White v. U.S. Corrections ( 2021 )

Case: 19-51074 Document: 00515846476 Page: 1 Date Filed: 05/03/2021
United States Court of Appeals
for the Fifth Circuit United States Court of Appeals
Fifth Circuit
FILED
May 3, 2021
No. 19-51074
Lyle W. Cayce
Clerk
Dana White, individually and on behalf of all others similarly situated,
Plaintiff—Appellant,
versus
U.S. Corrections, L.L.C.; US Corrections, L.L.C.; South
East Employee Leasing, Incorporated,
Defendants—Appellees.
Appeal from the United States District Court
for the Western District of Texas
USDC No. 1:19-CV-390
Before Elrod, Duncan, and Wilson, Circuit Judges.
Cory T. Wilson, Circuit Judge:
Dana White filed suit on behalf of herself and other employees against
her former employer, US Corrections, L.L.C. (USC), and two other entities,
alleging an overtime-pay claim and a recordkeeping claim under the Fair
Labor Standards Act (FLSA). The district court dismissed both claims under
Rule 12(b)(6) and entered judgment in favor of USC and the company’s
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payroll administrator, South East Personnel Leasing, Inc. (South East). 1
On appeal, White challenges the dismissal of her overtime-pay claim
and, relatedly, the district court’s denial of her motion for partial summary
judgment. 2 Both rulings were grounded on the applicability of the Motor
Carrier Act (MCA) exemption to White’s overtime-pay claim. 29 U.S.C.
§§ 207(a)(1), 213(b)(1). The district court concluded that the MCA
exemption defeated White’s claim. White contends that the Interstate
Transportation of Dangerous Criminals Act of 2000 (“Jeanna’s Act”), 34
U.S.C. §§ 60101–60104, precludes the applicability of the MCA exemption
to her and others involved in transporting prisoners, such that they are not
exempted from the FLSA’s overtime-pay requirements.
We agree with the district court that the MCA exemption governs
White’s job with USC. But we nonetheless conclude that the district court
erred when it dismissed White’s overtime-pay claim at the pleading stage.
We therefore reverse and remand for further proceedings.
I.
USC employed White as an extradition officer from June 2018 to
January 2019. In that role, White transported prisoners between prisons and
other facilities in passenger vans. White alleges she and other similarly-
situated extradition officers often worked more than forty hours per week
1
South East Personnel Leasing, Inc. asserts that it was erroneously designated in
White’s complaint as “South East Employee Leasing, Inc.” For the sake of simplicity, we
refer to the defendant-appellee as “South East.”
2
White does not challenge the district court’s dismissal of her recordkeeping
claim. While we lack jurisdiction to address the district court’s interlocutory order denying
White’s motion for partial summary judgment, as we will explain, the same legal issue
undergirds both of the court’s rulings.
2
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while employed at USC. She also alleges that she and others were not paid
overtime for hours worked in excess of forty hours per week.
White filed the instant action against USC, South East, and U.S.
Corrections, L.L.C. 3 on April 5, 2019. In her complaint, White alleged the
defendants failed to pay overtime compensation in violation of the FLSA, 29
U.S.C. § 207(a)(1), and likewise failed to maintain accurate time and pay
records, id. § 211(c). South East filed an answer to White’s complaint. USC
filed a motion to dismiss White’s claims under Federal Rule of Civil
Procedure 12(b)(6) and attached two exhibits: (1) a Federal Register
publication (USC’s Notice of Approval from the Surface Transportation
Board) and (2) information from the Federal Motor Carrier Safety
Administration (FMCSA) Safety and Fitness and Electronic Records
(SAFER) System.
