Court Opinion

ID: 6922556
Source: CourtListenerOpinion
Date Created: 2022-07-23 23:06:51.56484+00
Date Added: 2024-06-11T16:06:50.534720
License: Public Domain

CAMERON, Circuit Judge
(dissenting).
I.
The sole question involved in this ease, in my opinion, is this: Is the district court’s finding that there is no likelihood of future violations of the Fair Labor Standards Act by Ballenger Paving Company so clearly erroneous that this Court should reject it and set aside the district court’s denial of an injunction by adjudging that such a holding constitutes an abuse of the discretion vested in it ? This Court stated the basic premise of the question in Mitchell v. Hodges Contracting Co., 1956, 238 F.2d 380, 382-383: “The controlling factor is the probability or improbability of further violations.” And see Swift & Co. v. United States, infra.
I think that much which is said in the majority opinion begs that question. The decision of this case involves the very nature of injunctive relief. Concerning that nature the Supreme Court used this language:1
“A grant of jurisdiction to issue compliance orders hardly suggests an absolute duty to do so under any and all circumstances. We cannot but think that if Congress had intended to make such a drastic departure from the traditions of equity practice, an unequivocal statement of its purpose would have been made. * *
“We are dealing here with the requirements of equity practice with a background of several hundred years of history. Only the other day we stated that ‘An appeal to the equity jurisdiction conferred on federal district courts is an appeal to the sound discretion which guides the determinations of courts of equity.’ Meredith v. City of Winter Haven, 320 U.S. 228, 235, 64 S.Ct. 7, 11, [88 L.Ed. 9]. The historic injunctive process was designed to deter, not to punish. The essence of equity jurisdiction has been the power of the Chancellor to do equity and to mould each decree to the necessities of the particular case. Flexibility rather than rigidity has distinguished it. The qualities of mercy and practicality have made equity the instrument for nice adjustment and reconciliation between the public interest and private means, as well as between competing private claims. * * * ”
Based upon the decision and upon a rule I would think to be of such universal acceptance as not to be questioned, this *303Court recently said, in a wage and hour case :2
“Even assuming appellant’s contentions to be sound in both instances [that is, that appellee had been guilty of violating the Fair Labor Standards Act in the past], the Court would have been justified in either granting or denying injunctive relief under the broad discretion lodged in it by accepted equitable principles. Mitchell v. Hodges Contracting Co.
* * *
“The trial Court evidently reached the conclusion that more would be accomplished towards enforcement of the law and towards bringing appellant into cooperative conformity with its provisions by withholding the drastic remedy of injunction than by using it.
“The nature of injunctive relief is that it is prospective, prophylactic, preventive, — not punitive. By bringing about a better attitude on appellant’s part towards the Act, and his plighted purpose to obey it scrupulously and ungrudgingly, the Court below was using its equity powers in consonance with their best traditions.
* * *
“The District Judge, having the long-term responsibility for the enforcement of this law and others like it in a large district in Texas, and being acquainted with local conditions and having observed appellant and the government agents as the contest before him unfolded, was in better position than we are to assess and solve this problem. We are not willing to set aside the discretion employed by him in fashioning his decree to serve the interest of the litigant and the public.”
As far as I know, no court decision has questioned our words in the foregoing quotation as a correct statement of the law. The court below heard the entire case, holding more than one pre-trial conference and considering many depositions and other evidence which are not in the printed record. The case was tried by a judge whose experience has extended over a period substantially as long as the combined judicial experience of the three Judges of this panel. He is a judge of recognized ability and fairness, and he had had a much better acquaintance with the problems arising in that area and of the facts placed before him than we could possibly get. The words of his statement of the case and his findings, to my mind, carry great weight:
“For several years prior to April, 1959 there existed in the minds of defendant and its executives, [doubt] as to whether defendant’s operations in connection with runways on military airbases came within the provisions of said Act. It was generally believed among such contractors that the Act did not apply and defendant company was so advised by able counsel. The belief that the Act did not apply was encouraged and fostered by other departments of the United States Government whose primary interest was not to enforce the Fair Labor Standards Act but to save as much money as possible in regard to such operations * * *
“In April, 1959 defendant gave notice to all of its agents and employees concerning compliance with said Act, and since that time complete compliance has been had in all of its operations. There has not been a single instance where failure to comply with the Act is charged. There is no reason whatsoever to believe or even to suspect that the defendant will in the future fail to comply in all respects with the Act. Defendant before this case was tried gave the Government full access to its books and records, and has never concealed anything. A finding is demanded by this Court that there is no necessity for any injunction in this case.” [Emphasis supplied.]
*304The statute under which this proceeding is brought does not require the issuance of an injunction, but merely gives the court jurisdiction to restrain violations of the Act for cause shown.3 One of the essential ingredients of good cause is a showing that the accused person is likely to inflict on the accuser irreparable injury. The trial court found that there was no such showing and, as far as I can find, the record reflects no such showing. The court below stated that the principle had existed for centuries “that injunction is a harsh remedy and will not issue unless there is a probability of irreparable damage.” With respect to such likelihood the court stated: “that there is no reason whatsoever for anyone to suspect that there will be any future violations.”
I am unable to find in this record any justification whatever for declaring that the action of the court in denying an injunction was an abuse of its discretion.
II.
