Bull v. United States

United States Court of Appeals for the Federal Circuit
2006-5038

JOHN W. BULL, et al.,

Plaintiffs,

and

DAVID BAILEY, ED KRUZEL, JOHN F.M. LEUTH,
CLAUDIA MONISTROL, JOSE RIVERA, and TODD STUBLE,

Plaintiffs-Appellees,

v.

UNITED STATES,

Defendant-Appellant.

David L. Kern, Kern Law Firm, PC, of El Paso, Texas, argued for plaintiffs-
appellees. Of counsel on the brief were Richard Tinsman, and Dennis Bujnoch, Tinsman
& Sciano Inc., of San Antonio, Texas. Also of counsel on the brief was Dawn Finlayson,
The Gardner Law Firm, PC, of San Antonio, Texas.

Tara K. Hogan, Trial Attorney, Commercial Litigation Branch, Civil Division, United
States Department of Justice, of Washington, DC, argued for defendant-appellant. With
her on the brief were Peter D. Keisler, Assistant Attorney General, David M. Cohen,
Director, and Kathryn A. Bleecker, Assistant Director. Of counsel was Christian J. Moran.
Of counsel on the brief were Robert H. Humphries and Christopher J. Duncan, United
States Department of Homeland Security, of El Paso, Texas.

Larry J. Adkins, Deputy General Counsel, United States National Treasury
Employees Union, of Washington, DC, for amicus curiae. Of counsel on the brief were
Gregory O’Duden, General Counsel, Barbara Atkin, Deputy General Counsel, and Irene N.
Pantelis, Assistant Counsel.

Appealed from: United States Court of Federal Claims

Judge Emily C. Hewitt
 United States Court of Appeals for the Federal Circuit

2006-5038

JOHN W. BULL, et al.,

Plaintiffs,

and

DAVID BAILEY, ED KRUZEL, JOHN F.M. LEUTH,
CLAUDIA MONISTROL, JOSE RIVERA, and TODD STUBLE,

Plaintiffs-Appellees,

v.

UNITED STATES,

Defendant-Appellant.

___________________________

DECIDED: March 15, 2007
___________________________

Before NEWMAN, Circuit Judge, CLEVENGER, Senior Circuit Judge, and DYK, Circuit
Judge.

CLEVENGER, Senior Circuit Judge.

The United States appeals the October 21, 2005, order and judgment of the

United States Court of Federal Claims awarding $287,489.94 in overtime compensation,

liquidated damages, and attorneys’ fees and costs under the Fair Labor Standards Act,

as amended, 29 U.S.C. §§ 201-219 ("FLSA"), to six Canine Enforcement Officers
currently or formerly employed by the Customs and Border Protection Service within the

Department of Homeland Security. 1 We affirm.

I

A primary responsibility of the Customs and Border Protection Service

("Customs") is to intercept illegal drugs flowing into the United States through this

country's many ports of entry ("POE"). Customs carries out this responsibility, in part,

with the help of detector dogs trained by Canine Enforcement Officers ("CEOs") to find

drugs hidden in incoming containers. Training these dogs is not a one-time event, but

rather, it is an on-going process that continues throughout the dog's career. One

training exercise the dogs repeat regularly is the detection of tightly-rolled terry cloth

towels scented with narcotics and hidden in training aid containers of varying

complexity. When a dog successfully locates a training towel, his CEO rewards him

with some play time using either the recently-found training towel or a clean, unscented

towel. Because neither the training aid containers nor the scented towels are available

for purchase at the local pet store, the CEOs are tasked with constructing and

maintaining the training aid containers, as well as laundering the towels as needed.

Both of these tasks are vital to effective dog training. And although they may not be

1
The United States Customs Service was transferred from the Department
of the Treasury to the Department of Homeland Security as part of the Homeland
Security Act of 2002, Pub. L. No. 107-296, § 403(1), 2002 U.S.C.C.A.N. (116 Stat.)
2137, 2178 (codified at 6 U.S.C. § 203(1)), and it was later renamed as the Customs
and Border Protection Service, see Reorganization Plan Modification for the
Department of Homeland Security, H.R. Doc. No. 108-32 (2003).

2006-5038 2
unduly onerous, they are time consuming nevertheless. 2 Most important, these duties

are work that CEOs must perform, under pain of penalty for nonperformance. In spite of

that, Customs required the CEOs to do this work on their own time and without

compensation. Approximately sixty CEOs eventually became so dissatisfied with this

state of affairs that they filed suit against the United States in the United States District

Court for the Western District of Texas, seeking overtime pay pursuant to FLSA. The

case was subsequently transferred to the Court of Federal Claims on January 26, 2001.

In June of 2004, during the pendency of this suit in the court below, Robert

Jacksta, Customs' Executive Director of Border Security and Facilitation at the Office of

Field Operations, issued a directive via a memorandum to all POEs changing this

historical practice of requiring uncompensated overtime. Jacksta's memorandum read

in relevant part:

The first policy treated herein concerns the care and maintenance of
"reward" towels used in detector dog training. As outlined in the Detector
Dog Training Manual (Section 3, pg. 94) and the Canine Handbook CIS
HB 3200-07A dated August 2002, (Chapter 5, paragraph 5.9), the type of
reward a legacy Customs detector dog receives for responding to an odor
for the detection of which he has been trained is a retrieving towel
constructed of a terry cloth material. After each use, the retrieving towel
must be properly cleaned, and the officer must use caution to ensure that
the retrieving towel is not contaminated with the odor(s) of cleaning

2
For example, laundering the towels must be carefully done in order to
avoid cross contamination with secondary odors. As one witness explained in the
proceedings below, "[t]he dog is supposed to be finding narcotics, not Tide." Bull v.
United States, 68 Fed. Cl. 212, slip op. at 35 (Sept. 27, 2005). However, "[b]ecause
most POEs lacked facilities for laundering towels . . . and lacked sufficient materials for
constructing training aids, . . . CEOs often performed these tasks off duty." Id., slip op.
at 35. The meticulous laundering instructions mandated by Customs are no joking
matter. Failure to adhere to the required laundering procedures could subject a CEO to
a charge of neglect of duty under the Customs Service Table of Offenses. Id., slip op.
at 46.