USC asserted that White and other putative class members were
excluded from the FLSA’s overtime-pay requirements because their jobs fell
within the MCA exemption, which excepts certain employees whose job
duties affect the safety and operation of vehicles in transportation from
earning overtime pay. 29 U.S.C. § 213(b)(1); see Levinson v. Spector Motor
Serv., 330 U.S. 649, 685 (1947). To support this assertion, USC relied on
facts purportedly substantiated by the exhibits attached to its dispositive
motion. USC also contended that it was subject to the Department of
Transportation’s regulatory purview—a requirement for the MCA
exemption to apply—under Jeanna’s Act, which governs private prisoner
transportation entities. 34 U.S.C. § 60103. As for White’s recordkeeping
3
It is unclear from the record whether U.S. Corrections, L.L.C. is an actual
company or merely a misnomer for USC. Regardless, the district court clerk ordered an
entry of default against U.S. Corrections, L.L.C. on July 8, 2019, and the entity is not a
party to this appeal.
3
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claim, USC argued that no private cause of action existed for the alleged
violation.
White opposed USC’s motion, asserting that at the Rule 12(b)(6)
stage, it was improper for the district court to consider matters outside of her
complaint (i.e., USC’s proffered exhibits and the factual statements
predicated on them) to conclude that she was an exempt employee under the
MCA exemption. 4 She alternatively requested the district court either to
“postpone disposition” until trial, allow the parties to conduct discovery, or
grant her leave to file an amended complaint. South East filed an amended
answer in lieu of its own dispositive motion, adopting USC’s arguments and
interposing the MCA exemption as an affirmative defense.
While USC’s motion to dismiss was pending, White filed a separate
motion for partial summary judgment. In her motion, White in essence
argued the converse of USC’s motion, namely that Jeanna’s Act precluded
the Department of Transportation’s regulatory authority over private
prisoner transportation companies, so that the MCA exemption could not
apply to employees of private prisoner transportation companies. As a result,
USC owed White and similarly-situated employees overtime pay for hours
worked in excess of forty hours per week. USC opposed White’s motion and
attached a series of exhibits to its response. 5 The district court referred both
4
White also argued that USC improperly raised the MCA exemption as an
affirmative defense by failing to plead the defense in its answer. She reiterates this
argument on appeal. Federal Rule of Civil Procedure 8(c) requires defendants to plead
affirmative defenses in their responsive pleading. Fed. R. Civ. Proc. 8(c)(1); Pasco ex
rel. Pasco v. Knoblauch, 566 F.3d 572, 577 (5th Cir. 2009). But USC preserved its affirmative
defense by raising it in its initial response to the complaint, i.e., its Rule 12(b)(6) motion.
White’s argument is therefore without merit.
5
USC reattached the exhibits included its Rule 12(b)(6) motion to dismiss and
attached the following additional exhibits: (1) Driver Logs; (2) USC’s Department of
Transportation permit; (3) FMCSA Safety Measurement System (SMS) information; (4)
4
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USC’s motion to dismiss and White’s motion for partial summary judgment
to a magistrate judge for recommendation.
The magistrate’s recommendations to the district court were a bit
muddled. The magistrate recommended that USC’s motion to dismiss be
denied as to White’s overtime-pay claim because White “alleged a plausible
claim for relief under § 207(a)(1).” But somewhat inconsistently, the
magistrate also concluded that “the MCA applies . . . and [White’s] overtime
compensation claim under § 207(a)(1) fails as a matter of law and must be
dismissed.” As to White’s recordkeeping claim under 29 U.S.C. § 211(c),
the magistrate recommended that USC’s motion to dismiss be granted.
Finally, the magistrate recommended denying White’s motion for partial
summary judgment.
On November 18, 2019, the district court, without addressing the
inconsistency in the magistrate judge’s recommendations, accepted and
adopted them. 6 The district court entered an order that denied White’s
motion for partial summary judgment and granted USC’s Rule 12(b)(6)
motion to dismiss, concluding that Jeanna’s Act did not preclude the
application of the MCA exemption to employees of private prisoner
transportation companies, the MCA exemption applied to White, and no
private cause of action existed for White’s recordkeeping claim. The district
court then dismissed all of White’s claims against all three defendants with
prejudice. This appeal followed.
an SMS inspection report; and (5) a Federal Register publication (Attorney General Rule
and Regulation).
6
Perhaps a result of this lack of clarity, the parties dispute whether the district
court dismissed White’s claims under Rule 12(b)(6) or Rule 56(f). Though the record is
admittedly confusing, we construe the district court’s dismissal of White’s claims to have
occurred pursuant to Rule 12(b)(6).
