Vermilya-Brown Company v. Connell/Dissent Jackson

by Robert H. Jackson

United States Supreme Court

335 U.S. 377

Vermilya-Brown Company  v.  Connell

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

Mr. Justice JACKSON, dissenting.

The serious question in this case is not as to the meaning of the Fair Labor Standards Act. It means just what it says when it provides that it shall apply in any Territory or possession of the United States and I would apply it to every foot of soil that, up to the time of this decision, has been regarded as our possession.

The real issue here, and it is a novel one, is whether this Court will construe the lease under which the United States occupies a military buse in Bermuda as adding it to our possessions. The labor for which overtime nder the Act is sought was performed for a government contractor on this military base. The base did not exist when the Act was passed and it does not either expressly or impliedly purport to cover work in that area, unless the word 'possession' shall be construed to include the leased lands. Whether it is appropriate or permissible to hold as matter of law that our tenure there constitutes the leasehold area a possession obviously turns on a reading of the lease from Great Britain.

The Court of Appeals read the lease to give 'sweeping powers' to the United States and declared that 'the areas are subject to fully as complete control by the United States as obtains in other areas long known as 'possessions' of the United States.' It names as comparable possessions Alaska, Hawaii, Puerto Rico, Guam, Samoan Islands, Virgin Islands and the Canal Zone. This Court seems to approve that premise because it affirms, citing some if not all of the same examples; but it also says, '* * * it is difficult to formulate a boundary to its (the Act's) coverage short of areas over which the power of Congress extends * * * to legislate upon maximum hours and minimum wages.' ^[1]

Thus application of the Act to the leased area is put on two grounds: first, that the area is a possession of the United States; and second, since the Act applies to those 'engaged in commerce or in the production of goods for commerce,' ^[2] it operates wherever Congress has power to act with respect to commerce. Presumably the Court will not shrink from applying the converse of the latter proposition; that the Act does not apply where this country or its nationals are not engaged in commerce.

Bermuda and like bases are not, in my opinion, our possessions on a juridical and geopolitical footing with the possessions enumerated. I also believe that there is not and under the lease there can not be in the leased area any 'commerce' subject to the Act.

To consider the bases as possessions in that sense is incompatible with the spirit of the negotiations and with the letter of the lease by which the bases were acquired. It enlarges the responsibilities which the United States was willing to accept and the privileges which Great Britain was willing to concede. This will appear from the history of the transaction whose meaning we interpret.

When organized resistance in the Low Countries and in France went down and the German Wehrmacht stood poised on Europe's Atlantic seaboard, it was suspected, as it since has been proved, that the design for conquest embraced seizure of Atlantic islands as a pathway for future operations against the United States. ^[3] Disasters on land and sea had brought threat of invasion of the British Isles nearer to reality than at any time since the Spanish Armada. Consequently, Great Britain could divert no forces to the defense of her island possessions in our hemisphere, which after all were strategic spots to assail our commerce and stepping stones to our gateways. ^[4] Great Britain, however, desperately in need of destroyers to defend her shores, intimated a readiness to put the United States in a position to defend these islands and the Americas as a quid pro quo for overaged American destroyers. ^[5]

Among those who saw in the development of air warfare a necessity for moving our air defense outposts seaward from the cities which dot our own shores, an influential and respected group favored asking England to cede her island possessions in this hemisphere to us as an outright transfer of sovereignty. If this cession had been asked and granted, the Court would now rightly hold the bases to be our 'possessions.' But it was President Roosevelt himself who determined for this country that it was the part of wisdom neither to seek nor to accept sovereignty or supreme authority over any part of these islands. He decided that it was in our self-interest to limit the responsibilities of the United States strictly to establishment, maintenance and operation of military, naval and air installations. His reasons have been partially disclosed ^[6] and one of them, apparent to anyone even casually travelled in those islands, was the great disparity of social, economic and labor conditions between the islands and our Continent. Also he knew full well the different customs and institutions prevailing there, particularly the relations between the white, colored and native races, and the difficulty of assimilating them into the American pattern-a prospect that would arouse emotional tensions in this country as well as in the Islands and which indeed caused some anxiety even in Westminster. ^[7] Thus it was settled American policy, grounded, as I think, on the highest wisdom, that, whatever technical form the transaction should take, we should acquire no such responsibilities as would require us to import to those islands our laws, institutions and social conditions beyond the necessities of controlling a military base and its garrison, dependents and incidental personnel.

