United States: Statistical Modeling In Class Actions: The U.S. Supreme Court Weighs In, Kind Of

A U.S. Supreme Court decision expected to potentially change (or at least clarify) the rules on the hot-button issue of statistical modeling in class actions ended up turning much more on case law specific to the Fair Labor Standards Act ("FLSA"), and on some litigation strategy decisions made at the trial court level. The Court's 7-1 decision in Tyson Foods v. Bouaphakeo, thus became much less of a blockbuster than many had expected.

Plaintiffs in the case were workers at a pork processing plant. They sought overtime pay for time spent putting on and taking off protective gear at either end of their shifts. Neither Plaintiffs nor the employer kept exact records of the time the proposed class of 3,344 workers spent changing the clothing, so Plaintiffs commissioned an expert study. The study averaged the time taken by a sample of the workers to change into and out of the protective clothing, which Plaintiffs put forward as the presumptive amount of time to be used in calculating each employee's overtime pay. Based on the study, Plaintiffs claimed that the class was entitled to an aggregate $6.7 million.

The study found a variance – sometimes significant — in the amount of time each employee took. The evidence also showed that 212 workers never passed the 40-hour work week threshold, meaning they were not entitled to any overtime pay. Despite this, the defense never challenged the expert study, nor did it agree to Plaintiffs' proposal to bifurcate trial into liability and damages phases, a procedure that would have provided an opportunity to oppose awards for workers not entitled to overtime pay. Instead, the defense argued on a motion to set aside the verdict (after the jury returned a $2.9 million award) that the variance in time spent by individuals donning and doffing the clothing, and the fact that some workers were not entitled to overtime pay at all, meant that individual issues predominated over common questions, preventing class certification under Rule 23(b)(3). Despite the challenge, the Iowa federal district court maintained certification of a class action and a FLSA collective action. The Eighth Circuit later affirmed.

Justice Kennedy wrote the majority opinion for the Supreme Court, in which all but Justice Thomas joined. Focusing on the Rule 23(b)(3) "predominance" question, the Court framed the "central dispute" as whether individual "person-specific inquiries into individual work time" were required or whether "these individual inquiries are unnecessary because it can be assumed each employee donned and doffed for the same average time" observed in Plaintiffs' study. 577 U.S. ___ at 9. Signaling that it was not going to issue a "blockbuster" decision the Court declined the request of Tyson Foods and various amici to "announce a broad rule against the use in class actions of what the parties call representative evidence," and instead stated that "[w]hether and when statistical evidence can be used to establish class wide liability will depend on the purpose for which the evidence is being introduced and on 'the elements of the underlying cause of action.'" Id. at 10. "One way for [Plaintiffs] to show ... that the sample relied upon here is a permissible method of proving class wide liability" the Court continued "is by showing that each class member could have relied on that sample to establish liability if he or she had brought an individual action." Id. at 11 (citations omitted). In other words, where admissible statistical evidence could be used to prove an individual claim, that evidence could be used to prove class claims as well.

The Court then cited its prior decision in Anderson v. Mount Clemens Pottery Co., 328 U.S. 680 (1946), which established a burden shifting standard specific to the FLSA that allows a plaintiff to establish presumptive injury "'if he produces sufficient evidence to show the amount and extent of [uncompensated] work as a matter of just and reasonable inference.'" Id. at 12 (citation omitted). This standard applies if – as here — the employer failed its statutory duty to keep accurate records of time worked. An employer can rebut this evidence by "com[ing] forward with evidence of the precise amount of work performed or with evidence to negative the reasonableness of the inference to be drawn from the employee's evidence." Id. Under this precedent, and its "individual case" proof standard, the Court found Plaintiffs' study to be a permissible means of proving class liability since individual employees could have relied upon it had sued individually. The use of statistical evidence did not deprive defendants of an opportunity to assert any defense, the Court further observed: if the statistical evidence itself was subject to challenge, defendants remained free to do so; here, however, the defense did not contest the validity of the Plaintiffs' study.

A second question raised was whether a class could remain certified where Plaintiffs had not proven that uninjured class members (viz. the 212 employees not entitled to overtime) (i) did not contribute to the "size of the damage award" and (ii) would not be awarded damages. Id. at 16. The Court declined to address this question, saying it was "premature" since no damages had yet been paid. The Court observed, however, that the defense had declined Plaintiffs' proposal to bifurcate the trial, thereby potentially "inviting" the inclusion of uninjured workers within the class, an issue it said the District Court should consider on remand. Justice Roberts, in a concurring opinion, expressed concern that the District Court might not be able to properly apportion damages among the class members given that the jury returned, without explanation, an award much smaller than Plaintiffs' study suggested ($2.9 million award vs. $6.7 million claim), and given that numerous class members were not entitled to any award at all. It remains to be seen how the District Court will handle this issue, and if the case will again be making its way through the appellate courts after damages are apportioned.

Overall, the decision announces no broad rules either allowing or disallowing the use of statistical evidence in class actions, but instead emphasizes that such use will depend on the specific circumstances and law applicable to each case. Two takeaways for class action defendants are to (i) continue to challenge proposed statistical evidence, if appropriate, and (ii) seek bifurcation of trial, if that will provide an effective means to address individual damages issues.

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.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Events from this Firm
26 Sep 2018, Seminar, San Francisco, United States

Please join us for Sheppard Mullin's Labor & Employment Law Update & Happy Hour Seminar Series.

28 Sep 2018, Other, Los Angeles, United States

Leaders today don't just have to worry about nefarious cybercriminals getting "inside" their firewalls; there's an entire ecosystem of SAAS partners, third party vendors and suppliers, and all the hardware from switches to POS terminals that need to be monitored.

9 Oct 2018, Other, Los Angeles, United States

Sheppard, Mullin, Richter & Hampton LLP has opened for business in Dallas to proudly serve the Texas business community.

Similar Articles
Relevancy Powered by MondaqAI
 
In association with
Related Topics
 
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions