United States v. F. W. Darby Lumber Co.
1940 U.S. Dist. LEXIS 3188, 32 F. Supp. 734 (1940)
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Rule of Law:
Congress's power under the Commerce Clause does not extend to regulating the wages and hours of employees engaged in purely local manufacturing, even if the manufacturer intends to ship the goods in interstate commerce after production is complete. Such local activity lacks the required direct and substantial relation to interstate commerce to justify federal control.
Facts:
- A lumber manufacturer operated a business located entirely within the state of Georgia.
- The defendant produced and manufactured lumber using local labor and resources.
- At the time of production, the defendant intended to sell and ship a large proportion of the finished lumber to customers located outside of Georgia.
- The defendant's alleged violations of the Fair Labor Standards Act pertained to the failure to pay minimum wage during this production process.
- The actual sale and shipment of the lumber into interstate commerce occurred only after the manufacturing process was completed.
Procedural Posture:
- The United States government filed a criminal indictment against a Georgia lumber manufacturer in the United States District Court for the Southern District of Georgia, a court of first instance.
- The indictment charged the defendant with violating the minimum wage provisions of the Fair Labor Standards Act of 1938.
- The defendant challenged the indictment by filing a motion to quash, arguing that the Act, as applied to its local manufacturing activities, was an unconstitutional exercise of congressional power under the Commerce Clause.
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Issue:
Does the Fair Labor Standards Act's regulation of wages and hours for employees engaged in the 'production of goods for commerce' exceed Congress's constitutional authority under the Commerce Clause when applied to a lumber manufacturer whose production is entirely intrastate, even if the manufacturer intends to ship the lumber out of state after it is produced?
Opinions:
Majority - Barrett, District Judge
Yes. The Fair Labor Standards Act, as applied in this indictment, is an unconstitutional exercise of Congress's commerce power. The indictment improperly attempts to regulate purely local manufacturing activity, which is not itself interstate commerce. Citing Hammer v. Dagenhart, the court affirmed the principle that manufacturing is distinct from commerce, and the mere intent to later ship goods in interstate commerce does not merge the two activities. For Congress to regulate intrastate activities, those activities must have a 'close and substantial relation to interstate commerce,' as established in NLRB v. Jones & Laughlin Steel Corp. The indictment fails this test because it alleges only an intent to engage in interstate commerce after production is complete, which is too indirect and remote to justify federal intervention. To allow Congress to regulate local production based on such a tenuous link would 'obliterate the distinction between what is national and what is local and create a completely centralized government.'
Analysis:
This decision represents a traditional, restrictive interpretation of the Commerce Clause, adhering to the pre-New Deal distinction between manufacturing (local) and commerce (interstate). The court's reliance on Hammer v. Dagenhart positions it in direct opposition to the expanding scope of federal regulatory power embodied in New Deal legislation like the Fair Labor Standards Act. By quashing the indictment, the court created a direct constitutional challenge to the FLSA's core provisions, setting the stage for a landmark Supreme Court review that would ultimately decide whether Congress could regulate labor standards for goods destined for the national market.
