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Oliver Arlington was employed by Miller's Trucking as a log truck driver and loader operator pursuant to an oral employment agreement. For his work, Miller's paid Arlington twenty-five percent of the "load rate" as calculated by Miller's. Arlington, however, asserted that according to the parties' oral agreement, he should have been paid a salary in the form of annual wages. Arlington filed a wage claim, seeking the pay he alleged he was owed in regular and overtime wages. The Department of Labor and Industry's bureau dismissed Arlington's claim for lack of merit and lack of sufficient evidence. On appeal, a bureau hearing officer dismissed Arlington's claim. The district court affirmed. The Supreme Court reversed, holding (1) the hearing officer acted arbitrarily and capriciously in failing to require Miller's to produce material requested by Arlington and in refusing to admit tendered evidence, prejudicing the substantial rights of Arlington, and the district court erred in affirming the hearing officer's judgment; and (2) the hearing officer and district court incorrectly determined that Arlington engaged in activities of a character directly affecting the safety of the operation of motor vehicles in interstate commerce and thus was exempt from overtime requirements. Remanded.Receive FREE Daily Opinion Summaries by Email
April 24 2012
IN THE SUPREME COURT OF THE STATE OF MONTANA
2012 MT 89
OLIVER W. ARLINGTON,
Petitioner and Appellant,
MILLER’S TRUCKING, INC.,
a Montana corporation,
Respondent and Appellee.
District Court of the Third Judicial District,
In and For the County of Granite, Cause No. DV-11-11
Honorable Ray J. Dayton, Presiding Judge
COUNSEL OF RECORD:
Oliver W. Arlington (Self-Represented), Philipsburg, Montana
Brian J. Smith, Megan L. Dishong, Garlington, Lohn & Robinson, PLLP,
Submitted on Briefs: February 1, 2012
Decided: April 24, 2012
Justice Patricia O. Cotter delivered the Opinion of the Court.
Oliver Arlington (Arlington) appeals from the Memorandum and Order on Petition
for Leave to Present Additional Evidence and Petition for Judicial Review (Order),
entered by the Third Judicial District Court of Granite County, Montana. The Order
denied Arlington’s petition to present additional evidence and affirmed the dismissal by
the Montana Department of Labor and Industry (Department) of Arlington’s claim
against Miller’s Trucking, Inc. (Miller’s). Arlington seeks reversal of the Order, arguing
that the final decision entered by the Department’s Hearings Bureau (Bureau) did not
follow the regulations pertaining to intrastate and interstate commerce, the Bureau
Hearing Officer’s Findings of Fact and Conclusions of Law were erroneous, and the
District Court erroneously failed to allow the production of certain evidence.
We reverse and remand for further proceedings.
Arlington raises four issues on appeal. We restate the issues as follows:
1. Did the District Court act within its discretion when it denied Arlington’s
Petition for Leave to Present Additional Evidence and upheld the evidentiary rulings
made by the Hearing Officer?
2. Does substantial evidence support the Hearing Officer’s decision, affirmed by
the District Court, that Miller’s Trucking, Inc., did not have an oral employment
agreement with Arlington to pay him between $60,000 and $70,000 per year?
3. Did the Hearing Officer and District Court correctly determine that Arlington
engaged in activities of a character directly affecting the safety of the operation of motor
vehicles in interstate commerce and is thus exempt from overtime requirements?
FACTUAL AND PROCEDURAL BACKGROUND
Arlington was employed by Miller’s as a log truck driver and loader operator from
September 2008 through August 2009. Miller’s trucks were registered in Montana,
Idaho, Wyoming, and Washington, and Miller’s had a permit to operate through the
United States Department of Transportation (DOT).
As part of his employment,
Arlington operated and maintained one or more of Miller’s trucks, performing routine
maintenance and safety checks on the trucks. Arlington typically picked up logs at one
location in Montana and drove on public and private roads within Montana to deliver the
logs to another Montana location. Arlington usually picked up logs in the area near
Roundup, Montana, and delivered the logs to a railroad yard in Laurel, Montana, where
the logs were then transported by rail to the Smurfit-Stone plant in Frenchtown, Montana.
