Zillow gets attorney’s fees reduced by nearly $ 1 million in salary deal

Zillow convinced a Kansas federal judge to reduce attorney fees by $ 901,994 in a $ 3.9 million settlement reached after three years of “contentious” litigation in an overtime action by the Fair Labor Standards Act involving nearly 175 mortgage loan officers.

The attorney’s fees of $ 2.2 million are excessive, as evidenced by unreasonably high hourly rates and billable hours, Justice Holly L. Teeter said Wednesday.

Davis George Mook LLC, who represented the employees, did not exercise judgment on the billing, the court said. In particular, the file was composed of three partners of the firm who carried out all the work at the rate of the partners.

The lawyers also failed to adequately substantiate the hourly rates requested, which averaged about $ 585 per hour, the court said. Although the firm took the case on a contingent basis and the lawyers working there had significant litigation experience, only one had experience working on FLSA cases.

But the firm is expected to be reimbursed $ 131,128 for litigation costs, the court said.

Zillow challenged attorney fees in June, after the U.S. District Court for the District of Kansas granted the plaintiffs’ unopposed motion for approval of the preliminary settlement.

The agreement resolves claims filed in 2018 by Beau Charbonneau on behalf of other team leaders and loan officers employed by Mortgage Lenders of America LLC, which became Zillow Home Loans LLC after its acquisition by Zillow Group in 2019.

Charbonneau alleged that Zillow broke FLSA and Kansas law by wrongly classifying team leaders as exempt from overtime, forcing non-exempt loan officers to work after hours, and in unduly deducting certain costs from their commissions.

An FLSA collective was conditionally certified in 2018, and nearly 175 plaintiffs opted for the case. The state law claims were dismissed in 2020, but the court allowed the FLSA’s claims to continue later last year.

The settlement provides that each member of the FLSA collective receives at least $ 500 and potentially up to $ 3,000 depending on certain factors.

Ogletree, Deakins, Nash, Smoak & Stewart PC represent Zillow.

The case is Charbonneau v. Mortgage Lenders of America, LLC, 2021 BL 391335, D. Kan., No. 2: 18-cv-02062-HLT, 10/13/21.

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