The Supreme Court this month received the first round of briefing in a case that could cure one of the newest, most significant abuses in our civil justice system: massive class actions that lawyers file on behalf of people who are not injured. In these cases, the class action plaintiffs’ lawyers use novel legal theories and damage models to get their classes certified and then count on companies to settle the claims and pay them attorney fees – sometimes for more than the class members will end up collecting from the settlement.
The whole point of civil litigation is to make people whole for their losses. Any person who is not injured and has no loss to be corrected should have his or her claim dismissed. The person has no substantive legal basis for the claim, and Article III of the U.S. Constitution gives federal courts jurisdiction only over cases where people allege actual injury traceable to the defendant. But, what happens when uninjured people are nonetheless swept into federal class actions?
This is the issue before the Supreme Court in Tyson Foods, Inc. v. Bouaphakeo. The plaintiffs’ counsel used a controversial damages model to turn discrete wage-and-hour claims for some Tyson employees into a much larger class action. They created an “average employee,” claiming that this “average employee” would be due overtime pay if the time taken to put on and take off protective gear was included in the work week. They then sought to have every class member – some 3,300 people – paid the same overtime as the “average employee,” regardless of how much the real employees actually worked, spent putting on and taking off gear, or were paid.
The problem is that hundreds of class members had no injury at all. It was clear under the plaintiffs’ own statistical sampling model that these employees were fully paid, even accounting for the time to put on and take off gear. Yet, the district court certified the case as a class action with these uninjured people. At trial, the jury found that the modeling majorly overstated the damages and about half of the class had no or only a de minimis injury. Yet, the court allowed all class members, including the uninjured, to get the same pro rata share of the award.
Continue reading at The Hill.