Musarra v. Digital Dish, Inc.

• Decision Date: 28 September 2006
• Docket Number: No. C2-05-545.,C2-05-545.
• Parties: Dominic MUSARRA, et al., Plaintiffs, v. DIGITAL DISH, INC., Defendant.
• Court: U.S. District Court — Southern District of Ohio

Page 692

454 F.Supp.2d 692

Dominic MUSARRA, et al., Plaintiffs, v. DIGITAL DISH, INC., Defendant.

No. C2-05-545.

United States District Court, S.D. Ohio, Eastern Division.

September 28, 2006.

COPYRIGHT MATERIAL OMITTED

John Spenceley Marshall, Edward Reilley Forman, Louis Abraham Jacobs, Steven D. Dransfield, Marshall and Morrow LLC, Robert E. DeRose, II, Robert Karl Handelman, Barkan Neff Handelman Meizlish, LLP, Columbus, OH, for Plaintiffs.

Jill S. Kirila, Johnathan Sullivan, Squire Sanders & Dempsey, Columbus, OH, for Defendant.

OPINION AND ORDER

MARBLEY, District Judge.

I. INTRODUCTION

This matter comes before the Court on the parties' cross-motions for partial summary judgment.¹ On February 24, 2006, Plaintiffs moved this Court for partial summary judgment as to the applicability of the Motor Carrier Exemption to Plaintiffs. On the same day, Defendant, Digital Dish, moved for summary judgment on the same issue. For the reasons set forth herein, the Court DENIES Plaintiffs' Motion for Partial Summary Judgment and GRANTS Defendant's Motion for Partial Summary Judgment.

II. STATEMENT OF FACTS

A. Background

1. Digital Dish

Defendant Digital Dish ("Defendant" or "Digital Dish") is a privately-held, family-owned corporation whose primary purpose is to act as the Ohio Regional Service Provider ("RSP") for its parent company, DISH Network.² Digital Dish possesses an exclusive license to deliver and install DISH Network equipment, which consists primarily of satellite dishes and receivers, in an area encompassing Ohio, and portions of Kentucky, Indiana, and West Virginia.

Each of the three named plaintiffs, Dominic Musarra ("Musarra"), Kevin Mug ("Klug") and Charles Everett, Jr. ("Everett") (collectively "Plaintiffs"), worked for Digital Dish as a "satellite technician"³ (hereinafter "technician") during the time period between June 2003 through December 2004. During that time period, Digital Dish employed approximately 300 such delivery and installation technicians. Technicians have a myriad of duties, and their primary responsibilities consist of building, installing, repairing, and removing digital satellite equipment for DISH Network customers.

Digital Dish receives all of the goods that its technicians deliver, install, and service from out of state. DISH Network ships the goods via freight primarily from its facilities in Illinois, to pass onto its customers.⁴ DISH Network sends Digital Dish at least one or two tractor trailers of equipment each day. All incoming equipment goes to the Digital Dish distribution center in Millersburg, Ohio, and from there, is distributed to one of Digital Dish's thirteen Ohio warehouses. To determine the amount of product to ship to Digital Dish each day, DISH Network uses a formula based on the current needs of DISH Network customers in Digital Dish's geographic area. DISH Network extends a "credit limit" reflecting the amount of equipment that Digital Dish may receive per week, based on the number of customer jobs in queue — in other words, on the number of customers in Digital Dish's area of coverage who actually ordered product, made trouble calls, or requested changes and/or upgrades.

Digital Dish earns the most "credit" for each new connection currently in the job queue, and these "new connects" account for the largest part of the "credit limit" of shipped goods. Digital Dish receives a lesser "credit" for each pending trouble call in its area and for each pending customer "change or upgrade." To translate these "credits" into projected inventory requirements, DISH Network adds the above three "credit" categories together, doubles the result to account for inventory still in transit, and then multiplies by eighty percent. DISH Network then compares this "total credit" to Digital Dish's current credit balance, re-evaluating the need for a higher credit limit when and if the numbers reveal an increase in customer installation or service activity. The amount of "credit" DISH Network extends to Digital Dish changes constantly, rising and falling according to customer demand.

