Mineo v. Port Authority of New York and New Jersey

• Decision Date: 06 February 1986
• Docket Number: No. 83-5588,83-5588
• Citation: 779 F.2d 939
• Parties: 27 Wage & Hour Cas. (BN 777, 54 USLW 2349, 104 Lab.Cas. P 34,769 Vittorio MINEO, on behalf of himself and all others similarly situated v. PORT AUTHORITY OF NEW YORK AND NEW JERSEY, Appellant.
• Court: U.S. Court of Appeals — Third Circuit

Page 939

779 F.2d 939

27 Wage & Hour Cas. (BN 777, 54 USLW 2349,

104 Lab.Cas. P 34,769

Vittorio MINEO, on behalf of himself and all others similarly situated v. PORT AUTHORITY OF NEW YORK AND NEW JERSEY, Appellant.

No. 83-5588.

United States Court of Appeals Third Circuit.

Argued May 16, 1985.

Decided Dec. 27, 1985.

Rehearing and Rehearing En Banc Denied Feb. 6, 1986.

Hugh H. Welsh (Argued), Arthur P. Berg, Anne M. Tannenbaum, Jersey City, N.J., for appellant.

Seymour Margulies, Jack Jay Wind, (Argued), Margulies, Margulies and Wind, Jersey City, N.J., for appellees.

Before ADAMS, BECKER and VAN DUSEN, Circuit Judges.

OPINION OF THE COURT

VAN DUSEN, Senior Circuit Judge.

This case, before the court on the district court's certification pursuant to 28 U.S.C. Sec. 1292(b) (1982), presents the question whether appellees (hereinafter "Detectives"), who are police detectives employed by appellant, The Port Authority of New York and New Jersey (hereinafter "Port Authority"), are covered by the wage and hour provisions of the Fair Labor Standards Act, 29 U.S.C. Secs. 201-19 (1982) (hereinafter "FLSA"). In Garcia v. San Antonio Metropolitan Transit Authority, --- U.S. ----, 105 S.Ct. 1005, 83 L.Ed.2d 1016 (1985), which was decided after this court granted the Port Authority's petition for leave to appeal, the Supreme Court overruled its earlier decision in National League of Cities v. Usery, 426 U.S. 833, 96 S.Ct. 2465, 49 L.Ed.2d 245 (1976), and held that all state and municipal employees are covered by FLSA. For the reasons set forth in this opinion, we hold that Garcia should not be accorded retroactive application on the facts presented by this case and therefore that the Detectives do not fall within the coverage of FLSA. We will reverse the district court's denial of the Port Authority's motion to dismiss and will remand the case to the district court accordingly, with directions to dismiss this civil action.

I.

The Detectives are persons employed by the Port Authority as police detectives assigned to the Authority's Investigating Unit. They are authorized by the laws of New York and New Jersey to act as police officers, N.Y.Crim.Proc.L. Sec. 1.20, subdivision 34(k) (McKinney 1981); N.J.Stat.Ann. Sec. 32.2-25 (West 1963), and have the same powers as police directly employed by the two states. See State v. Cohen, 73 N.J. 331, 337, 375 A.2d 259, 264 (1977). ¹ The Port Authority is a municipal instrumentality of New York and New Jersey created by a compact between these two states with the consent of Congress (hereinafter "Compact"). See 1921 N.Y.Laws Ch. 154; 1921 N.J.Laws Ch. 151, pp. 412-22; S.J.Res. 88, 42 Stat. 174 (1921). ² This case had its origins in a collective bargaining dispute between the Detectives and the Port Authority over the latter's alleged refusal to pay the Detectives one and one-half times their regular hourly rate for hours worked in excess of forty hours a week. On October 10, 1980, in the midst of contract negotiations, the Detectives filed a complaint in the district court alleging that the refusal to pay this overtime rate violated Port Authority regulations. They later amended the complaint to allege that the Port Authority's refusal to pay overtime constituted a violation of FLSA. ³

On December 2, 1980, the Detectives and the Port Authority signed a collective bargaining agreement that took retroactive effect as of July 9, 1978. This agreement provided that the Detectives would be paid time and one-half for hours worked on a regular day off or vacation day, but not if they simply worked more than a certain number of hours in a given week. ⁴ Under the agreement, the Detectives were paid 25% more an hour than regular police officers employed by the Port Authority. During the course of the contract negotiations between the two parties, the Port Authority had contended that this 25% premium wage was being paid to the Detectives because they were often required to work overtime for which they received no increased hourly wage. The Detectives asserted, however, that they were entitled to the 25% premium because they performed duties in addition to those performed by regular Port Authority police officers and that the 25% premium therefore did not represent payment in lieu of time and one-half for overtime. The contract settlement thus did not end the overtime dispute, and the agreement contained no provision for the termination of the present lawsuit. ⁵

