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MITCHELL v. WADE LAHAR CONSTRUCTION COMPANY

January 6, 1960

JAMES P. MITCHELL, SECRETARY OF LABOR, UNITED STATES DEPARTMENT OF LABOR, PLAINTIFF,
v.
WADE LAHAR CONSTRUCTION COMPANY, A CORPORATION, DEFENDANT.



The opinion of the court was delivered by: John E. Miller, Chief Judge.

  These suits were commenced by the Secretary of Labor, in his official capacity, under provisions of the Fair Labor Standards Act of 1938, as amended, 29 U.S.C.A. § 201 et seq. Civil Action No. 451 was filed on May 5, 1959, and seeks an injunction restraining the defendant from further alleged violations of the Act. Civil Action No. 455 was filed June 3, 1959, and seeks recovery on behalf of several employees of the defendant corporation for alleged minimum wages and overtime compensation. Involved in these cases was the work performed by the defendant under a contract with the U.S. Corps of Engineers, which consisted of clearing certain areas of the reservoir formed by the Table Rock Dam project on the White River in Carroll and Boone Counties, Arkansas, and Barry, Stone and Taney Counties of Missouri.

In Civil Action No. 455 there is no dispute concerning the compensation paid and the hours worked by a majority of the defendant's employees. The records of the defendant accurately reflect the hours worked by all employees except three night watchmen who were paid on a weekly basis. The defendant did not pay his employees on the project in accordance with the Fair Labor Standards Act. Therefore, the only issue to be determined by the court is whether the employees of the defendant were engaged in interstate commerce, or in the production of goods for interstate commerce while clearing the designated areas of the Table Rock Reservoir.

The plaintiff alleges that the clearing activities of the defendant were part of the over-all construction of the Table Rock Dam and Reservoir, and therefore are subject to the Fair Labor Standards Act. The Secretary further contends that the defendant's employees were engaged "in commerce" in that (1) the purpose of the construction of the dam and reservoir was to control water levels and thereby affect the navigability of the lower White and Mississippi Rivers, (2) that flood control protection is given by the construction of the dam and reservoir to interstate highways, railroads, power lines and communication facilities.

In response to an interrogatory, the plaintiff stated that the employees of the defendant were engaged "in the production of goods for commerce" because:

    "The construction of the Table Rock Dam and
  Reservoir is an extension and improvement of the
  existing interstate power network operated under the
  supervision of the Southwestern Power Administration,
  whereby power is produced for interstate transmission
  as well as for use in the production of goods for
  interstate commerce. Further, the flood control
  features will protect farms and industrial areas
  producing goods for interstate commerce."

The defendant denies that its employees were engaged in commerce or in the production of goods for commerce within the coverage of the Fair Labor Standards Act. It further contends that the purpose of the clearing operation was only to provide suitable recreational facilities on the reservoir, and therefore was a local activity outside the coverage of the Act.

The cases were consolidated for trial and were tried to the court on September 14, 1959. At the conclusion of the trial the cases were submitted and briefs were requested from the parties in support of their respective contentions. The briefs have been received and considered by the court along with the pleadings, testimony and exhibits. Findings of fact and conclusions of law are included in this opinion which is filed in accordance with the provisions of Rule 52(a), F.R. Civ.P., 28 U.S.C.A.

The Wade Lahar Construction Company is an Arkansas corporation organized in 1952. Its home office is Mountain Home, Arkansas, and Mr. Wade Lahar is President of the company. The company is one of the largest concerns engaged in reservoir clearing and handles jobs throughout the United States. Mr. Lahar has been regularly engaged in clearing work under contract with the Corps of Engineers since 1931.

The construction and clearing of the Table Rock Dam and Reservoir, which forms the basis of the two cases now before the court, is a part of the development program of the White River Basin. The White River has its beginning in the mountains of northwest Arkansas and flows northeasterly 215 miles to the vicinity of Forsyth, Missouri. A short distance from that point it reenters Arkansas and flows southeasterly for a distance of 505 miles across the State to join the Mississippi River 45 miles up-stream from Arkansas City, Arkansas. The development program of the White River has consisted of the building of various levees and dams.