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II.
A district court’s grant of a Rule 12(b)(6) motion to dismiss is
reviewed de novo. Vizaline, L.L.C. v. Tracy, 949 F.3d 927, 931 (5th Cir.
2020). We accept all well-pled facts as true, construing all reasonable
inferences in the complaint in the light most favorable to the plaintiff. Heinze
v. Tesco Corp., 971 F.3d 475, 479 (5th Cir. 2020). “But we do not accept as
true conclusory allegations, unwarranted factual inferences, or legal
conclusions.” Id. (internal quotation marks and citations omitted). “To
survive a Rule 12(b)(6) motion to dismiss, a complaint ‘does not need
detailed factual allegations,’ but must prove the plaintiff’s grounds for
entitlement to relief—including factual allegations in a complaint that when
assumed to be true ‘raise a right to relief above the speculative level.’”
Cuvillier v. Taylor, 503 F.3d 397, 401 (5th Cir. 2007) (quoting Bell Atl. Corp.
v. Twombly, 550 U.S. 544, 555 (2007)).
III.
We first address White’s argument that Jeanna’s Act precludes
application of the MCA exemption to private prisoner transportation
companies and their employees. 7 Then, with the controlling legal issue
clarified, we discuss whether dismissal of White’s overtime-pay claim was
proper at the pleading stage.
7
We reject USC’s assertion that White “abandon[ed]” her statutory-construction
argument on appeal. As South East noted in its principal brief, both USC’s motion to
dismiss and White’s motion for partial summary judgment centered around whether the
MCA exemption applied to White and others similarly situated, whether by operation of
Jeanna’s Act or otherwise. And, as noted above, the parties’ arguments regarding the
MCA exemption are essentially two sides of the same coin. Further, the district court
considered White’s argument—whether Jeanna’s Act precludes the applicability of the
MCA exemption to employees of private prisoner transportation companies—before
dismissing her claims under Rule 12(b)(6).
6
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A.
The first issue—whether Jeanna’s Act renders the MCA exemption
inapplicable to private prisoner transportation companies and their
employees, such that they are not exempt from the FLSA’s overtime-pay
requirements—appears to be a question of first impression for this court.
The district court found that the MCA exemption applied to White and
employees like her, and we agree that the MCA exemption governs White’s
job with USC.
The FLSA ordinarily requires employers to pay overtime to
employees who work in excess of forty hours per week. 29 U.S.C.
§ 207(a)(1). If an employer violates this rule, it is “liable to the employee or
employees affected in the amount of their . . . unpaid overtime compensation
. . . and in an additional equal amount as liquidated damages.” Parrish v.
Premier Directional Drilling, L.P., 917 F.3d 369, 379 (5th Cir. 2019) (quoting
29 U.S.C. § 216(b)). The overtime-pay rule is subject to several enumerated
exemptions, however. See 29 U.S.C. § 213. “[T]he employer bears the
burden to establish a claimed exemption” applies to the claimant. Olibas v.
Barclay, 838 F.3d 442, 448 (5th Cir. 2016) (quoting Allen v. Coil Tubing
Servs., L.L.C., 755 F.3d 279, 283 (5th Cir. 2014)).
Relevant here, the MCA exemption, 29 U.S.C. § 213(b)(1), provides
that an employee is exempt from the FLSA’s overtime pay requirement if
“the Secretary of Transportation has power to establish qualifications and
maximum hours of service pursuant to the provisions of section 31502 of
Title 49.” Section 31502, in turn, delineates “motor carrier[s]” and “motor
private carrier[s]” as two types of employers entitled to the MCA exemption.
49 U.S.C. § 31502(b)(1), (b)(2). The Secretary of Transportation “need only
possess the power to regulate the employees at issue; it need not actually
exercise that power for the [MCA] exemption to apply.” Songer v. Dillon
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Res., Inc., 618 F.3d 467, 472 (5th Cir. 2010) (alteration in original) (citation
omitted).
