March 22, 2016

Supreme Court offers little clarification regarding statistical sampling

By Deborah J. La Fetra Senior Attorney

The Supreme Court receives dozens of class action related cert petitions every Term, and today’s decision in Tyson Foods v. Bouaphakeo is unlikely to stem the tide. The case arose when employees of a Tyson pork processing plant filed a class action claiming they were not paid for the time they spent donning and doffing protective gear. To the extent this extra time pushed the employees’ hours over 40 per week, they were entitled to overtime and the failure to pay violated the Fair Labor Standards Act (FLSA). Tyson did not track the time spent by individual class members donning and doffing, so the plaintiffs hired an expert to analyze the habits of about five dozen employees and then calculate an “average” time that would be imputed to all 3,344 class members. Tyson argued that the class members had widely different donning and doffing times such that the trial court’s decision to certify the class violated both the federal rule governing class actions as well as Tyson’s due process rights.

Today’s 6-2 decision, authored by Justice Kennedy, upholds the class certification. The passive-aggressive nature of the majority decision, however, offers citeable nuggets for both plaintiffs and defendants in future cases. Importantly, the Court’s decision repeatedly emphasizes the narrowness of its holding, and how closely it is tied to the particular facts and litigation stances of the parties in this litigation. The Court strongly resisted the urging of parties and amici across the board (including PLF) to establish “broad and categorical rules governing the use of representative and statistical evidence in class actions.”

To the extent the Court was willing to define the boundaries of the proper use of statistical samples, it said: “A representative or statistical sample, like all evidence, is a means to establish or defend against liability. Its permissibility turns not on the form a proceeding takes—be it a class or individual action—but on the degree to which the evidence is reliable in proving or disproving the elements of the relevant cause of action. It follows that the Court would reach too far were it to establish general rules governing the use of statistical evidence, or so-called representative evidence, in all class-action cases.” Thus, the Court continued, a statistical model is acceptable if each class member could have relied on the sample to prove liability in an individual lawsuit. The Court does not explain, however, how any individual could justifiably rely on a sample in lieu of his or her own testimony.

The majority also rested its decision on Tyson’s mis-steps as a company and in litigation. The Court essentially held that the statistical modeling, even with its acknowledged limitations and inaccuracies, was a reasonable penalty for Tyson’s failure to keep records of the employees’ donning and doffing time. The Court further held that reliance on the expert’s study did not deprive Tyson of its ability to litigate individual defenses because Tyson’s primary defense would have been to show that the study was unrepresentative or inaccurate, and Tyson made neither claim. Moreover, Tyson conceded that there were some common issues, and changed the focus of its arguments.

The majority opinion remanded to the district court to determine the second question presented in the case: whether the plaintiffs must demonstrate that uninjured class members will not be awarded damages. Chief Justice Roberts concurred to express concern that there may not exist any method for awarding damages only to those class members who suffered an actual injury and that it is undisputed that hundreds of class members suffered no injury. The Chief Justice agreed that the district court should address this issue in the first instance, but was very skeptical that the lower can devise a means of distributing the aggregate award only to injured class members. In language that may presage the pending decision in Spokeo v. Robins, he wrote: “Article III does not give federal courts the power to order relief to any uninjured plaintiff, class action or not. The Judiciary’s role is limited ‘to provid[ing] relief to claimants, in individual or class actions, who have suffered, or will imminently suffer, actual harm.’” Justice Alito joined on this point.

Justice Thomas authored a lengthy dissent, joined by Justice Alito. In sum, he wrote, “[A]n incorrect class certification decision almost inevitably prejudices the defendant. When a district court allows class plaintiffs to prove an individualized issue with classwide evidence, the court relieves them of their burden to prove each element of their claim for each class member and impedes the defendant’s efforts to mount an effective defense. . . . The majority thus puts employers to an untenable choice. They must either track any time that might be the subject of an innovative lawsuit, or they must defend class actions against representative evidence that unfairly homogenizes an individual issue.”

Finally, this case points out the difference between a class action certified under Rule 23 and collective actions that require even a tiny amount of participation by potential unnamed plaintiffs, i.e., opting in to the litigation by filing written consent, as is required by the FLSA. In this case, the same employees were covered by both types of action but while the Rule 23 class action contained 3,344 members, only 444 employees affirmatively consented to join the FLSA action. That means that 2900 employees (86.7% of the Rule 23 class) had so little interest in this lawsuit that they could not be bothered to submit one letter. The practical effects of opt-in versus opt-out have been thoroughly discussed in the briefing of Friedrichs v. California Teachers Association, the union dues case that is also pending decision.

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