Packard v. Pittsburgh Transportation Co. , 418 F.3d 246 ( 2005 )

Opinions of the United
2005 Decisions States Court of Appeals
for the Third Circuit
8-12-2005
Packard v. Pgh Transp Co
Precedential or Non-Precedential: Precedential
Docket No. 03-3088
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PRECEDENTIAL
UNITED STATES COURT OF APPEALS FOR THE
THIRD CIRCUIT
No. 03-3088
CAROL PACKARD, JAMES SINCLAIR, HOWARD
BOOKER, FLORENCE MARIE CAMP, EMANUEL A.
BRATTEN, RONALD E. DOMINICI, CHARLES R.
ROTHERT, SR., RAYMOND DAVIS, DONALD S. SPADE,
BEVERLY J. BENNETT, RANDER J. THOMPSON,
DARRYL SIGEL, LAVERA RAWLINGS, LEROY F.
WISE, DAVID L. MORRIS, EDWARD R. CROSBY,
GERALDINE REINHEIMER, PATRICIA ZILCH,
SHANNON MCGRATH, DARRYL TURNER, and
NORBERT G. ABEL, Plaintiffs-Appellees
v.
PITTSBURGH TRANSPORTATION CO.,
Defendant-Appellant
On Appeal from the U.S. District Court for the
Western District of Pennsylvania
(D.C. Civil No. 02-89)
District Judge: The Honorable Arthur J. Schwab
______________
Argued December 15, 2004
Before: **NYGAARD and GARTH, Circuit Judges,
and POLLAK,* District Judge.
(Opinion Filed: August 12, 2005)
______________
OPINION OF THE COURT
______________
RAY F. MIDDLEMAN, Esq. (argued)
CLIFFORD R. MEADE, Esq.
Malone, Larchuk & Middleman P.C.
117 VIP Drive, Suite 310
Wexford, PA 15090
Attorneys for Appellant
Pittsburgh Transportation Company
ERNEST B. ORSATTI, Esq. (argued)
Jubelirer, Pass & Intrieri, P.C.
219 Fort Pitt Blvd.
Pittsburgh, PA 15222
Attorney for Appellees
Carol Packard, et al.
*
Honorable Louis H. Pollak, Senior District Judge for
the United States District Court of the Eastern District of
Pennsylvania, sitting by designation. **Honorable Richard L.
Nygaard assumed senior status on July 9, 2005
2
THEODORE R. SCOTT, Esq.
Luce, Forward, Hamilton & Scripps LLP
11988 El Camino Real, Suite 200
San Diego, CA 92130
Attorney for Amicus Curiae
Laidlaw Transportation Services, Inc.
POLLAK, District Judge:
In this appeal, appellant-defendant Pittsburgh
Transportation Co. (“PTC”) seeks to establish that drivers for its
ACCESS transit service (“ACCESS drivers”), including
plaintiffs-appellees, are not eligible for overtime under the Fair
Labor Standards Act (“FLSA”). The precise question before us
is whether the ACCESS drivers, who would ordinarily be
eligible for overtime, become ineligible by virtue of a provision
of the Motor Carrier Act (“MCA”) that vests authority in the
Secretary of Transportation to regulate certain aspects of
interstate transport. Those within the Secretary’s sphere of
authority under the MCA are excluded from the overtime
3
provisions of the FLSA. The District Court concluded that this
so-called “MCA exemption” from the FLSA was not applicable
here, and that the ACCESS drivers therefore remained eligible
for overtime pay. We agree with that conclusion, although we
reach it by a different route, and will affirm the judgment of the
District Court.
I.
PTC’s ACCESS service, not available to the general
public, provides transportation to elderly and disabled persons
who are unable to use other forms of public transportation.
Under a contract with ACCESS Transportation Systems, Inc., a
federally-funded program to provide such services, PTC’s
ACCESS program serves roughly 5,000 people with disabilities
and 125,000 seniors. Most of these passengers have
“unconditional” eligibility, which requires a certification of need
based on review by a special panel, while others are eligible
4
based on certain more temporary conditions.
PTC provides ACCESS service within a defined service
area in Allegheny County that includes the Pittsburgh Amtrak
and Greyhound stations. PTC also provides some ACCESS
service to and from the Pittsburgh International Airport, which
is outside its regular service area. PTC’s ACCESS service
operates entirely within Pennsylvania, and ACCESS drivers do
not transport passengers across state lines. It is unclear what
portion of ACCESS service involves train or bus terminals.
Trips to the airport are a very minor part of ACCESS’s
aggregate operations,2 but it is the case that most, if not all, of
the ACCESS drivers have made at least a few trips to the
airport. Because PTC assigns the airport trips indiscriminately
2
During 2001 and 2002, airport trips were almost
always made by a separate ACCESS provider, Airbus, but the
ACCESS drivers still made such trips occasionally.
5
along with other trips, any ACCESS driver may be called upon
to drive such trips.
