The Supreme Court to Revisit Class Certification Standards
Nicholas Fortuna, June 17, 2015.
The Supreme Court will take another stab at defining the limits of class actions in the employment setting. On June 8, 2015 the Court granted review certification of a class of more than 3000 Iowa meat-processing employees on their wage and hour claims that resulted in a jury award of nearly $5.8 million in Tyson Foods, Inc. v. Bouaphakeo. The justices will consider the Eighth Circuit’s 2-1 decision that the district court did not abuse its discretion by certifying the workers’ collective and class actions under the federal Fair Labor Standards Act (FLSA) and the Iowa Wage Payment and Collection Law. The employees claimed that the amount added to their paychecks by their employer, Tyson Foods, Inc. for putting on and taking off protective gear and the required walking between stations was insufficient to compensate the actual time spent to cover pre- and post-production activities. This case will be a follow-up to the Supreme Court’s decision in Wal-Mart v. Dukes and could be another blockbuster in the area of class action litigation.
Under Federal Rule of Civil Procedure 23, a court may not certify a damages lawsuit in a class action unless there are questions of law or fact common to the class that predominate over any questions affecting only individual members. The FLSA imposes similar certification requirements on collective actions. In Wal-Mart, the Supreme Court held that in order to satisfy these commonality and predominance requirements, plaintiffs must demonstrate that the class members have suffered the same injury by proving their claims depend upon a common contention that is capable of class-wide resolution “in one stroke.” The Court explicitly disapproved of “trials by formula,” in which liability is determined for a “sample set” of class members and then applied to the remaining members of the class.
In Tyson, the Supreme Court will decide two questions about when a class may be certified under Rule 23 and a collective action under the FLSA: 1) whether differences among individual class members may be ignored, and a class certified, when plaintiffs use statistical techniques that presume all class members are identical; and 2) whether a class may be certified that contains hundreds of members who are not injured and have no legal right to damages. The framing of the questions for review suggests that the Court is skeptical of the validity of the certification in Tyson. The ruling could have far reaching effect depending on how precise the examination must be to determine if all class members are “similarly situated.”
The class members in Tyson are hourly workers at a pork-processing facility who allege that Tyson failed to compensate them fully for time spent donning and doffing personal protective equipment and walking to and from their work stations. At trial, the district court allowed the plaintiffs to prove liability and damages to the class with statistical evidence that presumed all class members are identical to an “average” employee as defined statistically.
Currently there are five Circuit Courts (Second, Fourth, Fifth, Seventh, and Ninth) that do not allow plaintiffs to obtain an aggregate damages award for a class by extrapolating from a statistical “average” class member. The Supreme Court’s decision will result in uniformity of treatment of this issue across the country.
The decision in will be of particular interest among businesses that are facing, or could face a putative class or collective action. Businesses are frequent targets of such suits and lower courts have been permissive in allowing putative class members with differences to obtain certification. The Supreme Court will likely set a uniform standard for tolerance of such differences. A decision is expected by June, 2016 – the end of the next term.