Opinion
CIVIL ACTION NO. 03-0536, SECTION "K"(5).
July 30, 2003.
ORDER AND REASONS
Before this Court is a Motion for Partial Summary Judgment, (Rec. Doc. 4), filed by defendant Canal Barge Company, Inc., ("Canal Barge"), seeking dismissal of claims brought by plaintiff Benjamin Craven on behalf of himself and putative class members for conversion, enrichment without cause, alienation of a thing not owed, and breach of duty of performance and standard of care. Canal Barge contends that the Court should dismiss Craven's claims because his allegation that Canal Barge's Accumulated Time Off ("ATO") system is unlawful is without merit. For the following reasons, the Motion is hereby GRANTED.
BACKGROUND
Canal Barge is an independent marine transportation company that employs wheelhouse employees, deck employees, engineers, cooks, and shore tankermen who work on and assist with the work being performed on vessels. In 1998, Craven was hired as a deckhand and later worked as a shore tankerman between May 2000 and the spring of 2001. Vessel employees normally work for thirty days and then are "off duty" for a period of either fifteen or thirty days.
Canal Barge pays their employees through an "Accumulated Time Off" system. Under the ATO method, an employee receives a paycheck for two-thirds of the amount he earned during the period he worked, and the remaining one-third of his earnings is placed into an ATO account. Defendant claims that the ATO system benefits employees because it: (1) helps employees keep track of the number of days off to which they are entitled, and (2) provides employees with a steady income throughout the year even though they may not work throughout the entire year. Defendant does not keep a separate ATO account for each individual employee, rather the ATO accounts are part of Craven's general funds. When an employee begins working at Canal Barge, defendant reviews the ATO system with the new employee and once he commences work, the employee receives a statement of his balance in the ATO account.
If an employee has a positive ATO balance at the end of his employment period, he will receive a check for that amount either in the next payroll period or within fifteen days, whichever is sooner. Also, employees may choose to withdraw funds from the ATO account at any time and for any reason. Canal Barge may advance the employee's salary and if an employee is paid more days than he has worked, then the employee owes work time to make up for the advanced wages.
Craven makes the following class claims stemming from his allegation that the ATO System of payment is unlawful: 1) enrichment without cause, 2) alienation of a thing not owed, 3) conversion, and 4) breach of duty of performance. Craven also brings an individual claim that defendant owes plaintiff overtime pay under the Fair Labor Standards Act. However, this claim is not subject to Canal Barge's Motion for Summary Judgment.
Canal Barge maintains that the ATO system is lawful and therefore the Court should dismiss plaintiff's individual and class claims because they arise from his and the class members' challenge to the legality of the ATO system.
SUMMARY JUDGMENT STANDARD
Fed.R.Civ.P. 56 provides in pertinent part that summary judgment will be granted when ". . . the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." See Celotex Corp. v. Catrett, 106 S.Ct. 2548, 2552 (1986); Lujan v. National Wildlife Federation, 110 S.Ct. 3177, 3189 (1990). To that end, the court must "view the facts and the inferences to be drawn therefrom in the light most favorable to the nonmoving party." Ameristar Jet Charter v. Signal Composites, 271 F.3d 624, 626 (5th. Cir. 2001). Where the record, taken as a whole, could not lead a rational trier of fact to find for the nonrnoving party, there is no genuine issue for trial. Matsushita Electric Industrial Co. v. Zenith Radio Corp., 106 S.Ct. 1348, 1356 (1986); Washington v. Allstate Ins. Co., 901 F.2d 1281 (5th Cir. 1990).
Furthermore, the party moving for summary judgment must "demonstrate the absence of a genuine issue of material fact," but not negate the elements of the nonmovant's case. Celotex, 106 S.Ct. at 2553; see Lujan, 110 S.Ct. at 3187. If the moving party fails to meet this initial burden, the motion must be denied, regardless of the nonmovant's response. However, if the movant does, meet this burden, the nonrnovant must go beyond the pleadings and designate specific facts showing that there is a genuine issue for trial. Celotex, 106 S.Ct. at 255 3-54. A dispute over a material fact is genuine if the evidence is such that a reasonable jury could return a verdict for the non-moving party. Kee v. City of Rowlett Texas, 247 F.3d 206, 210 (5th Cir. 2001).