House Document 917, 76th Congress, 3rd Session, is the basic authority for this development. The primary reason for the development of the White River Basin and the Table Rock Dam and Reservoir can be summarized as (1) aid to navigation on the lower White and Mississippi Rivers, (2) flood control, (3) generation of electric power, and (4) recreational purposes.

The Table Rock Dam is the third in a series of dams built on the White River and its tributaries. The Norfork Dam and Reservoir was completed in the year 1943. Bull Shoals Dam and Reservoir was completed in 1952. The Table Rock Dam was completed in 1959. Land acquisition is currently underway for the Beaver Dam, which is to be constructed near Beaver, Arkansas, upstream from the Table Rock project.

Table Rock Dam is located near Branson, Missouri, and the reservoir covers parts of Carroll and Boone Counties in Arkansas, and Barry, Stone and Taney Counties in Missouri. The entire development of the White River Basin is under the supervision of the Corps of Engineers of the U.S. Army.

There is no dispute as to the over-all purposes of the development of the White River Basin and the construction of Table Rock Dam. The purpose of the reservoir clearing performed by the defendant and its relationship to the function and operation of the Table Rock Dam is in conflict however.

When the Norfork Dam was constructed in the early 1940's, the Corps of Engineers required that all reservoir areas be cleared. When the Bull Shoals Dam and Reservoir were constructed beginning in 1947, the Corps of Engineers required only modified clearing of the reservoir. The original plans formulated by the Corps of Engineers for the Table Rock project limited the clearing operation to 15 or 16 public-use areas constituting less than 5 percent of the reservoir area. Upon learning of this plan, the citizens of the surrounding area filed numerous protests with the Government demanding more extensive clearing so as to make the lake more of a tourist attraction. A public meeting was held in the baseball park in Branson, Missouri, and was attended by area residents, representatives of nearby Chambers of Commerce, Congressmen, and Corps of Engineer officials.

There are approximately 52,000 acres in the reservoir area up to contour 936, and approximately 42,000 acres up to contour 915. Of the total number of acres approximately 40,000 were timbered acres, and as a result of the meeting and protests the defendant under its contract cleared, both complete and modified clearing, a total of 12,700 acres.

As appears above, there has been a substantial change in the Corps of Engineers' policy and planning with reference to reservoir clearing. While originally it was thought there should be complete clearing, the policy and thinking have changed in recent years. In Design Memorandum No. 12 for this project, prepared by the Little Rock District Corps of Engineers, the general factors considered in the clearing of this reservoir are stated as follows:

    "Clearing of the reservoir is desirable to the
  extent that it aids in control of the malaria and
  encephalitis vectors, reduces the hazard to boating,
  improves fish and wildlife conditions, adds to the
  general appearance and recreational value of the
  lake, and reduces the maintenance problems caused by
  floatage and possible interference with the outlet
  works."

In Section III of the same Memorandum, the Corps of Engineers explains its selection of clearing limits:

    "The data described above serves only as a general
  guide to selection of clearing limits for Table Rock.
  Clearing of the entire power draw-down storage
  between elevations 915 and 846 and topping of trees
  to elevation 846 would cost 5 to 6 million dollars.
  Although this would be a desirable plan which
  conforms to that followed at certain other projects,
  available data does not indicate the necessity for
  clearing such an extensive area. Progressively less
  clearing has been performed as new reservoirs have
  been completed in this area. At Blakely Mountain, the
  latest large reservoir project constructed, clearing
  was omitted entirely in the more isolated areas. The
  plans described herein for Table Rock provide for
  clearing only the reaches considered to be reasonably
  necessary from the standpoint of recreation and
  public use. The timber in the other reaches would be
  killed, resulting eventually in a large amount of
  drift, but lake velocities will be negligible and the
  drift would probably be concentrated locally by wind
  action where it would rot rather than float to the
  dam. Low pool stages during periods of drought will
  afford opportunity in the future to clear additional
  areas in the reservoir if the need should develop."

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