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ATLANTIC INDEPENDENT UNION v. SUNOCO

June 16, 2004.

ATLANTIC INDEPENDENT UNION, et al., Plaintiffs,
v.
SUNOCO, INC, d/b/a MOHAWK HOME COMFORT SERVICES, f/k/a MOHAWK VALLEY OIL, Defendant.



The opinion of the court was delivered by: BERLE M. SCHILLER, District Judge

MEMORANDUM AND ORDER

I. INTRODUCTION

This action involves a dispute regarding overtime wages between Plaintiff Atlantic Independent Union and several of its members (collectively "Plaintiffs"), who are employed as drivers under a collective bargaining agreement, and their employer, Defendant Sunoco, Inc. ("Sunoco"), d/b/a Mohawk Home Comfort Services, Inc., f/k/a Mohawk Valley Oil ("Mohawk"). Plaintiffs assert that: (1) they are entitled to overtime compensation under the Fair Labor Standards Act ("FLSA") and New York labor law; and (2) they are entitled to compensation during their lunch periods because the New York State Commercial Drivers Manual requires that they remain within 100 feet and in plain view of their vehicles during that time. Defendant contends that because the product transported by Plaintiffs to its ultimate destination travels via interstate commerce, the motor carrier exemption to the FLSA applies and Plaintiffs are not entitled to overtime compensation. Presently before the Court are the parties' cross-motions for summary judgment. For the reasons set forth below, I find that the motor carrier exemption applies, grant summary judgment in favor of Defendant on this issue, and decline to exercise supplemental jurisdiction over Plaintiffs' state-law claims. II. BACKGROUND

  The following facts are relevant to the dispute at issue in the cross-motions, that is, whether the essential character of the shipment of Mohawk's products is interstate or intrastate.*fn1

  A. The Shipment Process

  Defendant Mohawk is a division of Sunoco with an established retail, wholesale, and commercial customer base in New York. (Fioretto Aff. ¶ 2; Fioretto Dep. at 9-10; Russell Aff. ¶ 4.) Mohawk purchases the majority of its petroleum products, including heating oil, kerosene, diesel fuel, and gasoline, from Sunoco's refineries in Marcus Hook, Pennsylvania and Philadelphia, Pennsylvania. (Russell Aff. ¶ 8.) The product is then shipped via pipeline to the Buckeye Pipeline facilities in Macungie, Pennsylvania and Linden, New Jersey where the product is transferred to the Buckeye Pipeline Company for shipment to Mohawk's main terminal facility in Marcy, New York. (Id. ¶¶ 6, 8.)

  From Mohawk's main terminal facility in Marcy, the product is either delivered directly to customers or transported to one of Mohawk's bulk plants for delivery to its final destination. (Id. ¶ 6.) The product is not held for sale at the bulk plants; rather the bulk plants are temporary storage locations chosen for their geographic proximity to known customers. (Id. ¶ 9.) Mohawk takes ownership of the product at the Buckeye Pipeline facilities and maintains ownership as it moves continuously through the Buckeye Pipeline system to the Mohawk's main terminal in Marcy, New York, to Mohawk's bulk plants and then ultimately to customers. (Id. ¶ 8; Russell Dep. at 30.) Mohawk does not process or alter the product from the time it obtains title until delivery to its customers. (Russell Dep. at 32-33.)

  Mohawk's drivers deliver eighty-five to eight-seven percent of their products. (Fioretto Aff. ¶ 7.) The forty-one drivers are employed at the Marcy terminal and are represented by the Atlantic Independent Union pursuant to a collective bargaining agreement. (Id. ¶¶ 2-4.) These drivers are required to have New York commercial driver's licenses and a hazardous materials endorsement. (Pls' Mot. for Summ. J., Ex. B.) The remainder of the product is sold "over the rack" to wholesalers that generally have contracts with Mohawk to pick up their own product. (Fioretto Aff. ¶ 7.) According to Mohawk's deliveryprocedures, the drivers are given tickets each dayindicating delivery amounts, locations and types of product. (Fioretto Dep. at 14-15.) The drivers load the trucks and deliver the product to these specifications. (Id.) During the shipment process, the amount of product owned by Mohawk is identifiable by volume and carefully tracked by detailed documentation to each final location. (Russell Aff. ¶ 8; Fioretto Dep. at 15; Russell Dep. at 51-53.)

  B. Determining Supply and Demand

  Mohawk's business is seasonal and driven by the demands of customers. (Russell Aff. ¶ 4; Fioretto Aff. ¶¶ 5, 6; Fioretto Dep. at 10-14.) Approximately half of Mohawk's revenues are derived from the sale of home heating products to consumers and the other half of its revenue from commercial and wholesale contracts. (Fioretto Aff. ¶¶ 5, 6.) Mohawk does not maintain a standing inventory of product for resale to the general public. (Id. ¶ 7.) Approximately fifty-five to sixty percent of the home heating customers have entered into automatic monitoring arrangements with Mohawk. (Fioretto Dep. at 9-12; Fioretto Aff. ¶ 5.) Mohawk determines these customers needs based on temperature. (Fioretto Dep. at 11-13.) Between forty and forty-five percent of the home heating customers are "will call" customers who have an established relationship with Mohawk, monitor their own usage and contact Mohawk for delivery when they decide they need more product. (Fioretto Aff. ¶ 5; Fioretto Dep. at 11.) In addition, some of Mohawk's heating oil customers have pre-buy arrangements wherein the customer pre-pays a discounted price for all of the product it anticipates it will need for the upcoming season. (Fioretto Dep. at 17.) Mohawk also has commercial and wholesale contracts for diesel fuel with, for example, farmers and for kerosene and other products with entities such as the State of New York and various New York municipalities. (Russell Dep. at 11-13; Fioretto Aff. ¶ 6).

  In the summer months, Mohawk sells a substantial amount of diesel fuel to commercial accounts and farmers. (Russell Aff. ¶ 10.) Diesel fuel is ordered, shipped and then typically remains at the Marcy terminal for less than fifteen days. (Id. ¶ 10.) From the end of March to the end of June, Mohawk maintains virtually no inventory of home heating product. (Id. ¶ 4.) From October through March, approximately seventy-five percent of Defendant's annual amount of home heating oil and kerosene is sold. (Id. ¶ 5.) During the height of the heating oil season, Mohawk orders heating oil and supplies it to customers as soon as the product arrives at Mohawk's terminal in Marcy, New York. (Id. ¶ 6.) In addition, during this time period, the heating oil proceeds to its customers without significant delay and Mohawk must resupply heating oil about every two weeks. (Russell Dep. at 39-40.)

  Mohawk forecasts its demand for home heating oil with a system developed by Theodore Russell, an independent consultant and expert on the supply and distribution of petroleum products. (Russell Aff. ¶¶ 1-5.) In late February or early March, Mohawk creates its initial forecast for the following twelve months. (Id. ¶ 4; Russell Dep. at 31.) Mr. Russell's initial forecast is based on the prior year's sales to Mohawk's known customer base, assuming that average weather conditions will prevail. (Russell Aff. ¶ 4; Russell Dep. at 31.) The forecast is continually updated until the product is shipped. (Russell Aff. ¶¶ 5, 7; Russell Dep. at 33-38, 47.) The flexibility of this system allows changes to the amount shipped up until seven days before it is received by the customer and thus, permits Mohawk to adjust its shipment based on actual knowledge of customer need. (Russell Dep. at 47.)

  III. DISCUSSION

  A. Summary Judgment ...


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