Contract analysis

I. INTRODUCTION AND QUALIFICATIONS

1. I am an expert retained by defendant Aurelius Media Americas Inc. ("AMA") through its counsel, Calderwood & Harkness LLP, to provide economic and statistical analysis in connection with Plaintiffs' Motion for Class Certification filed in the above-captioned action. I make this declaration in opposition to Plaintiffs' Motion for Class Certification and in support of Defendant AMA's Opposition thereto. I have person

2. I am a Principal and Senior Economist at Hargrove Analytics Inc., located at 515 S. Figueroa Street, Suite 1100, Los Angeles, California 90071. I hold a Doctor of Philosophy (Ph.D.) degree in Economics from the University of California, Berkeley, where my doctoral dissertation focused on labor supply models and wage rigidity in contingent employment markets. I also hold a Master of Arts degree in Economics from th

3. I was retained by Calderwood & Harkness LLP on or about March 1, 2023, pursuant to an expert retention letter executed on that date. My hourly rate for work performed in this engagement is $700 per hour. The hourly rate for senior analyst staff at Hargrove Analytics Inc. who have assisted me in connection with this engagement is $375 per hour. My compensation in this matter is in no way contingent upon the substan

4. I was retained to perform the following tasks in connection with this matter: (a) analyze and evaluate the damages model presented in the expert report of Dr. Howard Rennick of Pinnacle Economic Consulting Group LLC, dated April 28, 2023 (the "Rennick Report"), which was submitted in support of Plaintiffs' Motion for Class Certification; (b) assess whether Dr. Rennick's model constitutes a reliable "common methodo

5. In forming the opinions set forth in this declaration and in my expert report, I reviewed and considered the following materials: a. The expert report of Dr. Howard Rennick, Pinnacle Economic Consulting Group LLC, dated April 28, 2023, including all appendices and supporting exhibits thereto; b. NovaPay Solutions TimeTrack Pro timekeeping data for all AMA California non-exempt employees for the class period of Nov

6. Based on my review of the materials described above, my education and training, my professional experience in labor economics and damages analysis in employment class actions, and the analysis set forth in detail in my expert report (Exhibit 1), I hold the following four primary opinions: Opinion 1: Dr. Rennick's damages model is fundamentally flawed because it rests on the unsupported assumption that every auto-d

III. OVERVIEW OF DR. RENNICK'S DAMAGES MODEL

7. Dr. Rennick's expert report proposes an aggregate damages model that calculates total damages of approximately $38.6 million for the putative class. As I understand Dr. Rennick's methodology and the calculations set forth in his report, his aggregate figure is composed of the following principal categories of damages and penalties: • First meal period premiums: approximately $16.3 million, based on the number of s

8. The core assumption underlying Dr. Rennick's meal period damages calculation is that every shift during the class period on which the NovaPay Solutions TimeTrack Pro system applied an automatic thirty-minute meal period deduction—and on which no Missed Meal Attestation was recorded—constitutes a shift on which the employee's meal period was "missed," "shortened," or otherwise non-compliant. According to the timeke

9. For rest period violations, Dr. Rennick assumed a fifty percent (50%) violation rate across the entire putative class. He applied this rate to the approximately 612,000 eligible shifts during the class period, yielding approximately 306,000 shifts on which a rest period violation allegedly occurred. He then multiplied this figure by an average one-hour premium at an average hourly rate of approximately $27.50 per

10. For off-the-clock overtime damages, Dr. Rennick assumed that each class member performed an average of 37.5 minutes of uncompensated work per shift—the arithmetic midpoint of the 30-to-45-minute range alleged in Plaintiffs' class certification papers. Rennick applied this assumption broadly across the putative class, multiplying the assumed uncompensated time by 1.5 times the regular rate of pay (i.e., the overti

IV. CRITIQUE OF DR. RENNICK'S MEAL PERIOD DAMAGES CALCULATION

11. The critical flaw in Dr. Rennick's meal period damages calculation is his treatment of the NovaPay Solutions TimeTrack Pro automatic meal deduction as evidence—indeed, as dispositive proof—that employees did not receive compliant meal periods. This treatment is fundamentally mistaken. The TimeTrack Pro auto-deduction is a timekeeping method, not evidence of a meal period violation. The system is designed to autom

