Worked in excess of 40 hours without compensation

Federal District Court Opinions

KING v. ASSET APPRAISAL SERVICES, INC., (Neb. 10-23-2006) TROY KING, on behalf of himself and other past and present employees similarly situated, Plaintiffs, v. ASSET APPRAISAL SERVICES, INC. and MICHAEL COX, Defendants. 8:05CV27. United States District Court, D. Nebraska. October 23, 2006

MEMORANDUM AND ORDER

F. GOSSETT, Magistrate Judge

This matter is before the magistrate judge by consent of
the parties on defendants’ Motion for Summary Judgment
[100] and plaintiff’s response in opposition thereto [107].
This is a collective action under the Fair Labor Standards
Act (FLSA). The plaintiffs were employed by the defendants
(together, “AAS”) as asset appraisers. They allege that,
during their employment by AAS, they “routinely worked in
excess of forty (40) hours per week without compensation,”
in violation of the FLSA, 29 U.S.C. § 201, et seq.,
and the defendants knew or showed reckless disregard for
the fact that the failure to pay overtime violated the
FLSA.

Defendants contend that the Motor Carrier Act (“MCA”)
exemption of the FLSA, see 29 U.S.C. § 213(b)(1); 49
U.S.C. §§ 31501 & 32502, applies to work
performed by the plaintiffs. Consequently, the plaintiffs
are not be entitled to overtime compensation for hours
worked in excess of 40 per workweek. Page 2

The court has carefully reviewed the pleadings, the briefs,
and the evidentiary materials filed by the parties. For the
reasons explained below, the court finds and concludes that
summary judgment should be granted in favor of the
defendants.

I. FINDINGS OF FACT

I find that the following facts are uncontroverted[fn1]
for purposes of this Motion for Summary Judgment and
constitute the material facts upon which a resolution of
these issues must be premised.

1. This complaint was filed on January 21, 2005 by Troy
King, on his own behalf and on behalf of past and present
AAS employees who served as asset appraisers.

2. King claimed that AAS had not paid its asset appraisers
overtime compensation for hours worked in excess of 40 per
workweek.

3. In January 2006 plaintiffs Barnett and Rupe were
granted leave to join the lawsuit as class plaintiffs.

4. King, Barnett, and Rupe seek unpaid overtime
compensation for hours allegedly worked in excess of 40
hours during various workweeks while they were asset
appraisers employed with AAS. Page 3

5. An AAS asset appraiser inspects and records, through
written data and pictures, the condition of heavy equipment
and other machinery throughout the United States for
purposes of establishing that machinery’s value to its
owner.

6. King, Barnett, and Rupe served as asset appraisers and
performed these tasks.

7. King served as an AAS asset appraiser from November
2002 through July 2004.

8. Barnett served as an AAS asset appraiser from March 2001
to August 2004.

9. Rupe served as an AAS asset appraiser from June 2001
through May 2004.

10. In order to travel to an inspection site and perform
an appraisal, King would use a company car, office keys,
digital camera, computer, calipers, tire-tread depth gauge,
inspection forms, tape measure, and master equipment keys.

11. All of the items listed in paragraph 10 were AAS
property.

12. In order to travel to the inspection site and perform
the appraisal, Barnett would use a company car, ECM reader
(Palm Pilot), tape measure, tire gauge, inspection forms,
and camera.

13. All of the items listed in paragraph 12 were AAS
property.

14. In order to travel to the inspection site and perform
the inspection, Rupe would use a company car, digital
camera, inspection forms, battery jump pack, ECM reader,
slim jim set, tape measures, depth gauge, keys, and
calipers.

15. All of the items listed in paragraph 14 were AAS
property. Page 4

16. During calendar year 2003, there were approximately 28
weeks in which King drove a company-owned car across state
lines to appraise heavy construction equipment for the
defendants. During the remaining 24 weeks of calendar year
2003, King did not drive across state lines to do
appraising, and many of these weeks were spent by King in
defendants’ Omaha office doing data entry. King worked over
40 hours in these weeks without overtime compensation.

