied) Id., at pp. 184-185, 56 S.Ct. at p. 424.
In State of California v. United States, supra, an order of the United States Maritime Commission requiring elimination of preferential and unreasonable practices, i. e., excessive free time and non-compensatory charges for services, was held enforceable against the State of California and the Board of State Harbor Commissioners for San Francisco Harbor. California defended its noncompliance with the order on the ground that the Act under which it was issued had no application to public owners of wharves and piers. This question of statutory construction was decided against its contention, with the Court adding:
" it is too late in the day to question the power of Congress under the Commerce Clause to regulate such an essential part of interstate and foreign trade as the activities and instrumentalities which were here authorized to be regulated by the Commission, whether they be the activities and instrumentalities of private persons or of public agencies." Id., 320 U.S. at p. 586, 64 S.Ct. at p. 357.
The belt railway which was the subject of litigation in United States v. State of California, supra, was also the subject of litigation in State of California v. Taylor, supra. In the latter the question was whether the Railway Labor Act was applicable to the employer-employee relationship between the State of California and its employees engaged in operating the railroad. Notwithstanding that California provided that its employees had no right to bargain collectively with it concerning terms and conditions of employment, the Railway Labor Act was held applicable on the principle that a state may not prohibit the exercise of rights which the federal labor relations acts protect. As in the earlier cases, California asserted the Act, if held to apply to it, invalidly interfered with its sovereign immunity, but the Court rejected this contention, saying:
"Finally, the State suggests that Congress has no constitutional power to interfere with the 'sovereign right' of a State to control its employment relationships on a state-owned railroad engaged in interstate commerce. In United States v. California (US) supra, this Court said that the State, although acting in its sovereign capacity in operating this Belt Railroad, necessarily so acted 'in subordination to the power to regulate interstate commerce, which has been granted specifically to the national government.' 297 U.S. at page 184 [56 S.Ct. at page 424]. 'California, by engaging in interstate commerce by rail, has subjected itself to the commerce power, and is liable for a violation of the Safety Appliance Act, as are other carriers .' Id., 297 U.S. at page 185 [56 S.Ct. at page 424], That principle is no less applicable here. If California, by engaging in interstate commerce by rail, subjects itself to the commerce power so that Congress can make it conform to federal safety requirements, it also has subjected itself to that power so that Congress can regulate its employment relationships." Id., 353 U.S. at p. 568, 77 S.Ct. at p. 1045.
A similar result was reached in Parden v. Terminal Ry. of Alabama State Docks Dept., supra, where Alabama's plea of sovereign immunity was rejected in a suit brought against it under the Federal Employers' Liability Act by an employee of a railroad which it owned and operated. The decision proceeded on the dual grounds that when Congress was empowered to regulate commerce, the States necessarily lost any portion of their sovereignty that would stand in the way, and that Alabama waived its protection against suit by an individual, as embodied in the Eleventh Amendment, by operating an interstate railroad approximately twenty years after enactment of the Federal Employers' Liability Act.
In United States v. Ohio, supra, the question was whether the State of Ohio was liable to the United States for penalties under the Agricultural Adjustment Act of 1938 for growing wheat on state-owned farms in excess of federally-imposed acreage allotments. Specifically, the wheat was grown on a prison farm as part of a program of individual therapy and rehabilitation. It was consumed exclusively on the farm; indeed, by the Ohio Constitution it could neither be "sold, farmed out, contracted or given away." The Sixth Circuit Court of Appeals held that the growing of wheat and consumption of the crop by the inmates of the institution could not have any substantial effect on interstate commerce and, hence, that the Act was inapplicable. 354 F.2d 549 (1965). The judgment was summarily reversed in a per curiam opinion on the authority of Wickard v. Filburn, supra.