2006-5038 3
 detergents, etc. For this reason, it is required that the retrieving towel be
washed in plain hot water and rinsed in cold water. Further, paragraph
5.9.2 of the Canine Handbook states that "the port management will
ensure that only clean towels are utilized." In order to guarantee that this
procedure is properly implemented, each Director, Field Operations shall
take the necessary measures to fulfill the requirement to maintain clean
retrieving towels used in training of our detector dogs. Necessary
measures could include the immediate purchase and setup of a washer
and dryer or the use of contract services. If necessary, on a rotating
basis, canine officers may be directed to spend all or part of a normal duty
shift washing and drying training towels consistent with the Handbook
requirements, through whatever means are made available by
management.

Secondly, each Port Director is to provide direction to [the Office of Field
Operations] canine officers, reminding them that supervisory approval is
required before performing any overtime work, either on or off the work
site; and that the performance of any work-related tasks, including, but not
limited to, the construction of detector dog training aids, will be
accomplished only during the officer's normal duty hours. For example,
during those times that the detector dog is resting, the canine officer can
construct training aids or roll and tape towels. Port Directors and
Supervisors will ensure that during all periods of downtime (e.g., while the
detector dog is resting or during any spare time at the beginning or end of
shifts), all canine officers are engaged in performing official duties.
Supervisors will also advise [the Office of Field Operations] canine officers
who construct training aids outside their normal duty hours that they will
not be compensated for the time spent performing such tasks.

Joint App. at 469-70.

Then, on August 3, 2004, the government moved for judgment on the pleadings

pursuant to Federal Rule of Civil Procedure 12(c), arguing that the plaintiffs' claims

should be dismissed because "the Customs Officer Pay Reform Act (COPRA or the

Act), 19 U.S.C. §§ 261, 267 (2000), enacted in 1993, is the exclusive pay system for

CEOs, excluding them from coverage under FLSA." Bull v. United States, 63 Fed. Cl.

580, slip op. at 2 (Feb. 1, 2005) (footnote omitted) ("Bull I"). The court denied the

motion. Id., slip op. at 17. The court held that COPRA, as correctly interpreted, only

2006-5038 4
covers overtime compensation for officially assigned overtime work. The court

concluded that the work at issue in this case, while required, was not officially assigned.

The CEOs were required—on pain of discipline or termination—to construct and

maintain training aid containers and to launder towels on their own time without

compensation simply because Customs did not "officially assign" those tasks. See

Digital audio recording: Oral Argument in Case No. 2006-5038, at 2:11 (Dec. 4, 2006)

("Oral Argument"). 3 The court concluded that non-officially assigned overtime work is

properly compensated under the terms of FLSA. Bull I, slip op. at 15.

In addition, due to the large number of plaintiffs, the court sought to simplify the

upcoming bench trial by directing each side to select three trial plaintiffs to proceed.

The parties complied, and a six-day trial commenced on May 3, 2005. Shortly

thereafter, the parties submitted post-trial briefs for the court's consideration. On

September 27, 2005, the court issued its written opinion explaining its conclusions that

Customs had violated FLSA willfully, and that all six plaintiffs are entitled to

compensation for 2 hours per week for "laundering and processing training towels," and

1.5 hours per week for "[c]onstructing training aids." Bull v. United States, 68 Fed. Cl.

212, slip op. at 94 (Sept. 27, 2005) ("Bull II"). No damages were awarded for any

overtime work performed after the distribution of the Jacksta memorandum. Id., slip op.

at 38.

The court then ordered the parties to "jointly calculate and present to the court

the amount of compensation to which each representative plaintiff is entitled in

accordance with [the hours of overtime found by the court]." Id., slip op. at 95. The

3
http://www.cafc.uscourts.gov/oralarguments/mp3/06-5038.mp3

2006-5038 5
parties were unable to reach an agreement, however, because certain plaintiffs had

originally sought less than the amount of overtime awarded by the court. Thus,

according to the government, the court's award should have been interpreted as a

maximum that would not create a windfall for such plaintiffs. The court disagreed,

explaining that "the reasonable time which the court is charged to determine will be

more than the approximated time some plaintiffs have claimed and less than the

approximated time others have claimed." Bull v. United States, 68 Fed. Cl. 276, slip op.

at 5 (Oct. 14, 2005) ("Bull III"). Having lost that dispute, the government subsequently

agreed to an appropriate amount of compensation due to each plaintiff. The agreed-

upon amount was then doubled pursuant to the court's award of liquidated damages

based on its finding that Customs had not acted in good faith by denying overtime pay.

A final judgment in the amount of $287,489.94 was entered against the United States

on October 21, 2005. This appeal followed. We have jurisdiction pursuant to 28 U.S.C.

§ 1295(a)(3).

II

"In reviewing decisions of the Court of Federal Claims, we apply a de novo

standard to legal conclusions . . . and a clear-error standard to factual findings." Adams

v. United States, 350 F.3d 1216, 1221 (Fed. Cir. 2003).

III

A

Before we resolve the issues disputed on appeal, it is first helpful to explain a few

evolutionary aspects of the statutory and regulatory framework that governs the

compensation of Customs inspectors in this country. Beginning at least as early as

2006-5038 6
1799, the owner of a vessel entering a port of the United States was responsible for

paying for the cost of the inspectional services he received. Act of Mar. 2, 1799, § 53,

1 Stat. 627, 667. Thus, it was historically the private sector—not the taxpayer—who

bore the burden of paying the compensation of the Customs inspectors. But because

transportation in the early days of our nation's history was rather unpredictable, cargo-

bearing vessels would arrive at any time of the day on any day of the week. As a

consequence, Customs inspectors faced uncertain work schedules. From 1873 to

1909, Congress passed various bills intended to ameliorate this situation by directing

the Secretary of the Treasury to prescribe regulations to provide additional

compensation (at the vessel owner's expense) for nighttime inspectional services. See

Act of Mar. 3, 1873, 17 Stat. 579, 579; Act of June 26, 1884, § 25, 23 Stat. 53, 59; Act

of June 30, 1906, 34 Stat. 633, 633; Act of Mar. 4, 1909, 35 Stat. 1065, 1065. Thus, if

the owner of an incoming vessel desired the services of Customs inspectors in the

middle of the night, he could obtain them by paying a higher price than he would during

the daytime hours.

