Tyson Foods: U.S. Supreme Court Avoids Issue of Recovery by Uninjured Class Members, While Allowing Statistical Evidence to Establish Classwide Liability

class action_mmayerThis blog article follows up on an earlier article (found here)  published prior to the U.S. Supreme Court's decision in Tyson Foods, Inc. v. Bouaphakeo, No. 14-1146, Slip Op., 577 U.S. ____ (Mar. 22, 2016).

In its recent Tyson Foods decision, the United States Supreme Court clearly announced that Walmart Stores, Inc. v. Dukes, 564 U.S. 338 (2011) "does not stand for the broad proposition that a representative sample is an impermissible means of establishing classwide liability."  Slip Op. at 13.  The ruling is a victory for class action plaintiffs and a general blow to business.  However, besides holding that statistical evidence can – at least in some circumstances – be used to establish classwide liability, the Court avoided bright-line rulings on a couple of important issues that many expected and hoped it would make.  Instead, the Court's written opinion is tied closely to the facts presented in the case.

At trial, the plaintiff class won a jury verdict against food industry giant Tyson Foods of $2.9 million in compensatory damages for violating the Fair Labor Standards Act ("FLSA"). Id. at 1.  The class consists of hourly pork processing plant employees. Id. at 1-2.  They claim that Tyson Foods failed to pay them overtime wages for time they spent putting on and removing protective equipment and walking between the locker room and production floor. Id.

Court Finds the Uninjured Class Members Issue Premature

As mentioned in my earlier December 31, 2015 blog, one of the major issues to be decided in Tyson Foods was whether a class can be certified or maintained if it contains members who were not injured and have no legal right to recover any damages.  However, the Supreme Court found that Tyson Foods had abandoned its argument on the issue, modifying it to become: "where class plaintiffs cannot offer proof that all class members are injured, they must demonstrate instead that there is some mechanism to identify the uninjured class members prior to judgment and ensure that uninjured members (1) do not contribute to the size of any damage award and (2) cannot recover such damages." Id. at 16 (internal quotations omitted).  The Court then explained that, because the damages award to the plaintiff class had not yet been disbursed, Tyson Foods' argument "is predicated on the assumption that the damages award cannot be apportioned so that only those class members who suffered [a FLSA] violation recover." Id. at 16.  In other words, the argument was premature. Id. at 17.

The Supreme Court noted that, "[a]s petitioner [Tyson Foods] and its amici stress, the question whether uninjured class members may recover is one of great importance." Id. at 16.  However, the Court found that the question had not yet been fairly presented in the case. Id.  The methodology employed by the plaintiff class could be successful on remand in identifying uninjured class members and ensuring that they do not recover damages. Id. at 17.

Court Holds that Using a Representative Sample is a Permissible Means of Establishing Classwide Liability, At Least in Some Circumstances

As also mentioned in my earlier blog, another major issue presented to the Court involved the use of statistical averaging and modeling to establish damages for a broad class of plaintiffs. On that issue, the Court ruled that the plaintiff class's use of its expert witness's sampling was proper, although the ruling was tied to the specific facts presented and the specific claim at issue (a FLSA action). Id. at 12, 14-15.  For example, the Court's decision relied on the fact that the plaintiff class was forced to use a "representative sample to fill an evidentiary gap created by [Tyson Foods'] failure to keep adequate records." Id. at 12.

The Court clearly disposed of any notion that "a representative sample is [always] an impermissible means of establishing classwide liability." Id. at 13. See also id. at 10-11 ("In a case where representative evidence is relevant in proving a plaintiff's individual claim, that evidence cannot be deemed improper merely because the claim is brought on behalf of a class.").  The Court held that using the expert's representative sampling was "a permissible method of proving classwide liability" because the plaintiff class showed that "each class member could have relied on that sample to establish liability if he or she had brought an individual action." Id. at 11-12.  The Court also noted that Tyson Foods' defense should have been to show that the expert's sampling "was unrepresentative or inaccurate." Id. at 12.

However, the Court's decision left more to be desired. It specifically stated that, "while petitioner, respondents, or their respective amici may urge adoption of broad and categorical rules governing the use of representative and statistical evidence in class actions, this case provides no occasion to do so." Id. at 15.  The Court explained that "[w]hether a representative sample may be used to establish classwide liability will depend on the purpose for which the sample is being introduced and on the underlying cause of action.  …  The fairness and utility of statistical methods in contexts other than those presented here will depend on facts and circumstances particular to those cases." Id. See also id. at 10 ("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.") (internal quotation and citation omitted).

Thus, although the Supreme Court provided some guidance to class action litigants concerning the issues of uninjured class members and representative evidence, greater clarity will need to come through subsequent caselaw that interprets Tyson Foods. Such a result is not uncommon, but litigants and practitioners who had hoped for broad rulings on those issues will be disappointed. In the end, after suffering some setbacks to its continued viability, the class action form itself can claim the biggest victory from Tyson Foods.

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Michael Mayer |