The record before us reflects proof which amply justified the finding of the court below that “any violations of said Act by the defendant were not done willfully, that defendant company was acting as were other companies in the same business under the belief that there was no coverage, and that there is no reason whatsoever for anyone to suspect that there will be any future violations.”
In testing whether that finding was clearly erroneous, we take a brief look at the law relating to coverage and to issuing or refusing an injunction, as it was recognized in this Circuit on October 18, 1957 when this action was begun, and on April 18, 1959 when appellee issued instructions that employees in its construction work being done for the government at airports and similar installations should be paid in obedience to the Fair Labor Standards Act. We draw again on this Court’s opinion in Mitchell v. Hodges, supra, 238 F.2d at page 383:
“* * * the right to challenge substantial questions of coverage ought to be freely open to good faith litigation by an employer unfettered, in that process, by the prospect of contempt proceedings.”
In this brief discussion the pertinent cases will be taken up along with the facts disclosed by the record.
On the crucial dates there was no decision of the Supreme Court relating to the question of coverage of military air bases. Until the decision of this Court in Mitchell v. Empire Gas Engineering Company, 256 F.2d 781 (July, 1958), there had been no decision of this Court holding that military air base construction was covered by the Act. The two cases theretofore decided by it had indicated noncoverage.
The former of these was Parham v. Austin Co., 5 Cir., 1946, 158 F.2d 566, 567. We held that watchmen and guards employed by a contractor engaged in constructing a new bomber plant for the United States were not engaged in interstate commerce nor in production of goods for commerce, and that the Act did not apply to them. The materials used in the construction came largely from beyond the confines of the state by train and by truck, and these guards controlled the admission of these carriers into the construction grounds. We said:
“In the instant case the employer was engaged in the construction of a plant that was intended some day to' produce goods for commerce. This was a war project being constructed as a place in which it was intended to manufacture bombers.”
The latter case was Reed v. Murphey et al., 5 Cir., 1948, 168 F.2d 257, reversed in part by Supreme Court, 335 U.S. 865, 69 S.Ct. 105, 93 L.Ed. 410, on questions not relating to this controversy. We there held that employees engaged in the construction of a navy training camp andi advanced base depot were not covered by the Fair Labor Standards Act.
April 16, 1954, the Comptroller General of the United States issued an official opinion to the Secretary of Defense rul*305ing that the Fair Labor Standards Act did not apply to defense work. He stated in part: “It is evident- that the proposed provision would tend to increase the cost to the government of the work to be done [and] there is no legal justification for the inclusion * * * ”
The Department of the Army followed this ruling by omitting from its contracts the requirement of observance of the Fair Labor Standards Act, while at the same time inserting requirements that other related Acts be observed. An officer of the Air Force testified that a like policy was pursued by that department of the armed services. In the fall of 1957 Lockheed, one of the largest aircraft corporations, ruled that Ballenger was not required to observe the Fair Labor Standards Act in the work then being done for it.
It was stipulated by the parties at the trial that Ballenger had adequate personnel and record-keeping facilities and other facilities for compliance with the Fair Labor Standards Act; where Ballenger had attempted compliance, it had been satisfactory and the records kept were likewise adequate; that Ballenger had not at any time concealed facts, falsified records or withheld information before or after the institution of this civil action; where Ballenger recognized the applicability of the Act the compliance had been satisfactory.
September 11, 1959, the court below ordered appellee to respond to appellant’s request for admission, giving a list of all of the projects in which it was engaged beginning with June, 1958 and extending through September 8, 1959. A part of that response is in these words:
“With the exception of military construction defendant has complied with the Fair Labor Standards Act on all of its construction projects. Defendant will comply with the Fair Labor Standards Act on all United States Government projects in the future and will continue to comply with the Fair Labor Standards Act on all projects as it has heretofore consistently done.
“Defendant had no knowledge of the Empire Gas Engineering Company decision until sometime in the latter part of February or early part of March [1959]; that prior to that time defendant was under the bona fide and sincere belief that military construction was not covered under the Fair Labor Standards Act and any violations of said Act prior thereto were in good faith and were not done deliberately to avoid or evade the law; that defendant’s president desired to learn more about the Empire Gas Engineering Company case to ascertain whether it was a bona fide case or a friendly, uncontested case for the purpose of establishing a new precedent in the Fair Labor Standards Act interpretation. That defendant’s president made inquiry through representatives of the Empire Gas Engineering Company in March, 1959 and learned that said case was actually contested; that this fact was communicated to defendant’s counsel in Greenville and a decision was reached to begin complying with the law as announced by the court in the Empire Gas Engineering Company case. That a memorandum to that effect was transmitted to all projects effective for the week ending April 25 [beginning April 18] 1959, and compliance has been had and will be had with said interpretation of said Fair Labor Standards Act henceforth.” [Emphasis added.]
To this statement was added a summary of thirty-seven contracts between the appellee and representatives of the armed services and with aircraft companies covering extensive projects in three states. Analysis of these summaries shows that in nine instances, appellee had not applied the Act before April 18,1959, but did apply it after that date. In thirteen instances, appellee had complied with the Act during the entire performance, and in fifteen instances, there had been no compliance with the *306Act. It is clear from this analysis that appellee recognized that the Act applied to some of its contracts, that it did not apply to others; and that appellee thought that it did not apply to the nine mentioned, but came into compliance when it learned that the Act did apply.