After the DISH Network equipment arrives at Digital Dish's Millersburg distribution center, Digital Dish employees break it down and sort it by warehouse. Receivers and dishes arrive on pallets. Receivers come in their own individual box on pallets that contain 50 to 70 boxes, depending on the model size. Each pallet is wrapped entirely in plastic, which must be removed when the warehouse workers break the pallets down. The warehouse workers scan each piece of equipment and determine which of the Digital Dish warehouses will receive it. Digital Dish maintains three tractor-trailers to deliver equipment from the Millersburg, Ohio distribution facility to its other Ohio warehouses.⁵

DISH Network maintains tight control over the equipment it ships to Digital Dish, shipping only on a consignment basis, and retaining title to its equipment until it is delivered to customers. In order to determine how long an individual piece of equipment sits in Digital Dish's warehouse, DISH Network also uses a tracking system based on the serial numbers of its equipment. Although DISH Network attaches a serial number to each piece of equipment it sends to Digital Dish, Digital Dish has its own tracking system as well. Pursuant to the Digital Dish system, Digital Dish assigns a second serial number to all incoming equipment before preparing it for distribution. DISH Network requires that Digital Dish retain equipment in its distribution centers for fewer than ten days before passing it onto DISH Network customers, and the equipment is usually transported to customers within three to four days.

2. Sales Referrals

In general, a DISH Network customer who wants to purchase DISH Network equipment contacts DISH Network directly either by phone or through the Internet. Digital Dish concedes, however, that approximately 0.5% of its monthly installations arise from Digital Dish referrals rather than from customers' direct contact with DISH Network.

Digital Dish employs one "salesperson" at its Millersburg, Ohio distribution center. Customers can contact that salesperson by phone or by walking into the Millersburg facility.⁶ There is no counter service for walk-in customers, but there are signs erected in the Digital Dish office that read, "Ask About Dish Network Service." If a person inquires about DISH Network, he or she is not guaranteed to become a DISH Network customer. If a person makes an inquiry, the Digital Dish salesperson contacts DISH Network who subsequently processes the person's information through its system to determine whether to "accept" him as a new customer.⁷ If DISH Network approves the customer, the customer's referral is processed as a standard DISH Network order.

After installation on a sales referral is complete, DISH Network considers the referral "successful" and the referring salesperson receives a $5.00 commission. Technicians can also make sales referrals. If a technician refers a new customer to Digital Dish to purchase DISH Network equipment, once that customer has been approved and the DISH Network equipment has been successfully installed, the technician receives a $30.00 commission on the sale. Aside from these commissions, all money from Digital Dish sales referrals goes directly to DISH Network.

3. DISH Network's Distribution of Work Orders to Digital Dish

DISH Network distributes work orders to Digital Dish based on the application of a complex formula which works on a "point system." Essentially, each Digital Dish technician who works in a particular geographic area represents a number of available "work points," depending on his background, experience, skill set, and availability. Digital Dish maintains a computer system to which DISH Network has access, which allows DISH Network to assess the amount of "points" Digital Dish has available in any give geographic area within its assigned region. When DISH Network receives a customer order, it examines the number of "points" available in that customer's geographic region, and if Digital Dish has sufficient points, DISH Network will forward the customer's order to Digital Dish, which will then assign the order to a specific Digital Dish technician. Each day, Digital Dish e-mails the upcoming DISH Network orders to its technicians, assigning orders based on each technician's geographic proximity to the customers.

4. Daily Tasks of a Technician

Technicians typically receive their next day's work orders in the evening and pre-call customers to schedule service appointments in advance. The Digital Dish warehouses " open at approximately 7:00 a.m. each day. When a technician arrives at one of Digital Dish's warehouses in the morning,⁸ he picks up the DISH Network equipment necessary to complete his day's assigned work orders. Technicians also pick up consumable supplies from the warehouses, such as nuts, bolts, cable, and poles, much of which are shipped to Digital Dish by DISH Network.⁹ Prior to leaving the Digital Dish warehouse, technicians generally attach the mounting structure, arms, and certain low-noise block feedhorns¹⁰ to satellite dishes to make more space in their trucks. Further, technicians often spend fifteen to twenty minutes downloading the necessary programs onto the receivers set for delivery, so they can save time once they arrive at a customer's home.¹¹

The warehouse worker scans all outgoing receivers and dishes, noting the DISH Network and Digital Dish serial numbers and the corresponding technician who took possession of the equipment. The worker also collects signed paperwork indicating that the technician actually received the equipment. The individual receivers and dishes are not assigned to a technician based on any specifically identified customer; each technician decides what receivers he needs based on his day's work orders. Technicians also pull equipment in advance, and store it in their truck...