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Workers comp adjuster settlement with AIG is fair: Calif. Court

Workers comp adjuster settlement with AIG is fair: Calif. Court

LOS ANGELES—A settlement favoring workers compensation adjusters suing American International Group Inc. claims units for wage-and-hour violations is fair, a California appellate court has ruled.

The Monday ruling by the 2nd District California Court of Appeals in Karen Keeler et al. vs. AIG Domestic Claims Inc. et al. upheld a trial court's 2010 approval of the class action settlement.

That resulted from a lawsuit that was filed in 2008 against several AIG units alleging that claims adjusters were misclassified as exempt from overtime requirements.

In June 2009, the parties reached a mediated settlement and sought preliminary approval. The agreement provided a maximum settlement amount of $1.4 million, from which the parties would subtract settlement administrator expenses and attorney fees.

In seeking approval of the settlement, the parties indicated there were approximately 340 class members.

But eight class members opted out; in March 2010, three filed an objection. They 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. It concluded that the trial court did not abuse its discretion in approving the settlement.

Among other findings, the appellate court ruled that the trial court had sufficient information to determine that the settlement was fair, adequate and reasonable.

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