At Smurfit-Stone, the bark was removed from the logs and shipped out of Montana. The
logs were then turned into fiber paper, which was also shipped out of Montana.
Arlington’s employment with Miller’s stemmed from an oral agreement made
between Arlington and Miller’s owner, Tony Miller (Tony). For his work, Miller’s paid
Arlington 25% of the “load rate,” as calculated by Miller’s. Arlington, however, asserted
that according to their oral agreement, he should have been paid a salary in the form of
annual wages. He contended he was hired for forty-hour work weeks, that he should
have made between $60,000 and $70,000 in annual income, and that he should have
received additional payment for any overtime worked. Tony denied giving Arlington an
oral guarantee of earning between $60,000 and $70,000 per year for driving for Miller’s.
Miller’s asserted it properly paid 25% of the load rate due Arlington and that Arlington
received all the compensation to which he was entitled.
Pursuant to § 39-3-201 et seq., MCA, Arlington filed a wage claim with the
Department on November 3, 2009, seeking $25,568.32 in regular wages and $46,101.81
in overtime wages from Miller’s for work performed during the period of employment.
His claim was dismissed on December 16, 2009, when the Department’s Wage and Hour
Unit determined that Miller’s did not owe Arlington any additional pay. Arlington
appealed to the Department’s Bureau and requested a redetermination of the dismissal
decision. Upon redetermination on March 15, 2010, his claim was again dismissed for
lack of merit and lack of sufficient evidence to support the pay he alleged he was owed.
Arlington appealed the redetermination and dismissal by the Bureau. The Bureau
issued a Scheduling Order in May 2010, allowing formal discovery and requiring it to be
completed, with responses due and depositions taken, on or before June 11, 2010.
Though dated June 10, 2010, Arlington filed a Motion for Production on June 14, 2010,
requesting the production of “[a] copy of all employment contracts for drivers employed
by Miller[’s] Trucking.” Miller’s objected, arguing that Arlington’s request was filed too
late, denying Miller’s adequate time to respond by the date required by the Scheduling
Order. Because Arlington was representing himself, the Bureau accorded him extra
latitude in meeting the deadlines, and issued a Rescheduling Order requiring the parties to
serve written discovery requests by August 13, 2010. On August 13, Arlington requested
the production of additional discovery from Miller’s, including “[a] list and copies of all,
Job Orders for Truck Drivers [it] placed with the Montana Job Service, [and] any Media
advertisement in connection with those Job Orders, from January 1, 2005 to September
30, 2009.” Miller’s objected to this request on September 10, 2010, stating “it [wa]s
wholly irrelevant to the claim at hand, unduly burdensome and overly broad.” Arlington
responded, arguing that the job orders were relevant to his claim and allowable in
discovery, and that Miller’s was in default and violation of the rules of discovery.
On October 10, 2010, Arlington requested that the Bureau issue a subpoena to the
Montana Job Service for all the truck driver job orders from Miller’s, for the period
between January 1, 2005, and August 13, 2010. Arlington did not file a motion for an
order compelling discovery, pursuant to M. R. Civ. P. 37(a) and Admin. R. M.
24.2.105(1) (1978). The Bureau never responded to his subpoena request.
The Hearing Officer held an administrative contested case hearing on November
18, 2010, at which Arlington represented himself and Miller’s appeared by counsel. Both
parties presented evidence and argument, and both Tony and Arlington testified as to the
terms of the oral agreement. The Hearing Officer found Arlington’s testimony was not
corroborated or credible.
The Hearing Officer entered his Findings of Fact, Conclusions of Law, Order and
Notice of Judicial Review Rights (Hearing Officer’s Order) on March 9, 2011, dismissing
Arlington’s claim. The Hearing Officer determined that Arlington worked for Miller’s
under an oral agreement never reduced to writing. The Hearing Officer also found that
there was “no substantial and credible evidence that Miller’s either made any binding
representations about the monthly or annual wage that Arlington could reasonably expect
to earn, or guaranteed any minimum monthly or annual wage that Arlington would earn.”
The Hearing Officer found that Arlington did not prove that Miller’s entered into an
agreement to pay him between $60,000 and $70,000. On a separate question, the Hearing
Officer found that Arlington was not entitled to overtime wages because his employment
was within the overtime exemption of the Motor Carrier Act (Act) by virtue of his
involvement with interstate commerce.
