In Tyson, SCOTUS OKs statistical samples, leaves open uninjured plaintiffs issue

March 22, 2016

(Reuters) – U.S. Supreme Court Justice Anthony Kennedy used some quite definitive language Tuesday in his opinion for the six justices in the majority in Tyson v. Bouaphakeo, the wage-and-hour case that asked the court to resolve two big questions about class action litigation.

On one of those questions – the issue of whether class action plaintiffs may rely on statistical evidence to establish a defendant’s liability – Justice Kennedy and his colleagues seemed to go out of their way to bless so-called representative evidence, and not just in the context of Fair Labor Standards Act cases like this one. That’s a giant relief for class action plaintiffs, including the meat-processing workers in the Tyson case, and a big setback for class action opponents (although, as I’ll explain, not an outright disaster).

The opinion, however, left unresolved the second big question Tyson raised in its petition for certiorari: Can classes be certified if they contain uninjured class members? (As the majority noted in its opinion, Tyson stepped back in merits briefing from its initial assertion that such classes are unconstitutional, but its pro-business amici took up the constitutional cudgel.)

The justices in the majority, as well as Justice Samuel Alito in joining part of Chief Justice John Roberts‘ concurrence, all said the problem of uninjured class members recovering class money is hugely important. But they also agreed it’s not yet ripe in the Tyson case, in which a $5.8 million judgment for 3,000 or so meat plant workers has not been allocated among class members. The Supreme Court said it will be up to the trial judge to figure out how to deliver money only to workers who put in enough hours to entitle them to overtime pay (or to decide that Tyson, by arguing against a bifurcated trial on liability and damages, has waived the right to challenge the allocation).

By highlighting the importance of the uninjured class member controversy yet declining to address it head on, the justices basically invited class action defendants and objectors to bring them a case that offers a better vehicle to resolve the issue. That’s not much solace for class action detractors, but it’s all the court is offering right now.

Justice Kennedy’s opinion hints in several places that class action critics overreached in the Tyson case, especially when it comes to the use of statistical evidence, which defendants deride as “trial by formula.” Tyson and its amicus backers, “maintain that the court should announce a broad rule against the use in class actions of what the parties call representative evidence,” the opinion said. “A categorical exclusion of that sort, however, would make little sense.”

As the court pointed out – and as several justices noted in oral arguments – statistical evidence on the time workers spent dressing and undressing was the only means of proving the overtime claim because Tyson didn’t keep adequate records. Under Supreme Court precedent on the burden of proof in collective actions under the Fair Labor Standards Act, Tyson workers were entitled to rely on that evidence.

But the court more broadly rejected the idea that statistical evidence is inadmissible in class actions under its 2011 precedent in Wal-Mart v. Dukes. Tyson’s interpretation of the Wal-Mart case, the court said, “is misplaced. Wal-Mart does not stand for the broad proposition that a representative sample is an impermissible means of establishing classwide liability.”

David Frederick of Kellogg Huber Hansen Todd Evans & Figel, who argued at the court for the Tyson workers, said the language of the opinion should end any doubt that plaintiffs are entitled to use statistical evidence when trial judges allow it. I asked whether, as the chief justice warned, it will be difficult for the judge in the Tyson case to weed out uninjured plaintiffs. Frederick said it’s time for Tyson to accept defeat and move along. “This is a small case,” he said. “People concerned about uninjured plaintiffs should look for another vehicle.”

Carter Phillips of Sidley Austin, who argued for Tyson, was on a plane and unavailable. For a defense perspective, I talked instead to Andrew Pincus of Mayer Brown, who has followed this case closely. Pincus said that for all of the opinion’s atmospherics about Wal-Mart’s restricted scope and allowing plaintiffs to use representative evidence, the test the justices articulated is one defendants can live with. The majority did not say statistical evidence about class members’ alleged injuries is always admissible, no more than it held the evidence is inadmissible as a rule. Admissibility is a case-by-case judgment, the court said, that depends on “the purpose for which the sample is being introduced and on the underlying cause of action.”

A key consideration, according to the opinion, is whether individual plaintiffs would be able to cite the representative evidence were they litigating on their own rather than as part of a class. If the answer is yes, the court said, then they must be permitted to rely on that evidence in the class action, lest their substantive rights be abridged in violation of the Rules Enabling Act. Pincus said the individual case test “fits the way defendants think about class actions” and will be “useful” to class action defendants.

Plenty of commenters, including me, have wondered whether Justice Antonin Scalia’s death would impact the Supreme Court’s big class action rulings this term. In the Tyson case, even if Justice Scalia had joined Justices Clarence Thomas and Alito in dissent, his vote would not have changed the outcome.

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