As the dust settles from a busy week at the Supreme Court, we’re left with the answer to one high profile case;Tyson Foods, Inc. v. Bouaphakeo. But it also leaves us with a few questions.
Depending on who you ask this case is a major boon or boost for plaintiffs; a confirmation of company’s nightmares about class actions or a logical continuity of past precedent. But like most Supreme Court decisions, this is not the class war won as some headlines might lead you to believe.
Tyson deals with hourly workers who filed a suit against Tyson, claiming that the food company failed to properly compensate them for time spent getting into and out of protective equipment, and walking to and from their work stations. Plaintiffs argued that under the FLSA they were entitled to overtime payments for this “work.” Tyson didn’t keep records of each employee’s time spent for these activities, so at trial the plaintiffs presented a study by Dr. Kenneth Mericle that took an estimated average of all employees. Additionally, plaintiffs introduced a study which stated that hundreds of class members were not injured at all, having not worked any overtime. Ultimately the jury awarded the class $2.9 million, and Tyson move to decertify the class, arguing that Mericle’s averaging approach improperly assumed there’d be large differences in the time each worker was owed damages for. The district court didn’t go for this line of thinking, but the Eighth Circuit did.
So by the time the case made it to the Supreme Court, there were some serious questions about what the legacy of Tyson would mean for class actions. Could differences in a class action be ignored if plaintiffs were applying statistical techniques that posited that all class members were identical? Could a class be certified even if it seems like many class members weren’t injured?
So when Tuesday saw SCOTUS certify the class action it seemed like the worst case scenario for many corporations facing class actions. Last year U.S. companies spent a combined $2.1 billion on class action defense—an increase of 3.5 percent from 2014—and now they were being told in a 6-2 decision that these class actions could be certified on statistical input. Initially the reports stated that this was a “major” victory for plaintiffs and future class actions. It was a decision that many expect federal agencies like the EEOC or the OFCCP to take full advantage of in the future, near or far.
But for others it’s not a simple loss.
“This Tyson Foods outcome should not surprise anyone who thought beyond the narrow bounds of partisan thinking. After all, clinical trials for lifesaving drugs, for example, often succeed or fail based on statistics, even though it is well known that the people in the trial are individually variable humans,” said Kirk Hartley in a blog post for GlobalTort. “The Tyson case also presented an element of “be careful what you wish for.” Imagine, for example, the plight of defendant companies if they were barred from using statistical proof (i.e. epidemiology) to defeat claims with a relative risk of below 2.0 (to date, most such calculations defy reality by assuming all humans are the same, which we know is not true).”
Indeed, looking at the decision it’s a logical conclusion that statistics play an important role in synthesizing large swaths of data (especially if, like Tyson, there’s no data readily available). And like most Supreme Court decisions, this is not a broad rule allowing statistics to expand the class willy-nilly, as Wystan Ackerman writes for the Class Actions Insider:
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.
Additionally, the court chose to not even address the second question about whether a class could be certified with members who were not injured. They acknowledged that it was a question “of great importance,” butconcluded it was not properly placed before the court in this case.
All this smacks of something far from a slam dunk for the plaintiffs. Though it may have seemed they were up against the odds, as the reaction calms a bit it seems clear that the plaintiffs here eked out a narrow victory over Tyson Foods. Whether they ultimately become the precedent for a greater number of class actions down the line appears to be a question for another time. For now, statistical evidence means class is in session.
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