Garcia et al v. Peterson et al
Filing
292
MEMORANDUM OPINION AND ORDER GRANTING IN PART 230 MOTION for Summary Judgment filed by Graebel defendants (joined by MidCap). (Signed by Judge Gray H Miller) Parties notified.(rkonieczny, 4)
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF TEXAS
HOUSTON DIVISION
JOSE GARCIA, et al.,
Plaintiffs,
v.
VASILIA A/K/A “VAUNA” PETERSON, et al.,
Defendants.
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CIVIL ACTION H-17-1601
MEMORANDUM OPINION AND ORDER
Pending before the court is a motion for summary judgment that was filed by various
defendants affiliated with Graebel Van Lines Holdings, LLC. Dkt. 230 (motion); Dkt. 231 (memo
in support of motion). The Graebel-affiliated entities (“Graebel Entities”) have been dismissed from
this lawsuit. However, the claims against defendant MidCap Funding X Trust (“MidCap”) are still
pending, and MidCap joined the motion for summary judgment. Dkt. 283. The court will therefore
address the motion as if it had been filed by MidCap.
After considering the motion, response, reply, and applicable law, the court is of the opinion
that the motion should be GRANTED IN PART.
I. BACKGROUND
With regard to the issues in the instant motion for summary judgment, this is an FLSA
collective action brought by individuals who drove moving trucks for the Graebel Entities. Dkt. 114.
MidCap had a security interest in the Graebel Entities, and the Graebel Entities dissolved in March
2017. Dkt. 114. The collective action consists of individuals who opted in from the following
group: “All Graebel Drivers performing driving services from July 1, 2016 to present, for the entities
identified as ‘GMI Subsidiaries’ in the Graebel Acquisition Agreement, their successors, and
including but not limited to, the subsidiaries making up the 33 Graebel branch terminal locations.”
Id.
MidCap moves for summary judgment on the plaintiffs’ claims, arguing that (1) the plaintiffs
were contractors, not employees; (2) the plaintiffs were exempt from the FLSA under the Motor
Carrier Act (“MCA”) Exemption; (3) there is no private cause of action for record-keeping
violations; (4) the plaintiffs cannot recover under a quantum meruit theory because they each entered
into ICOAS, which preclude the claim; (5) the plaintiffs fail to identify any false, material
misrepresentations that were known to be false when made; and (6) the plaintiffs cannot demonstrate
any conspiracy between the defendants and MidCap. Dkt. 231. This order addresses only the
argument that the plaintiffs were exempt from the FLSA under the MCA Exemption.
II. LEGAL STANDARDS
A.
Summary Judgment
A court shall grant summary judgment when a “movant shows that there is no genuine
dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed. R.
Civ. P. 56(a). “[A] fact is genuinely in dispute only if a reasonable jury could return a verdict for
the nonmoving party.” Fordoche, Inc. v. Texaco, Inc., 463 F.3d 388, 392 (5th Cir. 2006). The
moving party bears the initial burden of demonstrating the absence of a genuine issue of material
fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S. Ct. 2548 (1986). If the moving party meets
its burden, the burden shifts to the non-moving party to set forth specific facts showing a genuine
issue for trial. Fed. R. Civ. P. 56(e). The court must view the evidence in the light most favorable
to the non-movant and draw all justifiable inferences in favor of the non-movant.
Conservation Org. v. City of Dallas, 529 F.3d 519, 524 (5th Cir. 2008).
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Envtl.
B.
FLSA Motor Carrier Exemption
Under the MCA Exemption, the FLSA’s overtime requirement does not apply to “any
employee with respect to whom the Secretary of Transportation has the power to establish
qualifications and maximum hours of service pursuant to the provisions of section 31502 of title 49.”
29 U.S.C. § 213(b)(1). The Secretary of Transportation may set requirements “for qualifications and
maximum hours of service of employees of, and safety of operation and equipment of, a motor
carrier; and . . . qualifications and maximum hours of service of employees of, and standards of
equipment of, a motor private carrier, when needed to promote safety.” 49 U.S.C. § 31502. Under
29 C.F.R. § 782.2(a), the MCA Exemption applies to employees who “(1) [a]re employed by carriers
whose transportation of passengers or property by motor vehicle is subject to [the Secretary of
Transportation’s] jurisdiction under section 204 of the [MCA]”; and “(2) engage in activities of a
character directly affecting the safety of operation of motor vehicles in the transportation on the
public highways of passengers or property in interstate or foreign commerce within the meaning of
the [MCA].” The “exemption applies ‘to those employees and those only whose work involves
engagement in activities consisting wholly or in part of a class of work which is defined: (I) As that
of driver, driver’s helper, loader, or mechanic, and (ii) as directly affecting the safety of operation
of motor vehicles on the public highways in transportation in interstate or foreign commerce.’”