Arlington filed petitions with the District Court on April 6, 2011, seeking judicial
review and leave to present additional evidence. He argued that the Hearing Officer’s
Order should be reversed and that additional evidence should be received into the record
for consideration by the Hearing Officer. He sought to include in the record two job
listings for truck drivers that Miller’s issued and posted through the Montana Job Service,
as he believed they substantiated his wage claim. Although it is unclear when Arlington
actually obtained copies of the job listings from an outside source, the record clearly
shows that the Hearing Officer did not admit the job listings into evidence.
On August 24, 2011, the District Court affirmed the Hearing Officer’s decision,
dismissing Arlington’s claim against Miller’s and denying Arlington’s request to present
STANDARD OF REVIEW
“When [a] district court’s decision is based on review of an agency action, [the
Montana Administrative Procedure Act (MAPA)] governs our review,” and our scope of
review is limited. Citizens Awareness Network v. Mont. Bd. of Envtl. Rev., 2010 MT 10,
¶ 13, 355 Mont. 60, 227 P.3d 583; N. Fork Preservation Assn. v. Dept. of St. Lands, 238
Mont. 451, 465, 778 P.2d 862, 871 (1989). We apply the same standards as the district
court when we review a district court order affirming or reversing an agency decision.
Ostergren v. Dept. of Revenue, 2004 MT 30, ¶ 11, 319 Mont. 405, 85 P.3d 738. “In a
contested case, a district court reviews an administrative decision to determine whether
the findings of fact are clearly erroneous and whether the agency correctly determined the
law,” and we will review the district court decision for the same. Ray v. Mont. Tech of
the U. of Mont., 2007 MT 21, ¶ 24, 335 Mont. 367, 152 P.3d 122; Cenex Pipeline LLC v.
Fly Creek Angus, Inc., 1998 MT 334, ¶ 22, 292 Mont. 300, 971 P.2d 781.
“A finding is clearly erroneous if it is not supported by substantial evidence, if the
court misapprehended the effect of the evidence or if our review of the record convinces
us that the court made a mistake.” Montanans v. State, 2006 MT 277, ¶ 19, 334 Mont.
237, 146 P.3d 759.
We review the record to determine if the agency acted arbitrarily, capriciously, or
unlawfully. N. Fork, 238 Mont. at 458-59, 778 P.2d at 867; Kiely Constr. L.L.C. v. City
of Red Lodge, 2002 MT 241, ¶ 69, 312 Mont. 52, 57 P.3d 836 (citations omitted).
Pursuant to Montana law,
(2) The court may not substitute its judgment for that of the agency
as to the weight of the evidence on questions of fact. The court may affirm
the decision of the agency or remand the case for further proceedings. The
court may reverse or modify the decision if substantial rights of the
appellant have been prejudiced because:
(a) the administrative findings, inferences, conclusions, or decisions
(i) in violation of constitutional or statutory provisions;
(ii) in excess of the statutory authority of the agency;
(iii) made upon unlawful procedure;
(iv) affected by other error of law;
(v) clearly erroneous in view of the reliable, probative, and
substantial evidence on the whole record;
(vi) arbitrary or capricious or characterized by abuse of discretion or
clearly unwarranted exercise of discretion.
Section 2-4-704(2)(a), MCA.
Issue One: Did the District Court act within its discretion when it denied
Arlington’s Petition for Leave to Present Additional Evidence and upheld the
evidentiary rulings made by the Hearing Officer?