Unlike conventional bus systems, PTC’s ACCESS
service does not have regular, set routes, or set stops or
schedules from day to day. Rather, PTC schedules passengers’
trips each day to provide the most efficient service possible. To
use the service, eligible passengers must schedule their trips at
least one day in advance, by telephoning schedulers at either
PTC or ACCESS. Although limited same-day trips may also be
scheduled when space is available, ACCESS drivers do not pick
up or drop off passengers except as scheduled in advance
through the central schedulers. A passenger purchases a ticket
for the service in advance, presenting the ticket to the ACCESS
driver as payment. Tickets for ACCESS service are not linked
in any way to tickets for interstate travel, or indeed intrastate
travel, on non-ACCESS transit services.
6
Because PTC contends that its ACCESS drivers are
excluded from the FLSA’s overtime protection, it has refused to
pay the drivers more than their ordinary hourly wage when they
work more than 40 hours per week. It is undisputed that the
drivers regularly work over 40 hours per week, and that they are
entitled to recover overtime compensation for the excess hours
if they are not subject to the FLSA’s MCA exemption.
After the ACCESS drivers filed this action in the United
States District Court for the Western District of Pennsylvania,
seeking to confirm their entitlement to FLSA overtime pay, both
parties filed motions for partial summary judgment on the
question of the drivers’ entitlement to overtime protection. The
District Court denied PTC’s motion, and granted the ACCESS
drivers’ motion in part.
The District Court ruled that the ACCESS drivers were
not excluded from the protections of the FLSA, and remained
7
entitled to overtime, because they were not within the Secretary
of Transportation’s authority to regulate interstate transport.
According to the District Court, the ACCESS drivers were not
engaged in interstate transport because the ACCESS service
(which does not physically provide transport outside of
Pennsylvania) does not involve “through ticketing”
arrangements with interstate transport.
The court then entered final judgment for the ACCESS
drivers, based on the parties’ stipulation as to the amount of
compensatory damages and the court’s determination of
appropriate liquidated damages and attorneys’ fees. PTC timely
filed this appeal, challenging the underlying liability
determination.
The issues presented here have also been raised, but not
decided, in three actions in the Western District of Pennsylvania
involving ACCESS drivers for PTC and for another
8
transportation company in the Pittsburgh area, Laidlaw
Transportation, Inc. (“Laidlaw”). One of these actions, Eugene
J. Kott, et al. v. Pittsburgh Transportation Co., No. 02-0089, has
been dismissed without prejudice pending the resolution of this
appeal. In Spivak v. Pittsburgh Transportation Co., No. 98-984
(W.D. Pa. May 28, 1999), the District Court found that PTC
could apply the MCA exemption to plaintiff Machall Spivak, an
ACCESS driver. However, because Spivak did not dispute that
he was engaged in interstate transportation while making airport
trips, the Spivak decision does not directly address the issues
presented here. In the third action, Greenwood v. Laidlaw
Transit Services, Inc., No. 01-0728, the District Court has
denied both parties’ motions for summary judgment. Laidlaw
has submitted an amicus brief supporting PTC’s position on this
appeal.
II.
9
Our review of the District Court’s grant of partial
summary judgment is plenary. Madison v. Res. for Human Dev.,
Inc., 233 F.3d 175, 180 (3d Cir. 2000).
III.
Appellant PTC seeks reversal of the District Court’s
grant of partial summary judgment to its ACCESS drivers, as to
liability on the drivers’ claims for overtime pay under Section 7
of the Fair Labor Standards Act (“FLSA”), 29 U.S.C. §
207(a)(1). PTC claims that the drivers are exempt from the
FLSA’s overtime requirements under the Motor Carrier Act
(“MCA”) exemption, set forth at 29 U.S.C. § 213(b)(1). It is
well settled that exemptions from the FLSA are construed
narrowly, against the employer. Madison, 233 F.3d at 183.
Accordingly, PTC bears the burden of proving “plainly and
unmistakably” that the drivers qualify for the MCA exemption.
See Friedrich v. U.S. Computer Servs., 974 F.2d 409, 412 (3d
10
Cir. 1992).
A. The Statutes
Section 7 of the FLSA requires employers to pay
overtime compensation to employees who work more than forty
hours per week, unless one or another of certain exemptions
applies. 29 U.S.C. § 207. The exemption said by PTC to be
applicable here, the MCA exemption, appears in Section
13(b)(1) of the FLSA, and provides that overtime pay is not
required for “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 section
31502 of Title 49.” 29 U.S.C. § 213(b)(1).
Section 31502 of Title 49 “applies to transportation . . .
described in sections 13501 and 13502 of [Title 49].” 49 U.S.C.
§ 31502. In turn, Section 13501 of Title 49 provides in relevant
part that the Secretary and the Surface Transportation Board
11
have jurisdiction “over transportation by motor carrier . . . to the
extent that passengers, property, or both, are transported by
motor carrier between a place in . . . a State and a place in
another State.” 49 U.S.C. § 13501.3 Our task is to determine
whether the ACCESS drivers’ work brings them within the
3
The complete text of Section 13501 reads as follows:
The Secretary [of Transportation] and the [Surface
Transportation] 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.
