Amicus Curiae Brief — Tyson Foods, Inc. v. Bouaphakeo ex rel. Situated, 135 S. Ct. 2806 (2015) (No. 14-1146)

ene Court, US.

APR 20 2015

No. 14-1146 | _

HE CLERK

IN THE

Supreme Court of the Anited States

TYSON Foops, INC.,

Petitioner,

Vv.

PEG BOUAPHAKEO, Individually and On Behalf

of All Others Similarly Situated, et al.,

Respondents.

On Petition for a Writ of Certiorari to the

United States Court of Appeals

for the Eighth Circuit

BRIEF AMICUS CURIAE OF THE

EQUAL EMPLOYMENT ADVISORY COUNCIL

IN SUPPORT OF PETITIONER

RAE T. VANN

Counsel of Record

NORRIS, TYSSE, LAMPLEY

& LAKIs, LLP

1501 M Street, N.W.

Suite 400

Washington, DC 20005

rvann@ntll.com

(202) 629-5600

Apni 2015

aad

WILSON-EPEs PRINTING Co. INC — (202) 789-0096 — WaSHINGTON D C 20002

TABLE OF CONTENTS

TABLE OF AUTHORITIES. ..................ccccssscessees

INTEREST OF THE AMICUS CURIAE.............

STATEMENT OF THE CASE ..............:cccccceeee

SUMMARY OF REASONS FOR GRANTING

1 RES RE reer ene

REASONS FOR GRANTING THE PETITION..

REVIEW OF THE DECISION BELOW

1.

IS

NECESSARY TO SETTLE PER-

SISTENT QUESTIONS OF CLASS

ACTION PROCEDURE THAT ARE OF

SUBSTANTIAL IMPORTANCE TO

THE EMPLOYER COMMUNITY.............

A.

Dukes And Comcast Brought Re-

newed Rigor To Rule 23 Class

Certification Determinations..............

In Affirming Certification Of A Rule

23 Class Overrun With Individual

Questions Of Liability And Damages,

The Eighth Circuit Disregarded This

Court’s Pronouncements In Dukes

. The Decision Below Magnifies The

Disagreement In The Lower Courts

Regarding The Scope Of Dukes And

Comcast And Their Broad Applicabil-

ity To Rule 23 Class Certification

EE EEE ONG DEO

12

il

TABLE OF CONTENTS—Continued

D. In The Absence Of Clear Direction

From This Court, Lower Courts Will

Continue To Apply Very Different

Standards In Deciding Whether To

Certify Claims Involving Inherently

Individualized Issues, Such As In The

Wage And Hour Content ..................... 20

Il. IMPROPER CERTIFICATION OF

EMPLOYMENT CLAIMS ENCOUR-

AGES OPPORTUNISTIC, “BET-THE-

FARM” LITIGATION, WHICH ALL

TOO OFTEN PLACES EMPLOYERS

UNDER INORDINATE PRESSURE TO

SETTLE, REGARDLESS OF MERIT...... 22

CONCLUSION ........... slaneisaloninleils iiaiaaialacembtentipitidiads 24

ill

TABLE OF AUTHORITIES

CASES Page(s)

Authors Guild, Inc. v. Google Inc., 721 F.3d

I 16

Castano v. American Tobacco Co., 84 F.3d

RR eS 18

Comcast Corp. v. Behrend, _ _ U.S.__, 133

S53 EE earn passim

Creative Montessori Learning Centers v.

Ashford Gear LLC, 662 F.3d 913 (7th Cir.

TTI lass cphcieciahddiaanealiengestceilclaaidasieielehitendimainapidamnsia 24

Davis v. Abingdon Memorial Hospital, 765

F.3d 236 (3d Cir. 2014)..................cc0000000 21

Enriquez v. Cherry Hill Market Corp., 993

F Supp. 2d 229 (E.D.N.Y. 2013) .............. 21

Espenscheid v. DirectSat USA, LLC, 705

eye iy | 6

Halvorson v. Auto-Owners Insurance Co..,

718 F.3d 773 (8th Cir. 2013)..........0000000.... 19

In re Deepwater Horizon, 739 F.3d 790

(5th Cir.), cert. denied sub nom. BP

Exploration & Production Inc. v. Lake

Eugenie Land & Development, Inc., 135

Bs Se sscnocianeciseitatinsniiiectiseaiginnsipiiiiguah 18, 19

In re Johnson, 760 F.3d 66 (D.C. Cir.

In re Nassau County Strip Search Cases,

461 F.3d 219 (2d Cir. 2006) ........0. ee. 18

In re Nexium Antitrust Litigation, 777 F.3d

Ps ED stciccssivnnccdibivinthapitnidecnineit 18, 19, 23

iv

TABLE OF AUTHORITIES—Continued

Page(s)

In re Rail Freight Fuel Surcharge Antitrust

Litigation, 725 F.3d 244 (D.C. Cir.