As noted above, Arlington asked the District Court to receive additional evidence
into the record, consisting of two job listings issued by Miller’s—one issued in 2007 and
the other in 2008. The court acknowledged that it could order the consideration of
additional evidence, pursuant to § 2-4-703, MCA, which provides:
If, before the date set for hearing, application is made to the court for leave
to present additional evidence and it is shown to the satisfaction of the court
that the additional evidence is material and that there were good reasons for
failure to present it in the proceeding before the agency, the court may
order that the additional evidence be taken before the agency upon
conditions determined by the court. The agency may modify its findings
and decision by reason of the additional evidence and shall file that
evidence and any modifications, new findings, or decisions with the
The District Court found that Arlington did not explain or analyze how the two job
listings substantiated or were material to his wage claim. The court further observed that
Arlington failed to file a motion to compel discovery and did not provide “good reasons
for failing to present the evidence during the proceeding before the agency.” The District
Court also found that the Hearing Officer effectively ruled that the two job listings were
inadmissible, as the job listings were excluded from the exhibits listed with the Hearing
On appeal, Arlington provides us with the two job listings and asks us to consider
them in support of his argument that the District Court erred in refusing to receive this
additional relevant evidence. In response, Miller’s asks that we strike the tendered job
listing exhibits, as they were not a part of the record below. We agree with Miller’s. We
have consistently refused to accept or consider on appeal materials that were not part of
the district court record. Johnson v. Killingsworth, 271 Mont. 1, 2-3, 894 P.2d 272, 273
(1995). We therefore decline to consider the contents of the job listings in resolving this
appeal. However, this does not end our inquiry.
As described above, prior to his contested case hearing, Arlington diligently
sought formal discovery of job orders posted and advertised by Miller’s, in support of his
contention that he had been offered a salary in excess of $60,000. Miller’s objected to his
requests and did not produce them. Arlington then sought to subpoena the orders, but the
Bureau chose to ignore his request. In his findings and conclusions, the Hearing Officer
specifically faulted Arlington for submitting no “corroborative evidence” for his salary
claim, but precluded Arlington from offering the evidence he claims would have
provided such corroboration.
Given that Arlington made concerted efforts within the discovery rules to secure
the documents to support his case, we conclude that refusing him relief because he failed
to file a motion to compel constitutes an overly rigid application of the rules of discovery.
Arlington’s efforts were neither an “abuse [of] the dignity of the courtroom” nor a matter
of prejudice to Miller’s. State v. Colt, 255 Mont. 399, 408, 843 P.2d 747, 752 (1992)
(quoting Faretta v. California, 422 U.S. 806, 834 n. 46, 95 S. Ct. 2525, 2541 (1975)).
We therefore conclude that in failing to require Miller’s to produce the duly requested
material and excluding the tendered job listings for Arlington’s failure to file a motion to
compel, the Hearing Officer acted arbitrarily and capriciously, prejudicing the substantial
rights of Arlington. Section 2-4-704(2)(a)(vi), MCA. We further conclude that the
District Court likewise abused its discretion in affirming the exclusion of evidence and in
refusing to admit the tendered evidence pursuant to its authority under § 2-4-703, MCA.
Based on the foregoing, we reverse and remand this matter to the District Court
for remand to the Department for production and consideration of additional evidence.
As provided in § 2-4-703, MCA, the court may order that the additional evidence be
taken before the agency on conditions determined by the court, following which the
agency may modify its findings and decisions by reason of the additional evidence, and
shall file any further findings or decisions with the reviewing court. We take no position
on the question of whether the additional evidence should change the Bureau’s
We simply conclude that Arlington should have the opportunity to
formally obtain the requested evidence from Miller’s for due consideration in support of
his arguments concerning the wages he submits were offered to him by Miller’s.
Issue Two: Does substantial evidence support the Hearing Officer’s decision,
affirmed by the District Court, that Miller’s Trucking, Inc., did not have an oral
employment agreement with Arlington to pay him between $60,000 and $70,000
Given that we are reversing and remanding under Issue One with directions to
allow Arlington to secure the formal production of the job listings in support of his wage
claim, we decline at this juncture to determine whether substantial evidence supports the
Hearing Officer’s decision, as affirmed by the District Court, that Miller’s did not have
an oral agreement to pay Arlington between $60,000 and $70,000 per year.
Issue Three: Did the Hearing Officer and the District Court correctly determine
that Arlington engaged in activities of a character directly affecting the safety of
the operation of motor vehicles in interstate commerce and is thus exempt from
Arlington argues on appeal that the Hearing Officer and the District Court erred
when determining that Arlington engaged in activities affecting interstate commerce.