In 1911, Congress replaced the prior legislation with a more comprehensive

statutory scheme that, among other things, directed the Secretary of the Treasury to "fix

a reasonable rate of extra compensation . . . [, which] shall not exceed an amount equal

to double the rate of compensation allowed to each such officer or employee for like

services rendered by day" for inspections at night, on Sundays, and on holidays. Act of

Feb. 13, 1911, § 5, 36 Stat. 899, 901. In 1920, Congress amended the 1911 Act by

directing the Secretary of the Treasury to

2006-5038 7
 fix a reasonable rate of extra compensation for overtime services of
inspectors, storekeepers, weighers, and other customs officers and
employees who may be required to remain on duty between the hours of
[5:00 p.m. and 8:00 a.m.], or on Sundays or holidays, to perform services
in connection with the lading or unlading of cargo, or . . ., or examination
of passengers' baggage, such rates to be fixed on the basis of one-half
day's additional pay for each two hours or fraction thereof of at least one
hour that the overtime extends beyond [5:00 p.m.] (but not to exceed two
and one-half days' pay for the full period from [5:00 p.m. to 8:00 a.m.]),
and two additional days' pay for Sunday or holiday duty.

Act of Feb. 7, 1920, 41 Stat. 402, 402. Thus, under the generous terms of the amended

1911 Act, a Customs inspector could receive four hours' pay (one-half day's pay) by

working one additional hour beyond 5:00 p.m., and sixteen hours pay (two days' pay) by

working only a few minutes on a Sunday or holiday.

The compensation system became even more generous under subsequent

Treasury Department regulations which calculated overtime hours on a basis that had

little to do with the amount of time actually worked. For example, if a Customs inspector

having a typical 8:00 a.m. to 5:00 p.m. schedule was called back to perform a one-hour

assignment at night, he could (depending on the time of night) receive credit for up to

five hours of overtime, 19 C.F.R. § 24.16(g) (as enacted on Dec. 31, 1963), which

corresponded to three two-hour overtime units, i.e., twelve hours' pay, under the 1911

Act, see 41 Stat. 402, 402 (providing "one-half day's additional pay for each two hours

or fraction thereof of at least one hour"). Notably, however, the 1911 Act, for all its

generosity, failed to provide compensation for overtime work performed either during

customary working hours or during the first hour after 5:00 p.m. In other words, if a

Customs inspector began an inspection at, say, 4:45 p.m. and concluded that inspection

at 5:30 p.m., he would not qualify for thirty minutes of overtime under the 1911 Act.

2006-5038 8
Instead, he was supposed to be compensated (at least in later years) pursuant to the

overtime provisions of FLSA or the Federal Employees Pay Act of 1945, 5 U.S.C.

§§ 5541-5550b ("FEPA"). GAO Report, Customs Service: 1911 Act Governing

Overtime is Outdated, at 49 (1991) ("GAO 1911 Act Report") ("Overtime work from 8:00

a.m. to 5:00 p.m. is not compensable under the 1911 Act; thus, for example, overtime

work within these hours on an inspector's day off (including Saturdays) is compensated

under FEPA or the Fair Labor Standards Act, 29 U.S.C. 201 et seq., instead."),

available at http://archive.gao.gov/d20t9/144138.pdf; see also GAO Report, Premium

Pay for Federal Inspectors at U.S. Ports-Of-Entry, at 3 (1975) ("GAO Premium Pay

Report"), available at http://archive.gao.gov/f0302/095057.pdf. Under FEPA, Customs

inspectors were entitled to receive (subject to certain limitations) one and one-half times

pay for "hours of work officially ordered or approved in excess of 40 hours in an

administrative workweek." 5 U.S.C. § 5542(a) (emphasis added). Coverage under the

FLSA, which was made applicable to federal employees in 1974, was broader.

Customs inspectors were entitled to one and one-half times their normal pay if they

were "employ[ed]" for more than forty hours in a workweek, 29 U.S.C. § 207(a)(2); the

statutory definition of "employ" included "to suffer or permit to work," 29 U.S.C. § 203(g).

Thus, for work outside the time periods covered by the 1911 Act, Customs inspectors

were eligible for FEPA overtime if the work was "officially ordered" and FLSA overtime

even if the work was merely "suffered or permitted." 4

4
In 1990, Congress enacted the Federal Employees Pay Comparability Act
("FEPCA"). Pub. L. No. 101-509, Title V, § 529, 104 Stat. 1389, 1427 (codified in
scattered sections of 5 U.S.C.). Pursuant to this statute, federal employees who are not
exempt from the FLSA can only recover overtime under that statute and not the higher

2006-5038 9
 Customs operated under this lucrative regime for many years, largely at the

expense of the passengers and vessels paying for the inspectional services they

received. See GAO Premium Pay Report, at 2. This changed in 1976 when Congress

shifted the financial responsibility for overtime charges incurred on Sundays and

holidays to the Federal Government. See Airport and Airway Dev. Act Amendments of

1976, sec. 15, § 53(e), Pub. L. No. 94-353, 90 Stat. 871, 882 (codified at 49 U.S.C.

§ 1741 (repealed)). Shortly thereafter, Congress became concerned with the financial

burden being caused by the 1911 Act. According to a report by the House Committee

on Appropriations, in fiscal year 1979, 2,045 Customs inspectors received over $10,000

in overtime pay, 277 Customs inspectors received over $20,000 in overtime pay, and

three Customs inspectors received over $39,000 in overtime pay. H.R. Rep.

No. 96-248, at 11 (1979). The Committee expressed concern not only about the high

dollar amounts, but also about the "well known fact that such excessive overtime is

injurious to a person's health as well as being the cause of serious family disruptions."