Meantime, the law as to the application of the Act was in a state of uncertainty in this Circuit, and this uncertainty guided the actions of contractors generally. A like uncertainty existed as to whether courts in this Circuit would grant injunctive relief when it appeared that there had probably been wrongful nonobservance of the Act, but that there was no probability of future nonobservance. In 1956, this Court rendered its opinion in Mitchell v. Hodges, supra. That carefully reasoned opinion has been accepted by this Court and apparently by business institutions generally as laying down standards by which their actions should be judged when they were brought under an accusation by the Wage and Hour Division:
“The Secretary correctly recognizes that injunction, though authorized as a specific sanction under the Act, § 17, being equitable in nature, need not issue as a routine, absolute consequence of a finding of non-compliance and the existence of coverage. For the granting or denial of an injunction — and perhaps of greater importance, the delicate drafting of its terms — must inevitably be left initially to the sound discretion of the District Judge, Walling v. Florida Hardware Co., 5 Cir., 142 F.2d 444. It is he who has seen unfolded the intimate details of the controverted activity, the approach and attitude of the parties reflecting the circumstances giving rise to the controversy, the employer’s previous actions of noncompliance or litigation, the moral and business responsibility of the employer, the extent of which promises of future compliance are something more than empty, idle words unmatched by the institution of effectual corrective procedures, or are undependable contrition under pressure of legal action, whether litigious contention is the legitimate good faith quest for legal determination or the mere pretense, for past or future actions, to thwart effective compliance and many other similar and related factors from which the Judge can determine the probability of future compliance or violations.
“Where these have been properly evaluated, the action of the Trial Court, whether granting or denying an injunction, will be sustained. But where this has not been the case, reviewing courts have not been slow to act by ordering the issuance of injunction.
“We certainly see neither disregard nor misapplication of these subtle, delicate yet profound standards by this careful District Judge.”4 [Emphasis added.]
Appellee’s conduct here was subjected to a critical examination by the court below. It found throughout that a spirit of cooperation had been exhibited; that appellee had never been a party to litigation; that the moral and business responsibility of Charles P. Ballenger, Jr., the active operator and policy-maker of the business, was unquestioned.5 His records were all made available to the Government promptly upon request, and there was no suggestion that he had *307fallen down on any agreement with the Government. He came into compliance with the Act on April 18, 1959, while the pending litigation against appellee was not completed until July, 1960. In the meantime he had availed himself of the services of lawyers of the highest class in South Carolina and in Atlanta. If the foregoing standards suggested in Hodges are still valid, it is difficult to understand how the trial court could have reached any other conclusion than the one it did. Appellee met every one of these standards in letter and in spirit.6
The decisive conclusion here reached by the court below was:
“This Court is ruling as a Conclusion of Law that where a contractor is doing work, not operating in compliance with the Fair Labor Standards Act, but in a good faith belief that it does not apply, where other contractors of the same belief are doing likewise, where the law is in some confusion, and where, as soon as informed by his counsel that his operations are within the Act fully complies therewith, and there are no circumstances indicating any possibility of future violations, injunction will not be granted.”
No one seems to doubt that confusion did exist as to the question settled in Empire Gas, and that this decision blazed a new trail which had not been recognized before the decision was rendered. The language of Empire shows the basis for the conclusion reached in that case that the district court had not abused its discretion in refusing to grant an injunction so zealously contended for by the Secretary in (256 F.2d page 785):
“At the trial the Secretary made an effort to show that, subsequent to the decision in [Mitchell v. C. W. Vollmer & Co.], supra,7 an attorney who was experienced in the field of labor law should have been aware that the employment of construction workers engaged in performing the Empire contracts was subject to the overtime provisions of the Fair Labor Standards Act. What we have already said will indicate that a good faith conclusion could have been reached that the employees were not in commerce. The district court found that the Act did not apply. It would be difficult, under such circumstances, to question the court’s determination that Empire acted in good faith upon the honest advice of able counsel in its failure to comply with the Act. * * *
“It should not be forgotten that the issuance of injunctions in cases such as this is discretionary, as it is in most of the situations where this equitable remedy may be granted. [Citing cases.] The Supreme Court has said:
“ ‘The purpose of an injunction is to prevent future violations, Swift & Co. v. United States, 1928, 276 U.S. 311, 326, 48 S.Ct. 311, 314, 72 L.Ed. 587, and, of course, it can be utilized without a showing of past wrongs. But the moving party must satisfy the court that relief is needed. The necessary determination is that there exists some cognizable danger of recurrent violation, something more than the mere possibility which serves to keep the case alive. The chancellor’s decision is based on all the circumstances; his discretion is necessarily broad and a strong showing of abuse must be made to reverse it.’ * * * ” [Emphasis supplied.]
The labored effort of the majority opinion to hold the court below in error in exercising its discretion is difficult to understand. I do not believe a case will be found in the books where the proof shows *308an employer of such high character and trustworthiness, whose word given long before the case against him was completed, is entitled to greater credit. I think it is this Court’s duty to protect the business fraternity in their just efforts to determine and assert their rights, and that such action should not be penalized as is done here. This is particularly true when, to reach the majority’s decision, it is necessary to brand, as completely untrustworthy, the formal promise under oath that the Act would be observed in the future which was made by appellee’s authorized spokesman.
I do not believe we serve the cause of justice or of respect for law by such an action as is here taken. But another injunctive order has been put upon the books. Doubtless great satisfaction will come to those who seek to disparage on every occasion the concept that ours is a government of laws and who rejoice to exalt government by executive order and judicial fiat.
I respectfully dissent.

