Mazzarella v. Fast Rig Support, LLC

Citations: 115 F. Supp. 3d 500; 2015 WL 3972723; 2015 U.S. Dist. LEXIS 84275Docket: Civil Action No. 3:13-2844

Court: District Court, M.D. Pennsylvania; June 30, 2015; Federal District Court

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Plaintiff Alphonse Mazzarella, a truck driver for defendants FAST Rig Support, LLC and First Americans Shipping and Trucking, Inc., alleges violations of the Fair Labor Standards Act (FLSA) and the Pennsylvania Minimum Wage Act (PMWA). He and his coworkers transport water from Pennsylvania sources to natural gas drilling sites within the state, working over 40 hours a week but only receiving overtime pay after 45 hours, contrary to FLSA requirements. Mazzarella filed suit on November 21, 2013, seeking overtime for hours worked beyond 40 per week. His claims are collective under the FLSA and class-based under the PMWA, with a motion for conditional class certification that was later withdrawn in favor of a stipulation allowing all drivers employed since May 1, 2011, to join the collective action.

The court denied the defendants' motion to dismiss on June 23, 2014, and a trial is set for August 3, 2015. During a pre-trial conference, two key issues were identified for briefing: whether the water transported is "property" under the Secretary of Transportation's jurisdiction and if its intrastate transport significantly impacts interstate commerce. The court has jurisdiction under 28 U.S.C. § 1331 and supplemental jurisdiction over state law claims under 28 U.S.C. § 1367. For the defendants to cite the Motor Carrier Act (MCA) exemption to avoid liability for overtime, they must meet a substantial burden of proof regarding these two issues.

Water transported by the plaintiff drivers is deemed 'property' under the Motor Carrier Act (MCA). However, the court found insufficient evidence to classify the intrastate transport of this water as a practical continuity of movement in interstate commerce, preventing the defendants from claiming an MCA exemption. As a result, the plaintiffs are entitled to seek overtime compensation under the Fair Labor Standards Act (FLSA) and the Pennsylvania Minimum Wage Act (PMWA).

The FLSA, enacted in 1938, aims to protect workers from substandard wages and excessive hours. It states that employees engaged in commerce or in the production of goods for commerce cannot work more than 40 hours in a week without receiving overtime pay at a rate of at least one and one-half times their regular pay. Employers found in violation of the FLSA are liable for unpaid wages or overtime, plus an equal amount in liquidated damages.

Employees and their representatives can initiate actions for unpaid compensation under the FLSA, allowing for collective actions on behalf of similarly situated employees. A plaintiff must have a valid individual claim to pursue a collective action. Employers who fall under FLSA exemptions bear the burden of proof to establish such exemptions, which are interpreted narrowly against the employer.

The PMWA similarly mandates overtime pay for hours exceeding 40 per week at a rate of not less than one and one-half times the regular wage. Exemptions from FLSA provisions depend on the employee's classification and the nature of their work. The MCA includes an exemption regarding maximum hours and overtime provisions, specifically for employees subject to the Secretary of Transportation's authority related to qualifications and service hours.

The grant of authority pertaining to transportation under 49 U.S.C. § 13501 establishes the Secretary of Transportation's jurisdiction over motor carrier operations involving the transport of passengers or property across state lines on public highways. The Motor Carrier Act (MCA) exemption applies based on the Secretary's regulatory power, not its actual exercise. The Pennsylvania Minimum Wage Act (PMWA) contains a similar motor carrier exemption to that of the Fair Labor Standards Act (FLSA). Defendants must demonstrate that they are carriers under the Department of Transportation (DOT) jurisdiction and that their employees engage in safety-affecting activities related to interstate commerce transportation. The interplay between the FLSA and the MCA exempts certain employees from FLSA overtime requirements if their activities impact vehicle operation safety during interstate transport.

Defendants bear the burden of proving that the fracking water they haul qualifies as "property" and that its transportation includes interstate travel. The definition of "property" under the MCA remains unclear, and no court has ruled specifically on whether fracking water constitutes property. Defendants reference a 2004 DOT Certificate for First Americans, indicating authority to transport property in interstate commerce, but the plaintiff contests the absence of evidence showing water hauling to fracking sites at that time. Additionally, no DOT certificate for the co-defendant FAST is presented. Defendants claim the water, essential for fracking and owned by gas companies, should be considered property, while the plaintiff argues it does not qualify, thus negating the Motor Carrier Exception.

