Herman v. Héctor I. Nieves Transport, Inc.

United States Court of Appeals
For the First Circuit

No. 00-1594

ALEXIS M. HERMAN, SECRETARY OF LABOR,
UNITED STATES DEPARTMENT OF LABOR,

Plaintiff, Appellee,

v.

HÉCTOR I. NIEVES TRANSPORT, INC., ET AL.,

Defendants, Appellants.

APPEAL FROM THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF PUERTO RICO

[Hon. José Antonio Fusté, U.S. District Judge]

Before

Torruella, Chief Judge,

Stahl and Lipez, Circuit Judges.

Michael J. Rovell, with whom Jewel N. Klein, Law Offices of
Michael J. Rovell Chtd and Charles A. Cuprill-Hernández Law Offices,
were on brief, for appellants.
Anne Payne Fugett, Attorney, with whom Henry L. Solano, Solicitor
of Labor, Steven J. Mandel, Associate Solicitor, Patricia M.
Rodenhausen, Regional Solicitor New York, and Paul L. Frieden, Counsel
for Appellate Litigation, were on brief, for appellee.
March 26, 2001

-2-
 TORRUELLA, Chief Judge. This appeal addresses a question of

first impression: specifically, whether the "motor carrier exemption"

to the overtime provisions of the Fair Labor Standards Act ("FLSA"), 29

U.S.C. § 213(b)(1), includes a trucking company whose routes are

entirely within the boundaries of Puerto Rico.1 The district court

concluded that the trucking company, Héctor I. Nieves Transportation,

Inc. ("Nieves"), was not protected by the motor carrier exemption.

Herman v. Héctor I. Nieves Transp., Inc., Civ. No. 96-2479 (D.P.R.,

Jan. 15, 1999) (granting partial summary judgment as to that issue).

Because we find that a plain reading of the statutory language places

truck routes occurring entirely within the boundaries of Puerto Rico

outside the exemption, we affirm the holding of the district court.

I

The facts in this case are undisputed and presented at length

in the district court opinion that found Nieves in violation of the

FLSA. Herman v. Héctor I. Nieves Transp., Inc., 91 F. Supp. 2d 435,

437-44 (D.P.R. 2000). Defendant Nieves is a Puerto Rico trucking

corporation.2 Truck driver employees of Nieves regularly deliver

materials from one location on the island to another location, also on

1 There is only one reported case in which the overtime provisions of
the FLSA have been enforced against a trucking company in Puerto Rico.
The motor carrier exemption apparently was not raised in that case.
McComb v. La Casa del Transporte, Inc., 187 F.2d 209 (1st Cir. 1948).
2 Co-defendants Héctor I. Nieves Rivera and his wife Luz M. Rosendo de
Nieves own and operate Nieves.

-3-
the island. Approximately 98% of these deliveries either begin or end

at the San Juan Harbor docks, where the trucks either pick up materials

from, or deliver materials to, ships waiting at the harbor. Id. at

438-40. Defendants pay their employees a fixed amount for each trip,

which is calculated without regard to the duration of the trip. Id. at

440. The district court found that these payments did not comply with

the overtime requirements of the FLSA. Id. at 441-42.

II

We begin with the statutory scheme at issue. Although Nieves

concedes that the overtime provisions of the FLSA, 29 U.S.C. § 207, are

applicable to employers located in Puerto Rico, see, e.g., Sucrs. de A.

Mayol & Col. v. Mitchell, 280 F.2d 477, 479 (1st Cir. 1960), Nieves

argues that it comes under the motor carrier exemption to the maximum

hour requirements, 29 U.S.C. § 213(b)(1).

Section 213(b)(1) provides that the overtime provisions of

the FLSA "shall not apply to any employee with respect to whom the

Secretary of Transportation [(the "Secretary")] has power to establish

qualifications and maximum hours of service pursuant to the provisions

of [49 U.S.C. § 31502]." Section 31502 gives the Secretary the power

to establish maximum hours of service for employees of motor carriers

engaged in "transportation described in sections 13501 and 13502 of

-4-
this title." Id. § 31502(a)(1).3 We then must look to 49 U.S.C. §

13501, which provides the limitation relevant here.4 The applicable

subsection is § 13501(1)(C),5 which reads:

The Secretary and the 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—

3 The relevant parts of § 31502 are subsections (a)(1) and (b)(1).

Section 31502(a)(1) reads:

(a) Application. This section applies to transportation—

(1) described in sections 13501 and 13502 of this
title.