It csciscawiseacesapiatuisinsehbianacenaiealdaibdaaaumabiaaibaaia 11

Jacob v. Duane Reade, Inc., 293 F.R.D. 578

(S.D.N.Y. 2013), affd, _. Fed. Appx. __,

2015 WL 525697 (2d Cir. Feb. 10, 2015).. 17

Jimenez v. Allstate Insurance Co., 765 F.3d

1161 (9th Cir. 2014), petition for cert.

filed, No. 14-910 (U.S. Jan. 28, 2015) ...... 6, 16

McReynolds v. Merrill Lynch, Inc., 672 F.3d

NY CI iteinctsicsicoctsiccesubiatinimunaiteies 18

Perez v. Allstate Insurance Co., 2014 WL

4635745 (E.D.N.Y. Sept. 16, 2014)........... 18

Roach v. T.L. Cannon Corp., 778 F.3d 401

I a anenaaein 18, 22

Stiller v. Costco Wholesale Corp., 298

F.R.D. 611 (S.D. Cal. 2014), appeal

docketed, No. 15-55361 (9th Cir. Mar. 6,

EEE PRES ASE SSeaeR s len ee nee eee 20

Wal-Mart Stores, Inc. v. Dukes, ___ USS.

ig Bk Be CR, BEE CIBER) ccccccsocccscvcccccees passim

Wallace B. Roderick Revocable Living Trust

v. XTO Energy, Inc., 725 F.3d 1213 (10th

Fair Labor Standards Act of 1938,

ee es Se Or GIN verttnticsntecnncecneienseaes 2, 3,4

| REESE mre 7

v

TABLE OF AUTHORITIES—Continued

Page(s)

Rules Enabling Act,

28 U.S.C. §§ 2071 et seq. .............cccccceeeeeees 6

Title VII of the Civil Rights Act of 1964,

42 U.S.C. §§ 2000 et seq. ...........ccccccceeeeees 2,9

STATE STATUTES

Iowa Wage Payment Collection Law,

Iowa Code §§ 91A.1 et seq. ...........cccceeeceeees 3

RULES

Federal Rule of Civil Procedure 23.......... 4,6,7,8

Federal Rule of Civil Procedure 23(a) ....... 8,9,12

Federal Rule of Civil Procedure 23(a)(2)..... 5

Federal Rule of Civil Procedure 23(b) ......... 8

Federal Rule of Civil Procedure 23(b)3) ....passim

Federal Rule of Civil Procedure 23(c)(4) ..... 17

OTHER AUTHORITIES

Mark Moller, Common Problems for the

Common Answers Test: Class Certifica-

tion in Amgen and Comcast, 2013 Cato S.

Ct. Rev. 301 (Cato Inst. 2013).........000...... 11

Richard A. Nagareda, Class Certification in

the Age of Aggregate Proof, 84 N.Y.U. L.

Sn A ce 23

vi

TABLE OF AUTHORITIES—Continued

Page(s)

Saby Ghoshray, Hijacked by Statistics,

Rescued by Wal-Mart v. Dukes: Probing

Commonality and Due Process Concerns

in Modern Class Action Litigation, 44

Loy. U. Chi. LJ. 467 (2012)... ee. 10, 15

IN THE

Supreme Court of the Anited States

No. 14-1146

TYSON Foops, INC.,

Petitioner,

v.

PEG BOUAPHAKEO, Individually and On Behalf

of All Others Similarly Situated, ef al.,

Respondents.

On Petition for a Writ of Certiorari to the

United States Court of Appeals

for the Eighth Circuit

BRIEF AMICUS CURIAE OF THE

EQUAL EMPLOYMENT ADVISORY COUNCIL

IN SUPPORT OF PETITIONER

The Equal Employment Advisory Council respect-

fully submits this brief amicus curiae in support of the

petition for a writ of certiorari.’

' Counsel of record for all parties received notice at least 10

days prior to the due date of the amicus curiae’s intention to file

this brief. All parties have consented to the filing of this brief.

Counsel for amicus curiae authored this brief in its entirety. No

counsel for a party authored this brief in whole or in part, and no

counsel or party made a monetary contribution intended to fund

the preparation or submission of this brief. No person other than

2

INTEREST OF THE AMICUS CURIAE

The Equal Employment Advisory Council (EEAC) is

a nationwide association of employers organized in

1976 to promote sound approaches to the elimination

of employment discrimination. Its membership in-

cludes over 250 major U.S. corporations, collectively

providing employment to millions of workers. EEAC’s

directors and officers include many of industry’s

leading experts in the field of equal employment

opportunity and Human Resources compliance. Their

combined experience gives EEAC a unique depth of

understanding of the practical, as well as legal,

considerations relevant to the proper interpretation

and application of equal employment policies and

requirements. EEAC’s members are firmly committed

to the principles of nondiscrimination and equal

employment opportunity.

All of EEAC’s members are employers subject to the

Fair Labor Standards Act of 1938 (FLSA), 29 U.S.C.

§§ 201 et seg., as amended, Title VII of the Civil Rights

Act of 1964 (Title VII), 42 U.S.C. §§ 2000e et seg., as

amended, and other federal workplace protection and

nondiscrimination laws. In addition, virtually all

of EEAC’s members conduct business in multiple

state jurisdictions and thus are also subject to

many different state nondiscrimination and wage and

hour laws. As large employers, they represent likely

targets of broad-based employment class action litiga-

tion in both state and federal courts. Thus, the

nationwide constituency that EEAC represents has a

direct and ongoing interest in the issues presented

in this case regarding the proper interpretation and

amicus curiae, its members, or its counsel made a monetary

contribution to its preparation or submission.

3

uniform application of federal class certification proce-

dural requirements.

EEAC seeks to assist the Court by highlighting the

impact the decision below may have beyond the

immediate concerns of the parties to the case.

Accordingly, this brief brings to the Court’s attention

relevant matters that the parties have not raised.

Because of its experience in these matters, EEAC is

well situated to brief the Court on the concerns of the

business community and the significance of this case

to employers.

