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Finn v. Dean Transp., Inc.

United States District Court, M.D. Tennessee, Nashville Division

October 7, 2014

JAMES FINN, Plaintiff,

For James Finn, Plaintiff: Anne C. Martin, LEAD ATTORNEY, Bone, McAllester & Norton, PLLC, Nashville, TN; Jonathan Lewis Williams, LEAD ATTORNEY, Larry R. Williams, PLLC, Nashville, TN.

For Dean Transportation, Inc., Defendant: Chris R. Pace, LEAD ATTORNEY, Ogletree, Deakins, Nash, Smoak & Stewart, P.C. (MO Office), Kansas City, MO; Jonathan O. Harris, LEAD ATTORNEY, Ogletree, Deakins, Nash, Smoak & Stewart, P.C. (Nashville), Nashville, TN.

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ALETA A. TRAUGER, United States District Judge.

Pending before the court are cross-motions for summary judgment. Defendant Dean Transportation, Inc. (" DTI" ) has filed a Motion for Summary Judgment (Docket No. 32), to which the plaintiff, James Finn, has filed a Response in opposition (Docket No. 34), and DTI filed a Reply (Docket No. 39).[1] Finn has also filed a Motion for Partial Summary Judgment (Docket No. 25), to which DTI has filed a Response in opposition (Docket No. 36). For the reasons stated herein, DTI's

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motion will be granted, Finn's motion will be denied, and this case will be dismissed.


I. Overview

During the time frame relevant to this case, Finn was employed by DTI and performed work related to the distribution of Purity-brand dairy products and other liquid food products in the Nashville area. During this time, DTI classified Finn as a supervisor, but Finn assumed increasing responsibility to cover for his subordinates by driving their delivery routes.

In his Complaint, Finn contends that DTI violated the Fair Labor Standards Act (" FLSA" ), 29 U.S.C. § 201 et seq., by failing to pay him overtime and forcing him to work off the clock for time he spent driving these delivery routes. To prove that DTI violated the FLSA, Finn must prove that (1) DTI improperly classified him as an exempt administrative or executive employee under the FLSA, and (2) Finn's delivery work was not subject to the so-called " Motor Carrier Act" exemption (" the MCA exemption" ) to the FLSA. As explained herein, the undisputed facts establish that the MCA exemption applied to Finn's delivery work.

II. Facts[2]

Because the undisputed facts establish that the MCA exemption applies as a matter of law, the court will limit its summary to the facts most relevant to that issue.

A. The Purity and Dean Entities

Purity Dairies (" Purity" ) is a Nashville-based dairy that sells milk, ice cream, and a variety of other perishable, liquid food items, including orange juice and tea. Purity was founded by Miles Ezell in 1926. The Ezell family owned Purity until 1998, when it sold Purity to an entity affiliated with the Dean family.

As it stands today, Purity Dairies is a division of Dean Holding Company, which is a subsidiary of the Dean Foods Company (which is headquartered in Texas). Dean Foods Company, through its Purity Dairies division, still produces a line of dairy goods branded as " Purity," which are manufactured and packaged exclusively in Nashville. Purity distributes its own products at warehousing and distribution centers in Tennessee, Alabama, and Kentucky. Purity also manufactures products that are sold under its customers' labels and branded as such. Furthermore, Purity distributes a limited amount of branded products from other manufacturers. With respect to Nashville-area sales, Purity once made home delivery sales, but now its business is limited to wholesale delivery for resale, or limited cash and carry sales from a back dock to Nashville individuals or businesses who do not qualify for a route. As described herein, approximately 10% of the goods Purity sells in the Nashville area are produced outside of Tennessee by entities other than Purity, at least half of which are shipped to its Nashville facility on company-owned trucks.

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Dean Dairy Holdings, LLC (d/b/a " Purity Dairies LLC" ) (" DDHC" ) owns and operates a dairy facility in Nashville, Tennessee, at which Purity products are refrigerated until they can be delivered to customers. This refrigerated facility is known as " the Cooler." [3]

Purity's Nashville operations are divided between the " ice cream" operation, which sells and distributes frozen ice cream and similar dairy products, and the " milk" operation, which distributes liquid milk and other liquid dairy products to retail customers (such as grocery stores and convenience stores), schools, and restaurants in the Nashville area. All sales from Purity's Nashville branch (and the associated deliveries from the Cooler) take place within Tennessee.

DTI (DDHC's wholly owned subsidiary) owns a fleet of refrigerated trucks, which are commercial motor vehicles (" CMV" ) that weigh in excess of 10,001 pounds. DTI uses these trucks to deliver dairy products from the Cooler to DTI's customers.[4] Before delivering Purity products to these customers, DTI enters into agreements to supply the customers' needs for Purity products.[5] All of DTI's Nashville

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delivery routes start and finish at the Nashville facility, are less than 100 miles in radius from the Nashville facility, and are driven within the State of Tennessee.

All of the products that DTI delivers to its customers are perishable, although the expiration dates vary by product and product size. Purity milk, which is manufactured within Tennessee, expires within 18 days. Out-of-state products sold by Purity within Tennessee include Milo's tea (three to four weeks), orange juice (one month), fruit drinks (four to six weeks), butter (six to twelve months), water (minimum of one year). Purity markets itself as a company that provides fresh products. ( See Docket No. 27, Ex. 6, Martin Dep. at 158:1-12 (repeating twice that " freshness is our number one selling point" ).) In support of this " selling point," DTI's general practice is to buy back from its customers any product that it sold to the customer that remains on the shelf ( i.e., unsold) as of four days before each product's expiration date. As one deponent explained, " [w]e don't want anybody getting a bad product." (Martin Dep. at 158:8.) Product that is bought back for this reason, known as " returned" product, is destroyed. Because DTI takes a loss on all returned products, it attempts to minimize its returns. At the time Finn worked for DTI, DTI planned its distributions to minimize the amount of returned product to no more than 1.25% of sales. Also, less than 1.25% of products in the Cooler go out of date before they can be delivered to a customer. Incidentally, it appears that Dean later upped its maximum target threshold for returned product to 1.5% of sales.

DTI sells products manufactured both within, and outside of, Tennessee. It appears that DTI sells a total of 261 different products, 134 of which are branded " Purity." With respect to the 134 Purity-branded products that DTI distributes, 13 are manufactured outside of Tennessee, including Purity half-and-half, custard, and buttermilk, which are manufactured in Alabama or Kentucky. The balance of Purity products that DTI purchases and distributes, including Purity milk, are manufactured within Tennessee. As to products manufactured by entities outside of the " Dean" corporate family, DTI purchases and distributes some goods manufactured within Tennessee (products branded Market Pantry, Mayfield, Horizon Organic, Yoplait, and Over the Moon) and some goods manufactured outside of Tennessee (Tropicana orange juice, Envy fruit drinks, and Milo's tea). Of the 261 products that are sold and distributed by the Purity operation, 32 are manufactured outside of Tennessee.

Of the fluid products that DTI delivered to its customers in the Nashville area, the following percentages of product were manufactured outside Tennessee:

2010 (relevant portion of year): 10.17%
2011: 10.64%
2012: 11.52%
2013 (first eight months of year): 9.17%

In other words, during the relevant time frame, Purity's sales of goods that were manufactured out of state (whether manufactured by Purity or by a third party) accounted for, on average, approximately 10% of Purity's sales volume for the Nashville branch. ( See Docket No. 27, Ex. 7, Attachment B.) In other words, on average, approximately 10% of the products that DTI drivers ...

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