Talton v. I.H. Caffey Distributing Co. , 124 F. App'x 760 ( 2005 )

UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 04-1652
JAMES TALTON, JR.,
Plaintiff - Appellant,
versus
I.H. CAFFEY DISTRIBUTING COMPANY,
INCORPORATED; CHRISTOPHER CAFFEY,
Defendants - Appellees.
Appeal from the United States District Court for the Middle
District of North Carolina, at Durham. William L. Osteen, District
Judge. (CA-02-1048)
Argued: December 2, 2004 Decided: January 18, 2005
Before KING and SHEDD, Circuit Judges, and Henry F. FLOYD, United
States District Judge for the District of South Carolina, sitting
by designation.
Affirmed by unpublished per curiam opinion.
Robert James Willis, Raleigh, North Carolina, for Appellant. Carl
Ray Grantham, Jr., ROBINSON & LAWING, Winston-Salem, North
Carolina, for Appellees.
PER CURIAM:
James Talton, Jr., a former delivery route driver for
North Carolina malt beverages and wine wholesaler and distributor
I.H. Caffey Distributing Co., Inc., and principal Christopher
Caffey (collectively “Caffey”), appeals the district court’s ruling
on summary judgment that he is not entitled to overtime benefits
pursuant to the Fair Labor Standards Act (the “FLSA”), 29 U.S.C. §§
201-219. See Order and Judgment at 1 (April 16, 2004), adopting
Order and Recommendation of United States Magistrate Judge (March
11, 2004) (the “Opinion”). The district court agreed with Caffey
that Talton transported goods in interstate commerce, implicating
the Motor Carrier Act exception to the FLSA, 29 U.S.C. § 213(b)(1),
and precluding his claim for benefits. Opinion at 14. For the
reasons that follow, we affirm.
I.
Caffey is headquartered in Guilford County, North
Carolina, and licensed by the North Carolina Alcoholic Beverage
Control Commission (“ABCC”) as the exclusive distributor of certain
beer products, including those manufactured by Miller, Coors,
Heineken, Guinness, St. Pauli, and Pabst, for several North
Carolina counties. During the relevant time period, Caffey’s
warehouse in Greensboro sold approximately 3,400,000 cases and
18,000 kegs of beer per year. Approximately fifty percent of that
volume was either produced at the Miller plant in Eden, North
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Carolina, or produced by Miller outside the state and transshipped
at the Eden plant. Approximately ten percent was produced at and
shipped directly from the Miller plant in Albany, Georgia; twenty
percent was produced at or transshipped from the Coors plant in
Elkton, Virginia; and the remaining twenty percent was produced at
and shipped from various manufacturers’ plants outside North
Carolina or outside the United States.
Wholesalers like Caffey are prohibited by the North
Carolina Administrative Code from requiring a retailer to purchase
their beer pursuant to a contractual purchase agreement. N.C.
Admin. Code tit. 4, r. 2T.0706. However, by virtue of its ABCC
license, Caffey and other wholesalers are nonetheless required to
meet the orders of retailers in their assigned distribution areas,
regardless of account size or distance from the warehouse. Id. at
r. 02T.0610. Caffey’s sales representatives must therefore
estimate how much product a retailer will need on the next
delivery, sometimes by talking to retailer managers, and, if the
manager is unavailable, through analyzing sales data and
determining, based on a retailer’s current inventory and sales
history, how much beer should be ordered. The representatives
promptly enter the estimated quantity for those retailers into
handheld devices that transmit orders electronically to Caffey's
warehouse in Greensboro.
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Turnover among licensed retailers in Caffey’s
geographical area is less than five percent per year, so Caffey’s
customers are a stable group. Talton testified by affidavit that
each retailer to which he delivered typically had a certain amount
of display space allocated to Caffey products, and that this space
allocation “did not change.” Talton Second Aff. at ¶ 9. The
frequency of deliveries and amount of product in each delivery
fluctuated. Id. at ¶ 19.
Talton began working for Caffey as a “driver/sales
representative” on September 15, 1998. On February 25, 2000, he
was assigned to a “swing-route driver” position. As a swing-route
driver, Talton did not have any pre-assigned routes, but instead
filled in as needed on any route that was missing a driver. All of
Talton's routes were in North Carolina, though he once crossed into
Virginia briefly while en route to a North Carolina distributor
situated near the North Carolina/Virginia state line.
