Holly Hill Fruit Products, Inc. v. Addison , 136 F.2d 323 ( 1943 )

HOLMES, Circuit Judge.

Appellant is a cooperative corporation engaged in the packing and canning of citrus fruit at Davenport, Florida. This is a suit by its employees for wages, overtime, and statutory penalties alleged to be due them by reason of the failure of their employer to comply with the minimum-wage and maximum-hour requirements (Sections 6 arid 7) of the Fair Labor Standards Act.¹ A final judgment was entered in favor of some of the employees, and the employer has appealed.

It is admitted that the wage-and-hour requirements of the Act were not observed, but appellant contends that they were not applicable to its employees because of the provisions of Section 13(a) (10) of said Act, 29 U.S.C.A. § 213(a) (10). This section provides that Sections 6 and 7 of the Act shall not apply with respect to any individual employed within the area of production (as defined by the Administrator) engaged in handling, packing, storing, preparing in their raw or natural state, or canning agricultural or horticultural commodities for market. It is plain that these employees were engaged in handling, packing, preparing, and canning agricultural or horticultural commodities for market; and the decisive question is whether they performed these activities within the area of production as defined by the Administrator.

Appellant’s operations are seasonal, conforming with the harvesting of citrus fruit, and during the two seasons involved in the period covered by this suit it engaged in business from November 14, 1938, to May 26, 1939; and from November 16, 1939, to March 30, 1940. The Fair Labor Standards Act became effective on October 20, 1938, and as of that date • the Administrator promulgated Section 536.2 of his Regulations, which provided that an employee was within the area of production under Section 13(a) (10) of the Act if the agricultural or horticultural commodities were obtained by the establishment where he was employed from farms in the immediate locality and the number of employees in such establishment did not. exceed seven. The regulation was amended on April 30, 1939, by the addition of a paragraph providing that, with respect to the preparation or canning of perishable or seasonable fresh fruits, an employee was within the area of production if the employer’s establishment was located in a rural community and obtained all of its products from farms in the immediate locality. It was further provided that the term “rural community” should not include any town of 2,500 or greater population, and the term “immediate locality” should not include any distance of more than 10 miles.

Effective as of June 17, 1939, the regulation again was amended to provide that a worker was employed within the area of production within Section 13(a) (10) if he performed his packing or canning operations on commodities that came from farms within the general vicinity of the employer’s establishment, and the number of employees engaged therein did not exceed seven.

Our first problem is to determine whether these appellees were employed within the area of production from November 14, 1938, to April 19, 1939, as defined by the regulation effective during that period. In the case of Fleming v. Farmers Peanut Co., 5 Cir., 128 F.2d 404, this court held that the limitation in the regulation as to the number of employees working together in the establishment had no relation to area of production and was void. Conceding without deciding that the remaining portion of the regulation is valid, the question is whether the commodities used by the establishment came from farms in the immediate locality. The evidence shows that 97.24 per cent of the commodities came from farms located within 10 miles of the establishment, and 96/100 of one per cent could not be traced; the balance came from farms less than 25 miles distant. The overwhelming percentage of the fruit obtained from farms within 10 miles was certainly within the immediate locality, and it would be most unreasonable to say that the negligible quantity obtained from a slightly greater distance should affect the statutory concept of area of production.

The regulation in force during appellant’s operations from April 30, 1939, to May 26, 1939, provided that employees engaged in packing or canning perishable fruits were within the area of production if they worked in an establishment that was located in a rural community and that obtained all of its products from farms in its immediate locality. The regulation defined “rural community” to exclude any city or town of 2,500 or greater population, and “immediate locality” to exclude any distance of more than 10 miles. Appellant’s establishment was located in Davenport, Florida, a town of 650 people, and during this period more than 97 per cent of the commodities processed came from farms located within 10 miles of the plant, as we have heretofore indicated. The purchase of so great a portion within a 10-mile radius of the plant, and the acquisition of the negligible balance from farms within 25 miles, were sufficient to prove that the products were obtained within the immediate locality. The language of the regulation should be construed to mean that substantially all of the commodities must be obtained within 10 miles of the establishment if the 10-mile limitation is to be held valid. It would be wholly arbitrary and unreasonable to say that employees in one plant are within the area of production if 10,000 bushels of fruit canned are purchased within 10 miles, and the employees in another plant are outside the area of production if only 100 of the 10,000 bushels canned were purchased 11 miles away and the balance was purchased within 10 miles.

During appellant’s operations from November 16, 1939, to March 30, 1940, the regulation in force provided that one was employed in the area of production within Section 13(a) (10) if engaged in handling or canning agricultural or horticultural commodities that came from farms in the general vicinity of the establishment and the number of employees so engaged did not exceed seven. Again, on the authority of Fleming v. Farmers Peanut Co., supra, we disregard as void the limitation with respect to the number of employees, and consider only whether the fruits processed came from within the general vicinity of the establishment. During this period, 91.39 per cent of the fruit processed was purchased from farms within 10 miles of the plant, and an additional 4 per cent came from farms within 25 miles; none was known to have come from any greater distance. In ordinary usage, the words general vicinity indicate a larger area than is meant by immediate locality, and a distance of 25 miles in this day of highly developed travel facilities is not beyond the range of usual farm travel.²

The Administrator must define fairly and truly the area of production; but he cannot create such area, or arbitrarily limit it within false and artificial boundaries. On the other hand, this court should not attempt either to legislate or to define the area of production, but only to declare the law applicable to the facts before it, aided by the Administrator’s definition, and striking down invalid portions thereof only to the extent that may be necessary in order correctly to dispose of the case. Considering the facts of this case with reference to the location of appellant’s plant, it seems to us fairly certain that all of the citrus fruit processed therein came from the area of production as defined by the Administrator.

Finally, we conclude that these appellees were employed within the area of production during the entire period involved here, and that the minimum-wage and maximum-hour provisions of the Act did not apply to them. This result precludes the necessity of discussing the alternative contentions made by appellant, one of which is that during both periods in controversy the regulation was wholly arbitrary and void except as to those parts that required the material to come from the immediate locality or general vicinity of the establishment. If this contention were sustained, the result would be the same and the exemption would be allowed, because 36.3 per cent of the 48,000,000 boxes of citrus fruit produced annually in Florida was produced in Polk County where appellant’s plant was located, being approximately three times as much as was produced in any other county in Florida. The next largest production was in Orange County, approximately 25 miles north of appellant’s plant, located at or near the exact geographical center of the largest citrus growing area of any state in the United States. Since it is not necessary to decide the issue presented by this contention, in order correctly to dispose of the case, we refrain from doing so.

The judgment appealed from is reversed, and the cause remanded to the district court for further proceedings not inconsistent with this opinion.

1 29 U.S.C.A. § 201 et seq., 52 Stat 1060 et seq.

2 Cf. Fleming v. Farmers Peanut Co., 5 Cir., 128 F.2d 404.