The opinion of the court was delivered by: PAUL FRIEDMAN, District Judge
This matter is before the Court on defendant's motion for
summary judgment and plaintiff's motion for summary judgment on
the issue of liability. The Court heard oral argument on the
motions on May 19, 2004. Upon consideration of the parties'
motions for summary judgment, the oppositions, the replies, and
the arguments of counsel, the Court concludes that plaintiff's
motion for summary judgment on the issue of liability should be
granted and defendant's motion for summary judgment should be
Plaintiffs allege that defendant Government Employees Insurance
Company ("GEICO") has, since at least June 15, 1998, violated the
Fair Labor Standards Act, 29 U.S.C. § 201 et seq. ("FLSA"),
by failing to pay plaintiff Jerome Robinson-Smith and all other
persons employed as Auto Damage Adjusters and Resident Auto
Damage Adjusters time and one-half their regular rates of pay for all hours worked in excess of 40
hours per week. See Complaint at ¶ 1. These individuals have
been classified as exempt by GEICO. See id.
The Complaint is brought as a collective action pursuant to
29 U.S.C. § 216(b) on behalf of plaintiff Jerome Robinson-Smith and
all other persons who are or have been employed by defendant
anywhere in the United States as Auto Damage Adjusters or
Resident Auto Damage Adjusters between June 15, 1998 or November
16, 1998, respectively, and the date of final disposition of this
action. See Complaint at ¶ 2. Section 216(b) provides that an
action to recover liability for violations of Section 206 or
Section 207 of the FLSA may be maintained by "any one or more
employees for and in behalf of himself or themselves and other
employees similarly situated." 29 U.S.C. § 216(b). An employees
does not become a party plaintiff to such an action "unless he
gives his consent in writing to become such a party and such
consent is filed in the court in which such action is brought."
Id. Over 270 employees have filed consents in this case.
Plaintiff alleges that his job has been (1) to inspect damaged
automobiles as to which a claim for indemnity under policies sold
by the defendant has been made or is expected to be made; (2) to
enter a description of the damage into a GEICO computer; (3) to
offer payment for the damage in accord with the amounts provided
by the GEICO computer system; and (4) to perform related tasks
such as photographing damaged vehicles and filling out forms
provided by the defendant relating to their appraisals. See
Complaint at ¶ 9. Plaintiff received a salary and the amount of
his pay did not depend on the number of hours worked. See id.
at ¶ 10. Plaintiff regularly worked in excess of 40 hours per
week. Id. For the Court's convenience, plaintiff has consolidated all of
the statements of facts and the responses thereto made by both
plaintiff and defendant. The Court notes that although there are
lengthy oppositions to many of the asserted facts, most of them
consist solely of the legal implications of the asserted facts.
"In determining a motion for summary judgment, the court may
assume that facts identified by the moving party in its statement
of material facts are admitted, unless such a fact is
controverted in the statement of genuine issues filed in
opposition to the motion." L. Civ. R. 7(h). Because the material
facts regarding plaintiff's job duties are essentially
uncontested, there are no genuine issues of material fact, and
resolution of the issue of liability on cross-motions for summary
judgment therefore is appropriate.
B. Uncontested Material Facts
GEICO underwrites and sells automobile insurance directly to
consumers. See Plaintiff's Consolidated Statement of Facts
Presented by Both Plaintiff and Defendant, and Plaintiff's
Statement of Facts in Reply to Defendant's Statement of Facts in
Support of its Motion to Dismiss ("Con. Stmt. Facts") at 1. GEICO
also services insurance policies sold by other GEICO entities.
See id. at 102. GEICO receives claims on less than ten
percent of its policies. See id. at 4. Auto damage claims
account for 60 percent of GEICO's loss payments. See id. at
GEICO has a "Claims Home Office" which is responsible for the
policy and oversight of the claims function for GEICO. See Con.
Stmt. Facts at 104. The auto damage division establishes auto
damage policies. See id. at 106. GEICO regions are called
"profit centers," and there is an auto damage director for each
"profit center." See id. at 107. Auto damage adjusters, plaintiffs in this case, report to supervisors
who report to auto damage managers who report to auto damage
directors. See id. at 110.