The Hearing Officer found that Arlington’s employment—transporting property by motor
vehicles subject to the jurisdiction of the DOT Secretary (Secretary)—was of a character
directly affecting the safety of operation of motor vehicles transporting passengers or
property in interstate commerce. Because of this, and because Arlington was operating
and maintaining one or more of Miller’s trucks on public roads in Montana, the Hearing
Officer determined Arlington engaged in the interstate transportation of goods, and was
therefore within the overtime exemption of the Act and not entitled to overtime wages.
Both federal and Montana law require employers to pay employees overtime
wages, unless an exemption applies. Under the federal Fair Labor Standards Act (FLSA)
and Montana law, an employer is required to pay overtime of at least one and one-half
times of an employee’s regular rate of pay for hours worked in excess of forty hours per
week. 29 U.S.C. § 207(a)(1) (2006); Major v. Chons Bros., Inc., 53 P.3d 781, 784 (Colo.
2002); § 39-3-405, MCA. If an employer does not comply with this provision, an
employee may maintain an action against the employer to recover unpaid minimum
wages, unpaid overtime compensation, and possibly liquidated damages.
§ 216(b) (2006); Major, 53 P.3d at 784; see §§ 39-3-407 and -207, MCA.
However, numerous exemptions exist under which employees are not eligible for
overtime pay. Thompson v. K.R. Denth Trucking, Inc., 2011 U.S. Dist. LEXIS 13941 at
*8 (S.D. Ind. Feb. 11, 2011). One of the exemptions included in the FLSA is the Motor
Carrier Act exemption (Exemption), which “specifically exempts from overtime pay any
employee over ‘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.”
Thompson, 2001 U.S. Dist. LEXIS at *8 (quoting 29 U.S.C.
§ 213(b)(1) (2006)); see § 39-3-406(2)(a), MCA.
To the extent that property is
transported by a motor carrier between a place in one State and a place in another State,
the Secretary has jurisdiction over the transportation and the procurement of that
transportation, and the Secretary may prescribe requirements for “qualifications and
maximum hours of service of employees of, and safety of operation and equipment of, a
motor carrier.” 49 U.S.C. §§ 13501(1)(A), 31502(b)(1) (2006).
The Exemption applies to employees who:
(1) Are 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 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 Motor
29 C.F.R. § 782.2(a) (2012) (citations omitted). Put more plainly, the Exemption applies
to an employee who is: “(1) employed with a carrier subject to the power of the
Secretary of Transportation; (2) engaged in activities directly affecting the operational
safety of motor vehicles; and (3) engaged in interstate commerce.” Thompson, 2011 U.S.
Dist. LEXIS at *9 (emphasis omitted).
When evaluating the application of the Exemption, “FLSA exemptions ‘are to be
narrowly construed against the employers seeking to assert them and their application
limited to those establishments plainly and unmistakably within their terms and spirit.’ ”
Thompson, 2011 U.S. Dist. LEXIS at *9 (quoting Arnold v. Ben Kanowsky, Inc., 361 U.S.
388, 392, 80 S. Ct. 453, 456 (1960)); A.H. Phillips, Inc. v. Walling, 324 U.S. 490, 493, 65
S. Ct. 807, 809 (1945). The party asserting an exemption, usually the employer, bears the
burden of showing the applicability of the exemption, and that the employer is “clearly
and unmistakably within the spirit and the letter of [the exemption’s] terms.” Major, 53
P.3d at 784 (quoting Pugh v. Lindsay, 206 F.2d 43, 46 (4th Cir. 1953)). The applicability
of the Exemption depends on the class to which the employer belongs and the class of
and characteristics of the employee’s work; it is not dependent upon the nature of the
employer’s activities. 29 C.F.R. § 782.2(a); Major, 53 P.3d at 784 (citing Dole v. Solid
Waste Servs., Inc., 733 F. Supp. 895, 929 (E.D. Pa. 1989), aff’d, 897 F.2d 521 (3d Cir.
1990); Benson v. Universal Ambulance Serv., Inc., 675 F.2d 783, 786 (6th Cir. 1982)).
