Contract analysis

I. RECITALS AND PROCEDURAL BACKGROUND

1. On November 1, 2022, Plaintiff Marisol Fuentes filed a putative class action complaint against Defendant Aurelius Media Americas Inc. ("AMA"), Case No. 22STCV38214, alleging wage-and-hour violations under the California Labor Code and the Unfair Competition Law, California Business and Professions Code § 17200 et seq. (the "UCL"), on behalf of a putative class of approximately 1,850 non-exempt, hourly employees of

2. On November 18, 2022, Plaintiff Derek Halloran filed a related action against AMA, Case No. 22STCV39501, asserting substantially similar claims on behalf of a substantially overlapping putative class.

3. On February 3, 2023, the Court entered an Order consolidating Case Nos. 22STCV38214 and 22STCV39501, designating Case No. 22STCV38214 as the lead case for all purposes. Yesenia Padilla was subsequently added as a named plaintiff in the consolidated action.

4. The parties thereafter engaged in extensive discovery. AMA produced 147,832 documents, comprising approximately 1.2 million pages, relating to its employment policies, payroll records, timekeeping data, corporate communications, and related materials. Plaintiffs produced 3,412 documents. The parties conducted 18 depositions in total: 11 depositions noticed and taken by Plaintiffs, and 7 depositions noticed and tak

5. The parties exchanged expert reports. Plaintiffs' retained expert, Dr. Howard Rennick of Pinnacle Economic Consulting Group LLC, provided an opinion regarding aggregate damages in the amount of $38.6 million. AMA's retained experts, Dr. Rajesh Makhija of Workforce Dynamics Consulting LLC and Dr. Catherine Lindstrom of Hargrove Analytics Inc., provided rebuttal expert opinions, including Dr. Lindstrom's analysis op

6. On April 14, 2023, Plaintiffs filed a Motion for Class Certification. AMA filed its Opposition on June 16, 2023. Plaintiffs filed their Reply on July 7, 2023. The Court held a hearing on the Motion for Class Certification on July 28, 2023.

7. On August 11, 2023, the Court entered its Order Granting in Part and Denying in Part Plaintiffs' Motion for Class Certification (the "Certification Order"). The Court certified a class on Plaintiffs' first meal period automatic deduction claim, Plaintiffs' derivative wage statement claim under California Labor Code § 226, and Plaintiffs' UCL claim under California Business and Professions Code § 17200. The Court d

8. Following the Certification Order, the parties engaged in two full-day mediation sessions before the Honorable Patricia Okoro (Ret.) of Westpark Dispute Resolution Inc. The first mediation session was held on August 25, 2023, and focused on the class action claims. The second mediation session was held on September 8, 2023, and addressed both the class action claims and related matters, including the PAGA claims.

9. As a result of those mediation sessions, the parties reached an agreement in principle to settle all claims in the consolidated action. On September 15, 2023, the parties executed the Class Action Settlement Agreement and Release (the "Settlement Agreement").

10. On September 22, 2023, the parties filed a Motion for Preliminary Approval of Class Action Settlement.

11. On October 18, 2023, the Court entered an Order Granting Preliminary Approval of Class Action Settlement (the "Preliminary Approval Order"). In the Preliminary Approval Order, the Court provisionally certified the Settlement Class for settlement purposes only, preliminarily approved the Settlement Agreement and its terms, approved the proposed class notice plan, appointed Meridian Settlement Services LLC ("Meridi

12. On November 3, 2023, Meridian mailed the Court-approved Class Notice by first-class mail to the last known address of each of the 1,843 identified Settlement Class members.

13. The deadline for Settlement Class members to submit requests for exclusion (opt-outs) or objections to the Settlement was January 2, 2024.

14. On January 22, 2024, the parties filed the Motion for Final Approval, together with all supporting declarations, memoranda, and exhibits.

15. The Court held the Final Approval Hearing on February 2, 2024 at 8:30 a.m. in Department 34. Counsel for Plaintiffs and counsel for AMA appeared and presented argument.

16. In rendering this Order, the Court has reviewed and considered all of the following: (a) The Class Action Settlement Agreement and Release (execution version, dated September 15, 2023); (b) The Motion for Final Approval and the supporting Memorandum of Points and Authorities; (c) The Declaration of Renata Vasquez filed in support of Preliminary Approval (September 22, 2023) and the Supplemental Declaration of Ren

II. FINDINGS OF FACT AND CONCLUSIONS OF LAW Having considered the foregoing record, and for the reasons set forth below and stated on the record at the Final Approval Hearing, the Court makes the following findings of fact and conclusions of law: A. Final Certification of the Settlement Class

17. The Court hereby finally certifies, for settlement purposes only, the following Settlement Class: "All current and former non-exempt, hourly employees of Aurelius Media Americas Inc. who worked in the State of California at any time from November 1, 2018 through October 31, 2023, who were subject to AMA's automatic meal period deduction in the NovaPay Solutions TimeTrack Pro timekeeping system."