The plaintiff argues that fracking water should be treated similarly to non-recyclable debris, which has been ruled not to constitute property under the Motor Carrier Act (MCA) in a previous case involving a trash hauling company and a driver's overtime claim. The court in Alice v. GCS, Inc. found that materials without value, such as trash, do not qualify as property under the MCA. However, the current court distinguishes fracking water, asserting that it possesses economic value since gas-drilling companies pay for its transport and disposal. Citing Veney v. John W. Clarke, Inc., the court states that even temporary possession of recyclables constitutes property transportation. The definition of property from Black's Law Dictionary is referenced, emphasizing that fracking water is owned by the gas-drilling companies, who exercise rights over its use and transfer. Unlike garbage, the water retains value as it is essential for fracking and is not typically contaminated when initially transported.

Regarding the transportation of fracking water, defendants contend that this activity impacts interstate commerce. For the MCA's motor carrier exemption from the Fair Labor Standards Act (FLSA) to apply, it must be shown that the plaintiffs' work involved significant interstate travel or that such travel was integral to their roles. The Department of Transportation (DOT) has jurisdiction over drivers, even if they do not personally engage in interstate commerce, if company policies suggest they might. Ultimately, the court concludes that fracking water qualifies as property under the MCA and supports the defendants' assertion of the exemption based on the nature of the plaintiffs' activities.

The court must evaluate whether the plaintiffs could reasonably be expected to transport water interstate by examining the employer's interstate activities, driver assignments, and company policies. The defendants argue they contract with gas-drilling companies to transport both fresh and contaminated water within Pennsylvania and occasionally from New York to Ohio. However, these claims lack supporting evidence. The mere fact that part of a journey crosses state lines does not automatically categorize every segment as interstate commerce under the Motor Carrier Act (MCA). The classification of transport as interstate or intrastate hinges on the "essential character of the movement," with the Third Circuit emphasizing that cases qualifying for MCA exemptions typically involve identifiable patterns of distribution and essential continuity of movement. Transportation may be deemed interstate even without crossing state lines, provided the cargo is part of an interstate journey. Furthermore, purely intrastate transport can be part of interstate commerce if it contributes to a continuous flow of interstate travel. The court must determine if there is a "practical continuity of movement" between intrastate segments and the overall interstate journey, particularly considering whether the plaintiff drivers' activities relate to the eventual interstate transport of the water. The defense argues that the situation parallels a previous case where a passenger's ticket allowed for both intrastate and interstate travel, which the court deemed indicative of interstate travel. They assert that, like the passengers, the water they transport does not remain in Pennsylvania but is part of a continuous movement toward Ohio for disposal.

Defendants assert that plaintiff drivers qualify for the Motor Carrier Act (MCA) exemption, claiming they are engaged in interstate commerce and thus not entitled to overtime under the Fair Labor Standards Act (FLSA). However, the process of hydraulic fracturing interrupts the interstate movement of fresh water as it becomes contaminated and is transformed into wastewater prior to being transported to Ohio for disposal. The fracking process involves injecting a mixture of water, sand, and chemicals at high pressure into the earth to extract natural gas, which results in the surface return of contaminated wastewater. This wastewater must either be treated or disposed of using underground injection wells.

The court must determine if the mixing of fresh water with chemicals, which subsequently becomes wastewater, disrupts the continuity of transit from Pennsylvania to Ohio. The cited case, Tomlin, indicates that continuity of interstate movement is assessed practically; as long as goods are en route to their final destination, they remain in interstate commerce. The intended final destination at the start of transportation defines the nature of the shipment throughout its journey within the U.S.

Further analysis from a Third Circuit District Court in Barrios identified factors indicating interstate intent for the MCA exemption, noting that processing or significant modifications at a warehouse could disrupt the continuity of interstate movement. In Barrios, evidence showed that materials were extracted and burned before being shipped out of state, leading the court to conclude that there was no practical continuity of interstate commerce.

In this case, the court similarly concludes that the transportation of water for fracking does not constitute a continuous stream of interstate commerce, as the process introduces interruptions that affect the interstate nature of the shipment.

Defendants’ trucking activities involve two distinct commercial transactions: delivering untainted water to drilling rigs and transporting tainted water to a disposal site in Ohio. The final destination for the plaintiff drivers is the gas-drilling rigs in Pennsylvania. Despite the eventual transport of water to Ohio, there is inadequate evidence of interstate intent to establish practical continuity of movement. The fresh water delivered by plaintiffs is chemically altered during fracking and cannot be returned to its original source in Pennsylvania, indicating a break in continuity. Consequently, the transportation of clean water by plaintiffs and the subsequent interstate movement of modified water do not demonstrate a practical connection. Therefore, the plaintiff drivers are not engaged in interstate commerce under the Motor Carrier Act (MCA) exemption, allowing their claims for overtime under the Fair Labor Standards Act (FLSA) and the Pennsylvania Minimum Wage Act (PMWA) to proceed to trial. An appropriate order will be issued for the claims to move forward. All relevant facts are derived from the plaintiffs' complaint unless stated otherwise.