Free Motion for Summary Judgment - District Court of Arizona - Arizona

ATTACHMENT A
712974 1
6/21/2006
Case 2:03-cv-02262-ROS Document 282-2 Filed 06/26/2006 Page 1 of 3

Federal Register/' Voi. 69, No. 79 /Friday, April 23, 200a/Rules and Regulations 22145

_:__ - ;_ Wflshin v Allstate Insurance Co., 212 F . emphasis in originaii, quoting Martin v.
ave a us e suc *3 ,‘. Su . 2d 1360 (M D. Ga 20ti2), federal Crm erEler:trio So l Go, 940 F.2d
._._ `_ __ _ . PP P PP l'
whether the ·f_:-;g[f· _ ;_ courts have found employees who 895. 905 (3rd Cir. 1991), cert. denied,
in servicing the busi -i_ represent the employer with the public, 503 U.S. 936 [1992].
F-gi- er, as tire court in ;_f_.f§g‘• Q negotiate on behalf of the company, and In Hogan v. Allstate Insurance Co.,
p 'zed, claims adiuster e rp; engage in sales promotion to he exempt 2904 WL 362375. Hi *4 [Nth qi! 200%
employees the adrninistrative employees, even though tl?19 Eleventh Circuii held that 1¤S¤f¤¤€€
url accmpany is "in the employees also engaged in some agents wh¤_"sperrt the majority ofltheir
if =-if f nt d selling ile, ‘ inside sales activities. In contrast. the ¤¥¤€ S¤IV¤¤1¤B_¤>¤§U¤B ¤}·1$i¤j“¤€T$ HFC}
tether than 1 E-gifigf-*· busi ; gener in Cages V Coneeeo Fjngncg performed duties including promoting
,, claims. Ic'. Corp., 2002 WL 507059, at *9 (D. Minn $819*% EGVISIUB ¤¤$¥¤mB¥`S» &dBPUPE§
fg gugg g5[mg§grj!ii’f"i?1l;f‘ Cugfgm ~;:_·_;p gggg], ham fffaf fhg admfnfsffaffm policies to custorner's needs, deciding
er ma laim the poii .. fg exemption was not availabie for ¤¤ ¤dV€¥`l-l$l¤§ budset Emi l@‘?hm¤.“"*‘5=
perch the c¤ §f;]¢‘ emproyees was aaa a eprrmsry sary to hirirge and treieies Staff. dawrrgiieies
•5 ·_,, if ms echo do i‘ ff-?-.;_¢·Qi§f• roduoe th i SE;3 fro mmpanygf ]e¤dmg pggdrgrjg staff s pay. and delegaong roufrne
goods a that the -· j Cm H dHy-m.dBy baggy- dffgcfgy fg matters and saies tolsaid staff were
IOYBY Public fd 5 consumers and faiied to exercise €X9mPl3dm1¤{SUallV€ Bm·P]°YBE*`* The
· 1;.;; Simiiarl courts have - gjscfgffcfz End independant fudgmgnf court held the insurance agents exempt
ry ;i§ oated such to assess whe Z , Tha IOM? AMER msg mmfvgd tha even though they also soicl insurance
JZ§f;f GHl{3l0}’€3€’S if ses discretion = { if · products directly to existing and new
ependenr are nt sea r· g -l-- "”‘*’"‘P‘ mus O mm Emlg customers
_{`__5i 244 F. gc; g[:]_Qéé'[C1g ; fgpfiedlailégs W°fl“;1"g§§‘ EIEDHWHHY The court in Wilshin tr. mirrors
j§€;g· gpg Jr; .._· ,=Q;i BI time i"`` `Q. , B etree ' Cru E ilu if . f Ir1sumrrc·eCo., 212 F Supp. 2d 2360.