18. The estimated size of the Settlement Class is approximately 1,850 individuals. The Court finds that the Settlement Class satisfies all requirements for class certification under California Code of Civil Procedure § 382 and California Rules of Court, Rule 3.764, as set forth below.

19. Ascertainability. The Settlement Class is defined with sufficient precision to allow the Court and the parties to determine who is and who is not a member of the class. Class membership can be objectively ascertained by reference to AMA's payroll and timekeeping records, which are maintained by NovaPay Solutions Inc. through its TimeTrack Pro timekeeping system. The class definition is clear, uses objective crite

20. Commonality and Predominance. Common questions of law and fact predominate over any questions affecting only individual class members. The central question presented by the certified claims is whether AMA's automatic meal period deduction system, as implemented through the NovaPay Solutions TimeTrack Pro timekeeping system, denied class members meal period premium pay without providing an adequate mechanism for e

21. Typicality. The claims of the named plaintiffs — Marisol Fuentes, Derek Halloran, and Yesenia Padilla — are typical of the claims of the Settlement Class. Each named plaintiff was a non-exempt, hourly employee of AMA who was subject to AMA's automatic meal period deduction in the NovaPay Solutions TimeTrack Pro timekeeping system during the class period. The named plaintiffs' claims arise from the same course of

22. Adequacy of Representation. The named plaintiffs have fairly and adequately represented the interests of the Settlement Class throughout this litigation. Each named plaintiff participated actively in the prosecution of this action, including submitting to depositions, reviewing and producing documents, attending mediation sessions, and consulting with Class Counsel regarding the terms of the Settlement Agreement.

23. Superiority. A class action settlement is a superior method of resolving the common claims of the Settlement Class compared to individual lawsuits or other alternative methods of adjudication. The class action mechanism is efficient, avoids inconsistent results, and permits the resolution of the claims of approximately 1,850 employees in a single proceeding. The amounts at stake for individual class members, whil

24. The Court hereby appoints the following counsel as Class Counsel for the Settlement Class: Lead Class Counsel: Castellano Byrne & Salas LLP Marco Castellano (SBN 198422) Diane Salas 11755 Wilshire Boulevard, Suite 900 Los Angeles, California 90025 PAGA Co-Counsel: Veltrano Employment Law Group PC Sandra Higuera (SBN 217893) 350 South Grand Avenue, Suite 2800 Los Angeles, California 90071

25. The Court finds that Class Counsel have extensive experience in the prosecution of wage-and-hour class actions in California, have vigorously and competently represented the interests of the Settlement Class throughout the litigation, and have achieved a favorable result for the class. Class Counsel undertook substantial risk in prosecuting this case on a contingency basis, advanced significant costs, and devoted

26. The Court confirms Marisol Fuentes, Derek Halloran, and Yesenia Padilla as the Class Representatives for the Settlement Class. Each named plaintiff has demonstrated a commitment to the interests of the class and has provided meaningful service throughout the course of this litigation. D. Notice to the Settlement Class

27. The Court finds that the Class Notice was disseminated in substantial compliance with the Preliminary Approval Order, the due process requirements of the United States and California Constitutions, and all applicable legal requirements, including California Rules of Court, Rule 3.766(e). Specifically, the Court finds as follows: (a) On November 3, 2023, Meridian Settlement Services LLC mailed 1,843 individual Cla

28. The Court finds that the notice program constituted the best practicable notice under the circumstances and satisfied the requirements of due process. The notice was reasonably calculated to apprise Settlement Class members of the pendency of the action, the proposed settlement, and their rights, including the right to opt out, the right to object, and the right to appear at the Final Approval Hearing. E. Request

29. Twenty-three (23) Settlement Class members submitted valid and timely requests to be excluded from the Settlement Class on or before the January 2, 2024 deadline. The names and addresses of these individuals are set forth in Exhibit 1 to the Declaration of Angela Truong filed in connection with the Motion for Final Approval.

30. The 23 opt-outs represent approximately 1.24% of the approximately 1,850 identified Settlement Class members. This opt-out rate is well below the 5% threshold (93 individuals) that would have entitled AMA to exercise its right to void the settlement under Section 12.3 of the Settlement Agreement. AMA has confirmed that it does not exercise any right to void the settlement.