Section 31502(b)(1) reads:

(b) Motor carrier and private motor carrier requirements.
The Secretary of Transportation may prescribe requirements
for—

(1) qualifications and maximum hours of service of
employees of, and safety of operation and equipment of,
a motor carrier.
4 49 U.S.C. § 13502 provides for an exemption "to the extent that
transportation [is] between a place in Alaska and a place in another
state." Neither side suggests that § 13502 is at issue in this case.
5 Section 13501(1)(A) addresses transportation between two States;
§ 13501(1)(B) transportation in one State "through" another State;
§ 13501(1)(D) transportation from one point in the United States to
another "through a foreign country"; and § 13501(1)(E) transportation
between a foreign country and the United States. Neither side suggests
that one of these alternative statutory provisions applies here.

-5-
 . . .

(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.

For the purposes of this statute, a "State" is defined as

"the 50 states of the United States and the District of Columbia," id.

§ 13102(18), and the "United States" is defined as "the States of the

United States and the District of Columbia," id. § 13102(20).

Our approach to statutory interpretation is circumscribed.

We first determine whether the statutory language is unambiguous.

United States v. Commonwealth Energy Sys. & Subsidiary Cos., 235 F.3d

11, 15 (1st Cir. 2000) (citing United States v. Ron Pair Enters., Inc.,

489 U.S. 235, 241 (1989)). In the absence of ambiguity, we generally

do not look beyond the plain meaning of the statutory language. Id.;

Campbell v. Washington County Technical Coll., 219 F.3d 3, 6 (1st Cir.

2000).

Both parties agree that, at least for the purposes of

§ 13501, Puerto Rico is a "territory or possession" of the United

States rather than a State. See Trailer Marine Transp. v. Federal Mar.

Comm'n, 602 F.2d 379, 385 & n.26 (D.C. Cir. 1979). Both parties also

agree that § 13501(1)(C) is the appropriate statute from which to

determine the jurisdictional boundaries of the Department of

Transportation for purposes of this case: if § 13501(1)(C) gives the

-6-
Secretary jurisdiction over Nieves, the motor carrier exemption

applies; if not, Nieves is subject to the overtime provisions of the

FLSA.

Nieves argues that its trucking routes are part and parcel

of the transportation of property from a place in the continental

United States, through San Juan Harbor, to places in Puerto Rico. As

drop-off and pick-up points in Puerto Rico are "place[s] in a territory

or possession of the United States," Nieves suggests that § 13501(1)(C)

applies and that the Secretary has jurisdiction over its trucking

routes based on the statutory language.

Nieves's interpretation conflicts with the plain meaning of

the statute. Section 13501(1)(C) only gives the Secretary jurisdiction

"to the extent the transportation is in the United States" (emphasis

added). The definition of the "United States," for purposes of

§ 13501(1)(C), excludes Puerto Rico. 49 U.S.C. § 13102(20). A plain

reading of the statute, therefore, would place intra-island

transportation beyond the scope of the Secretary's jurisdiction because

such transportation is not "in the United States" for purposes of the

statute. Transportation undertaken by Nieves would thus fall outside

the Secretary's jurisdiction. To the extent that some portion of a

motor carrier's activities fall within the Secretary's jurisdiction,

the exemption applies broadly to covered employees. Morris v. McComb,

332 U.S. 422, 434-36 (1947). However, if all of the transportation

-7-
undertaken by Nieves falls outside of the Secretary's jurisdiction, the

company is ineligible for the motor carrier exemption. In short, under

the plain meaning of the statutory language, Nieves is subject to the

FLSA.

"If the plain language of the statute points unerringly in

a single direction, an inquiring court ordinarily should look no

further," United States v. Hilario, 218 F.3d 19, 23 (1st Cir. 2000).

However, before disposing of the subject, we must address several

arguments to the effect that ambiguity exists despite the apparent

clarity of the statutory definition.

First, Nieves points to 48 U.S.C. § 751, which exempts Puerto

Rico from Subtitle IV of Title 49. Subtitle IV includes

§ 13501(1)(C), as well as the relevant definitions of "State" and

"United States" contained in § 13102. Nieves argues that 48 U.S.C.

§ 751 makes § 13501(1)(C) and its incorporated definitions

"inapplicable" in Puerto Rico. At the same time, Nieves would have the

motor carrier exemption apply to companies in Puerto Rico because that

exemption falls in Subtitle VI. However, this admittedly complicated

statutory structure does not create any ambiguity in the plain meaning

of § 13501(1)(C). The fact that the subtitle does not apply in Puerto

Rico does not change the plain meaning of the statutory text when it is

referenced by another applicable statute.

-8-
 Second, Nieves argues that the way in which § 13501 applies

to commerce between two states (rather than between the continental

United States and Puerto Rico) makes it ambiguous in this context.

