Justices Grill Tyson Foods in Overtime Class Action

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By Perry Cooper

Nov. 10 — The U.S. Supreme Court pushed back against Tyson Foods Inc. during oral argument, asking what the company has to complain about in its quest to overturn a $5.8 million overtime class award.

The justices hinted that they may rule narrowly on the use of statistics in cases brought under the Fair Labor Standards Act, rather than making a broad ruling on evidentiary standards for class certification under Fed. R. Civ. P. 23.

More than 3,000 Tyson Foods meat-processing workers brought class and collective action claims alleging that they weren't adequately compensated for the time it took them to put on and take off protective equipment.

They relied in part on an expert time-study that calculated the average amount of time workers spent in these activities to prove liability and damages.

Tyson Foods argued that this kind of averaging constitutes impermissible “trial by formula,” and can't be relied on to certify a class under Fed. R. Civ. P. 23. It also argued that the class included members who were “uninjured” because they didn't actually work any overtime.

Tyson Foods Under Attack

Several justices peppered attorney Carter G. Phillips with questions as soon as he approached the podium to argue for Tyson Foods. Phillips is with Sidley Austin LLP in Washington.

Justice Ruth Bader Ginsburg questioned whether the protective gear really varied that much from worker to worker so that the time spent changing into and out of it would be so different. There didn't seem to be a very wide disparity, she said.

Justice Anthony M. Kennedy often casts the tie-breaking vote in close cases before the court, but has recently sided with the conservative justices in cases limiting the use of the class action device. Here he didn't seem very sympathetic to the defense arguments either.

“I just don't understand your arguments,” Kennedy said. He said that Tyson Foods couldn't really complain as it used a similar statistical method to calculate worker overtime; didn't challenge the plaintiffs' expert's testimony at trial; and objected to a bifurcated trial that could have smoothed over issues of uninjured plaintiffs.

Justice Sonia Sotomayor also voiced problems tracking the company's grievances.

“I'm completely at a loss as to what you're complaining about,” Sotomayor said. She agreed that Tyson Foods used the same method to account for the time it took employees to put on and take off their gear.

The company came out with a lower number, but it used a smaller sample size than the plaintiffs' expert, she said.

Is This Really a Class Issue?

Justice Elena Kagan questioned whether the case really turns on a class action issue at all. The FLSA claims make this case different because of Mt. Clemens, she said.

She referred to Mt. Clemens Pottery Co. v. Anderson, 328 U.S. 680 (1946), where the Supreme Court held in an FLSA case that if employers don't keep the required time records, employees can present a “reasonable inference” of their time worked.

“What Mt. Clemens does is to suggest that certain kinds of statistical evidence are completely appropriate in FLSA cases generally, even if they're brought by the government, or even if they're brought by a single person,” she said.

So the question before the court isn't a Rule 23 question, it's a question of whether the plaintiffs' statistical evidence complies instead with that FLSA standard.

Kagan also shifted the conversation away from class actions in the last oral argument the Supreme Court heard involving a case with class implications, Spokeo Inc. v. Robins, U.S., No. 13-1339, argued 11/2/15.

Phillips wanted to frame the issue as whether the kind of averaging used by the plaintiffs' expert “simply papers over the problems of the class.”

But Kennedy said Kagan is “precisely right.” This case starts with Mt. Clemens, the substantive law for FLSA claims, he said.

If the case were simply a class action under Rule 23, instead of a hybrid of FLSA and Rule 23 claims, the problems with the expert's methodology might be a barrier to certification, Kennedy said. But Mt. Clemens provides a special rule allowing statistics in FLSA cases.

Attorney David C. Frederick, who argued for the class, agreed that Mt. Clemens makes this an easier case.

But, even so, the averages here were reasonable, Frederick, of Kellogg, Huber, Hansen, Todd, Evans & Figel PLLC in Washington, said. “So even if there was not a special Mt. Clemens rule where there's a burdenshifting framework, the answer should be the same.”

Allocation on Remand?

Getting to the uninjured class member issue, Phillips argued that the jury award handed down in this case is one lump sum that will be distributed pro rata to all class members, even if they weren't injured.

“You can't unscramble this egg at this point,” he said. “It's impossible.”

But Kennedy and Kagan insisted that allocation is a question for remand. The district court will figure out “in a very ministerial way” who worked more than 40 hours and is entitled to share in the judgment, Kagan said.

Such an allocation “takes care of the entire problem” of uninjured class members, she said.

Justice Samuel A. Alito Jr. said he sees no way that the allocation could be done “other than in a very slapdash fashion.”

But Frederick said that the plaintiffs have an extensive expert analysis applying the average donning and doffing time to the number of minutes worked by each employee. It would just be a question of running the numbers.

Justice Antonin Scalia asked whether plaintiffs can really get a class certified that includes uninjured members and then wait until the end of the trial for the trial court to determine who hasn't been injured.

Justice Stephen G. Breyer, however, rejected the notion that the plaintiffs must know from the start of a case who is a member of the class and who was uninjured.

“I've never heard that you had to be able to know exactly how you're going to win your case when you form the class action because you don't know quite what the proof will be,” he said.

But Phillips said changing the class membership late in the case would negate the expert's testimony because the damages number put forward would be larger than after the class is constricted.

Elizabeth Prelogar, assistant to the solicitor general, argued for the government on behalf of the class.

To contact the reporter on this story: Perry Cooper in Washington at pcooper@bna.com

To contact the editor responsible for this story: Steven Patrick at spatrick@bna.com

The transcript is available at http://src.bna.com/0s.