Venegas v. Global Aircraft Serv., Inc.
| Decision Date | 23 September 2016 |
| Docket Number | Docket No. 2:14-cv-249-NT |
| Parties | CHRISTOPHER VENEGAS, et al., Plaintiffs, v. GLOBAL AIRCRAFT SERVICE, INC. and LUFTHANSA TECHNIK NORTH AMERICA HOLDING CORP., Defendants. |
| Court | U.S. District Court — District of Maine |
Before the Court is the Defendants' joint motion for summary judgment pursuant to Federal Rule of Civil Procedure 56 (ECF No. 100). For the reasons stated below, the Defendants' joint motion for summary judgment is GRANTED IN PART and DENIED IN PART.
The following facts are based on the parties' joint statement of material facts, which contains all of the parties' statements of facts and responses. At the summary judgment stage, I am obligated to view the facts in the light most favorable to the non-moving party and make all reasonable inferences in that party's favor. Johnson v. Univ. of P.R., 714 F.3d 48, 52 (1st Cir. 2013).
This class/collective action arises out of restoration work being performed on a Lockheed L-1649A Super Star airplane (the "Super Star") at the Lewiston-Auburn Municipal Airport in Auburn, Maine. The Plaintiffs are individuals who performed work on the Super Star project.
Defendant Lufthansa Technik North America Holding Corp. ("LTNA") falls within the corporate structure of Deutsche Lufthansa AG ("Lufthansa"). Lufthansa "is a global aviation group with approximately 540 subsidiaries, which are organized into five primary business segments: Passenger Airline Group;1 Logistics; Maintenance, Repair, and Overhaul ("MRO"); Catering; and IT Services." Joint Statement of Material Facts and Resp. to Req. to Strike ¶ 1 ("JSMF") (ECF No. 121). These business segments are referred to collectively as the "Lufthansa Group," and Lufthansa is the parent company of all Lufthansa Group entities. JSMF ¶¶ 1-2.
The events leading to this litigation began in December of 2007, when the Deutsche Lufthansa Berlin-Stiftung ("DLBS"), which is managed and controlled by Lufthansa, acquired three Super Star airplanes.2 JSMF ¶¶ 37, 39. DLBS thencontracted with Lufthansa Technik AG ("LHT") "to overhaul and restore one of the Super Stars to an airworthy condition." JSMF ¶ 37. LHT is a wholly owned subsidiary of Lufthansa, which provides MRO services for civil aircraft. JSMF ¶ 6. LHT provides integral services to the Passenger Airline Group, which is LHT's single largest customer. JSMF ¶¶ 9-10.
Defendant LTNA is a wholly owned and controlled subsidiary of LHT. JSMF ¶ 13. LTNA does not operate any aircraft itself. JSMF ¶ 105; Defs.' Resp. to Pls.' Statement of Material Fact ¶ 105 ("DRPSMF"). Instead, LTNA performs MRO work on "the aircraft and components used by Lufthansa German Airlines, . . . airlines that are under common control by Deutsche Lufthansa AG, and other external airlines." JSMF ¶ 14. MRO "are functions traditionally performed by airline employees in the aircraft industry." JSMF ¶ 53. The majority of LTNA's MRO work is performed for passenger and freight airlines through LTNA's Federal Airline Regulation Part 145 Repair Stations, which are located in Maine, California, Florida, Oklahoma, and Puerto Rico. JSMF ¶¶ 15-16.
Defendant Global Aircraft Services, Inc.
Defendant Global Aircraft Services, Inc. ("GAS") is a Texas repair company that services, maintains, and repairs aircraft fuel systems. JSMF ¶ 83; Ex. 6 to Loc. Rule 56(h) Stip. Rec. ¶ 2 ("Ex. 6") (ECF No. 122-6). Like LTNA, GAS does not operate any commercial flights. JSMF ¶ 106.
In September of 2009, LTNA retained GAS "to deseal, change fasteners and dome nuts, and reseal the wings of the Super Star." JSMF ¶ 80; Ex. 6, ¶ 3. After GASwas retained, however, "it became clear that the extent of the corrosion on other portions of the aircraft required more work than GAS was able to provide." JSMF ¶ 81. Accordingly, LTNA requested that GAS "identify and supply sheet metal contractors to perform repairs outside the fuel system." JSMF ¶ 82. "Although GAS's ordinary business was limited to fuel systems, it agreed to use its own repair-station license and contacts in the industry to refer contractors to the Super Star project." JSMF ¶ 83.
The referred contractors all signed the same agreement with GAS to work as independent contractors restoring the Super Star at an hourly rate. Ex. 3 to Loc. Rule 56(h) Stip. Rec. 57:10-20; 58:6-9 ("Ex. 3") (ECF No. 122-3). Christopher Venegas, the named Plaintiff, began working on the Super Star project in early 2013. Ex. 11 to Loc. Rule 56(h) Stip. Rec. ¶ 3 ("Ex. 11") (ECF No. 122-11).