Carley v. Crest Pumping Techs., L.L.C., 890 F.3d 575, 577 n.4 (5th Cir. 2018).
“Motor carrier” means “a person providing motor vehicle transportation for compensation.”
49 U.S.C. § 13102(14). A “motor private carrier” is “a person, other than a motor carrier,
transporting property by motor vehicle when . . . (A) the transportation is as provided in section
13501 of this title; (B) the person is the owner, lessee, or bailee of the property being transported;
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and (C) the property is being transported for sale, lease, rent, or bailment or to further a commercial
enterprise.” Id. § 13102(15). “Transportation” includes “(A) a motor vehicle, vessel, warehouse,
wharf, pier, dock, yard, property, facility, instrumentality, or equipment of any kind related to the
movement of passengers or property, or both, regardless of ownership or an agreement concerning
use; and (B) services related to that movement, including arranging for, receipt, delivery, elevation,
transfer in transit, refrigeration, icing, ventilation, storage, handling, packing, unpacking, and
interchange of passengers and property.” Id. § 13102(23).
The Corrections Act provides an exception to the MCA Exemption for—relevant to this
case—employees who drive motor vehicles weighing 10,000 pounds or less who are employed by
a motor carrier or private motor carrier. Carley, 890 F.3d at 579 (discussing the SAFETEA-LU
Technical Corrections Act of 2008, Pub. L. No. 110-244, § 306(a), ©), 122 Stat. 1572, 1621 (June
6, 2008), which is found in the notes of 29 U.S.C. § 207). The plaintiffs bear the initial burden of
proving they are covered by the FLSA’s overtime pay requirement, and the defendant bears the
burden of showing the MCA Exemption applies. Id. The plaintiffs then bear the burden of proving
that the Corrections Act applies to require overtime notwithstanding the MCA Exemption. Id. at
580.
III. ANALYSIS
MidCap argues that the Graebel Entities meet the requirements of the MCA Exemption
because the plaintiffs cannot meet their burden of showing that they did not drive vehicles weighing
10,000 pounds or less and the plaintiffs are drivers who either crossed state lines or could have been
called on to cross state lines. Dkt. 231. The plaintiffs stipulate that the trucks they drove exceeded
the minimum threshold for purposes of the MCA exemption. Dkt. 269 at 20. And the plaintiffs do
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not take issue with MidCap’s arguments that the were engaged in interstate commerce. See
Dkt. 253. Instead, the plaintiffs argue that they were not subject to the Department of Labor
Regulations because they were not “motor vehicle carriers.” Id. The plaintiffs contend that in order
to be “motor vehicle carriers” the drivers would have had to “transport property for sale, lease, rent
or bailment or to further a commercial enterprise,” citing 49 U.S.C. § 13102(13). Id. They assert
that moving office or household items for the Graebel Entities’ customers does not qualify. Id.
The statute refers to “motor carriers” and “private motor carriers,” not “motor vehicle
carriers.” See 49 U.S.C. § 31502. The section of the MCA definitions the plaintiffs cite in support
of their “motor vehicle carriers” argument, § 13102(13), contains the definition for “individual
shipper”; this definition does not contain the text the plaintiffs quote. The next definition in the
section is for “motor carrier,” and that definition also does not contain text that the plaintiffs quote.
See 49 U.S.C. § 13102(14). The definition of “motor private carrier,” however, does contain that
text. See 49 U.S.C. § 13102(15).
MidCap argues that the Graebel Entities were motor carriers, not motor private carriers, and
that they meet the definition of motor carriers. The court agrees. A “motor carrier” means “a person
providing motor vehicle transportation for compensation.” 49 U.S.C. § 13102(14). The Graebel
Entities provided “motor vehicle transportation for compensation,” as “transportation” includes
“arranging for, receipt, delivery, transfer in transit . . . storage, handling, packing, unpacking, and
interchange of passengers and property.” See 49 U.S.C. § 13102(14), (23). MidCap has met its
burden of showing the Graebel Entities were motor carriers and the plaintiffs, as Graebel drivers,
were exempt under the MCA Exemption.
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The plaintiffs do not present any other arguments relating to the MCA Exemption.
Accordingly, MidCap’s motion for summary judgment is GRANTED, and summary judgment is
ENTERED in MidCap’s favor with regard to the FLSA overtime claims.
IV. CONCLUSION
MidCap’s motion for summary judgment (Dkt. 230) is GRANTED IN PART. It is
GRANTED with respect to the plaintiffs’ FLSA overtime claims, which are DISMISSED WITH
PREJUDICE. The court will consider the motion as it relates to remaining causes of action at a later
date.
Signed at Houston, Texas on August 1, 2019.
___________________________________
Gray H. Miller
Senior United States District Judge
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