Opinions of the United
2005 Decisions                                                                                                             States Court of Appeals
                                                                                                                              for the Third Circuit


8-12-2005

Packard v. Pgh Transp Co
Precedential or Non-Precedential: Precedential

Docket No. 03-3088




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                                      PRECEDENTIAL

  UNITED STATES COURT OF APPEALS FOR THE
              THIRD CIRCUIT

                      No. 03-3088

   CAROL PACKARD, JAMES SINCLAIR, HOWARD
  BOOKER, FLORENCE MARIE CAMP, EMANUEL A.
   BRATTEN, RONALD E. DOMINICI, CHARLES R.
ROTHERT, SR., RAYMOND DAVIS, DONALD S. SPADE,
   BEVERLY J. BENNETT, RANDER J. THOMPSON,
   DARRYL SIGEL, LAVERA RAWLINGS, LEROY F.
   WISE, DAVID L. MORRIS, EDWARD R. CROSBY,
    GERALDINE REINHEIMER, PATRICIA ZILCH,
    SHANNON MCGRATH, DARRYL TURNER, and
       NORBERT G. ABEL, Plaintiffs-Appellees

                           v.

      PITTSBURGH TRANSPORTATION CO.,
              Defendant-Appellant


     On Appeal from the U.S. District Court for the
             Western District of Pennsylvania
                  (D.C. Civil No. 02-89)
     District Judge: The Honorable Arthur J. Schwab
                     ______________

              Argued December 15, 2004
    Before: **NYGAARD and GARTH, Circuit Judges,
              and POLLAK,* District Judge.

             (Opinion Filed: August 12, 2005)
                     ______________

                OPINION OF THE COURT
                    ______________

RAY F. MIDDLEMAN, Esq. (argued)
CLIFFORD R. MEADE, Esq.
Malone, Larchuk & Middleman P.C.
117 VIP Drive, Suite 310
Wexford, PA 15090

      Attorneys for Appellant
      Pittsburgh Transportation Company

ERNEST B. ORSATTI, Esq. (argued)
Jubelirer, Pass & Intrieri, P.C.
219 Fort Pitt Blvd.
Pittsburgh, PA 15222

      Attorney for Appellees
      Carol Packard, et al.


      *
       Honorable Louis H. Pollak, Senior District Judge for
the United States District Court of the Eastern District of
Pennsylvania, sitting by designation. **Honorable Richard L.
Nygaard assumed senior status on July 9, 2005

                               2
THEODORE R. SCOTT, Esq.
Luce, Forward, Hamilton & Scripps LLP
11988 El Camino Real, Suite 200
San Diego, CA 92130

       Attorney for Amicus Curiae
       Laidlaw Transportation Services, Inc.

POLLAK, District Judge:

       In   this   appeal,    appellant-defendant      Pittsburgh

Transportation Co. (“PTC”) seeks to establish that drivers for its

ACCESS transit service (“ACCESS drivers”), including

plaintiffs-appellees, are not eligible for overtime under the Fair

Labor Standards Act (“FLSA”). The precise question before us

is whether the ACCESS drivers, who would ordinarily be

eligible for overtime, become ineligible by virtue of a provision

of the Motor Carrier Act (“MCA”) that vests authority in the

Secretary of Transportation to regulate certain aspects of

interstate transport. Those within the Secretary’s sphere of

authority under the MCA are excluded from the overtime

                                3
provisions of the FLSA. The District Court concluded that this

so-called “MCA exemption” from the FLSA was not applicable

here, and that the ACCESS drivers therefore remained eligible

for overtime pay. We agree with that conclusion, although we

reach it by a different route, and will affirm the judgment of the

District Court.

                                I.

       PTC’s ACCESS service, not available to the general

public, provides transportation to elderly and disabled persons

who are unable to use other forms of public transportation.

Under a contract with ACCESS Transportation Systems, Inc., a

federally-funded program to provide such services, PTC’s

ACCESS program serves roughly 5,000 people with disabilities

and 125,000 seniors.         Most of these passengers have

“unconditional” eligibility, which requires a certification of need

based on review by a special panel, while others are eligible

                                4
based on certain more temporary conditions.

       PTC provides ACCESS service within a defined service

area in Allegheny County that includes the Pittsburgh Amtrak

and Greyhound stations. PTC also provides some ACCESS

service to and from the Pittsburgh International Airport, which

is outside its regular service area. PTC’s ACCESS service

operates entirely within Pennsylvania, and ACCESS drivers do

not transport passengers across state lines. It is unclear what

portion of ACCESS service involves train or bus terminals.

Trips to the airport are a very minor part of ACCESS’s

aggregate operations,2 but it is the case that most, if not all, of

the ACCESS drivers have made at least a few trips to the

airport. Because PTC assigns the airport trips indiscriminately



       2
       During 2001 and 2002, airport trips were almost
always made by a separate ACCESS provider, Airbus, but the
ACCESS drivers still made such trips occasionally.

                                5
along with other trips, any ACCESS driver may be called upon

to drive such trips.

