The Supreme Court recently granted Tyson Foods’ petition for certiorari which presents to the Court two important class action issues:

(1) Whether differences among individual class members may be ignored and a class action certified under Federal Rule of Civil Procedure 23(b)(3), or a collective action certified under the Fair Labor Standards Act, where liability and damages will be determined with statistical techniques that presume all class members are identical to the average observed in a sample; and

(2) whether a class action may be certified or maintained under Rule 23(b)(3), or a collective action certified or maintained under the Fair Labor Standards Act, when the class contains hundreds of members who were not injured and have no legal right to any damages.

Plaintiffs, employees in a Tyson pork processing plant, filed an action in Iowa federal district court asserting claims under the Iowa Wage Payment Collection Law (“IWPCL”) and the Fair Labor Standards Act (“FLSA”).  Plaintiffs alleged that Tyson failed to pay them overtime wages for time spent “donning” and “doffing” protective equipment and walking to and from their work stations.

The district court certified the FLSA claim as a collective action and the IWPCL claim as a Rule 23(b)(3) class action and denied Tyson’s decertification motion.  At trial, plaintiffs proved liability and damages by using individual time sheets and an average “donning,” “doffing,” and walking time calculated by plaintiff’s expert based on hundreds of employee observations.  A second plaintiff’s expert calculated classwide damages through use of this average time in connection with Tyson’s time records and a computer algorithm.  The damages expert conceded that, even using the average time (which Tyson claimed was excessive and inappropriate), over 200 class members were not entitled to overtime pay.  The jury returned a verdict in plaintiffs’ favor and the district court entered judgment.  Tyson appealed to the Eighth Circuit, where a divided panel affirmed.

Tyson argued in its petition for certiorari that the district court improperly allowed plaintiffs to ignore individual differences as to the actual time spent “donning” and “doffing” equipment, in favor of allowing plaintiffs to prove classwide liability and damages based on a fictional “average” employee developed by plaintiffs’ expert.  Tyson contended that such a method of proof evades Rule 23(b)(3)’s predominance requirement and violates both the Rules Enabling Act, by using Rule 23 to alter class members’ substantive rights, and the Due Process Clause, by denying Tyson the opportunity to present individual defenses to class members’ claims.  Tyson also argued that Wal-Mart and Comcast put an end to the “Trial by Formula” and that Comcast precludes damage models that ignore the basis of a defendant’s putative liability to each class member. Tyson further asserted that the inclusion of individuals who suffered no injury as class members was contrary to Article III.  It noted a significant split of authority among the Courts of Appeals on both the Trial by Formula and Article III class member standing issues.

The Court will take up the case in its October term, along with two other matters involving important class action issues.  In the first, Campbell-Ewald Company v. Gomez, the Court will address whether a case becomes moot, and beyond Article III judicial power, when a plaintiff receives an offer of complete relief on his or her claim, and, further, whether the answer to this question is different in the context of a putative class action before a class is certified.  In  Spokeo v. Robins, the Court will consider whether: “Congress may confer Article III standing upon a plaintiff who suffers no concrete harm, and who therefore could not otherwise invoke the jurisdiction of a federal court, by authorizing a private right of action based on a bare violation of a federal statute.”  Please see our prior posts for a further discussion of Spokeo.

Tyson Foods, Inc. v. Bouaphekeo, No. 12-3753, slip op. (8th Cir. Aug. 25, 2014), cert. granted, No. 14-1146 (U.S. Jun. 8, 2015).