Arlington disputes the satisfaction of requirements (1) and (3) of the Exemption as
set forth in ¶ 33, and therefore contends that the Exemption does not apply. As to
requirement (1), Arlington argues that all his shipments were intrastate and therefore
outside of the jurisdiction of the Secretary. Specifically, Arlington contends that he was
not subject to the jurisdiction of the Secretary and was therefore not exempt from the
overtime requirements. While both Arlington and Miller’s qualified as “motor carriers”
under 49 U.S.C. § 13102(14) (2006 & Supp. IV 2010), which defined a “motor carrier”
as “a person providing motor vehicle transportation for compensation,”1 the test to satisfy
requirement (1) is not if Arlington was subject to the jurisdiction of the Secretary, but
rather if his employer, Miller’s, was subject to the Secretary’s jurisdiction. 29 C.F.R.
It is uncontested that Miller’s was subject to the power of the Secretary. Miller’s
had the authority to engage in transportation as a contract carrier of property by motor
vehicle in interstate or foreign commerce, as permitted by the DOT Federal Motor Carrier
Safety Administration. Miller’s was authorized to operate under the DOT Identification
Number 762355 and Permit Number MC 392559 P. It operated in interstate commerce in
Montana, Idaho, Wyoming, and Washington, and had trucks licensed for transportation in
each of those four states. Where a corporation “holds itself out to the general public to
engage in the transportation by motor vehicle in interstate or foreign commerce of
passengers or property,” then it is a motor carrier that is regulated by the Secretary.
Brennan v. Schwerman Trucking Co., 540 F.2d 1200, 1204 (4th Cir. 1976). Miller’s held
itself out to the public as available for interstate cartage, and as such, was within the
definition of a common carrier by motor vehicle and subject to regulation by the
“Person” within this definition includes corporations and companies. 1 U.S.C. § 1 (2006).
Secretary. The Hearing Officer found that Miller’s was regulated by the Secretary. As
these facts are uncontested, the first requirement of the Exemption is met.
As for the second and third requirements of the Exemption, we look to the nature
of Arlington’s work to determine if they are satisfied. Arlington does not contest the
Hearing Officer’s finding that he engaged in activities directly affecting the operational
safety of motor vehicles. Arlington operated and maintained one or more of Miller’s
trucks, performing routine maintenance and safety checks on them.
requirement of the Exemption is thereby satisfied. Because Arlington did not dispute this
finding, we need not further address it.
Arlington vigorously argues that the third requirement of the Exemption does not
apply to him. He argues that Miller’s did not have the requisite intent to continue the
transportation of the logs beyond state lines, the loads of logs he hauled constituted
intrastate commerce rather than interstate commerce, and the loads of logs he hauled
were regulated by the Montana Department of Transportation rather than by federal
“Clearly, the touchstone of the interstate commerce requirement is the nature of
the employee’s work, not the actual percentage of time spent traveling interstate.”
Thompson, 2011 U.S. Dist. LEXIS at *12. For the Exemption to apply to “a driver who
has not driven in interstate commerce, evidence must be presented that the carrier has
engaged in interstate commerce and that the driver could reasonably have been expected
to make one of the carrier’s interstate runs.” Thompson, 2011 U.S. Dist. LEXIS at *12
(citation omitted). Moreover, “[w]here the employee’s continuing job duties have no
substantial direct effect on the safety of operation of motor vehicles in interstate
commerce, or where such activities are so trivial, casual, and insignificant as to be de
minimis, the exemption does not apply.” Major, 53 P.3d at 784 (citing Opelika Royal
Crown Bottling Co. v. Goldberg, 299 F.2d 37, 43 (5th Cir. 1962)) (emphasis added); 29
C.F.R. § 782.2(b)(3). In Major, the plaintiff’s interstate commerce activity as a tow truck
driver involved nine out-of-state tows during three years of work. The court found that
the plaintiff’s job activities were “overwhelmingly” conducted intrastate, and that the
nine out-of-state tows, which constituted interstate commerce activity, merely rose to the
level of being de minimis interstate commerce activity, therefore precluding the
application of the Exemption. Major, 53 P.3d at 784.