STATEMENT OF THE CASE

The plaintiffs are current and former hourly em-

ployees at Tyson Foods’ Storm Lake, Iowa pork

processing plant. Pet. App. la. In addition to their

regular hourly wages, the plaintiffs ~ who worked

either on the “slaughter” or the “processing” floor —

received additional pay for donning and doffing

activities (“K-Code time”). Pet. App. 26a.

The plaintiffs brought an action in federal court for

violations of the Fair Labor Standards Act (FLSA),

29 U.S.C. §§ 201 et seg., and lowa Wage Payment

Collection Law (IWPCL), Iowa Code §§ 91A.1 et seg.,

accusing Tyson of failing to properly compensate its

employees for overtime work. Pet. App. 5a, 26a-27a.

Among other things, they claimed that the K-Code

times were too low and did not cover the entire period

of time needed to don and doff protective gear and to

perform related activities. Pet. App. 5a, 27a. They

moved to certify a Rule 23(b)(3) class and an FLSA

collective action. Jd.

Tyson opposed the motion, arguing that the claims

of individual class members were not capable of

4

resolution on a classwide basis, pointing out among

other things that the types of jobs performed and the

protective equipment required varied significantly

from person to person. Pet. App. 3la-32a. Rejecting

Tyson’s arguments, the trial court found Tyson’s

overall compensation system to be the “tie that binds”

the class members’ claims, warranting Rule 23(b\3)

certification, as well as conditional certification of an

opt-in FLSA collective action. Pet. App. 32a.

After this Court decided Wal-Mart Stores, Inc. v.

Dukes, _ U.S. __, 131 S. Ct. 2541 (2011), Tyson

moved to decerti‘y the Rule 23 class, renewing its

argument that because the plaintiffs’ claims were not

capable of classwide resolution “in one stroke,” id.

at 2551, they could not establish commonality. Pet.

App. 32a. In response, the plaintiffs produced expert

testimony purporting to establish classwide liability

and damages based on an estimation of the average

time a small sample of employees spent on donning

and doffing activities. Jd. at 22a.

Tyson objected to what it characterized as a “trial by

formula” approach to establishing common questions

of liability and damages, an approach it argued was

squarely foreclosed by Dukes. Pet. App. 10a, 1la. The

trial court refused to decertify the class, concluding

that whether “donning and doffing and/or sanitizing”

protective gear “constitutes ‘work™ was a question

common to the class and susceptible to proof on a

classwide basis. Pet. App. 37a.

At trial, plaintiffs’ damages expert estimated that

classwide damages were $6.6 million for the Rule 23

class and $1.6 million for the FLSA collective class,

based on her assumption that every single member

worked the purported “average” donning and doffing

times. Pet. App. 124a-125a. She conceded, however,

5

that over 200 class members never worked more than

40 hours in a given work week, and therefore were not

entitled to any relief. Pet. App. 22a. Tyson’s pretrial

motions for decertification and judgment as a matter

of law were denied, Pet. App. 30a, and the jury

eventually rendered a verdict for the plaintiffs. Pet.

App. 27a.

Tyson appealed to the Eighth Circuit, which in a

2-1 ruling affirmed. Pet. App. la, 14a, 24a. After its

petition for rehearing en banc was denied by a 6-5 vote,

Tyson filed a petition for a writ of certiorari with this

Court on March 19, 2015.

SUMMARY OF REASONS FOR

GRANTING THE PETITION

The decision below represents one in a growing

number in which class certification was permitted

despite serious problems of class member commonal-

ity. It is unfaithful to this Court’s admonition in Wal-

Mart Stores, Inc. v. Dukes, _ _ U.S. ___, 1381S. Ct. 2541

(2011), that in order to satisfy the requirements of

Rule 23(a\(2) of the Federal Rules of Civil Procedure,

plaintiffs must demonstrate that there exists at least

one question common to the class that is capable of

classwide resolution, meaning “that determination of

its truth or falsity will resolve an issue that is central

to the validity of each one of the claims in one stroke.”

131 S. Ct. at 2551. It also contravenes important class

certification principles clarified by the Court in

Comcast Corp. v. Behrend, __ U.S. __, 133 S. Ct.

1426 (2013), creating substantial uncertainty for

employers — especially in the wage and hour context,

in which there continues to be a proliferation of

litigation. Accordingly, the petition should be granted

and the decision below reversed.

6

The actions of the lower courts in this case are of

particular concern because neither the trial court

nor the appeals court majority was troubled by the

undisputed fact that hundreds of class members

suffered no injury at all, giving rise to serious

problems under the Rules Enabling Act, 28 U.S.C.

8§ 2071 et seg. Equally troubling, the decision below

affirmed Rule 23 class certification on shaky proof of

common damages, which rested on a questionable

and unscientific sampling model. The manner in

which purported classwide damages were calculated

deprives Tyson of its right to present individual

defenses, and thus also raises constitutional due

process concerns.

This Court repeatedly has said that the class action

procedure “is an exception to the usual rule that

litigation is conducted by and on behalf of the

individual named parties only.” Comcast, 133 S. Ct. at

1432 (citing Califano v. Yamasaki, 442 U.S. 682, 700-

701 (1979)) (quotations omitted); see also Dukes, 131

S. Ct. at 2550. To invoke the exception, “a party

seeking to maintain a class action ‘must affirmatively

demonstrate his compliance’ with Rule 23.” Comcast

at 1432.

Despite those straightforward principles, lower

courts cannot agree on whether sprawling wage and

hour actions involving many disparate claims for relief

are suitable for class treatment. Compare Jimenez v.

Allstate Ins. Co., 765 F.3d 1161 (9th Cir. 2014)

(affirming class certification), petition for cert. filed,

No. 14-910 (U.S. Jan. 27, 2015), with Espenscheid v.