17. Plaintiff Rupe worked for defendants from June 2001
until April 30, 2004. During calendar year 2003 through
April 30, 2004, Rupe spent almost all of his time in
defendants’ Omaha office. In calendar year 2003, there were
eight weeks in which Rupe drove across state lines to do
work for the defendants. In 2004, there were no weeks in
which Rupe drove across state lines to do appraisal work
for the defendants. Rupe worked over 40 hours per week in
2003 and 2004 without overtime compensation.

18. Plaintiff Barnett performed appraisals on a weekly
basis, driving across state lines.

II. LAW

A. Jurisdiction

This court has subject matter jurisdiction pursuant to 28
U.S.C. §§ 1331 and 1367. Venue in this court
is proper under 28 U.S.C. § 1391. Page 5

B. Summary Judgment Standard of Review

Under Fed.R.Civ.P. 56, summary judgment is appropriate
when, viewing the facts and inferences in the light most
favorable to the nonmoving party, “there is no genuine
issue as to any material fact and . . . the moving party is
entitled to a judgment as a matter of law.” Fed.R.Civ.P.
56(c); Harder v. ACandS, 179 F.3d 609, 611 (8th Cir. 1999).
“In making this determination, the function of the court is
not to weigh evidence and make credibility determinations,
or to attempt to determine the truth of the matter, but is,
rather, solely, to determine whether there is a genuine
issue for trial.” Anderson v. Liberty Lobby, Inc., 477 U.S.
242, 249-50 (1986). The court must “look to the substantive
law to determine whether an element is essential to a case,
and `[o]nly disputes over facts that might affect the
outcome of the suit under the governing law will properly
preclude the entry of summary judgment.'” Dulany v.
Carnahan, 132 F.3d 1234, 1237 (8th Cir. 1997) (quoting
Anderson, 477 U.S. at 248).

A party seeking summary judgment bears the initial
responsibility of informing the court of the basis for its
motion, and identifying those portions of “the pleadings,
depositions, answers to interrogatories, admissions on
file, together with the affidavits, if any,” which it
believes demonstrates the absence of a genuine issue of
material fact. See Tenbarge v. Ames Taping Tool Sys., Inc.,
128 F.3d 656, 657-58 (8th Cir. 1997); NECivR 56.1(a).

In the face of a properly supported motion, “[t]he burden
then shifts to the nonmoving party to `set forth specific
facts showing that there is a genuine issue for trial.'”
Prudential Page 6 Ins. Co. v. Hinkel, 121 F.3d 364, 366
(8th Cir. 1997), cert. denied, 522 U.S. 1048 (1998)
(quoting Fed.R.Civ.P. 56(e)). A nonmoving party may not
rest upon the mere allegations or denials of its pleadings,
but rather, must set forth specific facts, supported by
affidavits or other proper evidence, showing that there is
a genuine issue for trial. See Fed.R.Civ.P. 56(e); Liberty
Mut. Ins. Co. v. FAG Bearings Corp., 153 F.3d 919, 922 (8th
Cir. 1998). In this respect, the nonmoving party “`must do
more than simply show that there is some metaphysical doubt
as to the material facts;’ . . . [i]t must show there is
sufficient evidence to support a jury verdict in [its]
favor.” Chism v. W.R. Grace & Co., 158 F.3d 988, 990 (8th
Cir. 1998); see NECivR 56.1(b).

C. Legal Analysis

The FLSA provides that any employee who “is engaged in
commerce or in the production of goods for commerce” shall
be paid “not less than one and one-half times the regular
rate at which he is employed” for every hour over forty
hours he works in a workweek. 29 U.S.C. § 207. This
provision is subject to numerous exemptions; however,
exemptions from the FLSA “are narrowly construed against
employers and are to be withheld except as to persons
`plainly and unmistakably’ within their terms and spirit.”
Musarra v. Digital Dish, Inc., Case No. C2-05-545, ___ F.
Supp. 2d ___, 2006 WL 2779856 (S.D. Ohio, Sept. 28, 2006)
(citing Auer v. Robbins, 519 U.S. 452, 462 (1997); and
Mitchell v. Kentucky Fin. Co., 359 U.S. 290, 295-96,
(1959)). The employer bears the burden of proving that the
exemption applies to the employees in question. Id. Page 7

The MCA exemption covers “any employee with respect to whom
the Secretary of Transportation has power to establish
qualifications and maximum hours of service pursuant to the
provisions of [the MCA, 49 U.S.C. § 31502].” 29
U.S.C. § 213(b)(1). Under 49 U.S.C. §§
13501[fn2] and 13502,[fn3] the Secretary of Transportation
may prescribe requirements for qualifications and maximum
hours of service for “motor carriers”[fn4] and for “motor
private carriers,” “when needed to promote the safety of
operations.” See 49 U.S.C. § 31502(b); Morgan v.
Francois, No. 05-1796, 2006 WL 488439, 170 Fed. Appx. 978,
980 (8th Cir. 2006).

