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Posts Tagged ‘tyson foods’

I attended the National Institute on Class Actions in Las Vegas last week, and it was probably the best one yet, considering the powerhouse lineup of speakers and excellent topics.  This year’s event also marked the 20th anniversary of the Institute, and the 50th anniversary of the introduction of the modern class action rule in 1966.  I’ve tried to include a short summary of some of the highlights of each of the presentations below.  For more on what you missed, click here for the full program brochure.

Class Actions 101, 201, and 301

As has become a tradition in recent years, the conference kicked off with Yoga, along with a series of class action training sessions for attorneys and judges new to the practice area.  As in past years, the training portion of the program was led by class action expert Drew McGuinness and Program Chair Dan Karon, with help this year from Lauren Guth Barnes and E. Colin Thompson.  In addition to the basic Class Actions 101 course and the advanced Class Actions 201 course, new this year was Class Actions 301, taught by Karon, which covered legal writing tips for class action lawyers.

“Viva Review!” The Past Year in Class-Action Action.

Instructors: Professor John C. Coffee, Jr., Professor Alexandra D. Lahav

The main program kicked off with what has become an annual tradition at the Institute.  Class action scholars John Coffee and Alexandra Lahav gave their annual rundown on the key developments in the courts on class action issues over the past year and their predictions for where class actions are headed in the coming year.  One highlight for me was Lahav’s summary of divergent rulings on the question of ascertainability, which continues to be an area of uncertainty and controversy in the lower courts.

“From Mirage to Immense.” The Genesis, Creation, and Evolution of Rule 23.

Host: Daniel R. Karon

Guest: Professor Arthur R. Miller

What better way to celebrate the 50th anniversary of the modern formulation of Rule 23 than to hear the story of the 1966 amendment by someone who actually helped draft it.  Titan of American civil procedure, Professor Arthur Miller, gave a colorful history of the development of Rule 23, including entertaining stories about how a small group of now-well-known attorneys and academics, including Miller, Ben Kaplan, Archibald Cox, and Charles Alan Wright, came together in the mid-1960s to develop the innovations that gave us the class action rule we know today.  A highlight was the story of how Miller used a manual typewriter to memorialize what ultimately became 23(b)(3) while in the back seat of Kaplan’s car on a ferry ride to the Kaplans’ summer home in Martha’s Vineyard.  A neighboring car mistook the sound of the typewriter as a sign that the boat was sinking.

“Winning Big or Crapping Out.” Class-Action Ethics from a Real-Life Perspective.

Host: Melissa H. Maxman

Guests: Honorable Gene E.K. Pratter, Professor Joshua P. Davis, Thomas G. Wilkinson, Jr.

This panel examined a series of hypotheticals raising ethics issues, specifically how the courts sometimes treat ethics issues differently when they arise in the class action context.  Among the colorful examples was the situation in which a plaintiffs’ class action attorney has a consensual sexual relationship with a woman who he later discovers is an absent class member.

“A Winning Hand or a Flop?” After 50 Years, Are Class Actions Still Legit?

Host:  E. Michelle Drake

Guests:  Michelle K. Fischer, Professor Richard D. Freer, Patrick J. Ivie, Jocelyn Larkin

In this presentation, a diverse group of plaintiffs’ and defense attorneys, a public interest attorney, settlement administrator, and an academic discussed common criticisms of modern class actions and insights into future trends. I was particularly interested to hear the panelists views on the viability of claims-made settlements and the benefits and criticisms of using electronic and other non-traditional notice in settlement adminstration.

“Behind the Curtain.” Examining Class Actions from the In-House Perspective.

Host: Sabrina H. Strong

Guests: Jennifer Bechet, Karin F.R. Moore, Ken K. Patel, Robert E. Bailey

This presentation offered insights from a panel of in-house attorneys whose companies face class action lawsuits. I thought one of the key points, reinforced in different ways by several panelists and consistent with my own experience, is that the threat of class actions doesn’t ordinarily have a deterrent effect on corporate business practices because most companies aren’t looking to intentionally harm their customers.

“Pit Boss Powwow.” Exactly What Is the MDL Judge College and How Does It Work?

Host: Vincent J. Esades

Guests: Honorable Barbara J. Rothstein, Honorable Jack Zouhary, Honorable J. Frederick Motz Sure

A behind-the-scenes treat, this panel of federal judges offered insights into how judges are selected and trained to preside over multi-district litigation proceedings. I thought it was notable that in recent years, practitioners have been brought in to speak at the annual training program to offer a practitioner’s perspective about what works and what doesn’t in complex MDL proceedings.

“Hitting the Jackpot!” A One-on-One Class-Action Conversation with Judge Richard Posner.

