Consumer Finance Insights
March 28, 2016

Supreme Court Stops Short of Bright-Line Rule Regarding Statistical Evidence in Class Actions

On March 22, the Supreme Court issued its decision in Tyson Foods, Inc. v. Bouaphakeo.  For those unfamiliar with the case, Tyson Foods is a Fair Labor Standards Act (FLSA) case that involved an alleged failure to pay overtime to employees who spent significant time “donning and doffing” (putting on and taking off) various protective equipment.  Tyson Foods argued that the plaintiffs/respondents could not rely on a calculated statistical average to support class treatment because those averages masked individualized differences between different employees working in different sections of the plant.  After the United States District Court for the Southern District of Iowa certified a class, and the Eighth Circuit affirmed, the Court granted cert to address two questions:  whether putative class plaintiffs may meet their burden under Rule 23(b)(3) by using “statistical techniques that presume all class members are identical to the average observed in a sample,” and whether certification is appropriate where members of the putative class have not been injured.

Last week, the Court (6-2) affirmed the Eighth Circuit, holding that where statistical evidence would otherwise be admissible to prove each employee’s individual claim, that evidence can be used to establish classwide liability.  In so holding, the Court specially noted that its decision did not establish “broad and categorical rules governing the use of representative and statistical evidence in class actions.” It also explained that the use of such evidence “will depend on the purpose for which the sample is being introduced and on the underlying cause of action.”  The Court did not reach the question of whether certification is appropriate if the class contains uninjured individuals because Tyson Foods abandoned its argument on this point.  It is worth noting that the Court’s opinion elicited both concurring and dissenting opinions.  In his concurrence, Chief Justice Roberts highlighted the necessity that the evidence sought to be introduced be “sufficient proof” for the matter asserted, and he noted that “if there is no way to ensure that the jury’s damages award goes only to the injured class members, then the award cannot stand.”  Justice Thomas filed a dissenting opinion explaining that he believed the District Court had failed to satisfactorily consider the impact of individualized issues in its class certification analysis and questioning whether the majority had created a new, relaxed standard regarding the use of statistical evidence in class cases.

After the Court granted cert last June, we wrote about Tyson Foods and its potential impact on class actions.  Given the two questions at issue, Tyson Foods had the potential to change the landscape of class action litigation.  Although the decision’s impact on class actions has yet to be seen, impact will likely be small because the Court avoided making any sweeping pronouncement regarding the use of statistical evidence in class cases.  Instead, whether such evidence may be used will turn on the type of case, whether the elements of a particular cause of action are susceptible to statistical proof, and the purpose for which the evidence is presented.  As the Court explained “the fairness and utility of statistical methods in contexts other than those presented here will depend on facts and circumstances particular to those cases.”  Tyson Foods itself exemplifies the point.  The Court approved of the use of statistical evidence in Tyson Foods, in part, because the defendant/petitioner had violated a statutory duty to keep proper records.  Whether courts will permit similar evidence in non-FLSA cases or in cases where there is an abundance of evidence remains to be seen.