       Unlike conventional bus systems, PTC’s ACCESS

service does not have regular, set routes, or set stops or

schedules from day to day. Rather, PTC schedules passengers’

trips each day to provide the most efficient service possible. To

use the service, eligible passengers must schedule their trips at

least one day in advance, by telephoning schedulers at either

PTC or ACCESS. Although limited same-day trips may also be

scheduled when space is available, ACCESS drivers do not pick

up or drop off passengers except as scheduled in advance

through the central schedulers. A passenger purchases a ticket

for the service in advance, presenting the ticket to the ACCESS

driver as payment. Tickets for ACCESS service are not linked

in any way to tickets for interstate travel, or indeed intrastate

travel, on non-ACCESS transit services.

                               6
       Because PTC contends that its ACCESS drivers are

excluded from the FLSA’s overtime protection, it has refused to

pay the drivers more than their ordinary hourly wage when they

work more than 40 hours per week. It is undisputed that the

drivers regularly work over 40 hours per week, and that they are

entitled to recover overtime compensation for the excess hours

if they are not subject to the FLSA’s MCA exemption.

       After the ACCESS drivers filed this action in the United

States District Court for the Western District of Pennsylvania,

seeking to confirm their entitlement to FLSA overtime pay, both

parties filed motions for partial summary judgment on the

question of the drivers’ entitlement to overtime protection. The

District Court denied PTC’s motion, and granted the ACCESS

drivers’ motion in part.

       The District Court ruled that the ACCESS drivers were

not excluded from the protections of the FLSA, and remained

                               7
entitled to overtime, because they were not within the Secretary

of Transportation’s authority to regulate interstate transport.

According to the District Court, the ACCESS drivers were not

engaged in interstate transport because the ACCESS service

(which does not physically provide transport outside of

Pennsylvania)      does     not   involve     “through   ticketing”

arrangements with interstate transport.

        The court then entered final judgment for the ACCESS

drivers, based on the parties’ stipulation as to the amount of

compensatory damages and the court’s determination of

appropriate liquidated damages and attorneys’ fees. PTC timely

filed   this   appeal,    challenging   the    underlying   liability

determination.

        The issues presented here have also been raised, but not

decided, in three actions in the Western District of Pennsylvania

involving ACCESS drivers for PTC and for another

                                  8
transportation company in the Pittsburgh area, Laidlaw

Transportation, Inc. (“Laidlaw”). One of these actions, Eugene

J. Kott, et al. v. Pittsburgh Transportation Co., No. 02-0089, has

been dismissed without prejudice pending the resolution of this

appeal. In Spivak v. Pittsburgh Transportation Co., No. 98-984

(W.D. Pa. May 28, 1999), the District Court found that PTC

could apply the MCA exemption to plaintiff Machall Spivak, an

ACCESS driver. However, because Spivak did not dispute that

he was engaged in interstate transportation while making airport

trips, the Spivak decision does not directly address the issues

presented here. In the third action, Greenwood v. Laidlaw

Transit Services, Inc., No. 01-0728, the District Court has

denied both parties’ motions for summary judgment. Laidlaw

has submitted an amicus brief supporting PTC’s position on this

appeal.

                               II.
                                9
       Our review of the District Court’s grant of partial

summary judgment is plenary. Madison v. Res. for Human Dev.,

Inc., 

, 180 (3d Cir. 2000).

                              III.

       Appellant PTC seeks reversal of the District Court’s

grant of partial summary judgment to its ACCESS drivers, as to

liability on the drivers’ claims for overtime pay under Section 7

of the Fair Labor Standards Act (“FLSA”), 29 U.S.C. §

207(a)(1). PTC claims that the drivers are exempt from the

FLSA’s overtime requirements under the Motor Carrier Act

(“MCA”) exemption, set forth at 29 U.S.C. § 213(b)(1). It is

well settled that exemptions from the FLSA are construed

narrowly, against the employer. 

.

Accordingly, PTC bears the burden of proving “plainly and

unmistakably” that the drivers qualify for the MCA exemption.

See Friedrich v. U.S. Computer Servs., 

, 412 (3d
                            10
Cir. 1992).

A. The Statutes

       Section 7 of the FLSA requires employers to pay

overtime compensation to employees who work more than forty

hours per week, unless one or another of certain exemptions

applies. 29 U.S.C. § 207. The exemption said by PTC to be

applicable here, the MCA exemption, appears in Section

13(b)(1) of the FLSA, and provides that overtime pay is not

required for “any employee with respect to whom the Secretary

of Transportation has 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).

       Section 31502 of Title 49 “applies to transportation . . .

described in sections 13501 and 13502 of [Title 49].” 49 U.S.C.