The Ohio case had present all of the factors relied on here by the States to invalidate the 1966 Amendments. Nothing could be a more essential or a more sovereign governmental function than providing places of detention for those convicted of crimes. The performance of such a state function neither produces income nor competes with any private enterprise. Likewise, it is a function which can in no way be provided by private enterprise. The case was decided by the Court of Appeals on the commerce issue without reaching the asserted issue of impairment of state sovereignty and we are advised that in the briefs presented to the Supreme Court the latter contention was not made. While the case is conclusive authority for determination of the scope of the power of Congress to regulate commerce, it is not necessarily determinative on the issue of impairment of state sovereignty.
In asserting boundaries to federal regulation under the Commerce Clause, the States claim support for the result they advocate in New York v. United States, 326 U.S. 572, 66 S.Ct. 310, 90 L.Ed. 326 (1946), and other cases which have held the power of Congress to tax is subject to limitation. It should be noted at the outset that in the New York case there was no opinion of the Court, and reliance is placed upon one of the opinions concurred in by only four justices. But the weakness of this authority lies not in the lack of unanimity of the Court, but rather in the fact that other decisions before and after New York establish that an unqualified analogy between the taxing power and the commerce power cannot be made. Parenthetically, it should also be noted that in New York the claim of state sovereignty was rejected and the validity of the tax upheld. The Sanitary District case, supra, decided in 1925, and Board of Trustees of University of Illinois v. United States, decided in 1933, clearly imply that Congress's power to regulate commerce and Congress's power to tax are not coterminus. Case v. Bowles, decided the same term as, but after, New York v. United States, specifically rejects limitations on the war power such as were suggested on the taxing power by dictum in some of the opinions in the New York case. On the other hand, when the power of Congress to regulate commerce is being considered, United States v. State of California, decided ten years before the New York case, is specific in saying that the test of validity of regulation under the Commerce Clause is different from the test of the validity of federal taxation touching upon state sovereignty. See also, United States v. Kahriger, 345 U.S. 22, 73 S.Ct. 510, 97 L.Ed. 754 (1953).
These cases demonstrate® that the taxing power and the commerce power have been viewed by the Supreme Court as having different limitations, because of the concurrent nature of the former, and the plenary nature of the latter. In sharp contrast, stand the statements of the Court that the power of Congress over war and over commerce, both foreign and interstate, are plenary. Because each is plenary, the war and commerce powers of Congress are necessarily coterminous, and Hopkins Federal Savings & Loan Ass'n v. Cleary, 296 U.S. 315, 343, 56 S.Ct. 235, 80 L.Ed. 251 (1935), so suggests. Thus, cases decided under any of the plenary powers are precedents for similar situations arising under one of the other plenary powers, while cases decided under the taxing power are weak authority for determining the limits of the exercise of a plenary power. While an attempt is made to distinguish Case v. Bowles on the ground that it concerned the war power, and to distinguish the Board of Trustees case on the ground that it concerned the power to regulate foreign commerce, patently, these powers are plenary, coterminous and indistinguishable from the power to regulate interstate commerce. Indeed, while asserting that the cases are distinguishable, the States fail to cite one case holding that these powers are not equally plenary and coterminous; at the same time, the States fail to cite one case holding that the commerce power is restricted to the same area as the taxing power.
Hopkins Federal Savings & Loan Ass'n v. Cleary, 296 U.S. 315, 56 S.Ct. 235, 80 L.Ed. 251 (1935), urged on the Court by the States, should also be noticed. In the Hopkins case, a federal statute which permitted state building and loan associations to become federal building and loan associations without state consent was held invalid. The Congressional power under which the statute had been adopted was deemed by the Court to be concurrent with a similar state power. As a consequence, the Court, consonant with its approach in taxing cases, where concurrent powers were also involved, drew a line between federal and state sovereignty in holding that the statute unconstitutionally transgressed state sovereignty, but in doing so, it was careful to state: "We are not concerned at this time with the applicable rule in situations where the central government is at liberty (as it is under the commerce clause when such a purpose is disclosed) to exercise a power that is exclusive as well as paramount." (emphasis supplied) Id., at p. 338, 56 S.Ct. at p. 241. • Thus, not only does the Hopkins case not constitute authority for the contention urged by the States, but the care with which the Court delineated the problem before it strongly suggests a contrary result had the legislation been an exercise of the power of Congress to regulate commerce. It is at most additional authority for the result I would reach.
