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IN RE WALLING

April 3, 1943

Application of WALLING, Adm'r of Wage and Hour Division, U.S. Dept. of Labor


The opinion of the court was delivered by: MEANEY

The question to be determined in this case is whether this Court should issue an order enforcing the subpoena duces tecum heretofore issued by the Administrator of the Wage and Hour Division of the Fair Labor Standards Act of 1938, 29 U.S.C.A. § 201 et seq., pursuant to Section 9 of the said Act. (In this opinion said Administrator shall be referred to as the Administrator, and said Act as the Act.)

The respondent herein is engaged in the business of publishing a newspaper in Paterson, New Jersey, within the jurisdiction of this Court, and refused permission to the agents of the Administrator to inspect its books and records, on the ground that its business was not subject to the provisions of the Act and that its employees were not affected by it.

 The purpose of the requested inspection was to examine the records of the respondent to determine the hours worked by and the compensation received by its employees and to seek for possible violations of sections 6, 7, 11(c), 15(a)(2) and 15(a)(5) of the Act.

 Upon the refusal of the respondent to permit any inspection of its books or records, the Administrator issued a subpoena duces tecum, requiring the respondent to appear before one of the officers of the Wage & Hour Division, United States Department of Labor and to produce all books and records concerning hours and wages of its employees from January 1, 1941, to the date of the subpoena, May 15, 1942, and also all records pertaining to sale, shipment, delivery or transportation by respondent of newspapers, books, periodicals or goods of any character between the same dates.

 In an examination of the situation before the Court, the first matter that arises for settlement would seem to be whether in a proceeding such as the instant one, the respondent may raise the question of its coverage by the Act.

 In its return to the order to show cause, respondent, along with certain objections to the constitutionality of the Act in its attempted application to a newspaper, in effect sets forth its claim that the Administrator is without jurisdiction over Respondent and that the Act does not apply to it.

 The Administrator insists that the question of coverage may not be raised in opposition to the enforcement of the subpoena and insists that Congress by the enactment of the Act intended that the Administrator should have full power to administer its provisions and that all phases of its administration within the provisions of the Act were left to his judgment and not to the judgment of the Courts.

 Relying on sections 9 and 11(a) of the Act, the Administrator insists that the issuance of the subpoena is in nowise dependent on proof of coverage and that under the broad provisions of section 11(a) he has power not only to investigate and gather data concerning pertinent matters in any industry subject to this Act, but that he may also issue administrative subpoenas and secure enforcement of them in this Court regardless of the question of coverage, since that issue is not a jurisdictional fact to be determined by the Court before such enforcement, but is initially for the Administrator to determine as a fact, binding on the Court.

 Reliance is had in large part by the Administrator on the cases of Perkins v. Endicott Johnson Corp., 2 Cir., 128 F.2d 208, affirmed by the United States Supreme Court in an opinion recently handed down by Mr. Justice Jackson, 63 S. Ct. 339, 87 L. Ed. , and upon Holland v. Standard Dredging Corp., D.C., 44 F.Supp. 601.

 Careful analysis of the opinion of Justice Jackson in the Endicott Johnson case indicates a distinction between that case and the one at bar. In the Endicott Johnson case, the corporation had voluntarily entered into contracts with the Government, and the matter which the Secretary of Labor was investigating was an alleged violation of the Act on the part of those who had become subject to the provisions of the Act by their own choice. The Walsh-Healey Public Contracts Act, 41 U.S.C.A. §§ 35-45, provided a course of procedure during which the subpoena in question was issued. That Act provided that the Secretary was authorized to hold hearings "on complaint of a breach or violation of any representation or stipulation" and "to issue orders requiring the attendance and testimony of witnesses and the production of evidence under oath" and provided in case of refusal of any person to obey such an order that the District Court should have jurisdiction to order compliance with the direction of the Secretary.

 No such procedure is outlined in the Fair Labor Standards Act.

 In the Endicott Johnson Corporation case, the secretary in accordance with the provisions of the Walsh-Healey Public Contracts Act, instituted an administrative proceeding against the corporation, charging violation of the stipulations in the contract and in the course of the hearing, further provided ...


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