§ 31502. In turn, Section 13501 of Title 49 provides in relevant

part that the Secretary and the Surface Transportation Board
                              11
have jurisdiction “over transportation by motor carrier . . . to the

extent that passengers, property, or both, are transported by

motor carrier between a place in . . . a State and a place in

another State.” 49 U.S.C. § 13501.3 Our task is to determine

whether the ACCESS drivers’ work brings them within the


       3
         The complete text of Section 13501 reads as follows:
The Secretary [of Transportation] and the [Surface
Transportation] Board have jurisdiction, as specified in this
part, over transportation by motor carrier and the procurement
of that transportation, to the extent that passengers, property,
or both, are transported by motor carrier--
(1) between a place in--
(A) a State and a place in another State;
(B) a State and another place in the same State through
another State;
(C) the United States and a place in a territory or possession
of the United States to the extent the transportation is in the
United States;
(D) the United States and another place in the United States
through a foreign country to the extent the transportation is in
the United States; or
(E) the United States and a place in a foreign country to the
extent the transportation is in the United States; and
(2) in a reservation under the exclusive jurisdiction of the
United States or on a public highway.

                                12
scope of this statutory authority.

1. The District Court’s Ruling

       The District Court found that the ACCESS drivers were

not within the authority of the Secretary of Transportation. The

District Court determined that, in general, the Secretary’s

authority extends to transportation in which there is “practical

continuity of movement” across state lines. In applying this

concept to the ACCESS drivers’ situation, though, the District

Court adopted a particular, narrow interpretation of that term.

       The District Court found that “[t]he DOL [Department of

Labor], in consultation with the DOT [Department of

Transportation], addressed the issue of ‘practical continuity of

movement’ as applied to intrastate bus drivers in a 1999 opinion

letter, which adopted the reasoning of a 1974 DOT ruling. In

the letter, John R. Fraser, Acting Administrator of the Wage and


                                 13
Hour Division, U.S. Department of Labor, asserts that intrastate

bus drivers would always be eligible for FLSA overtime

compensation, except in one situation not applicable here.” The

District Court then quoted the following passage from the Fraser

letter:

          Section 204 [the predecessor to 49 U.S.C. §
          31502]4 does not apply merely because the
          operation makes stops at airports, railroad stations
          or bus depots and picks up passengers who have
          had or will have a prior or subsequent interstate
          journey. The only case in which section 204
          would apply to a local bus operation transporting
          passengers who have made or will make a prior or
          subsequent journey across a State line is one in
          which there is a through ticketing arrangement
          under which the passengers purchase a single
          ticket which is good for both the local bus ride
          and the subsequent interstate journey.

          After acknowledging that “the DOT, not the DOL, has



          4
       Section 204 of the MCA, like the current 49 U.S.C. §
31502, defined the range of transportation activities subject to
DOT authority and therefore not protected by the FLSA.
                              14
the authority to interpret the DOT’s power under the MCA,” 5 the

District Court went on to find that “the DOL’s interpretation

must be given deference because the DOL and the DOT agree

on the interpretation.” Because there is admittedly no “through

ticketing arrangement” covering ACCESS passengers who also

travel interstate, the District Court found that the MCA

exemption did not apply, and that the ACCESS drivers remained

eligible for overtime pay.

          In appealing the District Court’s ruling, PTC challenges

the “through ticketing” test. To assess the “through ticketing”

test, we will examine the sources on which the District Court

relied.




          5
       The DOL has no independent authority to interpret the
MCA, even though the MCA defines the scope of an FLSA
exemption, because the DOL is not the agency entrusted with
the administration of the MCA. See Friedrich v. U.S.
Computer Servs., 

, 411 n.3 (3d Cir. 1992).
                             15
      First, looking back to 1974, it appears that what the

District Court referred to as “a 1974 DOT ruling” whose

“reasoning” was “adopted” by the DOL was in fact an unofficial

interagency letter. On July 8, 1974, one Isaac Benkin, then

Assistant Chief Counsel for Motor Carrier and Highway Safety

Law at the DOT, wrote a letter (the “Benkin letter”) to the

DOL’s Division of Minimum Wage and Hour Standards,

purporting to answer several questions from the DOL about the

scope of the DOT’s authority. One of the questions was the

following:

             Does section 204 of the Motor
             Carrier Act [which then defined the
             aspects of the Secretary of
             Transportation’s authority relevant
             here] apply to privately operated
             transit systems utilizing motorbuses
             operating over fixed routes which
             may cross State lines or have stops
             or terminals at airports, railroad
             stations, or interstate bus depots?


                             16
       Mr. Benkin’s answer to this question, in its entirety, read

as follows:

              Section 204 applies if the bus
              operations are conducted across a
              State line. Section 204 does not
              apply merely because the operator
              makes stops at airports, railroad
              stations or bus depots and picks up
              passengers who have had or will
              have a prior or subsequent
              interstate journey. The only case in
              which section 204 would apply to a
              local bus operation transporting
              passengers who have made or will
              make a prior or subsequent journey
              across a State line is one in which
              there is a through ticketing
              arrangement under which the
              passengers purchase a single ticket
              which is good for both the local bus
              ride and the prior or subsequent
              interstate journey by air, rail, or
              bus.

