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Munoz-Gonzalez v. D.L.C. Limousine Service, Inc.

United States Court of Appeals, Second Circuit

September 19, 2018

Alejandro Munoz-Gonzalez, on behalf of himself, individually, on behalf of all others similarly situated, Susie Townsend, as administrator for the estate of Danual Martin, Thomas Acheampong, Kwame Gyamfi, Abraham Weinstein, Michael DeJoseph, Timothy Geiger, Peter Befi, Edward Dapice, Raymond A. Brooks, Richard W. Nosher, Jr., Daniel Bennett Lilienfeld, Edward Vasquez, Leonard A. Dimase, John A. Anderson, Dennis Saddlemir, Michael F. Curran, Frank J. Savarese, Edward W. Henry, Massimo Novello, Maurice Pearson, Darrin R. Dean, Abdelouahad Benouara, John Richard Tocco, Plaintiffs-Appellants,
v.
D.L.C. Limousine Service, Inc., Chris Thornton, individually, John D'Agostino, D'Agostino, Melissa Thornton, individually, Defendants-Appellees.

          Argued: May 24, 2018

         D.L.C. Limousine Service, Inc. ("DLC") runs a chauffeured car service in Westchester County, New York. Much like taxicabs, DLC's cars pick up members of the public and, for a fare, take them to their requested destinations. Its drivers frequently work more than forty hours a week, but DLC does not pay them overtime. Plaintiffs-Appellants, all former DLC drivers, brought this suit for overtime compensation under the Fair Labor Standards Act ("FLSA"), 29 U.S.C. § 201 et seq. The district court (Oetken, J.) granted summary judgment to DLC, holding that the FLSA's overtime requirement did not apply to DLC's drivers because DLC is "engaged in the business of operating taxicabs," 29 U.S.C. § 213(b)(17). We agree. Accordingly, the judgment is AFFIRMED.

          For Plaintiffs-Appellants: Jeffrey R. Maguire (Alexander T. Coleman,

          Michael J. Borrelli, on the brief), Borrelli & Associates, P.L.L.C., Great Neck, New York. For Defendants-Appellees: Joanna Sandolo (Daniel G. Walsh, on the brief), Belowich & Walsh LLP, White Plains, New York.

          Before: Livingston, Chin, Circuit Judges, Failla, District Judge. [1]

          Debra Ann Livingston, Circuit Judge.

         The Fair Labor Standards Act ("FLSA"), 29 U.S.C. § 201 et seq., requires that employers pay employees one-and-a-half times their regular rate of pay for every hour exceeding forty each workweek. Id. § 207(a). Drivers employed by employers "engaged in the business of operating taxicabs" are exempt. Id. § 213(b)(17). D.L.C. Limousine Service, Inc. ("DLC") runs a chauffeured car service that does not pay its drivers overtime. Lead Plaintiff-Appellant Alejandro Munoz-Gonzalez ("Munoz-Gonzalez"), a former DLC employee, has brought this case against DLC for overtime compensation under the FLSA. The district court granted DLC's motion for summary judgment, holding that DLC qualifies as "an employer engaged in the business of operating taxicabs." Id. On appeal, Munoz-Gonzalez argues that the district court misinterpreted the word "taxicab."

         Having consulted dictionaries, the FLSA and other contemporaneously- enacted statutes, and related legal usage, we conclude that DLC is "an employer engaged in the business of operating taxicabs." Id. Three factors guide our understanding of what a "taxicab" is-namely, that it is: (1) a chauffeured passenger vehicle; (2) available for hire by individual members of the general public; (3) that has no fixed schedule, fixed route, or fixed termini. There is no genuine dispute that DLC's cars, vans, and SUVs meet this description, and so we conclude that DLC's drivers are "employed by an employer engaged in the business of operating taxicabs," id. § 213(b)(17). We therefore AFFIRM the judgment below.

          BACKGROUND

         I. Factual Background[2]

         DLC runs a chauffeured car service in New York's Westchester County. Though one company, DLC operates under two names: DLC Ground Transportation Services and LSW Chauffeured Transportation ("LSW"). The latter charges higher fares and uses more expensive cars, the former is the source of most of DLC's business, and both share the same staff, dispatchers, drivers, and management.

         DLC's fleet consists mostly of five-person cars, but it also has some SUVs, luxury vans, and mini-coaches. DLC's vehicles are not metered, nor do they have "Taxi" or "Vacancy" signs on their roofs. DLC's drivers must dress professionally in a black suit, white shirt, company tie, black shoes, and black socks. They may not choose their own jobs or pick up passengers who hail them from the street; DLC's central dispatch, which passengers call to arrange for pickup, assigns drivers all their jobs. Drivers take the passengers wherever they want to go, generally relying on in-car navigation systems for directions unless the customer directs the driver to take a different route. Most trips are local (less than seventy miles), but passengers may book longer trips within the tristate area. Passengers often prepay their fares before trips begin.