The burden is not satisfied with "some metaphysical doubt as to material facts," Matsushita, 106 S.Ct. at 1356, by "conclusory allegations," Lujan, 110 S.Ct. at 3180, by "unsubstantiated assertions," Hopper v. Frank, 16 F.3d 92 (5th Cir. 1994), or by only a "scintilla" of evidence, Davis v. Chevron U.S.A., Inc., 14 F.3d 1082 (5th Cir. 1994). The court resolves factual controversies in favor of the nonmoving party, but only when there is an actual controversy, that is, when both parties have submitted evidence of contradictory facts. However, in the absence of any proof, the court will not assume that the nonmoving party could or would provide the necessary facts. See Lujan, 100 S.Ct. at 3188. Summary judgment is appropriate in any case "where critical evidence is so weak or tenuous on an essential fact that it could not support a judgement in favor of the nonmovant." Armstrong v. City of Dallas, 997 F.2d 62 (5th Cir. 1993). If the nonmoving party fails to meet this burden, the motion for summary judgment must be granted. See Evans v. City of Bishop, 238 F.3d 586-89 (5th Cir. 2000).
DISCUSSION
I. Legality of the Accumulated Time Off System
To create an issue of fact to defeat Canal Barge's Motion for Partial Summary Judgment, Craven asserts that Canal Barge has not proven that the ATO system is lawful. In support of his contention, Craven submits three affidavits where he, Sean H. Batiste, and Cody B. Sewell allege that while they were employed by Canal Barge, Canal Barge never fully explained the ATO system to them, they were not paid interest from their earned wages, they did not have immediate access to the ATO funds, and that Canal Barge often restricted their access to the funds. Craven further maintains that these facts support their causes of action against Canal Barge for 1) conversion, 2) enrichment without cause, 3) alienation of a thing not owed, and 4) breach of duty of performance and standard of care.
However, Craven's affidavits are not enough to create a genuine issue of fact on the first three theories that the ATO system is illegal. First, several cases have considered ATO systems and have not declared them to be unlawful. For instance in Lipscomb v. Foss Maritime Co., 83 F.3d 1106, 1109 (9th Cir. 1996), the court defined the ATO in question as "a method of deferred wage payment." See also Shaw v. Ohio River Co., 526 F.2d 193 (3d Cir. 1975). The Fifth Circuit has characterized an ATO as "paid vacation" and "a part of a seaman's total wages." Morel v. Sabine Towing Trans. Co., 669 F.2d 345, 346 (5th Cir. 1982). In Morel the court defined an accumulated leave time is "part of a seaman's total wages." Id. at 346. The Court further stated that:
[t]he vessel owner or operator contracts with a seaman to pay him for the period of services performed on the vessel plus an extended period represented by accumulated leave or earned vacation. For all practical purposes, paid vacation is merely a method of deferring wage payments. Each day the seaman works he earns compensation payable in the form of a periodic wage payment, plus a paid leave entitlement. The paid leave time is a benefit which is directly attributable to the seaman's work on the vessel; it is an inherent part of the seaman's wages.Id. at 346. Granted none of the above cited cases explicitly ruled on the legality of an ATO, but there are also no cases that suggest the conclusion that the system is illegal. The ATO method is merely a manner of paying employees so that for each day they work, they accumulate days off, wages, or paid vacation. In this case, the vessel employees accumulate days off, and their wages are deferred so that they can be paid on those days that they do not work.