       Mistakenly referring to the Benkin letter as a “ruling by

the U.S. Department of Transportation (DOT),” Mr. Fraser of

the DOL relied on it twenty-five years later in two 1999 opinion
                               17
letters stating that certain categories of drivers apparently akin

to the appellees in the case at bar were not within the MCA

exemption, and were therefore subject to the FLSA’s overtime

requirements. The District Court, in turn, relied on one of these

DOL letters because the District Court found that the DOT

shared the DOL’s interpretation. However, neither the 1974

Benkin letter nor the 1999 Fraser letter the District Court relied

on has the formality and weight that would merit judicial

deference.6

       Some agency interpretations of statutes the agency

administers are entitled to substantial judicial deference. Here,

the ACCESS drivers contend that Mr. Benkin’s endorsement of

a “through ticketing” test is entitled to deference under Chevron



       6
       One of the DOL letters also stated that the DOL had
“confirmed with DOT that this ruling ha[d] not since been
superceded.” This undocumented recital cannot be entitled to
deference as an official DOT interpretation.
                             18
U.S.A., Inc. v. Natural Resources Defense Council, Inc., 

(1984), which requires judicial deference to an

agency’s reasonable interpretation of an ambiguous statute

entrusted to its administration. However, “[i]nterpretations such

as those in opinion letters - like interpretations contained in

policy statements, agency manuals, and enforcement guidelines,

all of which lack the force of law - do not warrant Chevron-style

deference.” Christensen v. Harris County, 

, 587

(2000). The informal and cursory Benkin letter falls into this

category, and hence does not merit Chevron deference. The

Fraser letter would similarly lack authority, even if the DOL had

authority to interpret the MCA, which it does not. As this court

has said, “[t]o grant Chevron deference to informal agency

interpretations would unduly validate the results of an informal

process.” 

.

       In the absence of Chevron deference, the ACCESS
                               19
drivers contend that the Benkin letter is at least entitled to the

lesser degree of deference called for by Skidmore v. Swift, 

(1944). However, Skidmore deference is available

only based on an agency interpretation’s power to persuade.

The general rule, where Chevron deference is not warranted, is

that “[t]he weight of [an agency’s] judgment in a particular case

will depend upon the thoroughness evident in its consideration,

the validity of its reasoning, its consistency with earlier and later

pronouncements, and all those factors which give it power to

persuade if lacking power to control.” 

. The materials at issue here simply provide no reasoning or

analysis that a court could properly find persuasive.

       Accordingly, we are of the view that the “through

ticketing” test utilized by the District Court is not a legal

standard that suffices to determine whether the MCA exemption

is applicable to the ACCESS drivers. We turn, then, to other
                                 20
sources of guidance.

B. Analysis

       Setting aside the “through ticketing” test, we will inquire

whether guidance is forthcoming from (a) DOT regulations, or

lack thereof, or (b) case law addressing analogous questions.

1. Regulatory Framework

       PTC maintains that a definition of interstate commerce in

DOT regulations unambiguously subjects the ACCESS drivers

to the Secretary’s authority. The DOT has defined interstate

commerce as “trade, traffic, or transportation . . . between two

places in a State as part of trade, traffic, or transportation

originating or terminating outside the State or the United

States.” 49 C.F.R. § 390.5 (emphasis added). However, even

if this definition of “interstate commerce” may be used as a form

of shorthand for the MCA’s specific language (in 49 U.S.C. §


                               21
13501),7 the DOT’s regulation is not dispositive one way or

another, since it provides no instruction as to what activity is

“part of” interstate commerce in marginal situations such as that

presented here.8

       The ACCESS drivers contend that they are not within the

MCA exemption because the Secretary of Transportation has

never in fact regulated their work.       However, the MCA

exemption depends only on the existence of secretarial authority,

not on its exercise. Levinson v. Spector Motor Serv., 

, 678 (1946); Morris v. McComb, 

, 434 (1947);


       7
           See text at note 

.
       8
         PTC and Laidlaw also refer us to DOL regulations
defining the sphere of interstate commerce that is subject to
the FLSA. These regulations could be, at best, persuasive.
See supra note 5. However, the regulations themselves note
that the MCA’s definition of interstate commerce is “not
identical with the definitions in the [FLSA],” 29 C.F.R. §
782.7(a), and has been more narrowly interpreted by the
courts than the parallel definition in the FLSA, 29 C.F.R. §
782.7(b)(1). Thus, they do not help us here.
                                22


. Thus, it does not matter that the

ACCESS drivers’ vehicles are below the weight threshold above

which the Secretary’s safety regulations apply, as the District

Court found that they are, or whether the drivers are exempt

from the Secretary’s regulations for any other reason. See id.;

Martin v. Coyne Int’l Enter., Corp., 

(2d Cir. 1992)

(finding laundry truck drivers excluded from FLSA protection

although trucks weighed 10,000 pounds and therefore were

exempt from Highway Administration’s safety regulations).

2. Judicial Treatment of the MCA Exemption

       In the one MCA exemption case addressed by this court,

the operative facts were far afield from those in the case at bar.