Following a period of limited discovery, the Port Authority moved to dismiss the complaint, contending that the Supreme Court's decision in National League of Cities v. Usery, 426 U.S. 833, 96 S.Ct. 2465, 49 L.Ed.2d 245 (1976), exempted state employees such as the Detectives from FLSA because they performed a "traditional governmental function." The Detectives responded by moving for partial summary judgment. The district court held a hearing on both motions. On September 29 1982, the district court filed an opinion and order denying the Port Authority's motion to dismiss. The court based its ruling on this court's earlier decision in Kramer v. New Castle Area Transit Authority, 677 F.2d 308 (3d Cir.1982), cert. denied, 459 U.S. 1146, 103 S.Ct. 786, 74 L.Ed.2d 993 (1983), which held that a mass transit authority was not an integral operation in an area of a state's "traditional governmental functions" and, therefore, that its bus drivers were not exempted from coverage under FLSA. Id. at 310. Reasoning that the Port Authority is engaged in the business of mass transit, the district court concluded that its employees, including the Detectives, are not exempt from FLSA coverage under National League of Cities. ⁶

Because the case revolved around a potentially dispositive legal question, viz., whether the Detectives are covered by FLSA, the Port Authority requested that the district court amend its September 29 order to certify the question for interlocutory appeal under 28 U.S.C. Sec. 1292(b) (1982). The court agreed, and on May 23, 1983, it amended its September 29 order accordingly. Shortly thereafter this court granted the Port Authority's petition for leave to file an interlocutory appeal pursuant to Fed.R.App.P. 5(a). ⁷

Prior to the date on which the case was to be heard in this court, the Supreme Court heard argument in consolidated appeals of Garcia v. San Antonio Metropolitan Transit Authority, --- U.S. ----, 105 S.Ct. 1005, 83 L.Ed.2d 1016, and Donovan v. San Antonio Metropolitan Transit Authority, --- U.S. ----, 105 S.Ct. 1005, 83 L.Ed.2d 1016, which presented the question whether the minimum-wage and overtime provisions of FLSA may be constitutionally applied to employees of publicly owned and operated mass transit systems. Because of the similarity between the question presented to the Supreme Court and the one presented here, we decided to hold this case under advisement pending the Court's decision. On February 20, 1985, the Supreme Court decided the Garcia and Donovan cases by overruling National League of Cities v. Usery, 426 U.S. 833, 96 S.Ct. 2465, 49 L.Ed.2d 245 (1976), and holding that no state employees should be exempted from coverage under FLSA. See Garcia v. San Antonio Metropolitan Transit Authority, --- U.S. ----, 105 S.Ct. 1005, 1020, 83 L.Ed.2d 1016 (1985). We then requested the parties to submit supplemental briefs addressing the question whether Garcia controlled this case. The parties disagreed as to the propriety of applying Garcia retroactively to serve as the governing law in this suit. This is the principal question we must now decide.

II.

Before determining whether to apply Garcia retroactively so as to govern this case, we will review the state of the law prior to Garcia to explain how and why Garcia changed such law.

In 1974, Congress amended FLSA to subject almost all persons employed by the states and their political subdivisions to its wage and hour provisions. Fair Labor Standards Amendments of 1974, Pub.L. No. 93-259, 88 Stat. 55, 59. The National League of Cities and the National Governors' Conference challenged the amendments, contending that they unconstitutionally infringed upon states' sovereignty. The Supreme Court agreed that the determination of state employees' wages is an attribute of state sovereignty, National League of Cities v. Usery, 426 U.S. at 845, 96 S.Ct. at 2471, and held that Congress may not use the Commerce power to impose upon the states its choices regarding essential decisions in areas of traditional governmental functions. Id. at 855, 96 S.Ct. at 2476. The Court thus declared FLSA unconstitutional to the extent that it purported to apply to state employees performing such functions. Id. at 852, 96 S.Ct. at 2474. The National League of Cities principle was clarified in a later decision, Hodel v. Virginia Surface Mining & Recl. Assoc., 452 U.S. 264, 101 S.Ct. 2352, 69 L.Ed.2d 1 (1981), which set out a three-part test for determining when congressional regulation of state conduct exceeded its Commerce Clause power:

"First, there must be a showing that the challenged statute regulates the 'States as States.' Second, the federal regulation must address matters that are indisputably 'attribute[s] of state sovereignty.' And third, it must be apparent that the States' compliance with the federal law would directly impair their ability 'to structure integral operations in areas of traditional governmental functions.' "

Id. at 287-88, 101 S.Ct. at 2366 (citations omitted).

The question presented to the Court in Garcia concerned an application of the third part of the Hodel test. The Court was asked to determine whether applying FLSA to employees of the San Antonio Metropolitan Transit Authority would constitute an impairment of San Antonio's ability to operate in an area of traditional governmental functions. Garcia, 105 S.Ct. at 1007. Although the Court in National League of Cities had identified certain types of state operations, such as police protection...