. Hecht Co. v. Bowles, 321 U.S. 321, 329, 64 S.Ct. 587, 591, 88 L.Ed. 754. The Supreme Court there reversed the decision of the Court of Appeals and remanded for consideration whether the trial court had abused its discretion in Brown v. Hecht Co., 78 U.S.App.D.C. 98, 137 F.2d 689. That court had reversed the decision of the District Court, Brown v. Hecht Co., 49 F.Supp. 528, 532, which had denied an injunction under its general equity powers, stating as the basis for such denial:
“In a case such as this an injunction should not issue unless thereby better compliance with law may be enforced. * * * and in my judgment an injunction would not be in the public interest.”
That case had arisen under the Emergency Price Control Act when it was not contradicted that a large department store had violated that law in several thousand instances.

. Mitchell, Secretary, etc. v. Bland, etc., 5 Cir., 1957, 241 F.2d 808, 810-811.
This case is further dealt with in my dissenting opinion in No. 18687, Mitchell v. Pidcock, et al., 5 Cir., 299 F.2d 281.

. 29 U.S.C.A. § 217 provides: “The district courts * * * shall have jurisdiction, for cause shown, to restrain violations of section 215 of this title * *

. The opinion quotes from a prior case where we had said: “Lip service to a law, with a background of violations, does not guarantee future compliance.”

. The proof showed that Mr. Ballenger was a man of unquestioned integrity — a business and civic leader in Greenville, South Carolina, who had been a deacon of the First Presbyterian Church, National President of the Alumni Association of Duke University, President of the Carolina Chapter of the Association of General Contractors of America, a member of the Board of directors of the XMCA, and an all-around substantial citizen.

. The evidence showed the presence of none of the factors which led to the decisión of this Court in Mitchell v. Blanchard, 1959, 272 F.2d 574. Our decision there came along in 1957, and the next decision of importance was Mitchell v. Empire Gas Engineering Co., 5 Cir., 1958, 256 E.2d 781.

. 349 U.S. 427, 75 S.Ct. 860, 99 L.Ed. 1196.