In Friedrich v. U.S. Computer Services, 

(3d Cir.

1992), the employees contending that they were entitled to

overtime    pay   were    technicians   providing    installation,

maintenance and repair services for cable television firms. In
                             23
carrying out their responsibilities, the technicians, headquartered

in Pennsylvania, drove with their equipment and tools to

customers located in Pennsylvania and in all the states bordering

on Pennsylvania. Although the technicians generally drove their

own vehicles, which weighed less than the “commercial

vehicles” of over 10,000 pounds that the DOT had affirmatively

undertaken to regulate, we concluded that the DOT’s non-

exercise of its regulatory power did not undercut that power.

       Because the plaintiffs literally fell within the
       MCA exemption and neither Congress nor the
       DOT has taken action to the contrary, we hold
       that employees operating passenger automobiles
       in interstate activities which require them to
       transport property essential to their job duties
       come within the reach of the Federal Motor
       Carrier Act as amended and are therefore exempt
       from the FLSA’s overtime compensation
       requirements.

       Thus, in Friedrich, unlike the case at bar, the employees

were in fact driving interstate and doing so as a regular and

                                24
central dimension of their jobs. Moreover, their duties required

them to transport property as well as themselves.

       In turning to decisions in other courts, it appears that, as

a general matter, cases sustaining claims of MCA exemption

from the FLSA overtime requirements involve patterns of

distribution markedly unlike the ACCESS pattern. Typically,

the carrier’s activity is a clearly identifiable element of an

integrated interstate distribution system. Also, typically, the

items the carrier is transporting are not passengers but freight.

       Back in 1947, in Morris v. McComb, 

(1947), a sharply divided Supreme Court held that truck drivers

and mechanics employed by a Detroit carrier engaged in the

transport of steel came within the MCA exemption.               Four

percent of the transport was “directly in interstate commerce”,

the balance was (a) steel transported “largely within

steel plants . . . for further processing . . . an unsegregated potion
                                   25
of [which] was shipped ultimately in interstate commerce,” and

(b) steel transported “between steel mills and industrial

establishments . . . [and] used in connection with the

manufacture of automobiles, a substantial portion of which

entered interstate commerce.” 

to the 4% of the

carrier’s operations which (unlike the operations of ACCESS)

were “directly in interstate commerce,” the Court noted that the

carrier, in order fully to serve its shippers, had “a practical

situation such as may confront any common carrier engaged in

a general cartage business, and who is prepared and offering to

serve the normal transportation demands of the shipping public

in an industrial metropolitan center.” 

       More recent instances in which claims of MCA

exemption have been sustained are not dissimilar. For example,

in Bilyou v. Dutchess Beer Distributors, Inc., 

(2d

Cir. 2002), the Second Circuit found no FLSA protection for an
                               26
intrastate driver who drove empty beer bottles to a facility from

which they were later shipped out of state. However, the Bilyou

driver’s activities were part of a clearly integrated commercial

cycle: the beer distributor received full bottles from out-of-state

suppliers and distributed them to customers, the plaintiff driver

picked up the empties and returned them to the distributor

(though technically employed by a different company), and the

distributor shipped them out of state and received credit for the

returns. 

Other cases like Bilyou similarly involve an

integrated system of interstate shipments. See, e.g., Klitzke v.

Steiner Corp., 

, 1470 (9th Cir. 1997) (involving

local delivery driver for linen service that ordered roughly half

of the materials it supplied from out-of-state suppliers, based on

specific customers’ orders); Foxworthy v. Hiland Dairy Co., 

, 672 (10th Cir. 1993) (involving Oklahoma truck

driver who regularly delivered dairy products ordered from his

                                27
employer’s Arkansas plant to customers in Oklahoma); Beggs v.

Kroger Co., 

(8th Cir. 1948) (involving truck

drivers who regularly delivered merchandise - 89% of it from

outside the state - to their employer’s retail groceries from its

warehouse, and who returned empty bottles and unsold

merchandise to the warehouse for shipment out of state).

       There is no general rule that once something (either

passenger or freight) embarks on a journey that will eventually

carry it between two states, every moment of that journey,

through the last conceivable moment of travel, is necessarily

interstate transport under the MCA. Although a mere shift from

one carrier to another does not disrupt an otherwise-integrated

interstate trip, see The Daniel Ball, 

(1871)

(considering the limits of the powers of Congress), the Supreme

Court has recognized that this does not mean that all portions of

a trip including some interstate travel are necessarily integrated.
                                28
       As Justice Brandeis remarked in Baltimore & Ohio

Southwestern Railroad Co. v. Settle, 

(1922),

whether a particular portion of travel is interstate or intrastate

“depends on the essential character of the movement.” 

(rejecting an interstate shipper’s attempt to pay lower total

tariffs by shipping its goods first from one state into another,

and then, after taking possession of them, re-shipping them to

their ultimate destination in the latter state). The Court made

clear in that case that the “essential character” of movement that

determines incorporation into interstate transport depends on the

individual facts of each case, and that mere proximity in time

and space will not necessarily make an intrastate trip part of a

larger interstate voyage. 

