Polly Ann Powell, Wife, Thomas C. Powell, Husband v. Tucson Air Museum Foundation of Pima County, a Non-Profit Arizona Corporation

771 F.2d 1309, 27 Wage & Hour Cas. (BNA) 569, 1985 U.S. App. LEXIS 23138

• Court: Court of Appeals for the Ninth Circuit
• Decided: September 18, 1985
• Docket: 84-2137
• Status: Published

Opinions

POOLE, Circuit Judge:

Polly Ann Powell (“Powell”) and her husband appeal from the district court’s grant of summary judgment in their action seeking back pay allegedly due her under the Fair Labor Standards Act (“FLSA”). The district court found that Powell’s former employer, the Tucson Air Museum (“Museum”) was not subject to the minimum-wage and overtime requirements of the Act. We affirm.

Powell was employed by the Museum as an after-hours security guard from January 15, 1979, to February 2, 1983. Powell moved her personal mobile home onto the grounds of the Museum so that she could provide after-hours security services on a regular basis. Powell’s “duty day” consisted of three two-hour patrols of the Museum grounds between sundown and sunrise; she was on duty every other day.

Powell resigned her position on February 2, 1983, after disputes arose between her and the Museum. She filed suit in state court in August 1983 on behalf of her marital community to recover unpaid minimum wages and overtime claimed to be mandated by the FLSA. The Museum removed the action to United States District Court.

The Museum moved for summary judgment on the ground that the Museum was not subject to coverage under the Act because the Museum was not “an enterprise engaged in commerce or in the production of goods for commerce,” as defined by 29 U.S.C. §§ 203(s)(l) and (6). Powell argued in opposition to the motion for summary judgment that the Museum was subject to coverage under section 203(s)(6) of the Act because it was a “public agency” or because it performs activities of a public agency. The district court granted summary judgment in favor of the Museum. Powell timely appealed.

We review a district court’s grant of summary judgment de novo. See, e.g., Castelli v. Douglas Aircraft Co., 752 F.2d 1480, 1482 (9th Cir.1985). We will affirm if we find that there is no genuine issue of material fact and that the moving party is entitled to judgment as a matter of law. Arizona Laborers, Teamsters and Cement Masons Local 395 Health and Welfare Trust Fund v. Conquer Cartage Co., 753 F.2d 1512, 1515 (9th Cir.1985); Fed.R.Civ.P. 56(c). Questions of statutory interpretation are also reviewed de novo. See, e.g., Callejas v. McMahon, 750 F.2d 729, 730 (9th Cir.1985).

Powell argues on appeal that the Museum, because of its contractual relationship with Pima County, is performing an “activity of a public agency,” and is thus subject to the FLSA pursuant to 29 U.S.C. § 203(s)(6). The Museum is a non-profit corporation that entered into an exclusive management agreement with Pima County, Arizona, to lease certain real property from the County for the purposes of developing, operating, and improving a public recreational facility dedicated to the display of historic aircraft. The agreement provides the County with the power to approve admission fees, concessionaires, hours of operation, and improvements to the property. It specifies the accounting methods to be used by the Museum, and requires the Museum to submit an annual budget and to open its books for inspection and audit. It prohibits the Museum from discriminating in employment on the basis of race, sex, religion, political affiliation, age or physical handicap; it requires the Museum to take steps to maintain and improve the natural resources and scenic values of the land.

We reject. Powell’s argument that the contractual relationship between the Museum and Pima County is so close as to render the Museum a de facto public agency or an activity of a public agency so as to subject it to the requirements of the Act.

When interpreting statutes, the plain meaning of the words used is controlling, “absent a clearly expressed legislative intention to the contrary.” City of Edmonds v. United States Department of Labor, 749 F.2d 1419, 1421 (9th Cir.1984) (quoting Consumer Product Safety Commission v. GTE Sylvania, Inc., 447 U.S. 102, 108, 100 S.Ct. 2051, 2056, 64 L.Ed.2d 766 (1980)). The FLSA provides that “[ejvery employer shall pay to each of his employees who in any workweek * * * is employed in an enterprise engaged in commerce” a specified minimum wage. 29 U.S.C. § 206(a). Section 203(s) provides, in pertinent part, that “enterprise engaged in commerce” means “an enterprise which has employees engaged in commerce * * * and which — * * * is an activity of a public agency.” 29 U.S.C. § 203(s). “Public agency” is defined to include “the government of a State or political subdivision thereof” and “any agency of * * * a State, or a political subdivision of a State.” 29 U.S.C. § 203(x).

The key factors in determining whether a private party should be considered a public agency are whether the entity is directly responsible to public officials or to the general public, Skills Development Services, Inc. v. Donovan, 728 F.2d 294, 300 (6th Cir.1984); Williams v. Eastside Mental Health Center, Inc., 669 F.2d 671, 679 (11th Cir.1982), and whether the parties’ contracts designated them as independent contractors, not state agencies, Skills Development, 728 F.2d at 299.¹ The ability of a state agency to hire and fire the employees of the independent contractor is the element of control that was absent in these cases, id. at 300; Williams, 669 F.2d at 679, and is lacking in the present case. The existence of an independent board of directors over which the County has no power of appointment or removal, see Williams, 669 F.2d at 679, also weakens Powell’s position.

Powell’s argument that substantial state regulation can change a private corporation into a state agency was expressly rejected by the Eleventh Circuit in Williams. The court stated that

we find it difficult to distinguish East-side from a variety of private corporations and professional individuals that are subject to similar state control pursuant to licensing statutes. Such controls are normal means by which states effectuate public policies through the regulation of private entities. These licensing controls do not, however, somehow magically transform the fundamental nature of the licensed entity into a public agency or official.

We find this reasoning persuasive authority .for rejecting Powell’s argument that the regulations contained in the contract were sufficient to transform the Museum into a public agency.

Because the Museum is a private corporation which is an independent contractor of Pima County, it is not an “activity of a public agency” under 29 U.S.C. § 203(s)(6) and thus is not subject to the requirements of the FLSA.² The judgment of the district court granting summary judgment in favor of the Museum is

AFFIRMED.

1 . Because we have found no cases interpreting this section of the Act, we rely upon several cases which have considered this issue in the context of private corporations trying to escape FLSA coverage by arguing that they were public agencies exempt from operation of the Act under National League of Cities v. Usery, 426 U.S. 833, 96 S.Ct. 2465, 49 L.Ed.2d 245 (1976) (overruled by Garcia v. San Antonio Metropolitan Transit Authority, — U.S. ---, 105 S.Ct. 1005, 83 L.Ed.2d 1016 (1985)). Although these cases are obviously not controlling, they provide a useful analysis of the issue.

2 . We disagree with the dissent’s assertion that the Museum is an “ ‘enterprise’ which 'is an activity of a public agency’ under 29 U.S.C. § 203(s)(6)." Dissenting opin. at 1312. The dissent argues that this court should reach for a "liberal" or "expansive” interpretation of the statúte and would rewrite the statute to respond to an imagined evil: that public agencies which are now subject to the FLSA under Garcia will seek to avoid its requirements by contracting with private parties not subject to the Act to perform their duties. That is not what occurred here, because the public agencies were exempt from the FLSA under National League of Cities when this contract was entered into. Moreover, the Museum conceded at argument that it will be required to comply with the Act in the near future because its gross sales will exceed the minimum set forth in 29 U.S.C. § 203(s)(l). More importantly, it is improvident to distort the plain language of a statute to cover a contingency that has not yet occurred. If the problem the dissent foresees comes to pass, Congress can always amend the Act to prevent public agencies from avoiding its coverage in this manner.