The States, in the stipulations which we earlier mentioned, have presented extensive evidence to show the far-reaching financial impact on them of the 1966 Amendments. The proof tends to show that the graduated financial burden, resulting from escalation of the minimum wage and contraction of maximum hours without payment of overtime over a period of years, will necessitate either increased taxes or a curtailment of essential services. There is before us evidence that current budgetary appropriations will be insufficient to meet the increased costs resulting from the 1966 Amendments during the current fiscal period, and that in many instances, political subdivisions, restricted by organic law to maximum limits of taxation and borrowing, are currently operating at these maxima so that, absent grants- in-aid or an amendment of organic law, they will be required to curtail the amounts spent for- teachers, text books and the like, or reduce the number of people served, if they are required to comply with the 1966 Amendments.
As I said earlier, this data is not excluded on evidentiary principles. It is properly before us — if only to put flesh on the skeletal frame of this litigation. But, in the decision of the constitutional issues presented to us, it, and the arguments of unconstitutional impairment of state sovereignty predicated upon it, are largely irrelevant. I have concluded that the 1966 Amendments are valid and constitutional, as is the enterprise concept of the 1961 Amendments, and that there is no unconstitutional impairment of the sovereignty of the plaintiff States. The financial impact of the 1966 Amendments on the States is an argument to be addressed to Congress and not to the courts. As Chief Justice Marshall authoritatively stated in Gibbons v. Ogden, 9 Wheat. 1, 6 L.Ed. 23 (1824):
"If, as has always been understood, the sovereignty of Congress, though limited to specified objects, is plenary as to those objects, the power over commerce with foreign nations, and among the several States, is vested in Congress as absolutely as it would be in a single government, having in its constitution the same restrictions on the exercise of the power as are found in the constitution of the United States. The wisdom and the discretion of Congress, their identity with the people, and the influence which their constituents possess at election, are, in this, as in many other instances, as that, for example, of declaring war, the sole restraints on which they have relied, to secure them from its abuse. They are the restraints on which the people must often rely solely, in all representative governments." (emphasis supplied) Id., at p. 197.
Even more specific in stating the principle that the financial impact of the 1966 Amendments is no guide to their validity is State of Oklahoma ex rel. Phillips v. Guy F. Atkinson Co., 313 U.S. 508, 61 S.Ct. 1050, 85 L.Ed. 1487 (1941). In that case, the federal government planned to flood certain lands belonging to Oklahoma. The state sought an injunction, arguing, inter alia, that the project as planned would take much land unnecessarily, without serving the purpose of the dam. The Court declared:
"Such matters raise not constitutional issues but questions of policy. They relate to the wisdom, need, and effectiveness of a particular project. They are therefore questions for the Congress not the courts. Nor is it for us to determine whether the resulting benefits to commerce as a result of this particular exercise by Congress of the commerce power outweigh the costs of the undertaking." (emphasis supplied) Id., at pp. 527-528, 61 S.Ct. at p. 1060.
Tó a further allegation that tax revenues of Oklahoma would be diminished because of loss of property taxes on the seized land, and that public education might be hampered because certain school buildings, on the condemned land, would have to be rebuilt elsewhere, the Court said:
"The possible adverse effect on the tax revenues of Oklahoma as a result of the exercise by the federal government of its power of eminent domain is no barrier to the exercise of that power." (emphasis supplied) Id., at p. 534, 61 S.Ct. at p. 1064.
I conclude that defendants' motion for summary judgment should be granted, but in view of the fact that my conclusions are shared only in part by Chief Judge Thomsen, and not at all by Judge Northrop, counsel may present a form of decree declaring the minimum wage provisions of the 1966 Amendments valid and constitutional and denying plaintiffs' prayers for injunctive relief.