DirectSat USA, LLC, 705 F.3d 770 (7th Cir. 2013)

(reversing class certification). The growing confusion

regarding the propriety of Rule 23 class certification in

such cases creates substantial uncertainty in an area

7

of law that is of great importance to the business

community. This inconsistency undermines prompt

and speedy resolution of individual claims by encour-

aging aggregation as a means of pressuring corporate

defendants to forgo their statutory right to put forth a

defense to each claim, being forced instead to settle for

strategic reasons.

REASONS FOR GRANTING THE PETITION

I. REVIEW OF THE DECISION BELOW IS

NECESSARY TO SETTLE PERSISTENT

QUESTIONS OF CLASS ACTION PROCE-

DURE THAT ARE OF SUBSTANTIAL

IMPORTANCE TO THE EMPLOYER

COMMUNITY

The Eighth Circuit affirmed certification of a class

pursuant to Rule 23 of the Federal Rules of Civil

Procedure and a collective action pursuant to Section

16b of the Fair Labor Standards Act (FLSA), 29 U.S.C.

$ 216b, despite substantial variations in the liability

and damages claims of the individual plaintiffs.

Because the decision below disregards the fundamen-

tal principles of class action law reinforced by this

Court in Wal-Mart Stores, Inc. v. Dukes, _U.S. __,

131 S. Ct. 2541 (2011) and Comcast Corp. v. Behrend,

__ US. __, 1383 S. Ct. 1426 (2013), review and

reversal is warranted.

Review also is necessary to quell the growing

conflict in the lower courts regarding the scope and

breadth of Dukes and Comcast, and how they should

govern a trial court’s decision to certify a Rule 23 class.

Accordingly, this case presents the Court with a timely

opportunity to restore balance and consistency to the

evaluation of Rule 23 class certification questions

generally. In particular, review of the decision below

8

will allow the Court to resolve ongoing confusion

regarding the circumstances under which claims

involving highly individualized liability and damages

issues — such as the payment of wages — ever are

suitable for class treatment under Rule 23(b\3).

A. Dukes And Comcast Brought Renewed

Rigor To Rule 23 Class Certification

Determinations

Federal court litigants seeking class certification

generally must satisfy al] four prerequisites of Federal

Rule of Civil Procedure 23(a), as well as the require-

ments of at least one subsection of Rule 23(b). Fed. R.

Civ. P. 23. Rule 23(a) permits class certification only

when

(1) the class is so numerous that joinder of al!

members is impracticable; (2) there are questions

of law or fact common to the class; (3) the claims

or defenses of the representative parties are

typical of the claims or defenses of the class; and

(4) the representative parties will fairly and

adequately protect the interests of the class.

Pet. App. 135a.

The class action procedure is an exception to the

“usual rule that litigation is conducted by and on

behalf of the individual named parties only.” Comcast,

133 S. Ct. at 1432 (internal quotation and citation

omitted); see also Dukes, 131 S. Ct. at 2550. As this

Court observed in Dukes:

Rule 23 does not set forth a mere pleading

standard. A party seeking class certification must

affirmatively demonstrate his compliance with

the Rule—that is, he must be prepared to provide

that there are in fact sufficiently numerous

parties, common questions of law or fact, etc. We

9

recognized in Falcon that “sometimes it may be

necessary for the court to probe behind the

pleadings before coming to rest on the certification

question,” and that certification is proper only “if

the trial court is satisfied, after a rigorous

analysis, that the prerequisites of Rule 23(a) have

been satisfied.”

131 S. Ct. at 2551 (citations omitted). Therefore,

parties seeking class certification carry the considera-

ble burden of proving every element of Rule 23(a), and

trial courts, which must undertake a “rigorous

analysis” of the proffered evidence, often will be

required to look beyond the pleadings in determining

whether the class certification requirements have

been satisfied.

In Dukes, this Court clarified that Rule 23(a)

commonality requires that all class members must

have suffered the same injury — not simply a violation

of the same statute. For example, “the mere claim by

employees of the same company that they have

suffered a Title VII injury, or even a disparate-impact

Title VII injury, gives no cause to believe that all their

claims can productively be litigated at once.” Id.

Rather, in order for Rule 23(a)’s commonality require-

ment to be met, the individual class members’ claims

must rely on a common assertion, such as that they

all were subjected to discrimination by the same

biased supervisor. “That common contention, more-

over, must be of such a nature that it is capable of

classwide resolution.” Jd. The Court reasoned:

What matters to class certification ... is not the

raising of common ‘questions’—even in droves—

but, rather the capacity of a classwide proceeding

to generate common answers apt to drive the

resolution of the litigation. Dissimilarities within

10

the proposed class are what have the potential to

impede the generation of common answers.

Id. (citation omitted). Dukes thus confirmed that to

justify certifying a class, the trial court must be

satisfied that the answers to common questions will

produce a result that applies to the class as a whole.

As one commentator observed:

In proposing the course correction in Dukes, the

Court tightened the evidentiary rules for

commonality under Rule 23. In moving away from

the long held practice of evaluating common

questions to address commonality, the Court

fashioned procedural rules indexed upon evaluat-

ing common answers. This contraction is neither

an abrogation of rights nor an attempt to impose

hurdles on the path toward justice. Rather, the

Supreme Court acted as referee to correct

asymmetric influences in class actions. The

elegance of statistical modeling may have

generated a false sense of precision, while in the

process losing the substantive concept of due

process. For too long, class certifications mush-

roomed under the simplified methodology, failing

to realize that interpreting statistics to generate a

desired outcome is neither legally permissible nor

ethically desired.

