Vermilya-Brown Company v. Connell/Opinion of the Court

by Stanley Forman Reed

United States Supreme Court

335 U.S. 377

Vermilya-Brown Company  v.  Connell

 Argued: Oct. 15, 1948. --- Decided: Dec 6, 1948

This case brings before us for review the applicability of the Fair Labor Standards Act of 1938, 52 Stat. 1060, 29 U.S.C.A. § 201 et seq., to employees allegedly engaged in commerce or the production of goods for commerce on a leasehold of the United States, located on the Crown Colony of Bermuda.

The leasehold, a military base, was obtained by the United States through a lease executed by the British Government. This lease was the result of negotiations adequately summarized for consideration by the letters of The Marquess of Lothian, the British Ambassador to the United States, of date September 2, 1940; the reply of Mr. Cordell Hull, then our Secretary of State, of the same date; and the Agreement of March 27, 1941, between the two nations to further effectuate the declarations of the Ambassador in his letter. ^[1]

The Fair Labor Standards Act covers commerce 'among the several States or from any State to any place outside thereof.' State means 'any State of the United States or the District of Columbia or any Territory or possession of the United States.' § 3(b) and (c) of the Act.

Certain employees of contractors who had contracts for work for the United States on the Bermuda base brought this suit under § 16(b) of the Act for recovery of unpaid overtime compensation and damages, claimed to be due them for the employer's violation of § 7, requiring overtime compensation. We do not enter into any consideration of the employees' right to recover if the Fair Labor Standards Act is applicable to employment on the Bermuda base, for the complaint was dismissed on defendant's motion for summary judgment on the ground that the applicability depended upon the 'sovereign jurisdiction of the United States,' that the executive and legislative branches of the Government had indicated that such leased reas were not under our sovereign jurisdiction and that this was a political question outside of judicial power. Connell v. Vermilya-Brown Co., D.C., 73 F.Supp. 860. The United States Court of Appeals for the Second Circuit, holding that the Act applied to the Bermuda base, reversed this judgment and remanded the case to the District Court for further proceedings on the merits. 164 F.2d 924. Our affirmance of this judgment approves that disposition of the appeal.

On account of the obvious importance of the case from the standpoint of administration, in view of the number of leased areas occupied by the United States, we granted certiorari. 333 U.S. 859, 68 S.Ct. 742.

(1) We shall consider first our power to explore the problem as to whether the Fair Labor Standards Act covers this leased area. Or, to phrase it differently, is this a political question beyond the competence of courts to decide? Cf. Coleman v. Miller, 307 U.S. 433, 450, 59 S.Ct. 972, 980, 83 L.Ed. 1385, 122 A.L.R. 695; Colegrove v. Green, 328 U.S. 549, 552, 66 S.Ct. 1198, 1199, 90 L.Ed. 1432. There is nothing that indicates to us that this Court should refuse to decide a controversy between litigants because the geographical coverage of this statute is involved. Recognizing that the determination of sovereignty over an area is for the legislative and executive departments, Jones v. United States, 137 U.S. 202, 11 S.Ct. 80, 34 L.Ed. 691, does not debar courts from examining the status resulting from prior action. De Lima v. Bidwell, 182 U.S. 1, 21 S.Ct. 743, 45 L.Ed. 1041; Hooven & Allison Co. v. Evatt, 324 U.S. 652, 65 S.Ct. 870, 89 L.Ed. 1252. We have no occasion for this opinion to differ from the view as to sovereignty expressed 'for the Secretary of State' by The Legal Adviser of the Department in his letter of January 30, 1948, to the Attorney General in relation to further legal steps in the present controversy after the judgment of the Court of Appeals. It was there stated:

'The arrangements under which the leased bases were acquired from Great Britain did not and were not intended to transfer sovereignty over the leased areas from Great Britain to the United States.'

Nothing in this opinion is intended to intimate that we have any different view from that expressed for the Secretary of State. In the light of the statement of the Department of State, we predicate our views on the issue presented upon the postulate that the leased area is under the sovereignty of Great Britain and that it is not territory of the United States in a political sense, that is, a part of its national domain.

