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                                                      19 7 6




v ~ c 8 K l L l L TAND   h LIVESTOCK, a Montana
;orporation,

                                      Defendant and Respondent.



ippdd!.      irc)l\i:     )is t r l i c t C o u r t o f t h e S i x t h J u d i c i a l D i s r r i c t ,
                          tionorable J a c k D. Shans t r o m , J u d g e p r e s i d i n g ,



         For Appellant :

                   James A . T u l l e y a r g u e d , Big Timber, Montana

         "or Itespondent :

                   Kenneth R. Olson a r g u e d , Big Timber, Montana



                                                         Submitted:          May 26, 1976

                                                               Decided :   flu(, 16 iq
X r . J u s t i c e Johli Sonway H a r r i s o n dellvereci t h e O p ~ n i o ~ l r h ~
                                                                              oi
Court.


           This i s an a p p e a l from t h e o r d e r of t h e d i s t r i c t c o u r t ,

Sweet Grass County d i s m i s s i n g p l a i n t i f f ' s complaint f o r f a . i l u r e

t o s t a t e a c l a i m upon which r e l i e f may be g r a n t e d .

           P l a i n t i f f , Margaret B u t t r e l l , f i l e d an a c t i o n based on an

a l l e g e d v i o l a t i o n of t h e F a i r Labor Standards Act, 29 U.S.C.S.

$ 5 201 through 219.             She a l l e g e d she had n o t been p a i d t h e minimum

wage and had n o t been p a i d overtime a s r e q u i r e d by t h e s t a t u t e .

Her complaint was dismissed by t h e d i s t r i c t c o u r t f o r f a i l u r e t o

s t a t e a c l a i m upon which r e l i e f may be g r a n t e d , based on t h e

c o u r t ' s f i n d i n g t h a t p l a i n t i f f was n o t s u b s t a n t i a l l y engaged i n

i n t e r s t a t e commerce.      P l a i n t i f f appeals.      The q u e s t i o n t o be

decided i s whether t h e d i s m i s s a l of t h e complaint was p r o p e r .

           The United S t a . t e s Supreme Court s e t o u t t h e c l a s s i c t e s t

of t h e s u f f i c i e n c y of a complaint a s a g a i n s t a motion t o d i s m i s s

i n Conley v . Gibson, 355 U.S. 4 1 , 78 S.Ct.                       9 9 , 2 L ed 2d 80, 84:
           I!*   Jx
                        I n a p p r a i s i n g t h e s u f f i c i e n c y of t h e complaint we
           f o l l o w , of c o u r s e , t h e accepted r u l e t h a t a complaint
           should n o t be dismissed f o r f a i l u r e t o s t a t e a c l a i m u n l e s s
           i t appears beyond doubt t h a t t h e p l a i n t i f f can prove no
           s e t of f a c t s i n s u p p o r t of h i s c l a i m which would e n t i t l e
           him t o r e l i e f . "

           This Court s a i d i n Kielmann v. Mogan,                      156 Mont. 230, 233,



                    "It i s w e l l s e t t l e d t h a t a complaint should n o t
           be dismissed f o r i n s u f f i c i e n c y u n l e s s i t appears f o r
           c e r t a i n t h a t p l a i n t i f f i s e n t i t l e d t o no r e l i e f under
           any s t a t e of f a c t s which could be proved i n s u p p o r t of
           t h e claim. Hamman v. United S t a t e s , 267 F. Supp. 411
           (Mont. D.C. 1967)          ."
           A s t r o n g e r s t a t e m e n t of t h i s r u l e i s found i n Wheeler v .

Xoe, 163 Mont. 154, 160, 515 P.2d 679, where t h e Court, q u o t i n g

from 5 Wright and M i l l e r ' s F e d e r a l P r a c t i c e and Procedure, p. 598,

said:
        I1 I
          The motion to dismiss for failure to state a claim
        is viewed with disfavor and is rarely granted. 9 * *
                                                       :




        "'As a practical matter, a dismissal under Rule
        1()6
         2b()    is likely to be granted only in the unusual
        case in which plaintiff includes allegations that show
        on the face of the complaint that there is some insuperable
        bar to relief. In other words, dismissal is justified
        only when the allegations of the complaint itself clearly
        demonstrate that plaintiff does not have a claim. * * *I1'

        In the instant case then, the question is whether plaintiff

made allegations on the face of her complaint which demonstrate

that she does not have a claim; whether she could          prove no set
of facts in support of her claim which would entitle her to relief.

        The district court found the insufficiency of the complaint

was that there was no coverage under the Fair La.bor Standards Act.
The basic provisions of that Act must be examined to determine

if the court was correct in dismissing the complaint.         The Act,
29 U.S.C.S.    5206, requires:

        "a
         ()   Every employer shall pay to each of his employees
        who in any workweek is engaged in commerce or in the
        production of goods for commerce, or is employed in an
        enterprise engaged in commerce or in the production of
        goods for commerce, wages at the following rates:

               "1
                ()   not less than $2 an hour    * * *."
The Act does not attempt to cover every employee that Congress

could have reached by a full exercise of the Constitution's

commerce clause power.       Under the Act, the determination of the
extent of coverage is "a problem of statutory delineation, not
constitutional power      **   *.I1   Warren-Bradshaw Drilling Co. v. Hall,
317 U.S. 88, 63 S.Ct. 125, 87 L ed 83, 84.
        A key to the determination of the scope of coverage under
the Fair Labor Standards Act is the definition of "commerce".

29 U.S. C .S. § 203(b),   defines 11 commercet1as :
       11Commerce' means trade, commerce, transportation,
            r

       transmission, or communication among the several
       States, or between any State and any place outside
       thereof       ."
By this definition, commerce includes the act of communication.