12. Dr. Rennick's model inverts the proper evidentiary inference that should be drawn from the auto-deduction data. The auto-deduction system operates on the assumption that the employee has taken a compliant meal period; the Missed Meal Attestation feature exists to capture the exception—that is, to identify shifts on which the employee did not take a compliant break. Under a proper analytical framework, the auto-de

13. The Missed Meal Attestation data that is available in this case directly undermines Dr. Rennick's core assumption. The Missed Meal Attestation feature of the TimeTrack Pro system was activated at four of AMA's seven California production facilities during portions of the class period. At those four facilities—West Hollywood HQ (Facility 1), Sherman Oaks (Facility 3), Hollywood (Facility 5), and Santa Monica (Faci

14. I recognize that the Missed Meal Attestation feature was not activated at three of AMA's seven California facilities during portions of the class period. Specifically, the feature was not activated at the Studio City facility (Facility 2), the Burbank facility (Facility 4), or the El Segundo facility (Facility 7). At these three facilities, employees who missed or were denied meal periods did not have the electro

15. The deposition testimony in this case supports a far more nuanced picture of meal period compliance than Dr. Rennick's model assumes. Derek Halloran, a named plaintiff who worked in post-production at the Hollywood facility (Facility 5), testified at his deposition that he was "usually" able to take his meal breaks, except during what he described as "crunch periods" of approximately two to three weeks before del

16. Dr. Rennick's model also fails to account for meal period premiums that AMA already paid during the class period. AMA's payroll records reflect that meal period premium payments were processed through the Missed Meal Attestation system for approximately 18,400 shifts during the class period. Dr. Rennick subtracts these 18,400 shifts from his total of approximately 612,000 auto-deducted shifts, producing a net fig

V. CRITIQUE OF REST PERIOD DAMAGES CALCULATION

17. Dr. Rennick's assumption of a fifty percent (50%) rest period violation rate across the entire putative class is empirically unsupported. The 50% figure is not based on any statistical analysis of timekeeping data, any survey or sampling of class members, any time-and-motion study, any systematic review of supervisory records, or any other empirical data source. It is extrapolated solely and entirely from the dec

18. There is a straightforward reason why Dr. Rennick was unable to conduct any empirical analysis of rest period compliance: rest periods are not tracked in the NovaPay Solutions TimeTrack Pro system. This is consistent with standard industry practice. Under California law, rest periods are paid time during which non-exempt employees are relieved of all duties. Because rest periods are paid time—unlike meal periods,

19. Beyond the absence of empirical data, the named plaintiffs' experiences are simply not generalizable to the putative class as a whole. Marisol Fuentes worked in the Unscripted Programming division at the Studio City facility (Facility 2), primarily on the show unit "Homefront Reno." Derek Halloran worked in the Post-Production division at the Hollywood facility (Facility 5), primarily on the show units "Kitchen C

VI. CRITIQUE OF OFF-THE-CLOCK DAMAGES CALCULATION

20. Dr. Rennick's assumption that each putative class member performed an average of 37.5 minutes of uncompensated, off-the-clock work per shift lacks any empirical foundation. The 37.5-minute figure is the arithmetic midpoint of the thirty-to-forty-five-minute range alleged in Plaintiffs' class certification papers and in the declarations of certain named plaintiffs and class members. It is not derived from any anal

21. The nature and extent of alleged off-the-clock work is inherently individualized, varying along multiple dimensions that preclude uniform, class-wide measurement. The type and duration of pre-shift setup activities and post-shift wrap activities differ significantly by job function—a production coordinator's pre-shift duties (reviewing call sheets, coordinating crew logistics, confirming location permits) are qua

22. For these reasons, a class-wide assumption of uniform off-the-clock work—37.5 minutes per shift for every employee on every shift across every facility and show unit—is not a reliable damages methodology. It does not account for the variation in pre-shift and post-shift activities by job function, show unit, facility, production phase, or individual circumstance. It does not distinguish between compensable and no

23. Dr. Rennick's PAGA penalty calculation of approximately $12.2 million assumes the application of maximum statutory penalties under the Private Attorneys General Act of 2004, California Labor Code section 2698 et seq. Specifically, Dr. Rennick applies penalties at the rate of $100 per aggrieved employee per initial pay period in which a violation occurred and $200 per aggrieved employee per subsequent pay period i