. Public Law, 89-601, 80 Stat. 830, amending the Fair Labor Standards Act of 1938, 29 U.S.G.A. § 201 et seq.
. Subsequent decisions have pointed out that "Congress did not exercise in this Act the full scope of the commerce power," but rather chose "to regulate only part of what it constitutionally can regulate." Walling v. Jacksonville Paper Co., 317 U.S. 564, 570-571, 63 S.Ct. 332, 336, 87 L.Ed. 460 (1943); Kirschbaum Co. v. Walling, 316 U.S. 517, 521-522, 62 S.Ct. 1116, 1119, 86 L.Ed. 1638 (1942). See also, Overstreet v. North Shore Corp., 318 U.S. 125, 128, 63 S.Ct. 494, 87 L.Ed. 656 (1943); Higgins v. Carr Bros. Co., 317 U.S. 572, 574, 63 S.Ct. 337, 87 L.Ed. 468 (1943) ; Mitchell v. H. B. Zachry Co., 362 U.S. 310, 313, 80 S.Ct. 739, 4 L.Ed.2d 753 (1960).
. The principal amendatory enactments have been the Portal-to-Portal Act of 1947 (61 Stat. 84), the Pair Labor Standards Amendments of 1949 (63 Stat. 910), the Pair Labor Standards Amendments of 1955 (69 Stat. 711), the Pair Labor Standards Amendments of 1961 (75 Stat. 65), the Equal Pay Act of 1963 (77 Stat. 56), and the Pair Labor Standards Amendments of 1966 (80 Stat. 830).
. In addition to amending the Act's definition of "employer" (see text, infra), other pertinent changes, effected by the 1966 Amendments were: an existing exemption for hospitals and certain related institutions and schools for handicapped or gifted children, formerly contained in § 13 (a) (2) (iii), was eliminated, and such institutions and schools, as well as elementary and secondary schools and institutions of higher learning, were designated in § 3(s) (4) as types of enterprises whose coverage would not depend on an annual gross volume test; the existing annual gross volume test for local transit enterprises (in former § 3(s) (2)) was lowered from $1 million to $500,000 until Feb. 1, 1969 and to $250,000 thereafter (§ 3(s) (1)); and the definitipn of "enterprise" in § 3(r) was amended to provide that local transit operations, the above described schools and hospitals and related institutions, whether public or private or for profit or not for profit, would be regarded as operated for a "business" purpose.
. Thus, while the minimum wage for employees theretofore covered by the Act is $1.40 per hour, for the first year after February 1, 1967, and $1.60 per hour thereafter, minimum wages for employees newly covered are $1.00 per hour, for the first year and increase 15^ per year for each year thereafter until the level of $1.60 is reached. Similarly, overtime must be paid to employees theretofore covered who work in excess of 40 hours per week, while overtime must be paid to newly covered employees who work more than 44 hours the first year, 42 hours the second year, and 40 hours each year thereafter, respectively, after February 1, 1987.
. While the 1966 Amendments to the Fair Labor Standards Act, inter alia, extend the Act's coverage to employees of schools, hospitals and related institutions, electric railways, trolley and motorbus systems, whether public or private, not every employee of such enterprise is made subject to the Act. Section 13 of the Act, 29 U.S.C.A. § 213, as it existed prior to the effective date of the 1966 Amendments, and as amended by the 1966 Amendments, exempts certain classes of employees. For our purposes, the significant exemption is that of a person "employed in a bona fide executive, administrative or professional capacity (including any employee employed in the capacity of academic, administrative personnel or teacher in elementary or secondary schools )."
. During the 89tli Congress, 1st Session, II.lt. 8259, was introduced in response to a special message of President Johnson urging, inter alia, extension of the Fair Labor Standards Act to an additional 4]/2 million workers. H.R. 8260, introduced by Mr. Roosevelt, also would have extended coverage of the Act. Neither bill purported to be applicable to state employees. While hearings on both bills were being conducted by the House Committee on Education and Labor, to which they had been referred, Mr. Roosevelt introduced another bill, H.R. 10518. This new bill extended coverage to certain employees of public and private hospitals and institutions of higher education regardless of whether public or private, ptrofit or non-profit.