i.};f_;oeae¤g w· ante aaa - ·t,_ T- L“St"`&“':" §’§’°l“"*S· Pnmflil l°‘ f 1s77—7s [MD. ca. zooz}, asm rear a
maya, _.r-Q-ei.·=j:_§§_l;Bps¤d€Hf _ uslflgmfis tg ¥”"’“" P‘f;“’B;s”;§§‘°“? neighbor-hood insurance agent met the
E; bority to o 5 between -.; ,‘_=‘· °°Wi;a§E O? EH Ein? Y did Ot 11 reqrrirements for the adrrrinistratirfe
one and ‘;Z`f{}—. hose mar B mgwpwsgn H NBS, H S8 exemption when his responsibilities
're l°~’l> `ri offers fo ? " tlxgugb dmlcl {mmams with tha included such activities as
. ‘-’fE’i:;i g ultimate customers, but instead relied di f d t d .d-
_. ger cla; qi yi w oeopted E. Ed hd Bndgm msummg reccmmen ng pro uc s an provi ing
_ ‘i,· eroised ‘_-P. rerion a depends upfm isms k I lap fm 1 T , claims help to different customers. as
"n erremgkj, F 3upp_ "=;_;f’;_ agent? D me B SB BS 0 9 gm? O} Br S well as using his own personal sales
,- -..- . --= - .- financial products. The rrrarireting t h · t { d CI S
in 757 S gdfggtgy _·_;·.:\ planner, . t t, E IG Dngbl fc: GC I1}C]_|:1BS G PIOIIID B EU']. OE}
_- I.: mg 5 __,_- 1 fnvastigmmu ._. ( ir lT8p§959_i'?= fi WGS W ¥ Wig b ld 8 d f irarisagtgorisi He also was recguwod to
[ ae ‘_,-. i* B im was cov by re - ”‘“©*§*“g °j“""°‘ fm ml fg ks ° represent his ·==r¤r·1¤yerl is the ¤¤¤rket·
" ¤_-if _e~= , _’·‘ egotiated {2[·Q_i\ had ·_ ` f gggmiglpggggd 2%;; ;;1;%;;;Sf,§ GBP ang bg knowlledigeablelebofrfrt the rnagitet
M :*3 ' y _ IL li i. I.
i »; 1 iirélfgiiiieiixii my I ¤¤¤¤<=i¤—¤ r¤r¤ .l r . {anis which Wgm uw 2 f, _ Changes lil PHCF5- and te dlscuss haw selling financial products to an
r pmd agm his Rummy ·’i‘‘.. 1 =-=- the preduew sushi Et their ¤¤Ste{1¤er¤' iaeiriaaar, ursmare consumes-as
_ _f - __ _ __ .f needs The rnarlceting representatives Dppgsgd ta an agent, broker Of-
· .¥ f -. _ ·r,. _ -· also would inform the employer of CUmPBny___W3S nm Emmgh Dfa
-if-_; _[]gn5ietenr with gxjsrjr-ig gage §;i—,,·rA§ §¤l’lh$¤H HWY laamad from the distinction to negate his exempt status.
Hri`al` subsection 5'41Z2D3[b]'provides§ lndapenlflenl 531% l‘·E*”mlS· Slfch HS In contrast, the district court in Cosos
r1i‘srem‘p16;·ees1attie earners} servicesg 1¤¤°¤f¤¤¤¤¤¤ e‘%¤9* E °¤mP?¤l¤*'F· _ v- Gvnsevv Fi{¤¤¤¤e Cmp-. 2062 WL
industry “ger1era}ly meet the duties Pwducls Oi ilucmgl Fmt Ciiicult 507059 (D MIDIL 2002). held iiifli 1039
requirements {op the gdminjgtygtivg ,; mled that $959 ¤¤il‘·’1U¤¤`S WBIB d1fB¤UY originators were riot exernptbecause
exemption if their duties include work Fglalflglg ¥T{B¤8§B¥`¤=°l¤i P°li¤l9$dG&] h they had a "primaiy duty to sell [tb;
b " I fi E] ‘ I gBD81' USIHBSS UPBIHTIGHS B1'] Eli l. 8 ggmpgny'$] lgndjng pfgducig gn ,-3 gy-
l’i11fcori$i;t[i;n€FegId§d§g File cgrilgiugrieris maflwiigs I€PFB5F*¤i¤iiV€5 WFWG B><¤1'¤Pl- t0—dey basie" directly to consumers.
