Earlier this week the Supreme Court issued its decision in Tyson Foods, Inc. v. Bouaphakeo, No. 14-1146, affirming the Eight Circuit’s decision to not disturb a jury verdict against Tyson where the district court permitted the jury to draw an inference of class-wide liability based on representative or statistical evidence.
Before the Court’s decision in Tyson, some lower courts allowed class certification premised on the notion that class-wide liability and damages can be established through a “trial by formula;” that is, where plaintiffs seek to obtain an aggregate damages award for the class by extrapolating from a fictional “average” class member. Moreover, courts appeared conflicted as to whether plaintiffs must be able to show injury to all class members. The Supreme Court accordingly had granted certiorari in Tyson to decide two questions, namely: (i) whether a court can disregard differences among individual class members and certify a class when plaintiffs employ statistical evidence that assumes all class members are identical; and (ii) whether a court can certify a class that includes members who were not injured.
Respondents in Tyson were employees at Tyson’s meat-processing plant and claimed that Tyson did not pay them appropriately for, among other things, the time they spent donning and doffing personal protective equipment. The employees sought certification as a class under Rule 23 of the Federal Rules of Civil Procedure, as well as a “collective action” under section 216 of the Fair Labor Standard Act (“FLSA”). Although the amount of time that employees spent on donning and doffing and other activities varied, the district court certified both classes, concluding that there were common questions susceptible to class-wide resolution, such as whether the employees’ activities were considered “compensable work” under the FLSA. The district court permitted the employees at trial to prove liability and damages to the class with statistical techniques that assumed that all class members were identical to an “average” employee. After a jury returned a verdict for the employees, the district court entered judgment in their favor.
Tyson appealed, and the Court of Appeals for the Eighth Circuit affirmed the judgment and award below. The Court of Appeals recognized that a verdict for the employees required an inference from their representative proof, but held that such an inference was allowable. The Court of Appeals explained that even though there were differences in the donning and doffing routines of individual employees, certification was appropriate because Tyson had a “specific compensation policy” that applied to all class members. Moreover, the class members worked at the same plant and used similar equipment. Judge Beam dissented, writing, inter alia, that certification was improper and class claims could not be resolved in “one stroke” because of differences among the employees’ activities. The Eighth Circuit declined Tyson’s request for rehearing en banc by a 6-to-5 vote.
The Supreme Court affirmed the Eighth Circuit’s judgment. Justice Kennedy, writing for the majority, endorsed a case-specific approach and reaffirmed existing law, dating back to at least 1946, allowing the use of statistical sampling in wage and hour cases where the employer has failed to keep accurate time records. Specifically, because Tyson had not kept records of time employees spent donning and doffing protective gear as required by FLSA, those employees could rely on statistical evidence to prove the elements of their claims even in an individual suit. The Court implied, if not concluded, that if it was appropriate for one plaintiff to use the study to establish his or her case, then it was an appropriate basis upon which to establish a class-wide claim as well.
Plaintiffs in non-FLSA cases may try to seize on the Tyson opinion in seeking class certification, such as using statistical evidence to support averaging out differences among class members and their purported damages. The Court’s language in Tyson, however, should cut against such arguments. The Court specifically declined to adopt “broad and categorical rules governing the use of representative and statistical evidence in class actions.” Rather, the Court explained that such evidence will still depend on the “purpose for which the sample is being introduced and on the underlying cause of action.” Justice Thomas, writing in dissent, agreed with this point and viewed the majority as creating a “special, relaxed rule authorizing plaintiffs to use otherwise inadequate representative evidence in FLSA-based cases.”
Additionally, the Court’s decision teaches defendants to avoid the critical mistake that Tyson made in the district court when it failed both (i) to mount a Daubert challenge to the admissibility of the employees’ study or (ii) seek to discredit that evidence with rebuttal experts. The Court noted Tyson’s omission, which, in the Court’s view, forced it to assume that the study would have been admissible as evidence of each individual’s actual time worked. (The study was arguably vulnerable to a Daubert attack because it demonstrated that some employees spent much longer donning and doffing than other employees.)
The Court declined to rule on the second question of whether a class may be certified if it contains members who were not injured because the question was premature, explaining that the damages award had not yet been disbursed. Justice Roberts wrote separately, however, to explain that the district court could likely not fashion a method for awarding damages only to those class members who suffered an actual injury.