Saby Ghoshray, Hijacked by Statistics, Rescued by

Wal-Mart v. Dukes: Probing Commonality and Due

Process Concerns in Modern Class Action Litigation,

44 Loy. U. Chi. L.J. 467, 509 (2012).

This Court reinforced those principles in Comcast

Corp. v. Behrend, a 23(b)(3) case, warning against

certifying classes in which “[q]uestions of individual

11

damage calculations will inevitably overwhelm ques-

tions common to the class.” 133 S. Ct. at 1433.

Comcast involved allegations of anti-competitive

business practices that resulted in customers having

to pay more for cable service. Over Comcast’s

objections, the trial court certified a class as to a single

theory of anticompetitive conduct, and a divided Third

Circuit panel affirmed.

This Court reversed. It observed that because the

class members were entitled to recover damages

stemming only from the specific theory of anticompeti-

tive conduct on which the trial court granted class

certification, “a model purporting to serve as evidence

of damages must measure only those damages

attributable to that theory.” Jd. If the model fails to

do so, it cannot then be used to establish “that

damages are susceptible of measurement across

the entire class” as required by Rule 23(b\3). Jd. The

Court pointed out that under the methodology

endorsed by the Third Circuit, “at the class-certifica-

tion stage any method of measurement is acceptable

so long as it can be applied classwide, no matter how

arbitrary the measurements may be.” Jd. Such an

approach, however, impermissibly “would reduce Rule

23(b)\(3)’s predominance requirement to a nullity.” Jd.

Comcast, like Dukes, accordingly brought a measure

of much-needed discipline to Rule 23 class certification

determinations, which for some time had been, “by all

accounts, a terrible mess.” Mark Moller, Common

Problems for the Common Answers Test: Class

Certification in Amgen and Comcast, 2013 Cato S. Ct.

Rev. 301 (Cato Inst. 2013); see also In re Rail Freight

Fuel Surcharge Antitrust Litig., 725 F.3d 244, 254

(D.C. Cir. 2013) (“Before Behrend, the case law was far

more accommodating to class certification under Rule

12

23(b\3). Though Behrend was grounded in what the

Court deemed ‘an unremarkable premise,’ courts had

not treated the principle as intuitive in the past”).

B. In Affirming Certification Of A Rule

23 Class Overrun With Individual

Questions Of Liability And Damages,

The Eighth Circuit Disregarded This

Court’s Pronouncements In Dukes And

Comcast

In declining to decertify the plaintiffs’ Rule 23 class

for lack of commonality, the trial court below “studied

the Dukes decision and [found] its holdings and

analysis largely inapplicable to and/or distinguishable

from the instant case.” It posited:

The instant matter is not like Dukes where each

alleged Title VII violation involved an inquiry into

the individual decisionmaker’s subjective thought

process. Moreover, the court does not see the

same evidentiary defects in the instant case as

those addressed in Dukes, as the instant case is

supportable by class-wide proof.

Pet. App. 37a.

Affirming, a fractured Eighth Circuit paid lip

service to, but ultimately disregarded, both Dukes and

the Court’s subsequent decision in Comcast, electing

instead to follow earlier decided, intra- and extra-

circuit court rulings that construed Rule 23(a)

commonality far more liberally than now is permitted.

Pet. App. 9a (quoting DeBoer v. Mellon Mort. Co., 64

F.3d 1171 (8th Cir. 1995); Mejdrech v. Met-Coil Sys.

Corp., 319 F.3d 910 (7th Cir. 2003)).

13

Among other things, it found that class certification

under Rule 23(bX3) was proper, because “[w]hile

individual plaintiffs varied in their donning and

doffing routines, their complaint is not dominated by

individual issues such that the varied circumstances

... prevent ‘one stroke’ determination.” Pet. App. 8a

(quotations omitted). Furthermore, “applying Tyson’s

K-Code policy and expert testimony to ‘generate ...

answers’ for individual overtime claims did require

inference, but this inference is allowable under

Anderson v. Mt. Clemens Pottery Co., 328 U.S. 680

(1946).” Id. As Judge Beam in his dissent to denial

of panel rehearing pointed out, however, Mt. Clemens

established a burden-shifting rule for assessing

damages for underpayment of wages where the

employer failed to maintain any proper records, which

is not the case here. Pet. App. 12la (Beam, J.,

dissenting).

Judge Beam also objected to the fact that while the

class members all were subject to the same compensa-

tion system, their wage claims were not subject to the

same answer across the class. In particular, he noted

that plant employees “are required to wear a different

combination of sanitary and protective gear” depend-

ing on their particular job. Pet. App. 21a (Beam, J.

dissenting). For instance:

Those employees wearing knives to use in

conjunction with their particular duties on a

particular day are required to wear a combination

of a plastic belly guard, mesh apron, mesh glove,

Polar glove, membrane skinner gloves, Polar

sleeves, “steel” for maintaining the knives and

knife scabbards (“knife-related gear”). Other

workers are required to wear a hard hat, hairnet,

beard net, earplugs, ear muffs, rubber or cotton

14

gloves, and rubber or plastic aprons (“sanitary

gear”).

Id. Even though the majority acknowledged that some

employees would require more, and others less, time

to don and doff the necessary equipment — which

would directly impact whether and to what extent they

were owed additional compensation above the K-Code

time payment — it nevertheless found the plaintiffs’

imprecise, “sample employee” damages mode! suffi-

cient to justify class certification, contrary to this

Court’s holdings in Dukes and Comcast.

