On Monday, the U.S. Supreme Court granted certiorari in Tyson Foods, Inc. v. Bouaphakeo, No. 12-3753 (8th Cir. 2014) to decide whether the use of representative proof—sometimes referred to as “trial by formula”—is an appropriate method for certifying a class under Federal Rule of Civil Procedure 23 (“Rule 23”). In the class action context, Rule 23(a) allows one member of a class to sue as a representative party on behalf of all members only if she is able to demonstrate four factors (numerosity, commonality, typicality and adequacy). In addition, certification under Rule 23(b)(3) requires plaintiffs to prove that questions of law or fact common to the class members predominate over questions affecting only individual members making class action superior to other forms of adjudication. However, “trial by formula” relieves plaintiffs of the burden to produce evidence on a class-wide basis, and instead allows proof of liability or damages to be extrapolated from a sample of class members, presuming that all members are identical.
The U.S. Supreme Court rejected the use of “trial by formula” in Wal-Mart Stores, Inc. v. Dukes, whereby plaintiffs offered a plan to try a sample set of class members’ claims and, if the alleged sex discrimination at issue in that case was proved, to then multiply the average back-pay award to determine the class-wide recovery. In Dukes, the Court expressed its view that plaintiffs could not extrapolate evidence from one subset of plaintiffs and apply it to the class as a whole absent additional individualized proceedings.
In Tyson, respondents are hourly workers in a food-processing facility who allege Tyson failed to compensate them for time spent dressing in protective equipment and walking to and from their work stations in violation of the Fair Labor Standards Act and a parallel state law. The class was certified at the district court level based on the existence of common questions about whether these activities were compensable work, even though the amount of time spent on the allegedly uncompensated activities differed among proposed class members. The district court allowed plaintiffs to prove liability and damages by employing statistical evidence that presumed all class members were identical to an average employee and spent equal time on the tasks at issue. On appeal, the Eighth Circuit Court of Appeals affirmed the trial court’s decision, holding that statistical inference could prove liability and damages and that individualized damages did not preclude class certification.
The Supreme Court has certified two issues in Tyson: whether a class may be certified: (1) where plaintiffs use statistical techniques that presume class members are identical to the average identified in a sample, despite that differences among class members exist; and (2) where the class contains hundreds of members who were not injured.
The Circuit Courts are divided on whether to allow use of averages as a means to extrapolate damages in class actions. Similarly, division exists on whether uninjured individuals may properly join a putative class action where they would not have standing to file suit in their individual capacity. We will keep you updated on developments in Tyson and what it means for class action certification, and beyond.