Id. at 12.

These concerns prompted the Committee to propose an annual cap to limit the

amount of overtime pay a Customs employee could receive. Id. at 11. In so doing, the

amount of FLSA or FEPA overtime as was the case before 1990. See 5 U.S.C.
§ 5542(c). Therefore, Customs inspectors, as non-FLSA exempt employees,
apparently were only eligible for FLSA overtime after 1990 (when the 1911 Act did not
apply). However, both the GAO report and the House hearings that were the impetus
for COPRA suggested that Customs inspectors were paid FEPA overtime for work not
covered by the 1911 Act. GAO 1911 Act Report, at 32, 39; U.S. Customs Service's
Abuse of Overtime Compensation: Hearing Before the Subcomm. on Oversight of the
H. Comm. on Ways & Means, 102d Cong. 96 (1991) (statement of Carol Hallett,
Commissioner, U.S. Customs Service). The reason for this discrepancy is unclear.

2006-5038 10
Committee recognized that "the reduction in overtime will result in the need for

additional manpower" because "of course, [Customs employees] may not be required to

work such overtime without pay." Id. at 12. Thus, the proposal also "included funds in

the accompanying bill for 200 additional inspectional personnel." Id. A report from the

Senate Committee on Appropriations expressed similar views, S. Rep. No. 96-299, at

15 (1979), and it was agreed at conference that the cap should be set at $20,000 per

year, H.R. Rep. No. 96-471, at 6 (1979) (Conf. Rep.). The cap was enacted into law on

September 29, 1979, Treasury Dep't Appropriations Act of 1980, Pub. L. No. 96-74,

93 Stat. 559, 560 (1979) ("[N]one of the funds made available by this Act shall be

available for administrative expenses to pay any employee [of the United States

Customs Service] overtime pay in an amount in excess of $20,000."), and it was

maintained at that level 5 until it was raised to $25,000 for fiscal year 1985, see Trade

and Tariff Act of 1984, § 702, Pub. L. No. 98-573, 98 Stat. 2948, 3043 (codified at

19 U.S.C. § 2075(d)) ("No part of any sum that is appropriated under subsection (b) for

fiscal years after September 30, 1984, may be used for administrative expenses to pay

any employee of the United States Customs Service overtime pay in an amount

5
See Appropriations – Fiscal Year 1981, § 101(a), Pub. L. No. 96-369,
1980 U.S.C.C.A.N. (94 Stat.) 1351, 1351 (continuing cap from prior fiscal year);
Appropriations – Fiscal Year 1981, § 101(a), Pub. L. No. 96-536, 1980 U.S.C.C.A.N. (94
Stat.) 3166, 3166 (same); Appropriations – Fiscal Year 1982, § 101(a), Pub. L. No. 97-
51, 1981 U.S.C.C.A.N. (95 Stat.) 958, 958 (same); Appropriations – Fiscal Year 1982,
§ 101(a), Pub. L. No. 97-92, 1981 U.S.C.C.A.N. (95 Stat.) 1183, 1183 (same);
Continuing Appropriations, Fiscal Year 1983, § 101(a), Pub. L. No. 97-276, 1982
U.S.C.C.A.N. (96 Stat.) 1186, 1186 (same); Further Continuing Appropriations, 1983,
§ 101(a), Pub. L. No. 97-377, 1982 U.S.C.C.A.N. (96 Stat.) 1830, 1830 (same);
Continuing Appropriations for Fiscal Year 1984, § 101(d), Pub. L. No. 98-107, 1983
U.S.C.C.A.N. (97 Stat.) 733, 736 (same); Continuing Appropriations, Temp., 1985,
§ 101(a), Pub. L. No. 98-441, 1984 U.S.C.C.A.N. (98 Stat.) 1699, 1699 (same).

2006-5038 11
exceeding $ 25,000."). Although the 1979 cap was immediately successful in

preventing the 277 Customs inspectors identified in the Committee report from again

receiving over $20,000 in overtime pay, a substantial number of inspectors were still

receiving significant overtime pay.

The Consolidated Omnibus Budget Reconciliation Act of 1985 ("COBRA"),

§ 13031, Pub. L. No. 99-272, 100 Stat. 82, 310 (1986) (codified at 19 U.S.C. § 58c),

brought about another significant change in the overtime system. With the passage of

COBRA, Customs was directed to collect user fees from virtually every passenger and

vessel entering the United States for deposit into a reimbursement account to cover

"expenses incurred by the Secretary of the Treasury in providing overtime customs

inspectional services." COBRA § 13031(f)(2)(A). Though relatively nominal in amount,

these fees were more than sufficient in the aggregate to pay for inspectional overtime

expenses. See GAO Report, Customs Service: Information on User Fees, at 13 (1994)

("GAO User Fees Report"), available at http://archive.gao.gov/t2pbat3/152022.pdf. And

although reimbursement from the user fee account was technically an appropriation

from Congress, it was not subject to the same Office of Management and Budget

controls as other appropriations. See H.R. Rep. No. 102-486, at 28-29 (1992); GAO

User Fees Report, at 11; U.S. Customs Service's Abuse of Overtime Compensation:

Hearing Before the Subcomm. on Oversight of the H. Comm. on Ways and Means,

102d Cong. 77 (1991) [hereinafter Abuse Hearing] (testimony of Lowell Dodge, Director,

Administration of Justice Issues, U.S. General Accounting Office). Nevertheless,

Congress maintained an interest in the disposition of these funds because some of the

2006-5038 12
account surplus could be used to offset the federal budget deficit. See GAO User Fees

Report, at 13; 19 U.S.C. § 58c(f)(3)(C)(iii).