sesame, assets, ravesrmenrs nr assis; 'glheér activitiga i¤v¤1v;d_"s¤rvi§ine" of zooz wr, sorose, at *s. The emprriyeee
determinin wh'ch fina ‘a] r-oduors *2 ¤St¤€$$ *¤¤¤¤5¤¥ B11? Wm was "113 called potential customers from a ist
basl mmf [gg Cu;fDmE1·§2EE,_iJS and the nature of 'represefntirrg the company' provided to them by the. employer and,
financial circumstances; advising the €*‘¤& PY¤m¤l~mB Si-UBS flflillill Alden USHEE [iw 9Y¤PlQ}’€¥‘ 5 surdelises ¤¤d_
customer regarding the advantages and i>¥0d_¤§l$· WU €X¤mP1€S U; €X€m?l §f¤¤d8fd_0P6f‘¤i1Hg Pf0U9dm`9$· ¤i>l¥=\1f1€d
dfsadvm-Mags; Of different financial adnnn.1str·aL1ve work provided by information such as income level, home
pf-Oducfs; and mufkaffng SGI-Vfgfng af §541..205{i¤] of the interpretations ." 225 ownership history, credit history and
promoting the ernpioyer'5 iingneig} gfifitit 19. Téli?. the court CfG%Cli2€}€d proper? gitaflrfieg rarflcreriit rfaports;
;·gduC{g_ Hgwgygrl an Bm 10 gf; Wbgsg B. E IIIBE B lng EEPFGEBH H VBS DFWET E B Bpp 1CEl ]OTl O BH
grim;-uy duty gg sagging ffngncila] contactwith the independent sales underwriter; and attempted to match the
pmdum; diggs mr quatjfy [D; fha agents involved 'SG1'1'lE'i.i11Dg more than customers needs mth one of C¤nseco’s
Hdmfnjsfmffvg B,.;Bmpfg¤n_·· SWE;-3] routine selling efforts focused simpiy on loan products. if the underwriter
(;m··nmgp,[5;f5 ggquggt 3 Sggtign fgggfdjng p3IilC\1lF.tI`S9.l€S l§&I’lSHCilD1’lS ' REl$l.`1Gi`, 8p§_)IDV€[l U18 lOE1§'t, lbf? DIlglI3i·l.{G¥
series; oeguperjene in the Igrlmciej their agent contacm are ‘airried at I gathered documents for the closing.
Sgfviggg induguy bgggugg gf gfgwjgg [.`t[O¥I`iDll1'3g U E., `lIlClfEf:l5i1’]g, ClEVElOp1I`lg, VEI1l:.|.ECi HIE l¥1l`O1`IT13ilO1’1, Hlld U¥`CE€1`9Ci
irrigation in rhig, gpga facilitating, and/or maintaining] the title work and appraisals. The court
in cases such as Reich v john Alden customer sales generally} activity which concluded that this was the ordinary
Life Insuronce Co., 226 F.3d 1 [rst Cir is deemed administrative sales production work of Conseco, which has
1997], Hogan v Allstate Insurance Co , promotion work under section the business purpose of designing,
2004 WL 362378 {11th Cir-. 2004], and 541. 205%} " ld. (citations omitted, creating, and selling borne lending
_ :LnO 'oe —- 55 e 22 5 2004
Case 2.03—cv—02262—ROl§ °b°0cumeniE2182l-2 llérled 06/26/2006 Page 2 of 3

22.146 Federal Register! VOL 69, Nu 79 / Friday, April 23, 2004/'Ruies and Regulations
mance, making {hem nenexempt A`` management peneas are general ·‘``i " `*fj€jQg
preductien employees. The court also business operations te which their work __ does nei beiieve that the
found that the plaintiffs lacked is directly reiated are these uf {heir exemption appiies. am
discretion and independent judgment empleyefs clieués er cueimmexa er these • who leads teams 10 ce e
necessayy Lu qualify fm the gxgmpijgn of their emp]0yer, See HHH} wie section may qualify fur
since they followed strict guidelines and 541,2Ui[c]; existing sections under {he
operating procedures, end had me 54l`2Ui(§}(2]. 342 2U5{¤)[5}§¤d IF§lE]¤U01’15· Cuillfmi Q?fl$§*
authority te approve loans. 541"2E|5( ]; HD Pi5C1'GI`i9V· 'ITISI Er` C app ES
.?<·The Department agpeee that Yeung, L.L.P. 1 71 FBC} 527 [7th Ci1» ajer
employees whose primary duly is inside 1999) Fi¥1311)’» CMH B]¤PI¤¤¤h_i5 i3¤1”¤B¤ CDH g U18 ;?.5"Ei
wig; gauge; qlmljfy 35 gxgmpg consistent with existing sectmrm {j;_ T; saijcms ess") The final
administrative empigyaes However, H5 5·&`l`2U7[d][2], Whid] p1‘OV'1dBS [1132 “& F:} SECHOD [C y upC.IBl@S Ullfi
fmmd by me jghn Ajdgn, Hggcm and custemefs man in a brokerage house" E,-Qjjj f cept with 2. » ig medem example
wjjghjn gguytg, many gmmcja] Services exercises discretion and independent dma? includes gifgz
gmplgyggg as gxgmpt jl.1dgl’I1GIii nil] §BCidi1’1g WhH€ ·€X3IT1 GXGFIUIIVBV
gdmjnisimlgjvg gmp]gygg5, gvgn if thgy teCUmme¤dBL3DHS {G make EU Customers {SEE d EQ? eggjgn iratgve BSS1St&¥1tS
Egg iygvglvgd ig ggmg Sglligg tg {DY tl}E p¥.`lI`C]3&SG ef SBCIJ1'"j.tj.BS,” but `I I GXIS d l `
Cgnsumgrg Sgrgicin gjdstjn TEHGCE {EIB H]DdE[HiZH1jGH of ` -- H] ll); 2 an .
