White v. Northstar Media, Inc.

Background

The court considered the parties’ joint motion for approval of a settlement involving Alanea White’s claim under the Fair Labor Standards Act, a federal wage-and-hour law. The proposed settlement provided for a total payment of $20,537.00, with $8,537.00 allocated to White’s attorneys for fees and costs.

Attorney-fee review

The parties’ proposed order stated that the court should review only the payment to White and should not evaluate the reasonableness of the attorneys’ fees. The court rejected the parties’ characterization of Eighth Circuit precedent as incomplete. It explained that when attorney fees are negotiated separately from, and without regard to, the employee’s FLSA claim, the employer’s payment to counsel does not affect whether the employee received an adequate settlement. But if the fees were negotiated jointly with the employee’s payment, the fees are subject to review.

The parties did not address whether the fees were negotiated separately. The court observed that the settlement was described as one agreement reached on a particular date, and that the total payment was presented as one amount to be divided among three recipients or purposes. The record therefore did not suggest that the fee negotiations were separate.

The court also found insufficient information to decide whether the fees were reasonable. It explained that courts typically use the lodestar method, which multiplies the hours reasonably worked by the applicable hourly rate. The parties provided neither the hours worked nor each attorney’s rate, and they supplied no evidence showing that the hours or rates were reasonable.

Disposition

Judge Katherine Menendez denied without prejudice the Joint Motion for Approval of Settlement. The court instructed the parties to resubmit the motion with a memorandum addressing the attorney-fee issues and a supplemental declaration showing whether the fees were negotiated separately.