(2) We have no doubt that Congress has power in certain situations, to regulate the actions of our citizens outside the territorial jurisdiction of the United States whether or not the act punished occurred within the territory of a foreign nation. This was established as to crimes directly affecting the Government in United States v. Bowman, 260 U.S. 94, 43 S.Ct. 39, 67 L.Ed. 149. This Court there pointed out, 260 U.S. at page 102, 43 S.Ct. at page 42, that clearly such legislation concerning our citizens could not offend the dignity or right of sovereignty of another nation. See Blackmer v. United States, 284 U.S. 421, 437, 52 S.Ct. 252, 254, 76 L.Ed. 375; Skiriotes v. State of Florida, 313 U.S. 69, 73, 78, 61 S.Ct. 924, 927, 929, 85 L.Ed. 1193. A fortiori civil controls may apply, we think, to liabilities created by statutory regulation of labor contracts, even if aliens may be involved, where the incidents regulated occur on areas under the control, though not within the territorial jurisdiction or sovereignty of the nation enacting the legislation. ^[2] This is implicitly conceded by all parties. This power is placed specifically in Congress by virtue of the authorization for 'needful Rules and Regulations respecting the Territory or other Property belonging to the United States'. Constitution, Art. IV, § 3, cl. 2. ^[3] It does not depend upon sovereignt in the political or any sense over the territory. So the Administrator of the Wage-Hour Division has issued a statement of general policy or interpretation that directs all officers and agencies of his division to apply this Act to the Canal Zone, admittedly territory over which we do not have sovereignty. C.F.R., 1947 Supp., tit. 29, pp. 4392-93.

(3) In this view of the relationship of our government to a leased area, the terms of this particular lease become important. Reference, note 1, supra, has been made to the United States Statutes where the title documents are readily available. It is unnecessary to print them here in full. In the margin are extracts that indicate their meaning as to the control intended to be granted. ^[4] Under this agreement we have no doubt that the United States is authorized by the lessor to provide for maximum hours and minimum wages for employers and employees within the area, and the question of whether the Fair Labor Standards Act applies is one of statutory construction, not legislative power.

(4) At the time of the enactment of the Act, June 25, 1938, the United States had no leased base in Bermuda. This country did have a lease from the Republic of Cuba of an area at Guantanamo Bay for a coaling or naval station 'for the time required for the purposes of coaling and naval stations.' The United States was granted by the Cuban lease substantially the same rights as it has in the Bermuda lease. ^[5] The time limits of the grant were redefined on June 9, 1934, as extending until agreement for abrogation or unilateral abandonment by the United States. A similar arrangement existed in regard to the Panama Canal Zone. ^[6] Further, in the Philippine Independence Acts of January 17, 1933, and March 24, 1934, provisions existed looking toward the retention of military and other bases in the Philippine Islands. 47 Stat. 761, §§ 5 and 10; 48 Stat. 456, §§ 5 and 10, 48 U.S.C.A. §§ 1232, 1235, 1240. ^[7] A Convention between the governments of Nicaragua and the United States of America, proclaimed June 24, 1916, 39 Stat. 1661, gave the United States for 99 years 'sovereign authority' over certain islands in the Caribbean Sea. ^[8] None of these international arrangements were discussed in reports or the debates concerning the scope of the Fair Labor Standards Act. After the passage of the Fair Labor Standards Act and during World War II, a number of bases for military operations were leased by the United States not only on territory of the British Commonwealth of Nations but on that of other sovereignties also. The provisions of these leases paralleled in many respects the Bermuda lease. ^[9]

Neither this lack of specific reference in the legislative history to leased areas, however, nor the fact that the particular Bermuda base was acquired after the passage of the Act seems to us decisive of its coverage. 'The reach of the act is not sustained or opposed by the fact that it is sought to bring new situations under its terms.' ^[10] The Sherman Act of 1890, 15 U.S.C.A. §§ 1-7, 15 note, a date when we had no insular possessions, was held by its use of the word 'Territory' in its § 3 to be applicable in Puerto Rico, a dependency acquired by the Treaty of Paris in 1898, 30 Stat. 1754. ^[11] The answer as to the scope of the Wage-Hour Act lies in the purpose of Congress in defining its reach.