The legal issue presented in this motion is whether the
plaintiffs were employees of a “motor private carrier.” That
term is currently defined by statute as follows: Page 8

(15) Motor private carrier. — The term “motor
private carrier” means a person, other than a motor
carrier, transporting property by commercial motor
vehicle (as defined in section 31132)[fn5] when —

(A) the transportation is as provided in section 13501 of
this title;

(B) the person is the owner, lessee, or bailee of the
property being transported; and

(C) the property is being transported for sale, lease,
rent, or bailment or to further a commercial enterprise.

49 U.S.C. § 13102(15) (emphasis added).

The definition of “motor private carrier” quoted above
became effective August 10, 2005, with the enactment of
“the Safe, Accountable, Flexible, Efficient Transportation
Equity Act: A Legacy for Users” (SAFETEA-LU). Pursuant to
SAFETEA-LU, the definition of “motor private carrier” is
now limited to the transportation of property using
commercial motor vehicles. Prior to August 10, 2005,[fn6]
the MCA exemption applied to most employees who drove any
type and size of motor vehicle in interstate commerce. See
Musarra v. Digital Page 9 Dish, Inc., 2006 WL 2779856 at
n. 19. Due to the enactment of SAFETEA-LU, however, many
vehicles that were previously exempt are no longer exempt
because they are not “commercial” motor vehicles. See id.

Although the plaintiffs all ended their employment with AAS
in 2004, they argue that the SAFETEA-LU amendments apply in
this case and render AAS ineligible for the MCA exemption.
The court, however, agrees with AAS that the legislation
does not apply retroactively.

Absent clear Congressional intent, a presumption exists
that a statute does not operate retroactively. Retroactive
application of a statute is improper if such application
“would impair rights a party possessed when [the party]
acted, increase a party’s liability for past conduct, or
impose new duties with respect to transactions already
completed.” Landgraf v. USI Film Prods., 511 U.S. 244, 280
(1994).

Tillison v. Gregoire, 424 F.3d 1093, 1098 n. 4 (9th Cir.
2005). As to its amendments to the Motor Carrier Act,

retroactive application of SAFETEA-LU is highly
disfavored. See Landgraf v. USA Film Prods., 411 U.S. 244,
280 (1994) (“If the statute would operate retroactively,
our traditional presumption teaches that it does not
govern absent clear congressional intent favoring such a
result.”); Michigan Ass’n of Governmental Employees v.
Michigan Dep’t. of Corr., 992 F.2d 82, 84 (6th Cir. 1993)
(noting that “the FLSA does not authorize retroactive
rulemaking”). SAFETEA-LU does not include any language
evincing Congressional intent to apply the amendment
retroactively, and such a finding would result in
confusion and unfairness as various individuals who until
August 10, 2005 were exempt.

Musarra v. Digital Dish, Inc., 2006 WL 2779856 at *8. See
also Dell’Orfrano v. IKON Office Solutions, Inc., No.
5:05CV245, 2006 WL 2523113 (M.D. Ga., Aug 29, 2006). Page
10 Retroactively applying the SAFETEA-LU amendments, which
became effective over six months after this lawsuit was
filed, would tend to increase AAS’ liability for past
conduct, or impose new duties with respect to transactions
already completed.[fn7]

Plaintiffs further argue that Public Law 104-88, enacted
in 1995 and codified at 49 U.S.C.A. § 13505(a),
limits the general jurisdiction of the Department of
Transportation (see 49 U.S.C. § 13501) so as to
render AAS ineligible for the MCA exemption in this case.
Section 13505(a) provides:

(a) In general. — Neither the Secretary nor the
Board has jurisdiction under this part over the
transportation of property by motor vehicle when —

(1) the property is transported by a person engaged in a
business other than transportation; and

(2) the transportation is within the scope of, and
furthers a primary business (other than transportation) of
the person.

