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| | Class Action Settlement Ruled In Favor Of AIG's Workers' Compensation Adjusters Upheld By Appellate Court
By Lonce LaMon - December 24, 2011
A settlement was upheld on Monday, December 19th, by a California appellate court in favor of the workers' compensation claims adjusters who sued American International Group Inc.'s claims department for wage-and-hour violations. The appellate court ruled that the settlement was fair.
The ruling was by the 2nd District California Court of Appeals in Karen Keeler et al. vs. AIG Domestic Claims Inc. et al. A trial court in 2010 had approved the class action settlement.
A lawsuit was filed in 2008 against several AIG claims units alleging that claims adjusters were misclassified as exempt from overtime requirements. In June of 2009, the parties reached a mediated settlement and sought preliminary approval. The agreement provided a maximum settlement amount of 1.4 million dollars from which the parties would subtract settlement administrator expenses and attorneys' fees. The parties indicated there were about 340 class members.
However, objections were filed. In March of 2010 three members filed objections. Eight class members opted out.
The objections argued the court should not approve the settlement because the parties involved had not provided evidence establishing the amount in controversy; the realistic range of the litigation's outcomes; or the pay rate used to calculate settlement payments, which averaged $2,700.
The trial court granted final approval of the settlement and dismissed the objectors' case in July 2010.
On appeal, the objectors argued that, among other things, the trial court should have required the parties to produce additional evidence to prove the settlement was reasonable.
But the appellate court disagreed unanimously by concluding that the trial court did not abuse its discretion in approving the settlement. It stated the trial court had sufficient information to determine that the settlement was fair, adequate and reasonable.
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