Asalde v. First Class Parking Sys. LLC

• Decision Date: 03 August 2018
• Docket Number: No. 16-16814,16-16814
• Citation: 898 F.3d 1136
• Parties: Flor Andrea Rodriguez ASALDE, John Conde, Javier Antonio Cabrera Savinovich, and all others similarly situated under 29 U.S.C. § 216(b), Plaintiffs-Appellants, v. FIRST CLASS PARKING SYSTEMS LLC, a.k.a. 1st Class Valet Service, Sebastian Lopez, Jorge Zuluaga, Defendants-Appellees.
• Court: U.S. Court of Appeals — Eleventh Circuit

898 F.3d 1136

Flor Andrea Rodriguez ASALDE, John Conde, Javier Antonio Cabrera Savinovich, and all others similarly situated under 29 U.S.C. § 216(b), Plaintiffs-Appellants,

v.FIRST CLASS PARKING SYSTEMS LLC, a.k.a. 1st Class Valet Service, Sebastian Lopez, Jorge Zuluaga, Defendants-Appellees.

No. 16-16814

United States Court of Appeals, Eleventh Circuit.

August 3, 2018

Jamie H. Zidell, Rivkah F. Jaff, Joshua Howard Sheskin, J.H. Zidell, PA, MIAMI BEACH, FL, for Plaintiffs-Appellants.

Lowell Joseph Kuvin, Sundeep K. Mullick, Lowell J. Kuvin Law Office, MIAMI, FL, for Defendant-Appellees.

Before JORDAN and JILL PRYOR, Circuit Judges.¹

JORDAN, Circuit Judge:

We withdraw our previous opinion, reported at 894 F.3d 1248 (11th Cir. 2018), and issue this opinion in its place.

Flor Andrea Rodriguez Asalde and others worked as valets for First Class Parking Systems LLC in Miami-Dade County, Florida. They brought claims against FCPS and its owners (whom we refer to collectively as FCPS) under the minimum-wage and overtime provisions of the Fair Labor Standards Act, 29 U.S.C. § 201 et seq. The district court granted summary judgment in favor of FCPS, concluding that there was no "enterprise" coverage under the FLSA.

Following a review of the record, and with the benefit of oral argument, we conclude that FCPS was not entitled to summary judgment on the issue of "enterprise" coverage. Based on the evidence, a jury could find that the valet tickets used by the plaintiffs in their work for FCPS constituted "materials" under the FLSA's "handling clause," thereby providing "enterprise" coverage. See 29 U.S.C. § 203(s)(1)(A)(i).

I

The FLSA covers certain employment scenarios. See, e.g., 29 U.S.C. § 203(s). The plaintiffs here asserted in part that their employment by FCPS as valets was covered by the "materials" prong of the "handling clause" under the "enterprise" coverage provision in the Act. See Polycarpe v. E&S Landscaping Serv., Inc. , 616 F.3d 1217, 1220–21 (11th Cir. 2010). Cf. Thorne v. All Restoration Servs., Inc. , 448 F.3d 1264, 1266 (11th Cir. 2006) (addressing "individual" coverage rather than "enterprise" coverage). The "handling clause" provides that an entity is subject to "enterprise" coverage under the FLSA if it "has employees handling, selling, or otherwise working on goods or materials that have been moved in or produced for [interstate or international] commerce by any person." 29 U.S.C. § 203(s)(1)(A)(i). See also § 203(b) (defining "commerce"). The entity must also have an "annual gross volume of sales made or business done [of] not less than $500,000," § 203(s)(1)(A)(ii), but that requirement is not at issue on appeal because FCPS stipulated that it earned at least $500,000 in the years at issue. See D.E. 44-4, Deposition of Sebastian Lopez at 11.

When it moved for summary judgment, FCPS argued in part that the plaintiffs could not show that any employees handled any qualifying "goods or materials." The district court agreed and granted summary judgment in favor of FCPS on this basis alone. The court concluded that the cars parked by the plaintiffs were not "materials" under the FLSA. It also ruled that "the fact that [the plaintiffs] handled walkie-talkies, pens, uniforms, valet tickets and other items that originated out of state" did not change the "instrastate nature of their work" because "[FCPS] was the ultimate consumer of those goods." Rodriguez Asalde v. First Class Parking Sys. LLC , 2016 WL 5464599, at *2–3 & n.4 (S.D. Fla. Sept. 29, 2016).

II

We review the district court's summary judgment order de novo, and view the evidence (and inferences) in the light most favorable to the plaintiffs, who were the non-moving parties. See Howlett v. Birkdale Shipping Co., S.A. , 512 U.S. 92, 94, 114 S.Ct. 2057, 129 L.Ed.2d 78 (1994) ; Penley v. Eslinger , 605 F.3d 843, 848 (11th Cir. 2010). We hold that the evidence presented by the plaintiffs permits a jury to find that the valet tickets they used while working for FCPS were "materials" within the meaning of § 203(s)(1)(A)(i).