Both a General Accounting Office ("GAO") investigation and an internal study

performed by Customs found that inspection managers were treating the user fee

account as a "bottomless pit," and further that inspectional overtime was being

monitored only to the extent necessary to ensure that employees were not exceeding

the annual cap. GAO 1911 Act Report, at 28. For example, GAO analyzed Customs'

"worktickets," which were the "time and attendance records for Customs' inspectional

overtime system," id. at 13, and "found worktickets that (1) were not certified by a

supervisor, (2) were approved by the person who worked the overtime, (3) were

improperly completed or altered, and (4) showed incorrect start and stop times for

assignments," id. at 17. Flaws in the workticket system allowed some employees to

receive duplicate payments for a given overtime period. Id. at 19-20. GAO

investigators even found an instance where an inspector had received two overtime

payments in addition to his regular pay for a single period. Id. at 20; Abuse Hearing, at

82 (testimony of Director Dodge). It was also discovered that the workticket system was

allowing 1911 Act payments for overtime that should have been paid at FEPA (or FLSA)

rates, i.e., overtime work performed either during customary working hours or during the

first hour after 5:00 p.m. GAO 1911 Act Reports, at 32. Similarly, non-inspectional

employees, e.g., secretaries and aides, were sometimes being paid for overtime at

1911 Act rates instead of FEPA (or FLSA) rates. Id. at 34. These latter practices drove

up costs because FEPA and FLSA generally provide only time-and-a-half overtime pay.

See 5 U.S.C. § 5542 (FEPA); 29 U.S.C. § 207 (FLSA). Moreover, under Office of

2006-5038 13
Personnel Management regulations, FEPA and FLSA overtime is paid in fifteen-minute

increments, 5 C.F.R. §§ 550.112(a) (FEPA), 551.521 (FLSA), as opposed to the 1911

Act's half-day increments. GAO 1911 Act Report, at 32.

The results of the GAO investigation—which was done at the behest of the

Subcommittees on Trade and Oversight within the House Ways and Means

Committee—prompted the reformatory legislation at issue in this case. Customs Officer

Pay Reform Act ("COPRA"), H.R. 3837, 103rd Cong., 107 Stat. 312, 668-672 (1993).

That legislation was written to provide double-time pay rates for "officially assigned"

work in excess of forty hours per week or eight hours in a day, see 19 U.S.C.

§ 267(a)(1), and to replace the 1911 Act's half-day increments for night work and two-

day increments for Sunday/holiday work with "premium" pay rates, see 19 U.S.C.

§ 267(b). It was Congress' intent that this new pay-rate regime, coupled with the

promulgation of Treasury Department regulations designed to prevent abuse of the

overtime system, would mirror FEPA and FLSA in the sense that payments would

reflect the amount of time actually worked. See 19 U.S.C. § 267(d); 19 C.F.R.

§ 24.16(c)-(g); H.R. Rep. No. 102-486, at 20; 139 Cong. Rec. 289, 289-90 (1993)

(extension of remarks by Rep. Pickle).

In fact, both the GAO and the Congressional Research Service, in reports that

provided the factual basis for the enactment of COPRA, noted the possibility of

eliminating the 1911 Act and paying overtime to Customs inspectors primarily under

FEPA and its time and half rate. GAO 1911 Act Report, at 45-46; Abuse Hearing, at 43

(Congressional Research Service report). However, concerns were expressed that the

double-time rate appropriately reflected both the nature of Customs inspectors' work

2006-5038 14
and the comparable pay in the private sector. See GAO 1911 Act Report, at 70-71

(comments of National Treasury Employees Union); House Report, at 139-142

(statement of Robert M. Tobias, President, National Treasury Employees Union).

Accordingly Congress amended the 1911 Act to mirror FEPA while retaining the double-

time rate. See 139 Cong. Rec. 289, 290 (1993) (extension of remarks by Rep. Pickle)

("[T]he Customs Service overtime pay laws—the 1911 Act—would be modified to mirror

the Federal Employees Pay Act [FEPA] rules which generally apply to Federal

Government workers."); 138 Cong. Rec. 20850, 20861 (1992) (statement of Rep.

Rangel) ("The committee came to recognize that the 1911 law needed revision, but that

it did not want to reduce the overall compensation of Customs inspectors."). Of

particular relevance, COPRA contained a similar provision to FEPA's "work officially

ordered or approved" limitation which limited COPRA to "officially assigned" work. See

19 U.S.C. § 267(a)(1); 5 U.S.C. § 5542(a).

Congress also limited eligibility for these increased hourly rates to "customs

inspector[s] [and] canine enforcement officer[s]," 19 U.S.C. § 267(e)(1), and included an

exclusivity provision which states:

A customs officer who receives overtime pay under subsection (a) or
premium pay under subsection (b) for time worked may not receive pay or
other compensation for that work under any other provision of law.

19 U.S.C. § 267(c)(2). In addition, paragraph (c)(1) of COPRA, though duplicative of

the broader pre-existing cap prohibiting any Customs employee from receiving more

than $25,000 in annual overtime, 6 explicitly capped COPRA overtime payments at the

6
See Trade and Tariff Act of 1984, § 702, Pub. L. No. 98-573, 1984
U.S.C.C.A.N. (98 Stat.) 2948, 3043 (FY 1985); Consol. Omnibus Budget Reconciliation

2006-5038 15
same amount, 19 U.S.C. § 267(c)(1). The legislative history reveals that Congress was

fully aware that paragraph (c)(1) would be duplicative of prior law, see H.R. Rep. No.

102-486, at 19 (noting that "Customs inspectors may receive up to $25,000 in overtime

pay, annually"), a fact that is not surprising given the instances of overtime abuse by

Customs.

B

The primary question presented in this appeal is whether COPRA is the

exclusive source of overtime pay for CEOs, and thus is an absolute bar to

compensation under FLSA for overtime work not officially assigned but nonetheless

required to be performed by CEOs. The government contends that such non-officially

assigned (but required) work must be performed for free. The plaintiffs argue that such

overtime work, never officially assigned until the Jacksta memorandum required it to be

done during regular work hours, is work "suffer[ed] or permit[ted]" under FLSA, see

29 U.S.C. § 203(g), and must be reimbursed under FLSA's overtime provisions.

As the court below correctly stated, "[t]he starting point for statutory interpretation

is the language of the statute." Bull I, slip op. at 5 (citing Hughes Aircraft Co. v.