The Department of Labor Wage and Hour Division discusses this

aspect of the definition of "commerce" at 29 C.F.R. 5 776.10 (b) :

       'I* *    *
              since 'commerce' as used in the act includes
       not only 'transmission' of communications but 'communi-
       cation' itself, employees whose work involves the con-
       tinued use of the interstate mails, telegraph, telephone
       or similar instrumentalities for communication across
       State lines are covered by the act. This does not mean
       that any use by an employee of the mails and other channels
       of communication is sufficient to establish coverage.
       But if the employee, as a regular and recurrent part of his
       duties, uses such instrumentalities in obtaining or
       communicating information or in sending or receiving written
       reports or messages, or orders for goods or services, or
       plans or other documents across State lines, he comes
       within the within the scope of the act as an employee
       directly engaged in the work of 'communication' between
       the State and places outside the State."

       As originally enacted the Fair Labor Standards Act only
                                        11
covered employees who were themselves        engaged in commerce" or

in "the production of goods for commerce".       Later the Act was

amended to extend coverage to employees of an "enterprise engaged

in commerce" whether the employees themselves were engaged in

commerce or not.

       In Paragraph 3 of her complaint, plaintiff set out these

facts to show she was covered by the Act:

       "* *   During the course of her employment in such
                9~
       position, plaintiff was called upon to conduct corres-
       pondence and engage in telephone conversations with
       prospective real estate purchasers located both within
       and outside the State of Montana. Plaintiff states that
       a substantial portion of her services during the term
       of her employment were rendered in dealing with persons
       living outside the State of Montana, and that said defendant
       is actively engaged in interstate commerce."
A f t e r c a r e f u l examination, t h e s e a l l e g a t i o n s prove s u f f i c i e n t

t o show t h a t p l a i n t i f f was covered by t h e F a i r Labor Standards

Act.     The f i r s t sentence quoted i s v e r y n e a r l y a paraphrase of t h e

Wage and Hour D i v i s i o n ' s r e g u l a t i o n h e r e t o f o r e quoted.      The

a l l e g a t i o n t h a t defendant was " a c t i v e l y engaged i n i n t e r s t a t e

commerce" r a i s e s t h e p o s s i b i l i t y t h a t a " s t a t e of f a c t s   ***
cnuld be proved i n support of t h e claim" t h a t would be t h e b a s i s

of coverage o f t h e defendant c o r p o r a t i o n and t h e r e f o r e t h e p l a i n t i f f

employee under t h e " e n t e r p r i s e " coverage.            These a l l e g a t i o n s do n o t

show, on t h e f a c e of t h e complaint, t h a t p l a i n t i f f would n o t be

covered by t h e F a i r Labor Standards Act, j u s t t h e o p p o s i t e .                    They

would e n t i t l e p l a i n t i f f t o r e l i e f , i f supported by t h e evidence

presented a t t r i a l .

          The motion t o dismiss f o r f a i l u r e t o s t a t e a c l a i m upon

which r e l i e f may be g r a n t e d i s n o t t h e proper p l a c e t o determine

coverage under t h e F a i r Labor Standards Act.                      A t t h a t p o i n t such

a d e t e r m i n a t i o n i s premature and must n e c e s s a r i l y be based on

i n f e r e n c e s and n o t on proven f a c t s .     McComb v. Johnson, 174 F.2d

833.     The i s s u e of coverage under t h e F a i r Labor Standards Act i s

often the determinitive               one, t h e r e being no d i s p u t e about t h e

wage r a t e being below t h e minimum e s t a b l i s h e d by t h e s t a t u t e .             This

i s s u e i s too important t o be decided on assumed o r i n f e r r e d f a c t s

e x t r a p o l a t e d from modern n o t i c e pleadings.

          I n Clyde v. Broderick, 144 F.2d 348, decided b e f o r e t h e

amendments expanded t h e coverage t o i n c l u d e employees of an " e n t e r -

prise",     the p l a i n t i f f s f a i l e d t o specifically allege t h a t t h e i r duties

were devoted t o commerce.               The c o u r t r e f u s e d t o dismiss t h e complaint

                                -
because i t f e l t t h a t more than t h e " s h o r t and p l a i n statement" of

t h e f a c t s i n a complaint v i o l a t e s       t h e s p i r i t of s i m p l i c i t y , con-
c i s e n e s s and d i r e c t n e s s t h a t i s t h e b a s i s of modern p l e a d i n g s .

The c o u r t pointed o u t t h a t f a c t s would be developed a t t r i a l o r

upon f u r t h e r p l e a d i n g which would c l e a r l y show whether t h e p l a i n t i f f s

were covered by t h e Act.

          Any f u r t h e r s p e c i f i c information, f o r example information

a s t o which workweeks t h e p l a i n t i f f claims she wa.s engaged i n

commerce during t h e time she s e t o u t i n h e r complaint, and who

h e r f e l l o w employees were i f " e n t e r p r i s e " coverage i s claimed,

may be obtained by t h e proper u s e of t h e d i s c o v e r y t o o l s provided

i n t h e Montana Rules of C i v i l Procedure.

          The d i s t r i c t c o u r t ' s o r d e r t o d i s m i s s t h e complaint f o r f a i l u r e

t o s t a t e a c l a i m upon which r e l i e f may be g r a n t i s vacated.                 The

cause i s remanded f o r f u r t h e r proceedings.




    Concur :




   ~ d n .Bernard W. Thomas, D i s t r i c t
   Judge, s i t t i n g f o r Chief J u s t i c e
   James T . Harrison.