Custcmem Promoting um Bmimygfs exisijng subsection fur the 2Est Century · ‘ O7[e], and Prep aieectse .::53
£nanciaE products, and advising WDYk§OI`C&— ' `203[b)[4]‘ Elnags mmm
cusmmgw Du Um Hppmpriam Hmmm] Consistent with Hegcm, the final rule -l _ .203{e} distmguzeh em manga ..._ 1
V pmaguct LD in their financial Hams am rejects the Yiew thai selling financial managers fre
{ duties dimcuy Iglatgd to tha products dnzectiy to a consume: g resume] cierks. The 11} thas ig.;
Q mamgemgm UT genera} business automatically precludes e Ending ef {glu appears in sections Tiff
· operations G1 %hei:‘emp1eyer or mer mmpf ¤dmi¤5S¤¤w ==*=¤¤=‘·· 2 ia·`-· I -;_ 1/2°5[¤}(3J and wd
· · . - Application ef {he exempzien eheuld J9-;-1• at eectie 1.20 -=__ and s;--":E
employer s customers, and whxch _; , . _;.
e¤¤*m*’¤¤ ¤““ SCYB UOM-* §§p%E§2§§·2ii?3§§§2?&“£E§é*§5$*:1* it »ala “1€§3§‘i£§°
‘ miE;I§Eg_?§§1§ui%§§i2;é¤t with this Case end user ez an intermediary-. The Hua} pmpe czien 541 ,
law tha {ina; {LIE distinguishes bgtwagm rule distinguishes the exempt and 'L.;.E.E=¤ from existing Q- »‘_ E
’ - nenexempt financial services employees tie E.205[c)(=1), 541.207%:1] ‘‘`.‘ T •€E?/5
exempt and zwnexempi Hnancml . ` · . . _ _..e- _._;,
· based can the dunes they pezferm,11¤t 1. _-.·».;;t-· e)[2]. Fmal subsection
servmes employees based er; the , , _ .. {5-;, . . .
· - She 1denl1iy ef the cueiemex Lhey sezve. _ [g) contains the mspectzen `,·
pmmary duty $11ey perform Fma] F , 1 I, .,-.. 0;; _r-_. 1 {_ . . t. - _\-=;;
Section 541l2U3(b) thus provides: For example, a magma senxcee L p e mm exgsiung sec mn _ HE.