Act of 1985, § 13022(a), Pub. L. No. 99-272, 1986 U.S.C.C.A.N. (100 Stat.) 82, 305 (FY
1986); Omnibus Budget Reconciliation Act of 1986, § 8102, Pub. L. No. 99-509, 1986
U.S.C.C.A.N. (100 Stat.) 1876, 1968 (FY 1987); Omnibus Budget Reconciliation Act of
1987, § 9503(a), Pub. L. No. 100-203, 1987 U.S.C.C.A.N. (101 Stat.) 1330-1, 1330-380
to -381 (FY 1988); Anti-Drug Abuse Act of 1988, § 7361(a), Pub. L. No. 100-690, 1988
U.S.C.C.A.N. (102 Stat.) 4181, 4474 (FY 1989); Act of Dec. 7, 1989, § 3(a), Pub. L. No.
101-207, 1989 U.S.C.C.A.N. (103 Stat.) 1833, 1833 (FY 1990); Customs and Trade Act
of 1990, § 102, Pub. L. No. 101-382, 1990 U.S.C.C.A.N. (104 Stat.) 629, 634 (FY 1991,
FY 1992); Treasury, Postal Service and Gen. Gov't Appropriations Act, 1992, Pub. L.
No. 102-141, 1991 U.S.C.C.A.N. (105 Stat.) 834, 837 (FY 1992); Treasury Dep't
Appropriations Act, 1993, § 108, Pub. L. No. 102-393, 1992 U.S.C.C.A.N. (106 Stat.)
1729, 1737 (FY 1993).

2006-5038 16
Jacobson, 525 U.S. 432, 438 (1999)). "[W]here the statutory language provides a clear

answer [to the question at issue], it ends there as well." Hughes Aircraft, 525 U.S. at

438. "Beyond the statute's text, [the 'traditional tools of statutory construction'] include

the statute's structure, canons of statutory construction, and legislative history." Timex

V.I. v. United States, 157 F.3d 879, 882 (Fed. Cir. 1998) (quoting Chevron U.S.A.,

Inc. v. Natural Res. Def. Council, Inc., 467 U.S. 837, 843 n.9 (1984)). "If a court,

employing traditional tools of statutory construction, ascertains that Congress had an

intention on the precise question at issue, that intention is the law and must be given

effect," Chevron, 467 U.S. at 843 n.9, and an agency's alternative interpretation of the

statute is not entitled to deference under either Chevron or Skidmore v. Swift & Co.,

323 U.S. 134 (1944). Gen. Dynamics Land Sys. v. Cline, 540 U.S. 581, 600 (2004)

("[W]e neither defer nor settle on any degree of deference [owed to the EEOC under

either Chevron or Skidmore] because the Commission is clearly wrong.").

The relevant portions of the statute provide:

In general. Subject to paragraph (2) and subsection (c), a customs officer
who is officially assigned to perform work in excess of 40 hours in the
administrative workweek of the officer or in excess of 8 hours in a day
shall be compensated for that work at an hourly rate of pay that is equal to
2 times the hourly rate of the basic pay of the officer.

19 U.S.C. § 267(a)(1) (emphasis added).

Exclusivity of pay under this section. A customs officer who receives
overtime pay under subsection (a) or premium pay under subsection (b)
for time worked may not receive pay or other compensation for that work
under any other provision of law.

19 U.S.C. § 267(c)(2) (emphasis added). Thus, COPRA provides double time for

"officially assigned" overtime work, § 267(a)(1), and precludes additional pay that might

2006-5038 17
otherwise be obtained "for that work" through non-COPRA sources, § 267(c)(2). In

other words, if a CEO "receives overtime pay under subsection (a)," i.e., for "officially

assigned" overtime work, he or she "may not receive pay or other compensation for that

work under any other provision of law." Nothing in the language of these provisions

precludes a CEO who does not "receive[] overtime pay under subsection (a)" for

overtime work that was not "officially assigned" from "receiv[ing] pay or other

compensation for that work under any other provision of law." Therefore, the plain

language of the statute clearly indicates that COPRA is not the exclusive source of

overtime pay for CEOs.

In support of its argument to the contrary, the government proposes a tortured

reading of section 267 by contending that "[t]he phrase 'that work' within the context of

COPRA broadly refers to all overtime and premium work performed by customs

officers." Appellant's Br. at 14. We disagree. The antecedent basis for "that work" in

paragraph (c)(2) is work for which a CEO "receives overtime pay under subsection (a)

or premium pay under subsection (b)." And since only "officially assigned" work can

entitle a CEO to "overtime pay under subsection (a)," the phrase "that work" cannot

encompass work that was not "officially assigned." Had paragraph (a)(1) been written

to cover a customs officer who "performs work" in excess of forty hours per week or

eight hours per day, the statute might have the breadth urged by the government.

Instead, Congress drafted the statute as it did, and thereby left open the possibility that

some overtime work would not be "officially assigned." See Bull I, slip op. at 6.

At the very least, the government's position is at odds with the "expansive nature"

of FLSA coverage. Doe v. United States, 372 F.3d 1347, 1360 (Fed. Cir. 2004); cf.

2006-5038 18
Mitchell v. Ky. Fin. Co., 359 U.S. 290, 295 (1959) ("It is well settled that exemptions

from the Fair Labor Standards Act are to be narrowly construed."). Nothing in the

legislative history suggests that FLSA overtime compensation, as historically available

to Customs workers, was being abolished by COPRA. Indeed, for the longest time it

has been understood that Customs officers should not be "required to work such

overtime without pay." H.R. Rep. No. 96-248, at 12.

The portion of the legislative history highlighted by the government is likewise

unpersuasive. As a threshold matter, we note that "[t]he 'strong presumption' that the

plain language of the statute expresses congressional intent is rebutted only in 'rare and

exceptional circumstances,' Rubin v. United States, 449 U.S. 424, 430, 66 L. Ed. 2d

633, 101 S. Ct. 698 (1981), when a contrary legislative intent is clearly expressed."

