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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 finding.

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 testimony.15 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

Tyson Foods, Inc. v. Bouaphakeo, No. 14-1146, slip op. (U.S. Mar. 22, 2016).

Id. at 15.

Id.

Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338 (2011).

Comcast Corp. v. Behrend, 133 S. Ct. 1426 (2013).

6 Tyson Foods, slip op. at 4-5.

Id. at 11 (citing Anderson v. Mt. Clemens Pottery Co., 328 U.S. 680, 687 (1946)).

Id. at 12, 14.

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., dissenting).

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.

Key Contacts

+1.202.639.6585
cseebald@velaw.com
+1.202.639.6518
jelwood@velaw.com
+1.202.639.6523
lvaala@velaw.com
+1.202.639.6749
jkeeney@velaw.com

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This information is provided by Vinson & Elkins LLP for educational and informational purposes only and is not intended, nor should it be construed, as legal advice.