(5) The point of statutory construction for our determination is as to whether the word 'possession,' used by Congress to bound the geographical coverage of the Fair Labor Standards Act, fixes the limits of the Act's scope so as to include the Bermuda base. The word 'possession' is not a word of art, descriptive of a recognized geographical or governmental entity. What was said of 'territories' in the Shell Co. case, 302 U.S. 253, at page 258, 58 S.Ct. at page 169, is aplicable:

'Words generally have different shades of meaning, and are to be construed if reasonably possible to effectuate the intent of the lawmakers; and this meaning in particular instances is to be arried at not only by a consideration of the words themselves, but by considering, as well, the context, the purposes of the law, and the circumstances under which the words were employed.'

The word 'possession' has been employed in a number of statutes both before and since the Fair Labor Standards Act to describe the areas to which various congressional statutes apply. ^[12] We do not find that these examples sufficiently outline the meaning of the word to furnish a definition that would include or exclude this base. While the general purpose of the Congress in the enactment of the Fair Labor Standards Act is clear ^[13] no such definite indication of the purpose to include or exclude leased areas, such as the Bermuda base, in the word 'possession' appears. We cannot even say, 'We see what you are driving at, but you have not said it, and therefore we shall go on as before.' ^[14] Under such circumstances, our duty as a Court is to construe the word 'possession' as our judgment instructs us the lawmakers, within constitutional limits, would have done had they acted at the time of the legislation with the present situation in mind.

The word 'possession' in the Act includes far off islands whose economy differs markedly from our own. Thus the employees of Puerto Rico, Guam, the guano islands, Samoa and the Virgin Islands have the protection of the Act. See C.F.R.,1947 Supp., 4393. Since drastic change in local economy was not a deterrent in these instances, there is no reason for saying that the wage-hour provisions of the Act were not intended to bring these minimum changes into the labor market of the bases. ^[15] Since its passage of the Act, Congress has extended the coverage of the Longshoremen's and Harborworkers' Compensation Act to the bases acquired since January 1, 1940, and to Guantanomo Bay. ^[16] When one reads the comprehensive definition of the reach of the Fair Labor Standards Act, it is difficult to formulate a boundary to its coverage short of areas over which the power of Congress extends, by our sovereignty or by voluntary grant of the authority by the sovereign lessor to legislate upon maximum hours and minimum wages. Under the terms of the lease, we feel sure that the house of assembly of Bermuda would not also undertake legislation similar to our Fair Labor Standards Act to control labor relations on the base. Since citizens of this country would be numerous among employees on the bases, the natural legislative impulse would be to give these employees the same protection that was given those similarly employed on the islands of the Pacific.

Under subdivisions 2 and 3, supra, we have pointed out that the power rests in Congress under our Constitution and the provisions of the lease to regulate labor relations on the base. We have also pointed out that it is a matter of statutory interpretation as to whether or not statutes are effective beyond the limits of national sovereignty. It depends upon the purpose of the statute. Where as here the purpose is to regulate labor relations in an area vital to our national life, it seems reasonable to interpret its provisions to have force where the nation has sole power, rather than to limit the coverage to sovereignty. Such an interpretation is consonant with the Administrator's inclusion of the Panama Canal Zone within the meaning of 'possession.'

We think these facts indicate an intention on the part of Congress in its use of the word 'possession' to have the Act apply to employer-employee relationship on foreign territory under lease for bases. Such a construction seems to us to carry out the remedial enactment in accord with the purpose of Congress.

Affirmed.

Mr. Justice JACKSON, dissenting.

