Contract analysis

I. Purpose and Executive Summary This memorandum provides our detailed comments and recommendations on Dr. Catherine Lindstrom's draft rebuttal expert report, which we received on May 26, 2023, from Hargrove Analytics Inc. (515 S. Figueroa Street, Suite 1100, Los Angeles, CA 90071). The draft report was prepared at our direction and responds to the expert report of Dr. Howard Rennick of Pinnacle Economic Consulting G

II. Summary of Dr. Lindstrom's Draft Methodology and Conclusions We begin with a section-by-section summary of Dr. Lindstrom's principal findings and our preliminary comments on each. These comments are elaborated in greater detail in Section III below. A. Alternative Damages Model — First Meal Period Premiums Dr. Lindstrom's alternative damages model for first meal period premiums constitutes the core of her rebutta

III. Specific Comments and Recommended Revisions This section sets forth our detailed comments and recommended revisions, organized by topic. We have prioritized these comments roughly in order of importance to the overall persuasiveness and defensibility of the report. A. Strengthen the Foundation for the 8.5% Violation Rate at Non-Attestation Facilities As noted above, the 8.5% assumed violation rate for Facilities

1. Provide a More Rigorous Basis for the 2.5× Uplift Factor. The current draft states that the 8.5% rate reflects a "conservative upward adjustment" but does not explain why 2.5× is the appropriate multiplier. Dr. Lindstrom should consider referencing published academic literature or government studies on underreporting of workplace safety incidents, wage-and-hour violations, or compliance issues when formal reportin

2. Present a Sensitivity Analysis. Rather than defending a single-point estimate of 8.5%, Dr. Lindstrom should present a sensitivity analysis showing total first meal period premium damages under multiple assumed violation rates for the non-attestation facilities. We recommend that the sensitivity analysis include the following rates: 8.5% (Dr. Lindstrom's base case), 15%, 25%, and 50% (Dr. Rennick's implicit assumpt

3. Cross-Reference Dr. Makhija's Variability Analysis. Dr. Lindstrom should cite the findings of Dr. Priya Makhija (Workforce Dynamics Consulting LLC, 444 Castro Street, Suite 800, Mountain View, CA 94041) regarding the operational characteristics of the three non-attestation facilities. Dr. Makhija's report, finalized on May 19, 2023, demonstrates that the three non-attestation facilities include a diverse mix of pr

1. Add a Clear, Standalone Explanatory Paragraph. The draft should include a self-contained paragraph, early in the discussion of meal period damages, that explains in plain terms what the NovaPay Solutions TimeTrack Pro auto-deduction feature actually does. The auto-deduction is a standard payroll system feature that records the 30-minute unpaid meal period that the employee took during the shift. For an employee wh

2. Include a Simple Numerical Example. To make this point concrete and accessible, the report should include a brief hypothetical illustration. For example: Employee A is scheduled for a shift from 8:00 a.m. to 5:00 p.m. Employee A takes a 30-minute meal break from 12:00 p.m. to 12:30 p.m. At clock-out, TimeTrack Pro auto-deducts 30 minutes, recording 8.5 hours of compensable time. Under Dr. Rennick's methodology, th

3. Reference Karen Fong's Deposition Testimony. The deposition of Karen Fong, AMA's Payroll Manager, was taken on May 18, 2023. Ms. Fong testified extensively about the design and operation of the TimeTrack Pro auto-deduction feature. Her testimony supports the characterization of the auto-deduction as a payroll recording mechanism — not a violation mechanism. Specifically, Ms. Fong testified that the auto-deduction

1. Move the Summary Comparison Table to the Front of the Report. As discussed in Section II.F above, the summary comparison table — showing Dr. Lindstrom's and Dr. Rennick's respective damages calculations by claim category, with the dollar difference and a brief notation of the methodological basis — should be placed in Section I or Section II of the report, not in Section VII where it currently appears. The reader

2. Ensure All Data Sources Are Clearly Cited. Every reference to NovaPay Solutions TimeTrack Pro data should include the specific data extraction identifier assigned by NovaPay's data extraction coordinator, Marcus Yee (NovaPay Solutions, Data Services Division). Where the data was produced in litigation, the corresponding Bates numbers should also be cited. This level of specificity is essential to establishing the

3. Add an Appendix of Materials Considered. Consistent with the requirements of California Evidence Code § 802 and the expectations of the Court, the report should include a comprehensive appendix listing all materials considered by Dr. Lindstrom in forming her opinions. This appendix should include all TimeTrack Pro data extractions, deposition transcripts reviewed, documents reviewed (by Bates number), and other ex

