Court Opinion

ID: 4683546
Source: CourtListenerOpinion
Date Created: 2021-05-04 00:03:19.490471+00
Date Added: 2024-06-11T08:04:15.048792
License: Public Domain

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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                                          No. 19-51074

   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.

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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.

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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)

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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).

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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.

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