However, the Secretary's jurisdiction over transportation between the

continental United States and Puerto Rico is limited by § 13501(1)(C)

in a manner in which interstate transportation is not, namely "to the

extent the transportation is in the United States." It is this

limitations clause which we have interpreted here. The rule applied to

commerce between states is simply irrelevant to the issue at hand.

Third, Nieves points out, correctly, that the Department of

Transportation regulates trucking companies (including Nieves)6

conducting business solely within Puerto Rico pursuant to the Hazardous

Materials Transportation Act, 49 U.S.C. § 5101 et seq. Nieves suggests

that the Department of Transportation's regulatory authority in the

area of hazardous waste is only one example of its broad regulatory

authority in Puerto Rico. However, as at least one court has

explained, the Secretary's regulatory authority with respect to the

transportation of hazardous materials is irrelevant to the

applicability of the motor carrier exemption. Kimball v. Goodyear Tire

& Rubber Co., 504 F. Supp. 544, 548 n.4 (E.D. Tex. 1980). The motor

carrier exemption applies only when the Secretary "has power to

6 Nieves has introduced into evidence a "Hazardous Materials
Certificate of Registration," a "Driver Vehicle Inspection Report," and
a Department of Transportation identification number.

-9-
establish qualifications and maximum hours of service" pursuant to 49

U.S.C. § 31502. 29 U.S.C. § 213(b). Whether the Secretary has power

to conduct other business and promulgate unrelated regulations within

Puerto Rico is irrelevant to this inquiry, and does not create

ambiguity from plain meaning.

A fourth argument is hinted at by Nieves, but not addressed

at length. We consider it here only to distinguish two cases in which

the D.C. Circuit interpreted the same or similar statutory language to

include transportation on the high seas. Puerto Rico Mar. Shipping

Auth. v. Interstate Commerce Comm'n, 645 F.2d 1102, 1106-13 (D.C. Cir.

1981); Trailer Marine, 602 F.2d at 386-93.7 The argument for statutory

ambiguity proceeds as follows: if a court can find that "United

States," despite seemingly clear language to the contrary, includes

ocean territory outside the physical limits of the 50 States and the

District of Columbia, might not "United States" also include routes

within Puerto Rico?

7 Puerto Rico Maritime Shipping Authority involved the same statute,
albeit found at 49 U.S.C. § 10521(a)(1)(C) prior to statutory
reorganization undertaken in 1995. See Klitzke v. Steiner Corp., 110
F.3d 1465, 1467 n.2 (9th Cir. 1997) (discussing reorganization).
Trailer Marine considered substantially the same jurisdictional
language: "jurisdiction over transportation to the extent the
transportation is in the United States and is between a place in a
State and a place in a territory or possession of the United States."
602 F.2d at 384. Note that both cases referred to the regulatory
authority of the Interstate Commerce Commission. The duties of the ICC
with respect to motor carriers have since been transferred to the
Department of Transportation. Foxworthy v. Hiland Dairy Co., 997 F.2d
670, 672 n.2 (10th Cir. 1993).

-10-
 We are not convinced by this argument. The fact that the

statutory phrase "in the United States" may be ambiguous with respect

to the question whether it includes the high seas between the

continental United States and Puerto Rico does not necessarily mean it

is ambiguous with respect to the question whether it includes Puerto

Rico. A primary canon of statutory construction is that a statute

should be construed so as not to render any of its phrases superfluous.

Commonwealth Energy, 235 F.3d at 15 (citing Reiter v. Sonotone Corp.,

442 U.S. 330, 339 (1979)). For us to interpret § 13501(1)(C) as

ambiguous in this manner would do just that. Including transportation

within the island of Puerto Rico in the phrase "to the extent the

transportation is in the United States" would make the phrase

meaningless; it would be a limitations clause that creates no

limitation. In contrast, the limitations clause may include the high

seas within the definition of "United States" yet still provide some

limitation; namely, the exclusion of transportation within Puerto Rico

from the Secretary's jurisdiction. Puerto Rico Mar. Shipping, 645 F.2d

at 1112 ("[I]t is clear beyond cavil that the limitation clause itself

was added to section 203 solely for the purpose of foreclosing [the]

regulation of transportation within the territories or possessions.")

(emphasis added); Trailer Marine, 602 F.2d at 392-393 ("[A]t least for

purposes of trade between ports of Puerto Rico and inland points of the

-11-
United States, the limitation clause does not bar . . . jurisdiction.")

(emphasis added).

