Zillow Gets Lawyer Fees Cut by Nearly $1 Million in Wage Deal

Oct. 14, 2021, 4:43 PM

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

Counsel’s requested $2.2 million in fees is excessive, as evidenced by the unreasonably high hourly rates and billable hours, Judge Holly L. Teeter said Wednesday.

Davis George Mook LLC, which represented the employees, failed to exercise billing judgment, the court said. Notably, the case was staffed by three firm partners who performed all of the work at partner rates.

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

But the firm should be reimbursed $131,128 for litigation expenses, the court said.

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

The deal resolves claims brought in 2018 by Beau Charbonneau on behalf of other team leads and loan officers employed by Mortgage Lenders of America LLC, which became Zillow Home Loans LLC after it was acquired by Zillow Group in 2019.

Charbonneau alleged Zillow violated the FLSA and Kansas law by misclassifying team leads as exempt from overtime, requiring nonexempt loan officers to work off-the-clock, and improperly deducting certain fees from their commissions.

A FLSA collective was conditionally certified in 2018, and nearly 175 plaintiffs opted into the case. The state-law claims were dismissed in 2020, but the court allowed the FLSA claims to proceed later last year.

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

Ogletree, Deakins, Nash, Smoak & Stewart PC represents 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.

To contact the reporter on this story: Kathleen Dailey at kdailey@bloomberglaw.com

To contact the editors responsible for this story: Rob Tricchinelli at rtricchinelli@bloomberglaw.com; Patrick L. Gregory at pgregory@bloomberglaw.com

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