24. California courts have routinely exercised their discretion under section 2699(e)(2) to reduce PAGA penalties by seventy-five percent (75%) to ninety percent (90%) or more below the maximum statutory amount. Courts consider range factors in determining the appropriate reduction, including, among others: (a) whether the employer's violations were willful or inadvertent; (b) whether the employer maintained facially

VIII. ALTERNATIVE DAMAGES CALCULATION

25. I have prepared an alternative damages calculation that is based on actual data where available and conservative, analytically defensible assumptions where data gaps exist. The methodology I employed is as follows: (1) Meal Period Premiums: For the four facilities where the Missed Meal Attestation feature was activated (West Hollywood HQ/Facility 1, Sherman Oaks/Facility 3, Hollywood/Facility 5, and Santa Monica/

26. The detailed calculation of meal period premium damages under my alternative methodology is as follows: Facilities 1, 3, 5, and 6 (Attestation Feature Active): At these four facilities, the weighted average Missed Meal Attestation rate during the class period was approximately 3.0%. During the class period, approximately 385,000 shifts were worked at these four facilities by non-exempt employees who are members o

27. Wage statement penalties under my alternative methodology are calculated as a derivative of the meal period violations identified through the analysis described above. Under California Labor Code section 226(e), an employee who suffers injury as a result of a knowing and intentional failure to comply with wage statement requirements is entitled to the greater of actual damages or fifty dollars ($50) for the initi

28. PAGA penalties under my alternative methodology are estimated in the range of $500,000 to $1,000,000. This range reflects a reduction of approximately 92% to 96% from Dr. Rennick's maximum statutory penalty calculation of $12.2 million. The magnitude of this reduction is consistent with reductions applied by California courts in comparable cases where the employer maintained written compliance policies, implement

29. My total alternative damages estimate is summarized as follows: As reflected in the table above, my alternative damages calculation yields a total of approximately $5.8 million, excluding PAGA penalties above $1.0 million. This figure represents my best estimate of class-wide damages based on actual data and conservative analytical assumptions.

30. The comparison between Dr. Rennick's $38.6 million figure and my $5.8 million alternative figure is stark. Dr. Rennick's estimate is approximately 6.7 times larger than mine. The difference—approximately $32.8 million—is almost entirely attributable to Dr. Rennick's unsupported assumption that every shift on which the TimeTrack Pro auto-deduction was applied constitutes a "missed" meal period. If that single assu

IX. DR. RENNICK'S MODEL AS A "COMMON METHODOLOGY"

31. Under Granite Harbor Partners LLC v. Behrend (2013) 569 U.S. 27, and consistent with California class certification principles, a damages model offered in support of class certification must be capable of measuring damages attributable to the plaintiff's class-wide theory of liability using common proof. A model that relies on assumptions disconnected from the theory of liability, or that cannot distinguish betwe

32. Even if the Court were to certify the meal period auto-deduction claim as a common question subject to class-wide resolution—a conclusion that AMA opposes on the grounds set forth in its Opposition to Plaintiffs' Motion for Class Certification—Dr. Rennick's damages model cannot reliably measure the damages flowing from that claim. The auto-deduction is common evidence in the sense that the same timekeeping mechan

33. In summary, my opinions are as follows: (1) Dr. Rennick's damages model is unreliable because it assumes that every shift on which the NovaPay Solutions TimeTrack Pro auto-deduction was applied constitutes a "missed" meal period for which premium pay is owed. This assumption is contradicted by the actual Missed Meal Attestation data, which shows that at the four facilities where the attestation feature was activa

34. I declare under penalty of perjury under the laws of the State of California that the foregoing is true and correct.

35. Executed this 14th day of June, 2023, in Los Angeles, California. ________________________________________ Dr. Catherine Lindstrom, Ph.D. Principal and Senior Economist Hargrove Analytics Inc. 515 S. Figueroa Street, Suite 1100 Los Angeles, California 90071 Exhibit 1: Expert Report of Dr. Catherine Lindstrom, dated June 9, 2023 (referenced herein; maintained in Compendium of Exhibits in Support of Defendant's Opp