31. The 23 individuals who timely and validly opted out are hereby excluded from the Settlement Class, are not bound by this Order, the Settlement Agreement, or the release of claims set forth herein, and retain whatever individual claims they may have against AMA, if any. F. Objections.

32. Four (4) Settlement Class members submitted timely written objections to the settlement on or before the January 2, 2024 deadline. The Court has carefully reviewed and considered each objection, together with the responses filed by the parties on January 22, 2024 and the arguments of counsel at the Final Approval Hearing. The Court rules on each objection as follows:

33. Objection No. 1 — Carlos Vega. Mr. Vega objects to the attorneys' fee award sought by Class Counsel, arguing that 33.33% of the Gross Settlement Amount is excessive and that attorneys' fees should be limited to no more than 25% of the Gross Settlement Amount. RULING: OVERRULED. The requested fee of 33.33% of the Gross Settlement Amount is within the range of fees routinely approved by California courts in class a

34. Objection No. 2 — Rachel Kimura. Ms. Kimura objects to the allocation formula used to distribute the Net Settlement Fund among participating class members. Ms. Kimura argues that overtime hours should be weighted more heavily than the current 40% weighting because, in her view, employees who worked more overtime worked longer shifts and were therefore more likely to miss or have their meal periods shortened. RULI

35. Objection No. 3 — Samuel Torres. Mr. Torres objects to the Gross Settlement Amount, arguing that $14,750,000 is too low and that the class should have received at least $25 million based on what Mr. Torres describes as the "true" value of the claims. RULING: OVERRULED. The Gross Settlement Amount of $14,750,000 represents approximately 38.2% of Plaintiffs' expert's aggregate damages calculation of $38.6 million.

36. Objection No. 4 — Dawn Prescott. Ms. Prescott objects to the scope of the release, arguing that the settlement should not release non-certified claims, including the rest period and off-the-clock claims, without providing separate compensation for those claims. RULING: OVERRULED. The release of both certified and non-certified claims is a standard and well-established feature of California class action settlement

37. The Court finds that the Settlement Agreement, and each of its terms, is fair, adequate, and reasonable to the Settlement Class. In reaching this conclusion, the Court has applied the factors set forth in Dunk v. Ford Motor Co. (1996) 48 Cal.App.4th 1794, 1801 and Kullar v. Foot Locker Retail, Inc. (2008) 168 Cal.App.4th 116, 128, and finds as follows:

38. Arm's-Length Negotiation. The settlement was the product of arm's-length, adversarial negotiations between competent and experienced counsel on both sides. The negotiations were facilitated by the Honorable Patricia Okoro (Ret.) of Westpark Dispute Resolution Inc., a retired Los Angeles Superior Court Judge with over 25 years of experience on the bench and extensive experience mediating complex employment class a

39. Sufficient Investigation and discovery. The parties conducted extensive fact and expert discovery prior to and during settlement negotiations. AMA produced over 147,000 documents comprising approximately 1.2 million pages. Plaintiffs produced approximately 3,400 documents. The parties took 18 depositions. The parties exchanged competing expert reports quantifying class-wide damages. The parties fully briefed and

40. Settlement Amount. The Gross Settlement Amount of $14,750,000 is fair and adequate. The settlement amount represents approximately 38.2% of Plaintiffs' expert Dr. Rennick's aggregate damages figure of $38.6 million. This percentage recovery is at the upper end of the typical settlement range of 15% to 40% of claimed exposure that California courts have observed in wage-and-hour class action settlements. The settl

41. Reaction of the Class. The overwhelmingly positive reaction of the Settlement Class confirms the fairness and reasonableness of the settlement. The claims data submitted by Meridian Settlement Services LLC demonstrates the following: (a) 1,262 valid claims were submitted by Settlement Class members out of approximately 1,850 identified class members, representing a claims rate of 68.2%. This claims rate is well a

42. Experience and Views of Counsel. Both Class Counsel and Defense Counsel are experienced practitioners in employment class action litigation. Class Counsel, including Marco Castellano and Diane Salas of Castellano Byrne & Salas LLP and Sandra Higuera of Veltrano Employment Law Group PC, have collectively prosecuted and resolved numerous wage-and-hour class actions and PAGA representative actions in California. Def

43. Stage of Proceedings. The settlement was reached at an advanced stage of the litigation, after class certification had been fully briefed and decided, after extensive fact and expert discovery had been completed, and at a stage when the parties had a well-developed understanding of the factual and legal merits of the case. The settlement was not premature; rather, it was reached at a point when the parties had su