We must conclude that the plain meaning of this statutory

combination places Nieves beyond the purview of the Secretary for the

purposes of maximum hour regulation, and thus within the reach of the

FLSA. "The plain meaning of legislation should be conclusive, except

in the 'rare cases [in which] the literal application of a statute will

produce a result demonstrably at odds with the intentions of its

drafters.'" Ron Pair, 489 U.S. at 242 (quoting Griffin v. Oceanic

Contractors, Inc., 458 U.S. 564, 571 (1982)); Dávila-Pérez v. Lockheed

Martin Corp., 202 F.3d 464, 468 (1st Cir. 2000). This is not such a

case. The D.C. Circuit delved deeply into the legislative history of

the limitations clause, concluding that it was passed to cure the

"anomalous situation" where "manufacturers shipping within the United

States or to foreign countries were at a competitive disadvantage

compared to shippers to or from Puerto Rico."8 Puerto Rico Marine

Shipping, 645 F.2d at 1110. Both the House and Senate sought to

8 Before the addition of the limitations clause, the Interstate
Commerce Commission had no jurisdiction over motor carrier traffic
within a state when that traffic originated in Puerto Rico. Puerto
Rico Mar. Shipping Auth., 645 F.2d at 1110. Thus a carrier operating
routes from Mobile, Alabama to Austin, Texas could (prior to the
addition of the limitations clause) face different regulations on the
portion of that transportation within Texas than did a carrier
operating a route from San Juan, Puerto Rico to Austin, Texas. See id.
Congress found this disparity troubling, and enacted the limitations
clause to cure it.

-12-
exclude transportation occurring entirely within Puerto Rico from the

reach of the Secretary's jurisdiction. Id. at 1111 (quoting H.R. Rep.

No. 2481, 81st Cong. (2d Sess. 2 1950); S. Rep. No. 2258, 81st Cong.

(2d Sess. 4 1950)). Nieves has not effectively shown that the

transportation it conducts is anything other than that "within

possessions and territories," nor has it indicated how it is placed at

a competitive disadvantage due to the application of the FLSA. We thus

cannot conclude that this is a case where an "extraordinary

consideration" or an "absurd outcome" requires us to construe a statute

in a manner contrary to its plain meaning. Pritzker v. Yari, 42 F.3d

53, 67-68 (1st Cir. 1994).

III

Nieves argues that, even if we interpret the motor carrier

exemption not to apply to their activities, we make such an

interpretation entirely prospective based on the test elucidated by the

Supreme Court in Chevron Oil. Chevron Oil Co. v. Huson, 404 U.S. 97,

106-07 (1971). However, the Supreme Court has "largely rejected" the

Chevron Oil retroactivity analysis. Mills v. State of Maine, 118 F.3d

37, 49 (1st Cir. 1997). In Harper v. Virginia Dep't of Taxation, 509

U.S. 86, 90 (1993), the Court held "that [its] application of a rule of

federal law to the parties before [it] requires every court to give

retroactive effect to that decision." Other courts of appeals have

applied this retroactivity approach to decisions issued by those

-13-
courts. Laborers Int'l Union of N. Am., AFL-CIO v. Foster Wheeler

Corp., 26 F.3d 375, 386 n.8 (3d Cir. 1994) ("Although both [ Harper and

James B. Beam Distilling Co. v. Georgia, 501 U.S. 529 (1991)] dealt

with decisions issued by the Supreme Court, given the ratio decidendi

of both cases, we suspect that other courts are probably correct that

there is no cogent basis for distinguishing decisions handed down by

the inferior federal courts."); Eckstien v. Balcor Film Investors, 8

F.3d 1121, 1128 (7th Cir. 1993) (noting that if not for state law to

the contrary, a previous Seventh Circuit decision would apply

retroactively based on Harper); Newport News Shipbuilding & Dry Dock

Co. v. Garrett, 6 F.3d 1547, 1554 (Fed. Cir. 1993) (applying previous

Federal Circuit decision retroactively in wake of Harper). We see no

reason to disagree with our sister circuits, especially given that we

have applied our own decisions retroactively in other circumstances

lacking an explicit Supreme Court statement as to the effect of

decisions made by the courts of appeals. See United States v. Melvin,

27 F.3d 703, 707 n.4 (1st Cir. 1994) (applying this Court's opinion in

United States v. Tavares, 21 F.3d 1 (1st Cir. 1994), retroactively

based on the Supreme Court's statement in Griffith v. Kentucky, 479

U.S. 314, 328 (1987), "that a new rule for the conduct of criminal

prosecutions is to be applied retroactively").

IV

-14-
 For the reasons herein, the decision of the district court

is affirmed.

-15-