The project involves the restoration of the Super Star at LTNA's Auburn, Maine Repair Station, which is located on the grounds of the Auburn-Lewiston Airport. JSMF ¶¶ 47-48. The Super Star "is being modified to meet current FAA standards for passenger safety." JSMF ¶ 54. Accordingly, the work "is highly regulated by the FAA." JSMF ¶ 85. While the work was initially performed through GAS's FAA Repair Station authorization, the FAA required LTNA to have its own Repair Station Certificate in 2010. JSMF ¶ 49. As the holder of an Air Agency Certificate, LTNA must comply with "the requirements of the Federal Aviation Regulations relating to the establishment of an Air Agency and Repair Station." JSMF ¶ 51. Thus, LTNA's Director of Maintenance for the project "is responsible forthe overall operation of the Repair Station[,]" including "directing, planning, and laying out the details of inspection standards, methods, and procedures used by the repair station in complying with all applicable Federal Aviation Regulations." JSMF ¶¶ 55-56.
The discovery of hidden damage on the Super Star has extended the project five years past its anticipated end date. JSMF ¶ 66. The Super Star itself has not flown in at least ten years, and the restoration project has now been ongoing for seven years. JSMF ¶¶ 108, 111. The Plaintiffs in this case have worked on the Super Star project only at the Auburn-Lewiston Airport. JSMF ¶ 109. And LTNA has not performed any additional work at the Auburn-Lewiston Airport beyond working on the Super Star. JSMF ¶ 110.
The majority of the work on the Super Star is performed by workers designated as independent contractors, although there are some LTNA employees who work on the project. See JSMF ¶ 58. For his part, Venegas "worked on fabricating parts, constructing the frame, installing various parts, and inspecting parts that would be installed on the Super Star." JSMF ¶ 65. Although the type of sheet metal work done on the Super Star was typical of the type of work airlines perform to maintain passenger and cargo aircraft, the licensing requirements were different.3 Workers on the Super Star project did not need an Airframe and Power Plant license, which wouldbe required if the work were performed for an airline. Pls.' Resp. to Defs.' Statement of Material Fact ¶ 63 ("PRDSMF"); Pls.' Resp. to Defs.' Reply Statement of Material fact ¶ 116 ("PRDRSMF"). "GAS's job advertisement for 'Aircraft Sheet Metal Contractors' states that an Airframe and Power Plant license is not required." PRDSMF ¶ 63.
Lufthansa, DLBS and LSSG "are restoring the Super Star aircraft to meet current FAA-standards for passenger service."4 JSMF ¶ 42. "Once the full restorationis complete, the Super Star will provide paying passengers with a unique service of traveling on one of Deutsche Lufthansa AG's fleet of vintage aircraft, flying both national and international routes." JSMF ¶ 43. Flights on the Super Star will operate as airplanes did in the 1950s—at half the speed and half the altitude of today's commercial airliners—"providing passengers with a unique perspective of the landscapes below." JSMF ¶ 44. "The Super Star will also be presented at airshows and exhibitions." JSMF ¶ 45. And ticket prices for flights on the Super Star "will be priced on the basis of a break-even policy to directly support the maintenance of the plane." JSMF ¶ 46.
LTNA's employees are eligible for several different programs, benefits, and plans through its parent company LHT. JSMF ¶¶ 17, 21-31. Examples of benefits include membership in different plans, such as medical, dental, life, accidental death/dismemberment, disability, and flexible spending accounts. JSMF ¶ 18. LTNA offers its employees three choices for health insurance with resulting contributions from LTNA/LHT, depending on the selected coverage. JSMF ¶¶ 19-20. After three months of employment, LTNA employees can participate in LTNA's 401(k) Plan "which provides a 2% contribution above what the employee contributes up to 7%." JSMF ¶ 26. Employees also receive flight privileges, including reduced-fares on "Lufthansa, Star Alliance, and ZED Partners" flights. JSMF ¶ 32. "Immediate familymembers, companions, and a limited number of friends can accompany the LTNA employee on these trips." JSMF ¶ 32. In all, these benefits are "estimated to increase LTNA's costs of employment on average of 30-40% above the employee's regular pay." JSMF ¶ 33. Each contractor working on the Super Star project would be entitled to these benefits if they were classified as LTNA employees. JSMF ¶ 69.
Given the higher costs LTNA spends on employees, reclassifying all of the workers on the Super Star project would impact the project itself and the way that LTNA conducts its business. JSMF 68.5 It is anticipated that reclassification would make it difficult to engage a sufficient number of workers to meet the Super Star's production schedule. JSMF ¶ 71; PRDSMF ¶ 71. And because of the unexpected costs that have already been incurred in restoring the Super Star, it is "foreseeable that requiring LTNA to reclassify all workers on the project as LTNA's employees would put the completion of the Super Star project in jeopardy." JSMF ¶ 74.6 On the other hand, if the project...
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