Class and collective action plaintiffs can establish liability
through statistical or "representative" evidence, the
U.S. Supreme Court ruled in Tyson Foods, Inc. v. Bouaphakeo, released last
week. The decision could have significant implications for class
and collective actions throughout the country.
Tyson Foods marks a departure from the High Court's
recent class and collective action jurisprudence as articulated in
the Dukes v. Wal-Mart and Comcast Corp. v.
Behrend decisions which questioned the validity of
representative proof as an impermissible "trial by
formula." The 6-2 decision written by Justice Anthony Kennedy
embraced a case-specific approach allowing for the introduction of
statistical or representative proof if the evidence is reliable and
can prove elements of the underlying cause of action.
In Tyson Foods, employees of the company's processing
plant in Storm Lake, Iowa, filed suit under the Fair Labor
Standards Act and Iowa state law, claiming they were entitled to
compensation for the time it took them to don and doff their
protective gear. Over Tyson's strong objections, U.S. District
Judge John Jarvey certified the case as both a collective action
under the FLSA and a class action under Rule 23. Tyson did not
maintain time records documenting how long it took each employee to
don and doff their equipment, a fact that proved central in the
Supreme Court's ultimate decision.
At trial, the centerpiece the employees' case was the testimony
of an industrial relations expert who, after conducting videotaped
observations showing how long donning and doffing activities took
depending on the department in which the various employees worked,
determined employees spent, on average, 18 or 21.25
minutes a day in uncompensated time donning and doffing their
equipment. Using these estimates, plaintiffs added the
uncompensated time to the number of hours each employee was
documented to have worked in a given week. Any employee who, after
adding this uncompensated time to his or her weekly total, worked
in excess of 40 hours was determined to be entitled to
overtime.
While the plaintiffs' expert witness on damages calculated the
employees were entitled to $6.7 million in uncompensated time, the
jury, finding most of the donning and doffing activities
constituted compensable work under the FLSA, awarded the plaintiffs
$2.9 million in unpaid wages. Tyson's motion to set aside the
jury's verdict was denied by the district court. Quoting the
U.S. Supreme Court's 1946 decision in Anderson v. Mt.
Clemens Pottery, Co., the Eighth Circuit Court of Appeals
upheld the verdict finding the jury could have drawn a
"reasonable inference of class-wide liability" based on
the evidence presented. The Eighth Circuit further denied
Tyson's argument that the class should never have been
certified in the first place because of the variations in the
donning and doffing time between individual employees.
Writing for the majority, Justice Kennedy made clear that, before
certifying a class under Rule 23(b)(3), district courts must find
that questions of law or fact common to class members predominate
over any questions affecting only individual members. This
predominance inquiry rests on whether the class or classes are
sufficiently cohesive to warrant adjudication by representative
proof. The central dispute in Tyson was whether plaintiffs
could rely on the "average" amount of time it took an
employee to don and doff their safety equipment to determine if
they worked in excess of 40 hours in a given week.
The Supreme Court rejected Tyson's invitation to broadly rule
against the use of "representative evidence" or
statistical proof in class actions, instead holding that
representative or statistical proof, like all other evidence
considered, should be evaluated under the Rules of Evidence. In so
holding, the court stated that "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." Noting that
in many cases, "a representative sample is the only
practicable means to collect and present relevant data," the
court held that, in cases 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." In a concurrence, Chief Justice
John Roberts, Jr. wrote, "despite the differences in donning
and doffing time for individual class members, respondents could
adequately prove the amount of time for each individual through
generalized, class-wide proof."
The majority was clearly persuaded by the fact that the statistical
proof put forward by the plaintiffs could have been used by each
employee were he or she to bring an individual cause of action.
Because Tyson did not satisfy its legal obligation to keep records
on how much time each of its employees worked, the employees had to
"fill [the] evidentiary gap" with the statistical proof
developed by their experts. As such, Tyson's primary defense
(which it did not avail itself of) was to attack the
plaintiffs' expert report as unrepresentative or inaccurate
– i.e., inadmissible under the Rules of Evidence. The
court's decision encourages district courts to consider the
admissibility of representative proof, holding that the absence of
proof as to an element of plaintiffs' action should be
addressed on summary judgment, not when challenging class
certification. Perhaps most importantly, the court's decision
signals future fights regarding representative or statistical proof
will be another front in the "battle of the
experts."
The Tyson decision is significant in light of the
court's 2011 decision in Wal-Mart v. Dukes. In that 5-4 decision, with
the late Justice Antonin Scalia writing for the majority (joined by
Justices Roberts and Kennedy), the court reversed the certification
of a class of 1.5 million female employees based on the
plaintiffs' use of representative proof to establish liability
in the absence of a common discriminatory policy. The
Wal-Mart opinion cast significant doubt on the
permissibility of representative or statistical proof. In its Tyson
decision, the Supreme Court stated in no uncertain terms that
"Wal-Mart does not stand for the broad proposition
that a representative sample is an impermissible means of
establishing classwide liability," reasoning instead that
unlike in Wal-Mart, the plaintiffs in Tyson could
have relied on the representative evidence to establish liability
and damages on an individual basis.
The Supreme Court's analysis on the issue of representative
proof raises an interesting point about Tyson's litigation
strategy. That Tyson did not challenge the methodology of the
employees' expert witness who calculated the average donning
and doffing times proved significant. Tyson's silence, combined
with their lack of time records relating to how long it took each
employee to don and doff their equipment, left them in the
difficult position of fighting something (i.e., the plaintiffs'
expert's report) with nothing. By not challenging the
admissibility of the report, the court seemed to indicate its hands
were tied as to whether the report should have been considered by
the jury. It is distinctly possible this decision comes out
differently (or is at least a closer question), if plaintiffs'
methodology was challenged on the merits.
The major takeaway is companies seeking to discredit representative
or statistical proof need to show such proof does not satisfy the
Rules of Evidence and should not be considered. The court was clear
in saying that just because statistical methods were used in this
case does not mean they will be appropriate in all circumstances:
"The fairness and utility of statistical methods in contexts
other than those presented here will depend on facts and
circumstances particular to those cases." Thus, going forward,
companies defending themselves against class and collective actions
need to be prepared to challenge the methodology of the
representative proof put forward by plaintiffs at summary judgment.
The use of representative and statistical proof remains viable,
meaning class and collective actions are alive and well. Businesses
must proceed accordingly.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.