12
scope of this statutory authority.
1. The District Court’s Ruling
The District Court found that the ACCESS drivers were
not within the authority of the Secretary of Transportation. The
District Court determined that, in general, the Secretary’s
authority extends to transportation in which there is “practical
continuity of movement” across state lines. In applying this
concept to the ACCESS drivers’ situation, though, the District
Court adopted a particular, narrow interpretation of that term.
The District Court found that “[t]he DOL [Department of
Labor], in consultation with the DOT [Department of
Transportation], addressed the issue of ‘practical continuity of
movement’ as applied to intrastate bus drivers in a 1999 opinion
letter, which adopted the reasoning of a 1974 DOT ruling. In
the letter, John R. Fraser, Acting Administrator of the Wage and
13
Hour Division, U.S. Department of Labor, asserts that intrastate
bus drivers would always be eligible for FLSA overtime
compensation, except in one situation not applicable here.” The
District Court then quoted the following passage from the Fraser
letter:
Section 204 [the predecessor to 49 U.S.C. §
31502]4 does not apply merely because the
operation makes stops at airports, railroad stations
or bus depots and picks up passengers who have
had or will have a prior or subsequent interstate
journey. The only case in which section 204
would apply to a local bus operation transporting
passengers who have made or will make a prior or
subsequent journey across a State line is one in
which there is a through ticketing arrangement
under which the passengers purchase a single
ticket which is good for both the local bus ride
and the subsequent interstate journey.
After acknowledging that “the DOT, not the DOL, has
4
Section 204 of the MCA, like the current 49 U.S.C. §
31502, defined the range of transportation activities subject to
DOT authority and therefore not protected by the FLSA.
14
the authority to interpret the DOT’s power under the MCA,” 5 the
District Court went on to find that “the DOL’s interpretation
must be given deference because the DOL and the DOT agree
on the interpretation.” Because there is admittedly no “through
ticketing arrangement” covering ACCESS passengers who also
travel interstate, the District Court found that the MCA
exemption did not apply, and that the ACCESS drivers remained
eligible for overtime pay.
In appealing the District Court’s ruling, PTC challenges
the “through ticketing” test. To assess the “through ticketing”
test, we will examine the sources on which the District Court
relied.
5
The DOL has no independent authority to interpret the
MCA, even though the MCA defines the scope of an FLSA
exemption, because the DOL is not the agency entrusted with
the administration of the MCA. See Friedrich v. U.S.
Computer Servs., 974 F.2d 409, 411 n.3 (3d Cir. 1992).
15
First, looking back to 1974, it appears that what the
District Court referred to as “a 1974 DOT ruling” whose
“reasoning” was “adopted” by the DOL was in fact an unofficial
interagency letter. On July 8, 1974, one Isaac Benkin, then
Assistant Chief Counsel for Motor Carrier and Highway Safety
Law at the DOT, wrote a letter (the “Benkin letter”) to the
DOL’s Division of Minimum Wage and Hour Standards,
purporting to answer several questions from the DOL about the
scope of the DOT’s authority. One of the questions was the
following:
Does section 204 of the Motor
Carrier Act [which then defined the
aspects of the Secretary of
Transportation’s authority relevant
here] apply to privately operated
transit systems utilizing motorbuses
operating over fixed routes which
may cross State lines or have stops
or terminals at airports, railroad
stations, or interstate bus depots?
16
Mr. Benkin’s answer to this question, in its entirety, read
as follows:
Section 204 applies if the bus
operations are conducted across a
State line. Section 204 does not
apply merely because the operator
makes stops at airports, railroad
stations or bus depots and picks up
passengers who have had or will
have a prior or subsequent
interstate journey. The only case in
which section 204 would apply to a
local bus operation transporting
passengers who have made or will
make a prior or subsequent journey
across a State line is one in which
there is a through ticketing
arrangement under which the
passengers purchase a single ticket
which is good for both the local bus
ride and the prior or subsequent
interstate journey by air, rail, or
bus.
Mistakenly referring to the Benkin letter as a “ruling by
the U.S. Department of Transportation (DOT),” Mr. Fraser of
the DOL relied on it twenty-five years later in two 1999 opinion
17
letters stating that certain categories of drivers apparently akin
to the appellees in the case at bar were not within the MCA
exemption, and were therefore subject to the FLSA’s overtime
requirements. The District Court, in turn, relied on one of these
DOL letters because the District Court found that the DOT
shared the DOL’s interpretation. However, neither the 1974
Benkin letter nor the 1999 Fraser letter the District Court relied
on has the formality and weight that would merit judicial
deference.6
Some agency interpretations of statutes the agency
administers are entitled to substantial judicial deference. Here,
the ACCESS drivers contend that Mr. Benkin’s endorsement of
a “through ticketing” test is entitled to deference under Chevron
6
One of the DOL letters also stated that the DOL had
“confirmed with DOT that this ruling ha[d] not since been
superceded.” This undocumented recital cannot be entitled to
deference as an official DOT interpretation.