_ _ employee whose przmary éuty as `2G7[c}(2) and pregzeeed sectmn _··jj
_ HmP]°Y*’B5 “* *]**3 ¤¤¤¤¤1¤1¤¤;v¤¤¤¤ gathexing and analyzing facts and -.` mdujmy g°nBmu:"hm°‘;1a1;;?°,d“[*‘?s previdiag censulting advice te assist ¤ maine the examples regarding 4
E§[g;n;Fl§;°;i; guim iidggvggigork Such customers in choosing among many {j__j; emimere anci graders from existing {
· - - - . lex financial products may be an ?i·`l`· [email protected][c:](3) and {4] and
es ceélqctmg my annlyzmg 1r1I0¥mat1q;1e;Y`{· mm? . . . r. · . - L;-!·
ry- thg.,&,]·t · - _ - [ _ M exempt adm1msLrahve empleyeeafm epeeed sectzcmn 54·1.:2G4{c). Fm :=_ J {iii;
§1§.£;;t;%ms G, £E§$E;\;(;;1;-Eingilgaigfijih empieyee whose primary duty is mside ; financial products best meet the custemefs $$99 is H0? BXBWPL `_ _ __ __ ` I?*HiSU¤ $hOPPi¤£ if Q
neeris and financial circumstances; advising ?` =; -`·- j;_.;1.-=__;_j;g:.Qj;T._%;;;" f * ~Q; {nj" -` jJ;‘_r;-Q2;] Stmg Sectxmn D "i;_J
the cusiumes regaréizsg the advantages and ·+]`_}_ "` " ¥="‘ `Q ‘"`` " substantive changes law
rlisarlvantages nfriifferent financial prerhmts; `. a ‘r,`- eyees assigned 1:0 CGmp]€t& are intended in the = 185-
Bhd marketing, stjvicing 0: prumutipg the DI. the Gmploym {Such HS The Departing ~_· Wgdptm
*’““P1°Y"‘ 5 H“"““’&,; P""*‘I“°‘S FI°“'°}""· an chasing ur closing ali cr part substantive s with respect te
‘;l"'Pl“£/*1* Wlgsg P’g‘*‘*“'$' duly li *‘f¥“*¥5h ` e Enusinese timg a real estate the exemp] enexempi wexk. With Eq;
““}'°,°‘ P'? um °°? nm qua 10 UN ° '_-msagzium mg ge mgeining respect nistrative ur executive `·:? \
“dm‘“""““"° “""’*"“Y’“°“ mem, ef was numbex ef cemmenters
The Department believes this 0 -_JL..]gmgm5¤g pyedugzivit ` ‘`i`· ” as t these employees should be
&ppl'GHCh also is CGDSESIBIH with [hl? ggvgmgnm] ganemiiy mee if {hey assist a senior execukive
gage law and she iina] rule regarding ` ties requirements fer fhfé '''' ‘ GOFPOFBLEOH bB]DW mg EBV?] cf
insurance claims adjusleus. which q igqislrative exemption, even if er chief executive ufn e ’
€¤'1Ph¤-$$2*35 that EFSFIOYGGS P@Tf¤Y¤2i1'1S = `l_- pleyee does net have direct Other commenters express a
duties related te servicing the company, » qezviseajy responsibility Over BY C0 CUHCBU1 thai Yhgsg {mms »
such as aepresesaliaug the cumpzmy in plgyees an {he team " could tee broadly te. ,`_
e;·a1¤.;Ie§i¤g theumgrits efgflaimstagainst dlgggggéjleggf pmpgsed t employees ‘‘`= d1i1‘t1e§, ~¤_Lj
a an uz negu a ng se emeu s, » · 1. respon men ers es secre asm = 3 B ma IU B , __,; E
generally qualify fur exemption, We also ¤ . il express nance a e executive makes ne change ent law, and
believe that this appxeach is consistent J Y mptj{J1‘1 faiis ·' the modem thus this example sh expand
with the existing and fine} regulations . `.,:¤ czteice ef a ce farming CI`0SS· the exemption tu inclu 0 _-_‘ ; ·i
providing that advisory specialists and -»;4»¤ii¤nal Qeams ta ethex clerical empleyees ··‘-;‘Q?;_§;f:e 1; ig _
consultants tu management, such as tax -’ mplete =_=; gf-*"i Several believe expansion of this `»i*-{gy; '_=. Z
experts. insurance experts, ur financial efgn ggest that the mEmHg8I GI beyond current law is wartanied • fi _ ·¥C,
consultants. whe exe employed by za ‘ h teams shuuid ice treated ;—gqg¤;·d Evidence. Q_
Erm that furnishes such services {br e e ..;jj;;-‘;§‘. even if the leadex did not Final subsection 541.203(j] contain ·
fee, should be treated the same as an in- ¤ .= ·`__- diticnal supervisory authority new example pwviciin i a :_ _ _ _:__: ::1;];
heuse adviser regardless uf whether the ‘;‘i-- 52. I- _-_. __:L _I;!
‘nO¤ `ne ·— E9 Fed. Regu 221 _2GD4
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Case 2:03-cv-02262-ROS

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Filed 06/26/2006

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Case 2:03-cv-02262-ROS

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Case 2:03-cv-02262-ROS

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