Knowledge of that policy and purpose gives a measure of the novel and dubious grounds for the Court's present determination to put these bases upon the egislative and juridical footing of 'Territories and possessions.' It is a first step in the direction of the very imprudence that was sought to be avoided by the limited tenure devised for the bases.

But if American interests neither require nor admit of the assumption that the bases have become our possessions, the bounds of the grant as understood and expressed by Great Britain deny it with even more compelling force. The confined character of the granted privileges and their incompatibility with either sovereignty or proprietorship on our part appear from the letter of the Marquess of Lothian to Secretary Hull of September 2, 1940, which committed the United Kingdom to grant to the United States 'the lease for immediate establishment and use of Naval and Air bases and facilities for entrance thereto and the operation and protection thereof,' on the Great Bay of Bermuda. ^[8] All of the specific provisions of the formal lease were subsidiary to and within this general measure of the rights yielded. It comprehended all that it was intended to bestow and all that we intended to take. Its dimensions were well defined by Mr. Stimson as 'the right to fortify and defend.' ^[9]

Details of the formal lease do but emphasize the common purpose of Great Britain to so confine the concession and that of President Roosevelt to so circumscribe our responsibilities. The leasehold right of the United States, in war time or emergency, to conduct military operations on land, water or in the air, which was the heart of the matter for us, is without bounds or restrictions except for a pledge of good neighborliness and friendly cooperation in their exercise.

The leasehold terms, however, are well chosen, carefully to deny every commercial and political right to the United States except as they are incidental and appurtenant to this primary military usufruct. American nationals cannot go there for any purpose other than governmental except in conformity to Bermudian laws. Its immigration laws are relaxed only to admit 'any member of the United States forces posted to a leased area' and 'any person (not being a national of a Power at war with His Majesty the King) employed by, or under, a contract with the Government of the United States in connection with the construction, maintenance, operation or defense of the Bases.' Even so, the lessee must submit to measures to identify such persons and to establish their status. In what formerly recognized possession of the United States mentioned by the Court is American citizens' privilege of ingress and egress, of transit and of residence, so limited?

Private trade and commerce by our citizens likewise are wholly in control of the Colony and is no more dependent upon out laws than in any other part of the United Kingdom or any foreign country. Bermudian customs duties are waived only on material for construction and maintenance of our bases, for consumption by our garrisons and supporting personnel, and on their household goods; and we undertake to prevent abuse of this customs privilege and to prevent resale of such imports. This is not greater than the immunity allowed by every foreign country to our diplomatic corps and staffs, and the power reserved by Britain over imports and customs is wholly inconsistent with the concept that these are our possessions.

The lease also expressly and unconditionally provides that no business can be established in the leased area and that no person shall habitually render any professional services except for the Government and its personnel. No wireless or submarine cable may be operated except for military purposes. Are such stifling restraints by another state consistent with the idea of our possession?

Payment of local income and property taxes are only waived as against those in the area when they are members of our a med forces, employees engaged in our works or contractors with our Government. In short, no actual possession of the United States used by the Court as a standard of reference is so insulated from the United States in fiscal, social, economic, commercial and political affairs. In none is the commerce power of Congress so stripped of subject matter for regulation or our permissible range of activity so circumscribed.

Possessions such as Puerto Rico, Guam, the guano islands, Samoa and the Virgin Islands, which the Court mentions as standards for the treatment of Bermuda, are, in vital respects, as different from it as night from day. Not one of them is subject to even a frivolous claim adverse to our complete ownership. They belong to us or they belong to no one. They are ceded territory over which United States sovereignty is as complete and as unquestioned as over the District of Columbia and they are subject to no dual control or divided allegiance. They are incorporated into our economy, freely trading in our markets, and 'protected' by our tariff walls. They are integrated with our social and, in some degree at least, with our political life as well; some of them being authorized to send delegates to our Congress.