18
U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467
U.S. 837 (1984), which requires judicial deference to an
agency’s reasonable interpretation of an ambiguous statute
entrusted to its administration. However, “[i]nterpretations such
as those in opinion letters - like interpretations contained in
policy statements, agency manuals, and enforcement guidelines,
all of which lack the force of law - do not warrant Chevron-style
deference.” Christensen v. Harris County, 529 U.S. 576, 587
(2000). The informal and cursory Benkin letter falls into this
category, and hence does not merit Chevron deference. The
Fraser letter would similarly lack authority, even if the DOL had
authority to interpret the MCA, which it does not. As this court
has said, “[t]o grant Chevron deference to informal agency
interpretations would unduly validate the results of an informal
process.” Madison, 233 F.3d at 186.
In the absence of Chevron deference, the ACCESS
19
drivers contend that the Benkin letter is at least entitled to the
lesser degree of deference called for by Skidmore v. Swift, 323
U.S. 134 (1944). However, Skidmore deference is available
only based on an agency interpretation’s power to persuade.
The general rule, where Chevron deference is not warranted, is
that “[t]he weight of [an agency’s] judgment in a particular case
will depend upon the thoroughness evident in its consideration,
the validity of its reasoning, its consistency with earlier and later
pronouncements, and all those factors which give it power to
persuade if lacking power to control.” Skidmore, 323 U.S. at
140. The materials at issue here simply provide no reasoning or
analysis that a court could properly find persuasive.
Accordingly, we are of the view that the “through
ticketing” test utilized by the District Court is not a legal
standard that suffices to determine whether the MCA exemption
is applicable to the ACCESS drivers. We turn, then, to other
20
sources of guidance.
B. Analysis
Setting aside the “through ticketing” test, we will inquire
whether guidance is forthcoming from (a) DOT regulations, or
lack thereof, or (b) case law addressing analogous questions.
1. Regulatory Framework
PTC maintains that a definition of interstate commerce in
DOT regulations unambiguously subjects the ACCESS drivers
to the Secretary’s authority. The DOT has defined interstate
commerce as “trade, traffic, or transportation . . . between two
places in a State as part of trade, traffic, or transportation
originating or terminating outside the State or the United
States.” 49 C.F.R. § 390.5 (emphasis added). However, even
if this definition of “interstate commerce” may be used as a form
of shorthand for the MCA’s specific language (in 49 U.S.C. §
2113501),7 the DOT’s regulation is not dispositive one way or
another, since it provides no instruction as to what activity is
“part of” interstate commerce in marginal situations such as that
presented here.8
The ACCESS drivers contend that they are not within the
MCA exemption because the Secretary of Transportation has
never in fact regulated their work. However, the MCA
exemption depends only on the existence of secretarial authority,
not on its exercise. Levinson v. Spector Motor Serv., 330 U.S.
649, 678 (1946); Morris v. McComb, 332 U.S. 422, 434 (1947);
7
See text at note 3, supra.
8
PTC and Laidlaw also refer us to DOL regulations
defining the sphere of interstate commerce that is subject to
the FLSA. These regulations could be, at best, persuasive.
See supra note 5. However, the regulations themselves note
that the MCA’s definition of interstate commerce is “not
identical with the definitions in the [FLSA],” 29 C.F.R. §
782.7(a), and has been more narrowly interpreted by the
courts than the parallel definition in the FLSA, 29 C.F.R. §
782.7(b)(1). Thus, they do not help us here.
22
Friedrich, 974 F.2d at 416. Thus, it does not matter that the
ACCESS drivers’ vehicles are below the weight threshold above
which the Secretary’s safety regulations apply, as the District
Court found that they are, or whether the drivers are exempt
from the Secretary’s regulations for any other reason. See id.;
Martin v. Coyne Int’l Enter., Corp., 966 F.2d 61 (2d Cir. 1992)
(finding laundry truck drivers excluded from FLSA protection
although trucks weighed 10,000 pounds and therefore were
exempt from Highway Administration’s safety regulations).
2. Judicial Treatment of the MCA Exemption
In the one MCA exemption case addressed by this court,
the operative facts were far afield from those in the case at bar.
In Friedrich v. U.S. Computer Services, 974 F.2d 409 (3d Cir.
1992), the employees contending that they were entitled to
overtime pay were technicians providing installation,
maintenance and repair services for cable television firms. In
23
carrying out their responsibilities, the technicians, headquartered
in Pennsylvania, drove with their equipment and tools to
customers located in Pennsylvania and in all the states bordering
on Pennsylvania. Although the technicians generally drove their
own vehicles, which weighed less than the “commercial
vehicles” of over 10,000 pounds that the DOT had affirmatively
undertaken to regulate, we concluded that the DOT’s non-
exercise of its regulatory power did not undercut that power.
