Labor Law -- 2016

Tyson Foods, Inc. v. Bouaphakeo   (U.S. Supreme Court)

Uninjured class members should be excluded

The National Association of Manufacturers filed an amicus curiae brief on August 14, 2015 in a class action that the Supreme Court of the United States will consider in the 2015-2016 term. The case involves the use of statistical sampling and the creation of an “average” employee to determine both injury and damages under the Fair Labor Standards Act (FLSA) in a case seeking overtime wages for the time it took employees to put on and take off protective gear. Many of the class members were fully compensated and had no FLSA injury, yet they were included in the class and were set to receive compensation under the aggregate award.

The amicus brief urged the Supreme Court to set a bright-line rule against the inclusion of uninjured class members. Individuals with no injuries have no claim, under both substantive law and Article III standing, and the brief explained that the class action mechanism is not to be “manipulated in ways that convert deficient claims into viable ones. A plaintiff without an injury cannot be permitted to hide among those who may. . . . The class action short cut works only when it leads to the same place as individually filed claims.” Finally, the brief discussed the development of “no injury” class actions, as demonstrated in recent product manufacturing, product labeling and data privacy class actions.

NAM was joined by the Alliance of Automobile Manufacturers, Association of Home Appliance Manufacturers, American Tort Reform Association, American Petroleum Institute and Metals Service Center Institute.

On March 22, 2016 the Supreme Court affirmed the lower court’s rulings against Tyson, but did so on narrow grounds and did not reach the issue that was central to the NAM’s amicus brief: whether classes can included uninjured claimants. The Court stated that “As petitioner and its amici stress, the question whether uninjured class members may recover is one of great importance. It is not, however, a question yet fairly presented by this case, because the damages award has not yet been disbursed, nor does the record indicate how it will be disbursed.” The Court then continued that “Petitioner may raise a challenge to the proposed method of allocation when the case returns to the District Court for disbursal of the award.” In his concurring opinion, Chief Justice Roberts cautions that “if there is no way to ensure that the jury’s damages award goes only to injured class members, that award cannot stand.”

The NAM will continue to advocate for the exclusion of uninjured class members in class action litigation. The presence of injured class members, regardless of how many, increase pressure on defendants to settle meritless claims, result in uninjured class members receiving windfall awards, and likely undercompensate individuals with actual losses because they have to share recovery with undeserving class members. Further, permitting certification of such no injury classes facilitates unwise regulation through litigation and litigation gamesmanship.

Related Documents:
NAM amicus brief  (August 14, 2015)
NAM amicus brief  (April 20, 2015)


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