Today, the Supreme Court issued its opinion in Tyson Foods v. Bouaphakeo, addressing the use of statistical evidence in class actions. The plaintiffs’ bar will undoubtedly claim the decision as a victory because class certification was upheld. But I don’t think that’s right. The decision (a 6-2 opinion by Justice Kennedy, with Justices Thomas and Alito dissenting) stands for principles that defendants can use to defend many class actions successfully.
The heart of the Court’s decision is that we should think of class actions conceptually as if they were hundreds or thousands (or millions, as the case may be) of separate individual suits. If the statistical evidence being offered could be properly used to prove entitlement to relief in individual cases, then it can all be used in a class action. But if the evidence would not be sufficient in an individual case, then it will not pass muster in a class action either. This is because the procedural device of a class action cannot alter substantive rights, under the Rules Enabling Act.
Tyson Foods involved a claim under the Fair Labor Standards Act. The plaintiffs alleged that Tyson Foods failed to pay for time spent putting on and taking off (“donning and doffing” in the legal lingo) protective equipment at overtime rates where the employee worked more than 40 hours per week including the “donning and doffing” time. The plaintiffs’ expert watched video recordings of employees taking their equipment on and off, and measured and averaged the times for the different departments. The Court found that this evidence, which had not been challenged by the defendant under Daubert, would be admissible in an individual lawsuit. This was because, in Anderson v. Mt. Clemens Pottery Co., the Court established a burden-shifting framework, under which, if the employer fails to satisfy its statutory duty to keep adequate time records, the employee can establish a prima facie case with evidence sufficient to make a “just and reasonable inference” about the amount of time worked. The burden then shifts to the employer to rebut that inference.
The Court distinguished the “Trial By Formula” method that was rejected in Wal-Mart Stores, Inc. v. Dukes because the putative class members in that sex discrimination case could not have properly used deposition evidence regarding practices of individual store managers in stores they did not work in to prevail in individual suits.
The Court declined to create any broad rule, explaining that “[w]hether a representative sample may be used to establish classwide liability will depend on the purpose for which the sample is being introduced and on the underlying cause of action.” (Slip op., at 15.) The Court also declined to decide the second issue in the case – whether uninjured class members could recover from the aggregate jury verdict. The Court found that issue premature, where the district court had not yet allocated the award. Chief Justice Roberts wrote a concurrence (joined by Justice Alito on this point) suggesting that there was no way of knowing how the jury reached its verdict and thus how it could be allocated without providing relief to uninjured plaintiffs. He wrote that “Article III does not give federal courts the power to order relief to any uninjured plaintiff, class action or not,” and “if there is no way to ensure that the jury’s damages award goes only to injured class members, that award cannot stand.” (Slip op. of Roberts, C.J., concurring, at 5-6.)
So how can defendants use this decision in defending against class certification? Here are a few thoughts:
- In many cases, the law does not permit any type of burden shifting in individual suits. In addition, in many other cases (such as many insurance and financial services class actions), defendants have detailed records of individual interactions with the putative class members. In these situations, statistical evidence often cannot properly be used to prove an individual case. Tyson Foods supports defendants’ position in these cases.
- Tyson Foods recognizes that the court cannot “deprive [defendant] of its ability to litigate individual defenses.” (Slip op. at 12.) While it appears that the defense was presented using common evidence in Tyson Foods, the defendant should be entitled to introduce individual evidence to support its defenses to individual putative class members’ claims. In some cases, this may result in decertification of the class if the trial becomes unmanageable due to the defendant’s right to put on its individual defenses. As Tyson Foods further explains, it “violate[s] the Rules Enabling Act [to] giv[e] plaintiffs and defendants different rights in a class proceeding than they could have asserted in an individual action.” (Slip op. at 14.) Where the defendant will use individual evidence to defendant against the named plaintiffs’ claims and/or some class members’ claims, it is entitled under Tyson Foods and Wal-Mart to use that same evidence in defending itself at the trial of a certified class action.
- The presence of uninjured class members, although still an open question, is an important one. The Chief Justice’s concurrence on this point is likely to carry significant weight in the lower courts. Defendants can continue to press this issue.