The Department of Transportation has promulgated regulations that
interpret the statutory requirements of the MCA exemption. See 29 C.F.R.
§§ 782.0–782.8. Here, the pertinent regulation is 29 C.F.R. § 782.2(a),
which states that the applicability of the MCA exemption to a particular
employee “depends both on the class to which his employer belongs and on
the class of work involved in the employee’s job.” The rule further explains
that the Secretary of Transportation may establish the qualifications and
maximum hours or service for employees of “motor carrier[s]” and “motor
private carrier[s]” 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 Motor Carrier Act, [and]
(2) engage in activities of a character directly affecting the
safety and 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 Motor Carrier
Act.
29 C.F.R. § 782.2(a); see Allen, 755 F.3d at 283 (noting that for the MCA
exemption to apply, an employee must “meet both of these requirements”).
Against this backdrop, we turn to White’s argument. As she did in
the district court, White focuses her argument on appeal only on the first
requirement of 29 C.F.R. § 782.2(a)—whether she is subject to the Secretary
of Transportation’s jurisdiction. Specifically, she contends that under
Jeanna’s Act, the Attorney General (as opposed to the Secretary of
Transportation) is exclusively empowered to establish the qualifications and
maximum hours of service for employees who work for private prisoner
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transportation companies. Put simply, White asserts that because Jeanna’s
Act explicitly authorizes the Attorney General to regulate employees of
private prisoner transportation companies, the Department of
Transportation does not have such authority, and the MCA exemption thus
cannot exempt her and others from overtime pay. In support of this
contention, White primarily relies upon 34 U.S.C. § 60103(a) of Jeanna’s
Act, which states that “the Attorney General, in consultation with the
American Correctional Association and the private prisoner transport
industry, shall promulgate regulations relating to the transportation of violent
prisoners in or affecting interstate commerce.”
White thus posits an “either/or” proposition. But we conclude that
the interplay between the MCA exemption and Jeanna’s Act is correctly
construed to be “both/and” regarding employers like USC (and employees
like White). In other words, the Attorney General’s authority to regulate the
transportation of violent prisoners in interstate commerce does not obviate
the Secretary of Transportation’s authority to regulate employees of “motor
carrier[s]” and “motor private carrier[s]” as contemplated by the MCA
exemption. The MCA exemption and Jeanna’s Act are not mutually
exclusive, and White’s job with USC falls under the purview of both.
The regulations promulgated by the Attorney General under Jeanna’s
Act bear out this conclusion. See 28 C.F.R. §§ 97.1–97.30. In 28 C.F.R.
§ 97.1, the Attorney General detailed the scope of Jeanna’s Act, namely that
the Act “provide[s] minimum security and safety standards for private
companies that transport violent prisoners on behalf of State and local
jurisdictions.” In 28 C.F.R. § 97.13, which refers to the maximum driving
time of employees of private prisoner transportation companies, the
Attorney General explained:
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Companies covered under [Jeanna’s Act] must adhere to the
maximum driving time provisions applicable to commercial
motor vehicle operators, as set forth in Department of
Transportation regulations at 49 C.F.R. § 395.3 which will
apply regardless of whether a private prisoner transport
company is covered by Department of Transportation
regulations.
And, in 28 C.F.R. § 97.22, the Attorney General clarified that the regulations
implementing Jeanna’s Act “do not pre-empt any applicable federal . . . law
that may impose additional obligations on private prisoner transport
companies or otherwise regulate the transportation of violent prisoners.”
The text of these regulations does not support White’s argument that
Jeanna’s Act removes her class of workers from the regulatory reach of the
Department of Transportation (and in turn, from the reach of the MCA
exemption). To the contrary, the regulations indicate that employees of
private prisoner transportation companies are regulated by both the
Department of Transportation and the Department of Justice. Jeanna’s Act
sets a baseline for private prisoner transportation companies. But by their
terms, neither Jeanna’s Act nor its implementing regulations supplant the
Secretary of Transportation’s authority to regulate employees of private
prisoner transportation companies who happen also to fit within the
definition of the MCA. We therefore agree with the district court that,
Jeanna’s Act notwithstanding, the MCA exemption of the FLSA governs
private prisoner transportation companies and their employees like White.
