Cleveland-based partner David D. Yeagley published a client alert regarding the Supreme Court’s recent and highly anticipated decision in Tyson Foods v. Bouaphakeo, Slip Op. 14-1146. In Tyson Foods, the Court addressed the propriety of a class action or collective action claim brought under the Fair Labor Standards Act (FLSA), seeking damages for overtime spent “donning and doffing” protective equipment. The Supreme Court’s decision is an important one under the FLSA, and much will be written about its impact on collective actions brought under the FLSA.
Outside of the FLSA collective action context, Tyson Foods may impact class action litigation in the following ways:
First, Tyson Foods undercuts any bright line rule that statistical proof is not permitted in a class action case, including as drawn from the Court’s decision in Wal-Mart Stores, Inc. v. Dukes, 131 S. Ct. 2541 (2011), which in the context of that case rejected “trial by formula” as contrary to the Rules Enabling Act. Following Tyson Foods, the use of statistical and representative evidence to prove class-wide liability will depend on the “facts and circumstances particular to [the] case.” Of course, a party is always free to challenge statistical or representative evidence (including on a Daubert challenge), but in certain instances any deficiency in the reliability of such evidence will, in the words of the Court, present a “fatal similarity” directed to substantive liability issues on a class-wide and across-the-board basis. See Slip Op. at 12-13. Notably, the Court’s willingness to accept statistical or representative evidence in Tyson Foods should be read, at least in part, in the context of the employer’s failure to maintain required work records, which based on past precedent relaxes the burden to prove back wages, and the carry-over of the rationale in Tyson Foods to other cases will be fought out in future cases based on the facts and theories presented.
Second, Tyson Foods may be argued to present a more certification-friendly application of the “predominance” prerequisite under Federal Rule 23(b)(3), and to undercut an argument drawn from the Supreme Court’s fractured decision in Comcast Corp. v. Behrend, 133 S. Ct. 1426 (2013), that the predominance prerequisite cannot be established in a case where there is no methodology to prove class-wide damages. Companies should continue to defend class certification if (as often is the case) there are individualized issues of harm and damages that require individualized evidentiary proof, as opposed to the simple mathematical computation of damages based on a common and class-wide formula.
Third, class action plaintiffs may argue that Tyson Foods impacts whether a court can deny class certification – at least on Article III standing grounds – on the basis that a class definition might include individuals who were not harmed or injured by the challenged conduct. Notwithstanding the Tyson Foods decision, companies should continue to defend class certification if an overbroad class certification would sweep into a putative class a significant or substantial number of individuals who did not suffer or sustain any harm or injury as a result of the challenged wrongdoing, particularly where the plaintiff/class proponent cannot identify – at the class certification stage – a workable mechanism to identify those uninjured class members prior to judgment and insure that their presence does not increase the damages award. Importantly, Tyson Foods unquestionably affirms the principle that uninjured class members cannot recover.
Overall, the decision of the United States Supreme Court in Tyson Foods could add some fuel to certain class certification issues and arguments outside of the narrow facts and unique procedural context of that particular FLSA case, while even in that case it has yet to be determined if uninjured class members can in fact be excluded from recovery. See Slip Op. at 5, concurring opinion of Chief Justice Roberts. Tyson Foods is unlikely to become a transformative decision under Rule 23 that carves a dramatically new class action and class certification landscape.
As a final matter, it is notable that the recent death of Justice Antonin Scalia did not directly impact the Court’s 6-2 decision, which was written by Justice Kennedy and joined by Chief Justice Roberts and Justices Ginsburg, Breyer, Sotomayor, and Kagen, with a dissent by Justice Thomas in which Justice Alito joined. However, several recent class action cases have been decided 5-4, and Justice Scalia’s death may prove to be more impactful on the forthcoming decision of the Supreme Court in Spokeo, Inc. v. Robins, which presents the equally important issue of whether a plaintiff who is seeking only statutory damages has standing to sue under Article III.