Ardestani v. INS, 502 U.S. 129, 135-36 (1991). Moreover, mere ambiguities in the

legislative history are insufficient to rebut the strong presumption in favor of the plain

language of the statute. See id. at 137. The government points to the following

passage:

The Committee intends that Customs officials will be compensated for
actual time worked at only one of the following rates for any given tour of
duty: (1) basic pay rates as prescribed in Title 5 of the United States
Code; (2) premium pay rates as prescribed in this legislation; or,
(3) overtime pay rates as prescribed in this legislation, exclusively. The
Committee does not intend that these rates be additive.

H.R. Rep. No. 102-486, at 20 (emphasis added).

We, like the court below, do not believe this brief excerpt compels the

government's reading of COPRA. The Committee may have intended the undefined

"tour of duty" term to include only "regularly scheduled work, such as inspections, rather

2006-5038 19
than work 'suffer[ed] or permit[ted]' to be performed," Bull I, slip op. at 7, especially in

light of the fact that the flawed workticket system used for inspectional overtime was a

significant driving force behind COPRA's enactment. A Conference Report issued

subsequent to the Committee Report adds additional support to this interpretation of

"tour of duty": "[T]he annual overtime pay limitation [with respect to holidays, nights,

and Sundays under section 267(b)] would be made a part of the same law that controls

payment of inspectional overtime." H.R. Rep. No. 103-213, at 919 (1993) (Conf. Rep.),

as reprinted in 1993 U.S.C.C.A.N. 1088, 1608 (emphasis added). See also H.R. Rep.

No. 102-486, at 20 ("The Committee's purpose in requiring Customs officials to work 40

hours in a week or 8 hours in a day without regard to the hour or the day or the day of

the week before they qualify for overtime pay is to encourage U.S. Customs Service to

adjust its inspectional resources to meet actual trade patterns, rather than the trade

community being forced to adjust to a predetermined Customs workday." (emphasis

added)). Accordingly, this is not a "rare and exceptional circumstance" where the

Committee's comments override the plain meaning of the statute. Furthermore,

because we find the congressional intent behind the scope of COPRA's exclusivity

provision to be adequately revealed by the statutory language itself, we owe no

deference to Customs' alternate interpretation. See Cline, 540 U.S. at 600.

We note that there is no reason for concluding that recovery under the FLSA

would circumvent the COPRA statutory cap on overtime compensation. From 1979

until 1994—a time period which extends both before and after the enactment of

COPRA—all Customs employees who received overtime pay from any source were

2006-5038 20
subject to the same annual cap. 7 Thus, with or without the duplicative cap provided in

19 U.S.C. § 267(c)(1), a CEO seeking overtime from non-COPRA sources would not

have been able to receive more than $25,000. Even today, all Customs employees are

subject to the same cap, regardless of the source of the overtime pay. 8 Therefore, we

have no reason to believe that our interpretation of COPRA as a non-exclusive regime

will permit CEOs to circumvent the cap.

In summary, COPRA merely precludes recovery for "officially assigned" work

under another pay statute. As discussed above, Congress was well aware before it

enacted COPRA that Customs inspectors received overtime under the FLSA and FEPA

if the 1911 Act did not apply. Congress' inclusion of the "officially assigned" limitation in

COPRA, which mirrored FEPA's "work officially ordered or approved" limitation,

demonstrates (as does the legislative history) that COPRA was meant to supersede

7
See supra notes 5 & 6; Treasury Dep't Appropriations Act, 1994, Pub. L.
No. 103-123, 1993 U.S.C.C.A.N. (107 Stat.) 1226, 1227 (FY 1994) (enacted Oct. 28,
1993).
8
Trade Act of 2002, § 311(a), Pub. L. No. 107-210, 2002 U.S.C.C.A.N. (116
Stat.) 933, 973 (FY 2003, FY 2004); Dep't of Homeland Sec. Appropriations Act of
2004, Pub. L. No. 108-90, 2003 U.S.C.C.A.N. (117 Stat.) 1137, 1139 ("[N]one of the
funds appropriated shall be available to compensate any employee [of United States
Customs and Border Protection] for overtime in an annual amount in excess of $30,000
. . . .") (FY 2004); Dep't of Homeland Sec. Appropriations Act of 2005, Pub. L. No. 108-
334, 2004 U.S.C.C.A.N. (118 Stat.) 1298, 1388 ("[F]or fiscal year 2005, the aggregate
overtime limitation prescribed in [19 U.S.C. 267(c)(1)] shall be $35,000; and
notwithstanding any other provision of law, none of the funds appropriated in this Act
may be available to compensate any employee of the Bureau of Customs and Border
Protection for aggregate overtime and premium pay, from whatever source, in an
amount that exceeds such limitation . . . ."); Dep't of Homeland Sec. Appropriations Act
of 2006, Pub. L. No. 109-90, 2005 U.S.C.C.A.N. (119 Stat.) 2064, 2067 (same) (FY
2006); Dep't of Homeland Sec. Appropriations Act of 2007, Pub. L. No. 109-295, 120
Stat. 1355, 1358-59 (same) (FY 2007).

2006-5038 21
coverage under FEPA for Customs inspectors. See 19 U.S.C. § 267(a)(1); 5 U.S.C.

§ 5542(a). However, nothing supports a similar conclusion for FLSA overtime. The

GAO report and House hearings upon which COPRA was based clearly alerted

Congress to the availability of FLSA overtime, see GAO 1911 Act Report, at 49, and the

text does not support a reading that would exclude recovery under the FLSA for work

that is not "officially assigned." Given the Supreme Court's restrictive view of FLSA

exemptions, see, e.g., Mitchell, 359 U.S. at 295, we conclude that FLSA overtime

remains available for Customs inspectors after the enactment of COPRA in situations in

which COPRA does not apply. Thus, for "officially assigned" overtime, COPRA is the

exclusive source of remuneration, but for other overtime work suffered or permitted,

FLSA remuneration is available. 9

C

In the event we hold—as we do—that COPRA is not exclusive, the government

does not challenge the lower court's finding of liability under FLSA. Appellant's Br. at

29. Instead, the government challenges the lower court's conclusion that Customs

willfully violated the overtime provisions of FLSA. Where an agency violates FLSA

willfully, the ordinary two-year statute of limitations on employee causes of action is

extended to three years. 29 U.S.C. § 255(a). Proof of willfulness requires the plaintiffs

to show that Customs "either knew or showed reckless disregard for the matter of

9
COPRA does not define what constitutes an "official[] assign[ment]," and
Customs has not promulgated a regulation defining the term "officially assigned." Lack
of a specific meaning for the term is of no consequence to the decision because in any
event the government does not contend that the overtime work in question was
"officially assigned."