Host: Daniel R. Karon

Guest: Honorable Richard A. Posner

In one of the highlights of the Institute this year (along with Professor Miller’s presentation), Judge Richard Posner sat down via teleconference for an interview with Dan Karon.  Judge Posner’s remarks were filled with unique insights and a few zingers including his comment that class action settlements are “an invitation to shenanigans” where, in his view, the class is at the mercy of the plaintiffs’ attorneys, and the Defendants interested in getting off as lightly as they can, so the judiciary has an important role in scrutinizing the terms.  He also talked about his process for reaching a decision in a case.  He considers the case as a problem to be solved in general terms, comes up with a practical solution to that problem that makes sense, and then evaluates whether there is anything in the law that “blocks” that solution.  At one point he quipped, “I don’t get a lot out of Rule 23,” preferring instead to consider the Rules of Civil Procedure in general terms and reaching a holistic judgment.

“Small Wagers, Big Results.” How the Supreme Court’s Tyson Foods Decision Could Affect Your Practice.

Host: Andrew J. McGuinness

Guests: Honorable Terrence G. Berg, Eric Grannon, James Langenfeld, Ph.D., Paul Novak, Joseph M. Sellers

This panel presentation on expert witnesses and statistical sampling was highlighted by a mock oral argument of a class certification proceeding in which the plaintiff sought to introduce statistical sampling evidence in an antitrust case.  The argument offered a practical way of evaluating how issues presented by the Supreme Court’s decision in Tyson Foods might play out in a context other than wage and hour employment litigation.

“Into the Stratosphere or Simply a Circus Circus?” After Fifty Years, What’s Class Actions’ Future?

Host: Fred B. Burnside

Guests: Professor Brian T. Fitzpatrick, Professor Robert H. Klonoff, Arthur H. Bryant, William Donovan, Jr.

A fitting end to an outstanding program, this panel of top class action scholars and practitioners offered insights into the current state of class actions and what might be in store in the near future.  Here are some highlights on the predictions offered by the panelists: 1) class actions are not going away; 2) the continued growth of mass commerce will continue to spawn class action litigation; 3) Justice Scalia’s death will have a significant impact on class action jurisprudence going forward and the judiciary is likely to get less friendly to defendants in the short-term; 4) technology will make a big difference for the better in managing class action litigation; 5) defendants will continue to come up with creative, far-reaching ways of limiting class actions; 6) plaintiffs’ attorneys will continue to bring class actions when a) they think they can make money and/or b) they think they will advance the public good; 7) there will be some good class actions and some horrible ones; 8) look out for states to pass new consumer protection laws similar to the New Jersey New Jersey Truth-in-Consumer Contract, Warranty and Notice Act (TCCWNA); 9) the TCPA and all-natural litigation booms will continue in the near future; 10) The CFPB will broadly define consumer finance services; 11) more class actions will go to trial; 12) what happens with the enforceability of arbitration clauses will have a big impact on the viability of many categories of class actions in the future; 13) look for more class actions in the federal courts in New York state.

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The Supreme Court issued its decision today in Tyson Foods, Inc. v. Bouaphakeo, No. 14-1146, a case that many commentators predicted would provide an opportunity for the Court to limit or bar the use of statistical evidence as a substitute for common proof in class actions.  The majority opinion, authored by Justice Kennedy, rejected the invitation to create a “broad rule” limiting the use of statistical evidence, however.  Instead, the Court offered practical guidance on the situations in which statistical evidence may or may not be appropriate.  The relevant portion of the opinion is short and succinct, so I have quoted it in its entirety below:

[P]etitioner and various of its amici maintain that the Court should announce a broad rule against the use in class actions of what the parties call representative evidence. A categorical exclusion of that sort, however, would make little sense. A representative or statistical sample, like all evidence, is a means to establish or defend against liability. Its permissibility turns not on the form a proceeding takes—be it a class or individual action—but on the degree to which the evidence is reliable in proving or disproving the elements of the relevant cause of action. See Fed. Rules Evid. 401, 403, and 702.

It follows that the Court would reach too far were it to establish general rules governing the use of statistical evidence, or so-called representative evidence, in all class-action cases. Evidence of this type is used in various substantive realms of the law. Brief for Complex Litigation Law Professors as Amici Curiae 5–9; Brief for Economists et al. as Amici Curiae 8–10. Whether and when statistical evidence can be used to establish classwide liability will depend on the purpose for which the evidence is being introduced and on “the elements of the underlying cause of action,” Erica P. John Fund, Inc. v. Halliburton Co., 563 U. S. 804, 809 (2011).

In many cases, a representative sample is “the only practicable means to collect and present relevant data” establishing a defendant’s liability. Manual of Complex Litigation §11.493, p. 102 (4th ed. 2004). In a case where representative evidence is relevant in proving a plaintiff’s individual claim, that evidence cannot be deemed improper merely because the claim is brought on behalf of a class. To so hold would ignore the Rules Enabling Act’s pellucid instruction that use of the class device cannot “abridge . . . any substantive right.” 28 U.S.C. § 2072(b).