H.R. 10518 was referred to the Committee on Education and Labor which, on August 25, 1965, reported the bill favorably, without amendment, and recommended that it be passed. House Rpt. No. 871, 89th Cong., 1st Sess. H.R. 10518 was then committed to the Committee of the Whole House on the State of the Union and no further action was taken thereon. Cong. Quart. Almanac, 1965, Vol. 21, p. 861.
. See, n. 6, supra.
. The bill as originally introduced would have also extended coverage to employees of a "street, suburban or interurban electric railway, or local trolley or motor-bus carrier, if the rates and services of such railway or carrier are subject to regulation by a State or local agency (rer/ardless of whether or not such railway or carrier is public or private or operated for profit or not for profit) ." (emphasis supplied)
. As introduced, the bill did not apjriy to employees of elementary and secondary schools, although it did apply to employees of institutions of higher learning, whether public or private. After the House Education and Labor Committee reported the bill favorably, with amendments, the House resolved itself into the Committee of the Whole House on the State of the Union. At this point in the legislative process, Mr. Collier, of Illinois, offered an amendment to extend coverage to employees of elementary and secondary schools. The amendment was adopted and the bill passed the House as so amended. lie made the following statement about the rationale of his amendment, viz.,
"MR. COLLIER: Mr. Chairman, these amendments are simple and sound and essential amendments. I do not believe that any Member of this body who believes in the principle and purpose of the bill before, us today can oppose them.
"What we have done here, if Members will review with me the language of the definition of 'enterprise,' is to say that in sum and substance the employee who works as a dishwasher in a home for the-sick or the aged or mentally ill, or one who works as a dishwasher in a college- or university cafeteria, or one who works as a dishwasher, for example, in a mental institution, is covered under this bill. Vet, the same employee working as a dishwasher in an elementary or high-school cafeteria is not covered.
"All I want to do is to establish equity in application of the bill. Let me tell why. I believe I can best explain it by giving an example. This is. an actual case.
"In a suburban area of one of our southern States, school officials were recently notified that poverty funds were available to hire students who qualified under the poverty family income level at $1.25 per hour. What happened was this: The same school had working in the cafeteria women who had been employed for years — in fact, one was a widow — drawing 85 cents an hour for working in the school cafeteria. Yet, children were handpicked and given $1.25 an hour to wash the blackboards in the same school.
"I do not believe there is anyone sitting in this House today who can justify this type of situation realizing, as we all must, that there will be under the poverty program a $1.25 hourly wage level. If not, then I would have grave reservation as to the depth of the sincerity such a Member would have in the principle of minimum wage.
"MR. PUCINSKI: Mr. Chairman, will the gentleman yield?
"MR. COLLIER: I yield to the gentleman from Illinois.
"MR. PUCINSKI: Mr. Chairman, if I understand this amendment correctly, it will establish a different fair labor standard provision for people presently employed in elementary and secondary schools and universities.
"MR. COLLIER: That is exactly correct. I do not leant any inequities such as we have been talking about today. We are moving to achieve equity lohich means treating everyone alike." (emphasis supplied) 112 Congressional Record (May 25, 1966), pp. 10820-10821. The Senate Committee on Labor and Public Welfare reported the bill favorably, with an amendment to exclude employees of elementary and secondary schools, and this amendment was adopted. Senate Report No. 1487, August 23, 1966, 2 U.S.C. Congressional and Administrative News (89th Congress— Second Session, 1966), p. 3002. The Senate Committee, however, did not undertake to exclude any other public employees from coverage under the Act. The excluded coverage was subsequently restored by the Conference Committee appointed to iron out differences between the House and Senate versions of the legislation. Conference Report No. 2004, September 6, 1966, 2 U.S.C. Congressional and Administrative News, supra, p. 3047. It was with an extension of coverage to employees of elementary and secondary schools that H.R. 13712 was finally enacted and signed into law.
