Garcia v. San Antonio Metropolitan Transit Authority

Congress passed the Fair Labor Standards Act (FLSA) in 1938, but ruled in National League of Cities v. Usery, 426 U.S. 833 (1976), that the FLSA did not grant authority to Congress to regulate the wages, overtime pay, and hours of state government employees. The San Antonio Metro Transit Authority (SAMTA) (defendant) had previously paid its state employees according to the federal standards established in the FLSA, but ceased doing so after the Supreme Court’s decision in National League of Cities. In 1979, the Wage and Hour Administration of the United States Department of Labor ruled that SAMTA could be regulated by the FLSA because its actions were not a traditional government function reserved for the states under National League of Cities. SAMTA then filed suit against the United States Department of Labor in the United States District Court for the Western District of Texas seeking a declaratory judgment that its actions were not subject to congressional regulation. Garcia (plaintiff) and other employees of SAMTA also filed suit at the same time against SAMTA claiming overtime back-pay. The district court allowed Garcia to intervene as a defendant in SAMTA’s suit against the United States Department of Labor. The district court ruled for SAMTA. Garcia and the Department of Labor appealed directly to the United States Supreme Court. The United States Supreme Court remanded the case, and the district court again ruled for SAMTA. On appeal the second time, the United States Supreme Court granted certiorari.