As Judge Beam observed:

Here we have undifferentiated presentations of

evidence, including significant numbers of the

putative classes suffering no injury and members

of the entire classes suffering wide variations in

damages, ultimately resulting in a single-sum

class-wide verdict from which each purported

class member, damaged or not, will receive a pro-

rata portion of the jury’s one-figure verdict.

Assuming that the district court could now re-

open the proceedings ..., the exercise would be

laborious, virtually unguided, and well outside of

the limiting parameters the Supreme Court has,

as a matter of law, placed upon use of the Rule 23

class action machinery.

Pet. App. 24a (Beam, J. dissenting). Indeed, this

Court in Dukes and Comcast firmly rejected such

“Trial by Formula” approaches to establishing

classwide damages, 131 S. Ct. at 2551, and for good

reason as one commentator suggests:

The use of statistics in class actions has been

characterized as trial by formula, identifying

gross statistical disparities, and bellwether trials;

15

yet, each of these variants contains similar weak-

nesses. First, within the context of sampling,

extrapolation allows a non-plaintiff to enjoy the

fruits of adjudication by relying on a representa-

tive plaintiffs testimony and construction of

causation. It does not, however, allow the defend-

ant a reciprocal opportunity to defend against

each absent class member. ... Second, finding

causation to a claimed injury becomes a function

of statistical variability that results from various

factors like quality, quantity, and class members’

characteristics.

Ghoshray, 44 Loy. U. Chi. L.J. at 498-99 (footnotes

omitted).

C. The Decision Below Magnifies The

Disagreement In The Lower Courts

Regarding The Scope Of Dukes And

Comcast And Their Broad Applicability

To Rule 23 Class’ Certification

Determinations

Since Dukes, questions have emerged in the courts

regarding whether and to what extent it should be

applied to class certification determinations generally.

For example, some courts downplay the fact that

Dukes rejects the notion that plaintiffs may establish

proof of classwide damages through statistical sam-

pling, the very methodology utilized by the plaintiffs

in the instant case and sanctioned by the court below.

This Court observed:

The Court of Appeals believed that it was possible

to replace such proceedings with Trial by

Formula. A sample set of the class members

would be selected, as to whom liability for sex

discrimination and the backpay owing as a result

16

would be determined in depositions supervised by

a master. The percentage of claims determined to

be valid would then be applied to the entire

remaining class, and the number of (presump-

tively) valid claims thus derived would be

multiplied by the average backpay award in the

sample set to arrive at the entire class recovery—

without further individualized proceedings. We

disapprove that novel project. Because the Rules

Enabling Act forbids interpreting Rule 23 to

“abridge, enlarge or modify any substantive

right,” a class cannot be certified on the premise

that Wal—Mart will not be entitled to litigate its

statutory defenses to individual claims.

Dukes, 131 S. Ct. at 2561. Some lower courts have

adhered to that principle, see, e.g., Authors Guild, Inc.

v. Google Inc. , 721 F.3d 132 (2d Cir. 2013), while others

have not. See Jimenez v. Allstate Ins. Co., 765 F.3d

1161 (9th Cir. 2014), petition for cert. filed, No. 14-910

(U.S. Jan. 28, 2015); In re Johnson, 760 F.3d 66 (D.C.

Cir. 2014).

In Johnson, for instance, the D.C. Circuit acknowl-

edged that under Dukes, “a class cannot be certified on

the premise that [the defendant] will not be entitled

to litigate its statutory defenses to individual claims.”

760 F.3d at 75 (citation and internal quotation

omitted). It nevertheless permitted the trial court’s

order granting class certification to stand, reasoning

that the trial court:

[I]n effect complied in advance with that aspect of

the Wal-Mart decision. Unlike the lower courts in

Wal-Mart, the district court here did not certify

the class on the ground that it could resolve

individualized issues on a classwide basis. The

practical effect of the district court’s decision

17

is that it certified a “class action with respect

to particular issues,” which it is expressly

authorized to do by Rule 23(c)(4).

Id. (emphasis added).’

Since Dukes, and “[ijn the wake of Comcast ...

district and circuit courts alike have grappled with the

scope, effect, and application of Comcast’s holding, and

in particular, its interaction with non-antitrust class

actions.” Jacob v. Duane Reade, Inc., 293 F.R.D. 578,

581 (S.D.N.Y. 2013), affd,__ Fed. Appx. __, 2015 WL

525697 (2d Cir. Feb. 10, 2015). In general:

[T]he class-certification decisions applying Comcast

can be divided into three, distinct groups:

(1) courts distinguishing Comcast, and finding

a common formula at the class certification stage,

and thus, predominance, satisfied; (2) courts

applying Comcast and rejecting class certification

on the ground that no common formula exists for

the determination of damages; and (3) courts

embracing a middle approach whereby they

employ Rule 23(c)(4) and maintain class certifica-

tion as to liability only, leaving damages for a

separate, individualized determination.°

Id. at 581-82 (citations omitted).

? The D.C. Circuit did so, despite conceding that “there is a

controversy over the proper use of issue classes, especially when

the result is to isolate a particular issue that would otherwise

derogate from the predominance of common issues in a 23(bX3)

class action.” In re Johnson, 760 F.3d at 75. See infra note 3.