Those who were hoping for a rule barring statistical evidence as a proxy for common evidence in class actions will no doubt be disappointed, but Justice Kennedy’s opinion does go much further than it had to in beginning to develop standards that will govern resolution of the issue in future cases.  To summarize:

  1. There is no general rule barring the use of statistics to prove class-wide liability in a class action.
  2. The extent to which statistical evidence is allowable in a class action depends on whether the evidence is reliable in proving or disproving the elements of a relevant cause of action.
  3. Statistical evidence is admissible in a class action if it would be admissible in an individual action to prove or disprove elements of a plaintiffs’ claim.
  4. Whether statistical evidence can be used to establish class-wide liability depends on the purpose for which the evidence is being introduced and on “the elements of the underlying cause of action.”

As a final side-note, the decision in Tyson Foods does not appear to have been impacted at all by the recent death of Justice Scalia.  Only two of the eight remaining Justices, Justices Thomas and Alito, dissented.

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The October 2015 United States Supreme Court Term is already well underway, and there are several cases on the docket that could have a significant impact on class action practice.  Here is a summary of the three cases this term that I think could have the biggest impact on class action practice going forward:

Campbell-Ewald Co. v. Gomez, No. 14-857

The Campbell-Ewald case addresses the tactic known as “picking-off” named plaintiffs in class actions, and deals with the question whether an offer of judgment that would provide a named plaintiff complete relief is sufficient to moot the plaintiffs’ claim, even if it is not accepted.  The case follows the Court’s 2013 decision in Genesis Healthcare v. Symczyk, where the majority opinion assumed, without deciding, that an offer of judgment had mooted the named plaintiffs’ claim in an FLSA collective action, based on a finding that the issue had been waived below.

Oral argument in Campbell-Ewald was held in October.  Justices Alito, Scalia, and Chief Justice Roberts all displayed open hostility to the plaintiffs’ position that she should be allowed to litigate the case even after the defendant had offered everything she hoped to achieve for herself in the case.  Despite these views, however, it remains to be seen whether a majority of the court will ultimately hold that any unaccepted offer of settlement is sufficient to actually moot the plaintiffs’ claim under Article III, or whether the decision will fall short of reaching that sweeping question.  Some of the questions posed by likely swing voter, Justice Kennedy, suggest that he agrees with his conservative colleagues that a litigant who has been offered full relief should not be permitted to proceed with the case, but other questions reflected a reluctance to treat an unaccepted offer the same as a judgment.  This suggests that the Court’s ultimate decision could turn on a more technical procedural analysis rather than the broader and more abstract question of whether a controversy can ever exist following an offer of full relief, but of course the questions posed during oral argument do not always signal the Court’s ultimate analysis.

When the Supreme Court originally granted cert in Campbell-Ewald, there appeared to be a split in the circuits on this question, but since then, the circuits have become aligned with the view that an unaccepted offer in a proposed class action does not moot the named plaintiffs’ claims.  A contrary ruling by the Supreme Court would revive a powerful tool that defendants could wield to effectively preempt many types of consumer class actions, especially those seeking statutory damages for small individual amounts.

Spokeo, Inc. v. Robins, No. 13-1339

Spokeo has been hailed as a case with the potential to end “no-injury” class actions.  Ostensibly at issue is whether Congress has the power to enact legislation that gives a private plaintiff the right to seek statutory damages despite the lack of any concrete injury.  A decision could therefore potentially have a significant impact on class actions brought under a variety of federal statutes that provide a private right of action to recover statutory damages upon proof of a violation, one that goes beyond the Fair Credit Reporting Act, the statute at issue in Spokeo.

However, during today’s oral argument, much of the questioning focused on whether the named plaintiff had, in fact, suffered an injury by alleging that false information had been published on his credit report, and the extent to which Congress actually intended to limit the private right of action under the Fair Credit Reporting Act to persons who could show an actual injury.  It seems likely that the outcome of the case will turn on the majority’s view of those two factors.

Tyson Foods, Inc. v. Bouaphakeo, No. 14-1146

Tyson Foods offers the Court an opportunity to further elaborate on the concept of “trial by formula”, discussed in Justice Scalia’s 2011 opinion in Wal-Mart Stores, Inc. v. Dukes, as well as the standards governing expert testimony at the class certification phase, which the Court touched upon but did not  ultimately address directly in both Wal-Mart and again in the 2013 decision in Comcast Corp. v. Behrend.  It also raises the question whether it is ever proper to certify a damages class that includes individual plaintiffs that undisputedly lack any injury or damages.

Specifically, the Court granted certiorari on the following two questions:

I. Whether differences among individual class members may be ignored and a class action certified under Federal Rule of Civil Procedure 23(b)(3), or a collective action certified under the Fair Labor Standards Act, where liability and damages will be determined with statistical techniques that presume all class members are identical to the average observed in a sample; and

II. Whether a class action may be certified or maintained under Rule 23(b)(3), or a collective action certified or maintained under the Fair Labor Standards Act, when the class contains hundreds of members who were not injured and have no legal right to any damages.

Oral argument in Tyson Foods is set for next Monday, November 10.

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