On the other hand, however, Bermuda never has ceased in its entirety to be a Crown Colony of Great Britain. Social, industrial and labor conditions prevailing at the Island bases are such that both nations made every effort to insulate them from the damaging effects of our limited occupation for military purposes. It seems to me unsound policy as well as capricious statutory interpretation for the Court blindly to mingle them by imposing statutory policies that were not shaped with their existence or peculiarities in mind. It may be that, in some matters, the same policies suited to our legitimate possessions will also be considered adaptable to the bases. But it is not necessarily or presumptively so, and where the bases are to be brought into our scheme of things, it should be deliberately and consciously done by the Congress, in particular matters and with particular regard to local conditions, ^[10] and perhaps after consultation with the United Kingdom or Colonial authorities. We should not by the process of judicial interpretation impose upon the bases not only the policies of the Act before us but those of many Acts not involved here and as to which we are even less informed. ^[11]

Neither should we embark upon a course of making the same naked words mean one thing in one Act and something else in another. It cannot be pretended that such an interpretation as the Court announces is in response to any demonstrable intention of Congress on the subject, for when this Act was passed the Bermuda base was not in being nor was it within the contemplation of even the more foresighted.

It should be enough to dispose of this matter to point out that the United States has no supreme authority or sovereign function in Bermuda, where every commercial activity is subject to control by another sovereign which is our political superior in the island. We have no commercial rights in Bermuda in the sense of private enterprise such as Congress by this Act sought to regulate. The United States cannot in good faith conduct or permit its nationals to engage in industry, manufacture or trade there. It cannot authorize them to conduct commerce there or to produce goods for commerce, which are the conditions which this Act itself makes necessary to bring the Labor Standards Act into play. To do so would be a flagrant breach of good faith with the United Kingdom and an overreaching of the people of Bermuda. Small wonder that the Department of State feels constrained to inform us that it 'regards as unfortunate' the conclusion of the court below, which is now affirmed, and adds a warning that any holding that the bases are 'possessions' of the United States in a political sense 'would not in the Department's view be calculated to improve our relations with that Government.' ^[12]

The Canal Zone has been cited as a possession with which Bermuda is comparable. But the Isthmian Canal Convention of 1903, which ceded the Canal Zone to the United States, provides in Art. III that the United States is to have 'all the rights, power and authority within the zone * * * which the United States would possess and exercise if it were the sovereign * * * to the entire exclusion of the exercise by the Republic of Panama of any such sovereign rights, power or authority.' ^[13] Our State Department has firmly maintained that this treaty confers upon the United States complete power of commerce. ^[14] To such an extent, indeed, are we sovereign in the Canal Zone that Panama has been granted special commercial rights only by express and formal concession, ^[15] and this Court has reviewed the history of the acquisition and oncluded that the title of the United States is cimplete and perfect. Wilson v. Shaw, 204 U.S. 24, at pages 32, 33, 27 S.Ct. 233, 234, 235, 51 L.Ed. 351.

But the Panama Canal history may well be explanatory of a paragraph of the Bermudian lease from Great Britain, upon which the court below and respondent heavily rely and which this Court cites as one of the significant provisions. This clause provides that the 'leased area is not a part of the territory of the United States for the purpose of coastwise shipping laws so as to exclude British vessels from trade between the United States and the leased area.' From this provision it is sought to draw the conclusion that for all other purposes the area is part of the territory of the United States. The remaining provisions of the identical paragraph are sufficient to negative any idea that the territory becomes a United States possession. ^[16] But coastwise shipping privileges had been the subject of friction between the United States and Great Britain over the Panama Canal and the plain purport of the article is to say that we do not want to repeat that experience. The Panama Canal Act of 1912, 37 Stat. 560, 562, exempted American coastwise shipping from tolls, which the British Government represented to be a violation of the Hay-Pauncefote Treaty of 1901, 32 Stat. 1903, and which it considered a corollary of the Clayton-Bulwer Treaty of 1850, 9 Stat. 995. President Wilson recommended that Congress repeal the exemption favoring American coastwise shipping as against British shipping ^[17] and the action was taken only after a bitter and extensive debate. ^[18] I think that the clause, instead of being read to create a possession of the leased bases would, in the light of our tendency to favor our shipping, be more accurately read to say 'even for the purpose of coastwise shipping, the leased area shall not be considered a possession.'