° Federal appeals courts strongly disagree on the propriety of

utilizing Rule 23(cX4) to certify issue classes where other

required elements of Rule 23 have not been satisfied. The Fifth

Circuit holds that using Rule 23(cX4) as a means of narrowing

down a proposed class until the plaintiffs are able to establish

18

Some courts have read Comcast narrowly. See

Roach v. T.L. Cannon Corp., 778 F.3d 401, 402-03 (2d

Cir. 2015); In re Nexium Antitrust Litig., 777 F.3d 9,

18-19, 23 (1st Cir. 2015); In re Deepwater Horizon, 739

F.3d 790, 815 (5th Cir.), cert. denied sub nom. BP

Exploration & Prod. Inc. v. Lake Eugenie Land & Dev.,

Inc., 1385 S. Ct. 754 (2014); see also Perez v. Allstate Ins.

Co., 2014 WL 4635745, at *21 (E.D.N.Y. Sept. 16,

2014) (“neither Comcast nor any other binding author-

ity holds that the need to calculate damages on an

individualized basis necessarily defeats the predomi-

nance element of Rule 23(b)(3)”). In Roach v. T.L.

Cannon Corp., for instance, the Second Circuit

reversed a trial court’s order denying certification of a

23(b)(3) nationwide class, concluding that “Comcast

does not mandate that certification pursuant to Rule

23(bX3) requires a finding that damages are capable

of measurement on a classwide basis.” 778 F.3d at

402.

There, the plaintiffs sued the owner-operator of

several Applebee’s Neighborhood Grill and Bar

Restaurants, alleging among other things that the

company “had a policy of not paying hourly employees

an extra hour of pay when working a ten-hour work

day as was then required” under New York state law

(the “10-hour spread” claim). Jd. at 403. In denying

their motion to certify a 23(b)(3) nationwide class, the

common issues of fact or law is improper. Castano v. Am. Tobacco

Co., 84 F.3d 734 (5th Cir. 1996). In contrast, the Second Circuit

takes the position that Rule 23(cX4) may be utilized “to certify a

class on a designated issue regardless of whether the claim as a

whole satisfies the predominance test.” In re Nassau County

Strip Search Cases, 461 F.3d 219, 230 (2d Cir. 2006). The

Seventh Circuit is in accord. See McReynolds v. Merrill Lynch,

Inc., 672 F.3d 482 (7th Cir. 2012).

19

trial court, relying on Comcast, found that because

the plaintiffs have offered no “model of damages

susceptible of measurement’ across the [entire] puta-

tive [10-hour spread claim] class, ... ‘[q]uestions

of individual damage calculations will inevitably

overwhelm questions common to the class.” Jd. at 404

(citations omitted).

The Second Circuit reversed, observing, “Prior to the

Supreme Court’s decision in Comcast, it was ‘well-

established’ in this Circuit that ‘the fact that damages

may have to be ascertained on an individual basis is

not sufficient to defeat class certification’ under Rule

23(b\3). ... We do not read Comcast as overruling

these decisions.” Jd. at 405. Other courts similarly

have read Comcast narrowly to permit certification

of otherwise uncertifiable classes. See In re Nexium

Antitrust Litig., 777 F.3d 9, 23 (1st Cir. 2015)

(“Comcast did not require that plaintiffs show that all

members of the putative class had suffered injury

at the class certification stage—simply that at class

certification, the damages calculation must reflect the

liability theory”) (citation omitted); In re Deepwater

Horizon, 739 F.3d 790, 815 (5th Cir.) (Comcast “has no

impact on cases such as the present one, in which

predominance was based not on common issues of

damages but on the numerous common issues of

liability”), cert. denied sub nom. BP Exploration &

Prod. Inc. v. Lake Eugenie Land & Dev., Inc., 135 S.

Ct. 754 (2014).

Other courts construe Comcast differently, finding

that where there exists no readily ascertainable

means by which to measure and determine damages

as to the class as a whole, Rule 23(b\3) class certifica-

tion is improper. See, e.g., Halvorson v. Auto-Owners

Ins. Co., 718 F.3d 773, 778 (8th Cir. 2013) (“The

20

predominance inquiry requires an analysis of whether

a prima facie showing of liability can be proved by

common evidence or whether this showing varies from

member to member. In order for a class to be certified,

each member must have standing and show an injury

in fact that is traceable to the defendant and likely to

be redressed in a favorable decision”) (citations

omitted); Wallace B. Roderick Revocable Living Trust

v. XTO Energy, Inc., 725 F.3d 1213, 1220 (10th Cir.

2013) (“Although individualized monetary claims

belong in Rule 23(bX3), predominance may be

destroyed if individualized issues will overwhelm

those questions common to the class”) (citations

omitted); see also Stiller v. Costco Wholesale Corp., 298

F.R.D. 611, 627 (S.D. Cal. 2014) (“Comcast makes

clear that individualized damages determinations can

defeat Rule 23(b\3)’s predominance requirement”),

appeal docketed, No. 15-55361 (9th Cir. Mar. 6, 2015).

D.In The Absence Of Clear Direction

From This Court, Lower Courts Will

Continue To Apply Very Different

Standards In Deciding Whether To

Certify Claims Involving Inherently

Individualized Issues, Such As In The

Wage And Hour Context

The sometimes widely divergent standards applied

by federal courts in evaluating 23(b\3) motions to

certify wage and hour classes can result in vastly

different treatment of similarly situated workers,

depending largely on the jurisdiction in which their

claim is brought. Thus, while “Dukes is widely

understood as reinvigorating the notion that class

actions are the exception, rather than the rule,”

{courts are divided] “as to whether claims alleging

widespread underpayment of wages fits within the

21

exception.” Enriquez v. Cherry Hill Mkt. Corp., 993 F.