At each of the retailer locations, Talton’s duties
included printing an invoice for the beer delivered, obtaining the
retailer’s approval for the beer, unloading it, pricing it,
stocking it, and securing payment. Drivers such as Talton also
sometimes returned kegs used by the retailers to Caffey’s
warehouse, which Caffey returned to the manufacturers for credit,
reuse, and recycling. After suffering an on-the-job injury, Talton
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ceased performing the duties of a swing-route driver for Caffey on
June 11, 2002.
On November 29, 2002, Talton filed a complaint against
Caffey in the Middle District of North Carolina, alleging that
Caffey had failed to pay him all regular and overtime wages when
due, in contravention of the FLSA and the North Carolina Wage and
Hour Act (“NCWHA”), N.C. Gen. Stat. §§ 95-25.1 et seq. He sought
a declaratory judgment, compensatory damages, and liquidated
damages, plus interest, attorney’s fees, and costs. In its Answer,
Caffey contended that it was exempt from both the FLSA and NCWHA as
to Talton because of the interstate nature of Talton’s duties, see
Amended Answer at 4-5, and that in the event that it was not
exempt, its actions were in good faith. Id. at 6.
After discovery was conducted, both parties moved for
summary judgment on Talton’s FLSA claim for unpaid overtime wages
under § 207(a)(1). On April 16, 2004, in adopting the magistrate
judge’s recommendations, the district court denied Talton’s motion
for summary judgment and granted Caffey’s. Order and Judgment at
1-2. The court reasoned that though Talton’s delivery was solely
intrastate, the beer itself was an article travelling in interstate
commerce, making the Motor Carrier Act applicable and thus
exempting Caffey from the FLSA’s overtime requirements.1 See
1
Caffey also moved for summary judgment on Talton’s NCWHA
claim for unpaid wages, arguing that Talton was not entitled to the
unpaid wages under the NCWHA, and that his employment was not
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Opinion at 10-13. Talton filed a timely notice of appeal, and we
possess jurisdiction pursuant to 28 U.S.C. § 1291.
II.
On appeal, Talton contends that the Opinion utilized and
applied incorrect legal principles, impermissibly resolved issues
of disputed fact, and applied the legal standard to the facts
incorrectly. We review a district court’s award of summary
judgment de novo, viewing the facts and drawing all inferences in
the light most favorable to the non-moving party. See Seabulk
Offshore, Ltd. v. Am. Home Assurance Co., 377 F.3d 408, 418 (4th
Cir. 2004). An award of summary judgment is appropriate only “if
the pleadings, depositions, answers to interrogatories, and
admissions on file, together with the affidavits, if any, show that
there is no genuine issue as to any material fact and that the
moving party is entitled to a judgment as a matter of law.” Fed.
R. Civ. P. 56(c). A genuine issue of material fact is one “that
might affect the outcome of the suit under the governing law.”
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). Because
we find no error in the judgment, we affirm.
covered by the NCWHA. The district court granted this motion as
well, adopting the magistrate judge’s assessment that “evidence
before the Court demonstrates that Defendants’ deduction of cash
shortages from Plaintiff’s paychecks met all of the NCWHA’s
statutory and regulatory requirements.” Opinion at 16. The
magistrate judge also recommended that the district court deny a
number of motions from both sides as moot. Opinion at 18. Talton
has appealed the FLSA ruling only.
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A.
The FLSA establishes a forty-hour workweek for covered
employees and provides for compensation at time-and-a-half for
those weekly hours in excess of forty. Section 207(a)(1) provides
as follows:
[N]o employer shall employ any 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, for a workweek longer than forty hours unless
such employee receives compensation for his employment in
excess of the hours above specified at a rate not less
than one and one-half times the regular rate at which he
is employed.
29 U.S.C. § 207(a)(1). To establish a claim for unpaid overtime
wages, Talton must establish by a preponderance of the evidence (1)
that he worked overtime hours without compensation, (2) the “amount
and extent” of the work “as a matter of just and reasonable
inference,” and (3) that Caffey knew of the uncompensated overtime.
See Anderson v. Mt. Clemens Pottery Co., 328 U.S. 680, 687 (1946);
see also Davis v. Food Lion, 792 F.2d 1274, 1276 (4th Cir. 1986).
Talton must also show that Caffey was an enterprise engaged in
interstate commerce. 29 U.S.C. § 207(a)(1).
In his motion for summary judgment as to liability,
Talton maintained that the undisputed facts established each of
these elements. Caffey admits that it is engaged in interstate
commerce, that Talton worked overtime during the relevant period,
and that he was not paid overtime wages during that time. The
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Opinion accordingly concluded that Talton had made a prima facie
showing of his entitlement to overtime compensation. Opinion at 7.