Rather, the “essential

character” of truly interstate transport will show some “essential

continuity of movement.” 

                               29
       When we apply the “essential character of the

movement” inquiry to the ACCESS drivers, it is clear that other

cases applying the MCA exemption do not suggest the proper

outcome here. The ACCESS drivers are not integrated into their

passengers’ interstate travel to the degree in which many

intrastate commercial drivers are integrated into the interstate

movement of commercial goods. Indeed, the ACCESS service

lacks any legal or institutional connection to the interstate

movement of passengers or goods. Although the service’s pick-

up or drop-off point sometimes coincides in time and space with

one endpoint of certain passengers’ interstate journeys, there is

no well established logical or logistical connection between the

two.

       The distinction between the “essential character” of the

ACCESS drivers’ work and that of the commercial freight

operations considered in other MCA exemption cases also
                               30
reflects broader differences in the usual commercial treatment

of freight and passenger transportation. The Supreme Court has

recognized in another context that “what may fairly be said to be

the limits of an interstate shipment of goods and chattels may

not necessarily be the commonly accepted limits of an

individual’s interstate journey,” and that the courts “must

accordingly mark the beginning and end of a particular kind of

interstate commerce by its own practical considerations.” United

States v. Yellow Cab Co., 

, 231 (1947). In any

event, unlike the delivery drivers in the cases canvassed above,

the ACCESS drivers are not part of a clearly-defined, routine

interstate commercial exchange controlled centrally by their

employer.

       Because the cases considering the FLSA status of

commercial freight drivers are factually unlike that presented

here, we will look outside the array of cases applying the MCA
                               31
exemption to consider past judicial treatment, in other statutory

contexts, of passenger transportation more similar to the

ACCESS service.

3. Interstate Transportation in Other Contexts

       In the 1940s the Supreme Court twice addressed the

question whether Capital Transit, a company that provided

public transit almost entirely within the District of Columbia,

was subject to the regulatory authority of the ICC. The Court’s

approach, in upholding the ICC’s authority, focused heavily on

the massive interstate movement of Capital Transit’s passengers;

the facts of the two Capital Transit cases offer an instructive

counterpoint to the facts of the case at bar. Thousands of

Capital Transit’s passengers were commuting government

employees who rode the company’s streetcars or buses within

the District to transfer points where they boarded interstate

transportation to Virginia. In its first opinion on the matter,
                              32
United States v. Capital Transit Co., 

(1945)

(“Capital Transit I”), the Court found that Capital Transit was

subject to ICC regulation in part because it provided interstate

service on one particular route that ran from the District of

Columbia into Virginia. However, on a rehearing of the same

case after Capital Transit had discontinued its sole interstate

route, the Court again found that the ICC had regulatory

authority. The Court stood by its earlier holding that Capital

Transit’s transportation service - now provided exclusively

within the District - was “part of a continuous stream of

interstate transportation,” and “an integral part of an interstate

movement.” United States v. Capital Transit Co., 

,

290 (1949) (per curiam) (“Capital Transit II”).

       The Supreme Court’s analysis in United States v. Yellow




                               33
Cab Co., 

(1947),9 offers more guidance here than

the Capital Transit decisions. Although Yellow Cab involved

the Sherman Act, not the MCA, it followed Capital Transit I in

looking to the “commonly accepted sense of the transportation

concept” to determine what travel was part of an interstate

journey.10 Yellow 

. Indeed, Capital Transit


       9
       Yellow Cab has been limited, but not overruled, on
grounds unrelated to the matters discussed here. Specifically,
in Copperweld Corp. v. Independence Tube Corp., 

(1984), the Court repudiated the intra-enterprise
conspiracy doctrine that had been derived from Yellow Cab.
       10
         Yellow Cab has guided courts considering the
boundaries of interstate movement under statutes other than
the Sherman Act. See, e.g., Airlines Transp. v. Tobin, 

, 251 (4th Cir. 1952) (finding limousine service to
and from airport, provided under contract with the airlines,
was within interstate commerce as defined under the FLSA);
Mateo v. Auto Rental Co., 

(9th Cir. 1957)
(finding, under the FLSA, that airport drivers in Honolulu
were not within interstate commerce where they had no valid
contractual arrangements with the airlines). Addressing the
scope of the ICC’s jurisdiction, the D.C. Circuit referred to
Yellow Cab, and later FLSA case law based on it, as
establishing a general “principle . . . that the degree of contact
                               34
II later noted that Yellow Cab “does not conflict with our prior

holding [in Capital Transit I] that [Capital] Transit’s

transportation was part of a continuous stream of interstate

transportation.” Capital Transit 

. In applying

the Capital Transit I standard to the Yellow Cab facts, which

involved taxi service to railroad stations in Chicago, the Court

noted that “interstate commerce is an intensely practical concept

drawn from the normal and accepted course of business.”