B.
Still, two questions remain. The first is whether White failed to state
a claim upon which relief can be granted. The second, relatedly, is whether
the MCA exemption forecloses White’s claim based on the pleadings.
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To state a prima facie overtime-pay claim under 29 U.S.C.
§ 207(a)(1), a plaintiff must plausibly allege: (1) that an employer-employee
relationship existed during the time that she worked in excess of forty hours
per week; (2) that she engaged in activities covered by the FLSA; (3) that the
employer violated the FLSA’s overtime-wage requirements; and (4) the
amount of overtime-pay due. E.g., Johnson v. Heckmann Water Res. (CVR),
Inc., 758 F.3d 627, 630 (5th Cir. 2014) (collecting cases).
White’s complaint meets these requirements. First, White alleges
that she worked for USC as an extradition officer from June 2018 to January
2019 and that during her employment, she “regularly” worked in excess of
forty hours per week. Second, she alleges that she engaged in activities
covered by the FLSA, specifically, that she “engaged in commerce” in her
job with USC because she transported prisoners between prisons and other
facilities “in passenger vans weighing less than 10,001 pounds.” See 29
U.S.C. § 207(a)(1); see also Carley v. Crest Pumping Techns., L.L.C., 890 F.3d
575, 579–82 (5th Cir. 2018) (clarifying that the MCA exemption does not
apply to certain employees who operate motor vehicles weighing less than
10,001 pounds). Lastly, White alleges that she and other similarly-situated
employees were paid on an hourly basis but that she was “paid for her
overtime at a rate less than one and one-half times the regular rate at which
she was [] employed in violation of the FLSA.” Crediting her complaint’s
allegations most favorably to her, as we must in weighing a Rule 12(b)(6)
motion, White thus plausibly pled a prima facie claim for relief under the
FLSA.
Indeed, this conclusion is consistent with the recommendation of the
magistrate judge, adopted by the district court, that USC’s motion to dismiss
should be denied. We diverge from the district court, however, on the
question of whether the MCA exemption nonetheless forecloses White’s
claim at the pleading stage. Following the magistrate judge’s
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recommendation, the district court concluded that it did and dismissed
White’s claim with prejudice. But this ruling was premature in this case.
While USC adequately raised the MCA exemption as an affirmative
defense to White’s claim, “[i]f the employer claims ‘that the suing employee
is exempt from the overtime requirement,’ then the employer ‘has the
burden of proving that the employee falls within the claimed exempted
category.’” Johnson, 758 F.3d at 630 (quoting Samson v. Apollo Res., Inc., 242
F.3d 629, 636 (5th Cir. 2001)). USC attempted to meet this burden by
attaching several exhibits to its motion to dismiss (and to its response to
White’s motion for partial summary judgment). But the “determination as
to whether an employee is exempt under the [FLSA] is primarily a question
of fact” typically better suited for summary judgment. Dalheim v. KDFW-
TV, 918 F.2d 1220, 1224 (5th Cir. 1990) (alteration in original) (quoting
Blackmon v. Brookshire Grocery Co., 835 F.2d 1135, 1137 (5th Cir. 1988));
accord Aston v. Glob. Prisoner Servs., LLC, No. 16-CV-420, 2016 WL 4079547,
at *4 (W.D. Tex. July 29, 2016) (holding that applicability of the MCA
exemption “is a fact-based assertion that goes to the merits of [p]laintiff’s
claims and requires factual determinations not appropriate on a motion to
dismiss”). This is just such a typical case.
To sum it up: The district court correctly construed the law to
determine that the MCA exemption governs the relationship between White
and USC, irrespective of Jeanna’s Act and its implementing regulations. But
it was error to apply the MCA exemption to foreclose the otherwise plausible
FLSA overtime-pay claim alleged by White in her complaint, at least at the
pleading stage. Accordingly, the district court’s dismissal of White’s
overtime-pay claim is
REVERSED and REMANDED.
12