Auto damage adjusters assess, negotiate and settle automobile
damage claims made to GEICO. See Con. Stmt. Facts at 15. Level
I adjusters, such as plaintiff, have settlement authority up to
$10,000. See id. at 15. Level II adjusters have settlement
authority up to $15,000. See id. An auto damage adjuster can
recommend settlements in excess of his settlement authority.
See id. at 17. The majority of adjusters' time is spent
inspecting vehicles, writing estimates, and traveling to and from
inspection sites. See id. at 142.*fn1 The adjusters do
not determine whether GEICO is liable for a given claim and do
not have the authority to deny liability, but they do determine
the value of a claim once it has been determined that the claim
should be paid. See id. at 143, 147. Adjusters may stop
payment on certain damage items if they determine that those
damage items were not caused by the accident. See id. at 147.
When evaluating a damaged part, the adjuster first determines
whether the damage was caused by the accident. See id. at 25.
If the damage is accident related, the adjuster assesses the cost
of fixing the damage. See id. at 28. The adjuster must also
determine whether the vehicle has "hidden damage" which cannot be
detected without disassembling the car. See Con. Stmt. Facts at
60. GEICO auto damage adjusters write estimates using software
called "Pathways," which is licensed by Certified Collateral
Corporation ("CCC") and is installed on the adjusters' laptop
computers. See Con. Stmt. Facts at 21. The software uses
databases to locate information on items such as parts prices.
See id. at 22. Paint times and material costs are stored in
the computers. See id. at 179. The information in the
computer is essentially the same as the information GEICO
adjusters previously looked up in books. See id. at 22. The
software does provide certain prompts to aid the adjusters. For
example, the software indicates when a vehicle becomes a total
loss, when a more cost effective part is available, and when it
would be more cost effective to replace a part. See id. The
adjuster must determine, without the aid of computer programs,
formulas or tables, the amount of labor time that a repair will
require. See id. Adjusters make this determination based on
their training and knowledge. See id. at 33. Procedural pages
are stored in the computer, however, and describe the repair
procedures to be followed in repairing parts. See id. at 173.
If the auto damage adjuster makes a manual entry, or an entry
which conflicts with the software's suggestions, the software
program will mark the entry with an asterisk or pound sign. See
id. at 154.
If the adjuster determines that a part can be repaired safely,
the adjuster determines whether the part should be repaired or
replaced. See Con. Stmt. Facts at 31. If a customer requests
replacement of a part even though repair is appropriate, an auto
damage adjuster would grant the request without consulting his
supervisor if it were clear that the discrepancy was sufficiently
small that the supervisor would approve it. See id. at 35.
If the adjuster determines that a part must be replaced, then
he must determine what type of part to use. See Con. Stmt.
Facts at 38. A part can be replaced with a new part made by the manufacturer of the car ("OEM part"), a new part made
by someone else ("aftermarket part"), or a non-damaged used OEM
part ("LKQ part"). See id. GEICO has policies which dictate
use of OEM parts with respect to certain parts of cars. See
id. at 246. The adjuster must determine what type of part to
use and whether to take a depreciation deduction when replacing a
worn part with a new one. See id. at 38, 41. Depreciation
guidelines are set out in the Auto Damage Handbook, but in some
cases the depreciation determination is left to the discretion of
the adjuster. See id. at 186. For example, the Auto Damage
Handbook states that "carpets, floor mats, upholstery,
headliners, convertible tops and other soft trim will be
depreciated based on the pre-loss condition as established by the
adjuster." Id. at 45 (quoting Auto Damage Handbook at 115). The
parties agree that GEICO has guidelines for these types of
decisions, but disagree on the amount of discretion left to the
adjusters. See id. Working with repair shops, there is some
leeway, but auto damage adjusters must still conform with GEICO
guidelines. See id. at 50-51.
Adjusters also must determine whether the vehicle is a total
loss. See Con. Stmt. Facts. at 59. The computer software will
flag a vehicle as a total loss if the estimated repair cost
exceeds 75 percent of the market value. See id. at 156. If a
vehicle is a total loss, the adjuster orders a valuation estimate
from CCC and then makes certain additions and subtractions
pursuant to GEICO policies and guidelines to determine the final
value. See id. at 62. When owners want a higher total loss
settlement, an auto damage adjuster would not consult his
supervisor, so long as he knew the supervisor would approve the
additional credit. See id. at 67. The frequency with which
adjusters call their ...