2006-5038 22
whether its conduct was prohibited by the statute." McLaughlin v. Richland Shoe Co.,

486 U.S. 128, 133 (1988). In other words, "[i]f an employer acts reasonably in

determining its legal obligation, its action cannot be deemed willful . . . under the

standard [stated above]." Id. at 135 n.13. Similarly, "[i]f an employer acts

unreasonably, but not recklessly, in determining its legal obligation, then [its action]

should not be . . . considered [willful] . . . ." Id. Whether Customs acted recklessly, as

opposed to unreasonably, is a question of fact which we review for clear error. See

Adams, 350 F.3d at 1229.

In finding that Customs had in fact acted willfully, the court below relied upon

extensive testimony to establish that Customs knew the plaintiffs were working off duty

without compensation, as well as an internal memo predicting that such work "could

open Customs management to compensation issues because the CEOs are using their

off duty time to meet Customs requirements." Bull II, slip op. at 90-91. The court also

found that the Jacksta memorandum (directing that previously off-duty work was to be

performed during working hours) was "an admission by defendant that it knew it had

been engaging in activity in possible violation of the FLSA." Id. at 91-92. This evidence

is plainly sufficient to support a finding of willfulness. Furthermore, we have considered

the arguments in opposition presented by the government, and find that those

arguments amount to nothing more than an attempt to have us re-weigh the evidence

weighed below. That is not our role on appeal. Therefore, because we find no clear

error, we affirm the lower court's finding of willfulness.

As noted earlier, we do not decide in this case whether any of the work in

question is "officially assigned." If the work had been officially assigned, recovery for

2006-5038 23
this work under FLSA at the rate of three times the base rate (the standard overtime

rate of 150% doubled for willful violations) would be precluded by paragraph (c)(2) of

COPRA. 19 U.S.C. § 267(c)(2). However, the government specifically disclaimed at

oral argument any suggestion that the work here was officially assigned. See Oral

Argument, at 2:12, 4:43.

D

The government next challenges the lower court's award of liquidated damages.

Pursuant to 29 U.S.C. § 260, "if the employer shows to the satisfaction of the court that

the act or omission giving rise to such action was in good faith and that he had

reasonable grounds for believing that his act or omission was not a violation of the

[FLSA], the court may, in its sound discretion, award no liquidated damages." "The

burden rests on the government to establish its good faith and the reasonable grounds

for its decision." Adams, 350 F.3d at 1226. Because the lower court has broad

statutory discretion, we review its decision for abuse of that discretion.

The court below relied upon the same facts in determining that Customs did not

act in good faith as it did in determining that Customs acted willfully. Because such

determinations are closely intertwined, reliance upon the same evidence for both is not

necessarily problematic. See id. at 1229. As we held above, we likewise hold here that

the evidence was sufficient, and the court's finding was not clearly erroneous. As such,

the court did not abuse its discretion in awarding liquidated damages. Furthermore, we

note that the government's arguments in favor of its good faith compliance with FLSA

reveal its view, prior to issuance of the Jacksta memorandum, about the nature of the

overtime work at issue. The government contended that "an awareness that towels are

2006-5038 24
dirtied and then cleaned is separate from awareness from how the towels become

clean." Bull II, slip op. at 44. This argument, correctly dismissed as specious by the

Court of Federal Claims, is revealing. Far from "officially assigned" overtime work, the

government sought to treat the circumstances of cleaning of the towels as something of

which it was not even aware. That Customs suffered this work to be performed is

indisputable.

E

With respect to the determination below that the plaintiffs are entitled to two

hours of compensation per week for the time they spent laundering towels, the

government contends that the trial court erred because the plaintiffs were "waiting to be

engaged," as opposed to being "engaged to wait," during the downtime between loading

and unloading the washer and dryer. See Skidmore, 323 U.S. at 137. In particular, the

government argues that "[g]iven the variety of personal activities that plaintiffs could and

did perform while the towels were in the washer and dryer [e.g., eating, reading,

watching television, etc.], Customs did not significantly restrict their activities for two

hours." Appellant's Br. at 30. At most, the government continues, the plaintiffs should

be awarded fifteen minutes of compensation for their weekly laundry duties.

Because the government does not challenge the lower court's findings of fact, we

review the compensability under FLSA of the plaintiffs' downtime de novo. See

Huskey v. Trujillo, 302 F.3d 1307, 1310 (Fed. Cir. 2002) (reviewing de novo the

compensability of on-call time under FEPA). Under that standard of review, we

conclude that the plaintiffs were "engaged to wait" because their activities during the

downtime were significantly limited by their need to monitor their running washers—

2006-5038 25
appliances capable of overflowing—and running dryers—appliances capable of causing

fires. Indeed, as the Court of Federal Claims found, CEOs generally remained at or

near their home laundering facilities during the cleaning cycles. Bull II, slip op. at 51.

Therefore, we affirm the award of two hours per week for laundering towels.

F

Finally, we address the government's claim that the trial court erred in awarding

three plaintiffs 1.5 hours per week for the construction of training aid containers even

though those three plaintiffs testified that they spent less than that amount of time

performing that duty. However, the government has not cited any authority for the

proposition that damage awards cannot exceed the amount requested by the plaintiff.

Thus, we find no reason to disturb the award of 1.5 hours per week.

IV

In sum, and for the reasons stated above, we affirm decision of the Court of

Federal Claims in full.

AFFIRMED

2006-5038 26