Supp. 2d 229, 236-37 (E.D.N.Y. 2013). As the district

court in Enriquez explained:

In part, the divide is simply a reflection of the

reality that not all wage-and-hour cases are the

same. In some, the claim is that an employer has

classified a category of employees as exempt ....

In other cases—including this one—the claim is

that an employer has systematically failed to pay

employees the legally mandated wage for all

hours worked. At least one district court has

certified such a case as a class action, finding that

the employer’s “overtime policy ‘is the “glue” that

the Supreme Court found lacking in Dukes.”

In the Court’s view, however, that holding

runs afoul of Dukes’s clear pronouncement that

“[clommonality requires the plaintiff to demon-

strate that the class members have suffered the

same injury ....”. In other words, alleging that

systematic underpayment of wages amounts to a

“policy” of noncompliance with the wage-and-hour

laws does not establish commonality if demon-

strating such noncompliance requires, as it would

in this case, an inquiry into the total pay and total

hours worked for each employee.

Id. at 237 (citations omitted).

As in this case, individuals seeking to establish

an employer’s liability for alleged wage and hour

violations must prove that they actually worked a

specific number of hours and were not properly com-

pensated for that time. See, e.g., Davis v. Abingdon

Mem Hosp., 765 F.3d 236, 242-43 (3d Cir. 2014).

Accordingly, the basic requirements of a wage and

hour claim, whether in state or federal court, often

22

involve highly individualized factual allegations that

can vary significantly from plaintiff to plaintiff.

For those courts that faithfully adhere to this

Court’s reasoning in Dukes and Comcast, those

individualized determinations would in most cases be

found to predominate over common questions, such as

whether employees felt pressure to underreport their

hours worked. For others seeking to limit the scope of

Dukes and Comcast, such highly individualized

liability and damages issues “alone cannot preclude

certification under Rule 23(bX3).” Roach, 778 F.3d at

409 (emphasis added).

Il. IMPROPER CERTIFICATION OF EMPLOY-

MENT CLAIMS ENCOURAGES OPPOR-

TUNISTIC, “BET-THE-FARM” LITIGA-

TION, WHICH ALL TOO OFTEN PLACES

EMPLOYERS UNDER INORDINATE

PRESSURE TO SETTLE, REGARDLESS

OF MERIT

Continued inconsistency in the courts regarding the

propriety of Rule 23(b)\(3) class certification will have

a profound effect on the business community in

general, but especially on large companies that

operate and employ staff across the United States.

Such inconsistency threatens to expose those

employers to significant risk of litigation under

myriad worker protection laws, but especially in the

wage and hour context. In particular, the decision

below magnifies the conflict in the courts regarding

whether, in light of Dukes and Comcast, 23(b\3) class

certification is permissible where — as routinely is the

case in wage and hour class litigation — significant

questions of disparate, individualized damages are

presented.

23

This Court has said repeatedly that the class action

procedure is “an exception to the usual rule that

litigation is conducted by and on behalf of the

individual named parties only.” Comcast, 133 S. Ct.

at 1432 (quoting Califano v. Yamasaki, 442 U.S. 682,

700-01 (1979)); see also Dukes, 131 S. Ct. at 2550

(quoting Yamasaki). The decision below does not

adhere to that rule, and if allowed to stand, will make

it easier to certify large class actions, increasing

exponentially the pressure on employers to settle even

meritless claims. Given the proliferation of class-

based wage and hour litigation at the state and federal

levels, employers already are at great financial

risk, both in terms of the substantial fees associated

with merely defending such claims, as well as the

frequently exorbitant cost to resolve them.

Indeed:

With vanishingly rare exception, class certifica-

tion sets the litigation on a path toward resolution

by way of settlement, not full-fledged testing of

the plaintiffs’ case by trial. In terms of their real-

world impact, class settlements can be quite

significant, potentially involving dollar sums in

the hundreds of millions or requiring substantial

restructuring of the defendant’s operations.

Richard A. Nagareda, Class Certification in the Age of

Aggregate Proof, 84 N.Y.U. L. Rev. 97, 99 (2009)

(footnote omitted). By limiting the reach of Dukes and

Comcast and allowing highly individualized claims to

form the basis for class certification — even where, for

instance, the class contains entirely uninjured class

members, Nexium Antitrust Litig., 777 F.3d at 31

(certifying a class in which most of the class members

were “probably injured”) — some courts, including the

court below, have all but ignored the reality that class

24

certification almost invariably leads to a settlement.

As the Seventh Circuit observed, “Certification as a

class action can ‘coerce the defendant into settling on

highly disadvantageous terms, regardless of the

merits of the suit,’ and in this case is ‘highly likely to

because of the magnitude of the potential damages.”

Creative Montessori Learning Ctrs. v. Ashford Gear

LLC, 662 F.3d 913, 915 (7th Cir. 2011) (citations

omitted).

Allowing plaintiffs to aggregate hundreds or thou-

sands of claims without having to satisfy all the

required elements of Rule 23 invariably wil! lead to the

class action device being used not in the limited

manner in which it was intended, but rather as a

strategic and opportunistic means of extracting

settlements from employers wishing to avoid the

financial and commercial risk associated with class-

wide litigation.

CONCLUSION

Accordingly, the petition for a writ of certiorari

should be granted.

Respectfully submitted,

RAE T. VANN

Counsel of Record

NORRIS, TYSSE, LAMPLEY

& LAKIS, LLP

1501 M Street, N.W.

Suite 400

Washington, DC 20005

rvann@ntl!l.com

(202) 629-5600

April 2015