Craven contends that Canal Barge's ATO system is distinguishable from the ATOs in Lipscomb and Morel. Craven argues that in Lipscomb, the plaintiff earned ATO time in addition to a base wage he received for the time working aboard ships. Likewise, he alleges in Morel, the defendant's system allowed the employees to receive the full amount of their earned pay in addition to paid vacation time for each day worked. In contrast to the Lipscomb and Morel ATO's, Craven asserts that Canal Barge's accumulated leave time requires employees to surrender one-third of their earned wages to create the accumulated time-off. Craven suggests that the crucial fact that distinguishes this case is that the money retained under Canal Barge's system has been earned by the employee and is the employee's property.
The Court fails to see the alleged differences between the lawful ATOs in Morel and Lipscomb and the ATO involved in the case at bar. Any difference in the execution of these ATOs is merely semantic. Although these cases describe systems that are slightly different than the ATO system in the instant case, the basic idea of these three systems are the same. As mentioned above, in Morel the court explained that accumulated leave time is a "method of deferred payment." Morel, 669 F.2d at 346. Each day the employee works, he earns compensation. Id. In Morel, this compensation was "paid vacation." Likewise, in this case, each day a Canal Barge employee works, he earns a wage deferment. In addition, he also earns a half day off. The wage deferment accumulates in the ATO account so that the employee can be paid for this time-off. As the Deckhand Manual puts it, "[w]ith the ATO system, even though the apprentice deckhand worked only 243.3 days, Canal Barge pays him regularly as if he had worked 365 days during the year." Manual, p. 2. The wage deferment, like the "paid vacation" in Morel and Lipscomb, is a benefit to the employee. Furthermore, the funds in the ATO account are not "inaccessible" because the employee can withdraw the money even to the point where he dips into his next paycheck. Consequently plaintiffs affidavits do not provide sufficient facts to create a genuine issue of material fact on the issue of the legality of the ATO system.
As to Craven's class claims that the ATO system constitutes conversion, enrichment without cause, alienation of a thing not owed, and breach of duty of performance and standard of care, the Court finds that no rational trier of fact could find merit in these theories of recovery. Craven simply has not brought forth any convincing evidence to show that Canal Barge employees did not consent to the use of the ATO system. First, the plaintiff and putative class members continued to work for Canal Barge and by withdrawing funds from the ATO accounts. Plaintiffs were willingly participating in the ATO system and reaping the benefit of being paid while not working. Canal Barge has attached as exhibits numerous statements that reflect the balance in the ATO account. These statements were sent to all Canal Barge employees, suggesting that Craven and the class members were aware of the ATO system and impliedly consented to it by drawing on the funds. Canal Barge has also attached an exhibit illustrating that Craven participated in orientation where the ATO system was explained to him.
Allegations that the Canal Barge ATO or "deferred payment" system constitutes conversion, wrongful possession, or impoverished the employees are completely without merit in light of the fact that the employees were aware of and consented to the system. Moreover, Craven makes no supportable allegation that the funds were misappropriated. A portion of each employee's wage was merely deferred. In sum, plaintiffs have not satisfied their burden of creating a genuine issue of material fact on these claims.
As to Craven's final claim, of failure to pay after resignation, the Court finds that this claim is based on his overtime claim under federal law under the Fair Labor Standards Act, as well as state law relating to timeliness of payment. Since the amount sought is part of the overtime claim, the state law claim is preempted by federal law, whether it is de minimus or not. Whitworth v. Chiles Offshore, No. 92-1504, 1992 WL 245618, (E.D. La.9/17/92), Divine v. Levy, 36 F. Supp. 55 (W.D. La. 1940). Accordingly, the Court will not resolve the issue in the instant motion, as it was not within the scope of the instant Motion for Partial Summary Judgment.
Accordingly,
IT IS ORDERED that Canal Barge's Motion to Dismiss or, Alternatively Partial Motion for Summary Judgment, Rec. Doc. 4, is GRANTED. Craven's class claims challenging the legality of the ATO system (including the related claims for conversion, enrichment without cause, alienation of a thing not owed, and breach of duty of performance and standard of care) are DISMISSED with prejudice.