Caffey maintained, however, that Talton’s employment was
exempt from the FLSA under the Motor Carrier Act exemption, set
forth at 29 U.S.C. § 213(b)(1). That exemption provides that the
FLSA overtime requirements do not apply to “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 [the Motor Carrier
Act].” Id. The Motor Carrier Act gives the Secretary of
Transportation jurisdiction, inter alia, over interstate
transportation by a motor carrier, 49 U.S.C. § 13501, and authority
to establish qualifications and maximum hours of service for
covered employees. 49 U.S.C. § 31502. Courts have interpreted
this authority to extend not just to carriers who actually cross
state lines while transporting goods, but also to carriers whose
cargo originates from outside the state or is ultimately bound for
a destination outside the state, even where the carrier’s route is
entirely intrastate. See, e.g., Bilyou v. Dutchess Beer Distrib.,
300 F.3d 217, 223 (2d Cir. 2002); Merch. Fast Motor Lines, Inc., v.
I.C.C., 528 F.2d 1042, 1044 (5th Cir. 1993).
Caffey contends that Talton is covered by the Motor
Carrier Act, and thus exempt from the provisions of the FLSA,
because the beer Talton carried and delivered was an item in
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interstate commerce. Talton counters that the beer he carried and
delivered on his intrastate delivery routes had ceased to be an
item in interstate commerce, and for that reason he does not fall
within the Motor Carrier Act exemption. Thus, Talton argues, he is
covered by the FLSA and entitled to overtime pay.
The question, then, is simple: whether the beer’s pause
in Caffey’s Greensboro warehouse was of such a character as to
bring its interstate journey to an end. In Walling v. Jacksonville
Paper Co., 317 U.S. 564 (1943), the Supreme Court analyzed whether
goods imported from outside the state by a wholesaler for in-state
sale, and temporarily stored in a warehouse before subsequent
movement to their in-state destination, are nevertheless still
items in interstate commerce during the second, in-state leg of
their journey. The Court identified and discussed three possible
fact patterns for assessing the interstate commerce issue: (1)
where items were ordered pursuant to a pre-existing contract with
a specific customer; (2) where items were ordered pursuant to a
pre-existing understanding with a customer, though not pursuant to
a written contract; and (3) where items were ordered in
anticipation of the needs of customers. 317 U.S. at 335-36; see
also Galbreath v. Gulf Oil Corp., 413 F.2d 941, 945 (5th Cir. 1969)
(listing three Jacksonville Paper fact patterns); Allesandro v.
C.F. Smith Co., 136 F.2d 75, 77 (6th Cir. 1943) (same).
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Talton maintains that our Circuit has interpreted and
applied the principles of Jacksonville Paper narrowly, such that
“interstate” movement will continue after temporary stoppage at a
warehouse only if a specific customer has “ordered the goods.”
Appellant's Br. at 11 (quoting Schroepfer v. A.S. Abell Co., 138
F.2d 111, 114 (4th Cir. 1943)). Talton contends that, because of
this narrow interpretation, the district court used the incorrect
legal standard when it relied on authorities from the Fifth and
Sixth Circuits, embodied in the Galbreath and Allesandro decisions.
Opinion at 10.
On careful analysis, we see Talton’s contention on this
point as without merit. First, contrary to what Talton maintains,
we did not broadly conclude in Schroepfer that the in-state leg of
a shipment of goods from outside the state is not in interstate
commerce unless in-state customers have previously “ordered the
goods.” Rather, Schroepfer merely used the phrase “ordered the
goods” to characterize how the facts of Jacksonville Paper differed
from a companion case, Higgins v. Carr Bros. Co., 317 U.S. 572(1943). See Schroepfer, 138 F.2d at 114. Nor was the fact that no
customer had “ordered the goods” in Schroepfer deemed to be
dispositive. Rather, in Schroepfer, the product at issue was a
newspaper, and two employees, whose jobs were to distribute
newspapers to racks and vendors, sued the publishing company for
minimum wages and overtime, on the theory that their employment was
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in interstate commerce because the newspaper gathered out-of-state
news and used it to produce the newspaper. We simply determined
that the defendant’s newspaper business was not the sale of the
interstate news, as would be the business of a “telegraph company
or a news service,” because the company took the interstate news
and used it as it saw fit to create a new product, a newspaper,
which the plaintiffs distributed. Id. As a result, the intrastate
distribution of locally produced newspapers was not “so closely
related to the movement of the [interstate] commerce” as to cause
the distribution of the papers to constitute interstate activity.