Although there is existing authority that could be construed
to support plaintiffs’ position, i.e., Mielke v. Laidlaw
Transit, Inc., 102 F. Supp. 2d 988 (N.D. Ill. 2000), the
argument has been rejected in the higher courts:

Attempting to defeat the application of section 31502 of
Title 49, [plaintiff] argues that under 49 U.S.C. §
13505 the Secretary of Transportation is deprived of
jurisdiction over [defendant-employer] because
[defendant’s] “primary business” is wholesaling, rather
than transportation. The same argument has been presented
to two other circuits; both have rejected it. See Klitzke
v. Steiner, 110 F.3d 1465, 1468 (9th Cir. 1997); Friedrich
v. U.S. Computer Servs., 974 F.2d 409, 413 (3d Cir. 1992);
see also Carpenter v. Pennington Seed, Inc., 2002 WL
465176, *3-*4 (E.D. La. Mar. 26, 2002). We reject it
also. Page 11 Bilyou v. Dutchess Beer Distributors, Inc.,
300 F.3d 217, 225 (2d Cir. 2002). The court reasoned,

[Plaintiff] is correct that § 13505 covers
[Defendant], because [Defendant’s] transportation is in
furtherance of a primary business other than
transportation — the beer and beverage wholesaling
business. But the remainder of [Plaintiff]’s argument
falters. On the basis of [Defendant’s] involvement in
another primary business other than transportation,
§ 13505 exempts it from the Secretary’s
jurisdiction, as specified “in this part, over
transportation of property by motor vehicle.” 49 U.S.C.
§ 13505 (emphasis added). Section 13505 is a
provision of Part B of Subtitle IV of Title 49, 49
U.S.C. §§ 13101-14914. That Part contains
provisions authorizing the DOT to enact registration and
security (insurance and bonding) requirements for motor
carriers, freight forwarders, and brokers. See 49 U.S.C.
§ 13902 (registration requirements for motor
carriers); § 13903 (registration requirements for
freight forwarders); § 13904 (registration
requirements for brokers); see also § 13906 (bonding
and insurance requirements for motor carriers, freight
forwarders, and brokers).

Section 13505 has no bearing on the Secretary’s power, as
described in 29 U.S.C. § 213(b)(1), “to establish
qualifications and maximum hours of service pursuant to
the provisions of section 31502 of Title 49.” Section
31502 falls under a different part of Title 49. It falls
in Part B of Subtitle VI relating to “Motor Vehicle and
Driver Programs.” The fact that § 13505 denies the
Secretary power to prescribe economic and licensing
regulations of the sort covered in Subtitle IV, Part B, in
no way contradicts the Secretary’s authority, established
in a different part of the Motor Carrier Act, to set
qualifications and maximum hours of service for drivers to
promote safety of operations. That is the crucial inquiry
under FLSA’s § 213(b)(1), and, as shown above,
[Defendant] satisfies those criteria.

300 F.3d at 226 (footnotes omitted). After a comprehensive
discussion of the legislative history and purpose of the
MCA, the court concluded that “the Secretary of
Transportation `has power to establish qualifications and
maximum hours of service pursuant to the Page 12
provisions of section 31502 of Title 49[.]'” 300 F.3d at
229. I adopt that conclusion in this case.

To establish the applicability of the motor carrier
exemption, AAS must show that: “(1) the Secretary of
Transportation had the authority to establish the drivers’
qualifications and maximum hours; (2) the drivers engaged
in activities that directly affected the safe operation of
motor vehicles on public highways; and (3) the drivers
transported passengers or property on public highways in
interstate commerce.” Chao v. Gary Bauerly, LLC, No. Civ.
03-6200, 2005 WL 1656915 at *4 (D. Minn. 2005). Considering
the parties’ uncontroverted facts in light of the
applicable law, I find that the defendants have met this
burden.

