Federal Court Rejects Defense Arguments Against Class Certification of RICO Class Action Complaint Finding that Generalized Evidence Exists to Prove or Disprove the Class Claims and that Methodologies Exist to Calculate Damages
Plaintiffs filed a class action complaint in Tennessee federal court against poultry company Tyson Foods for violations of the federal Racketeer Influence and Corrupt Organizations Act (RICO) predicated on Tyson’s alleged harboring and hiring of illegal aliens in violation of federal law. Trollinger v. Tyson Foods, Inc., ___ F.Supp.2d ___, 2006 WL 2924938 (E.D. Tenn. October 10, 2006) [Slip Opn., at 2]. The complaint alleged that Tyson knowingly employed a substantial number of illegal immigrants and that in so doing “saved . . . large sums of money by driving down wages at the chicken processing plants below what wages would be if the [program] were not in existence.” _Id._, at 3. Following substantial litigation, including motions for summary judgment and judgment on the pleadings, plaintiffs filed a motion for class certification under Rule 23(a) and Rule 23(b)(3), _id._, at 6. The district court granted the motion.
While the district court discussed the requirements for a class action set forth in Rule 23(a), Tyson, at 6-14, the court noted, “It is not at all clear Tyson contests these prerequisites,” id., at 8. Moreover, defense attorneys did not challenge each of the four separate elements considered under Rule 23(b)(3); rather, “Defendants’ only challenges to Plaintiffs’ motion are in respect to Rule 23(b)’s requirements of manageability and predominance.” Id. Thus, while the federal court discussed each of the elements of Rule 23(b)(3), id., at 14-20, it observed that defense attorneys did not address whether class members will have a strong interest in controlling their claims, id., at 15, whether other litigation exists by or against class members, id., or the desirability of concentrating the litigation “in this forum,” id., at 15-16.
The focus of the federal court’s inquiry was on the single issue of manageability, which “is the ‘most hotly contested and the most frequent ground for holding that a class action is not superior.’” Tyson, at 16 (citation omitted). Defense attorneys argued that “Establishing liability, injury and damages would require detailed, particularized proof of numerous individual issues” and that “neither liability nor injury damages can be established on a class-wide basis,” id., at 17. The district court disagreed. As to liability, the court held that the relevant inquiry was “whether generalized evidence exists which will prove or disprove Plaintiffs’ claims on a simultaneous, class-wide basis,” id.; the court concluded that such evidence existed, id., at 17-18. As to damages, the court rejected defense arguments concerning the methodology proposed by plaintiffs’ expert for calculating damages because the proper inquiry at the class certification stage was not which methodology should be used but whether such a methodology exists. Id., at 18-19. Because methodologies were available to address the issue, the court concluded that treating the lawsuit as a class action would be manageable and certified the class.
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