A Win for Class Action Plaintiffs at the U.S. Supreme Court

Tyson Foods v. Bouaphakeo, ___ U.S. ___ (2016).  This decision, issued today, is one of several closely-watched class action cases at the Supreme Court of the United States this year.  In a 6-2 decision, the Court upheld a jury verdict in a class trial, rejecting defendant’s claims that individual issues meant that a class should not have been certified, or should later have been decertified.  Justice Kennedy wrote the majority opinion, in which Chief Justice Roberts and Justices Breyer, Ginsburg, Sotomayor, and Kagan joined.  Justice Thomas, along with Justice Alito, dissented.  The Chief Justice filed a concurring opinion, in part of which Justice Alito joined.

The case involved claims by a class of workers at a Tyson Food pork processing plant.  The work that the employees do there is “[g]rueling and dangerous, … requir[ing] employees to wear certain protective gear.”  The employees sued under the Fair Labor Standards Act, 29 U.S.C. §201 et seq. (“FLSA”), for Tyson’s failure to pay overtime for the time (18-21 minutes per day, according to one of plaintiffs’ experts) that employees who worked more than forty hours per week spent “donning and doffing” the protective gear.  The employees won certification of a Rule 23 class and of a collective action under the FLSA, 29 U.S.C. §216.  At trial, the jury returned a class verdict of $2.9 million.  Tyson appealed, but the Eighth Circuit affirmed the jury verdict.  The Supreme Court granted review and affirmed as well.

The key issue in the case was whether expert testimony that presented “representative evidence” of how long employees took to don and doff was permissible.  Plaintiffs relied on such representative evidence because different job functions involved different protective gear, and different employees may have taken different amounts of time to don  and doff the gear.  Tyson did not keep records of donning and doffing time.  Plaintiffs thus offered expert testimony as to the average number of minutes that donning and doffing took.

Tyson argued that relying on averages was improper, and that, as a result, there was no predominance of common issues.  The majority disagreed, citing two well-known treatises on the subject of predominance.  “Whether and when statistical evidence can be used to establish classwide liability will depend on the purpose for which the evidence is being introduced and on the elements of the underlying cause of action.”  Thus, Justice Kennedy emphasized, the Court would not use this case as a vehicle “to establish general rules governing the use of statistical evidence, or so-called representative evidence, in all class-action cases,” rejecting the demand of Tyson and pro-defense amici curiae for a blanket ban on such evidence.

Instead, the relevant inquiry was whether such evidence could validly have been used by a plaintiff in an individual case.  If so, the evidence would necessarily be permissible in a class action, since the Rules Enabling Act, 28 U.S.C. §2072(b), contains a “pellucid instruction” that the class action device cannot “abridge … any substantive right.”  Such evidence was proper here since, as in Anderson v. Mt. Clemens Pottery Co., 328 U.S. 680 (1946), plaintiffs “sought to introduce a representative sample to fill an evidentiary gap created by the employer’s failure to keep adequate records” (recall that Tyson did not keep records of actual donning and doffing time).

Justice Kennedy rejected Tyson’s argument that Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338 (2011), which criticized “Trial by Formula,” mandated a decision for Tyson.  In that case, the Court found that there was not even a single common issue among the putative plaintiff class, due to variations by location in Wal-Mart’s employment policies.  In contrast, “in this case each employee worked in the same facility, did similar work, and was paid under the same policy.”

Tyson had presented another issue: whether, since some class members were not injured (not all of them worked overtime), plaintiffs needed to present a method of ensuring that uninjured class members do not get a damage payment.  Justice Kennedy found that issue not yet “fairly presented by this case, because the damages award has not yet been disbursed, nor does the record indicate how it will be disbursed.”  He noted, however, that “this problem appears to be one of [Tyson’s] own making,” since plaintiffs had sought to bifurcate the trial into liability and damages phases in order to avoid issues of uninjured class members, but Tyson successfully opposed that.  The dissenters bridled at that mention of potential “invited error,” but it appears to be a compelling argument for plaintiffs.

The issue of whether a class can include uninjured persons, which was the question that Tyson originally presented before abandoning that issue in favor of whether uninjured class members could get a payment, thus lives for another day.  Defendants often raise it, but it is not a valid argument.

Classes routinely are defined to include members who potentially have no damages.  The question of which plaintiffs in fact have damages, and are therefore entitled to payment, is normally sorted out in a damages phase or in administrative proceedings after trial or settlement.  The alternative to defining classes without reference to who suffered damages would be to include in a class definition the parameter that class members must have been injured.  But defendants attack such definitions as improper “fail-safe” classes, since such a definition, according to defendants, requires an individual inquiry into whether a particular class member has been damaged before deciding whether there can be a class.  Accepting the notion that class definitions cannot include uninjured persons thus  creates a “heads I win, tails you lose” structure that would effectively repeal Rule 23 in many contexts.

Besides being a victory for plaintiffs in a case that corporate interests had counted on to cut back class actions yet more (and by a margin that Justice Scalia’s expected pro-defendant vote would not have affected, had he lived), today’s opinion raises a tantalizing possible argument for plaintiffs confronting the Third Circuit’s unrealistically expansive ascertainability doctrine.  That doctrine rears its head in consumer class actions involving goods such as aspirin for which (unlike, for example, motor vehicles) sellers do not keep records of purchasers. Though there are some differences between the context of today’s decision and that of consumer class actions, the majority’s rationale here that Tyson’s failure to keep records was a basis for allowing representative testimony might be able to be relied on by plaintiffs to attack ascertainability based on sellers’ non-maintenance of records.

Today’s ruling is also significant for its cabining of Wal-Mart, as well as its effect on Comcast Corp. v. Behrend, 569 U.S. ___ (2013).  As discussed here, Comcast was an anti-plaintiff decision regarding expert testimony that was limited to its facts.  Neither the majority nor Chief Justice Roberts cited Comcast.  The dissenters, however, noted that the treatises cited by the majority in its discussion of predominance were the same ones on which the dissenters in Comcast had relied.  To the extent that this opinion undercuts Comcast, it is significant for that reason as well.

Finally, a conspiratorial observation.  Though the Chief Justice “join[ed] the Court’s opinion in full,” much of his concurrence was given over to expressing reasons why “the District Court may not be able to fashion a method for awarding damages only to those class members who suffered an actual injury,” a circumstance that Tyson contended would require the District Court to “throw out the jury’s verdict and decertify the class.”  It is possible that the Chief Justice, who has not necessarily been a friend to class actions, joined the majority so that he could assign the majority opinion to Justice Kennedy, who presumably would write a more cautious opinion than one of the other Justices in the majority might have issued.  Some food for thought.