Notes

1. 55 Stat. 1560, 1572, 1576, 1590. Those documents are published in Department of State publication No. 1726, Executive Agreement Series 235.
2. No due process question arises from this extension of legislation over such controlled areas such as was considered to bar state action concerning contracts made and to be performed beyond the boundaries of a state. Cf. Home Ins. Co. v. Dick, 281 U.S. 397, 407, 50 S.Ct. 338, 341, 74 L.Ed. 926, 74 A.L.R. 701, with Alaska Packers Ass'n. v. Comm'n, 294 U.S. 532, 541, 55 S.Ct. 518, 521, 79 L.Ed. 1044.
3. Cf. Ashwander v. T.V.A., 297 U.S. 288, 330 et seq., 56 S.Ct. 466, 475, 80 L.Ed. 688.
4. 55 Stat. 1560:
5. 1 Malloy, Treaties, Conventions, International Acts, Protocols and Agreements, S. Doc. 357, 61st Cong., 2d Sess., 359:
6. Isthmian Canal Convention, 33 Stat. 2234:
7. Through the Joint Resolution of June 29, 1944, 58 Stat. 625, these provisions were effectuated in leases for 99 years by an agreement of March 14, 1947, 61 Stat. --, Treaties and International Acts No. 1611. The rights of control over the areas obtained by the United States from the Republic of the Philippines are quite similar to those obtained over the Bermuda base. The power of control over leased areas obtained by the United States through the above leases is not greater than that ordinarily exercised by sovereign lessees of foreign territory. See 34 American Journal of International Law 703; Lawrence, Principles of International Law (6th ed., 1915) 175; H. Doc. No. 1, 56th Cong., 2d Sess., 386; Oppenheim's International Law (6th ed. by Lauterpacht, 1947) 412-14. Oppenheim contains numerous illustrations of leases by an owner-state to a foreign power. His views upon the leases of the bases herein referred to correspond to that of our Department of State and to the postulate as to sovereignty stated in this opinion.
8. 55 Stat. 1560, 1572; Executive Agreement Series 235, Department of State (GPO 1942), pp. 14, 15.
9. E.g., 55 Stat. 1245, Executive Agreement Series 204 (Greenland); 56 Stat. 1621, Executive Agreement Series 275 (Liberia).
10. Browder v. United States, 312 U.S. 335, 339, 61 S.Ct. 599, 602, 86 L.Ed. 862; Barr v. United States, 324 U.S. 83, 90, 65 S.Ct. 522, 525, 89 L.Ed. 765.
11. People of Puerto Rico v. Shell Co., 302 U.S. 253, 257, 58 S.Ct. 167, 169, 82 L.Ed. 235.
12. Federal Employers' Liability Act, 35 Stat. 65, § 2, 45 U.S.C. § 52, 45 U.S.C.A. § 52 (1908) ('Every common carrier by railroad in the Territories, the District of Columbia, the Panama Canal Zone, or other possessions of the United States * * *');
13. United States v. Darby, 312 U.S. 100, 115, 61 S.Ct. 451, 457, 85 L.Ed. 609, 132 A.L.R. 1430:
14. Johnson v. United States, 163 F. 30, 32, 18 L.R.A.,N.S., 1194.
15. When Congress dealt with coverage in the National Labor Relations Act, enacted July 5, 1935, 49 Stat. 449, 450, 29 U.S.C.A. § 151 et seq., it used a narrower definition of commerce, one restricted to States and Territories. That has been held to cover Puerto Rico but we are not advised of any application to the bases. Cf. National Labor Relation Board v. Gonzales Padin Co., 1 Cir., 161 F.2d 353.
16. Defense Base Act, 56 Stat. 1035, 42 U.S.C. § 1651, 42 U.S.C.A. § 1651 (1942). This act extends the coverage of the Longshoremen's and Harbor Workers' Compensation Act, 33 U.S.C.A. § 901 et seq., to 'any employee engaged in any employment-

'(1) at any military, air, or naval base acquired after January 1, 1940, by the United States from any foreign government; or

'(2) upon any lands occupied or used by the United States for military or naval purposes in any Territory or possession outside the continental United States (including Alaska; the Philippine Islands; the United States Naval Operating Base, Guantanamo Bay, Cuba; and the Canal Zone); * * *.'

This extension was necessary because of the prior limited language of the Act which covered injuries 'occurring upon the navigable waters of the United States', the term 'United States' being defined to mean 'the several States and Territories and the District of Columbia, including the territorial waters thereof.' 44 Stat. 1424, 33 U.S.C. §§ 902, 903, 33 U.S.C.A. §§ 902, 903.

It will be noted that Guantanamo Bay and the Canal Zone were included in the lists as 'possessions.'