. Texas words this point as follows: "A state in the performance of the functions of its sovereignty is not engaged in commerce within the meaning of the commerce clause of the constitution of the United States."
. Maryland also advances an argument based upon tire Eleventh Amendment and its asserted conflict with the provision of the Pair Labor Standards Act which permits an employee not paid in accordance with the minimum wage or overtime provisions of the Act to bring suit if such suit is not brought by the Secretary. 29 U.S.C.A. § 216. This argument is beyond the scope of this consolidated proceeding and will not be further considered at this time. It may be made if and when some State employee finally attempts to sue his employer. Of course, when the argument is advanced and if it is found valid, due regard will be given to the other enforcement provisions contained in 29 U.S.C.A. § 216 and the separability language in 29 U.S.C.A. § 219.
Maryland and Texas also argue that their schools and hospitals are the "ultimate consumers" of commodities purchased from out-of-state, that such commodities are not "goods" as defined by 29 U.S.C.A. § 203 (i) and, as a consequence, the Pair Labor Standards Act is not applicable to them. This argument is one of statutory construction, not of constitutional significance, and is also one beyond the scope of this proceeding. It should be asserted in a suit in which the application of the Act to a particular school or hospital is brought into question, so that after full development of the facts, it may be determined if that particular enterprise meets the statutory tests for coverage.
. Pertinent also are the following authorities which have held to be "commerce," non-commercial interstate transportation of persons and chattels; Edwards v. People of State of California, 314 U.S. 160, 62 S.Ct. 164, 86 L.Ed. 119 (1941) (movement of indigent persons across state lines); Thornton v. United States, 271 U.S. 414, 46 S.Ct. 585, 70 L.Ed. 1013 (1926) (diseased cattle ranging across state lines); Caminetti v. United States, 242 U.S. 470, 37 S.Ct. 192, 61 L.Ed. 442 (1917) (transportation of women across state lines for non-commercial immoral purposes); Brooks v. United States, 267 U.S. 432, 45 S.Ct. 345, 69 L.Ed. 699 (1925) (transportation of stolen articles); United States v. Hill, 248 U.S. 420, 39 S.Ct. 143, 63 L.Ed. 337 (1919) (transportation of liquor for one's own consumption). As a latest expression of the state of the law, Heart of Atlanta Motel, Inc. v. United States, supra, 379 U.S. at pp. 256-257, 85 S.Ct. at p. 357, declares: "Nor does it make any difference whether the transportation is commercial in character."
. The 1961 extension of the Act's coverage had the effect of adding over four million workers to the twenty-four million previously within the Act's protection. This extension of coverage was the result of deliberate and lengthy consideration by at least two Congresses. (Senate Report No. 145, 87tlx Congress First Session, pp. 2, 10; House Report No. 75, 87th Congress, First Session, pp. 2, 7). Exercise of the power to extend coverage was based upon the conclusion, discussed in detail in the Committee Reports of both the Senate and the House, that the additional coverage was necessary to accomplish the Act's original purposes and was within the scope of the federal commerce power as evidenced by existing precedents under the National Labor Relations Act and other regulatory statutes.
. See e. g., Senate Report No. 145, April 10, 1961, 87th Congress, First Session, 2 U.S.C.Cong. and Adm.News (87th Cong., 1st Sess., 1961), pp. 1622-1623.
. In this regard, the authorities cited in footnote 2. supra, all of which were decided prior to the 1961 Amendments are-pertinent. They clearly indicate that prior to 1961, there were interstices in the Act which Congress could constitutionally fill. As pointed out in the text, they were only partially filled in 1961.
. See New York v. United States, 326 U.S. 572, 583-584, 66 S.Ct. 310, 90 L.Ed. 326 (1946).
