Tyson Foods, Inc. v. Bouaphakeo, the third and last of the three class action cases that the U.S. Supreme Court is hearing this Fall was argued yesterday. Articles in the New York Times and USA Today have suggested that the plaintiffs are likely to win this case because Justice Kennedy’s comments suggested he would side with them, and his vote could prove crucial, as it often is. My reading of the transcript is that how the case will be decided seemed very much up in the air. How the majority opinion is written, more than the result itself, will have the most impact (or lack thereof) on class action law more broadly, including insurance cases.

Tyson Foods is an employment class action alleging that Tyson failed to  pay overtime wages for time spent by employees putting on and taking of their protective equipment. The case involves both a class action and a collective action under the Fair Labor Standards Act (“FLSA”). It was tried to a jury verdict in which the plaintiffs introduced evidence based on statistical sampling, but the amount of the verdict reflected that the jury rejected that evidence in substantial part. The questions presented involve the propriety of class certification based on the statistical sampling technique, and whether the class could be properly certified where it includes many members who were not injured.

Towards the end of the argument, Justice Sotomayor summarized a key question that her colleagues had asked about repeatedly, involving how the Court could know what the jury decided where it did not accept the plaintiffs’ evidence:

Sotomayor photo

Clearly, the expert here, Dr. Joy, said – I’m using a hypothetical – there’s 10 minutes of overtime. And the figure that comes out with 10 minutes of overtime is a million dollars. Now the jury comes back with half a million dollars.  . . . How do we know what – how the jury calculated that half million? (Transcript, at 55.)

The Government’s counsel (supporting the plaintiffs) conceded that the answer to that question is not known, and Justice Sotomayor then asked, then why is it fair to distribute the award pro rata? The Government’s counsel responded that this issue should be left to the district court on remand, and that Tyson may have waived the issue by asking for a lump sum verdict.  Justice Ginsburg suggested that Tyson should not care about that because they have to pay the same amount of money regardless. On rebuttal, Carter Phillips (arguing for Tyson) said Tyson would be happy for a remand for allocation, but noted that the district court had already entered a final judgment, with no provision for allocation. Justices Scalia and Alito had suggested earlier in the argument that there was no way at this point to identify who was injured, and whom to pay. Justice Kagan appeared to blame that on Tyson’s litigation strategy in the district court. Chief Justice Roberts suggested that the Court may need to address how this case was presented to the jury, and then whether there was a waiver by Tyson.

There was also extensive discussion about the interplay here between class action law and the substantive law under the FLSA. Back in 1946, the Supreme Court adopted a burden shifting framework under the FLSA – the employee must prove liability, but then “[u]nless the employer can provide accurate estimates, it is the duty of the trier of facts to draw whatever reasonable inferences can be drawn from the employees’ evidence as to the amount of time spent in these [compensable] activities in excess of the productive working time.” Anderson v. Mt. Clemens Pottery Co., 328 U.S. 680, 693 (1946). Justices Kagan and Kennedy both suggested that the answer here may lie more in that rule than in class action law. But the case appears to involve a class action under state law as well.

Kennedy photo

Justice Kennedy asked whether the plaintiffs’ counsel would concede that the class might not be certifiable under Rule 23 absent the Mt. Clemens decision. Plaintiffs’ counsel did not concede that point, but the Government’s counsel agreed that the case would be much closer if it did not involve the FLSA. Justice Kennedy seemed to struggle with how an opinion might be written if the result were in plaintiffs’ favor. He asked about what the standard would be and expressed dissatisfaction with the suggested answers. Given that he is the senior justice if the majority consists of Justice Kennedy and the four liberal justices, he will either write the opinion or decide who writes it. And that will determine to what extent this case impacts class action law more broadly. The Supreme Court is usually not in the business of deciding cases narrowly based on their facts. That is not its role. But it has to decide the case, not just expound on the law, and sometimes the result is a narrow decision. That seemed to be where Justice Kennedy might be headed, if he is the lynchpin in forming a majority. But I also see the possibility here of a majority being formed that might, as the Chief Justice suggested, explain how the case was not properly presented to the jury and the verdict now cannot properly be distributed, and then send it back to the lower courts.