Because the plaintiffs literally fell within the
MCA exemption and neither Congress nor the
DOT has taken action to the contrary, we hold
that employees operating passenger automobiles
in interstate activities which require them to
transport property essential to their job duties
come within the reach of the Federal Motor
Carrier Act as amended and are therefore exempt
from the FLSA’s overtime compensation
requirements.
Id. at 419.
Thus, in Friedrich, unlike the case at bar, the employees
were in fact driving interstate and doing so as a regular and
24
central dimension of their jobs. Moreover, their duties required
them to transport property as well as themselves.
In turning to decisions in other courts, it appears that, as
a general matter, cases sustaining claims of MCA exemption
from the FLSA overtime requirements involve patterns of
distribution markedly unlike the ACCESS pattern. Typically,
the carrier’s activity is a clearly identifiable element of an
integrated interstate distribution system. Also, typically, the
items the carrier is transporting are not passengers but freight.
Back in 1947, in Morris v. McComb, 332 U.S. 422(1947), a sharply divided Supreme Court held that truck drivers
and mechanics employed by a Detroit carrier engaged in the
transport of steel came within the MCA exemption. Four
percent of the transport was “directly in interstate commerce”,
id. at 427; the balance was (a) steel transported “largely within
steel plants . . . for further processing . . . an unsegregated potion
25
of [which] was shipped ultimately in interstate commerce,” and
(b) steel transported “between steel mills and industrial
establishments . . . [and] used in connection with the
manufacture of automobiles, a substantial portion of which
entered interstate commerce.” Id. In referring to the 4% of the
carrier’s operations which (unlike the operations of ACCESS)
were “directly in interstate commerce,” the Court noted that the
carrier, in order fully to serve its shippers, had “a practical
situation such as may confront any common carrier engaged in
a general cartage business, and who is prepared and offering to
serve the normal transportation demands of the shipping public
in an industrial metropolitan center.” Id. at 434.
More recent instances in which claims of MCA
exemption have been sustained are not dissimilar. For example,
in Bilyou v. Dutchess Beer Distributors, Inc., 300 F.3d 217 (2d
Cir. 2002), the Second Circuit found no FLSA protection for an
26
intrastate driver who drove empty beer bottles to a facility from
which they were later shipped out of state. However, the Bilyou
driver’s activities were part of a clearly integrated commercial
cycle: the beer distributor received full bottles from out-of-state
suppliers and distributed them to customers, the plaintiff driver
picked up the empties and returned them to the distributor
(though technically employed by a different company), and the
distributor shipped them out of state and received credit for the
returns. Id. at 220. Other cases like Bilyou similarly involve an
integrated system of interstate shipments. See, e.g., Klitzke v.
Steiner Corp., 110 F.3d 1465, 1470 (9th Cir. 1997) (involving
local delivery driver for linen service that ordered roughly half
of the materials it supplied from out-of-state suppliers, based on
specific customers’ orders); Foxworthy v. Hiland Dairy Co., 997
F.2d 670, 672 (10th Cir. 1993) (involving Oklahoma truck
driver who regularly delivered dairy products ordered from his
27
employer’s Arkansas plant to customers in Oklahoma); Beggs v.
Kroger Co., 167 F.2d 700 (8th Cir. 1948) (involving truck
drivers who regularly delivered merchandise - 89% of it from
outside the state - to their employer’s retail groceries from its
warehouse, and who returned empty bottles and unsold
merchandise to the warehouse for shipment out of state).
There is no general rule that once something (either
passenger or freight) embarks on a journey that will eventually
carry it between two states, every moment of that journey,
through the last conceivable moment of travel, is necessarily
interstate transport under the MCA. Although a mere shift from
one carrier to another does not disrupt an otherwise-integrated
interstate trip, see The Daniel Ball, 77 U.S. 557 (1871)
(considering the limits of the powers of Congress), the Supreme
Court has recognized that this does not mean that all portions of
a trip including some interstate travel are necessarily integrated.
28
As Justice Brandeis remarked in Baltimore & Ohio
Southwestern Railroad Co. v. Settle, 260 U.S. 166 (1922),
whether a particular portion of travel is interstate or intrastate
“depends on the essential character of the movement.” Id. at
170 (rejecting an interstate shipper’s attempt to pay lower total
tariffs by shipping its goods first from one state into another,
and then, after taking possession of them, re-shipping them to
their ultimate destination in the latter state). The Court made
clear in that case that the “essential character” of movement that
determines incorporation into interstate transport depends on the
individual facts of each case, and that mere proximity in time
and space will not necessarily make an intrastate trip part of a
larger interstate voyage. Id. at 173. Rather, the “essential
character” of truly interstate transport will show some “essential
continuity of movement.” Id. (emphasis added).