Guantanamo Naval Base, also referred to, is a leased base in Cuba upon which we have agreed that 'no person, partnership or corporation shall be permitted to establish or maintain a commercial, industrial or other enterprise.' But Guantanomo has been ruled by the Attorney General not to be a possession; ^[19] it has not been listed by the State Department as among our 'non-self-governing territories,' ^[20] and the Administrator of the very Act before us has not listed it among our possessions. ^[21] Its treatment confirms our view that neither is Bermuda a possession.

Among responsible agencies of the United States, this Court alone insists that the Bermuda bases are possessions. The Department of Justice files a brief urging the Court against this position; the Department of State warns of its dangers and harmful effects upon our foreign relations; the Wage-Hour Administrator ruled administratively against coverage in Bermuda. ^[22] Congress has shown that it has not regarded the leased areas as 'possessions.' ^[23]

Heretofore it has been thought that the Court should follow rather than overrule the Executive department in matters of this kind. ^[24]

What I have said does not reflect the slightest doubt about the power of Congress to make government contractors, doing work in Bermuda or anywhere else in the world, whether in our own or in foreign possessions, pay time-and-a-half for overtime or to enforce almost any labor policy upon them. ^[25] The power of Congress, by appropriate legislation, to govern such a relationship is not impaired if we hold that the place where the contract is performed is not our 'possession.' The holding that it is a possession is not essential to enable Congress to act but serves only the purpose of expanding the coverage of this Act to the bases without specific action by Congress. We need not resort to such an unwarranted and disturbing interpretation of our relations with Bermuda and the United Kingdom in order to preserve the full power of Congress to extend all proper protection to the wages and hours of all personnel at the base, because they are and can be there only by virtue of government assignment or government contracts.

In summary: Congress made the Act applicable in our 'possessions.' There is no indication or reason to believe that, had Congress considered the matter, it would have regarded our tenure in the Bermuda base as creating a 'possession,' or would have applied an Act regulating private employment to an area where no such private enterprise could exist. There is no indication of a purpose to apply the Act to an exclusively military operation; indeed the Act indicates the contrary by exempting government employees from its operation. ^[26]

It would not concern the United Kingdom, or the Colony of Bermuda, if the United States should require its contractors to pay overtime, upon any assumptions which do not imply a possession adverse to theirs. But I do think it will cause understandable anxiety if this Court does it by holding, as matter of law, that the leased areas are possessions of the United States, like those we govern to the exclusion of all others. Such a decision by this Court initiates a philosophy of annexation and establishes a psychological accretion to our possessions at the expense of our lessors, not unlikely to be received in more critical quarters abroad as confirmation of the suspicion that commitments made by our Executive are lightly repudiated by another branch of our Government. It should be the scrupulous concern of every branch of our Government not to overreach any commitment or limitation to which any branch has agreed. ^[27]

I would reverse the judgment below and direct dismissal of the complaint. ^[28]

I am authorized to state that The CHIEF JUSTICE, Mr. Justice FRANKFURTER and Mr. Justice BURTON join in this opinion.