The facts before the Hearing Officer and the District Court established that
Arlington never drove a log load outside the State of Montana nor did Miller’s expect
him to do so. Though Tony testified at the hearing that it would have been reasonable to
ask Arlington to transport a load of logs out of Montana, Miller’s never made such a
In fact, Miller’s even noted that Arlington was not to deal in interstate
commerce in its response to Arlington’s wage claim. Miller’s was presented with the
following question with respect to Arlington’s wage claim:
DID THE CLAIMANT DEAL IN INTERSTATE COMMERCE? (SUCH
AS INDIVIDUALS INVOLVED IN INTERSTATE TRUCKING, CREDIT CARDS [sic]
TRANSACTIONS, MAIL AND/OR TELEPHONE TRANSACTIONS WITH OTHER
Miller’s marked “NO” as the answer.
Though Miller’s was engaged in interstate
commerce, the evidence establishes that Arlington, as a driver for Miller’s, was not
reasonably expected to make even one interstate drive for Miller’s.
Moreover, it does not appear that Miller’s intended to transport Arlington’s
intrastate log loads in interstate commerce.
To constitute interstate commerce, the
shipper must have a “fixed and persisting intent” to transport the goods beyond the
terminal storage point at the time of shipment. 29 C.F.R. § 782.7(b)(2) (2012). The
intent is not fixed and persisting where:
(i) At the time of shipment there is no specific order being filled for a
specific quantity of a given product to be moved through to a specific
destination beyond the terminal storage, and (ii) the terminal storage is a
distribution point or local marketing facility from which specific amounts
of the product are sold or allocated, and (iii) transportation in the
furtherance of this distribution within the single State is specifically
arranged only after sale or allocation from storage.
29 C.F.R. § 782.7(b)(2).
The record reflects that Miller’s, as the original shipper, controlled the logs from
the point where they were cut and Arlington collected them, to the point of delivery,
typically at a railroad yard in Laurel, Montana. According to Tony’s hearing testimony,
Miller’s was paid for the logs when they crossed a certified scale in Laurel, at which
point Miller’s had no further ownership interest in the logs.
The logs were then
transported by rail to Smurfit-Stone’s log yard in Frenchtown, Montana, after which
Smurfit-Stone made all subsequent transportation decisions and arrangements involving
the logs, including a determination of the final destinations of the log byproducts and
whether those destinations were inside or outside of Montana.
While a considerable amount of the log byproducts was eventually transported in
interstate commerce, it does not appear that Miller’s had a fixed intent at the time of
shipment, within the meaning of the regulation, to deliver the logs to any destination but
one in Montana. Arlington transported the logs only within Montana to one or two log
yards, and at the time of transport, Miller’s issued no specific orders to transport the logs
or log byproducts outside of Montana. Therefore, the interstate movement did not begin
during Arlington’s intrastate transports as movements of the log byproducts to points
outside of Montana had not yet begun. Thus, the transportation within Montana did not
form “a ‘practical continuity of movement’ across State lines from the point of origin to
the point of destination.” 29 C.F.R. § 782.7(b)(1) (citations omitted).
As in Solis v. R.M. Intl., Inc., 2012 U.S. Dist. LEXIS 35888 at **13-14 (D. Or.
Mar. 16, 2012), where the defendants did not meet their burden to prove that the
Exemption “plainly and unmistakably” applied to their drivers who only drove intrastate
routes, we find that Miller’s similarly did not carry its burden of proving that the
Exemption plainly and unmistakably applied to Arlington.
We conclude that the Exemption is not applicable to Arlington. The contrary
findings by the Hearing Officer and the District Court were not supported by substantial
evidence and, as a matter of law, they inadequately applied and addressed the
components of the test for determining what transport is considered interstate commerce.
Based on the foregoing, we reverse the determination that Arlington engaged in
the interstate transportation of goods and that his work was within the overtime
exemption of the Act. We therefore remand to the District Court for remand to the
Department for production and consideration of additional evidence, a determination of
whether this evidence bears on Arlington’s claim that there was an oral employment
agreement for wages of over $60,000 per year, and a determination of the amount of
overtime pay owing from Miller’s to Arlington.
Reversed and remanded.
/S/ PATRICIA COTTER
/S/ MIKE McGRATH
/S/ BRIAN MORRIS
/S/ BETH BAKER
/S/ JAMES C. NELSON