Supreme Court’s Tyson Foods Decision Is a Win for Class Plaintiffs and May Have Wide-Ranging Impact
V&E Antitrust Update E-Communication, March 24, 2016
On March 22, 2016, the Supreme
Court of the United States released its decision in the much-watched class
action Tyson Foods, Inc. v. Bouaphakeo.1 Siding with the class
plaintiffs to uphold a $5.8 million judgment against Tyson Foods, Inc., the
Court’s decision endorsed the class plaintiffs’ use of averages and other
statistical analyses to show class-wide liability in a don-doff dispute. Writing
for the 6-2 majority, Justice Kennedy emphasized that the court was not
adopting “broad and categorical rules governing the use of representative and
statistical evidence in class actions” generally, saying that the ability to
use averages and other statistical analyses “will depend on facts and
circumstances particular to those cases,” and that the Court had long allowed
use of representative evidence in Fair Labor Standards Act (FLSA) of the sort
at issue there.2
Although the decision on its face appears limited to the particular facts of
that case or to FLSA wage and labor cases more generally, the lack of a clear
rule creates ambiguity ripe for class plaintiffs to litigate and test the
bounds of the Tyson Foods decision. Future
class action litigation, including antitrust cases where the class-action mechanism
is regularly used, will reveal whether the holding in Tyson Foods will be limited to similar FLSA cases or will instead upend
class action litigation in favor of class plaintiffs.
Tyson Foods3 involves an FLSA dispute
about uncompensated time Tyson Foods pork-processing employees spent putting on
and removing required protective gear. To succeed on their overtime claims,
class plaintiffs had to show that they worked more than 40 hours per week,
including the time spent donning and doffing their protective gear.
In class certification
proceedings, the employees relied on statistical modeling and the use of
averages to show class-wide damages. In particular, the employees used
individual time sheets and average times of employees donning, doffing and
walking to their workstations to prove class-wide liability and damages (a
federal jury had found that the time spent donning and doffing protective gear
was an indispensable part of the employees’ work). In 2014, a divided Eighth
Circuit affirmed the district court’s judgment, in a decision widely viewed as
inconsistent with the Supreme Court’s 2011 Wal-Mart
Stores, Inc. v. Dukes4 and 2013 Comcast Corp. v. Behrend5 decisions, both of which overturned
decisions approving class certification, in part because of inadequate
commonality as to injury among the plaintiffs, and were seen as requiring trial
courts to conduct a rigorous analysis of class certification evidence.
A significant class
certification hurdle for the Tyson Foods
class plaintiffs was that individual damages were not necessarily consistent among
the class members — they wore different types of protective gear, which
required differing amounts of time to put on and remove. In addition, Tyson Foods
did not maintain records of the time each employee spent donning and doffing
protective gear. Plaintiffs ultimately relied upon a study performed by an
industrial relations expert, Dr. Kenneth Mericle, based on 744 videotaped
observations of employees donning and doffing their protective gear. The study
estimated that employees in one department spent an average of 18 minutes and
employees in another department spent an average of 21.25 minutes putting on
and removing protective gear every day. Those estimates were then added to
employee’s timesheets to determine which employees were not compensated with
overtime as required by the FLSA. Tyson Foods argued that class certification
was improper because it took employees varying amounts of time to don and doff different protective
equipment, and, thus, their claims were not sufficiently similar and too speculative
to be resolved on a class-wide basis.6
In upholding the certification, Justice Kennedy focused on
the “evidentiary gap” created by Tyson’s failure to maintain adequate records
of the time employees spent putting on and removing protective gear, explaining
that “when employers violate their statutory duty to keep proper records,” “the ‘remedial nature of [the FLSA] and the
great public policy it embodies . . . mitigate against making’ the burden of
proving uncompensated work ‘an impossible hurdle for the employee.’”7
The decision emphasized that if employees had brought individual claims, they would have been able to use representative
evidence, such as Dr. Mericle’s study, to prove individual damages.8
The majority explicitly declined to adopt a broad or categorical rule for class
actions generally, saying instead the use of averages and other statistical
analyses “will depend on facts and circumstances particular to those cases.”9
The Court distinguished Wal-Mart, which had rejected
a “Trial By Formula” approach for a Title VII discrimination class action, stating
that the representative evidence proffered there could not have been used to
establish liability in an individual action.