29
When we apply the “essential character of the
movement” inquiry to the ACCESS drivers, it is clear that other
cases applying the MCA exemption do not suggest the proper
outcome here. The ACCESS drivers are not integrated into their
passengers’ interstate travel to the degree in which many
intrastate commercial drivers are integrated into the interstate
movement of commercial goods. Indeed, the ACCESS service
lacks any legal or institutional connection to the interstate
movement of passengers or goods. Although the service’s pick-
up or drop-off point sometimes coincides in time and space with
one endpoint of certain passengers’ interstate journeys, there is
no well established logical or logistical connection between the
two.
The distinction between the “essential character” of the
ACCESS drivers’ work and that of the commercial freight
operations considered in other MCA exemption cases also
30
reflects broader differences in the usual commercial treatment
of freight and passenger transportation. The Supreme Court has
recognized in another context that “what may fairly be said to be
the limits of an interstate shipment of goods and chattels may
not necessarily be the commonly accepted limits of an
individual’s interstate journey,” and that the courts “must
accordingly mark the beginning and end of a particular kind of
interstate commerce by its own practical considerations.” United
States v. Yellow Cab Co., 332 U.S. 218, 231 (1947). In any
event, unlike the delivery drivers in the cases canvassed above,
the ACCESS drivers are not part of a clearly-defined, routine
interstate commercial exchange controlled centrally by their
employer.
Because the cases considering the FLSA status of
commercial freight drivers are factually unlike that presented
here, we will look outside the array of cases applying the MCA
31
exemption to consider past judicial treatment, in other statutory
contexts, of passenger transportation more similar to the
ACCESS service.
3. Interstate Transportation in Other Contexts
In the 1940s the Supreme Court twice addressed the
question whether Capital Transit, a company that provided
public transit almost entirely within the District of Columbia,
was subject to the regulatory authority of the ICC. The Court’s
approach, in upholding the ICC’s authority, focused heavily on
the massive interstate movement of Capital Transit’s passengers;
the facts of the two Capital Transit cases offer an instructive
counterpoint to the facts of the case at bar. Thousands of
Capital Transit’s passengers were commuting government
employees who rode the company’s streetcars or buses within
the District to transfer points where they boarded interstate
transportation to Virginia. In its first opinion on the matter,
32
United States v. Capital Transit Co., 325 U.S. 357 (1945)
(“Capital Transit I”), the Court found that Capital Transit was
subject to ICC regulation in part because it provided interstate
service on one particular route that ran from the District of
Columbia into Virginia. However, on a rehearing of the same
case after Capital Transit had discontinued its sole interstate
route, the Court again found that the ICC had regulatory
authority. The Court stood by its earlier holding that Capital
Transit’s transportation service - now provided exclusively
within the District - was “part of a continuous stream of
interstate transportation,” and “an integral part of an interstate
movement.” United States v. Capital Transit Co., 338 U.S. 286,
290 (1949) (per curiam) (“Capital Transit II”).
The Supreme Court’s analysis in United States v. Yellow
33
Cab Co., 332 U.S. 218 (1947),9 offers more guidance here than
the Capital Transit decisions. Although Yellow Cab involved
the Sherman Act, not the MCA, it followed Capital Transit I in
looking to the “commonly accepted sense of the transportation
concept” to determine what travel was part of an interstate
journey.10 Yellow Cab, 332 U.S. at 231. Indeed, Capital Transit
9
Yellow Cab has been limited, but not overruled, on
grounds unrelated to the matters discussed here. Specifically,
in Copperweld Corp. v. Independence Tube Corp., 467 U.S.
752 (1984), the Court repudiated the intra-enterprise
conspiracy doctrine that had been derived from Yellow Cab.
10
Yellow Cab has guided courts considering the
boundaries of interstate movement under statutes other than
the Sherman Act. See, e.g., Airlines Transp. v. Tobin, 198
F.2d 249, 251 (4th Cir. 1952) (finding limousine service to
and from airport, provided under contract with the airlines,
was within interstate commerce as defined under the FLSA);
Mateo v. Auto Rental Co., 240 F.2d 831 (9th Cir. 1957)
(finding, under the FLSA, that airport drivers in Honolulu
were not within interstate commerce where they had no valid
contractual arrangements with the airlines). Addressing the
scope of the ICC’s jurisdiction, the D.C. Circuit referred to
Yellow Cab, and later FLSA case law based on it, as
establishing a general “principle . . . that the degree of contact
34
II later noted that Yellow Cab “does not conflict with our prior
holding [in Capital Transit I] that [Capital] Transit’s
transportation was part of a continuous stream of interstate
transportation.” Capital Transit II, 338 U.S. at 290. In applying
the Capital Transit I standard to the Yellow Cab facts, which
involved taxi service to railroad stations in Chicago, the Court
noted that “interstate commerce is an intensely practical concept
drawn from the normal and accepted course of business.”
Yellow Cab, 332 U.S. at 231. Therefore, the Court directed
courts to “mark the beginning and end of a particular kind of
interstate commerce by its own practical considerations.” Id.between the interstate carrier and the local transportation is an
important factor [in defining the scope of interstate travel].”
Pa. Pub. Util. Comm’n v. United States, 812 F.2d 8, 11 (D.C.
