United States Department of Labor v. R.M. International, Inc. et al

Filing 107

Findings of Fact and Conclusions of Law and Verdict. Signed on 4/26/12 by Judge Anna J. Brown. (mja)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF OREGON
PORTLAND DIVISION

HILDA L. SOLIS, SECRETARY OF
LABOR, UNITED STATES DEPARTMENT
OF LABOR,

3:09-CV-863-BR
SUPPLEMENTAL FINDINGS OF
FACT AND CONCLUSIONS OF
LAW AND VERDICT

Plaintiff,
v.
R.M. INTERNATIONAL, INC., and
JAMES KEYES,
Defendants.

KATHY ALEJANDRO
Acting Regional Solicitor
BRUCE L. BROWN
Associate Regional Solicitor
EVAN H. NORDBY
United States Department of Labor
Office of the Solicitor
300 Fifth Avenue, Suite 1120
Seattle, WA 98104
[phone]
Attorneys for Plaintiff
1

- SUPPLEMENTAL FINDINGS OF FACT, CONCLUSIONS OF LAW, AND VERDICT

RICHARD N. VAN CLEAVE
VanCleave & Cobrain LLC
16135 S.W. Railroad Street
Sherwood, OR 97140
[phone]
TODD A. HACKETT
Stoel Rives LLP
900 S.W. Fifth Avenue, Suite 2600
Portland, OR 97204
[phone]
Attorneys for Defendants

BROWN, Judge.
This action concerns the parties’ dispute over the
application of an exemption to the Fair Labor Standards Act of
1938 known as the Motor Carrier Act Exemption under 29 U.S.C.
§ 213(b)(1).

The matter was tried to the Court on November 14

and 16, 2011.
On March 16, 2012, the Court issued Findings of Fact and
Conclusions of Law (#105) with respect to the liability of
Defendants under FLSA for overtime pay to their truck-driver
employees.

In its Findings of Fact and Conclusions of Law, the

Court concluded, inter alia, there were outstanding issues
concerning the parties’ Stipulation (#95) as to Damages that
resulted from the Court’s factual and legal determinations, and
the Court requested the parties to file a joint statement
clarifying the amount of damages to which the parties had
stipulated.

2

In response, on April 16, 2012, the parties filed

- SUPPLEMENTAL FINDINGS OF FACT, CONCLUSIONS OF LAW, AND VERDICT

their Proposed Stipulation (#106) as to Damages.
Having considered the parties’ Stipulation (#106), the Court
now resolves the remaining issues the Court reserved in its
Findings of Fact and Conclusions of Law (#105) issued on March
16, 2012, which are fully incorporated herein by this reference.
Accordingly, the Court makes these Supplemental Findings of Fact
and Conclusions of Law pursuant to Federal Rule of Civil
Procedure 52(a).

SUPPLEMENTAL FINDINGS OF FACT
Pursuant to Federal Rule of Civil Procedure 52(a), the Court
finds the following additional facts by a preponderance of the
evidence:
A.

Stipulated Facts.
1.

Based on the parties’ Stipulations, the Court finds the
amount of uncompensated overtime pay due to Defendants’
employee-drivers “who drove only inside the State of
Oregon” is $94,740.63.

2.

Based on the parties’ Stipulations, the Court finds the
amount of uncompensated overtime pay due to Defendants’
employee-drivers who drove interstate routes is
$93,449.31.

3.

Thus, the total amount of uncompensated overtime pay is
$188.189.94.

3

- SUPPLEMENTAL FINDINGS OF FACT, CONCLUSIONS OF LAW, AND VERDICT

B.

Additional Facts Established at Trial:
1.

On or about November 29, 2009, the Department of
Transportation performed a compliance review of DTNA
and RMI during which the DOT cited “some” of
Defendants’ roughly 130 intrastate-only drivers.

2.

Defendants retained legal counsel during the DOT
compliance audit in November 2009.

3.

Defendants required their drivers to meet DOT physical
standards, to perform DOT-mandated inspections, and to
maintain DOT-mandated trip logs.

SUPPLEMENTAL CONCLUSIONS OF LAW
Based on the record and the legal standards that follow, the
Court makes the following additional Conclusions of Law pursuant
to Rule 52(a)(1):
A.

Stipulated Conclusions of Law.
1.

Based on the parties’ Stipulation (#106), Defendants’
liability for uncompensated overtime wages of their
employee-drivers “who drove only inside the State of
Oregon” is $94,740.63.

2.

Based on the parties’ Stipulation (#106), Defendants’
liability for uncompensated overtime wages of their
employee-drivers who drove interstate routes is
$93,449.31.

4

- SUPPLEMENTAL FINDINGS OF FACT, CONCLUSIONS OF LAW, AND VERDICT

3.

Thus, the total amount due for uncompensated overtime
wages is $188.189.94.

B.

Additional Conclusions of Law.
1.

For violations of FLSA’s overtime provisions, employers
“shall be liable to the employee or employees affected
in the amount of their unpaid minimum wages, or their
unpaid overtime compensation, as the case may be, and
in an additional equal amount as liquidated damages.”
29 U.S.C. §§ 216(b), (c).

2.

Courts retain discretion whether to award liquidated
damages and in what amount “where an employer shows
that, despite the failure to pay appropriate wages, the
employer acted in subjective ‘good faith’ and had
objectively ‘reasonable grounds' for believing that the
acts or omissions giving rise to the failure did not
violate the FLSA.”