III

"Goods" and "materials" are distinct (i.e., not overlapping) categories; an object may be a "good" in certain contexts and a "material" in others. See Polycarpe , 616 F.3d at 1222, 1225–27. The term "goods" is defined broadly in the Act. See id. at 1222 (quoting 29 U.S.C. § 203(i) ). The term "materials" is not defined at all. See Rodriguez v. Gold Star, Inc. , 858 F.3d 1368, 1370 (11th Cir. 2017) (decided after the district court's ruling in this case); Polycarpe , 616 F.3d at 1222.²

In Polycarpe , we concluded that "materials" are "tools or other articles necessary for doing or making something," 616 F.3d at 1224, but added a cautionary footnote: "We do not rule out today that additional meanings of ‘materials’ might also exist that also preserve the unchanged ‘goods’ definition and the important ultimate-consumer exception. But no party has drawn our attention to such a definition of ‘materials’ in this case." Id. at 1224 n.4.

We set out the following test for determining whether an item constitutes a "material" under the FLSA:

First, whether an item counts as "materials" depends on whether the item is serving as a material in context.... [T]o count as "materials," an item must [be a] tool[ ] or other article[ ] necessary for doing or making something....

Second, for an item to count as "materials" it must have a significant connection with the employer's commercial activity; the business may not just somehow internally and incidentally consume the item.

Id . at 1226. We also provided multiple examples to explain what this test means in practice.

First, following the lead of the Senate Report for certain 1974 amendments to the FLSA, we discussed the soap used by a laundry. See id . at 1224–25. We noted that if a laundry uses soap to clean clothes handed over by a customer, then it uses the soap as a "material" (a tool or other article necessary for doing or making something) to clean those clothes. See id . at 1225. "One could easily consider the soap in this example as an ‘article[ ] necessary for doing something,’ for instance, washing clothes." Id. We explained that "where a business provides a service using an item as part of its ‘commercial operations,’ Congress intended for those kinds of items to be viewed as ‘materials.’ " Id .

Second, we looked to a Department of Labor opinion letter. That letter opined that coffee served by a fast-food retailer, as well as the cleaning supplies and equipment that it used, were "materials" for the purpose of this test. See id ."[W]e imagine that, where a restaurant uses interstate cooking equipment as an article to perform its commercial activity of serving food, the restaurant is engaged with ‘materials’ that will subject the business to FLSA coverage." Id.

Third, we considered the example of china dinner plates. See id . at 1226. We said that "[d]epending on how they are used, china dinner plates ... could count as either ‘goods’ or ‘materials.’ Where a catering business uses the china plates at a client's banquet, the plates count as part of the ‘materials’ necessary for serving a catered meal." Id . But where "an accounting firm ... uses the same china plates as objects of decoration mounted on its lobby wall, the china plates cannot count as ‘materials’ because the plates have no significant connection to the business['] accounting work." Id . Instead, "[t]he china plates in this example seem likely to count as ‘goods’ that are subject to the ultimate-consumer exception because the accounting firm is the items' ultimate consumer." Id . at 1226 n.9.

Applying this test, and considering the examples we provided, we held in Polycarpe that the district court on remand would have to determine whether the following items could be found to be "materials" under the FLSA: (1) "shutters containing blades that were evidenced to have been made in Col[o]mbia," sold by the employer and installed by its employees, id . at 1227 ; (2) "burglar alarms with wires, key pads, and other components manufactured out of state," sold by the employer and installed by its employees, id . ; (3) "paint, tape, and coarse drywall screws" with which employees made "home repairs" for customers, id. ; and (4) "lawn mowers, edger blades, trucks, pencils, and gasoline" with which employees performed "landscaping tasks" for customers, id . at 1228.

Our recent decision in Gold Star , 858 F.3d at 1368 —issued after the district court issued its summary judgment order—is also informative on the "materials" front. In that case, as here, employees of a valet parking company sued under the FLSA. They claimed that the cars they parked were "materials." Applying our Polycarpe test, we held that they were not.

In so holding, we further elaborated on the definition of "materials." We favorably cited the decision of the district court on remand in Polycarpe , which had ruled that "trucks used by the employees in a landscaping business were ‘materials.’ " Id . at 1370–71. We did the same with another district court decision concluding that "the flashlight, uniform, and cellphone used by an employee of a property rental business" could be "materials.'" Id .

Ultimately, we reasoned in Gold Star that cars parked by valets are not "materials" because they are an item on which a service is performed rather than the means of performing the service. See id . at 1371. Returning to our "example of a commercial laundry, with the soap employed to wash the clothing constituting the ‘materials,’ " we reasoned that

[t]he cars that Rodriguez parks are more akin to the clothing than the soap in this example. Like the dirty clothing brought to the commercial laundry to be washed, the cars are handed to the valet parkers to be parked. In both cases, the employees perform a service for the customer with respect to the items left in their care. The employees do something to the cars here, like the employees of the commercial laundry do something to the

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