Cir. 1987) (upholding ICC decision that company providing
shuttle service from airport to hotel and back for airline crew
was engaged in interstate commerce and not subject to
regulation by the state of Maryland).
35
The Court’s application of this approach in Yellow Cab
is instructive. The Court considered two types of taxi service,
both involving taxi transportation of passengers immediately
before or after an interstate railroad trip. The first type of
service, provided under contracts with the railroads, involved
carrying passengers between two railroad stations, in order for
them immediately to continue their interstate travels. The Court
found that taxis providing this service were “clearly a part of the
stream of interstate commerce.” Id. at 228. Viewing the
intrastate portion of the journey - the shuttling between railroad
stations - “in its relations to the entire journey rather than in
isolation,” the Court found that it was “an integral step in the
interstate movement.” Id. at 229.
However, the Court found that taxis providing the second
type of taxi service, which merely involved carrying passengers
between the railroad stations and their homes, offices, or hotels,
36
were not engaged in interstate commerce. Id. at 230. “To the
taxicab driver, [such a trip to the railroad station was] just
another local fare.” Id. at 232. Those providing the service had
“no contractual or other arrangement with the interstate
railroads,” nor any joint collection or payment of fares.
According to the Court, “their relationship to interstate transit
[wa]s only casual and incidental.” Id. at 231. The Court found,
and we agree today, that “[t]he common understanding is that a
traveler intending to make an interstate rail journey begins his
interstate movement when he boards the train at the station and
that his journey ends when he disembarks at the station in the
city of destination.” Id. at 231. Thus, “[w]hat happens prior or
subsequent to that rail journey, at least in the absence of some
special arrangement, is not a constituent part of the interstate
movement.” Id. at 232.
The second type of Yellow Cab service seems more
37
closely analogous to the ACCESS service than Yellow Cab’s
shuttling between stations or the mass commuter service found
to be part of interstate travel in Capital Transit. ACCESS
service to interstate terminals similarly involves no joint fare or
ticketing arrangement, and no prior arrangement of any kind,
contractual or otherwise, with the railroads, airlines, or other
companies that carry a certain few ACCESS passengers across
state lines. Also, there is no strong, established cycle of regular
passenger movement between the ACCESS service and
particular interstate routes. To the ACCESS drivers and their
passengers, a trip to an interstate travel hub is “just another local
fare.”
This lack of coordination with other transportation
distinguishes PTC’s ACCESS service not only from the Yellow
Cab taxi shuttles, but also from airport shuttle arrangements that
this court found in Southerland v. St. Croix Taxicab Association,
38
315 F.2d 364 (1963), to be part of passengers’ interstate travel.
In Southerland, the local government of the Virgin Islands had
made an exclusive arrangement for a local taxi company to
provide all transportation from the airport to local hotels. This
court found that the preferential arrangement favoring the local
taxi company unreasonably burdened interstate commerce
because it conflicted with prior arrangements by the plaintiff’s
tour agency to provide the same service for certain passengers
on an interstate package tour. Id. The tour agency’s
transportation services were found to be part of the passengers’
interstate travel, although the agency did not itself provide direct
interstate transportation, because the services “had been
arranged for [the passengers] and paid for in advance as an
integral part of their all-expense interstate journey.” Id. at 369.
Therefore, this court ruled that “it cannot, under these facts, be
said that the service rendered by the plaintiff under his contract
39
was distinct and separate from the interstate journey or that it
was just another local fare.” Id. (emphasis added).
Unlike in Southerland, the ACCESS drivers’ services are
not arranged as part of their passengers’ interstate travels
through a pre-packaged tour, or linked in any other way. Even
where certain of ACCESS passengers’ travels will eventually
carry them out of the state, the ACCESS service itself is purely
intrastate.
Accordingly, we conclude that there is no “practical
continuity of movement,” in connection with the ACCESS
drivers’ services. Hence, the MCA exemption does not apply.
While “through ticketing” is one example of a common
arrangement involving both intra and interstate portions of
passenger transport, it is not the only means of establishing that
passenger transport operating intrastate is in practical continuity
with a larger interstate journey. In that sense, the District
40
Court’s reasoning missed the mark even though its conclusion
was correct. In this case, as we have stated, there is no evidence
of any arrangement between PTC and the other carriers, thus
rendering the MCA exemption inapplicable to the ACCESS
drivers.
IV.
When an employer contends that a sub-set of its
employees are excluded from FLSA overtime entitlements by
virtue of the MCA exemption, “[i]t is the employer’s burden to
affirmatively prove that its employees come within the overtime
exemption, and any exemption from the Act must be proven
plainly and unmistakably.” Friedrich, 974 F.2d at 412. We
conclude that PTC has not made the required showing.
Accordingly, the judgment of the District Court will be
affirmed.
