Tyson Trumps Dukes

I suspect that many are reading this article because "Trump" is in the headline, a place Donald Trump generally finds himself most days. But, in the interests of full disclosure, the article is actually about Tuesday's 6-2 decision of the U.S. Supreme Court in Tyson Foods v. Bouaphakeo. In keeping with the Trump theme, this case is "huge" and it's going to make wage and hour so great again. You should read this article because, believe me, this case is going to make wage and hour class actions win again. All the Trump-isms aside though, this case will change the way that both class actions and Private Attorneys General Act actions are litigated. Because it throws out Wal-Mart v. Dukes (2011) and Comcast v. Behrend (2013) in the wage and hour context, it will make it much easier to get class, collective, and representative actions to trial.

Tyson can be viewed as the federal equivalent of the California Supreme Court case of Duran v. U.S. Bank decided in 2014. In Duran, the court laid out the standards for the use of representative testimony and statistical evidence in class action trials. Here, in Tyson, the U.S. Supreme Court refers to "representative evidence," in both the Fair Labor Standards Act context and under Rule 23, which it treats identically. Unlike in Duran, the U.S. high court doesn't delve into margins of error and the like, leaving for another day Daubert challenges that defendants will likely bring in the future; however, they do state that, "A categorical exclusion of that sort [representative evidence], however, would make little sense."

Despite the fact that Justice Anthony Kennedy wrote the majority opinion with Chief Justice John Roberts joining in for good measure, the sweep of the opinion is quite broad as pointed out by Justice Clarence Thomas' scathing dissent. For example, the majority states, "In many cases, a representative sample is 'the only practicable means to collect and present relevant data' establishing a defendant's liability." The court also clarifies that the old tried-and-true Anderson v. Mt. Clemens Pottery is alive and well.

Mt. Clemens was a 1940s case that laid out the theory that if the defendant did not have records of overtime that they were required to keep, then once a plaintiff testified as to the his hours worked, the burden would shift to defendant to disprove the employee's testimony. While many in the plaintiff's bar have relied upon Mt. Clemens in the class action context to argue that a burden shift occurred and that statistical evidence could be used in place of testimony, Tyson definitively extends Mt. Clemens into the reprehensive action realm.

The court does impose a limitation on the type of representative evidence that may be used, which is not insignificant. Namely, the plaintiffs must show that the sample relied upon "is a permissible method of proving class-wide liability" which can be achieved by "showing that each member could have relied on that sample [representative evidence] to establish liability if he or she had brought an individual action. If the same could have sustained a reasonable jury finding as to the hours in each employee's individual action, that sample is a permissible means of establishing the employees' hours worked in a class action." This means that in cases where there is significant data, survey evidence combined with unlawful policies will clearly pass constitutional muster under Tyson.

Perhaps the most significant line in the opinion is the rejection of Dukes. "Petitioner's reliance on Wal-Mart Stores, Inc. v. Dukes, 564 U. S. 338 (2011), is misplaced. Wal-Mart does not stand for the broad proposition that a representative sample is an impermissible means of establishing class-wide liability." The court wholly distinguishes Dukes in the wage and hour context and it will no longer be the impediment to class certification for wage and hour claims that it has been since it was published. Such a strong rejection also suggests that in the PAGA context where plaintiffs can provide permissible representative evidence, the matter should go to trial.

Having addressed the propriety of class certification and the judgment that resulted, the second part of the opinion discusses the allocation of damages amongst the three thousand class members. The court was concerned with the possibility that some class members may not have been harmed. By way of back ground, the plaintiff advocated for $6.7 million in uncompensated overtime and the jury awarded $2.9 million. The majority sent the case back to the district court to determine a successful methodology for identifying uninjured class members. The court also noted that this problem was one of the defendant's own creation by refusing to agree to bifurcate liability and damages. This underscores the fact that the parties should consider bifurcation and more specific special verdict forms to prevent these sorts of problems.

As it worked its way up to the U.S. Supreme Court in a post-Dukes and post-Concepcion world, many touted Tyson as the nail in the coffin of class actions. If the court found that representative evidence could not be utilized to certify or maintain collective status, it would be difficult, if not impossible, for the plaintiff's bar to pursue claims on a class-wide basis. But, that day did not come and wage and hour class litigation is no longer on life support.

Foreshadowing the leftward shift of the U.S. Supreme Court in the aftermath of Justice Scalia's death, with the likely confirmation of a far less conservative justice in the next 12 months, AT&T v. Concepcion may be next. If Concepcion is handily rejected the way Dukes was in the wage and hour class action context, class plaintiffs may be able to break free from the bonds of arbitration. A new day is dawning in wage and hour and it's finally looking bright. But, as Donald Trump would say in this world of winners and losers, good negotiators and bad negotiators, the plaintiff's bar may finally have gotten a really great deal.