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Garcia v. Peterson

United States District Court, S.D. Texas, Houston Division

August 1, 2019

Jose Garcia, et al., Plaintiffs,
v.
Vasilia A/K/A “Vauna” Peterson, et al., Defendants.

          MEMORANDUM OPINION AND ORDER

          GRAY H. MILLER SENIOR UNITED STATES DISTRICT JUDGE

         Pending before the court is a motion for summary judgment that was filed by various defendants affiliated with Graebel Van Lines Holdings, LLC. Dkt. 230 (motion); Dkt. 231 (memo in support of motion). The Graebel-affiliated entities (“Graebel Entities”) have been dismissed from this lawsuit. However, the claims against defendant MidCap Funding X Trust (“MidCap”) are still pending, and MidCap joined the motion for summary judgment. Dkt. 283. The court will therefore address the motion as if it had been filed by MidCap.

         After considering the motion, response, reply, and applicable law, the court is of the opinion that the motion should be GRANTED IN PART.

         I. Background

         With regard to the issues in the instant motion for summary judgment, this is an FLSA collective action brought by individuals who drove moving trucks for the Graebel Entities. Dkt. 114. MidCap had a security interest in the Graebel Entities, and the Graebel Entities dissolved in March 2017. Dkt. 114. The collective action consists of individuals who opted in from the following group: “All Graebel Drivers performing driving services from July 1, 2016 to present, for the entities identified as ‘GMI Subsidiaries' in the Graebel Acquisition Agreement, their successors, and including but not limited to, the subsidiaries making up the 33 Graebel branch terminal locations.” Id.

         MidCap moves for summary judgment on the plaintiffs' claims, arguing that (1) the plaintiffs were contractors, not employees; (2) the plaintiffs were exempt from the FLSA under the Motor Carrier Act (“MCA”) Exemption; (3) there is no private cause of action for record-keeping violations; (4) the plaintiffs cannot recover under a quantum meruit theory because they each entered into ICOAS, which preclude the claim; (5) the plaintiffs fail to identify any false, material misrepresentations that were known to be false when made; and (6) the plaintiffs cannot demonstrate any conspiracy between the defendants and MidCap. Dkt. 231. This order addresses only the argument that the plaintiffs were exempt from the FLSA under the MCA Exemption.

         II. Legal Standards

         A. Summary Judgment

         A court shall grant summary judgment when a “movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a). “[A] fact is genuinely in dispute only if a reasonable jury could return a verdict for the nonmoving party.” Fordoche, Inc. v. Texaco, Inc., 463 F.3d 388, 392 (5th Cir. 2006). The moving party bears the initial burden of demonstrating the absence of a genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548 (1986). If the moving party meets its burden, the burden shifts to the non-moving party to set forth specific facts showing a genuine issue for trial. Fed.R.Civ.P. 56(e). The court must view the evidence in the light most favorable to the non-movant and draw all justifiable inferences in favor of the non-movant. Envtl. Conservation Org. v. City of Dallas, 529 F.3d 519, 524 (5th Cir. 2008).

         B. FLSA Motor Carrier Exemption

         Under the MCA Exemption, the FLSA's overtime requirement does not apply to “any employee with respect to whom the Secretary of Transportation has the power to establish qualifications and maximum hours of service pursuant to the provisions of section 31502 of title 49.” 29 U.S.C. § 213(b)(1). The Secretary of Transportation may set requirements “for qualifications and maximum hours of service of employees of, and safety of operation and equipment of, a motor carrier; and . . . qualifications and maximum hours of service of employees of, and standards of equipment of, a motor private carrier, when needed to promote safety.” 49 U.S.C. § 31502. Under 29 C.F.R. § 782.2(a), the MCA Exemption applies to employees who “(1) [a]re employed by carriers whose transportation of passengers or property by motor vehicle is subject to [the Secretary of Transportation's] jurisdiction under section 204 of the [MCA]”; and “(2) engage in activities of a character directly affecting the safety of operation of motor vehicles in the transportation on the public highways of passengers or property in interstate or foreign commerce within the meaning of the [MCA].” The “exemption applies ‘to those employees and those only whose work involves engagement in activities consisting wholly or in part of a class of work which is defined: (I) As that of driver, driver's helper, loader, or mechanic, and (ii) as directly affecting the safety of operation of motor vehicles on the public highways in transportation in interstate or foreign commerce.'” Carley v. Crest Pumping Techs., L.L.C., 890 F.3d 575, 577 n.4 (5th Cir. 2018).

         “Motor carrier” means “a person providing motor vehicle transportation for compensation.” 49 U.S.C. § 13102(14). A “motor private carrier” is “a person, other than a motor carrier, transporting property by motor vehicle 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.” Id. § 13102(15). “Transportation” includes “(A) a motor vehicle, vessel, warehouse, wharf, pier, dock, yard, property, facility, instrumentality, or equipment of any kind related to the movement of passengers or property, or both, regardless of ownership or an agreement concerning use; and (B) services related to that movement, including arranging for, receipt, delivery, elevation, transfer in transit, refrigeration, icing, ventilation, storage, handling, packing, unpacking, and interchange of passengers and property.” Id. § 13102(23).

         The Corrections Act provides an exception to the MCA Exemption for-relevant to this case-employees who drive motor vehicles weighing 10, 000 pounds or less who are employed by a motor carrier or private motor carrier. Carley, 890 F.3d at 579 (discussing the SAFETEA-LU Technical Corrections Act of 2008, Pub. L. No. 110-244, § 306(a), ©), 122 Stat. 1572, 1621 (June 6, 2008), which is found in the notes of 29 U.S.C. § 207). The plaintiffs bear the initial burden of proving they are covered by the FLSA's overtime pay requirement, and the defendant bears the burden of showing the MCA Exemption applies. Id. The plaintiffs then bear the burden of proving that the Corrections Act applies to require overtime notwithstanding the MCA Exemption. Id. at 580.

         III. ...


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