The court must also reject plaintiffs’ final argument that
they are entitled to overtime compensation for the weeks in
which they did not travel interstate. In this regard, the
determining factor is not what percentage of the
plaintiffs’ duties affected the safety of operation but,
rather, “whether any of [plaintiffs’] duties had a
substantial effect on motor vehicle safety.” Yellow Transit
Freight Lines, Inc. v. Balven, 320 F.2d 495, 498 (8th Cir.
1963). Accord Spears v. Preston Refrigeration Co., Inc.,
205 F. Supp. 2d at 1106; see generally 51B C.J.S. Labor
Relations § 1203 (Westlaw, May 2006): “[I]t is the
character of the safety-affecting activities rather than
the proportion of either the employee’s time or of the
employee’s activities that is controlling. In other words,
the true determinant is whether or not the employee
performs duties which substantially affect the safety of
operation, rather Page 13 than whether the duties
affecting safety are substantial. Thus the emphasis is
placed on the effect of the duties on safety operation
rather than the proportion of time spent in doing those
duties.” (Footnotes omitted).

In this case, the plaintiffs routinely used their vehicles
on the public highways to complete the work that is the
subject of this lawsuit. Their duties substantially
affected the safety of operation of the motor vehicles, and
the plaintiffs do not dispute that point.

For the reasons discussed above, the court finds that the
defendants are exempt from compensating plaintiffs for
overtime pursuant to the motor private carrier exception to
the FLSA. The instant case presents no issues of material
fact, and the defendants are entitled to judgment as a
matter of law on all claims.

ORDER

IT IS ORDERED that defendants’ Motion for Summary Judgment
[100] is granted in its entirety.

[fn1] Plaintiffs “generally agree with defendants’ Statement
of Facts,” but wish the court to consider additional facts,
as set out in their brief (Filing 107). In reply (Filing
112), defendants indicate that they “take Plaintiffs’
additional statement of facts as true.”

[fn2] 49 U.S.C. § 13501 provides:

The Secretary and the Board have jurisdiction, as
specified in this part, over transportation by motor
carrier and the procurement of that transportation, to the
extent that passengers, property, or both, are transported
by motor carrier —

(1) between a place in —

(A) a State and a place in another State;

(B) a State and another place in the same State through
another State;

(C) the United States and a place in a territory or
possession of the United States to the extent the
transportation is in the United States;

(D) the United States and another place in the United
States through a foreign country to the extent the
transportation is in the United States; or

(E) the United States and a place in a foreign country to
the extent the transportation is in the United States; and

(2) in a reservation under the exclusive jurisdiction of
the United States or on a public highway.

[fn3] 49 U.S.C. § 13502 pertains to transportation
between Alaska and other states.

[fn4] The term “motor carrier” means “a person providing
commercial motor vehicle (as defined in section 31132)
transportation for compensation.” 49 U.S.C. §
13102(14). The parties agree that the plaintiffs did not
perform their asset-appraisal work using commercial motor
vehicles.

[fn5] 49 U.S.C.A. § 31132(1) provides:

[C]ommercial motor vehicle” means a self-propelled or
towed vehicle used on the highways in interstate commerce
to transport passengers or property, if the vehicle
—

(A) has a gross vehicle weight rating or gross vehicle
weight of at least 10,001 pounds, whichever is greater;

(B) is designed or used to transport more than 8
passengers (including the driver) for compensation;

(C) is designed or used to transport more than 15
passengers, including the driver, and is not used to
transport passengers for compensation; or

(D) is used in transporting material found by the
Secretary of Transportation to be hazardous under section
5103 of this title and transported in a quantity requiring
placarding under regulations prescribed by the Secretary
under section 5103.

[fn6] Prior to August 10, 2005, a motor private carrier
“was statutorily defined as a person `transporting property
by motor vehicle when — (A) the transportation is as
provided in section 13501; . . . (B) the person is the
owner, lessee, or bailee of the property being transported;
and (C) the property is being transported . . . to further
a commercial enterprise.'” Spears v. Preston Refrigeration
Co., Inc., 205 F. Supp. 2d 1104, 1106 (D. Minn. 2002)
(quoting 49 U.S.C. § 13102(13)).

[fn7] I also note that the Eighth Circuit applied the
pre-August 2005 version of the statute in Morgan v.
Francois, No. 05-1796, 2006 WL 488439, 170 Fed. Appx. 978,
980 (8th Cir. 2006). Page 1