41
Nygaard, J., concurring in judgment; No. 03-3088
Although I concur with the judgment reached by
the majority, I write separately because I disagree with the
majority’s analysis in Part III.B. of the Opinion. In that Part, the
majority seeks guidance from regulations and case law as to
whether Appellees are engaged in “interstate commerce.” That
inquiry, although scholarly and interesting, is not necessary to
resolve this appeal.
Rather than probing the contours of interstate
commerce within the meaning of the Motor Carrier Act, I would
hold the plain language of the Act’s jurisdictional statute to be
dispositive. That statute gives the Secretary of Transportation
the authority to establish qualifications and maximum hours for
employees of a motor carrier—thereby triggering the Motor
Carrier Act exemption—only “to the extent that passengers,
property, or both, are transported by motor carrier . . . between
a place in . . . a State and a place in another State.” 49 U.S.C. §
13501. As PTC ACCESS drivers, Appellees transport
individuals from locations within Pennsylvania to other
locations within Pennsylvania, without crossing state lines.
They do not transport passengers “between a place in . . . a State
and a place in another State.” Id. Thus, the Secretary of
Transportation has no power to establish Appellees’
qualifications and maximum hours. Id. Absent this power, the
Motor Carrier Act exemption does not apply and PTC must
comply with the Fair Labor Standards Act’s overtime pay rules.
See 29 U.S.C. § 213(b)(1).
Neither the District Court in its order granting
partial summary judgment, nor the parties in their briefs before
us, relied upon the plain language of 49 U.S.C. § 13501. They
assume instead, and the majority follows suit, that it is necessary
to interpret the term “interstate commerce.” This assumption is
43
understandable, as it is derived from language in a Supreme
Court opinion. In determining the applicability of the Motor
Carrier Act exemption under different circumstances, the Court
in Levinson v. Spector Motor Service held that the Interstate
Commerce Commission (now the Secretary of Transportation)
has the power to establish qualifications and maximum hours of
service for employees of a motor carrier whose employment
“affects the safety of transportation . . . in interstate commerce.”
330 U.S. 649, 687 (1947) (emphasis added). Relying on this
language, the parties focus on the definition of “interstate
commerce” and attempt to discern its meaning by referring to
case law and regulatory definitions. The majority, in Part III.B.
takes a similar approach—one I believe to be unnecessary.11
11
I recognize that I am rather lonesome in this view,
in that other Courts of Appeal have also explored the scope of
the Motor Carrier Act exemption via inquiry into the presence
or absence of interstate commerce. See Bilyou v. Dutchess
Beer Distrib., Inc., 300 F.3d 217, 223 (2d Cir. 2002); Klitzke
44
The plain language of the Motor Carrier Act’s jurisdictional
statute governs the Secretary of Transportation’s authority to
establish Appellees’ qualifications and maximum hours of
service. It is unambiguous and does not contain the term
“interstate commerce.” To the extent the definition of that term
does have any relevance here, its proper understanding is found
in a source not previously considered: the United States Code.
v. Steiner Corp., 110 F.3d 1465, 1470 (9th Cir. 1997);
Foxworthy v. Hiland Dairy Co., 997 F.2d 670, 672 (10th Cir.
1993); Beggs v. Kroger Co., 167 F.2d 700, 702–03 (8th Cir.
1948). In so doing, the Courts in each of these cases relied
upon Walling v. Jacksonville Paper Co., 317 U.S. 564 (1943).
In Walling, the Supreme Court held that purely intrastate acts
may constitute interstate commerce within the meaning of the
Fair Labor Standards Act if the intrastate acts are part of a
“practical continuity of movement” between states. Id. at
568. As the majority points out, however, the contours of
interstate commerce under the Motor Carrier Act and the Fair
Labor Standards Act are different. See 29 C.F.R. § 782.7(a).
Thus, Walling has no bearing upon the scope of the Motor
Carrier Act exemption. The Courts of Appeal relying upon
the case to determine the scope of the exemption have done so
in error.
45
In 1947, the year the Supreme Court decided
Levinson, the Motor Carrier Act contained a statutory definition
of interstate commerce. See 49 U.S.C. § 303(a)(10) (1940). It
would appear that when the Court used the term, it did so
pursuant to its understanding of the then-existing statutory
definition. At the time the Court decided Levinson, the Motor
Carrier Act defined “interstate commerce” as “commerce
between any place in a State and any place in another State . . .
whether such commerce moves wholly by motor vehicle or
partly by motor vehicle and partly by rail, express, or water.” Id.It is worthy of note that this definition is similar, albeit not
identical, to the present day Motor Carrier Act jurisdictional
statute found at 49 U.S.C. § 13501, which was added to the Act
after the Court decided Levinson. But whether Appellees’
employment would fall within the 1947 statutory definition is
irrelevant, as that definition no longer exists in the United States
46
Code. What does exist is the present day jurisdictional statute,
the plain language of which resolves this appeal without the
need for resort to regulatory definition or case law.
Because I would decide this issue upon the plain
language of 49 U.S.C. § 13501, I do not join Part III.B. of the
Opinion. With respect, I concur in the judgment.
47