Notes

1. This is the more striking because it is said concerning an Act which we have held does not, even in continental United States, exercise or purport to exercise the full scope of the commerce power. See, e.g., McLeod v. Threlkeld, 319 U.S. 491, 493, 63 S.Ct. 1248, 1249, 87 L.Ed. 1538; Kirshbaum Co. v. Walling, 316 U.S. 517, 62 S.Ct. 1116, 86 L.Ed. 1638.
2. Section 6 of the Act requires every employer 'as defined therein) to pay the prescribed rates to each employee who is 'engaged in commerce or in the production of goods for commerce'; and § 7 forbids overtime employment, except at prescribed rates, of any employee who is 'engaged in commerce or in the production of goods for commerce'. 29 U.S.C. §§ 206, 207, 29 U.S.C.A. §§ 206, 207.
3. On October 29, 1940, Major (General Staff) Freiherr von Falkenstein, from the Fuehrer's headquarters, wrote a secret 'resume of the military questions current here.' The 5th item thereof reads:
4. 'I understand that in the view of the American technical authorities modern conditions of war, especially air war, require forestalling action, in this case especially in order to prevent the acquisition by Hitler of jumping-off grounds from which it would be possible, bound by bound, to come to close quarters with the American Continent.' Mr. Churchill to House of Commons, July 9, 1941. Churchill, 'The Unrelenting Struggle,' pp. 175, 176.
5. Stimson, 'On Active Service,' Vol. II, pp. 356-358.
6. Hull, 'Memoirs,' p. 834; Stimson, 'On Active Service, Vol. II, pp. 356-358.
7. See Parliamentary Debate, Commons, Vol. 370, p. 255, et seq., and Vol. 376, p. 567, et seq.
8. 55 Stat. 1560, 1572; Executive Agreement Series 235, Department of State (GPO 1942), pp. 14, 15.
9. Stimson, 'On Active Service,' Vol. II, p. 356.
10. The following statutes use language expressly covering the leased bases or language which seems to imply that the statute will reach as far as there is power to make it reach:
11. The following tabulation of statutes whose coverage provisions are so similar to those being construed as to either be governed by today's decision or to require most sophisticated distinctions shows in what is network of legislation the Court is entangling the bases:
12. The State Department's Legal Adviser, in a letter to the Attorney General dated January 30, 1948, wrote, in part, as follows:
13. 33 Stat. 2234, 2235.
14. Secretary Hughes to the Panamanian Minister, Oct. 15, 1923, 2 Hackworth, Digest of International Law, pp. 801-805.
15. Joint Statement of President Roosevelt and President Arias, Oct. 17, 1933, id., 806 et seq.; General Treaty and Supplementary Conventions of March 2, 1936, ratified July 26, 1939, 53 Stat. 1807.
16. The other subparagraphs provide that the United States must conform to the local system of lights and other navigation aids, and report in advance to local authorities any such devices established or changed; that the United States is exempt from local pilotage laws; that British commercial vessels may use the leased areas on the same basis as American commercial vessels; and that commercial United States aircraft cannot operate from the bases for other than military purposes except by agreement with the United Kingdom.
17. President Wilson, in a message delivered in person to the Congress (51 Cong. Rec. 4313) said
18. After hearings, the House Committee recommended passage. House Report No. 362, 63d Cong., 2d Sess. Three separate minority reports, reflecting the views of four Committee members, were filed. Id. The Senate Committee heard testimony covering more than one thousand pages. Hearings on H.R. 14385, Senate Committee on Interoceanic Canals, 63d Cong., 2d Sess. The issue was so explosive that the measure was reported back without recommendation. S. Rep. No. 469, 63d Cong., 2d Sess. The measure was debated for five days in the House, 51 Cong.Rec., Pt. 6, 5554 5602; 5605-5640; 5677-5767; 5797-5897; 5922-6089, and more than a month in the Senate, 51 Cong.Rec., Pt. 8, 7660-7667; 7723-7727; 8115-8172; 8211-8229; 8277-8284; 51 Cong.Rec., pt. 9, 8335-8340; 8428-8446; 8492-8507; 8548-8560; 8638-8642; 8693-8707; 8730-8741; 8803-8824; 8367; 8875-8888; 8941-8956; 9003-9031; 9209-9031; 9209 9214; 9215-9243; 9291-9297; 51 Cong.Rec., Pt. 10, 9355-9365; 9435 9436; 9509-9526; 9626-9631; 9713-9722; 9723-9745; 9784-9788; 9916 9918; 9977-10008; 10041-10087; 10127-10174; 10185-10210; 10211 10248. See also Extension of Remarks at 51 Cong. Rec., Pt. 17, pp. 252, 253; 253-255; 258-263; 266-270; 279, 280; 280; 280, 281; 281, 282; 282-290; 290-292; 292-294; 295, 296; 296-298; 298; 298, 299; 299-303; 306, 307; 307-309; 309-315; 316-319; 319-324; 324-330; 331-333; 333, 334; 334, 335; 335; 335-339; 339, 340; 352, 353; 353 356; 370-372; 418-428; 539-543; 610-617; 644, 645; 645, 646; 646, 647; 650.