44. Absence of Fraud or Collusion. The Court finds no evidence of fraud, collusion, or overreaching in the negotiation of the settlement. The settlement was negotiated at arm's length between adverse parties with the assistance of a neutral mediator. The terms of the settlement, including the Gross Settlement Amount, the allocation formula, the scope of the release, and the amounts allocated to attorneys' fees, costs

III. APPROVAL OF SETTLEMENT TERMS Based on the foregoing findings, the Court hereby approves the Settlement Agreement and its terms, and orders as follows: A. Gross Settlement Amount

45. The Court approves the Gross Settlement Amount ("GSA") of Fourteen Million Seven Hundred Fifty Thousand Dollars ($14,750,000). The GSA is non-reversionary; no portion of the GSA shall revert to AMA under any circumstances. B. Attorneys' Fees

46. The Court approves Class Counsel's request for attorneys' fees in the amount of Four Million Nine Hundred Sixteen Thousand One Hundred Seventy-Five Dollars ($4,916,175), which represents 33.33% of the Gross Settlement Amount. This amount is to be paid from the GSA. The Court finds that this fee is fair, reasonable, and justified by the quality of the representation provided, the complexity of the litigation, the

47. The Court approves reimbursement of Class Counsel's reasonable litigation costs in the amount of Four Hundred Twelve Thousand Three Hundred Dollars ($412,300), as documented and supported by the declarations of Class Counsel filed in connection with the Motion for Final Approval. The costs include, among other items, filing fees, deposition costs, expert witness fees, mediation fees, document review and hosting e

48. The Court approves the following service awards to the named Class Representatives, in recognition of their meaningful service to the Settlement Class, including their willingness to serve as named plaintiffs, their active participation in discovery and depositions, their attendance at mediation sessions, and their involvement in the settlement approval process: (a) Marisol Fuentes: Fifteen Thousand Dollars ($15,

49. The service awards are to be paid from the GSA. The Court finds that these awards are reasonable and commensurate with the contributions of the named plaintiffs. Ms. Fuentes receives a higher award in recognition of her role as the lead plaintiff, her additional participation in discovery and mediation, and the earlier filing date of her complaint. E. Settlement Administration Costs

50. The Court approves settlement administration costs in the amount of Three Hundred Eighty-Five Thousand Dollars ($385,000), payable to the claims administrator, Meridian Settlement Services LLC (Angela Truong, principal contact), 1600 E. Fourth Street, Suite 240, Santa Ana, California 92701. The administration costs cover all services provided by Meridian in connection with the settlement, including class member i

51. The Court approves a PAGA payment in the total amount of Seven Hundred Fifty Thousand Dollars ($750,000) from the GSA, allocated in accordance with California Labor Code § 2699(i) as follows: (a) Seventy-five percent (75%) of the PAGA payment, in the amount of Five Hundred Sixty-Two Thousand Five Hundred Dollars ($562,500), shall be paid to the California Labor and Workforce Development Agency ("LWDA"). (b) Twent

52. The Court finds that the PAGA payment amount is reasonable in light of the nature and scope of the alleged PAGA violations, the value of the certified class claims, and the risks and uncertainties associated with continued prosecution of the PAGA claims. G. Net Settlement Fund

53. After deduction of the foregoing amounts from the Gross Settlement Amount, the Net Settlement Fund ("NSF") is calculated as follows: H. Distribution to Settlement Class Members

54. The Net Settlement Fund of Eight Million Two Hundred Fifty-One Thousand Five Hundred Twenty-Five Dollars ($8,251,525) shall be distributed pro rata to all participating Settlement Class members — that is, all Settlement Class members who did not timely and validly opt out — in accordance with the allocation formula set forth in the Settlement Agreement, as follows: (a) Sixty percent (60%) of each Settlement Class

55. Based on the foregoing formula, the estimated average individual payment is approximately $4,460 per participating class member ($8,251,525 ÷ 1,827 participating class members, after excluding the 23 class members who opted out from the 1,850 total class members). Actual individual payments will vary based on each class member's individual allocation factors, including weeks worked and overtime hours.

56. Tax Treatment. Individual settlement payments shall be allocated for tax purposes as set forth in Section 8.4 of the Settlement Agreement: (a) Fifty percent (50%) of each individual payment shall be treated as wages, subject to all applicable federal, state, and local tax withholdings, including withholding for federal income tax, California state income tax, FICA (Social Security and Medicare), and SDI contribut