Jno. McCall Coal Co. v. United States

248 F. Supp. 253, 1965 U.S. Dist. LEXIS 7790
CourtDistrict Court, D. Maryland
DecidedDecember 27, 1965
DocketCiv. A. No. 15090
StatusPublished
Cited by1 cases

This text of 248 F. Supp. 253 (Jno. McCall Coal Co. v. United States) is published on Counsel Stack Legal Research, covering District Court, D. Maryland primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Jno. McCall Coal Co. v. United States, 248 F. Supp. 253, 1965 U.S. Dist. LEXIS 7790 (D. Md. 1965).

Opinion

WINTER, District Judge:

Plaintiff’s motion for summary judgment, less a claimed set-off of the United States, was granted, in the amount of $126.72, for the reasons set forth in an oral opinion rendered October 22, 1965. Because of the importance of the issue presented by the claimed set-off, the reasons and authorities upon which the Court acted are herein set forth in greater detail.

Under a fifth contract between the parties, plaintiff agreed to deliver, and delivered, to the United States $11,240.46 worth of coal. The United States paid $2,744.41 of this amount. Against the difference of $8,496.05, an amount which is not disputed, the United States claimed a set-off of $8,369.33 under four previous coal contracts.

The set-off arose under the Walsh-Healey Public Contracts Act, 41 U.S.C.A. §§ 35-45, and regulations adopted thereunder, as applied to the four previous contracts between plaintiff and the United States. Under them plaintiff was to deliver, and did deliver, coal from Kistler No. 62 Mine of Young Weeks Coal Company, Inc., Kistler, West Virginia. In regard to these contracts, the Administrator, Division of Public Contracts, United States Department of Labor, determined that plaintiff and Young Weeks failed to pay minimum wages and overtime compensation and to provide safe working conditions in regard to employees of Young Weeks. This determination was made on September 28, 1961, pursuant to the provisions of § 5 of the Act, 41 U.S.C.A. § 39, and regulations issued thereunder, 41 C.F.R. §§ 50-203.-1-203.12.

Based upon a hearing before an examiner, the administrator found, and these findings are not contested, that plaintiff, a Maryland corporation, having its principal place of business in Baltimore, sells and distributes coal at wholesale. In 1956 and 1957 it was awarded four contracts for the delivery of bituminous coal to the United States. Each of the contracts was for an amount in excess of $10,000.00 and, therefore, subject to the provisions of the Act, which require, inter alia, that parties contracting with the United States pay established minimum wages and overtime compensation and provide safe and sanitary working conditions, 41 U.S.C.A. §§ 35(b) and 35(e). Plaintiff did not qualify as a “regular dealer” within the meaning of § 1(a) of the Act, 41 U.S.C.A. § 35(a), [255]*255because it did not have any storage yards or other facilities in which it stocked and from which it sold coal to the public.1 Plaintiff’s eligibility to contract with the United States rested upon plaintiff’s compliance with regulations issued under the Act, 41 C.F.R. § 50-201.64(a).2

Pursuant to this regulation, plaintiff submitted for each of the four contracts a bid which named Young Weeks Coal Company, Inc., Kistler No. 62 Mine, Kist-ler, West Virginia, as plaintiff’s supplier and, after the bids were accepted as submitted by the plaintiff, plaintiff advised Young Weeks that the latter must comply with the federally-established wage, hour and safety standards. Young Weeks complied with the wage standards (but not the safety requirements) 3 until May 14, 1957. For each working day from May 15, 1957 to June 14,1957 emp-ployees of Young Weeks mined coal which was used to fulfill the plaintiffs contracts, but the employees were totally unpaid. The mine closed on June 14, 1957. On December 19, 1957 a petition for involuntary bankruptcy was filed against Young Weeks, and it was adjudicated a bankrupt on January 6, 1958. The bankrupt estate was insufficient even to pay in full a preferred claim for federal taxes ; there has been no distribution for unpaid wages.

Although plaintiff paid Young Weeks for the coal which the latter mined in the period May 15 to June 14, 1957, wages unpaid by Young Weeks to its emp-ployees during that time amounted to $8,369.33.

Plaintiff seeks to escape the validity of the set-off on the ground that the [256]*256failure of Young Weeks to pay any wages during the crucial period, as distinguished from its failure to pay some wages but less than the established minimum rates, did not constitute a breach of - § 1(b) of the Act, 41 U.S.C.A. § 35(b),4 that “all persons employed by the contractor * * * will be paid * * * not less than the minimum wages as determined by the Secretary of Labor * * It is next contended that, if the failure of Young Weeks to pay any wages constituted such a breach, plaintiff is not “the party responsible therefor” within the meaning of § 2 of the Act, 41 U.S.C.A. § 36, and, hence, is not liable to the United States, which sues for the benefit of the unpaid employees.

I conclude that plaintiff’s first contention is lacking in merit. The first point pressed by plaintiff presents a matter of first impression judicially, but it is not a contention which presents real difficulty in decision. Section 1 of the Act, 41 U.S.C.A. § 35, expresses a plain and clear congressional intent that employees of persons engaged as suppliers to the United States where the value of the transaction exceeds $10,000 are to be paid the minimum wages as determined by the Secretary of Labor to be the prevailing minimum wages for persons employed on similar work. This direction, when analyzed, embodies two concepts— first, that the employees of government suppliers be paid, and second, that they be paid at certain designated minimum levels. An examination of § 1, as well as the other provisions of the Act, gives no indication that Congress intended, in enacting the direction that employees be paid, that the Secretary of Labor, or his representative, or the courts were to engage in equitable considerations as to when to enforce this mandate. Thus, it makes no difference whether employees go unpaid because of bankruptcy or other cause presumably beyond the direct control of the employer, or whether they go unpaid to the full extent required by the law, because of inadvertence or wilful act on the part of the employer. Plaintiff’s argument that § 1 is inapplicable when nonpayment is total and due to bankruptcy, but does apply when nonpayment is partial and results from inadvertence or wilful act of the employer, is an argument based on degree of nonpayment and leads to the absurd conclusion that Congress intended only to correct a partial wrong, but provided no remedy for the correction of a total wrong. It is no answer, as plaintiff contends, that had not plaintiff been in the picture the employees could not collect from Young Weeks because of its bankruptcy. Bankruptcy did render the wages uncollectible, but it did not diminish the liability of Young Weeks (unless and until a discharge was granted), nor the liability of -he bankrupt estate. Nor can the Court accede to the argument that the sole purpose of the Act was to prevent underbidding which was made possible by the payment of substandard wages and that a further purpose of the Act was not also to protect employees from the loss of wages earned.

Plaintiff’s second contention is no more meritorious than its first. Section 2 of the Act, 41 U.S.C.A. § 36, provides that any breach of § 1 of the Act (including the failure to pay minimum wages),"* * * shall render the party responsible therefor liable to the United States of America for liquidated damages, in addition to damages for any other breach of such contract * * * ” and the damages shall include “ * * * a sum equal to the amount of any * * * [257]*257underpayment of wages due to any employee engaged in the performance of such contract * *

Free access — add to your briefcase to read the full text and ask questions with AI

Related

United States v. Southland Manufacturing Corp.
264 F. Supp. 174 (D. Puerto Rico, 1967)

Cite This Page — Counsel Stack

Bluebook (online)
248 F. Supp. 253, 1965 U.S. Dist. LEXIS 7790, Counsel Stack Legal Research, https://law.counselstack.com/opinion/jno-mccall-coal-co-v-united-states-mdd-1965.