Yellow 

. Therefore, the Court directed

courts to “mark the beginning and end of a particular kind of

interstate commerce by its own practical considerations.” 

interstate carrier and the local transportation is an
important factor [in defining the scope of interstate travel].”
Pa. Pub. Util. Comm’n v. United States, 

, 11 (D.C.
Cir. 1987) (upholding ICC decision that company providing
shuttle service from airport to hotel and back for airline crew
was engaged in interstate commerce and not subject to
regulation by the state of Maryland).
                                35
       The Court’s application of this approach in Yellow Cab

is instructive. The Court considered two types of taxi service,

both involving taxi transportation of passengers immediately

before or after an interstate railroad trip. The first type of

service, provided under contracts with the railroads, involved

carrying passengers between two railroad stations, in order for

them immediately to continue their interstate travels. The Court

found that taxis providing this service were “clearly a part of the

stream of interstate commerce.”       

   Viewing the

intrastate portion of the journey - the shuttling between railroad

stations - “in its relations to the entire journey rather than in

isolation,” the Court found that it was “an integral step in the

interstate movement.” 

       However, the Court found that taxis providing the second

type of taxi service, which merely involved carrying passengers

between the railroad stations and their homes, offices, or hotels,
                                36
were not engaged in interstate commerce. 

“To the

taxicab driver, [such a trip to the railroad station was] just

another local fare.” 

Those providing the service had

“no contractual or other arrangement with the interstate

railroads,” nor any joint collection or payment of fares.

According to the Court, “their relationship to interstate transit

[wa]s only casual and incidental.” 

The Court found,

and we agree today, that “[t]he common understanding is that a

traveler intending to make an interstate rail journey begins his

interstate movement when he boards the train at the station and

that his journey ends when he disembarks at the station in the

city of destination.” 

Thus, “[w]hat happens prior or

subsequent to that rail journey, at least in the absence of some

special arrangement, is not a constituent part of the interstate

movement.” 

       The second type of Yellow Cab service seems more
                               37
closely analogous to the ACCESS service than Yellow Cab’s

shuttling between stations or the mass commuter service found

to be part of interstate travel in Capital Transit. ACCESS

service to interstate terminals similarly involves no joint fare or

ticketing arrangement, and no prior arrangement of any kind,

contractual or otherwise, with the railroads, airlines, or other

companies that carry a certain few ACCESS passengers across

state lines. Also, there is no strong, established cycle of regular

passenger movement between the ACCESS service and

particular interstate routes. To the ACCESS drivers and their

passengers, a trip to an interstate travel hub is “just another local

fare.”

         This lack of coordination with other transportation

distinguishes PTC’s ACCESS service not only from the Yellow

Cab taxi shuttles, but also from airport shuttle arrangements that

this court found in Southerland v. St. Croix Taxicab Association,
                                 38


(1963), to be part of passengers’ interstate travel.

In Southerland, the local government of the Virgin Islands had

made an exclusive arrangement for a local taxi company to

provide all transportation from the airport to local hotels. This

court found that the preferential arrangement favoring the local

taxi company unreasonably burdened interstate commerce

because it conflicted with prior arrangements by the plaintiff’s

tour agency to provide the same service for certain passengers

on an interstate package tour.         

agency’s

transportation services were found to be part of the passengers’

interstate travel, although the agency did not itself provide direct

interstate transportation, because the services “had been

arranged for [the passengers] and paid for in advance as an

integral part of their all-expense interstate journey.” 

Therefore, this court ruled that “it cannot, under these facts, be

said that the service rendered by the plaintiff under his contract

                                39
was distinct and separate from the interstate journey or that it

was just another local fare.” 

       Unlike in Southerland, the ACCESS drivers’ services are

not arranged as part of their passengers’ interstate travels

through a pre-packaged tour, or linked in any other way. Even

where certain of ACCESS passengers’ travels will eventually

carry them out of the state, the ACCESS service itself is purely

intrastate.

       Accordingly, we conclude that there is no “practical

continuity of movement,” in connection with the ACCESS

drivers’ services. Hence, the MCA exemption does not apply.

While “through ticketing” is one example of a common

arrangement involving both intra and interstate portions of

passenger transport, it is not the only means of establishing that

passenger transport operating intrastate is in practical continuity

with a larger interstate journey. In that sense, the District
                              40
Court’s reasoning missed the mark even though its conclusion

was correct. In this case, as we have stated, there is no evidence

of any arrangement between PTC and the other carriers, thus

rendering the MCA exemption inapplicable to the ACCESS

drivers.

                               IV.

       When an employer contends that a sub-set of its

employees are excluded from FLSA overtime entitlements by

virtue of the MCA exemption, “[i]t is the employer’s burden to

affirmatively prove that its employees come within the overtime

exemption, and any exemption from the Act must be proven

plainly and unmistakably.” 

. We

conclude that PTC has not made the required showing.

Accordingly, the judgment of the District Court will be

affirmed.



