Agreed-Upon Attorneys’ Fees Should Stand: 8th Cir.

A district court shouldn’t have reduced the attorneys’ fees that parties in a wage-and-hour settlement agreed to, a federal appeals court ruled.

More than 1,000 OK Foods Inc. and OK Industries Inc. chicken processing plant employees opted into the settlement. The district court approved the confidential settlement but knocked the attorneys’ fees down from $87,500 to $22,500.

There appears to be a split among some circuit courts over whether district courts must exercise some level of review of Fair Labor Standards Act settlements, JudgeMichael J. Melloy wrote for the U.S. Court of Appeals for the Eighth Circuit. Even if courts have such an obligation, “fairness and reasonabless” required greater deference to the fees that the parties negotiated than the district court gave, he said. The result might be different for a disputed case, he added.

The Eighth Circuit ordered the district court to award the fees agreed to in the settlement. Judges Raymond W. Gruender and L. Steven Grasz joined the opinion.

The case is Melgar v. OK Foods, 8th Cir., No. 17-02612, reversed 8/29/18.

To contact the reporter on this story: Jon Steingart in Washington at jsteingart@bloomberglaw.com

To contact the editor responsible for this story: Terence Hyland at thyland@bloomberglaw.com