The majority also
emphasized that a statistical analysis like that at issue in Tyson Foods is to be evaluated by the
judge based on an evidentiary admissibility standard.10 Once the evidence is
deemed admissible, responsibility for deciding whether the averaging testimony
is persuasive is within the purview of the jury, not the judge. Judges can only
deny class certification on this ground if “no reasonable juror could have
believed that the employees spent roughly equal time donning and doffing.”11 The Court further wrote that
an alleged “failure of proof as to an element of the plaintiffs’ cause of
action” — namely challenging the accuracy of the study — was a “matter of
summary judgment, not class certification.”12
What This Means for You
Undoubtedly a win for the
Tyson Foods class plaintiffs, the
extent of the impact of the Court’s decision remains to be seen. Although the
majority took pains to depict the holding as a narrow one, the Tyson Foods decision almost certainly
will embolden the class action plaintiff bar to test the boundaries of the use
of statistical evidence and averages to prove class-wide damages. We anticipate
an inevitable uptick in reliance on statistical evidence and averages in class
certification proceedings as class plaintiffs use trial and error to test the
bounds of Tyson Foods. Lower courts
will have to grapple with the question of just how attenuated an average or
statistical analysis must be before it cannot support a class certification
What is not clear is the
extent to which the methodology allowed in Tyson
Foods will be successfully extrapolated beyond the FLSA context. The FLSA’s
statutory requirement to keep adequate time records — and Tyson’s apparent
failure to do so — appeared to weigh heavily in the majority’s reasoning, and
Justice Thomas’s dissenting opinion accused the majority of “devising an
unsound special evidentiary rule for cases under the [FLSA].”13 The Court’s emphasis on deciding
each matter based on the “facts and circumstances particular to those cases”
will give defendants arguments for limiting the sweep of Tyson Foods. In a typical antitrust suit, for example, where
damages are often based on specific purchases by individual plaintiffs, the use
of averages and statistical evidence in lieu of actual evidence of class-wide
damages may not fly. What is clear, however, is that future class plaintiffs
will look for opportunities to test the bounds of the decision. We expect
case-by-case attempts to expand Tyson
Foods beyond the limited purview of FLSA cases.
The Tyson Foods decision serves as further incentive for class action
defendants to be vigilant about scrutinizing expert studies and evidence put
forward by class plaintiffs in support of class-wide injury and class
certification. The Tyson Foods majority
weighed heavily the fact that Tyson Foods did not challenge the admissibility
of the plaintiffs’ expert study in the trial court proceedings14 or offer rebuttal expert
Class action defendants should expect and plan for even more rigorous contests
regarding expert evidence.
As discussed above, the
decision may make it easier for trial courts to defer resolution of issues that
typically have been resolved at the class certification stage. Tyson Foods suggests that questions
about the accuracy of statistical reports are perhaps more properly evaluated
during summary judgment and questions about the persuasiveness of the
statistical reports are for the jury to decide. This language may encourage
district courts to kick the can down the road and not resolve difficult issues,
which may essentially be dispositive, during class certification.
The decision also leaves unresolved
the issue of whether uninjured class members may recover damages. Although Tyson
Foods raised the issue in its petition seeking Supreme Court review, the Court
declined to consider this issue on the grounds that it was premature because
damages awards had not yet been distributed by the trial court. Concurring in
the majority decision, Chief Justice Roberts expressed concern about whether it
would be feasible to develop a method of awarding damages only to class
plaintiffs who in fact suffered an actual injury. Class action lawyers
undoubtedly will monitor the allocation methodology and process, in which Tyson
Foods will be able to challenge allocation to uninjured class members.
For more information, please contact Vinson & Elkins lawyers Craig Seebald, John Elwood, Lindsey Vaala, or Jeremy Keeney. Visit our website to learn more about V&E's Antitrust practice, or e-mail one of the practice contacts.
1 Tyson Foods, Inc. v. Bouaphakeo, No. 14-1146, slip op. (U.S. Mar. 22, 2016).
2 Id. at 15.
4 Wal-Mart Stores, Inc. v. Dukes,
564 U.S. 338 (2011).
5 Comcast Corp. v. Behrend,
133 S. Ct. 1426 (2013).
6 Tyson Foods, slip op. at
7 Id. at 11 (citing Anderson v. Mt. Clemens Pottery Co., 328
U.S. 680, 687 (1946)).
8 Id. at 12, 14.
9 Id. at 15.
10 Id. at 10 (“A representative
or statistical sample, like all evidence, is a means to establish or defend
against liability. Its permissibility turns . . . on the degree to which the
evidence is reliable in proving or disproving the elements of the relevant
cause of action.”); 15 (“Once a district court finds evidence to be admissible,
its persuasiveness is, in general, a matter for the jury.”).
11 Id. at 15.
12 Id. at 12-13.
13 Id. at 1 (Thomas, J.,
14 Id. at 14-15 (majority
opinion) (“Petitioner, however, did not raise a challenge to respondents’
experts’ methodology under Daubert;
and as a result, there is no basis in the record to conclude it was legal error
to admit that evidence.”).
15 Id. at 6.