Supreme Court Justices Question Tyson Claims Against Damages Formula

By | November 11, 2015

U.S. Supreme Court justices expressed skepticism on Tuesday toward Tyson Foods Inc.’s challenge to an almost $5.8 million class action judgment in a case that could buck the court’s recent pro-business trend in such disputes.

Conservative Justice Anthony Kennedy, who often casts the deciding vote in close cases before the nine-member court, and the four liberal justices appeared hostile to Tyson’s claims during a one-hour oral argument.

Tyson is appealing a jury verdict over claims that it underpaid workers at an Iowa pork facility.

Based on questions asked by the justices, the case is unlikely to lead to a ruling cutting back on class action litigation, a goal for a business community eager to rein in big-money payouts in such lawsuits.

Kennedy could hold the key vote in handing a possible narrow victory to the plaintiffs. Kennedy expressed concerns about Tyson’s legal strategy, telling attorney Carter Phillips at one point: “I just don’t understand your arguments.”

A ruling along the lines suggested by Kennedy’s questions likely would not have a broad impact on class actions in general because it would be limited to wage cases similar to this one.

The court is considering Tyson’s objection to the use of statistics to determine liability and damages. Critics in the business community describe such use of statistics as “trial by formula” that violates defendants’ due process rights, instead of assessing each claim individually for the more than 3,000 current and former employees who are suing.

Workers at the meat-processing facility, which employs around 1,300 people, sued in 2007, claiming they were entitled to overtime pay and damages because they were not paid for time spent putting on and taking off protective equipment and walking to work stations.

The ruling could turn on a 1946 Supreme Court precedent that said plaintiffs can rely on averages in such situations to determine claims under the federal Fair Labor Standards Act.

Kennedy indicated a willingness to rule for the plaintiffs on that point. But he said without that precedent, “it would be a much closer, more difficult case.”

Safety Gear

Liberal Justice Ruth Bader Ginsburg questioned Tyson’s assertion that the workers should not be treated as a class because they had to wear different safety gear depending on their job, saying no “wide disparity” existed in such gear.

Although some workers, including those charged with using knives, had different equipment, all employees had to wear hard hats, ear protection and boots, Ginsburg said.

Conservative Chief Justice John Roberts, appearing more sympathetic to Tyson, highlighted the fact that jurors awarded less in damages than the plaintiffs’ expert had suggested.

“The fact that the jury did not give you the damages sought seems to me to call into question the significance of the statistics,” Roberts told the plaintiffs’ lawyer, David Frederick.

The jury found in favor of the plaintiffs following a trial in a federal district court in Iowa in 2011. The 8th U.S. Circuit Court of Appeals upheld the judgment in 2014.

The Tyson dispute is one of three class action cases the court is hearing in its current term. The conservative-leaning court has cut back on class actions in a series of rulings in recent years, including high-profile wins for Wal Mart Stores Inc. and Comcast Corp.

The court last week heard arguments in a case involving a class action suit against online search company Spokeo Inc.

Last month, it heard arguments related to a class action suit against advertising agency Campbell-Ewald Co.

Rulings in all three cases are due by the end of June.

The case the court heard on Tuesday is Tyson Foods Inc. v. Bouaphakeo, U.S. Supreme Court, No. 14-1146. (Reporting by Lawrence Hurley; Editing by Will Dunham)

Topics Lawsuits USA Claims

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