                               41
       Nygaard, J., concurring in judgment; No. 03-3088

               Although I concur with the judgment reached by

the majority, I write separately because I disagree with the

majority’s analysis in Part III.B. of the Opinion. In that Part, the

majority seeks guidance from regulations and case law as to

whether Appellees are engaged in “interstate commerce.” That

inquiry, although scholarly and interesting, is not necessary to

resolve this appeal.

               Rather than probing the contours of interstate

commerce within the meaning of the Motor Carrier Act, I would

hold the plain language of the Act’s jurisdictional statute to be

dispositive. That statute gives the Secretary of Transportation

the authority to establish qualifications and maximum hours for

employees of a motor carrier—thereby triggering the Motor

Carrier Act exemption—only “to the extent that passengers,

property, or both, are transported by motor carrier . . . between
a place in . . . a State and a place in another State.” 49 U.S.C. §

13501.     As PTC ACCESS drivers, Appellees transport

individuals from locations within Pennsylvania to other

locations within Pennsylvania, without crossing state lines.

They do not transport passengers “between a place in . . . a State

and a place in another State.” 

Secretary of

Transportation    has   no   power    to   establish   Appellees’

qualifications and maximum hours. 

power, the

Motor Carrier Act exemption does not apply and PTC must

comply with the Fair Labor Standards Act’s overtime pay rules.

See 29 U.S.C. § 213(b)(1).

              Neither the District Court in its order granting

partial summary judgment, nor the parties in their briefs before

us, relied upon the plain language of 49 U.S.C. § 13501. They

assume instead, and the majority follows suit, that it is necessary

to interpret the term “interstate commerce.” This assumption is
                                43
understandable, as it is derived from language in a Supreme

Court opinion. In determining the applicability of the Motor

Carrier Act exemption under different circumstances, the Court

in Levinson v. Spector Motor Service held that the Interstate

Commerce Commission (now the Secretary of Transportation)

has the power to establish qualifications and maximum hours of

service for employees of a motor carrier whose employment

“affects the safety of transportation . . . in interstate commerce.”

, 687 (1947) (emphasis added). Relying on this

language, the parties focus on the definition of “interstate

commerce” and attempt to discern its meaning by referring to

case law and regulatory definitions. The majority, in Part III.B.

takes a similar approach—one I believe to be unnecessary.11


       11
           I recognize that I am rather lonesome in this view,
in that other Courts of Appeal have also explored the scope of
the Motor Carrier Act exemption via inquiry into the presence
or absence of interstate commerce. See Bilyou v. Dutchess
Beer Distrib., Inc., 

, 223 (2d Cir. 2002); Klitzke
                                44
The plain language of the Motor Carrier Act’s jurisdictional

statute governs the Secretary of Transportation’s authority to

establish Appellees’ qualifications and maximum hours of

service.   It is unambiguous and does not contain the term

“interstate commerce.” To the extent the definition of that term

does have any relevance here, its proper understanding is found

in a source not previously considered: the United States Code.



v. Steiner Corp., 

, 1470 (9th Cir. 1997);
Foxworthy v. Hiland Dairy Co., 

, 672 (10th Cir.
1993); Beggs v. Kroger Co., 

, 702–03 (8th Cir.
1948). In so doing, the Courts in each of these cases relied
upon Walling v. Jacksonville Paper Co., 

(1943).
In Walling, the Supreme Court held that purely intrastate acts
may constitute interstate commerce within the meaning of the
Fair Labor Standards Act if the intrastate acts are part of a
“practical continuity of movement” between states. 

As the majority points out, however, the contours of
interstate commerce under the Motor Carrier Act and the Fair
Labor Standards Act are different. See 29 C.F.R. § 782.7(a).
Thus, Walling has no bearing upon the scope of the Motor
Carrier Act exemption. The Courts of Appeal relying upon
the case to determine the scope of the exemption have done so
in error.
                              45
               In 1947, the year the Supreme Court decided

Levinson, the Motor Carrier Act contained a statutory definition

of interstate commerce. See 49 U.S.C. § 303(a)(10) (1940). It

would appear that when the Court used the term, it did so

pursuant to its understanding of the then-existing statutory

definition. At the time the Court decided Levinson, the Motor

Carrier Act defined “interstate commerce” as “commerce

between any place in a State and any place in another State . . .

whether such commerce moves wholly by motor vehicle or

partly by motor vehicle and partly by rail, express, or water.” 

worthy of note that this definition is similar, albeit not

identical, to the present day Motor Carrier Act jurisdictional

statute found at 49 U.S.C. § 13501, which was added to the Act

after the Court decided Levinson. But whether Appellees’

employment would fall within the 1947 statutory definition is

irrelevant, as that definition no longer exists in the United States

                                46
Code. What does exist is the present day jurisdictional statute,

the plain language of which resolves this appeal without the

need for resort to regulatory definition or case law.

              Because I would decide this issue upon the plain

language of 49 U.S.C. § 13501, I do not join Part III.B. of the

Opinion. With respect, I concur in the judgment.




                               47