19. 35 Op. Atty. Gen. 536, 540, 541.
20. See United Nations, Non-Self-Governing Territories, Summaries of Information Transmitted to the Secretary General during 1946 (UN, 1947) p. 101.
21. Wage & Hour Manual (1942 ed.) 30; 12 F.R. 4583, 4584; 29 C.F.R. 1947 Supp., § 776.1.
22. See note 21. See also Administrator's Letter dated May 22, 1942, stating that the Act does not apply to bases in the 'British West Indies' and Deputy Administrator's Letter dated September 24, 1943, with specific reference to the leased area on Trinidad.
23. (a) In 1941 Congress sought to extend to the leased bases the provisions of the Longshoremen's and Harbor Workers' Compensation Act which covered death or disability from an injury occurring upon the navigable waters of the United States. The 'United States' was therefore 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, 33 U.S.C.A. § 902. The amendment, c. 357, 55 Stat. 622, 42 U.S.C.A. § 1651 et seq., made the Act applicable to injuries or death of covered employees at any military, air or naval base acquired after January 1, 1940, by the United States from any foreign government or 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, Guantanamo, and the Philippine Islands. This Act was amended in 1942, c. 668, 56 Stat. 1028, 1035, and, as amended, lists separately (1) bases acquired from foreign governments after January 1, 1940, and (2) lands used for military or naval purposes and any Territory or possession, including Alaska, the Philippines, Guantanamo, and the Canal Zone. It is clear that in neither 1941 and 1942 did the Congress consider that the term 'possession' alone would have extended coverage to the bases.
24. More than 100 years ago, Mr. Chief Justice Marshall, speaking for a unanimous Court in Foster v. Neilson, 2 Pet. 253, 307, 309, 7 L.Ed. 415, said: '* * * In a controversy between two nations concerning national boundary, it is scarcely possible that the courts of either should refuse to abide by the measures adopted by its own government. * * * The judiciary is not that department of the government to which the assertion of its interests against foreign powers is confided; and its duty commonly is to decide upon individual rights, according to those principles which the political departments of the nation have established. If the course of the nation has been a plain one, its courts would hesitate to pronounce it erroneous. * * * After these acts of sovereign power over the territory in dispute, asserting the American construction of the treaty by which the government claims it, to maintain the opposite construction in its own courts would certainly be an anomaly in the history and practice of nations. If those departments which are entrusted with the foreign intercourse of the nation, which assert and maintain its interests against foreign powers, have unequivocally asserted its right of dominion over a country of which it is in possession, and which it claims under a treaty; if the legislature has acted on the construction thus asserted, it is not in its own courts that this construction is to be denied. * * *'
25. See, e.g., the statutes mentioned in note 23.
26. Section 3(d) of the Act provides that the term 'employer' shall not include the United States. 29 U.S.C. § 203(d), 29 U.S.C.A. § 203(d).
27. See President Wilson's message quoted note 17; and see note 24.
28. Since the District Court entered summary judgment before trial based on a ruling that the leased area is not a possession of the United States, I assume that this Court's affirmance of the reversal of that ruling leaves open on remand all other questions relevant to respondents' right of recovery, such as whether or not they were engaged in commerce or in the production of goods for commerce, as well as any defenses which may be available to petitioner.