. Although one of the best expressions of judicial self-restraint in the process of constitutional adjudication, United States v. Raines, supra, does not stand alone. It is only one of a line of decisions developing the concept which it so eloquently states: Flint v. Stone Tracy Co., 220 U.S. 107, 31 S.Ct. 342, 55 L.Ed. 389 (1911); Village of Euclid, Ohio v. Ambler Realty Co., 272 U.S. 365, 47 S.Ct. 114, 71 L.Ed. 303 (1926); Ashwander v. Tennessee Valley Authority, 297 U.S. 288, 347, 56 S.Ct. 466, 80 L.Ed. 688 (1936) (concurring opinion, Brandeis, J.); Alabama State Federation of Labor, etc. v. McAdory, 325 U.S. 450, 65 S.Ct. 1384, 89 L.Ed. 1725 (1945); United Public Workers of America (CIO) v. Mitchell, 330 U.S. 75, 67 S.Ct. 556, 91 L.Ed. 754 (1947); United States v. Spector, 343 U.S. 169, 72 S.Ct. 591, 96 L.Ed. 863 (1952) ; International Longshoremen's and Warehousemen's Union, Local 37 v. Boyd, 347 U.S. 222, 74 S.Ct. 447, 98 L.Ed. 650 (1954). Additional authorities are cited in the portion of the opinion in United States v. Raines, supra, from which the quotation is extracted.
. It is interesting that in an earlier suit, Sherman v. United States, 282 U.S. 25, 51 S.Ct. 41, 75 L.Ed. 143 (1930), involving the same belt railroad, Mr. Justice Holmes said: "California has not gone into business generally as a common carrier, but simply has constructed the Belt Line as an incident of its control of the harbor — a State prerogative." Id., at p. 29, 51 S.Ct. at p. 41.
. Three decisions of United States Courts of Appeals in this area are worthy of note. United States v. Feaster, 330 F.2d 671 (5 Cir. 1964), held that the National Mediation Board, acting under the Railway Labor Act, could require the state agency which operated state-owned dock facilities to produce its employment records for inspection by a union. In State of Colorado v. United States, 219 F.2d 474 (10 Cir. 1954), it was held that the Colorado State Board of Stock Inspection was- subject to the registration requirements of the Packers and Stockyards Act, and to the payment of penalties under the Act, "the samo as are private persons or agencies," notwithstanding that inspection was conducted "in its sovereign capacity as a state." Id., at p. 477. The most recent decision in this regard is N.L.R.B. v. Local 254, Building Service Employees International Union, AFL-CIO, 376 F.2d 131 (1 Cir. 1967), holding that for purposes of the National Labor Relations Act the Department of Education of the State of Massachusetts was "a person engaged in commerce" and "an employer" as defined in the Act.
. The vitality of the principle announced has not been eroded by time. Heart of Atlanta Motel, Inc. v. United States, 379 U.S. 241, 255, 85 S.Ct. 348, 13 L.Ed.2d 258 (1964); Polish National Alliance, Inc. v. N.L.R.B., 322 U.S. 643, 650, 64 S.Ct. 1196, 88 L.Ed. 1509 (1944); State of Oklahoma ex rel. Phillips v. Guy F. Atkinson Co., 313 U.S. 508, 527-528, 61 S.Ct. 1050, 85 L.Ed. 1487 (1941); Sanitary District of Chicago v. United States, 266 U.S. 405, 432, 45 S.Ct. 176, 69 L.Ed. 352 (1925).
. Although not as explicit, several of the authorities discussed in the text support the rule that when the commerce power is exercised the test of validity of the exercise is not the cost to the States. In State of California v. Taylor, supra, the State was exposed to payment of the higher wages for state employees arrived at as a result of collective bargaining rather than the scale prescribed by state fiat. The result of the decision in United States v. Ohio, supra, would be presumably to increase the state's cost for wheat and flour supplies purchased from the market place rather than grown on the prison farm. In Case v. Bowles, supra, price controls on the sale of timber decreased school revenues so that services would have to be reduced or school taxes increased. The penalties exacted in United States v. Ohio, supra, and United States v. State of California, supra, represented a diminution of general state revenues otherwise available to support other state activities.