Alvarez v. IBP, Inc., 339 F.3d F.3d

894, 909 (9th Cir. 2003)(internal quotations omitted)
(quoting Herman v. RSR Sec. Servs. Ltd., 172 F.3d 132,
142 (2d Cir. 1999)).
3.

See also 29 U.S.C. § 260.

Defendants have the “difficult” burden to prove they
acted in subjective good faith and with objectively
reasonable grounds in this context when liquidated
damages in an amount equal to the unpaid overtime
compensation are the norm.

5

Alvarez, 339 F.3d at 910.

- SUPPLEMENTAL FINDINGS OF FACT, CONCLUSIONS OF LAW, AND VERDICT

“Where the employer ‘fails to carry that burden,’ we
have noted, ‘liquidated damages are mandatory.’”
Alvarez, 339 F.3d at 910 (quoting Local 246 Util.
Workers Union v. S. Cal. Edison Co., 83 F.3d 292, 298
(9th Cir. 1996)).
4.

Defendants maintain they have demonstrated both their
subjective good faith and objectively reasonable belief
that their failure to pay overtime wages to their
drivers did not violate FLSA.

To meet their burden,

Defendants rely almost exclusively on their compliance
with DOT rules and the DOT’s citation of “some” of
their intrastate-only drivers.

The DOT’s citation of

“some” of Defendants’ intrastate-only drivers, however,
does not provide a sufficiently reasonable basis for
concluding all such drivers were under the DOT’s
jurisdiction and, therefore, exempt from FLSA.

The

objective reasonableness of Defendants’ failure is
undermined by the fact that the determination as to
whether the Department of Labor or the DOT has
jurisdiction is resolved on a driver-by-driver basis,
as the Court explained at length on summary judgment,
and, in any event, DOT jurisdiction for a driver who
only occasionally drives in interstate commerce lasts
only 4 months from the last such trip.

6

See Reich v.

- SUPPLEMENTAL FINDINGS OF FACT, CONCLUSIONS OF LAW, AND VERDICT

Am. Driver Serv., Inc., 33 F.3d 1153, 1155-56 (9th Cir.
1994).

Furthermore, exemptions to FLSA, such as the

Motor Carrier Exemption relied on by Defendants, are to
be construed narrowly and only apply to employees who
“plainly and unmistakably” fall within their terms.
See Solis v. Washington, 656 F.3d 1079, 1083 (9th Cir.
2011).

Thus, the Court concludes Defendants’

generalizations about entire classes of their drivers
on the basis of DOT citations of some of its drivers
are insufficient to establish the objective
reasonableness of Defendants’ failure to comply with
FLSA.

Similarly and in light of the lack of testimony

in this regard, the fact that Defendants required both
their interstate and intrastate drivers comply with DOT
regulations neither establishes Defendant’s subjective
belief nor its objective reasonableness.
5.

Defendants also maintain their belief that their
drivers were exempt from FLSA is reasonable in light of
the fact that they hired counsel to assist with the
November 2009 DOT compliance audit.

Although there is

not any direct evidence as to the purpose of counsel’s
representation, the Court concludes it is fair to infer
that counsel was hired to ensure Defendants’ compliance
with DOT regulations rather than to ensure Defendants

7

- SUPPLEMENTAL FINDINGS OF FACT, CONCLUSIONS OF LAW, AND VERDICT

were compliant with FLSA.

In any event, there is not

any evidence on this record from which the Court can
find that Defendants took “the steps necessary to
ensure [its] practices complied with [FLSA].”

Alvarez,

339 F.3d at 910 (“Mistaking ex post explanation and
justification for the necessary affirmative ‘steps’ to
ensure compliance, [the defendant] offers no evidence
to show that it actively endeavored to ensure such
compliance.”).

Thus, the Court concludes on this

record that Defendants did not satisfy their
“difficult” burden to show their subjective good faith
failure to comply with FLSA or the objective
reasonableness of their actions, and, therefore, the
Court concludes Plaintiff is entitled to liquidated
damages in the amount equal to the unpaid overtime
wages.

CONCLUSION
Based on the foregoing and on the Court’s Findings of Fact
and Conclusions of Law (#105) issued on March 16, 2012, the Court
enters its VERDICT as follows:
1.

In favor of Plaintiff and against Defendants as to
Plaintiff’s sole Claim for Defendants’ violations of
FLSA overtime provisions for unpaid overtime

8

- SUPPLEMENTAL FINDINGS OF FACT, CONCLUSIONS OF LAW, AND VERDICT

compensation under 29 U.S.C. § 216(c) in the amount of
$188,189.94, and
2.

In favor of Plaintiff and against Defendants for an
award of liquidated damages pursuant to 29 U.S.C.
§ 216(c) in the same amount of $188,189.94.

To the extent Plaintiff contends she is entitled to
attorneys’ fees and/or costs, Plaintiff shall submit a timely
petition and cost bill after entry of judgment.
The Court directs the parties to confer and to submit to the
Court no later than May 18, 2012, a jointly proposed form of
judgment on this Verdict.
IT IS SO ORDERED.
DATED this 26th day of April, 2012.

/s/ Anna J. Brown
____________________________
ANNA J. BROWN
United States District Judge

9

- SUPPLEMENTAL FINDINGS OF FACT, CONCLUSIONS OF LAW, AND VERDICT