4. Include Required Expert Disclosures. The report should clearly state that Dr. Lindstrom was retained by Calderwood & Harkness LLP on behalf of AMA, disclose her hourly rate ($700 per hour), and state the total fees incurred to date. While the draft includes some of this information, it should be consolidated and presented in a single paragraph or section, consistent with standard practice for expert reports in Cal

5. Correct the Arithmetic Discrepancy in Table 4. We have identified a minor computational discrepancy in Table 4 of the draft. The sum of the facility-level meal period premiums set forth in the table does not precisely equal the stated total of $3.4 million. The discrepancy appears to be a rounding issue of approximately $12,000 — the sum of the individual facility figures totals approximately $3,412,000, while the

IV. Anticipated Plaintiffs' Critiques and Recommended Responses Based on our review of Plaintiffs' briefing to date, the Rennick report, and the arguments advanced at the initial case management conference and subsequent hearings, we anticipate the following critiques of Dr. Lindstrom's report and recommend the following responses: A. "Lindstrom's Model Underestimates Violations Because It Relies on Attestation Data

V. Coordination with Dr. Makhija's Report Dr. Priya Makhija's expert report (Workforce Dynamics Consulting LLC, 444 Castro Street, Suite 800, Mountain View, CA 94041) was finalized on May 19, 2023, and has been served on Plaintiffs. Dr. Makhija's report addresses the operational variability across AMA's 14 show units and 7 facilities and opines that the experiences of putative class members are too diverse to be reso

1. Cross-Reference Makhija's Variability Findings. Dr. Lindstrom's report should expressly cite Dr. Makhija's findings on the statistically significant differences in shift-length distributions, overtime frequency, and meal period timing across show units. Among the most compelling of these findings is the dramatic difference in self-reported missed meal rates between show units: for example, the Studio City show "Ki

2. Ensure Consistent Use of the Same Data Set. Both experts rely on the same underlying data: the NovaPay Solutions TimeTrack Pro data set extracted by Marcus Yee of NovaPay's Data Services Division. We should confirm that both reports reference the same extraction date and version of the data set, and that any data filters or exclusions applied by one expert are consistent with those applied by the other. Any discre

3. Ensure Consistent Class Period Definition. Both reports should use the same class period definition: November 1, 2018 through the present (the class period as alleged in the operative complaint). We should verify that Dr. Lindstrom's calculations cover this full period and do not inadvertently truncate or extend it.

4. Avoid Inconsistent Opinions. We should review both reports side by side to ensure that no statement in Dr. Lindstrom's report contradicts a finding or opinion in Dr. Makhija's report, and vice versa. While the two experts address different questions, there are areas of overlap — particularly regarding the variability of working conditions across facilities and show units — where inconsistent statements could be ex

VI. Timeline and Next Steps The following table sets forth the timeline for completion of the Lindstrom report and the related certification opposition filings: Given the compressed timeline, it is critical that we transmit this memorandum to Dr. Lindstrom today and that Devon deliver the PAGA case citations by June 4 at the latest. We should also schedule a call with Dr. Lindstrom for June 3 or June 4 to walk throug

VII. Conclusion In sum, Dr. Lindstrom's draft rebuttal expert report is fundamentally sound and provides a well-reasoned, empirically grounded alternative to Dr. Rennick's inflated damages model. The draft's core methodology — using actual attestation data as a measure of the true missed-meal rate, applying a conservative uplift for non-attestation facilities, and opining that PAGA penalties are subject to significan

1. Better justification for the 8.5% non-attestation facility violation rate, including a more rigorous basis for the 2.5× uplift factor and a sensitivity analysis showing damages under multiple assumed violation rates;

2. A sharper, more accessible critique of Dr. Rennick's "every auto-deduction = violation" assumption, including a plain-language explanation of the auto-deduction mechanism, a simple numerical example, and a cross-reference to Karen Fong's deposition testimony;

3. Expanded punch-in time analysis with visual exhibits (histograms or distribution charts by facility and, if feasible, by show unit or show type) to undermine Plaintiffs' off-the-clock claims;

4. An illustrative rest period damages range table showing damages under several hypothetical violation rates, to provide the Court and the mediator with a sense of rest period exposure without endorsing any specific violation rate;

5. PAGA case citations — specific California court decisions in which penalties were reduced by 75–90% from the statutory maximum — to support Dr. Lindstrom's opinion on the reasonable penalty range; and

6. Presentational improvements, including front-loading the summary comparison table, correcting the approximately $12,000 rounding discrepancy in Table 4, ensuring complete data source citations, adding a materials-considered appendix, and consolidating the expert retention and fee disclosures. With these revisions, the Lindstrom report will be a powerful tool in three critical contexts: first, in the opposition to