         During the time at issue in this case, most of DLC's work came from trips originating at the Westchester County Airport, where it operated a taxi stand. Its contract with the Airport required it to list itself as an Airport Transportation Service and a Limousine Service in the NYNEX Yellow Pages. The second largest source of DLC's work came from passengers calling DLC's dispatcher to request pickup. DLC also received small portions of its business (less than 5% total) from contracts with:

(1) a local hotel that allowed DLC to keep a counter in its lobby to serve the hotel's guests, in exchange for DLC paying the hotel a commission for these rides; and
(2) PepsiCo to provide transportation to and from its offices as requested. Finally, for some of its repeat customers, DLC would instruct its drivers to charge certain fixed rates, treat the passengers as "VIP[s]," and keep bottled water and newspapers in the car.

         During the period relevant here, many of DLC's drivers worked more than forty hours every week, but DLC did not pay them overtime compensation. In 2003, a former driver sued DLC for overtime compensation under the FLSA. DLC responded that it did not have to pay the driver overtime because, as "an employer engaged in the business of operating taxicabs," 29 U.S.C. § 213(b)(17), its drivers were exempt from the FLSA's overtime requirements. The United States District Court for the Southern District of New York agreed and dismissed the case. See Cariani v. D.L.C. Limousine Serv., Inc., 363 F.Supp.2d 637, 645, 649 (S.D.N.Y. 2005). Since Cariani, DLC has renamed its upscale car service to its current name, LSW, entered into its contracts with the local hotel and PepsiCo, and increased the size of its LSW fleet to as many as twenty-five cars.

         II. Procedural History

         On December 2, 2015, lead Plaintiff-Appellant Munoz-Gonzalez sued DLC in the United States District Court for the Southern District of New York. He and approximately twenty other named plaintiffs wish to represent a class of former DLC drivers who, like the plaintiff in Cariani, are seeking to recover overtime compensation under the FLSA. On July 12, 2017, the district court granted summary judgment to DLC. See Munoz-Gonzalez v. D.L.C. Limousine Serv., Inc., No. 15-CV-9368 (JPO), 2017 WL 2973980 at *9 (S.D.N.Y. July 12, 2017) (Oetken, J.).

         The FLSA does not define the word "taxicabs," but the Department of Labor's Field Operations Handbook (2016 ed.) ("Handbook") lists criteria to help assess whether car services qualify for the taxicab exemption. Applying the Handbook's criteria, the district court concluded that even though DLC had some "recurrent contracts" during the relevant period with a local hotel and PepsiCo, DLC's drivers did not drive along "fixed routes" and DLC served primarily local needs, which, on balance, demonstrated that it operated as a taxicab company. Id. at *4-5. Munoz-Gonzalez argued that DLC is an "airport limousine service," which the Handbook distinguishes from a taxicab company, because most of its business comes from trips from the Westchester County Airport. The court disagreed, reasoning that DLC receives so much of its business from airport trips only because Westchester County has little need for taxicabs beyond shuttling passengers to and from transportation hubs. Finally, Munoz-Gonzalez contended that DLC is not a taxicab company because it assigns its drivers their jobs, advertises itself as a limousine service, and charges higher fees than ordinary taxicab companies. The district court concluded that these factors carry little weight because the Handbook does not list them.[3]

         The district court entered final judgment on August 2, 2017.

         DISCUSSION

         We review de novo the district court's grant of summary judgment. See Ramos v. Baldor Specialty Foods, Inc., 687 F.3d 554, 558 (2d Cir. 2012). Summary judgment is appropriate if "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). "We may affirm on any ground the record supports, and are not limited to the reasons expressed by the district court." Laurent v. PricewaterhouseCoopers LLP, 794 F.3d 272, 289 (2d Cir. 2015).

         Congress enacted the FLSA in 1938. See Fair Labor Standards Act of 1938, 52 Stat. 1060, 29 U.S.C. § 201, et seq. Sections 6 and 7 of the FLSA, respectively, require that employers pay covered employees a minimum wage and overtime pay. 29 U.S.C. §§ 206, 207. Section 13(b) of the FLSA exempts certain categories of employees from overtime but not minimum wage. This case concerns § 13(b)(17), the "taxicab exemption," which exempts from the overtime requirement "any driver employed by an employer engaged in the business of operating taxicabs." Id. § 213(b)(17). Congress enacted the taxicab exemption in 1949. See Fair Labor Standards Amendments of 1949, Pub. L. No. 81-393, § 11, 63 Stat. 910, 918. [4] DLC concedes that it does not pay its drivers overtime compensation but argues that it does not have to because it qualifies for the taxicab exemption. The legal issue before us, accordingly, is whether DLC is "engaged in the business of operating taxicabs."

         I

         This Court has never interpreted the taxicab exemption before. Both Munoz-Gonzalez's and DLC's briefs focus extensively on how the Department of Labor defines the taxicab exemption in its Handbook. But they have skipped a crucial step. "In statutory construction, we begin with the language of the statute. If the statutory language is unambiguous and the statutory scheme is coherent and consistent - as is the case here - the inquiry ceases." Kingdomware Techs., Inc. v. United States, 136 S.Ct. 1969, 1976 (2016) (internal citations, brackets, and quotation marks omitted) (quoting Barnhart v. ...


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