Id. at 113-14. Put simply, we neither discarded nor narrowed the
Jacksonville Paper categories. As a result, the decisions of the
Fifth and Sixth Circuits in Galbreath and Allesandro, relied on in
the Opinion, are not, as maintained by Talton, “materially
different” from the applicable principles in this Circuit.
Further, Talton’s contention that the products that he
carried could not remain in interstate commerce because they were
not specifically ordered by Caffey’s customers contravenes
Jacksonville Paper itself. There, the Supreme Court recognized
that goods could be ordered pursuant to an “understanding,” though
not part of a specific order. 317 U.S. at 568. The Court also
explicitly left open the possibility that shipments purchased in
anticipation of the needs of certain customers might remain in
interstate commerce when delivered in-state, observing that “a
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wholesaler’s course of business based on anticipation of needs of
specific customers, rather than on prior orders or contracts,”
might “at times be sufficient to establish that practical
continuity in transit necessary to keep a movement of goods ‘in
commerce.’” Id. at 570. Here, the district court recognized that
the products delivered by Talton were ordered by Caffey pursuant to
an “understanding” implied by law, were ordered to meet the needs
of “specific customers,” and thus were within the second
Jacksonville Paper fact pattern. See Opinion at 10-13. This
analysis correctly utilized the applicable legal standard. Id.
B.
Next, Talton contends that the district court, in
rendering summary judgment, impermissibly resolved issues of
disputed fact. Though the Opinion relied on what the magistrate
judge repeatedly characterized as “undisputed facts,” see, e.g.,
Opinion at 8, 11, 12 n.7, Talton maintains that the “undisputed
facts” were in fact disputed.
This contention, while less clear than the legal standard
issue, is also without merit. Though the Opinion did recite some
facts that Talton, on appeal,2 characterizes as disputed, the
2
Talton’s disputed issues of fact contention on the Motor
Carrier Act exemption is new. He did not assert to the magistrate
judge that the facts underlying the application of the exemption
were disputed, though he did maintain that facts related to other
issues were in dispute. With regard to the Motor Carrier Act
exemption, Talton argued solely that the application of the
Jacksonville Paper doctrine to the facts showed that his employment
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pivotal point for the court was the very nature of the ABCC
statutes and the exclusive relationship that those statutes
establish between a beer wholesaler and a beer retailer. The fact
of the ABCC statutes’ existence and their terms were not in
dispute, and thus the court did not improperly resolve disputed
issues of fact when it granted summary judgment. See Griffin v.
Consol. Foods Corp., 771 F.2d 826, 828 (4th Cir. 1985) (affirming
determination of applicability of Motor Carrier Act exemption based
on undisputed facts).
C.
Finally, the district court correctly determined that the
products handled and distributed by Talton continued to be in
interstate commerce even though they had temporarily paused at the
Greensboro warehouse. The Opinion observed that the relationship
detailed in the first category of Jacksonville Paper, delivery
pursuant to written contract, was unavailable to Caffey because the
ABCC statutes prohibit a beer wholesaler from entering into a
written contract with a beer retailer. Opinion at 13. The Opinion
then concluded, as to the second category of Jacksonville Paper,
that, “[c]learly, by operation of North Carolina’s ABC law, the
was not in interstate commerce. Pl.’s Mem. of Law in Opp. to
Def.'s Mot. for Summ. J. at 5-9. Moreover, he did not assert to
the district court that the magistrate judge had erroneously based
his recommended ruling on disputed issues of fact. See Pl.’s
Objections to Magistrate Judge’s Order and Recommendation at 3-4.
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licensed retailers had an ‘understanding’ with [Caffey] that
[Caffey] was required to provide them with enough beer to meet
their sales needs.” Opinion at 12. The Opinion reached this
conclusion despite the fact that Caffey ordered quantities of beer
without specific orders from its retailers because Caffey, as the
holder of a state-established monopoly for the wholesaling of beer
products, was required to keep its retailers stocked with beer, and
“if [Caffey] breached its legal obligations to the licensed
retailers, not only would it face potential contract damages, but
also the revocation of its business license.” Opinion at 13. As
a result, the district court properly concluded that the “implied
requirements contracts arising out of ABC law in this case are an
even stronger legal relationship than most express requirements
contracts.” Id. The beer products carried in-state by Talton were
“different from goods acquired and held by a local merchant for
local disposition.” Jacksonville Paper, 317 U.S. at 570. We agree
with the reasoning of the district court on this point, see Opinion
at 8-14, and we are content to adopt it.
III.
Pursuant to the foregoing, the summary judgment award of the
district court is affirmed.
AFFIRMED
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