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Just in time for Labor Day, claims adjusters for one of the country’s largest insurance companies were rewarded for all their overdue overtime labor. On Friday, Alameda County Superior Court Judge Ronald Sabraw approved a settlement plan that plaintiffs lawyers say will top $200 million. The settlement resolves the largest overtime pay class action ever tried in the United States. The underlying suit, filed in 1996 by Rudy, Exelrod & Zieff, accused Farmers Insurance Exchange of cheating 2,402 California-based claims adjusters out of overtime pay. Farmers had argued that the employees were administrators exempt from overtime regulations. Oakland jurors disagreed, and in 2001 awarded more than $90 million for unpaid overtime. The First District Court of Appeal affirmed the award in February, and the state Supreme Court denied review in May. In settling, plaintiffs lawyers say, Farmers agreed to pay the entire judgment, as well as attorneys fees and accumulated interest, which added about $80 million to the recovery. In addition, Farmers agreed to begin paying overtime to all California class members and to throw in $40 million more for overtime pay accrued since the trial. “We have been working on behalf of Farmers’ California claims representatives for more than eight years,” lead counsel Steven Zieff said, “and are gratified to see that justice has finally been served.” Co-counsel Michael Rubin, of Altshuler, Berzon, Nussbaum, Rubin & Demain, said that the appeal courts had settled the legal principles in the case years ago. “But Farmers and its industry supporters kept fighting their workers’ claims with all their resources,” he said. “We are delighted that the workers will finally be fairly compensated for their long hours of work on Farmers’ behalf.” Farmers GC Jason Katz and outside trial counsel Lee Paterson of L.A.’s Winston & Strawn were both traveling Friday afternoon and unavailable for comment. Plaintiffs lawyers said that the total payment would not be calculated until March, but that it is expected to exceed $200 million. The case is Bell v. Farmers Insurance Exchange, 774013-0. A separate case against Farmers on behalf of claims adjusters outside California is pending in federal court in Portland, Ore. Friday’s settlement, however, doesn’t resolve a malpractice suit against Rudy, Exelrod & Zieff in which one claims adjuster argued that the firm could have gotten a larger payout than the original $90 million judgment if it had filed an additional claim under the state’s unfair competition law. The 1st District Court of Appeal, in Janik v. Rudy, Exelrod & Zieff, A102513, cleared the case for trial in June. The firm has petitioned for review by the state Supreme Court.

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